Scottish Court of Session Decisions

Subject_1 BANKRUPT.
Subject_2 DIVISION II.

Alienation after Diligence.
Subject_3 SECT. V.

What Diligence sufficient to found Reduction upon the act 1621.

Bathgate
v.
Bowdoun

Date: 25 January 1681
Case No. No 140.

After horning against a common debtor, a disposition made by him not being for a price paid, by way of commerce, but for a prior debt, was found reducible at the, instance of the creditor who had done the prior diligence.

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James Coustoun having first disponed a tenement in Leith to Helen Bathgate for a full price, she was infeft, but upon mistake, as if the tenement had been within a burgh-royal, she neglected to registrate her sasine. Thereafter Coustoun disponed the same tenement to James Bowdoun, who was infeft and registrate. In a competition betwixt them, Bowdoun craved preference by this last infeftment, because Bathgate's infeftment was null, not being registrate: Bathgate repeated a reduction upon this reason, that she being a lawful creditor to Coustoun had used horning, against him, whereupon he had disponed to her the tenement, and therefore Coustoun could not, by gratification, prefer Bowdoun another creditor, who had done less diligence by the act of Parliament 1621, anent fraudulent alienations, and the last clause thereof, by which it is declared, That after diligence done by any creditor lawfully to affect his debtor's estate, by horning, apprising, arrestment, or inhibition, that the debtor could not, by gratification, prefer another creditor, having done less diligence. It was answered, That that clause bears diligence lawfully to affect the debtor's estate, and cannot be extended to horning, which does not affect the estate, at least could only extend to the liferent; as arrestment could only affect moveables; and could not prefer the arrester, as to real rights; as apprising, or inhibition could not prefer the creditor thereof, as to moveable rights. 2do, If all these inchoate diligences should be equal diligences, it would invert that excellent design in securing purchasers bona fide; for then arrestments which could not be known, or apprisings, though not registrate, might exclude them, which would marr commerce. It was replied, That if the clause imported no more, but that complete diligences should prefer creditors, quoad the proper effect, as to these diligences, it would then signify nothing; for without that, statute law did secure such diligences; but the true intent must be, that after such diligence inchoate, though not complete, the common debtor cannot, by gratification prefer another creditor, having done less diligence, by a voluntary disposition, which doth not concern purchasers, by way of commerce, who buy and pay a price; and therefore though Bowdoun's disposition bears a price paid, yet the true cause was for satisfying a debt due to Bowdoun before the disposition; and therefore the act doth not bear, That the creditor having used diligence, affecting any subject of his creditors, but bears, diligence lawfully to affect, which imports, that the dilgence was but inchoate, and designing to affect; and therefore, horning being a diligence affecting both the moveables by single escheat, and lands and heritable rights, by liferent escheat, the common debtor cannot gratify another creditor, and prefer him to the user of the horning.

The Lords found the reason of reduction relevant, That after horning used by Bathgate against Couston the common debtor, the disposition made by him to Bowdoun thereafter, not being for a price paid by way of commerce, but for satisfying a prior debt due to Bowdoun, that the same was reducible at the instance of Bathgate.

Fol. Dic. v. 1. p. 78. Stair, v. 2. p. 841. *** Fountainhall thus reports the same case:

A reduction of a posterior disposition on the act of Parliament 1621, because she had charged him with horning upon her disposition before he made the second, and duly registrate it: Answered, Horning is not the habile and legal diligence to hinder a man to dispone lands, but only an inhibition, and the words of the act of Parliament must be understood singula singulis, according to their proper subjects and effects, though an arrestment might be extended to secure lands, the contrary whereof was decided in Durie, March 1623,* and who ever searched the register of hornings, but only to secure against escheats ? yet the Lords found the reason of reduction relevant, and repelled the answer; but the Lords were divided, and were not unanimous; for some thought horning not such a diligence as could secure against alienation of lands: All of them were of opinion it would not prejudge a posterior bargain, where the price was truly paid, but only that it secured where the disposition was voluntarily made to another creditor in satisfaction of an anterior debt, which was the case in hand. See M'Kenzie's Observations on the said act of Parliament 1621, page 154. et seq. Fountainhall, MS.

* The case alluded to seems to be Braco against Ogilvie, Durie, p. 61. 22d March 1623. voce Inhibition.

A disposition omnium bonorum being quarrelled by the disponers; creditors, that had done no diligence, upon this reason, That he was notourly bankrupt, and so could not prefer one creditor to another, as was found in Tarpersie's case, No 28. p. 899.

The Lords sustained the reason thus qualified, viz. That the disponer was under several hornings, and his debt exceeded his free gear before the disposition, and the disposition was of all his estate, real and personal; and resolved to determine so in other cases: But found, That the raising or horning was not sufficient, unless the party were denounced, and [the horning] registrate; and it would appear that one horning would not be found sufficient.

Harcarse, (Alienation) No 138. p. 29