BAILII is celebrating 24 years of free online access to the law! Would you consider making a contribution?
No donation is too small. If every visitor before 31 December gives just £5, it will have a significant impact on BAILII's ability to continue providing free access to the law.
Thank you very much for your support!
 |
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback] | |
Scottish Court of Session Decisions |
||
|
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> James Wylie v. The Heritable Securities Investment Association (Ltd) [1871] ScotLR 9_184 (22 December 1871) URL: http://www.bailii.org/scot/cases/ScotCS/1871/09SLR0184.html Cite as: [1871] ScotLR 9_184, [1871] SLR 9_184 |
||
[New search] [Printable PDF version] [Help]
Page: 184↓
Where there were inserted in a bond and disposition in security two clauses, the one entitling the creditors, upon any of the monthly instalments of the loan falling into arrears for two months, to remove the debtor and his tenants from the possession and occupancy of the subjects, and to enter into possession of them themselves, and that one month after intimation of their intention to do so, made by letter under the hand of their manager, without any warning or legal process whatever; and the other clause, declaring that upon the same failure to pay for two months, and one month intimation, as aforesaid, “all interest in and right and claim to the said property competent to the debtor should be forfeited ipso facto,” and the creditors should be entitled to sell forthwith, “without farther premonition or other process of law,” any law or practice to the contrary notwithstanding:—
Held (diss. Lord Ardmillan), on appeal, in a summary petition for removing in the Sheriff-court, founded upon the first of these clauses, against the debtor, who was in the natural possession of the subjects, that the action was incompetent in the Sheriff-court, because decree in the removing could not be given without deciding that the obligation in question was valid and effectual, and without determining several other questions of heritable right which were proper subjects of a declaratory action in the Court of Session; and because it was incompetent for private parties to invest a judge with a jurisdiction against the law.
Opinion by Lord Cowan, that it is illegal for parties by private paction to dispense with the established executorials of the law, and that therefore the clause in question was illegal and invalid.
Opinion by Lord Benholme, that the action was incompetent in the Sheriff-court as an “extraordinary removing.”
On April 18, 1867, James Wylie, grocer and spirit merchant in Armadale, near Bathgate, granted to the Heritable Securities Investment Association (Limited) a bond and disposition in security over his premises there for the sum of £550 sterling. By this bond and disposition he bound himself, his heirs, executors, and successors
Page: 185↓
whomsoever, to repay to the Association, within their office in Edinburgh, “the sum of £9, 1s. 6d. sterling, each and every month during the period of six years from and after the date of delivery of these presents, and that in full repayment of the said sum of £550, and interest thereon, provided the said monthly instalments are regularly paid on the dates when they respectively become payable, said monthly payments or instalments being always due and payable on the first Monday of each month from and after the date hereof, beginning the first payment or instalment on the first Monday of May 1867, for the sum due betwixt the date of delivery hereof and the 31st day of the said month of May; the next monthly instalment, being £9, 1s. 6d., on the first Monday of June 1867, and that for the month ending 30th June 1867, and so on thereafter on the first Monday of each month respectively, until the end of the said period of six years, together with interest as after mentioned in case of failure in the punctual payment of the said monthly instalments, viz., interest on each instalment, at the rate of five per cent, per annum, for any period less than one month that the same remains unpaid, and at the rate of ten per cent, per annum for any period exceeding one month, and less than six months, that the same remains unpaid, and at the rate of fifteen per cent, per annum for any period exceeding six months that the said monthly instalment remains unpaid, with one-fifth part more of each monthly instalment of liquidate penalty, in case of failure in the punctual payment thereof.” The said bond and disposition thereafter proceeded—“And further declaring that nothing herein contained shall be held to affect the right and power of said Heritable Securities Investment Association (Limited), in the event of one full monthly instalment remaining at any time unpaid, to take all proceedings against me or my successors competent by the law of Scotland, by diligence or otherwise, for enforcing payment of whatever sura, whether the whole or a balance, may at the time be due of said principal sum and interest then due, and thereafter to become due thereon; and it is further hereby declared that the amount, whether the whole] or a balance, then due and payable as aforesaid, shall, for the purpose of such proceedings, be competently ascertained by a certificate under the hand of the manager for the time being of said Association; and I accordingly bind and oblige myself and my foresaids to make payment to the said Heritable Securities Investment Association (Limited), or their foresaids, of whatever sum may appear by said certificate to be so due and payable, with the interest thereafter to become due thereon; and in security of the personal obligations before written, I dispone to and in favour of the said Heritable Securities Investment Association (Limited), and their successors and assignees whomsoever,”— (Here followed the disposition of the subjects conveyed in security, with an obligation to insure and maintain in repair, c.)
There then followed the clauses upon which this case more particularly depended:—“And I assign and convey to my said disponees the rents of the said subjects, with power to them and their foresaids, in the event of any of the said monthly instalments falling into arrear for two months, to remove me or my tenants from the possession or occupancy of said subjects, and to enter into possession thereof themselves, to let the same, and to draw the rents thereof, and that one month after a letter, under the hand of the manager or law-agents of the said Association for the time being, has been addressed to me intimating the intention of the said Association to remove me, as aforesaid, without any warning or legal process whatever, and a certificate under the hand of the said manager or the law-agents for the time of said association, that such letter was delivered to me or put into the post-office bearing my own address, shall be legal evidence of said intimation, declaring that my said disponees, in the event of their entering into possession of said subjects, shall not be liable for waste rents or insolvent tenants, or be bound to do exact diligence; and I also assign to my said disponees the writs and title-deeds, and I grant warrandice, and on giving two months' notice to the manager for the time being of said Heritable Securities Investment Association (Limited), it shall be competent to me, at any time during the currency of said six years, to redeem the said subjects by making a single payment to the said Association of the whole sum, and interest due and payable at the time, as the amount of such single payment may be specially arranged with the said directors, all in terms of the rules of said Association, a printed copy of which is subscribed by me of equal date herewith, as relative hereto; but declaring always, as it is hereby specially provided and declared, that if at any time I shall allow one monthly instalment to remain unpaid for two months after the date of payment thereof, then, and in that event, on the expiry of one month after notice shall have been sent to me by the manager or law-agents of said Association, all interest in and right and claim to the said property hereby disponed competent to me shall be forfeited, ipso facto, which failure or neglect to pay to said extent shall be held to be fully and legally instructed by a certificate under the hand of the manager of the said Association for the time being, and a similar certificate under the hand of the said manager shall be legal evidence of the foresaid notice having been sent to me; and the said Association, or the directors thereof, shall then be at liberty, without any further premonition to me, or other process of law, forthwith to advertise the subjects above disponed for public sale in such newspaper or newspapers, and for such number of times as the directors of said Association shall think fit, and thereafter to sell the said subjects for whatever price the same may bring, any law or practice to the contrary notwithstanding, and my said disponees are hereby authorised to execute articles of roup, to adjourn the sale from time to time, giving such advertisement as said directors shall think proper, and to grant absolute and irredeemable dispositions to the purchasers of said subjects, binding me in absolute warrandice; Which articles of roup and disposition and conveyance shall be held as valid and effectual as if executed by myself, but I bind and oblige myself to concur therein if required.”
The said James Wylie allowed the monthly instalment of £9, 1s. 6d., due and payable by him to the Heritable Securities Investment Association on the 7th day of October 1867, to fall into arrear, and remain unpaid, and also the monthly instalments of £9, 1s. 6d., each due and payable by him to the Association upon the following dates respectively—4th November 1867, 2d December 1867, 6th January 1868, 3d February 1868, and 2d March 1868, to fall into arrear and remain unpaid for more than two months after they respectively became payable, and all subsequent instalments of
Page: 186↓
the said debt remain due and unpaid. On the 23d day of January 1869 Andrew Paterson, manager and for behoof of the Association, intimated to the said James Wylie, by despatching to him through the post office a letter addressed to him at his residence at Armadale, that unless the arrears of said instalments then due by him should be paid by the end of one month subsequent to the said last mentioned date, the Association intended to remove him from the possession of the foresaid subjects disponed by him to them in security as aforesaid, and themselves to enter into possession of said subjects, to let the same, and draw the rents thereof, and that without any other warning or legal process whatever, and thereafter sell the said subjects for whatever price the same might bring. The said James Wylie was sequestrated on 15th January 1868; and William Roberts, auctioneer in Bathgate, was, after the usual steps of procedure, confirmed trustee on his estate on 4th February thereafter. The Association made intimation to the trustee of the existence of the said bond and disposition in security, and of Wylie's failure to pay the foresaid instalments, but the trustee declined to have anything to do with the subjects disponed in security to the Association, as there could be no reversion therefrom to the creditors. They also intimated to the said William Roberts their intention to remove Wylie from the subjects in question. The said James Wylie was discharged under the said sequestration, but he has not been retrocessed into his estate. As Wylie remained in the occupancy of the premises, which consisted of his shop and dwelling-house, and refused to remove from the same, the Heritable Securities Investment Association, in June 1870, presented to the Sheriff of Linlithgow a petition, directed against the said James Wylie and his trustee William Roberts, setting forth the circumstances and the terms of the bond, and craving the Sheriff to grant warrant for “summarily ejecting and removing the said James Wylie, respondent, his wife, bairns, servants, and dependents, goods and gear, furth and from the said dwelling-house, situated in Armadale aforesaid, occupied by the said James Wylie as aforesaid, and forming part of the said subjects conveyed in security as aforesaid, to the effect that the petitioners may deal therewith in terms of the said bond, and to find the respondent the said James Wylie, and also the said William Roberts, in case of his opposing the prayer hereof, liable in expenses, and to decern therefor; or to do otherwise in the premises as to your Lordship shall seem proper.” The petitioners pleaded—“(1) The respondent James Wylie having failed to pay the monthly instalments at the dates when they respectively became due, as stipulated for and agreed to in said bond and disposition in security, the petitioners were entitled to remove the said James Wylie and his tenants from the occupancy and possession of the foresaid subjects, to enter into possession thereof themselves, to let the same, and draw the rents thereof, in the manner prescribed by the said bond, and herein set forth. (2) The respondent James Wylie having been sequestrated and not retrocessed into his estate, all interest in the said subjects belongs to the trustee on his sequestrated estate for behoof of his creditors, and the trustee having declined to interfere with the subjects of security, decree ought to be pronounced in accordance with the prayer of the petition.”
The respondent, besides several pleas founded on an alleged state of matters disproved by the evidence, also pleaded—“(4) This removing, being of an extraordinary nature, is incompetent in the Sheriff-courts; and (5) This action involves questions of heritable right, and is therefore incompetent in the Sheriff-court.”
The Sheriff-Substitute ( Home) on 9th December 1870 pronounced the following interlocutor:—“In respect that the removal sought for in this action is grounded upon a conventional irritancy contained in a disposition to land, and involves the question, not only as to the right to possess said land, but also as to the property of the same, and requires solemn investigation into whether said irritancy has been incurred, and declarator of the same, Finds that the action is incompetent in this Court, and sustains the defender's pleas in law thereanent: Finds also that the clause in said bond and disposition referred to does not give the petitioners the power of ejecting the respondent de claro, but only removing him therefrom if the said irritancy has been incurred, and that therefore the action should have been one of removal in ordinary form: Therefore, on these two grounds, dismisses the action—reserving to the petitioners to bring their action against the defender as accords of law.
“Note.—The Sheriff-Substitute was inclined to think at first that this removal was competent in the Sheriff-court, as being one founded only on a conventional irritancy contained in an ordinary agreement between the parties, and there is no doubt that the said parties themselves meant that the obligation should be enforced in as summary a way as possible. On farther consideration, however, he is of opinion that the irritancy is so connected with an heritable deed, and relates so closely to the depriving of the defender, not only of the possession, but of the property also, of the lands in question, and therefore in a high degree penal, that something like a declarator thereof, or a finding at least, after a solemn and regular investigation as to whether the irritancy has been incurred or not, where this is denied, as in this case, is necessary, and consequently, that the action of removal thereon must either be raised in the Supreme Court, or, if in the Inferior Court, that it must be not in a summary way by petition, but by way of an ordinary action and summons, although now-a-days not so much stress is laid on the difference between the one form of action and the other. See case of Nisbet, Jan. 12, 1866; and, on the whole matter, Barclay's M'Glashan, p. 40.”
The petitioners appealed to the Sheriff ( Monro), who, upon 21st December 1870, pronounced the following interlocutor:—“Recals the said interlocutor: Repels the plea that the petition as laid is not within the jurisdiction of this Court: Finds that the summary petition is a competent form of raising the present action: Allows the parties a proof, before answer, of their respective averments on record, so far as not admitted, and to each party a conjunct probation: Grants diligence against havers to both parties for recovery of writings in support of their respective averments, and remits to the Sheriff-Substitute to proceed with the said proof and whole cause.
“Note.—The question above decided is one of very general application, and is of considerable importance. The power of removal of the debtor in the event of his falling into arrear of his instalments is commonly inserted in bonds granted to such Associations as that of the pursuers; and, unless a summary procedure in the Sheriff-court is
Page: 187↓
competent, the power can scarcely be promptly and effectually exercised. The Sheriff has jurisdiction to enforce agreements as to the possession of heritage; and the present action is raised to enforce a conditional agreement to remove. There is no irritancy of the proprietary right. The foregoing intent does not affect any question of jurisdiction which may emerge in the course of the cause. “The following cases are important, both on the question of jurisdiction and as to the summary form of action:— Nisbet v. Aikman, Jan. 12, 1866, 4 M'Ph. 284; Williamson v. Johnston, Dec. 23, 1848, 11 D. 332; Gordon v. Grant, June 22, 1848, 10 D. 1385.
After a proof was led in terms of this interlocutor of the Sheriff, the Sheriff-Substitute found that the defender had forfeited his right to retain any longer possession of premises as against the petitioners under the said condition of the bond, and that the petitioners, on the other hand, had acquired right by the same to remove him summarily therefrom, and to take possession themselves. He therefore decerned in the removing against the defender James Wylie, and against the other defender William Roberts, as trustee on the said James Wylie's sequestrated estate, in absence, as not having entered appearance in the action, from the premises in question, in terms of the prayer of the petition; and failing their so removing therefrom within fourteen days from the date of the interlocutor, he granted warrant to eject the said defenders James Wylie and William Roberts, as trustee foresaid, with all the defender's goods and effects, in terms also of said prayer.
The Sheriff adhered on appeal, and the respondent appealed to the First Division of the Court of Session.
The case was argued at the close of the Summer session, but on November 3d the Court intimated that they intended to put it out for argument before seven Judges, as it was a case of importance and contained points of novelty and difficulty, which had not been sufficiently noticed in the previous debate. These points were stated to be in particular—1st, As to the irritancy in the bond—whether it was one of those irritancies which the Court was bound to enforce in its terms, the competency of the Sheriff-court to declare it being of little importance compared with the competency of the irritancy itself; 2d, as to the preferable execution attempted to be given to a particular creditor,—whether such preference was lawful?
The case was accordingly reheard by the First Division, with the assistance of Lords Cowan, Benholme, and Neaves.
Fraser, Scott, and Strachan for the appellant.
Solicitor-General and Kinnear for the respondents.
Argued for the appellants—1. The provision in the bond, upon which the respondents found, is an irritancy. 2. It is one which the Court ought not to enforce, looking at the deed itself, and to the rights of other parties, for it cannot be looked upon as a matter personal to the debtor and creditors, but the object is to give the creditor a right against the world, and all other creditors whatsoever. If this was upheld, what more oppressive power could be devised, and what chance would other creditors have of fair competition? 3. At any rate it is an irritancy which the Sheriff is not competent to enforce.
Authorities—Bell's Lectures, p. 1075; Forsyth v. Aird, Dec. 13, 1853, 16 D. 197; Blair v. Galloway, Dec. 21, 1853, 16 D. 291; Waterston v. Mason, June 30, 1846, 8 D. 944; Macfarlane v. Campbell, March 4, 1857, 19 D. 623; Williamson v. Johnston, Dec. 23, 1848, 11 D. 332; Miller v. Carrick, March 29, 1867, 5 Macph. 724; Nesbit v. Aikman, Jan. 12, 1866, 4 Macph. 284; Forrester, June 27, 1815, F.C. (Lord Meadowbank's opinion); Campbell of Blythswood, May 28, 1823, 2 S. 341, 6 S. 679, and 1 W. and S. 690; Heriot's Hospital, M. 12,857, 3 Paton 674; Stair iv, 18, 3, i, 13, 14, and iv, 5, 7; 31 and 32 Vict. 101, § 13.
Argued for the respondents—The portion of the subjects of which the Heritable Securities Investment Association propose to take possession is in the natural occupation of their debtor. They propose to do so in virtue of the clause of removing in their bond. The security and rights of a heritable creditor depend upon the contract with the debtor. In the case of a bond and disposition in security, conceived in the ordinary form, the creditor has certain known remedies. The creditor has a debt by reason of the bond and disposition, which is made a debitum fundi. He has also an assignation to the rents, and a power of sale. The first gives him the ordinary execution competent to a creditor in a debitum fundi, i.e., he may poind the ground. This is the only way of ordinary diligence by which he can proceed when the debtor is in the natural possession of the subject. But when the subjects are in the possession of tenants, then the creditor has another right in respect of the assignation to rents. That entitles him to an action of maills and duties. The third and most important right or remedy is the power of sale in the event of non-payment. This was thought at one time a power inconsistent with the ordinary rule of law. It has since been upheld as a legal power enforceable by the Court.
All these remedies are limited in this respect, that though you may attach the rents and sell the property, you still cannot reach, except by poinding of the ground, the subjects which are in the natural possession of the debtor. That being so, the debtor and creditor here have entered into a special stipulation applicable to that emergency. The creditor has stipulated that as part of his security he shall have a right to the possession of the property in the natural occupation of his debtor immediately on demand. If any part of the subjects is let, he must proceed by maills and duties in the ordinary way. But in respect to that portion occupied by his debtor he may surely deal with him thus—He may say to his debtor, I will not lend to you, because a large part of your property is in your own possession. What I stipulate for is, that if I am to lend to you at all, I shall, at the time the loan is made, be put in possession of the subjects, so that I may have, not a mere debitum fundi, but the actual possession and administration of the property. It is quite intelligible that a creditor might refuse to deal on any other footing with some debtors. But, then, it may not be convenient to the borrower to part with possession at the time. He may say, however,—I will give you a stipulation binding me, that when I am in arrear with my interest I will go out of possession and surrender it to you. There is nothing very unusual or out of reason in this. It is not easy to see why, if a creditor can sell as mandatory or commissioner of his debtor, and thus effectually put him out of possession, he should be debarred from stipulating that, instead of selling, he should be entitled to enter into possession himself. The
Page: 188↓
idea involved in such a stipulation is not half so illegal and oppressive as that involved in the power of sale. The next step in the argument, however, is this—It is said to be an extravagant power conceded to the creditor, and one which the Court must not enforce, that the amount due or in arrear should be settled by a certificate under the hand of the creditor's manager. But this is not an unusual condition in such bonds. It is not supposed to be absolutely conclusive against the debtor. The condition of its coming into play is that certain instalments should be overdue, and the evidence whether or no this be so is in the hands of the debtor. The Sheriff has immediate means of verifying whether the certificate is true or not. Even if any malpractice did escape notice, the whole can be set right by reduction. The whole object of the obligation being to secure the possession, not to interfere with the property, there is nothing unreasonable either in the stipulation itself as to the possession, or in that as to the ascertainment of the amount due. “With regard to the clause of forfeiture of the property, any contention that it could be enforced in its terms must be disclaimed. What is contended for, namely, that the lender is ‘to obtain possession in an event which has happened, does not imply any forfeiture of property, and is quite independent of that stipulation.
But how is this obligation to be enforced by the creditor? There is no way except by petition presented to the Sheriff. If declarator of irritancy were required, the Court of Session would be the only Court competent. But no such declarator is required, for it is not contended that any forfeiture of; property has been incurred. The debtor is bound, at the demand of the creditors, to quit possession. He has declared in the bond that, to the extent at least of the creditor enforcing his security to this effect, every right of his is irritated on a certain event. What, then, is the creditor to do to get possession. He cannot proceed at his own hand without warrant. He must take the aid of the law. So far as possession goes, every right of the debtor is irritated. He has just put himself in this position, that when the creditor chooses to enforce his right he is to be dealt with as having no title to possess at all. It is a matter which can settled by agreement, and the debtor cannot plead his title as proprietor against the creditor in this obligation. The application to the Sheriff was therefore competent, and not only so, but the only means competent to the creditor to obtain his end.
At advising—
The petitioners are heritable creditors, holding a real security over the subjects for an advance of £550, declared to be payable by instalments of £9, 1s. 6d., each and every month during the period of six years. It is in the exercise of their alleged power under this bond that they seek to have judicial authority and warrant for “summarily ejecting and removing” the appellant, “his wife, bairns, servants, and dependants, goods and gear, forth and from the” subjects occupied by him, “and forming part of the said subjects conveyed in security as aforesaid.” The application is directed, not merely against the debtor in the bond (the appellant), but also against the trustee on his sequestrated estate—whose right to the subjects, and the possession of them for behoof of the general creditors of the bankrupt, is, by the terms of the petition, brought directly under challenge.
The heritable bond contains the usual executorial clauses in the event of non-payment of the stipulated sum at the terms when due, with a power of sale; but, farther, it contains two clauses or conditions altogether novel and unexampled in such securities.
One of these clauses confers power on the creditors, “in the event of any of the said monthly instalments falling into arrear for two months, to remove me or my tenants from the possession or occupancy of said subjects, and to enter into possession thereof themselves, to let the same, and to draw the rents thereof; and that one month after a letter, under the hand of the manager or law-agents of the said Association for the time being, has been addressed to me, intimating the intention of the said Association to remove me as aforesaid, without any warning or legal process whatever; and a certificate, under the hand of the said manager or the law-agents for the time of said Association, that such letter was delivered to me or put into the post office bearing my known, address, shall be legal evidence of said intimation; declaring that my said disponees, in the event of their entering into possession of said subjects, shall not be liable for waste rents, or insolvent tenants, or be bound to do exact diligence.”
The other clause declares that, upon the lapse of the same period of two months without payment of one monthly instalment, and the expiry of one month after intimation,—precisely as provided in the first clause,—“all interest in and right and claim to the said property hereby disponed competent to me shall be forfeited ipso facto;” and the creditors are declared to be then at liberty, “without farther premonition or other process of law,” forthwith to advertise the subjects for sale, and to sell the same, “any law or practice to the contrary notwithstanding.”
It is under the first of these clauses that the present application is professedly brought; and the warrant craved is for the removal of the appellant from a part of the subjects not let to tenants, but in his own occupancy.
In reference to preliminary pleas stated for the appellant to the competency of the procedure and jurisdiction of the Court, the Sheriff-Substitute, by his interlocutor of 9th December 1870, dismissed the action on two grounds, afterwards noticed; but this interlocutor was recalled by the Sheriff on 21st December 1870. The cause was subsequently disposed of on its merits by interlocutors adverse to the appellant.
In the argument addressed to the Court under this appeal, various important questions, affecting the competency of the summary procedure thus resorted to by the respondents, appear to me to arise for judicial consideration.
The first of these questions is the legality of parties, by private paction, dispensing with established law and practice, in reference to the enforcement of the real security constituted by their bond, i.e., dispensing with action of maills and duties where the subjects are in possession of tenants, and with poinding of the ground where the owner himself is in possession; and in either case with the process of adjudication; and arranging for themselves a mode of procedure hitherto unknown
Page: 189↓
The deeply-seated constitutional principles on which this doctrine was held applicable in the case then before the Court were fully explained in the case of Forrester, June 27, 1815, F.C., and especially in the opinion of Lord Meadowbank. The Bank of Scotland had there stipulated that the debtor should not be entitled to his legal remedy of suspension, except on consignation of the amount due by the bond, to be certified by their cashier or accountant. The debtor had consented to this; but the Court held it to be an illegal stipulation, interfering with the usual course of legal procedure. Other instances of the same kind have occurred, and been similarly dealt with by the Court. Mr Bell, in his Commentaries (vol. i, p. 382, last edition), referring to the decision in the case of Forrester, which he says was very deliberately considered, states that the provision that no suspension should be competent, unless upon the consignation of the balance, “is not a legitimate or an effectual stipulation.” And in the subsequent case of Gilmour, 9 S. P. 907, Lord Moncreiff (Ordinary), whose interlocutor was adhered to, states in his note—“The Lord Ordinary considers it to be a settled point that such a clause is not effectual.” Now, it is surely a grave question, requiring deliberate consideration by the Supreme Court, whether the stipulation here sought to be enforced, by the most summary of all procedure, does not fall under the principle which ruled this class of cases, and within the maxim commented on by Lord Stair (b. i, t. 17, § 14), pacta privatorum non derogant juri communi.
More especially must the necessity of this course be apparent, when it is remembered how greatly the interest of other parties, creditors of the debtor, may be affected by this private consensual arrangement, and how far that equality among creditors doing diligence against their debtor's estate, provided for not less by statute than at common law, may be disturbed, if not destroyed. No publicity is to be given to the defalcation of the debtor, or to the intimation made to him by his creditor; and no process or procedure at law whatever is to be followed. While other creditors are prosecuting their diligence in due course, the creditor in a bond with such a provision as this is to be entitled to dispossess the owner at once and de piano. That is the basis of this application. It is made to the Judge Ordinary only because the debtor has not complied with the private requisition made on him to get out of the premises. And with this view I am the more impressed because of the petition having been directed against the trustee for the general creditors of the bankrupt, against all of whom this consensual arrangement is asked to be enforced. It does not matter that no appearance was made for the trustee, and that he is decerned against in absence. The application in its prayer is demonstrative of its true nature and proposed effect.
Again, this clause relates to property, but in substance there is really no difference had the consent been with regard to the attachment of the debtor's person. For example, a consensual stipulation that the debtor should go to prison on the day when payment should have been made; so that the creditor, on the last of the days of grace where the debt is constituted by bill, or on the very day of a bond becoming due, might have instant warrant of incarceration of his debtor. Say that it was matter of arrangement that this should be in the creditor's power, without any charge for payment on letters of horning and caption—would such a clause be held binding? Yet that is the kind of case raised by this application.
These views lead me to observe, that when the Sheriff-Substitute, who refused to entertain the application, found that the removal sought involved the question, not only as to the right to possess, but as to the property of the subjects, and required solemn investigation by the Supreme Court, and was therefore incompetent before him,—he formed a just appreciation of the true nature of the application. A summary ejection process before the Judge Ordinary is the remedy open to a proprietor against parties who have taken possession of a subject without right or title, and are in truth mere squatters. The petitioners are not in the position of owners in any sense so as to justify such an action—unless indeed it is to be held that, under the second clause in this bond to which I have referred, there was, on account of the defalcation of the debtor to pay for two months and the intimation of one month longer, ipso facto forfeiture of his whole interest in, and right and claim to, the property,—which, however, the counsel for the petitioners was at pains to disclaim as not at all within the argument. Still, it does appear to me,—although this view may not be necessary for our present decision,—that by that there is great room for contending that the one clause in this bond cannot be dissevered from the other; and that a question of irritancy arises, not merely of the debtor's right to possess, but of his right to and interest in the subjects themselves; and if this be so, then, as involving the effect of the clauses imposing such conventional irritancy, the Supreme Court alone is the Court to which recourse must be had for its enforcement, assuming the provision in itself to be entitled to legal effect. No Inferior Court can give effect to a conventional irritancy.
On all these grounds, I am of opinion that the interlocutor of the Sheriff should be recalled, and that of the Sheriff-Substitute, of 9th December 1870, substantially adopted, finding the petition incompetent, at all events in the Sheriff-court; and this result appears to me to be supported by the decision in the very analogous case of M'Farlane v. Campbell, March 4, 1857, 19 D. 623.
Page: 190↓
The deed by which the property is conveyed is set forth in the petition to the Sheriff. The condition of the loan was that the debtor was to have six years to repay the money by monthly instalments, but there is a clause to the effect that if he fails to pay any one of these monthly instalments for a period of two months, certain consequences are to follow.
There is to be 5 per cent of interest paid upon the arrears for the first month, 10 per cent if the period is between one month and six months, and 15 per cent if the period is allowed to run for more than six months; and there is a condition, moreover, that, failing payment within two months, the creditor is entitled to give a written notice of one month, and, at the expiry of that time, to enter into possession of the subjects whether in the natural possession of the debtor or let to tenants, for that is plainly the import of that part of the clause to which I am now referring—“I assign and convey to my said disponees the rents of the said subjects, with power to them and their foresaids, in the event of any of the said monthly instalments falling into arrear for two months, to remove me or my tenants from the possession or occupancy of said subjects, and to enter into possession thereof themselves, to let the same, and to draw the rents thereof, and that one month after a letter, under the hand of the manager or law-agents of the said Association for the time being, has been addressed to me, intimating the intention of the said Association to remove me as aforesaid, without any warning or legal process whatever.” The further consequences are to be—“If at any time I shall allow one monthly instalment to remain unpaid for two months after the date of payment thereof, then, and in that event, on the expiry of one month after notice shall have been sent to me by the manager or law-agents of said Association, all interest in, and right and claim to the said property hereby disponed competent to me shall be forfeited, ipso facto, which failure or neglect to pay to said extent, shall be held to be fully and legally instructed by a certificate under the hand of the manager of the said Association for the time being, and a similar certificate under the hand of the said manager shall be legal evidence of the foresaid notice having been sent to me.” Now, the petition which was presented to the Sheriff is founded upon the narrative of this bond; and it was set forth that these instalments were still due, and being still due and unpaid, “the said petitioners gave the intimation prescribed by the said bond to the respondent the said James Wylie, and exercised the powers of entering into possession of the foresaid subjects, in respect of the non-payment of said arrears, as aforesaid, all in terms of the said bond, which is herewith produced and specially referred to, and also the certificate of intimation to the said James Wylie, respondent, under the hands of Andrew Paterson, manager of the said Heritable Securities Investment Association (Limited), dated 14th May 1870, also herewith produced.”
Your Lordships will observe that what is set forth there is, that the power of entering into possession had been exercised. There is no prayer in this petition to be authorised to exercise the power. The statement is that the powers have been exercised by entering into possession; and what the prayer asks is not to confer any power, but to give the petitioner the aid of the officers of the law in keeping them in their possession, and enforcing the possession which they have taken at their own hands; and which, if they were right at all, they were entitled to take at their own hands. The petition goes on to say—“That the said James Wylie wrongfully and unwarrantably remains in the occupancy of the shop premises forming part of the said subjects, and of the dwelling-house above said shop premises, being part of the subjects conveyed in security by him as aforesaid, and refuses to remove from the same, although he has no right to remain therein; his right to possess the same has terminated under the foresaid clause of said bond and subsequent intimation, and the present proceedings have been rendered necessary;” and the prayer of the petition is—“May it therefore please your Lordship to appoint a copy of this petition, and of the deliverance to follow hereon, to be served on the said James Wylie and the said William Roberts, trustee foresaid, and thereafter to grant warrant for summarily ejecting and removing the said James Wylie, respondent, his wife, bairns, servants, and dependents, goods and gear, furth and from the said dwelling-house, situated in Armadale aforesaid, occupied by the said James Wylie as aforesaid, and forming part of the said subjects conveyed in security as aforesaid, to the effect that the petitioners may deal therewith in terms of the said bond, and to find the respondent the said James Wylie, and also the said William Roberts, in case of his opposing the prayer hereof, liable in expenses.” It is therefore an application upon the footing that the petitioners have done things which they were entitled to do, and they call in the aid of the officers of the law summarily to eject the respondent, to the effect that he be dealt with in terms of the bond, which undoubtedly, according to the words of it, includes forfeiture, not only of his right of possession but of his right of property. It follows that the Sheriff was called upon to consider the whole questions that might arise under this bond, and the whole consequences which might result from this exercise of the power
Page: 191↓
Page: 192↓
Now, that being the real nature of this petition, the question is, Whether a petition that asks for possession against a debtor in a heritable bond, who is the proprietor in the natural possession of the subjects, is one that can be supported in the inferior court? In considering this question of jurisdiction (for such I think this case ought to be considered), it does not fall to us to decide by anticipation whether, if an action similar to this were brought in the superior court, it would be a good demand; and I do not mean to say one word about that. If a declarator were brought, or some other mode of bringing it before us were resorted to, I think it is matter of indifference to the present question whether that would or would not be a legal demand. The point for our consideration is whether such demand can be made in the inferior court. My opinion is that such a demand is not competent in the inferior court. I think it is a pure question of jurisdiction. I do not anticipate what the effect of this unusual clause might be if it was brought before the superior Court in proper form. It certainly is a very unprecedented form of procedure, and I don't know that there has been any heritable bond of exactly the same kind brought under the notice of the Court. But I think it is a question of pure jurisdiction, and as such I shall consider it. I think it very plain that this is of the nature of an extraordinary removal. It is extraordinary in this respect, that it is unprecedented; but further, it is extraordinary in the extreme severity of the procedure. The effect of this petition, if it had been acceded to, would be to authorise those parties to enter into possession and to remove the proprietor, and to enable them to let the subjects and draw the rents; for these are the consequences, that I think are referred to in the prayer of the petition as to dealing with the lands in terms of the bond. I don't think the words mean that they are to deal with the subject as having changed its property, but merely that the possession shall be changed, and that the right of letting to new tenants shall be held to have been given to the new possessor. Now, that is a very serious matter, and I take leave to observe that the clause in the original bond, although it is not insisted in exactly to the extent to which it goes, gives them power to remove tenants, which I should say is utterly illegal. A tenant has a nineteen years' lease, and in consequence of the failure of his landlord to pay the interest on the bond, it is supposed that the creditor may turn him out. That is a very extraordinary result. The petition does not enforce that claim against any tenant; it confines it to the proprietor. But the clause itself goes that length, and although it is restricted merely to the natural possessor—viz., the proprietor, this clause certainly takes a very extraordinary power to itself in asking it against him. But an extraordinary removing undoubtedly in the ordinary case belongs to the Court of Session, and my view upon that matter has been very much strengthened by the case of Macfarlane v. Campbell. I had some doubts originally, but they have been entirely dispelled by referring to that case. It differed from the present case in regard to the conception of the clauses in the bond. The clause in that case did not entitle the creditor, upon the default of his debtor, to remove the proprietor; it was a clause which gave him power to remove possessors; and the argument was, that that must apply not only to tenants or squatters without any good title of possession, but also to the proprietor himself, although he had a good title. An argument was urged that such a clause did not even ex facie entitle the creditor to extrude the proprietor; but the Court proceeded upon the footing that the clause might be held to extend to the proprietor, the natural possessor; and, in short, that the clause in that bond might be interpreted to mean that which the clause in the present bond bears on its face. The decision in the case of Macfarlane went upon the footing of supposing that the clause was intended, and might be interpreted to extend to the proprietor as the natural possessor. The decision was not put upon any want of words in the clause; it was not put upon this—that the clause was of a doubtful character, and consequently that it ought not to be enforced. The view was this—supposing it is a clause that extends, at least by interpretation, to the proprietor, as in the natural possession, the Court are of opinion that it is not competent in an inferior court. The opinions of the Judges bring that out very distinctly. The Lord Justice-Clerk stated that he adhered to the Lord Ordinary's interlocutor, on the ground that a summary action of removing against a proprietor who was feudally infeft was clearly incompetent In the Sheriff-Court:—“I limit myself to that ground.” Now, this plainly assumes that the clause had been as imperative and as unmistakeable as the clause in the present case; but his Lordship says, without reference to that question, he confines himself to the ground of decision that a summary action of removing against a proprietor who was feudally infeft was clearly incompetent in the Sheriff-Court. Lord Murray concurs; Lord Wood was absent; and Lord Cowan was content to acquiesce in the ground of judgment proposed. Now that case is quite enough for me. I think it is a very clear and authoritative judgment, and it commends itself to my mind upon the ordinary principles of law. I am therefore fortified in the opinion that I now express, not merely from a somewhat difficult consideration of the principles of law on this matter, but by the decided precedent I have before me, which I think cannot be said not to be applicable to the present case.
Page: 193↓
The respondent in this action, James Wylie, grocer and spirit-dealer in Armadale, Linlithgow, borrowed from the petitioners £550, and on receiving that money he granted to the petitioners a bond and disposition in security, dated 18th April 1867, by which he conveyed to them in security certain heritable subjects; and by which he obliged himself and his heirs, &c., to pay to the petitioners the said sum of £550 so borrowed by him, by monthly instalments of £9, 1s. 6d. per month, for six years, till the whole sum was repaid. By that deed James Wylie, in security of the said debt, also assigned and conveyed to the petitioners, the lenders of the money, the rents of the subjects; and he expressly conferred on them power, on the said monthly instalments falling into arrear for two months, to remove him from the possession or occupancy of the subjects, and to enter into possession themselves, and to let the same and draw the rents thereof, one month after a letter under the hand of the manager or law agents of the Association has been addressed to him, intimating their intention to remove him. This removal he expressly consents shall be “without warning or legal process;” and he also consents that a certificate by the manager or law agents that such letter was delivered to him, or posted to his known address, shall be legal evidence, by which I understand legal prima facie evidence of such intimation. There is no difficulty and no question in regard to the construction of this bond. The terms and the meaning of the bond are perfectly clear. There is no doubt in regard to them. The respondent Wylie borrowed and received the money, and subscribed the bond.
The obligations which he undertook as to payment by instalments, as to removing without warning or legal process on getting one month's notice, and as to the acceptance of a letter as sufficient notice, are clearly expressed; indeed, the meaning of them is not questioned, and they form the conditions or consideration in respect of which he received the money borrowed. Now, if nothing has been done but that to which he has expressly assented—his assent being part of the consideration for which the money was lent him—what right has he to complain? Volenti non fit injuria. In point of fact, Wylie, the debtor in this bond, having received the money on this consideration, did fail to pay the monthly instalments; and these instalments fell into arrear to a much greater extent than two months. A letter of notice, duly posted, was addressed to him at his residence, on 23d January 1869; and this was followed by formal certificate of intimation on 14th May 1870, ample time being given to the debtor; and in June 1870, after every opportunity had been given for payment, the petitioners presented an application to the Sheriff of the county praying for the summary ejection of Wylie, in terms of his obligation in the bond. The prayer of the petition is simply for warrant to eject. There has been no attempt and no desire to act without warrant, and there is no attempt to enforce any other stipulation than the obligation to remove. It was clearly explained by the Solicitor-General that nothing more than a question of possession is here raised, that nothing more than removal is here craved, and that no demand is now made for forfeiture of the right of the respondent. It is essential that there be no misapprehension on this point.
Before proceeding further in the consideration of the case, it is right to guard against misunderstanding on another point. I have therefore to observe that this question arises exclusively, between the two parties to the bond. There is no third party here. It appears, indeed, that Wylie was sequestrated, but he had no funds—he has been discharged without composition. The trustee does not appear, but declines to appear. There is no interest of any third party now involved. The borrower of the money, who received it under certain clearly expressed conditions, is occupying the subjects, retaining the money, and repudiating the conditions on which he obtained it. His defence on record in this action is in all respects false and groundless in point of fact, and not only false and groundless in point of fact, but the falsehood is in regard to matters of fact, within his own knowledge. I have no hesitation in saying that, apart from the point of law to which I shall now shortly advert, the defences put on record are without truth or honesty.
It may however be that we are compelled to give effect to a defence in point of law, even though it be plainly contrary to the equity and good faith of the transaction. That, however, must be a very clear point of law, bringing with it a very imperative duty of enforcement, which, in a question of possession, in a case between creditor and debtor, and with the interest of no third party involved, can compel a court of justice to give a triumph to dishonesty. In my opinion there is no such point of law here.
The respondent's plea was presented at the bar, and has, I think, been considered by your Lordships under two respects.
First. It is said that this obligation on the debtor, if he falls into arrear, to remove without warning or legal process, on getting a month's notice by letter, is an obligation which the law will not recognise—which cannot be enforced at all in any court or by any action. I cannot accept that proposition. I see nothing to prevent a court of justice recognising and enforcing this obligation. Generally speaking, every clearly expressed obligation granted deliberately on just and true consideration, if not illegal or contra bonos mores, is to be recognised and enforced in a court of justice. Is this obligation an exception? I think not. It was the consideration in the bond; it was the condition on which the money was given and received. The lender might have said, “I will not lend the money unless you (the borrower) unico contextu convey the subjects to me, retaining a power to redeem on payment.” That would not have been unlawful if the borrower agreed to it. The lender might also have said, “You shall repay me the whole sum within three years, or you shall then convey to me your estate that I may draw the rents, pay myself, and account for the balance;” or he may, as here, stipulate for payment by instalments, and, on failure to pay instalments, stipulate for the power of removing on a month's notice, without other warning, and without legal process, the debtor having a power of redemption, and the creditor being bound to account, and in any view being entitled to no more than his just debt. Any one of these modes of arranging the relations of debtor and creditor in the bond is legitimate, if
Page: 194↓
I do not doubt that there may be, in a bond, a clause so unfair and oppressive that a court of justice would refuse to enforce it. It might be equivalent to the surrender of liberty or of honour. It might be so cruel and grasping that equity recoils from it; or so immoral that justice rejects it. There is nothing of the kind here. No wrong is done or proposed by this creditor; and the principles of morality are certainly not favourable to this debtor. On the contrary, in my humble opinion, viewing this case as between the debtor and the creditor (for no other interest is now involved), the equity and the honesty of the case is with the creditor. The good faith of the transaction is with the creditor, and in dealing with a consentual obligation that is of the utmost importance. The incorrupta fides is truly the justitice soror. I should regret their separation. It would be to me matter of great regret if the law compelled us to decide against the honesty of the transaction, and to refuse a remedy which good faith requires.
On the first point, therefore, I am of opinion that Wylie's obligation to remove without legal process, and without other warning than a month's notice by letter, is an obligation which the Court cannot justly refuse to recognise, or refuse to enforce.
The next question is, Can this obligation be enforced in any court by summary procedure? I am of opinion that it can. The plain meaning of the obligation is, to remove on a month's notice without legal process. To avoid protracted legal procedure was the aim and intention of both parties. To insist on the legal process of a declaratory action at the creditor's instance would surely not be in accordance with the meaning of the parties, or with the stipulation in the bond. That cannot be maintained. The plain and honest meaning of the bond is clearly to the contrary. Where there is no obligation to remove without warning or legal process, a different course of procedure must be pursued, for there the grounds for removing must be cleared; but here the failure to pay, the falling into arrear, is not disputed, and is proved in the manner agreed on; and the acceptance of a substituted notice, and the obligation to remove without warning or legal process, is, when clearly expressed, sufficient in law to sustain a summary action for removal. Effect has often been given to a waiver of notice in the negotiation of a bill. In many other cases a legal objection has been held to be waived. This clear and express obligation to remove without legal process is surely a waiver of the right to demand legal process. This has been repeatedly recognised in cases between landlord and tenant; and in my opinion the rule and principle of law is, in this case, quite the same. In the case of Brown v. Peacock, Feb. 27, 1822, 1 Shaw, 359, the tenant bound himself to remove at the end of the year without warning or process of removal. The landlord applied to the Sheriff for warrant for summary ejection. The Sheriff sustained the defence that there was no warning; but the Court, adhering to the judgment of Lord Gillies (Ordinary), recalled the Sheriff's interlocutor, and remitted to him to decern in the ejection. This decision is of undoubted authority, and referred to by our more recent writers; and the law and practice in Scotland, in regard to the removal of tenants, is in accordance therewith.
I may also mention the case of M'Laren v. Marquis of Breadalbane, Dec. 17, 1831, 10 Shaw, p. 163, where the decision in Brown v. Peacock was referred to by Lord Moncreiff, whose judgment was adhered to by the Court.
But not only in actions against tenants has this law been applied. In the case of Nisbet v. Aikman, Jan. 12, 1866, 4 Macph., 284, a summary removing was sustained and enforced against a person who was not a tenant, and between whom and the proprietor there was no contract of lease or otherwise. In that case of Nisbet the defender had no title to maintain his possession. He was an intruder. In this case the defender Wylie has no right to maintain his possession. He has bound himself to remove. In Nisbet's case the defender objected to the summary procedure for ejection and removal. The Court, however, sustained the competency of the summary procedure, and the defender was ejected accordingly.
I have carefully considered the authorities on this point, and I have found no decision to prevent my taking the next step in this course of reasoning. I think that if this obligation to remove on a month's notice without legal process, is such as a court of justice can recognise and enforce at all, then it can be enforced by summary procedure. An heritable creditor cannot remove the owner of heritable subjects by summary procedure, unless there be a distinct obligation so to remove. But the man who has bound himself to remove without warning, except the month's notice which he has got, cannot demand other warning. The man who has bound himself to remove without legal process cannot insist for legal process before removing. There is, in my opinion, no authority to support such a demand by the party who has given such an obligation, and who has received and retained the money which he got in return for the obligation.
The remaining question is, If summary procedure to enforce ejection is competent, is it competent before the Sheriff?
I think it is. Nay, more, I think that a summary
Page: 195↓
The case of Blair v. Galloway was quite different. The creditor held only an ordinary heritable bond, with power of sale, but no obligation to remove, and in that case the debtor was removed.
The case of Macfarlane v. Campbell, in 1857, is not of authority on this point, for the facts were very different. In that case there was no express undertaking by the debtor to remove, there was no obligation there, as there is here, to cede possession on getting into arrear, and to cede possession on a month's notice, without warning or legal process, This is pointed out in the note of the Sheriff, who was the late Lord Barcaple, and it is an important distinction between the two cases.
The observation of the Lord Justice-Clerk in the case of Macfarlane is indeed authoritative as applied to the case before him, or to a case where the facts are similar. But it is not applicable to this case, which is quite different, and no case of authority has been quoted to us where in the question of possession effect has been refused to a clear obligation in a bond such as we have here. I venture again to repeat, because it is of the greatest importance, that no question but a question of possession is now raised.
Our law has always recognised the jurisdiction of the Sheriff in questions of disputed possession; and, in cases of conventional obligation to remove from possession it is according to the law and practice of Scotland that the Sheriff can exercise that jurisdiction summarily. This has been recognised in many cases as between landlord and tenant, and in the case of Nisbet, to which I have referred, a person who was not a tenant was summarily ejected by the Sheriff, and the ejection was sustained by the Court. The form of this bond is new. We cannot expect direct precedents. The form has not been introduced by grasping creditors. It has been framed to meet the wants and wishes of persons of small means, desiring to acquire heritable subjects by purchasing with borrowed money to be repaid by instalments. It would be, on every ground, most unfortunate, if, in such a transaction, a breach of good faith should be successful.
Questions have been suggested which it is said may arise in regard to some of the other clauses in this bond, but which are not now before us. I reserve my opinion on these. It may be that the clause of forfeiture of the right is not clearly expressed. It may be that it is not effectual. No attempt is now made to enforce it. The present question relates not to the permanent right, but only to the obligation to remove or to cede possession, so that the creditor may take possession as stipulated, and obtain payment of his just debt. I think there has been some misunderstanding about this. But it was clearly explained by the Solicitor-General. I shall not detain your Lordships longer. I regret that I am compelled to dissent from this judgment. I would not have done so if I had not felt that a great principle of justice and equity is involved. To my mind it appears—1st, that to refuse to recognise this obligation to remove on the part of the borrower, who got his money on the strength of that obligation, is against the equity and good faith of the transaction; 2dly, that the enforcement of the obligation by summary procedure, and without other process of law, is according to the plain meaning of the obligation, and is the necessary consequence of its judicial recognition; and lastly, that the procedure for summary ejection or removal is competently and appropriately within the jurisdiction of the Sheriff.
I repeat that there has been no attempt, and there is no averment of attempt, on the part of the creditor to act without warrant. The debtor states on record that he was in possession of the subjects when the petition for warrant to remove him was presented to the Sheriff, and that is the fact. The question is, whether the law will refuse him the warrant which he asks? I am of opinion that he is entitled to remove Wylie from possession, and to that effect is entitled to the warrant which he craves.
Page: 196↓
Page: 197↓
The question arises on a heritable bond and disposition in security of a very peculiar and stringent character. With some of its most remarkable clauses, such as those irritating the right of property of the debtor in a certain event, we are not now directly concerned, and on these I desire to offer no opinion. The clause with which we have to deal is that which gives power to the creditors, ‘in the event of any of the said monthly instalments falling into arrear for two months, to remove me or my tenants from the possession or occupancy of the said subjects, and to enter into possession thereof themselves, to let the same and to draw the rents thereof; and that one month after a letter under the hand of the manager, or law agent of the said Association for the time being, has been addressed to me, intimating the intention of the said Association to remove me as aforesaid, without any warning or legal process whatever.” The provided notice is said to have been given; and the debtor having failed to go out, the petition with which this process commenced was presented to the Sheriff for summary warrant of ejection.
The object of these proceedings is to recover from the subjects and their rents the instalments due on the heritable bond. And an argument at once arose, of great strength and cogency, that in the ordinary case such recovery could not be made except by means of the well known diligences of maills and duties, and poinding of the ground; and that parties could not competently contract to dispense with such diligence, and to give the creditor right to make the same levy at his own hand, without any process whatever, and so to assume a position of great advantage over all other creditors, who were left to the ordinary diligence of the law. The answer was, that parties were entitled, as between themselves, to contract as they pleased; and whatever might be urged by third parties, that the debtor could not fly in the face of his own contract. The rejoinder was, that the law did not permit parties to contract as they pleased, where the object was to supersede and set aside forms and proceedings laid down by the law on considerations of public policy, and for the general good of the community.
I do not feel called on to decide at present whether the creditor in the bond can, by virtue of the contract, enter into possession of the subjects without the usual forms of diligence—as, for instance, by a process of declarator and removing before the Supreme Court. It is enough for the disposal of the present case to decide, as I concur in doing, that the creditor could not competently enforce his right by a summary process of ejection before the Sheriff-court. On this point I entertain a clear opinion. The object of the process is, by virtue of a conceived heritable right, to turn out of possession the feudal proprietor of the subjects. The Sheriff cannot decern in the removing without deciding a preliminary question of heritable right—that is to say, deciding that a contract to the effect in question, as to a heritable subject, is a valid and effectual contract. Certainly the proposed removing may, in the strictest sense, be called extraordinary. To such a proceeding I think the Sheriff-court incompetent, according to our best settled principles and most familiar authorities. Whether the right may be enforced by a process of declarator and removing before the Supreme Court it is unnecessary at present to inquire. It is enough that this summary process of ejection is inadmissible.
If, as it is contended, the contract of the parties sanctions this proceeding before the Sheriff-court, I have no hesitation in holding that the contract is one which cannot be legally enforced to that effect. There is great latitude given to parties to contract away their private rights. But they cannot contract away the established rules of courts of law, nor confer jurisdiction on courts to which the law says jurisdiction does not belong. This is what the parties have, on the assumption now made, attempted to do. They have not only contracted that the creditor should, without the usual forms of diligence, enter on the land for recovery of his heritable debt; but further, ex hypothesi, that if the debtor refuse to give effect to the contract, the Sheriff shall enforce it by a summary warrant of ejection. This, I am of opinion, no contract of parties can render admissible or effectual.
Lord President—The granter of this bond acknowledges to have received in loan the sum of £550; but the leading obligation which he undertakes is not the ordinary obligation to repay that sum with interest, but it is to pay the sum of £9, 1s. 6d. sterling “each and every month, during the period of six years, from and after the date of delivery of these presents, and that in full repayment of the said sum of £550 and interest thereon.” All the rest of this bond—every clause of it—is intended either to secure the payment of these instalments or to enforce payment; and the clause with which we are more immediately concerned—the clause of removing, as it is called—is to come into operation as soon as one of these monthly instalments has fallen into arrear for two months, and a notice has been given by the Company that they intend to enter into possession. Now the first question which arises is, whether, upon the occurrence of these events, the creditor in this bond can lawfully enforce the clause of removing against the debtor; and that involves the question whether such a clause is effectual to a party possessed only of a temporary and redeemable title against another party who is feudally vested in the estate in absolute property. That is a question of considerable importance, and it is one upon which I am not going to give an opinion. But it appears to me very clearly not to be a question that can be competently tried in the Sheriff-court. And yet, according to my view of the case, it stands upon the very threshold of the dispute between these parties. Another question which will inevitably require to be considered before possession can be given under this clause of the bond, is to what effect that possession can be given and taken; and this general question involves a number of very difficult particulars. Is that portion of the bond which provides that the creditor entering into possession of the subjects shall not be liable for waste rents or insolvent tenants, or be bound to do exact diligence, binding between the parties? It appears to me that, before any course of possession can be begun under this clause, it is of the utmost importance to settle whether that is one of the conditions of the possession. But again, to what effect is this possession to be had and continued? Is it to the effect only of taking payment out of the proceeds of the estate as they fall due, as much as will keep down the monthly instalments of £9, 1s. 6d. as they fall due? or, supposing the produce of the estate to be more than sufficient for that purpose,
Page: 198↓
The Court accordingly recalled the interlocutors appealed against, and found the petition incompetent.
Solicitors: Agent for Appellant— David Miln, S.S.C.
Agents for Respondents— Murray, Beith, & Murray, W.S.
