Scottish Court of Session Decisions

James Ferguson, creditor in a bond and disposition in security containing a power of sale in ordinary form, having failed to obtain payment of the sum due to him after making due demand upon his debtor, advertised the security subjects for sale.

The sale was advertised in the Ardrossan and Saltcoats Herald on six consecutive Fridays, viz.—26th January, 2nd, 9th, 16th, and 23rd February, and 2nd March 1894;

Page: 526↓

and in the Glasgow Herald on Saturday 27th January, and the five following Wednesdays, viz.—31st January, and 7th, 14th, 21st, and 28th February.

The subjects were exposed for sale by public roup on 7th March 1894, when Hugh Rodger offered £181, and being the highest bidder was preferred as purchaser.

By article 4 of the conditions of roup the purchaser was bound to grant a bond with caution for the price within ten days of the sale, and article 5 provided that if the purchaser failed to grant such a bond with security within that time, he should, in the exposer's option, forfeit his interest in the purchase and should be liable to the exposer in a fifth part more of the price offered by him as liquidate damages for loss of market.

Rodger being called upon to grant a bond of caution in terms of article 4, declined to do so, on the ground that he had discovered that the sale had not been advertised for six weeks as required by sec. 119 of the Titles to Lands Consolidation Act, unless a clause were inserted in the bond to the effect that the purchase price would be paid in exchange for a valid disposition of the subjects. Ferguson having declined to accept a bond of caution with such a clause, Rodger consigned the price in bank. Thereafter Ferguson declared Rodger's purchase forfeited, and advertised the subjects for sale. Rodger offered at the sale but his offer was refused. The subjects were sold for £145.

Ferguson then raised an action against Rodger in the Sheriff Court at Glasgow for payment of £36, 4s. as liquidate damages for loss of market.

The defender pleaded—“(2) The defender having agreed to grant a bond of caution undertaking to pay the price in exchange for a valid disposition of the subjects, he is entitled to be assoilzied. (4) The pursuer having failed to comply with the requirements of the statute could not validly convey, and was therefore not entitled to call upon the purchaser to grant a bond for the price.”

Section 119 of the Titles to Lands Consolidation (Scotland) Act 1868 (31 and 32 Vict. cap. 101) provides as follows:—“The import of the clauses of the form No. 1 of the said Schedule (FF) occurring in any bond and disposition in security, whether granted before or after the passing of this Act, shall be as follows, viz.—… The clauses reserving right of redemption and obliging the grantor to pay the expenses of assigning or discharging the security, and, on default of payment, granting power of sale, shall have the same import, and shall be in all respects as valid, effectual, and operative as if it had been in such bond and disposition in security specially provided and declared … that, if the grantor should fail to make payment of the sums that should be due by the personal obligation contained in the said bond and disposition in security within three months after a demand of payment intimated to the grantor, … then and in that case it should be lawful to and in the power of the grantee immediately after the expiration of the said three months, and without any other intimation or process at law, to sell and dispose in whole or in lots of the said land and others by public roup at Edinburgh or Glasgow … on previous advertisement stating the time and place of sale and published once weekly for at least six weeks subsequent to the expiry of the said three months in any newspaper published in Edinburgh or in Glasgow.”

Upon 23rd October 1894 the Sheriff-Substitute ( Balfour) dismissed the action as irrelevant.

Upon appeal the Sheriff ( Berry) pronounced this interlocutor:—“Finds that the defender was preferred as purchaser of the property referred to in the pleadings at the sale which took place on 7th March 1894, under articles of roup, and that he failed to carry out the purchase in terms of the articles: Finds in these circumstances and under reference to note that he is liable in payment to the pursuer of the amount concluded for: Therefore recals the interlocutor of the Sheriff-Substitute appealed against: Decerns against the defender as craved,” &c.

“Note.—… It is said that as in the one case only forty days elapsed between the first advertisement and 7th March, the day of the sale, and in the other only 39 days, the requirement in the statute of advertisement ‘published once weekly for at least six weeks subsequent to the expiry of the said three months’ was not satisfied. I do not think this objection is valid. The requirement of the Act is not that there shall be an interval of six weeks or forty—two days between the date of the first advertisement and the sale, but that there shall be an advertisement published once in each of at least six weeks after the expiration of the three months’ intimation and before the sale. That condition was complied with.”

The defender appealed, and argued—The words in the clause in the Act of Parliament required that the advertisement should take place in six successive weeks, i.e., six successive periods of seven days each, at the expiry of three months after the intimation to the debtor in the bond and disposition, so that forty-two days must elapse between the date of the first advertisement and the day of sale. The purpose of the clause was that the sale might be properly advertised in the interest of the debtor in the bond, and up to the last day before the sale he might come forward and pay the sum contained in the bond. The want of proper advertisement was therefore a bar to the creditor in the bond giving the purchaser at the sale a good title. There was no absolute authority on the subject, but the dicta were in favour of the defender— Howard & Wynd—ham v. Richmond's Trustees, June 20, 1890, 17 R. 990; Nisbet v. Cairns, March 12, 1864, 2 Macph. 863. Even assuming that the Court held the advertisement to be sufficient, the defender was entitled to absolvitor, because he had made a reasonable objection and not a frivolous one, and in these circumstances

Page: 527↓

the pursuer ought to have considered it and tried to remove it, but he did neither, and also refused to accept a valid bond of caution when offered to him— Howard & Wyndham v. Richmond's Trustees, cited supra—Lord Shand's opinion p. 994.

The pursuer argued—The pursuer had opportunity to examine all the titles, &c., of the property before he offered for it at the public roup, and if anything was wrong he must bear the risk of his actings. The objection, however, was a frivolous one, as the advertisement had been properly made upon a fair reading of the statute. All that was necessary for compliance with the Act was that an advertisement should appear in each of six weeks prior to the sale; it did not infer that a term of forty—two days must expire between the date of the first advertisement and the day of sale.

At advising—