Scottish Court of Session Decisions

Subject_1 BANKRUPT.
Subject_2 DIVISION VI.

Cases which peculiarly regard the particular terms of the late Bankrupt Statutes, from 1772 downwards.

James Dickson
v.
Adam Watson

Date: 6 February 1779
Case No. No 270.

A factor under 12th Geo. III. paid the bankrupt's landlord the rent due to him, without being claimed and proved as the statute directs. Objection to this payment sustained.

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George Landels possessed part of a farm as subtenant under his. father James Landels. Having fallen into arrear of half a year's rent, the Sheriff, upon the application of the father, sequestrated his crop and stocking for security of this arrear, and of the half year's rent to become due at the next term.

Before that time George Landels became bankrupt. His personal effects were sequestrated upon the act 12th Geo. III. and a factor was named. The sactor fold his crop and stocking, and paid up to James Landels the year's rent due by his son. The factor, in the state of the bankrupt's funds lodged, by him, took credit for this article; to which it was

Objected by a creditor of the bankrupt: That this arrear of rent is paid by the factor, without having been claimed and proved by the creditor as the statute directs, and therefore cannot be allowed.

Answered for the factor: The creditor, in this case, had a security over the crop and stocking of the bankrupt by his hypothec, and would have been entitled to draw his payment out of these subjects, without coming into this Court to claim and instruct his debt. He had obtained a sequestration of these subjects from the Sheriff, for making his debt upon them effectual, before the sequestration under the statute had taken place. In these circumstances, the Creditor was not obliged to part with the effects to the factor, and make the circuit of claiming and proving his debt before he could recover it. He might have proceeded to fell the subjects under the authority of the Sheriff, by whom they were sequestrated; and thereby got immediate payment of his rent.

There is nothing in the statute to have prevented him from following this course. The statute does not take away the right of hypothec itself, nor the summary methods founded on it, which have been constantly practised by landlords for recovery of their rents.

As, therefore, the creditor could have recovered his debt out of the effects, by means of the sequestration, without claiming in this Court, it was for the interest of the other creditors to pay up the debt, and relieve the effects of this burden.

Replied for the objector: The sequestration awarded by the Sheriff could have no other effect prior to an actual sale, than to secure the subjects falling under the hypothec from being embezzled. It did not transfer the property of the effects to the bankrupt's father, and could not prevent them from falling under the general sequestration of this Court.—So it was found in the case of Brown contra Gordon and Fraser, 1773, (not reported.)

These effects, therefore, could not have been disposed of by the father at his own hand, or by warrant of the Sheriff. The debt, no doubt, continued preferable in consequence of the hypothec; but there was no method of obtaining payment, except by claiming and proving it, as directed by the statute.

The Court ‘sustained the objection to the rents stated as paid to the father, these debts not having been claimed or proved by the father in terms of the statute.’ See Hypothec.

Lord Ordinary, Alva. Act. M'Leod. Alt. Sinclair. Clerk, Tail. Fac. Col. No 67. p. 127.