Scottish Court of Session Decisions

Subject_1 ADJUDICATION and APPRISING.
Subject_2 NATURE and EFFECT of this DILIGENCE.

Sir Lewis M'Kenzie of Scatwell,
v.
His Majesty's Advocate

Date: 9 March 1754
Case No. No 19.

Whether interest is due on the penalty in an adjudication.

Is interest on an accumulated sum, being in so far interest upon interest, of the nature of a penalty?

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In the 1705, George Earl of Cromarty became bound to pay 2300 merks to Kenneth M'Kenzie of Scatwell. In the 1723, Scatwell obtained decreet, adjudging the estate of Cromarty, for payment of the principal and interest of the sum foresaid, accumulated from the date of the adjudication. The late Earl of Cromarty, heir of the original debtor, was attainted, and his estate vested in the King. Sir Lewis M'Kenzie of Scatwell, having right to the adjudication aforesaid, entered his claim for payment of the accumulated sum and interest on it, from the date of the adjudication.

His Majesty's Advocate objected: That, by the act 20 Geo. II. cap. 41. it is provided, “That no decree in favour of any claimant, or debenture, or cetificate to be issued thereupon, shall be made for any sum or sums, on account of penalties, for failure of payment at the day it became due, or for any other penalties whatsoever.” And he contended, That the accumulating of capital and interest may not be stipulated in an original obligation; but is indeed a legal penalty inflicted for the non-payment of the capital and interest; and that therefore the claim, in so far as it is for such penalty, ought to be dismissed.

Answered for the claiment: He who fails to make payment of the interest of money borrowed, ought, by a bond of corroboration, to convert both capital and interest into one capital sum bearing interest; this, on his neglect, the law effectuates by a decreet of adjudication. And neither can the former accumulation, which is by the deed of the party, nor the latter, which is from the operation of the law, be, in any propriety of speech, termed a penalty: As a bond of corroboration would not, on the forfeiture of the granter, be restricted; so neither ought an adjudication to be restricted to the original capital and simple interest.

‘The Lords sustained the claim.’*

Act. Lockhart. Alt. The Crown Lawyers. Clerk, Justice. Fol. Dic. v. 3. p. 11. Fac. Col. No 107. p. 158.

* This case was appealed, a circumstance mentioned inaccurately in the Faculty Collections, and entirely omitted in the Folio Dictionary.—The Lord Dun, Ordinary, had rejected the claim, principally on account of alleged precedents. A petition, against this interlocutor, was refused. A second petition was presented, arguing, that the precedent, chiefly insisted on, was not in point. The Lords altered the Lord Ordinary's interlocutor, and their own, and sustained the claim.— But the following was the judgment of the House of Lords:

“It is ordered and adjudged, That the said interlocutor of the 9th March 1754, complained of, in the said appeal, be, and the same is hereby reversed; and that the interlocutor of the Lord Ordinary, of the 7th March 1753, and the said interlocutor of the Lords of Session, of the 10th of July following, adhering thereto, be and the same are hereby affirmed.”

Journals of the House of Lords, 25th March 1756.