July
3. 1770.
Unto the Right Honourable, the Lords of Council and Session,
THE PETITION OF John and William Cunningham and Company brewers in Glasgow, James Hotchkis and Company brewers in Edinburgh, and James Graham vintner in Glasgow, for themselves, and as trustees of William M'Gregor late tenant in Parkhall,
Humbly sheweth,
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 William M'Gregor were adjudgeable at the instance of the now petitioners 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 deceased, let to William M'Gregor and his heirs, secluding sub-tenants and assignees, except by the special consent of the proprietor, 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 to M'Gregor of subsetting part of said lands during the first nineteen 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 character, the Mill of Newark, mill-lands, thirlage, and sucken thereto pertaining, for the space of thirty-seven years from and after Martinmas 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 various 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 sundry large sums, in which they were jointly bound; and they were bound in others bonds, for which no bond of relief appeared. Wishaw 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'Gregor's effects from the diligence of his creditors, Wishaw thought proper, whether by himself or by the moyen of his factor is immaterial, to elicite from M'Gregor, of this date,
Oct. 28. 1767.
a disposition
omnium bonorum
of his whole subjects heritable and moveable, including 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 intimation 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 baronbailie, took decreet for a large sum of arrears, computing the rent as stated in the aforesaid proposals, and thereupon execute one poinding in his own name, and was conjoined with the petitioners in another poinding.
WISHAW thereafter took adjudication against M'Gregor for various 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, other 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 petitioners, 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 aforesaid 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 proceedings 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 embarked, now a confessed bankrupt, did judicially disclaim the disposition
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 produced, 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 voluntary assignation, it could not bar the diligence of lawful creditors. Upon which the Lord Ordinary pronounced the following interlocutor:
Having considered the mutual memorials,
Dec. 2. 1769.
Finds, That when a proprietor sets his lands in lease to a tenant and his 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 therefore finds this seclusion is effectual, not only against voluntary assignees, but also against legal assignees by adjudication; consequently 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 Breakenbrae and others, let to M'Gregor and Burns, without any seclusion of assignees, that Mr Hamilton, in virtue of his adjudication, 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 adjudged by all the competitors, and their adjudications within year and day of another, finds them all
pari passu
preferable; 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 stated 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 taken 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 representation 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 representation, 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 specified 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 adjudication 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 petitio
did not strike against one of the adjudications,
viz.
that at the instance of Grahame; and therefore that that adjudication behoved 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 stated, which ought to be available to annul the same
in totum,
or at least to restrict it to a security; And
4thly,
That supposing Wishaw's adjudication to be sustained, as a first effectual adjudication, 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 petitio, 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 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 other 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 allowed 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 consequence is plain, that a tenant, who cannot be removed by the heritor, 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 enjoy 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 amount of about
L.
1500 Sterling. He then becomes bankrupt; and, in collusion with his master, to the the prejudice of his other lawful creditors, grants to him a disposition
omnium bonorum,
allows 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 introduced 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 instance 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 extended 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
contra
the Duke of Buccleugh, where it was found, that a tack, secluding 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 considered, before it is established to be law.
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, whether 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 unknown at the time, there is not equal reason to extend the exclusion to exclude the diligence of lawful creditors.
AND in the present case, there occurs this remarkable specialty, which demonstrates Wishaw's own sense of the matter,
viz.
That it was he who led the way, by taking the first adjudication 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 seclusion 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 thereto, he has thereby not only shown his own sense and understanding of that clause, which meant only to exclude voluntary assignees, but has thereby consented to the adjudications of other creditors within year and day of his, the first effectual adjudication.
THE other point proposed for your Lordships consideration, respects the exceptions that have been taken to Wishaw's adjudication, 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 bankruptcy, and was in other respects the act of fraud between persons so intimately connected, with an intention to frustrate the diligence of the other creditors. The bond granted to Collector Corthine 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 contained, 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 adjudication, so far as it is taken for the whole sums, principal, annualrent, and penalties in the bond to Collector Corthine, or at least to restrict the same to a security for the one half of the principal 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 adjudication 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 principal sums, annualrents, and penalties, to the end he may apply the same towards operating his relief of said bonds.
No such requisition was ever made; but, in lieu thereof, Wishaw, 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 prevailed in reducing the whole adjudications of the whole other creditors, 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.
May it therefore please your Lordships, to alter the Lord Ordinary's interlocutors in the above-mentioned particulars: And, in the 1st place, To repel the objection to the other creditors adjudications so far as regards the tack of Easter-Park and Birkenhill, founded upon the clause, secluding assignees: 2dly, To sustain the objections to Wishaw's adjudication, so far as it proceeds upon the debt due to Collector Corthine, relevant to annul the same
in totum,
or at least to restrict it to a security for the one half of said principal sum and annulrents: 3dly, To sustain the other objection to Wishaw's adjudication, as led for the whole of the aforesaid debts unpaid by Wishaw at the time, without any previous requisition to M'Gregor in terms of the bond of relief, relevant to reduce that adjudication
in totum. According to justice,
&c.
ALEX. LOCKHART.