Scottish Court of Session Decisions

Subject_1 DECISIONS of the LORDS OF COUNCIL AND SESSION, reported by SIR DAVID DALRYMPLE, LORD HAILES.
Subject_2 BANKRUPT.
Subject_3 Money having been advanced upon a communing and agreement that an heritable bond should be granted; such security, though within sixty days of the granter's bankruptcy, not reducible upon the Act 1696, c. 5.

Messrs Mansfield and Company
v.
Thomas Cairns

Date: 15 February 1771

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[Fac. Coll. V. 222; Dict. App. I.—Bankrupt, No. 6.]

Pitfour. The Act 1696 is salutary in itself: it would be quite otherwise upon the interpretation of Mansfield and Company. By that statute a retrospect was wisely, though boldly admitted. When the law forbids new security for an old debt, the creditor is not hurt: he has the same security as at first. Money lent on the faith of an heritable security is the same thing as a sale. It is plain that here there was no purpose of parting with the money upon the promise either of the doer or of the debtor. If a price is paid, and some days thereafter a disposition is granted, will this be said to be a new security? This question occurred in January 1751, Johnson against Burnet. Elchies and Arniston were both present, and gave that opinion which I give, though better expressed.

Monboddo. Part of the heritable bond was for a vetus debitum, if the heritable bond had been granted for the L.300 due to Kerr. If Kerr had given up his personal bond, and taken heritable security, the case would have fallen within the statute. The same thing was done here, per ambages, as to the L.500 in the one, and in the other note it is the same thing as if Cairns had taken those promissory notes from Nisbet, instead of their being taken by Hart, Cairns's doer, from Nisbet. The bond is good quoad the remainder left in Hart's hands by Nisbet.

Coalston. The pursuer of the reduction on the Act 1696 must prove, 1st, That a debt was created. 2d, That a security was granted. If Cairns had taken promissory notes from Nisbet, or if Hart had lent the money in Cairns's name, the case might have come within the Act of Parliament. Nisbet was not debtor to Cairns till the heritable bond was to be granted. It remained at the risk of Hart. If I advance money upon the honour of the debtor, and do not get heritable security for a day or two, will such security, when granted, fall within the prohibitions of the statute 1696?

Kaimes. The promise was, from the beginning, for heritable security. Money was advanced from time to time. Will this make the security become a novum debitum?

Gardenston. There is not one instance of a hundred, where the heritable bond is granted simul et semel, with the advance of the money. The same circumstances, as in this case, daily occur. When a man advances his money within the sixty days, he cannot be in a better situation than other creditors. But that is not the case here. Heritable security was intended from the beginning.

President. If the Act 1696 could have the interpretation put upon it by Messrs Mansfield, I would certainly move for an application to Parliament for its repeal.

On the 15th February 1771, “The Lords assoilyied from the reasons of reduction;” adhering to Lord Kennet's interlocutor.

Act. R. M'Queen. Alt. H. Dundas.

Diss. Monboddo.