IN reclaiming againſt the Lord Auchinleck's interlocutor, to be in the ſequel more particularly ſtated, the points propoſed to be ſubmitted to your Lordſhips review, are, firſt, Whether certain tacks granted by Mr Hamilton of Wiſhaw to Wil⯑liam M'Gregor were adjudgeable at the inſtance of the now peti⯑tioners his creditors? 2dly, The exceptions that are taken to the adjudication at Wiſhaw's own inſtance, adjudging inter alia theſe very tacks. And the facts upon which the queſtion ariſes, are theſe following.
BY tack, of this date, Charles Hamilton of Wiſhaw,Aug. 12. 1761. now de⯑ceaſed, let to William M'Gregor and his heirs, ſecluding ſub-te⯑nants and aſſignees, except by the ſpecial conſent of the proprie⯑tor, the lands of Eaſter-Park and Birkenhill, for the ſpace of fifty-ſeven years, commencing at Martinmas 1761, for a rent or tack-duty of L. 76 : 2 : 6 Sterling; and a liberty was thereby granted [2]to M'Gregor of ſubſetting part of ſaid lands during the firſt nine⯑teen years.
BY another tack,Mar. 17. 1763. of this date, the ſaid Charles Hamilton let to the ſaid William M'Gregor and his heirs, ſecluding ſub-tenants and aſſignees, except they be of an unexceptionable good charac⯑ter, the Mill of Newark, mill-lands, thirlage, and ſucken thereto pertaining, for the ſpace of thirty-ſeven years from and after Mar⯑tinmas 1762, for a rent or tack-duty of 100 merks Scots.
BY a third tack,Jan. 6. 1763. of this date, the ſaid Charles Hamilton let to the ſaid William M'Gregor and his heirs and aſſignees, of no higher degree than himſelf, the lands of Slaymuir, for the ſpace of fifty-ſeven years from and after Martinmas 1762, and for a rent or tack-duty of L. 4 Sterling.
BY a fourth tack,May 23. and 25. 1761. of this date, the ſaid Charles Hamilton let to David Gardiner and his heirs the lands of Windiehall, for a term of nineteen years, commencing from Martinmas 1759, for a tack-duty of L. 8, 6 s. Sterling, to which tack laſt above mentioned the ſaid William M'Gregor and John Burns acquired right.
AND by an after-agreement,Aug. 27. 1765. of this date, paſſed betwixt the ſaid William M'Gregor and John Burns, they agreed to take in leaſe from Wiſhaw certain parcels of the lands of Newark, at a rent of L. 4 : 16 : 7 8/12 during the currency of Windiehall tack, with a power of ſubſetting; which propoſals Wiſhaw accepted of, and in virtue thereof, M'Gregor entered into poſſeſſion, and has ſince ſubſet the ſame.
YOUR Lordſhips have formerly had occaſion to hear of the va⯑rious ſchemes deviſed by Wiſhaw and the ſaid William M'Gregor for raiſing the eſtate of Wiſhaw to an immenſe value; and it was in proſecution of theſe aerial projects, that M'Gregor, ſeemingly in a flouriſhing way, but in reality bankrupt and inſolvent to a great degree, if he is truly reſting the large ſums he is ſaid to be due to Wiſhaw, found means to poſſeſs himſelf of the ſums he owes to his other creditors.
WISHAW had obtained bonds of relief from M'Gregor for ſun⯑dry large ſums, in which they were jointly bound; and they were [3]bound in others bonds, for which no bond of relief appeared. Wi⯑ſhaw could not be ignorant of M'Gregor's inſolvent ſtate, with whom he was ſo nearly connected, and bound alongſt with him in ſuch large ſums unknown to the other creditors, ſeverals of whom, under the apprehenſion that his affairs were not in the beſt ſituation, were in curſu diligentiae.
TO fruſtrate the effect of theſe, and to cover and protect M'Gre⯑gor's effects from the diligence of his creditors, Wiſhaw thought proper, whether by himſelf or by the moyen of his factor is im⯑material, to elicite from M'Gregor, of this date,Oct. 28. 1767. a diſpoſition om⯑nium bonorum of his whole ſubjects heritable and moveable, inclu⯑ding his houſehold-furniture, and the very liquor in his cellars.
THAT this was a fraudulent and colluſive deed, for the purpoſe above mentioned, is apparent from this ſingle circumſtance, that though conceived in the form of an immediate conveyance of all and ſingular the premiſes, including the above-mentioned tacks, M'Gregor was allowed to continue in poſſeſſion ſo far down as the 8th and 9th days of February 1768, when two inſtruments of inti⯑mation and poſſeſſion of the premiſes were taken in Wiſhaw's name.
IN the mean time M'Gregor's inſolvency came to be generally known; whereupon the petitioners, whoſe misfortune it is to be creditors to him in conſiderable ſums, were about to execute a poinding of his effects, when Wiſhaw compeared and produced a moſt extraordinary writing, containing a variety of ideal ſchemes and propoſals for retrieving M'Gregor's circumſtance, and paying his debts.
TO theſe propoſals were ſubjoined the following words: ‘I have confidered the above, and agree thereto;’ bearing no date, and kept in Wiſhaw's pocket. And as it was part of ſaid propoſals, That M'Gregor, upon the faith of future improvements, ſhould pay an immenſe additional rent, from thenceforward Wiſhaw was pleaſed to conſider this as a new tack between him and M'Gregor; and having preferred a complaint to his own baron⯑bailie, took decreet for a large ſum of arrears, computing the rent as ſtated in the aforeſaid propoſals, and thereupon execute one [4]poinding in his own name, and was conjoined with the petition⯑ers in another poinding.
WISHAW thereafter took adjudication againſt M'Gregor for va⯑rious large ſums, in which he was jointly bound with M'Gregor, and for moſt of which he had bonds of relief; but there was one of theſe bonds for no leſs than L. 1000 Sterling, granted by them jointly to Joſiah Corthine, for which he had no bond of relief, o⯑ther than what was contained in the aforeſaid diſpoſition omnium bonorum, wherein M'Gregor was made to confeſs, That the whole of that ſum was his proper debt.
M'GREGOR'S other creditors, and amongſt theſe the petition⯑ers, did in like manner adjudge, and were within year and day of Wiſhaw's adjudication.
UPON this title the petitioners brought a reduction of the afore⯑ſaid memorial, which Wiſhaw had been pleaſed to characterize a tack, of the baron-decreet, and poinding following thereon, and of the adjudication.
IT is unneceſſary upon this occaſion minutely to ſtate the pro⯑ceedings in that proceſs. It is ſufficient to obſerve, that Wiſhaw, anxious to avoid the appearances of colluſion between him and his tenant, with whom in other reſpects he was ſo deeply embark⯑ed, now a confeſſed bankrupt, did judicially diſclaim the diſpoſi⯑tion omnium bonorum, throwing the blame of it upon his factor, as taken without his knowledge.
A MULTIPLE-POINDING was brought in name of the tenants, calling the petitioners and Wiſhaw to diſpute their preferences, when the ſeveral adjudications of M'Gregor's ſubjects being pro⯑duced, it was objected on the part of Wiſhaw, That the tack, of date 12th Auguſt 1761, which excluded aſſignees and ſub-tenants, was not adjudgeable. And it was on the other hand contended, That however effectual ſuch clauſe might be to exclude a volunta⯑ry aſſignation, it could not bar the diligence of lawful creditors. Upon which the Lord Ordinary pronounced the following interlo⯑cutor: ‘Having conſidered the mutual memorials,Dec. 2. 1769. Finds, That when a proprietor ſets his lands in leaſe to a tenant and his [5]heirs, excluding aſſignees and ſub-tenants, this ſhows, that he had in view, which is known to be common and natural, to favour a particular perſon and his family, and not to expoſe himſelf to the hardſhip of having a tenant forced in upon him, who upon many accounts might be diſagreeable: And there⯑fore finds this ſecluſion is effectual, not only againſt voluntary aſſignees, but alſo againſt legal aſſignees by adjudication; con⯑ſequently that the creditors of M'Gregor the tenant, by their adjudication of the tack of Eaſter-Park and Birkenhill, can take nothing, and have no title to compete with Mr Hamilton the proprietor. Finds, That ſo far as concerns the tack of Breaken⯑brae and others, let to M'Gregor and Burns, without any ſeclu⯑ſion of aſſignees, that Mr Hamilton, in virtue of his adjudica⯑tion, has right to the ſame; and that the other creditors have no right thereto, in reſpect that tack is not adjudged by them: And with reſpect to the tacks of the lands of Slaemuir, and the mill of Newark, with the pendicle therein mentioned, which are ad⯑judged by all the competitors, and their adjudications within year and day of another, finds them all pari paſſu prefera⯑ble; but that Mr Hamilton, as the firſt effectual adjudger, muſt draw in the firſt place the expence of his adjudication; and that he muſt, as proprietor, be paid up the rent of theſe ſubjects for crop 1766, and in time coming, ſo far as reſting owing.’
AGAINST which interlocutor both parties having repreſented; and in the repreſentation for Wiſhaw, a new objection being ſta⯑ted to the whole adjudications for the other creditors, viz. That they had recovered payment of part of their debts by a poinding, and that notwithſtanding thereof, the adjudications had been ta⯑ken for the whole ſums, the Lord Ordinary pronounced this other interlocutor:Jan. 25.1770. ‘Having again conſidered this repreſentation with the anſwers, and reſumed the conſideration of the repreſenta⯑tion for Mr Hamilton of Wiſhaw, to which no anſwers have been given in, though the time fixed for giving in anſwers is long expired; finds no ſufficient cauſe ſhewn for altering the interlocutor, ſo far as thereby Mr Hamilton is found to have a preferable right to the tack of Eaſter-Park and Birkenhill, and that the ſame is not adjudgeable by the competing creditors: But in reſpect of the pluris petitio in the adjudications of the creditors competing with him, fully ſet forth in his repreſenta⯑tion, [6]to which no anſwers are made, holds the other creditors as confeſſed on the truth of theſe averments; and therefore finds theſe adjudications void, and perfers Mr Hamilton of Wiſhaw upon his adjudication upon the whole tacks, and recals the pari paſſu preference given to the other creditors upon the tacks ſpe⯑cified in the former interlocutor; and finds no neceſſity now to determine the queſtion, Whether Mr Hamilton is intitled to draw the whole, or only a part of the expence of his adjudica⯑tion in preference to the other creditors, as the adjudications of theſe creditors being annulled, puts an end thereto.’
AGAINST which interlocutor laſt above recited, a repreſentation being preferred for the now petitioners, wherein the following points were inſiſted upon; 1ſt, That the objection of a pluris peti⯑tio did not ſtrike againſt one of the adjudications, viz. that at the inſtance of Grahame; and therefore that that adjudication be⯑hoved to be effectual not only againſt ſuch of the tacks as did not exclude aſſignees and ſub-tenants, but alſo againſt the tack of Eaſter-Park and Birkenhill, quoad ſo much of the lands in ſaid tack as M'Gregor was thereby at liberty to ſubſet; 2dly, That it was equally effectual to carry the ſum of L. 70 which Wiſhaw was thereby bound to pay to M'Gregor in the event of his taking advantage of the breach of the tack thereby allowed; 3dly, That Wiſhaw's adjudication was liable to certain objections therein ſta⯑ted, which ought to be available to annul the ſame in totum, or at leaſt to reſtrict it to a ſecurity; And 4thly, That ſuppoſing Wi⯑ſhaw's adjudication to be ſuſtained, as a firſt effectual adjudicati⯑on, it ought to be aſcertained by what proportion theſe expences ought to be paid out of the different ſubjects adjudged; the Lord Ordinary, upon adviſing the ſame with a counter-repreſentation for Wiſhaw,June 19. 1770. pronounced this other interlocutor: ‘Having again conſidered this repreſentation with the counter-repreſentation for the other creditors of M'Gregor, and the mutual anſwers, repreſentation, and replies for the other criditors, and anſwers for Mr Hamilton of Wiſhaw, adheres to the former interlocutor, with the following variations: 1ſt, Finds, That only three of the adjudications are void and null, on account of the pluris pe⯑titio, viz. thoſe at the inſtance of Meſſ. Cuninghams and Hotchkis; but finds the ſaid nullity does not affect James Grahame's adjudication: And further, finds, That James [7]Grahame, in conſequence of that adjudication, is intitled to come in pari paſſu with Mr Hamilton for theſe tacks which M'Gregor had power to ſubſet, as alſo for the L. 70 ſtipulated by the leaſe; and refuſes the ſeveral repreſentations as to all o⯑ther points.’
OF theſe interlocutors, in ſo far as it is thereby found that the tack of Eaſter-Park and Birkenhill, for a term of fifty-ſeven years, excluding aſſignees and ſub-tenants, without the ſpecial conſent of the proprietor, is not adjudgeable; and in ſo far as the objections to Wiſhaw's adjudications are repelled, the petitioners are now humbly to pray your Lordſhips review.
AND with reſpect to the firſt of theſe, the petitioners will be al⯑lowed to aſſume this general propoſition, That it is adverſe to the firſt principles of law and juſtice, that any beneficial eſtate ſhould be ſo eſtabliſhed in the perſon of a debtor, as to ſecure to him the enjoyment thereof, and, at the ſame time, to exclude the diligence of his lawful creditors. If the ſecluſion of aſſignees has the effect of barring the diligence of creditors by adjudication, the conſe⯑quence is plain, that a tenant, who cannot be removed by the he⯑ritor, and whoſe voluntar aſſignment has no other effect but to void the aſſignation, and does not annul the tack itſelf, will keep poſſeſſion of the lands, reap the fruits and profits thereof, and en⯑joy all the emoluments of the tack, whilſt his lawful creditors; with whoſe money he purchaſed the tack, pay a large graſſun, and improves the lands, are diſabled from affecting the ſame for their payment. The maſter refuſes his conſent either to a voluntary or legal aſſignment of the tack; and as the tenant cannot be removed till the iſſue of the tack, he enjoys the benefit thereof, in defiance of his creditors.
THE particular circumſtances of this caſe ſtate the hardſhips of this principle in a ſtrong point of view. M'Gregor purchaſes a tack from Wiſhaw for a term of no leſs than fifty-ſeven years, to him and his heirs, ſecluding aſſignees and ſub-tenants, without the ſpecial conſent of the proprietor. He is in good credit at the time; borrows at all hands; makes expenſive meliorations on the ſubjects ſet, by buildings, machinery, and otherwiſe, to the a⯑mount of about L. 1500 Sterling. He then becomes bankrupt; [8]and, in colluſion with his maſter, to the the prejudice of his other lawful creditors, grants to him a diſpoſition omnium bonorum, al⯑lows a decreet to paſs againſt him, at his maſter's inſtance, for large ſums which were not juſtly due. Wiſhaw himſelf adjudges this very tack, which was at the ſame time conveyed to him by the general diſpoſition; and when the other creditors have likewiſe adjudged the ſame tack, they are told by Wiſhaw, that the tack was not adjudgeable.
THE apparent injuſtice of this propoſition ſeems to have intro⯑duced a diſtinction in the conſtruction of clauſes of this nature, between a voluntary aſſignation, and an attachment of the right by legal diligence.
THUS in the caſe of Bruce contra Buckie, as far back as the 3d February 1619, judgment was given, ‘Finding that a reverſion granted to any perſon and his heirs, ſecluding aſſignees, may be compriſed.’—And again, in the caſe of Bruce contra Vaſſals of Lochleven, 30th July 1680, obſerved by Lord Fountainhall, ‘The reverſion in a wadſet being granted to the reverſer and his heirs, but not to aſſignees, the Lords, in a purſuit at the in⯑ſtance of an aſſignee, found this ſufficient to exclude him ſo long as he inſiſted on his voluntary diſpoſition; but that this would not found againſt him when he produced a right from compriſers of the ſubject, unleſs the reverſion was ſo perſonal as to include both aſſignees and compriſers.’ The plain import of which was, that however the clauſe, ſecluding aſſignees, may be available to exclude voluntary aſſignees, it ought not to be ex⯑tended to exclude the legal diligence of creditors, compriſers of the right, where the ſame was not expreſsly ſecluded.
IN oppoſition to theſe, reference was made to a later deciſion of this Court, 4th December 1747, in the caſe of William Elliot con⯑tra the Duke of Buccleugh, where it was found, that a tack, ſe⯑cluding aſſignees, could not be adjudged. What ſpecialties may have occurred in that caſe, your petitioners cannot take upon them to ſay. It is very imperfectly ſtated in Falconer's Collection; and, at any rate, it is but a ſingle deciſion, repugnant to the former deciſions of this Court; ſo that the point merits well to be conſi⯑dered, before it is eſtabliſhed to be law.
[9]THE clauſe in this tack, excluding aſſignees and ſub-tenants, is qualified with this exception, ‘Except by the ſpecial conſent of the proprietor;’ and therefore it may juſtly be doubted, whe⯑ther any more was thereby intended, but a reſerved faculty to the maſter to refuſe his conſent to a voluntar aſſignment, upon juſt and reaſonable grounds; and conſequently not to comprehend the diligence of lawful creditors adjudging this valuable part of their bankrupt debtor's eſtate.
IN ſhort leaſes, a dilectio perſonae may be preſumed: But where a tack is granted for ſuch a long term of years to the leaſee and his heirs, in whom there can be no ſuch dilectio, being perſons un⯑known at the time, there is not equal reaſon to extend the exclu⯑ſion to exclude the diligence of lawful creditors.
AND in the preſent caſe, there occurs this remarkable ſpe⯑cialty, which demonſtrates Wiſhaw's own ſenſe of the matter, viz. That it was he who led the way, by taking the firſt ad⯑judication adjudging this very tack; and that equality which the law maintains with reſpect to the whole creditors of a bankrupt, by bringing in all adjudgers pari paſſu who are within year and day of the firſt effectual adjudication, will never permit his diſpenſing with the clauſe ſecluding aſſignees, ſo far as regards his own diligence, and to lay hold of it to exclude the diligence of other creditors. Wiſhaw's adjudication, now that he has repudiated the diſpoſition omnium bonorum, is his only title to this tack. He muſt therefore take that ſpecies of diligence as qualified by law, and with all its legal effects; one of which is, that every adjudication led within year and day is intitled to come in pari paſſu along with it: So that having diſpenſed with the ſe⯑cluſion of aſſignees in favours of one adjudication, he muſt be underſtood to have diſpenſed with it in favours of all the other adjudications, which the law brings in pari paſſu with it.
AND therefore, to conclude upon this point, the petitioners humbly ſubmit to your Lordſhips, That the clauſe of ſecluſion, qualified as above, in a tack of ſuch a long endurance, does not exclude the diligence of lawful creditors by adjudication; and that as Wiſhaw himſelf, in the character of creditor, has taken adjudication of this very tack, and which is his only title there⯑to, he has thereby not only ſhown his own ſenſe and underſtand⯑ing [10]of that clauſe, which meant only to exclude voluntary aſſig⯑nees, but has thereby conſented to the adjudications of other cre⯑ditors within year and day of his, the firſt effectual adjudica⯑tion.
THE other point propoſed for your Lordſhips conſideration, re⯑ſpects the exceptions that have been taken to Wiſhaw's adjudica⯑tion, not only as to what reſpects the above-mentioned tack of the lands of Eaſter-Park and Birkenhill, but M'Gregor's whole other eſtate.
AND in ſo far as that adjudication proceeds upon Wiſhaw and M'Gregor's joint bond to Collector Corthine, June 3. 1765, for L. 1000 Sterling, it is an agreed fact, That no bond of relief was granted therefor till the 28th October 1767, when the diſpoſition omnium bonorum was granted by M'Gregor in favours of Wiſhaw; wherein M'Gregor is made to confeſs, that that was his proper debt, in which Wiſhaw was only cautioner for him.
THE granting ſuch a diſpoſition, at the time when the other creditors were proceeding in diligence to operate their payment againſt M'Gregor and his effects, was per ſe an act of nottour bank⯑ruptcy, and was in other reſpects the act of fraud between perſons ſo intimately connected, with an intention to fruſtrate the dili⯑gence of the other creditors. The bond granted to Collector Cor⯑thine proves this to have been their joint debt, and conſquently that M'Gregor had relief againſt Wiſhaw for the one half. This relief he gives away by the diſpoſition omnium bonorum, and takes the whole debt upon him, by the acknowledgment therein contain⯑ed, of Wiſhaw's being but cautioner for him therein. Was this to be allowed, to bring ſo great a debt upon the bankrupt's eſtate, there would be no ſecurity againſt fraudulent contrivances of this kind. The other creditors were in curſu diligentiae. M'Gregor's claim of relief againſt Wiſhaw for the half of this debt was part of the bankrupt's eſtate. This he gives away by the diſpoſition omnium bonorum, and ſubmits to take the whole of that debt upon himſelf. How far it would be proper or juſt to ſuſtain a device of this kind, is humbly ſubmitted.
AND if your Lordſhips ſhall be of opinion that this objection is well founded, it muſt be effectual either totally to annul Wiſhaw's adju⯑dication, [11]ſo far as it is taken for the whole ſums, principal, an⯑nualrent, and penalties in the bond to Collector Corthine, or at leaſt to reſtrict the ſame to a ſecurity for the one half of the prin⯑cipal ſum and annualrents.
BUT the objection does not reſt here: For your Lordſhips have heard that Wiſhaw has judicially diſclaimed and renounced that diſpoſition omnium bonorum, as taken from M'Gregor by his factor, without any authority from him, and without his privity and knowledge.
WISHAW is indeed pleaſed to ſay, That that diſclamation ought to be extended no further than to repudiate the diſpoſition omnium bonorum, but by no means to comprehend the acknowledgement therein contained of Wiſhaw's being but cautioner for M'Gregor in ſaid bond: But this is a diſtinction which your Lordſhips will never allow. He has been obliged to confeſs that that deed was taken without his authority, privity, or knowledge. He therefore diſclaimed the ſame; and that acknowledgement or diſclamation cannot now be ſplit, ſo as to ſupport it in one part, and reject it in another. The whole was a fraudulent contrivance, and muſt ſtand or fall in whole.
BUT the petitioners do further inſiſt, That Wiſhaw's adjudica⯑tion is equally exceptionable, ſo far as it proceeds upon the other grounds of debt wherein M'Gregor and he were jointly bound, and for which Wiſhaw had a bond of relief.
THE bond of relief, of this date, recites ſeveral debts in which Wiſhaw was bound jointly with M'Gregor,July 11. 1764. all which M'Gregor thereby acknowledges to have been his proper debts, and therefore becomes bound and obliged to free, relieve, and ſkaithleſs keep Wiſhaw, and his heirs, &c. of ſaid ſeveral ſums, principal, annualrents, and liquidate penalties, and of all damages, expences, &c. ‘and for that effect, ſo ſoon as required by Wiſhaw or his foreſaids, to make payment to the ſeveral creditors therein named of their reſpective principal ſums and annualrents, and to deliver up to Wiſhaw the principal bonds, or ſufficient diſcharges of the ſame; or otherwiſe to make payment to Wiſhaw of the princi⯑pal ſums, annualrents, and penalties, to the end he may apply the ſame towards operating his relief of ſaid bonds.’
[12]No ſuch requiſition was ever made; but, in lieu thereof, Wi⯑ſhaw, of this date,Aug. 11. 1768. took decreet againſt M'Gregor for payment of the whole ſums, principal, annualrent, and penalties contained in the aforeſaid bond.
THAT Wiſhaw might have adjudged for ſecurity and relief of theſe debts which were ſtill outſtanding unpaid by Wiſhaw, the petitioners ſhall readily admit. But as Wiſhaw had not paid theſe debts to the creditors; and as the obligation upon M'Gregor in the aforeſaid bond of relief, to make payment of theſe ſums to Wiſhaw himſelf, was ſo qualified as only to take effect, in caſe M'Gregor, when required ſo to do, ſhould fail or neglect to make payment of the ſums to the proper creditor, and either to retire and deliver up the bonds themſelves, or diſcharges of the ſame; and as no ſuch requiſition was ever made; the petitioners do humbly contend, that the adjudication was improper and illegal, which therefore ought to be annulled in totum. And as Wiſhaw has pre⯑vailed in reducing the whole adjudications of the whole other cre⯑ditors, one only excepted, upon a mere omiſſion of the creditors agent in the country neglecting to adviſe their town-agent of the partial payment they had recovered on a poinding, he can with no reaſon complain when the ſame meaſure is dealt to him, thereby to bring him on a level with the other creditors, at leaſt equally onerous.