Scottish Court of Session Decisions

Subject_1 FRAUD.
Subject_2 SECT. XII.

Reviving an extinguished obligation in prejudice of a creditor. - Discharging a bond, and taking a new one, payable to a third person, to disappoint a creditor. - Sale retenta possessione.

David Macclellan
v.
Henry Allan, Write in Edinburgh

Date: 8 July 1725
Case No. No 61.

A cautioner in a bond having granted a bond of corroboration after the seven years, within which time a creditor of the cautioner had affected his a state by an inhibition; the Lords found, that the debtor being ones tree of his cautionary obligation by prescription, could not revive it in prejudice of an inhibiter.

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In the competition of Sir George Hamilton's creditors, there arose a debate betwixt Mr Macclellan and Mr Allan, concerning their different interests: That produced for Mr Allan was a bond by Sir Robert Miln as principal, and Alexander Miln as cautioner, with a bond of corroboration thereof by the said Sir Robert and Alexander Milns as principals, and Sir George Hamilton as cautioner, to James Macclellan, dated 3d of July 1697, upon which inhibition had been used against both principals and cautioner, anno 1698. The bond was assigned by the said James Macclellan to his son David, to whom Sir George granted a bond of corroboration, in March 1705, for L. 1500 as then only resting. Upon this last bond there was a new inhibition used, anno 1709, and a new bond of corroboration granted; and, upon all these, an adjudication was led by Macclellan against Sir George of his interest in the estate of Kinglass anno 1722.

Mr Allan's interest was a bond by Sir Robert Miln and Sir George Hamilton as co-principals, for 3000 merks, in April 1693, and another bond by Sir George for L. 4000 in December 1693; upon both which bonds inhibition was used in February 1698.

It was objected by Mr Allan, 1mo, That Sir George was only a cautioner in Mr Macclellan's debt anno 1697, and after the act 1695 anent cautioner's, he was free in the course of seven years; and therefore his bond of corroboration in March 1705 was reducible upon Allan's inhibition anno 1698: For he being once free by the prescription, he could not revive the debt in prejudice of an inhibiter, more than he could contract a new one.

2do, The inhibition used by Mr Maclellan within the seven years could not preserve the debt, so as it might be corroborated after that time; for the act of Parliament only excepts diligence done within the seven years, which is to stand good and have its force and effect; and, granting the inhibition had the effect of an interruption, yet it could go no further than to secure the principal sum and annualrents due within the seven years, but not the annualrents arising thereafter.

It was answered for Mr Macclellan, That the inhibition within the seven years secured the principal sum, and of consequence its growing annualrents as its accessory; and besides, there was a registrate horning used within the seven years, which had the effect to make even the fruitless part of the debt a principal sum which afterwards bears annualrent. 2do, Sir Robert Miln, the principal debtor, disponed to Sir George, the cautioner, several funds for payment of this and other debts, whereby Sir George became in effect principal debtor, by which there accresced to Mr Macclellan and the other creditors an interest in these funds, seeing they were assigned as a subject for their payment. 3tio, Allan's inhibition was null, as not being executed at the head burgh of the jurisdiction within which the subject in competition lay; and further, Allan's inhibition narrates two bonds, yet in the imperative part of the letters there is only one bond mentioned, and the executions are made out accordingly; and therefore only one of the debts is secured by the inhibition.

It was replied for Allan, to the 1st, That neither principal nor annualrents are preserved, except in so far as they can be made effectual by diligence within the seven years, which in the present case being only an inhibition, could not affect the fund in question; and suppose the debt were preserved, yet the growing annualrents after the seven years were not due; for, though the statute excepts ‘lawful diligence,’ yet that was restricted to make effectual only what fell due within that time.

It was replied to the 2d, That the disposition being made in security of the proper debts due to Sir George, and for relief of cautionries, and the debts due to himself far exceeding the sums disponed, he did not thereby become a proper debtor.

To the 3d it was replied, That the inhibition being executed at the head burgh of the shire where the inhibited party dwelt, it was sufficient since it was registrated in the public register, Lord Gray contra Hope, No 71. p. 3733.; which holds the rather in this case, where the subject falling under inhibition was not secured by infeftment in land, but by an adjudication; which is therefore to be regulated by diligence done in domicilio of the debtor: And though the inhibitory part relates only to one bond, yet seeing the inhibition narrates both, and bears a discharge of contracting, &c. in defraud of the complainer, anent payment making of the sums of money, &c. therein contained, it is evident, that although the letters S be omitted, the prohibition will extend to both bonds, which were sufficiently notified by the narrative and registration.

The Lords found the inhibition at Macclellan's instance secured the principal sum and annualrents due within the seven years; and found the inhibition at Allan's instance cuts off the effect of the corroboration to Macclellan; and found the making over securities to Sir George Hamilton did not make any alteration in the nature of his obligation, but that notwithstanding thereof he continued cautioner; and repelled the objection against Allan's inhibition. See Inhibition.

Reporter, Lord Forglen. For Allan, Ja. Boswell. Alt. Alex. Hay. Clerk, Mackenzie. Fol. Dic. v. 3. p. 246. Edgar, p. 186.