Scottish Court of Session Decisions

Subject_1 IMPLIED OBLIGATION.

James Lamb and Others
v.
James Duncan

Date: 16 May 1798
Case No. No 25.

A creditor of a person who has obtained a cessio bonorum, suing him for a debt which had been previously contacted, must shew that proper diligence has been done for recovering the debts contained in the general disposition granted by the defender to his creditors when he got the cessio; and if the pursuer fail to do so, the defender will be entitled to set off the amount of these debts against the pursuer's claim.

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James Duncan, in 1788, obtained a cessio bonorum, and in compliance with the act of sederunt 8th February 1688, granted to his creditors a disposition of his whole effects, consisting chiefly of a number of small outstanding debts. The creditors, however, never acted under it.

Duncan having, several years afterwards, acquired some property by succession, James Lamb, and other two of his creditors, all of whose debts had been contracted before the date of his cessio, brought an action against him for payment of them.

Duncan met this by a counter action against them, concluding, that they should be found liable for such of his effects as they might have recovered under the disposition omnium bonorum.

In defence, Lamb, and the other pursuers in the original action,

Pleaded; The circumstances of persons obtaining a cessio bonorum are generally so desperate, that although, in point of form, they are obliged to execute a disposition omnium bonorum, it rarely happens that their creditors pay the smallest attention to it. In the present case, none of the pursuers opposed the cessio, or so much as knew that the disposition had been granted. To make them suffer, therefore, for not acting under it, would be an evident hardship, and an unwarranted stretch of the law with regard to implied obligations. The disposition is not granted by the pursuer in solutum pro tanto of his debts, Erskine, b. 4. tit. 3. § 27.; 11th July 1778, Reid against Donaldson, No 5. p. 1392.; 5th August 1788, Pringle against Nielson, No 6. p. 1393.; but merely for the further security of his creditors; and it is a fixed point, that assignees in trust are not bound to do diligence, Erskine, b. 3. tit. 5. § 8.; 27th June 1706, Macmichen against Kennedy, No 15. p. 3482.; 8th June 1715, Anderson against Corbet, No 18. p. 3485.; February 1682, Home against Home, No 14. p. 3481.; Fount. 28th December 1709, Smith against Vint, No 17. p. 3483. Besides, as the disposition in this case was granted to all the pursuer's creditors, it in fact conferred no power of doing so on the defenders, who are but a small proportion of them.

Answered; The disposition granted by a person obtaining a cessio, is an irredeemable right in favour of his creditors, to the extent of their debts, Stair, b. 4. tit. 52. § 22. It is clear, that diligence must be done by some person for recovering the debts assigned by it; and, as the granter is thereby completely divested, and consequently barred from doing diligence himself, it necessarily follows, that it must be done by his creditors, Stair, 7th February 1678, Stuart against Melvill, No 12. p. 3480. It is no doubt true, that the bankrupt cannot compel them to act; but the implied obligation on them to do so, must go the length of precluding them from demanding payment of their debts, till they account for those funds of their debtor which they ought to have recovered. Nor will it, in this case, avail the pursuers, that they could not, in their own names, have sued the defender's debtors; they ought to have called a meeting of his whole creditors, and got a factor appointed to act for the general behoof.

The Lord Ordinary found, “That, in so far as the debts, belonging to the pursuer at the time of the granting the disposition omnium bonorum, were not prescribed at that period, the defenders, who were called as creditors of the pursuer in his said process of cessio bonorum, must hold count and reckoning with the pursuer, to the effect of having the amount of the said debts proportionally and ratably imputed towards extinction of the debts owing to them respectively by the pursuer, at the period of his so obtaining his cessio, except in so far as they can sufficiently instruct, that the debtors, by whom the said debts were owing to the pursuer, were notoriously insolvent at the period above said, and have continued to be so: Found, that, hoc statu, there are no sufficient materials for judging as to the amount of the sums for which the defenders ought to hold count and reckoning, in manner above said: Ordained the pursuer to give in an additional condescendence, specifying the particular debts, and the circumstances thereof, for which he now insists that the defenders ought to be accountable; and, till then, reserved consideration of what allowance ought to be made to the defenders, on account of the expense which they would have incurred, if they had endeavoured to recover the said debts by virtue of the pursuer's disposition omnium bonorum.”

The defenders presented a reclaiming petition against this interlocutor, on advising which, with answers, the Court, on the grounds stated for the pursuer ‘adhered.’

Lord Ordinary, Glenlee. Act. Dickson Alt. Turnbull. Clerk, Colquhoun. Fac. Col. No 72. p. 163.