Scottish Court of Session Decisions

Subject_1 BANKRUPT.
Subject_2 DIVISION I.

Reduction of Alienations made by Bankrupts where the Reducer has done no Diligence.
Subject_3 SECT. III.

Alienations in favour of Conjunct and Confident Persons.

Captain Newman
v.
Tenants of Whitehill, and Mr John Preston

Date: 8 January 1669
Case No. No 27a.

A conjunct person preferred on his disposition, granted before diligence, only to the extent of debts, actually and previously due to himself, or for which he had been bound.

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Captain Newman having apprised the lands of Whitehill from Prestoun of Craigmillar his debtor, and being thereupon infeft, pursues the tenants for mails and duties. Compearance is made for Mr John Prestoun, who produces a disposition from Craigmillar his brother, of the baronies of Craigmillar, Prestoun, and Whitehill: Which disposition relates this debt of Captain Newman's, and many other debts, and for satisfaction thereof dispones these lands to Mr John, reserving the disponer's and his lady's liferent, containing a reversion upon ten merks, and containing a provision that it should be leisom to Craigmillar during his life, and after his decease to Mr John, to pay any of the creditors contained in the disposition they pleased, without contributing the price proportionally to the rest of the creditors; and also produces a renunciation by Craigmillar, whereby he renunces the reversion and the liferents in favours of Mr John, and also his own power of preference of the creditors, and Mr John his infeftment upon the disposition, whereupon he alleged, that he ought to be preferred to the mails and duties, because he stands publicly infeft, by virtue of the said disposition, before any infeftment in the person of the pursuer. It was answered for the pursuer, that the infeftment produced cannot exclude him, because it is expressly granted for satisfying of the sum whereupon his infeftment proceeds. It was answered for Mr John Prestoun, that he having a power to prefer any creditor he pleased, he paid other creditors to the value of the estate, whereby Newman is excluded. It was answered for Newman, that this disposition was fraudulent and simulate, in prejudice of lawful creditors, whereof he has reduction upon the act of Parliament 1621, as being granted by a brother to another, with a power of preference of creditors at the purchaser's option; which clause is altogether null, especially as to the preferences done, since lawful diligence was used by this pursuer, by horning, inhibition, arrestment, and apprising; and as no debtor can so prefer himself, so neither can he give such a power to any other; and therefore the pursuer ought to be preferred to all the creditors, conform to his diligence. It was answered for Mr John Prestoun, that there being no diligences done before the disposition by any creditor, Craigmillar might dispone, being for an onerous cause, as he pleased, and might prefer one creditor to another. 2dly, Albeit this power of preference were not simply to be allowed after diligence done by creditors to prefer others to them; yet it ought to be sustained, in so far as Craigmillar might lawfully have done, viz. to prefer Mr John for the sums due to himself, and for his relief of such sums as he was cautioner in. The pursuer answered, that such a disposition was not made, nor doth this disposition any way relate to Mr John's sum, and his relief, but generally and equally to all, and there is no difference but the unwarrantable power of preference, which can have no effect after diligence done.

The Lords found the power of preference not to be sustained as to any other debts, than to such as were due to Mr John himself; and for which he was cautioner before the disposition; and found as to these, that the power of preference was lawful and valid, and was equivalent to this clause, with power to Mr John to Satisfy himself and those to whom he was cautioner, primo loco. see No 2. p. 880.

Stair, v. 1. p. 579.