Scottish Court of Session Decisions

Subject_1 BANKRUPT.
Subject_2 DIVISION III.

Decisions upon the act 5th Parliament 1696, declaring Notour Bankrupts.
Subject_3 SECT. V.

Of Securities for Debts to be Contracted.

M'Dowal of Freuch, and Captain Alexander Stevenson,
v.
Sir John Rutherford and his Lady

Date: 19 January 1715
Case No. No 210.

A dispositon granted in security of debts due and to be acquired, found good only to the extent of debts in the disponee's person, at the time the infeftments of other creditors were made public.

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In a ranking of the Creditors of Hackburn, there being produced a disposition in favour of William Cairncross, (to which Sir John Rutherford has right by progress) granted by Hackburn, of his lands, &c. under reversion, and for security not only of L. 2495 acknowledged due at granting, and which he obliges himself to pay betwixt and the 8th of June 1679, but of all other sums due by Hackburn to him, or which thereafter might be due and addebted to the said Cairncross, or whereunto he had right, or he or his heirs might thereafter have right by whatsoever manner of way; upon which he was infeft 3d January 1675. There was also produced for Stevenson an heritable bond and infeftment, dated 3d February 1679, and another heritable bond and infeftment produced for Fullerton of Dreghorn, dated the same day with Cairncross's, viz. the 3d of January 1679; which infeftment is confirmed in 1689, and is now in the person of M'Dowal of Freuch, who has also procured a charter of confirmation of the whole rights in his favour.

Stevenson, whose infeftment was latest, insists in a poinding of the ground in June 1679, where Cairncross and Dreghorn compear, and plead preference upon their rights; and, during the dependence, Dreghorn procures his charter of confirmation. But Stevenson's right being made public by his citation against the tenants, and the dependence of the process before the confirmation, there is a decreet in his favour extracted upon his preference.

Cairncross having thereafter by back-bond restricted his above sum to L. 1100, does, after the common debtor was lapsus and dead, purchase in certain personal bonds due to other creditors, and now in the ranking insists for preference even as to these also, and that by reason of the above clause of reversion.

It was alleged for the said other creditors, That their real rights having supervened before any acquisition of the personal rights, there was a medium impedimentum, which hindered the debts personal at that time to become real; especially considering that their sasines were not only on record, but intimated, and Cairncross's right rendered litigious before his acquiring the personal debts.

Answered for Sir John Rutherford, That his claim is supported by law and form, and all analagous parallel instances; since there is nothing more usual, than for parties to give wadsets redeemable, for payment of a special sum, and of all other debts which should afterwards be owing before redemption. Nay, tis usual for parties engaging for one another to take heritable bonds of relief, not only for all undertaken by them, but wherein they should afterwards engage; which general clauses have always, before 1696, been found effectual. And there is no medium impedimentum here, since Sir John's right was originally exclusive of the competitors, who were certiorate by the records, that all sums to which Cairncross might have right, would certainly exclude them; so that they cannot complain who contracted with a party so disabled, seeing scire debebant conditionem ejus cum quo contraxerunt.

Replied for the Creditors, 1mo, That Cairncross's right, was most suspicious and ensnaring, destructive to commerce, and tending to render our great securities by the registers altogether loose and uncertain; for, by this clause the creditors do indeed see that their debtor owes a certain sum, whereof they take their hazard, knowing the estate will pay both that and theirs, for which they secure themselves by infeftment, and render the same public; but what other sums may be latent betwixt their debtor and other personal creditors, no real creditor can, or is obliged to know. 2do, If such a clause be sustained, the debts which could never claim any preference, yea debts not in rerum natura, when other creditors rights were existing, would, by the mere accident, of another creditor having a right in security with so ample a clause, through the coming into that other creditor's person, be transubstantiate, and become real and preferable; which is a manifest absurdity and injustice, tending to the overthrow of all our securities.

The Lords found Cairncross's right is not preferable for those debts, which were not in his person the time that the other creditors, Stevenson and Fullerton, their infeftments were made public.

For Sir John Rutherford, Sir Ja. Nasmyth. Alt. Graham. Clerk, Robertson. Bruce, No 30. p. 39.