Scottish Court of Session Decisions

The company of Wilson and Sons, who carried on an iron manufactory at Wilsontown, in the county of Lanark, took in 1804, from Mr Crawford, proprietor of the lands of Climpy, adjacent to their works, a lease of the coal of these lands for 40 years, at a rent of £150 for the first five years, and £200 for the remaining years of the lease. This coal was thereafter wrought by the company for supplying fuel to their works. In 1807, the company obtained from Crawford a feu of a portion of the lands of Climpy above mentioned, at a feu-duty of £100, and they further acquired right to another portion previously feued to other parties, at a feu-duty of £5 per annum. The ground thus acquired was used by the company as affording sites for workmen's houses, and otherwise facilitating their operations. In 1808, the company fell into embarrassments. These were supposed to be only of a temporary nature, and a number of individuals agreed to support them by advancing money, chiefly in sums of £500 each, the company at the same time granting a trust-deed to certain individuals as trustees for greater security of the parties making these advances and of their creditors generally, and for the better management of the works. Under these trustees the manufactory was carried on by the company, but, in 1812, their affairs having become still more embarrassed, a sequestration of their estates was awarded under the bankrupt statute on the 5th of June of that year. On the 15th the statutory meeting of creditors was held for the election of an interim factor, at which a protest was served by the private trustees, setting forth a claim to retain the property of the company, with which they had been regularly vested, till the purposes of the trust were fulfilled. The meeting elected an interim-factor, and, with reference to the protest of the private trustees, they resolved “that the whole property claimed by the foresaid trustees fell under the present sequestration, and must be taken possession of by the interim-factor, in terms of the statute;” and appointed “the interim-factor to make an immediate application to the Court to obtain actual possession of the whole effects so sequestrated, and to take every other measure which he may be advised to be proper for carrying the resolution into effect.”

The interim-factor accordingly adopted legal measures for having the private trustees interdicted from interfering with him, and for obtaining possession of the whole estates of the company. This he accomplished, and, till the election of the trustee, he kept the iron-works in operation, using for that purpose coal wrought from the lands of Climpy. The creditors in the sequestration consisted to a great extent of those parties who had made the advances in 1808 for the support of the company. At a meeting held on the 13th July, the late Mr James Bristow Fraser, W.S., was elected trustee, but no other business was done, a report by the interim-factor being remitted to the trustee without having been read. The election of the trustee was confirmed by the Court on the 6th of August, and decree pronounced adjudging to him all the property of the company, including specially the Climpy lease and feus. The trustee, as the interim-factor had done, kept the works in a going state, and at the next meeting of creditors, which was held on the 10th September (being that for instructing him in regard to the management of the estate), he reported that he had so kept the works going, as “they would sell to greater advantage in a going state than if stopt;” the farther reported his opinion that the works should be brought to sale, being kept in operation till the day of sale. The meeting “approved of the measures which had hitherto been pursued and were now proposed, including the exposure of the works to sale by public roup,” and fixed the upset price. The works, including the Climpy lease and feus, as appendages, were accordingly exposed to sale by the trustee in October and November, but no offer was made for them, and a meeting of creditors, held on the 27th November, instructed the trustee again to advertise them, and to endeavour to dispose of them by private bargain; and in the event of no sale being thus effected within a fortnight, to have the furnaces blown out and the works stopped. No sale was effected, and the works were accordingly stopped in the course of the month of December, but it was averred that the trustee had subsequently, to a certain extent, wrought the Climpy coal for sale, and occupied the ground of the feus, drawing for several years certain small sums of grass mail for it. After the meeting of creditors in November, 1812, no meeting was held till the year 1820. In the mean-time the trustee carried on the legal proceedings which had been instituted for determining the claims made by the private trustees, and the Court, on the 22d December, 1812, pronounced an interim order on the private trustees to convey the estate and works to the trustee in the sequestration that they might be sold. In obedience to this order a disposition of the whole estates of the company, including the Climpy lease and feus, was executed by the private trustees in May, 1813, in favour of the statutory trustee, who, in July, 1814, was infeft thereon in, inter alia, the feus above mentioned. The estates of Crawford, the proprietor of Climpy, had been sequestrated prior to the sequestration of the Wilsontown Company, and, at the first meeting of the Wilsontown creditors, Crawford's trustee had attended, and produced a claim and affidavit of debt on the estate, composed in part of arrears of rent and feu-duties under the Climpy lease and feus. In November, 1812, Crawford's trustee raised an action against the Wilsontown trustee for payment of these arrears, and, in March, 1813, he farther raised a declarator of irritancy of the feus ob non solutum canonem. The Wilsontown trustee put in defences to these actions, pleading a counter-claim against Crawford's estate more than sufficient to extinguish the claim made by his trustee. In 1814, these actions were submitted to the arbitration of Mr Cockburn (now Lord Cockburn) as sole referee; and he, in July, 1817, pronounced a decreet-arbitral, whereby he found that the claims by Crawford's trustee for rents and feu-duties were extinguished by the counter-claims of the Wilsontown trustee, down to Martinmas, 1814; that from that date to Whitsunday, 1817 (the term immediately, preceding the date of the decree-arbitral), Crawford's trustee was entitled to full payment of the rents and feu-duties from the Wilsontown trustee, and decerned for payment thereof, and finally found that, upon implement of his decree, the parties submitters were “severally and mutually discharged of all claims which they may have against each other in this submission or the processes referred to in it, together with the said processes themselves, and all following or competent to follow thereon.” The Wilsontown works, together with the Climpy lease and feus, after the two first attempts at sale in October and November, 1812, already mentioned, had been again exposed by the trustee in August and September, 1813, and June, 1814; and subsequent to this decrcet-arbitral they were exposed of new, and at reduced upset prices, in September, 1818, and in January and February, 1819, but without success.

In 1818, the pursuer, Kirkland, alongst with a party named Sharpe (in whose right also Kirkland now stands), purchased from Crawford's trustee his right and interest in the lands of Climpy, and thereafter made a demand on the Wilsontown trustee for the rents and feu-duties falling due since Whitsunday, 1817. In 1820, the Wilsontown trustee circulated a report among the creditors of his proceedings in the sequestration, and called a meeting of creditors to consider various matters, and, among others, the claim by Kirkland and Sharpe for rents and feu-duties. Accordingly, on the 27th December, 1820, a meeting of creditors was held, being the first since that in November, 1812, and, in regard to the claim of Kirkland and Sharpe, the following resolution was adopted:—“The meeting having considered the claims made upon this estate under the coal-lease and feu-contracts of the Climpy lands, and the submission and decrcet-arbitral, regarding these subjects, they are unanimously of opinion, that the said decreet-arbitral having been implemented, and the sum found due paid, no farther claim lies under these leases and contracts against this estate; and they instruct the trustee to resist such claims accordingly.”

In 1825, Kirkland and Sharpe raised action against Fraser, the Wilsontown trustee, concluding against him both personally and qua trustee for payment of the arrears of rent and feu-duties the personal conclusions were, however, afterwards departed from. Eraser resisted this action, on the ground that the estate was not liable, and, at all events, that the decrcet-arbitral having been implemented, nothing more was due. In 1829, and pending the proceedings in this action, Fraser having himself become bankrupt, a meeting of creditors was called to receive his resignation. With a view to this meeting, Kirkland and Sharpe addressed a circular to each creditor explaining the state of their process against the estate, and intimating further as follows:—“And we shall insist for and take a decree in the said depending action, which we will hold to be binding on you as a decree in foro, in respect of your being represented in the action by your trustee, and we will look to you and the other creditors for implement of the decree accordingly.” The meeting of creditors was held on the 31st January, 1829, when Mr Fraser's resignation was accepted, and an application authorised for the appointment of a new trustee. Thereafter Mr Archibald Gibson, accountant in Edinburgh, was appointed trustee. He sisted himself in place of Mr Fraser as defender in the action at the instance of Kirkland and Sharpe, in which the Lord Ordinary (January 19, 1831) pronounced the following interlocutor:—

“The Lord Ordinary having resumed consideration of the debate, and advised the process, Finds, that after trying the effect of a voluntary trust, the estates of Messrs Wilson and Sons, late ironmasters at Wilsontown, were sequestrated in June 1812, and Mr James Bristow Fraser, the trustee, entered into possession of a coal-lease of part of the lands of Climpy, as well as of two feu-rights of parts of the said property, and was infeft therein 25th July, 1814: Finds it admitted that the said trustee carried on the Wilsontown iron-works from the term of his appointment, at least till December 1812, and that during this period the coals in the lands of Climpy were, in virtue of the said lease, worked for the use of the works: Finds it farther admitted, that, in February 1813, sums were paid to and received from Thomson the overseer, on account of sales of coals at Climpy, on behalf of the trust-estate: Finds it farther admitted, that, for several years subsequent to the sequestration, the pasture grass on the Climpy feus were let on behalf of said estate, and in particular that payments from this source were received down to Whitsunday 1819: Finds that Mr Crawford, the proprietor of Climpy, having also been sequestrated, his trustee, in 1812, instituted three actions against the trustee on Messrs Wilson's estates, one in the Sheriff-Court relative to the lease, and the other two in this Court relative to the feus, one of them for payment of the feu-duties, and the other a declarator of irritancy ob non solutum canonem; and that the Wilsontown trustee did not state in defence that he had not entered into possession, or that he meant to surrender the possession to the landlord, nor did he allege that he had intimated to the landlord, and obtained his approbation or acquiescence, that he was trying the experiment of a sale, and did not mean to take possession of them for behoof of the estate; on the contrary, it appears that at this time these subjects were reckoned valuable appendages of the iron-works, and that he only stated counter-claims against the rents and feu-duties claimed from him as assignee to the lease and feuar in the lands: Finds, that in August 1814 these processes, and the mutual claims of the parties, were submitted to the decision of Mr Henry Cockburn, advocate, and that a decree arbitral was pronounced in July 1817, which sustained various claims of the parties, hinc inde, and among others the claim on the part of the landlord to the coal-rents under the lease, and the land-rents under the feu-rights down to Whitsunday 1817: Finds, that as the trustee did not argue in this submission that he had abandoned the lease and surrendered the feu-rights, and that he was no longer liable for them, but, on the contrary, if not expressly, he at least tacitly admitted himself to be liable to implement the conditions of the lease and the feu-rights, the clause in the decreet-arbitral founded on, which mutually discharges all claims the one party has against the other, cannot be interpreted as cutting off the landlord's claim to these rents and feu-duties subsequent to Whitsunday 1817: Finds it averred by the pursuers, that subsequent to the date of the decreet-arbitral it was held by both parties that the lease and feu-rights continued in force as before, and possessed by the Wilsontown trustee—a statement which is simply denied by the defender; but this denial is contradicted by his continuing to draw rent for the pasture-grass: moreover, he does not allege, that after the date of the decreet-arbitral there was any notice of the surrender of these to the landlord, and invitation to him to take possession, and that the defender was no longer to be liable for the rent and feu-duty; on the contrary, the Wilsontown trustee was assoilzied by the decreet-arbitral from the declarator of irritancy; he is craved for the rent due at Whitsunday 1818, to which he returns no answer; and though the feu-rights were not, the lease was expressly exposed to public roup along with the other Wilsontown property of the following dates, 16th September, 1818, 20th January, 10th February, and 10th March, 1819, forming lot second of the subjects expoped, as alleged by the pursuers, at the upset price of £2000, which is denied by the defender, who, however, does not state what was the upset price of this lot; and no offerer having appeared, the property was again exposed to sale on 14th June, 1820, when, for the first time, the said lease was left out of the articles of roup: Finds that the pursuers, who had purchased the lands of Climpy in 1818, having renewed the demand for the coal-rents due under the lease, and the feu-duties under the feu-rights, the Wilsontown trustee was instructed by the creditors to resist this claim by the resolution of 27th December, 1820, on the ground that the decreet-arbitral having been implemented, nothing more was due: Finds, under these circumstances, that the Wilsontown trustee having entered into possesion of the lease, and been infeft in the feu-rights, and having for so many years taken benefit of the lease and feu-rights for the use of the sequestrated estate, has become the assignee to the lease, and the vassal in the feu-rights, and must be bound to fulfil the prestations due under these contracts towards the landlord, and is not now entitled to abandon them: Finds that Mr Fraser, the trustee, has been succeeded in his office by the present defender, and no decree is now craved, either as an individual, or as trustee, against Mr Fraser: Therefore, and in respect that the pursuers have acquired right to the coal-rents and feu-duties which fell due subsequent to Whitsunday 1817, decerns against the defender, the trustee on the Wilsontown estate, for the rents and feu-duties subsequent to Whitsunday 1817, payable half-yearly, at the terms of Martinmas and Whitsunday, with interest from the term at which each fell due and till payment, and to continue the payment of the said rent and feu-duties, with interest as above during the subsistence of the said contracts respectively: And farther, Finds the defender liable in expenses, of which allows an account to be given in, and remits to the auditor to tax the same when given in, and to report.” Against this interlocutor the trustee reclaimed, but the Court (May 17, 1831) adhered. ¹ A meeting of the creditors thereafter resolved that an appeal should be taken to the House of Lords. The trustee accordingly appealed, but the judgment of the Court of Session was affirmed. ²

The trustee on the Wilsontown estate having no funds wherewith to pay the rents and feu-duties decerned for (the creditors, indeed, having been obliged to advance five per cent on their claims, for defraying the expenses of the sequestration), Kirkland, who had now acquired right to Sharpe's share and interest in the Climpy property and arrears, after causing a circular, requiring payment, to be addressed by his agents to all the creditors on the Wilsontown estate, made a formal demand under protest upon the defender Cadell and the deceased Thomas Allan, who had both been commissioners on the estate, for about £7000 of arrears, and for the yearly rent and feu-duty, as the same should fall due in time to come. In this protest Kirkland, inter alia, represented that they “being in one, or other, or several, or all, of the situations hereinafter described, viz. as creditors on the said sequestrated estates of the said Wilson and Sons, and William Wilson, junior, and James Wilson, and as having, by themselves, or by mandatories duly authorized by them, attended meetings of the creditors on the said sequestrated estates, held under the said sequestration, in terms of the bankrupt statute, or as having claimed and been ranked as creditors upon the said sequestrated estates, or as having been chosen commissioners on the said sequestrated estates, and having accepted of that office, and acted in that capacity from the date of their election downwards to that time:” were conjunctly and severally liable to him in the rents and feu-duties in question. He then raised an action against these two parties, the summons in which recited the summons in the prior action against the trustee—the judgments pronounced therein—the acquisition by Kirkland of Sharpe's interest—the demand on the creditors—the protest served upon Cadell and Allan, and concluded against them for payment thereof, “as being in one, or other, or all, or several of the situations hereinbefore described.” As a preliminary defence, Cadell and Allan pleaded that all the other creditors ought to be called as parties; and this defence having been sustained by the Court adhering to an interlocutor of the Lord Ordinary, ³ a supplementary summons was

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¹ Ante, IX. 596.

² March 25, 1833.

³ Feb. 21, 1834; Ante, XII. 472.

raised, reciting; the previous summons, and concluding, conjunctly and severally, against all the parties newly called. A record was thereafter made up, in which a great variety of special pleas were maintained, applicable to the cases of particular creditors or classes of creditors, together with certain general pleas, to which alone it is necessary at present to advert.

The pursuers' pleas were as follows:—

“I. The interim-factor, and the trustee and commissioners on the sequestrated estate of Wilson and Sons, having, for behoof of the creditors, taken up the bankrupts' right, under the Climpy coal lease,—entered into possession,—worked the coal to a great extent,—maintained possession under the said lease in various legal proceedings with the landlord, and paid rent for several years, became thereby bound to implement all the conditions of the said lease.

“II. The interim-factor, and the trustee and commissioners, having, in like manner, for behoof of the creditors, taken up the bankrupts' right under the feu-contraets,—having entered into possession of the same,—been infeft in them,—drawn the rents of them for years,—paid feu-duty to the superior, and maintained possession of them as vassal in various legal proceedings with the superior, became thereby bound to implement all the conditions of these contracts.

“III. The bankrupts' private trustees having become tenants under the lease, and vassals under the feu-contracts, and Mr Fraser having, by authority of the commissioners and creditors, taken a disposition and assignation from these trustees, to the said lease and feu-contracts, under the express obligation to relieve them of all their liabilities, he became thereby bound, and likewise bound the defenders, who authorized that proceeding, or who have been ranked, or have claimed as creditors on the sequestrated estate, to implement all the conditions in the said lease and feu-contracts.

“IV. The conduct of the interim-factor, and of the trustee and commissioners, in regard to their acquisition of the right of the bankrupts under the said coal-lease and feu-contracts, for the purpose of rendering the same available to the creditors, as valuable parts of the sequestrated estate of the bankrupts, were prudent and legitimate acts of administration at the time of the sequestration, and are binding on all of the creditors who were ranked, or have claimed on the said sequestrated estate.

“V. As the defenders in various ways authorized, homologated, or acquiesced in the various resolutions and proceedings of the interim-factor and trustee, with regard to the coal-lease and feu-contracts libelled on, they are liable, jointly and severally, to implement all the conditions of the said lease and feu-contracts.”

The more general pleas of the defenders were these:—

“I. The decree obtained against the trustee upon the sequestrated estate of Wilson and Sons, is effectual only against the trustee, qua trustee, and only against the sequestrated estate of which he had the management.

“II. In the present litigation, which is levelled against the creditors personally, and their private estates, the defenders cannot be bound or affected by any of the proceedings in the former litigation, with the trustee, to which they were no parties.

“III. In so far as the proceedings in Mr Eraser's time are concerned, the pursuer by his authors, whom he represents, having consented to that gentleman's being assoilzied, is precluded from now insisting against the creditors.

“IV. The trustee and creditors upon a sequestrated estate, acting within the powers given them by statute, do not bind themselves personally, or thereby affect their private estates, for obligations previously incumbent on the bankrupt.

“V. Supposing it to be found that, in this case, the judicial trustee has exceeded his statutory functions, and that his proceedings are not protected by the Bankrupt Statute, no creditors can be subjected in personal responsibility for such proceedings or their consequences, but such as specially and per expressum directed and authorized them, which the defenders never did.

“VI. Even if liable, the defenders are only liable pro rata with the whole creditors claiming under the sequestration, and not singuli in solidum.”

The Lord Ordinary (8th March, 1836) pronounced the following interlocutor, adding the note subjoined: ^*—“The Lord Ordinary having

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^*“It appeared very early to the Lord Ordinary, that the greater part of what was urged for the defenders in their very long argument before him, was truly superseded and overruled by the final decision of this Court and the House of Lords, in the question between the pursuers and the statutory trustee. In a strict sense, it might indeed be held that that was res inter alios; but at all events, it was a precedent so precisely in point, that no individual judge could well be exported to go against it, and it is sufficiently admitted and proved on the record of this case, that the defenders were not only perfectly aware of all the proceedings in that action, but were truly the real parties and domini litis, both in the original defence, in the name of their trustee, and in the whole matter of the appeal. It is scarcely necessary, therefore, for the Lord Ordinary to do mere than to refer to those final judgments, as the ground of his assuming that? oUicial acts of the trustee, as representing the creditors, being such as to in i,,n!.he estate with the burden of the coal-rents and feu-duties now pursued for, the only question truly remaining to be disposed of in this action, was what degree of accession to, or adoption of, the said official acts should be held sufficient to subject the several creditors now appearing as defenders to the claims of the pursuers? As the leading or prejudicial question, however, was very largely gone into by the defenders, the Lord Ordinary shall state, in a few words, the grounds upon which, even if he could consider it as quite open, he should have no hesitation in deciding it, as it has in point of fact been decided in that action with the trustee.

“In the first place, he has always had the very strongest impression, that the whole of the defenders who were creditors prior to, or at the data of the voluntary trust in 1808, or who distinctly recognised and acceded to that trust-management, were bound by the coal-lease and feu-contracts, long before the date of the sequestration in 1812. These voluntary trustees indisputably took up both the feus and the coal-lease, as early as 1808, deliberately made up feudal titles to the one, and dealt with the other as completely at their disposal, for a period of four entire years, and it is not, and cannot be disputed, that their proceedings in this respect were deliberately adopted and approved of during all that time by the whole body of the acceding creditors. Upon this ground, therefore, the Lord Ordinary would have found these defends had there not been a doubt whether the summons of the pursuers is so to admit of sUCh a finding. The Lord Ordinary's own impression is, the words enough in it to warrant such a deliverance. But as the point was but slightly touched on at the debate, and the case seemed clear enough on the sequestration, he was unwilling to rest his judgment upon a ground on which there might be a pretext for saying that the parties had not been sufficiently heard. If the case, however, should go farther, it may be of importance that this should be more deliberately considered.

“But, in the next place, and looking only at what took place after the sequestration, it appears clear to the Lord Ordinary, that without going into the whole details so clearly set forth in Lord Medwyn's interlocutor in the question with the trustee, there was much more than enough done in the first six months' management to entitle the landlord and superior to hold that the creditors, through their trustee, had completely adopted the coal-lease and feu-contracts, and were liable, as the bankrupts had previously been, in all the corresponding prestations. The defenders have always spoken of the possession taken by the trustee as a mere tentative or experimental possession, which ought not to be construed into an adoption of these contracts, but rather to have been assumed custodia? gratia only, or at the most, for the purpose of deliberation. But without entering into the question (which might be nice and difficult), whether such a temporary occupancy might in some cases be taken without leading to such consequences, it seems enough to say, that the whole circumstances of this case are exclusive of such a ground of pleading. The whole sequestrated estate here consisted, with little exception, of heritable property, lands and minerals, and fixed machinery, and this was perfectly Well known to all the creditors. The feued lands and the coal-leases were then considered on all hands as necessary, or at least most valuable appendages of the iron-manufactory; and it was never a matter of doubt or deliberation, for upwards of eight years alter the sequestration, that they should be repudiated or renounced, and the foundery disposed of without them. The only thing that was tentative or experimental, was the actual carrying on of the manufactory by the creditors, or keeping the works going, and that, no doubt, was not very long persevered in. But it is matter of absolute certainty that the idea of renouncing the coal-lease or the feus, was never once contemplated, till after 1820, at the very earliest,-and it might as well be pretended that the creditors gave up and abandoned all right to the iron-works themselves, because they ceased to work them in 1813, as that they renounced the coal-lease and feued lands, merely because, in consequence of that stop of the works, they were not afterwards occupied to the same extent as before. Considering the nature of these contracts, it seems obvious that the creditors were bound within a reasonable (and it is apprehended, a very short) time, either to renounce and repudiate them in explicit terms, or to become bound by their actual retention of the subjects, in all the obligations of the bankrupts. Now, it is not so much as pretended that they ever gave the least notice of such a purpose of repudiation to the landlord or superior, till after the present pursuers had come to be vested with those characters, or rather, it is believed, till after their first action had been actually brought against the trustee. During the whole intermediate time, they retained the exclusive possession of the feus and the coal, and repeatedly exposed them to sale by public advertisements, as part of the sequestrated estate. They drew such rents as they could get from the feued lands, and occasionally wrought the coal for local purposes, though certainly to no considerable extent. But they, at all events, completely excluded the landlord and superior from both those subjects, for the long period referred to. The coal-leases were valued, and twice exposed to sale in 1812, at the upset price of £2000, and so late as 1819, at a reduced upset price of £1000, and the feued lands were, in like manner, advertised and exposed to sale at the same periods. Now, without going further, the Lord Ordinary holds the very first of these attempted sales, without protest or notice to the landlord, as conclusive evidence that the creditors had finally made their election not to renounce hut to adopt and continue in right of the contracts which the pursuers now call on them to implement. If they were not to keep those leases and feus, with the burdens necessarily attached to them, what passible right could they have to sell them for their own benefit? A stronger assertion of their own absolute right to them cannot well be imagined, than their repeated attempts to alienate and dispose of them as their own. It may be very true that they did not intend to keep them for ever in their own hands. But they most manifestly did intend to keep them till they could sell them to advantage; and after having so kept them for nine or ten years, it is a great deal too late, when they find they will not sell, to say they are ready to renounce them. Indeed, if, up to 1819, they were advised that the coal-leases alone were worth £2000, and even at that late period worth £1000, it is idle to talk of their having virtually renounced them, when they ceased actually to work the furnaces in January, 1813.

“Independently, therefore, either of the effects of the voluntary trust on the one hand, or of the final judgments of this Court and the House of Lords on the other, the Lord Ordinary has not the slightest doubt that the sequestrated estate, and all who took part as creditors in the sequestration, are liable to the pursuers for the feu-duties and coal-rents that may be due for these subjects, and that the case, in this respect, has no resemblance to that of Mitchell's trustee, 23d January, 1834 (12 Shaw, 322), referred to by the defenders, and is a much stronger case than that lately decided by this Division of the Court, between the Marquis of Abercorn and Mr Grieve, 16th December, 1835 (14 Shaw, 168).

“Nothing then truly remains to be settled in this action but the nature and description of these acts, which should render individual creditors liable in their several persons for the claims that are indisputably good against the estate of their original debtors; and the Lord Ordinary admits, both that this is a question of considerable nicety, and that in his solution of it, he may appear to have extended the liability of such creditors further than is precisely warranted by the terras of any former decision. He is not aware, however, that he has gone against the principle of any such decision, and on the contrary, he has certainly endeavoured to follow out what he conceived to be that principle, and to apply it to the circumstances of this particular case. The general rule seems to be, that third parties contracting with the trustee, in such a way as effectually to bind the sequestrated estate, are entitled, where the estate is exhausted, to enforce implement of such contracts from the creditors ranked in the sequestration—or, as it is expressed in one or two cases, from the creditors claiming on the estate. But it does not appear to have been necessary in any previous case, to determine distinctly, whether merely claiming, without being ranked, would render a creditor so liable, or, if it would, what sort of claim was required to have this effect; or, finally, whether any compearance or co-operation as a creditor in the business of the sequestration would have the same effect, although no proper claim ever appeared to have been entered? The variety of objections taken by the several defenders in this case has made it necessary, however, now to determine all those points, and the Lord Ordinary shall accordingly state very shortly the grounds on which he has decided all of them against the defenders.

“In the first place, as to the supposed necessity of an actual ranking, it may be enough to say, that if this were held the only criterion of liability, the consequence would be, that no one of the creditors could be made liable in the present case, even although it could be proved that they distinctly authorized or even enjoined and directed one and all of these acts by which the trustee has been found bound to the pursuers; for, by the law and practice of sequestrations, there is truly no ranking of the creditors till a fund has been realized for division, and the trustee makes up his scheme of ranking with a view to its distribution; and it is only after this is done, that any creditor can complain of his exclusion from the scheme, or of the place assigned to him in it by the trustee. But in so far as the personal creditors are concerned, this is a period which never arrived, and never can now arrive in this sequestration, the whole funds having been more than exhausted by the claims of the heritable and preferable creditors, and nothing whatever remaining to be distributed among the others. It is plain, therefore, that if creditors, directly authorizing the trustee to enter into any engagements with third parties, are liable to make them good, the want of an actual ranking can be no bar to such liability, though, in cases where there had been a ranking before such liability was asserted, it was natural to refer to such ranking; not, however, as the ground, so much as the measure of their liability.

“The next point is attended with rather more difficulty. If parties lodge claims on the estate, but do not accompany such claims with regular affidavits and complete vouchers of debt, and if some of those claims are noted by the trustee as defective in these particulars, but not rejected or withdrawn, will such creditors be liable, in respect of having so claimed in the sequestration, and having thus become constituents of the trustee in his lawful engagements with third parties? In answering this question in the affirmative, as to the defenders, by whom it is raised, in this particular case, the Lord Ordinary proceeds upon a very important fact, which is very much at the bottom of his whole decision. One and all of these defenders admit and allege, not only that they truly were creditors, entitled to claim under the sequestration, but that they could have been under no difficulty in establishing the verity and amount of their respective debts in the most incontrovertible manner. If this, however, was the case, it must be assumed that, if there had been any funds for distribution, they would have taken care to supply any deficiency in their productions, and to support their claims by exhibition of the necessary vouchers, and would have drawn their dividends accordingly, as onerous and original claimants in the sequestration. But if this be the state of the fact, and if they deliberately sisted themselves as creditors and claimants, and were entered as such in the sederunts of one or mors meetings, ought they not to be liable along with those who were not in reality more forward in claiming the character of sequestration creditors, but merely supported their claims by more complete or regular instructions? The statute has provided, no doubt, that without the necessary productions, such creditos shall not be entitled to vote. But that is a special precautionary enactment, and does not touch the true ground of a real and claiming creditor's liability for the acts of the trustee. It suspends his active rights as such creditor,—but it by no means follows that it permanently exempts him from the liabilities naturally attaching to his claim and appearance. It suspends his power to act, from a reasonable distrust of his being a creditor at all, till production of the necessary evidence;—but in the ultimate question of his passive liability, the admission that he truly was a creditor, or the offer to prove it, would seem to be sufficient, at whatever time it is made. A true creditor, coming forward with a claim, has always in him a potential and inherent right to vote, and a liability for what is legally done in the sequestration in which he has compeared. But the active right is very properly restricted pro tempore, or till he produces evidence that he is a true creditor; and the moment he produces such evidence, the right again becomes operative, and he votes in respect of his claim. But liability is truly in the same predicament. If he was really a creditor, it was substantially incurred from the moment he appeared and claimed in the sequestration; and it probably could not be enforced (like the right of voting) till the fact of his being a true creditor was established, or admitted by the party interested to deny or disprove it. But there is such an admission as to all the defenders here,—and it is not pretended that there could be any difficulty in proving the fact, if the admission should not be held to be sufficient.

“If a claim is actually rejected by the trustee in such a form as to entitle the party to complain of his judgment, and if, instead of complaining, he acquiesces, or even if, without abiding such judgment, it is formally withdrawn (rebus integris and bona fide), the liability and the chance of benefit may probably be held to be at once extinguished, and the character of creditor to be finally and effectually lost. But where the claim is not rejected or withdrawn, hut remains to be provided for, at least contingently, by the trustee, and ready tn •” made available at any moment, by exhibition of the requisite instructions, it is really nothing to the purpose that the claimant, during that interim, may not be in a condition to vote. If he is truly a creditor, he is, after making his claim, as much entitled to take benefit from the exertions of the trustee as any other creditor, and ought therefore to be as much bound by the engagements into which the trustee may have entered for the prospective benefit of all. From the moment of entering his claim, the trustee is bound to act for him, and whatever his own opinion may be of its justice. u> provide for the chance of its being ultimately sustained; and being thus charged with his eventual interests, it seems no more than just that he should be entitled to bind him subsidiarie to any third parties with whom he may have contracted (or continued) engagements for the benefit of all who not only claimed, but had truly an interest in his administration. In considering so large a question, the conditions and hazard of such third parties is by no means to be overlooked.

“Instead of the individuals with whom they originally contracted, they are compelled to receive an unknown body of creditors with whom they can deal only through the instrumentality of the trustee, who is charged with their interests, and who binds himself personally for nothing. If he offer, however, to continue the contracts of the bankrupts, the other parties to such contracts have generally no power to repudiate, or even to inquire; and upon plain principles of equity, it would, therefore, seem, that if it turns out that he is really charged with the interests of such compearing creditors, in the event of such contracts being for their advantage, he should be equally empowered to bind them where the benefit was the other way.

“The same general views must rule the last, and it may, perhaps, be thought the more doubtful case of those who, though undoubted, and now admitted, creditors of the bankrupt, have only taken part in the sequestration by attending certain meetings of creditors, without having ever actually lodged any written or formal claim as such creditors, A few of the defenders in this action profess to be in this predicament; and, founding on the admitted fact that they were truly such creditors, and that they did appear and take part in that character, at certain meetings under the sequestration, the Lord Ordinary has found that they are equally liable with those who lodged regular claims, for the administration in which they so concurred. Their being creditors is, in all the cases which here occur, matter of notoriety, and never disputed, and their actual compearance in the character of creditors, with the tacit recognition or admission of that character on the part of the trustee and all concerned, has seemed to the Lord Ordinary to import a virtual claim on their part to such character, and such an admission and aggregation of them to the statutory body of creditors for all eventual benefits, as to render them justly liable to an equal share of responsibility in the event of loss.

“As to the more comprehensive argument which was maintained, with more or less confluence by the whole body of defenders, that the adoption of the coal leases or feu-contracts was, in this case, of the nature of a speculative engagement in new mercantile adventures or contracts of hazard, and as such, beyond the ordinary rights or duties of a statutory trustee, and not to be imposed upon creditors without distinct evidence of their individual accession, it appears to the Lord Ordinary that there are two conclusive answers to be made. First, That the point has been already substantially settled by the final judgments of the Court, affirmed on appeal, by which the trustee and the estate have been found to be effectually bound by such adoption, without any limit or qualification whatever; and, second, that considering the known nature and description of the whole subjects which fell under the sequestration in this particular case, it is utterly absurd to represent the retention (or adoption) of the feued lands and coal leases as an embarkati' in new or speculative adventures, or as any thing else than an appropriation of the only funds to which the creditors could look for their eventual payment. The bankrupts, it was universally known, had no personal or moveable property to any noticeable amount, and it is beyond all dispute that these leases and feus wore universally considered for many years after their sequestration, as adding materially to the value of the manufacturing premises, which formed the whole of their available estate. To compare this, therefore, with the cases in which a certain proportion of creditors have in some cases of mercantile bankruptey, engaged in new trading speculations, to the hazard of which those who did not individually accede have not been held committed, is humbly conceived to be altogether perverse and extravagant. Not only did the great majority of the defenders actively and zealously patronize the retention of those feus and leases (and it was never more than a retention), but it is manifest, on the face of the whole proceedings, that, for seven or eight years after the sequestration, no one creditor thought any more of renouncing those leases or feus than of abandoning the iron-works themselves, or withdrawing all claims on the estate. The case, in fact, till the decline of the iron manufacture taught them humbler thoughts, was like the common case of the sequestration of a tenant or landed proprietor, whose whole estate consisted in leases supposed to be of value, or lands, which, though liable to feu-duties, were yet expected to bring large prices. It was never yet imagined that, in the sequestration of such persons, and after very high upset prices had been fixed, by the best attainable advice, on the lands and leases, there was any thing of the nature of a speculation, or new adventure, in the trustee and creditors retaining the only property from which payment was to he expected, or that any creditors acceding generally to such a sequestration could, in the event of ultimate loss, object to what was in fact implied in assuming any possible possession of the sequestrated estate. Considering the known occupation and means of credit of the persons to whom they trusted, it seems to the Lord Ordinary to be mere mockery and affectation in the defenders now to say, that, by claiming under the sequestration, they did not mean to authorize the trustee taking possession of the leases and feued lands, which formed a principal part of the estate of their debtors, and upon which high values were put in public advertisements for many years thereafter. If it were necessary to fix them with the direct knowledge of such possession being taken, the documents in process afford redundant evidence of such knowledge, and of deliberate acquiescence in all that was subsequently done. But, independently of all that, the Lord Ordinary holds, that the known occupation of the bankrupt company, and the nature of the funds on which they had obtained credit, relieves the case of all difficulty, and makes what might have been a questionable renewal of speculative engagements, in some other cases, really nothing more than a necessary assumption of the bankrupt's property, with all its inseparable burdens in the present.

“Those who have claimed, or appeared only as heritable creditors, are probably entitled to be assoilzied, and some questions may be raised by such of the defenders as deny that they represent the original creditors. But, with these exceptions, the Lord Ordinary is of opinion that all the defenders are liable.

“He forbears saying any thing on the reasons which have induced him to find that they must be liable singuli in solidum. He will only briefly suggest, that if they gave any mandate to the trustee to bind them by the adoption of these leases and feus, it could not well be any other than a joint mandate. It certainly was not a mandate by each creditor to adopt such a share of these subjects as might correspond with the debt due to such individual creditor, but a joint mandate by the whole, to adopt the whole subjects. If the mandatory, therefore, cannot implement his part of the delegated contract, the mandants must be jointly and not severally liable. So much for the legal principle; but upon a plain view of the equity, it is to he observed, 2d, That if the third parties who transacted with their mandatory have any claim upon them at all, it would be absolutely inextricable, and practically worth nothing, if they could only enforce it pro rata, against those with whose proportional liabilities they have no means of becoming acquainted. Besides, as it seemed to be admitted that such parties would at all events be entitled to repeat their demands on the solvent creditors, to make up what might prove irrecoverable from the insolvent, it would obviously be not only the fairest course for them, but the most equitable for all parties, to allow them at once to seek their satisfaction from those who are best able to afford it, and to leave them to operate their relief from their correi debendi, with whose situation they had so much better means of being acquainted, and this, in so far as can be gathered from the decisions, seems to have been the rule which has been practically adopted. The plea of a pro rata responsibility appears to have been deliberately rejected in the cases of Wilson v. Magistrates of Dunfermline, 17th May, 1822, and Ellis v. Connel, 26th June, 1822 (1 Shaw, 417 and 529); and also in the more recent case of Brown v. Baird, &c., 2d February, 1833 (11 Shaw, 350). Other earlier cases to the same effect may be found, establishing conclusively that in all cases where parties are bound as joint mandants, they are uniformly liable singuli in solidum. See Anderson, 1726; Chalmers, 1730; French, 1730; (all Mor. 14,706). Walker, 23d November, 1830 (F.C.) Wilson, 10th February, 1813 (F.C., and cases there cited). The case of Macghie in 1785 (Mor. 14,668), referred to by the defenders, related entirely to the pro rata or in solidum liability of partners in a company as inter se, and has truly no application to such a case as the present, as not depending in any degree on the principle of implied mandate, and most certainly the former decision of the Court, on the form of the first summons raised in the present case, was anxiously guarded, so as to leave this question of joint or several liability quite open after all the creditors should be sisted.”

resumed consideration of the debate, with the closed record, productions for the parties, and whole process, repels the objection to the competency of the present action maintained by certain defenders, on the ground of the pursuers having consented to the former trustee being assoilzied from such of the conclusions of the original action against him as inferred his personal responsibility to the said pursuers, in respect that none of the defenders in the present action can be prejudiced by such absolvitor, they being only liable for the consequences of such acts of the said trustee as were binding upon them, by being within his competence as such trustee, and consequently inferring no personal responsibility: And upon the merits of the question, in respect that it is already settled by final judgments of this Court and of the House of Lords, that the claims of the pursuers for feu-duties and coal-rents are legal and valid against the trustee in his official capacity, and against the sequestrated estate under his administration: Finds, lmo, That in so far as these claims cannot be satisfied from the sequestrated estate, they must be made good to the pursuers by the creditors in the said sequestration: And finds, 2do, That all the defenders who now admit or aver that they were (or represented those who were) personal creditors of the bankrupts at the date of the sequestration, and who at any time made claims in the sequestration which were not rejected, or being such personal creditors, did attend meetings of creditors, and take part as such in the proceedings under the said sequestration, are liable jointly and severally to the claims of the said pursuers, for the coal-rents and feu-duties now pursued for, as the amount or value of the same may be ultimately liquidated and adjusted in the course of this process, and that it is no valid defence against such liability that the claims made by such personal creditors were not set forth in regular and formal writings, or accompanied by such unexceptionable affidavits or complete vouchers of debt as might have been necessary to obviate objections which might have been taken under the Sequestration Statute to their right of voting in any such meeting of creditors, but that such liability is to be held as sufficiently established by the fact of their making such claims, and being in any degree recognised as creditors in consequence thereof, or by their attending personally, or by their mandatories at any meeting of creditors, and being recognised as constituent members of such meetings, even though it might not otherwise appear that they had any express claim as such creditors: And before further answer as to the liability of the several defenders, for whom appearance has been made in this action, appoints the cause to be enrolled, that parties may be heard upon the effect of the preceding findings, upon the cases of the said several defenders.”

The defenders reclaimed. Lords Meadowbank and Medwyn having declined judging, in consequence of relationship to some of the parties, Lord Moncreiff was called in to form a quorum, and the Court, thus constituted, ordered cases.

Pleaded for the Pursuer—

The decision in the former action against the trustee constitutes res judicata, as in a question with the individual creditors. He is their mandatory, and as such represents them; ¹ and besides in this particular case, his proceedings were sanctioned by meetings of creditors, and acquiesced in generally by the whole body who were specially warned by the pursuer while the action was still in dependence, that he looked to them individually for payment of the claims insisted for in that action.

2. Even if the question were open there can be no doubt that the contracts of lease and feu were fully adopted, so as to render the creditors liable to implement them. The interim factor and trustee carried on the works, and wrought the Climpy coal, and used the Climpy feus for that purpose, for several months after the sequestration. The trustee took a conveyance from the private trustees, and was infeft thereon. Possession of the subjects of lease and feu was retained by the trustee who drew rents therefrom, for behoof of the estate, for a series of years. In the action submitted to Mr Cockburn, he resisted a declarator of irritancy ob non solutum canonem. The lease and feus were exposed for sale down to the year 1820. This was no mere tentative possession, but a complete adoption of the contracts, whereby the creditors became tenants

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¹ 2 Bell, 305, King, May 25, 1811 (F.C.); Davidson v. Falconer, Dec. 14, 1826 (ante, V. 131); Scott v. Pattison, Dec. 21, 1826 (ante, V. 172); Gibson v. Pearson, May 25, 1833 (ante, XI. 656).

in the lease, and vassals in the feu, and so liable to implement all the obligations of the bankrupt therein. If it could be alleged that the actings of the trustee had been illegal or beyond his powers, it might no doubt be open to such creditors as had not authorized or acquiesced in these actings, to contend that they were not bound; but there is no room for such allegations. The actings of the trustee were clearly within his powers; they were also approved of by meetings of the creditors, and the plea that he had acted beyond his powers, which was expressly pleaded by the succeeding trustee in the appeal case, was over-ruled by the House of Lords, affirming the judgment of the Court of Session, which found him as such liable in consequence of the acts of his predecessor thereby necessarily determining the competency of his acts, which could only affect the trust-estate if competent. This being the ease the whole parties who, either by ranking or otherwise, are to be deemed creditors on the estate must be liable to implement the obligations in the contracts thus legally adopted, ¹

3. This liability is personal on all the creditors. The trustee is their mandatary. He is elected by them. He represents them. It is for their individual benefit that he acts in adopting contracts of the bankrupt or entering into new contracts with third parties for behoof of the estate, and there is no room to distinguish between the case of the bankrupt's contracts adopted and that of contracts entered into for the first time with third parties; or if there were any distinction, it would operate to place the party who had contracted with the bankrupt in the more favourable position, as he has no option, but must submit to the contract, being taken up by the creditors if they so resolve, while it is the third party's own act and deed if he engage with them. Neither is the trustee on a sequestrated estate in a different situation as to this matter from a private trustee, both being substantially the mandataries of the creditors and representing them; but in the late case of Lord Abercorn it was expressly found that a private trustee had subjected the acceding creditors, personally, to the obligations in a feu contract, by adopting it and entering into possession. ² In like manner, in several cases, creditors on a sequestrated estate have been found liable personally for the actings of the trustee, or of general meetings at which they were not present; ³ and it would be a great hardship on parties in the situation of the pursuer, were a different rule adopted. By taking up a contract of feu or lease which had belonged to the bankrupt, the creditors exclude the landlord or superior from disposing of the

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¹ Nisbet's Trustees, Dec. 10, 1802 (M. 15268); Cuthill v. Jeffrey, Nov. 21, 1818 (F.C.)

² Lord Abercorn v. Grieve, Dec. 16, 1835 (ante, XIV. 168.)

³ Wilson v. Scotland, May 17, 1822 (ante, I. 147); Bland v. Short, Jan. 11, 1825 (ante, III. 419); Reid v. Douglas, May 25, 1830 (ante, VIII. 795); Jeffrey v. Brown, June 18, 1824 (3 Shaw's App 349).

subject till perhaps it entirely loses its value, and having thus, for the chance of gain to themselves, subjected him to great disadvantage, it would be contrary to justice to allow them to throw it back on his hands when, it may be, he could no longer make it available for any useful purpose.

4. There can be no doubt whatever that the creditors subject to such obligation as the pursuer contends for must be liable singuli in solidum, and not pro rata. ¹

In addition to special pleas of non-liability applicable to particular creditors or classes of creditors, maintained in separate Cases, but which were not decided upon, it was pleaded for the defenders—

1. The decision in the action against the trustee cannot possibly form res judicata in a question with the creditors as to their personal liability. The conclusions in that action were exclusively against the trustee as such. It was the liability of the estate alone that was at issue, and the trustee did not there represent the creditors individually. If the decree there had been equivalent to a decree against all the creditors, a new action would have been unnecessary, and at all events the action would have been competent against any one creditor without calling the others; while the Court, by finding that all required to be called, have already repelled the plea now insisted on.

2. and 3. Assuming, for the sake of argument, that the lease and feus were adopted by the trustee, this infers no liability on the creditors beyond their interests in the sequestrated estate, the subject of the trust-management established by the bankrupt statute. Creditors may doubtless act as a private association, and as such enter into contracts, and incur liabilities, for which all the creditors will be personally responsible who authorize or sanction such acts. This liability, however, does not arise from the force of the acts of the trustee or creditors, as in themselves binding under the statute on the creditors in the sequestration, but from the actual or implied consent of the individual creditors in a matter beyond the statute. In so far as regards actings under the statute, there is no power in the trustee or meetings of creditors to bind the body of creditors personally or in any way beyond their interests in the estate. The estate may be bound, and the trustee, by taking up the property of the bankrupt, may subject the estate to its full amount, and the interest of every creditor under it, for his liabilities as tenant and vassal, but he has no power to convert a body of creditors into a permanent association as lessees and feuars in perpetuity, personally liable to the full extent of their means and fortunes. Nor can the sanction of meetings of creditors to such acts within his competence alter their character, or give them a

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¹ Ersk. 3, 3, 38; 1 Bell, 346; Tod and Wright, January 31, 1823 (ante, II. 175); Reid v. Douglas, ut supra; Brown v. Scott, July 2, 1833 (ante XI. 350); Wilson, July 10, 1813 (F.C.); Brodie, July 7, 1836 (ante XIV., 1097).

force they would not otherways possess. The trustee is a statutory officer, and though elected by the creditors, it is to an office with statutory powers. If these powers enable him, or meetings of creditors sanctioning his proceedings, to bind the creditors personally, then such parties may undoubtedly be so rendered liable in opposition to their expressed resistance. They may appeal to meetings of creditors, and then to the Court of Session, but if the resolution of the trustee and meeting be confirmed, they are unquestionably bound under the statute; and so, if the statute authorizes a personal liability in consequence of the actings of the trustee or meetings of creditors within their competency, the necessary consequence is that individual creditors may be made liable to the whole extent of their private fortunes against their, will, and for acts which they resisted by every means allowed them by the statute. It cannot be presumed that the statute intended any thing so monstrous, and there are no words in it bearing such a construction. On the contrary, the expressed object of the statute is the realization and distribution of the estate, not the formation of a permanent corporation; and the only extent to which the actings of the trustee and general meetings are legally binding, is to the value of the estate which alone is the subject of their administration. Here it is admitted that the trustee acted within his competence. Indeed it has been so decided by the judgment in the House of Lords in the former action, as otherwise, whatever obligation might have been incurred by the trustee himself personally, or by individual creditors who might have authorized his proceedings, he never could have bound the estate, or himself as trustee. Neither is there any authority in the decisions of the Court for the plea maintained by the pursuer. The case of Lord Abercorn was that of a private trust which depends on totally different principles, and in the only cases having reference to contracts of the bankrupt, the judgments have never carried the responsibility incurred by the adoption of such contracts further than the estate itself, on which, undoubtedly, the claim of the landlord and superior has been held to be preferable. Such and no more was the nature of the decisions in the cases of Nisbet and Cuthill, quoted by the pursuer; and in two others not referred to by him, the liability was expressly limited to the estate. ¹ In all the cases again in which creditors have been found personally liable the circumstances have been totally different. The trustee or creditors, going beyond the statute and not confining themselves to the statutory purpose of taking possession of and realizing the bankrupt estate, in these cases, entered into new contracts in which they were the contracting parties; substantially forming themselves into private associations for profit, in the course of carrying on which they came directly under obligations to third parties, either by themselves or the trustee authorized to

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¹ Ferrier v. Hector, June 28, 1819, and House of Lords, May 22, 1824 (1 Shaw's Appeals, 159); Harvie v. Haldane, July 2, 1833 (ante, XI. 872).

act for them. Of this nature was every one of the cases relied on by the pursuer, and it is material to remark that the creditors there held liable were only such as had authorized, sanctioned, or taken benefit by the proceedings, and also that the trustee was equally with the creditors found personally liable, which he never could be when, as has been found in the present case, he was acting within his competence as trustee. The same rule is further illustrated by the cases of trustees instituting actions or sisting themselves in actions raised previously by the bankrupt, in regard to which it seems now to be settled that for the expenses previously incurred the opposite party, if found entitled thereto, must rank, while as to those subsequently incurred, or as to actions raised originally by the trustee himself, the trustee is personally liable with relief from the creditors. ¹ Nor is there any hardship in limiting the claims of a landlord or superior to the value of the estate. If there were no sequestration he could do no more than exhaust the means of his tenant and vassal, and then eject him under the A. S. 1756, or, in regard to the feu, ob non solutum canonem. If again a sequestration take place and the trustee adopt the bankrupt's lease or feu, he is preferable in the first place for his rents and feu duties till he exhaust the whole estate, and then he has the same remedy of ejection open to him as before. He thus truly suffers no injury to which the nature of his right does not legally subject him; while, if the plea here contended for were sustained, he would, instead of an insolvent tenant or vassal, secure fifty or a hundred responsible tenants or vassals, in a lease or feu perhaps at an inordinately extravagant rent or duty.

4. Creditors on a sequestrated estate, who are united by act of the law, fall mainly to be viewed as joint owners of a common subject, and as such ought only to be liable pro rata, at least in the first instance.

The Court, on advising the several cases, directed (March 7, 1837) the opinions of the other Judges to be taken on two questions thus stated in the following Note of Explanation furnished to their Lordships by the Second Division:—

“The pursuer insists against the defenders, as creditors on the sequestrated estate of the Wilsontown Iron Company, that they are conjunctly and severally liable to all the obligations expressed or legally implied in certain contracts of feu and lease which had been entered into between the pursuer's author, as superior and landlord, and the bankrupt company as vassals and tenants, under which the latter were fully invested and in possession, long before the bankruptcy and sequestration; and which contracts, and the subjects of them, were taken up and possessed as part of the property of the bankrupts, by the statutory trustee in the sequestration. By a final judgment of the Court, February 21st, 1834, affirmed on appeal, it has been determined that the trustee, qua trustee, but not

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¹ Scott v. Pattison, Dec. 21, 1826 (ante, V. 172); Kidd v. Brown, May 17, 1828 (ante, VI. 825); Gibson v. Pearson, May 25, 1833 (ante, XI. 656).

personally, had rendered himself and the sequestrated estate liable to give implement of all the prestations due under these contracts. But the sequestrated estate being entirely exhausted, the pursuer now claims implement from the creditors personally.

“In the voluminous papers lodged, many pleas and arguments are urged upon special grounds, on the one hand, for subjecting all and each of the defenders as creditors in the sequestration; and on the other, for saving or exempting the defenders collectively or individually from such liability. The special pleas now referred to founded on the alleged knowledge and actings of the defenders or their statements on that subject, and on the particular situation of some of them, must of course be considered and disposed of by the Court. But they are of a special nature depending on the statements in the Record and the documents produced, and the Judges of the Second Division do not propose to impose the duty of considering them on the other Judges of the Court.

“But there are two questions raised of so general a nature, and apparently of so great importance in the law of sequestration, that they think they ought to be considered by all the Judges before any decision shall be pronounced upon them.

“1st, It is maintained for the creditors ‘that the trustee, acting within his competence as such, and executing the powers conferred on him by the statute, in taking possession of the property of the bankrupt, can only bind the estate committed to his charge, and that the statute gives him no power, by such act of taking possession of the bankrupt estate, to bind the creditors personally, or to an extent beyond their interest in that estate.’

“This point is fully argued in the revised case for the defenders, William Cadell and others; and though in the revised ease for the pursuer, Kirkland, the argument is a good deal mixed up with the specialities of the case, all that materially applies to the general point seems to be embraced between pages 35 and 71, and more particularly from page 58 onwards of that paper, and from 116 to 123.

“2d, The defenders maintain that, supposing them to be personally liable in respect of the acts of the statutory trustee, they are not liable singuli in solidum, but only pro rata, according to their respective interests, as creditors of the bankrupt estate.

“This point is shortly stated on pages 32 and 33 of the same paper, for Cadell and others, and in the revised ease for Mowbray and others, from page 74 to 79, and on the other side, in the case for Kirkland, pages 113 and 114.”

Several Judges declined in consequence of relationship to parties in the cause. By the others the following opinions were returned.