Scottish Court of Session Decisions

At advising—

Lord President—The leading object of this building society, as specified in its rules, is by the subscription or payments of its members to form a fund out of which members who are desirous of erecting or acquiring dwelling-houses or other heritable property may receive advances upon heritable security by way of mortgage to enable them to do so. The defender is a member, and there have been transactions of a somewhat complicated character between him and the society. He was proprietor of certain heritable subjects, and on the security of these obtained large advances. The form of the security given was a disposition ex facie absolute, and there was no back-letter properly speaking. But it is quite clear that the title was in reality a security merely. I think it necessary that this should be clearly shown, as the basis of the judgment I am to propose. I beg therefore to refer to the 33d, 34th, and 35th rules of the society:—“33. Applications for advances shall be in the form No. 2 or No. 3 appended to these rules, accompanied by such specification of the security offered and other information as the directors may require; and these applications shall be recorded by the manager according to the dates at which they are received by him, in a register to be kept for that purpose; and they shall be preferred and disposed of by the directors in the order in which they are recorded. The manager shall have power, before receiving any application for an advance, to require the applicant to deposit with the society the amount of the surveyors fees.” “34. When the directors are satisfied that the property offered is a sufficient security, such property shall be conveyed to the society by absolute disposition, or by bond and disposition in security, or such other deed as the law agents of the society may require; and the same and all other necessary title-deeds relating thereto shall be deposited with the society; and the directors shall then give the party who has sold the property, or is to grant the necessary deed, an order on the society's bankers for the amount agreed to be advanced by the directors.” “35. No member who has obtained an advance shall be entitled on any ground whatever to change or alter the property over which the security of the society extends without the written consent of the directors; nor shall he without such consent be entitled to take a grassum on letting any lease, or to grant any feu of such property or any portion thereof, to sell or give up any right or pertinent to the property, nor to lease the property for a longer period than five years: Provided always, that no lease granted by any member shall be held to be valid or to bind the society in the event of their having to enter into possession of the property, unless the rent fixed under the same shall have been conditioned as the fair annual value of the property. Such members shall, however, from and after the execution and delivery to the society of the requisite conveyances and title-deeds as before provided, and so long as these rules are complied with, have power to possess such property, to in-put and out-put tenants, and to draw the rents and pursue therefor, but always without prejudice to the preferable right of the society over the same.” Now, it is quite clear that this 35th rule in all its parts applies equally to a security given in the form of an absolute disposition as to one in the form of a bond and disposition in security. The borrower therefore, so long as he fulfils the condition of the loan, has power to possess the property. Now, before rule 61 is put in operation the forfeiture must be established as matter of fact, and until that is done the right to possess continues. Now the question is, Is this a case for summary ejection? To warrant that the possession must either be vicious possession, that is, obtained by fraud or force, or precarious possession, i.e., without a title. Now, in this case there is neither. There is no question of vicious possession. A precarious possessor is a possessor by tolerance merely. But the power is here in virtue of ownership, and under the rules of the society. The law on this is very clearly settled, and I may refer to the case of Halley v. Lang, the rubric of which is—“A petition for summary ejection which contained no allegation of vicious or precarious possession without title held incompetent.” I need not quote more than the opinion of Lord Deas, who says—“The first ground on which we must dismiss this petition is that there is not set forth here any such ground of action as acoording to the form of process in the Sheriff Court will warrant an ejection. An ejection is only competent when a party is either a vicious possessor or a precarious possessor in the sense of having no title at all.” I am therefore of opinion that this petition stands properly dismissed.

Lord Deas—I should have some difficulty in proceeding on my own opinion in the case of Halley v. Lang, in so far as I think that opinion seems to proceed a good deal on the action being in the Sheriff Court. Now, in this case I do not see any clear objection to the jurisdiction of the Sheriff or to the action proceeding in the Sheriff Court if otherwise competent. The jurisdiction of the Sheriff is now extended to questions of heritable right relating to subjects of not greater value than £1000. Now this question is about property of the value of £30 per annum, and therefore presumably of not greater value than £1000. I am therefore disposed to view this case in the same light as if it applied to some objection brought in this Court. I think the action is ruled to be incompetent in the case of Wyllie—I mean incompetent on principle. A warrant of ejection is not a decree but a diligence. Now, the question arises whether private parties can make rules for themselves applicable to diligence quite different from those of ordinary law. If that were so, they might make rules of diligence quite injurious to the interests of all the other creditors. And under its rules this society may, without any warning whatever, enter into the possession of the gentleman's property. Now, that is quite inconsistent with the ordinary rules of law. These principles are fully explained in the case of Wyllie—that no private parties are entitled to make rules applicable to diligence which cut out all the other creditors.

Lord Mure—The nature of this action is an ejection of the more summary kind known to law, just as in the case of Halley. I am of opinion with your Lordships that the forfeiture requires to be established. There are certain circumstances in which it is provided that the society may enter on the possession, and these circumstances must be shown to have taken place. I concur with your Lordship in putting my opinion on the case of Halley.

Lord Shand was absent.