July
26. 1770.
ANSWERS FOR JOHN and WILLIAM CUNINGHAMS and Company, brewers in Glasgow; JAMES HOTCHKIS and Company, brewers in Edinburgh; and JAMES GRAHAM vintner in Glasgow; for themselves, and as trustees for the other creditors of WILLIAM M'GREGOR late tenant in the lands of Parkhall, and others: TO The PETITION of ROBERT HAMILTON of Wishaw.
THE general question at issue between Mr Hamilton of Wishaw, and the other creditors of M'Gregor, in the process of multiple poinding, presently depending in this Court, is, Whether the various tacks which Wishaw had granted to M'Gregor of sundry farms for a long course of years, adjudged by Wishaw himself as a creditor of M'Gregor's, were also adjudgeable by M'Gregor's other creditors, so as to bring them in
pari passu
with Wishaw, these being within year and day of Wishaw's adjudication?
IT was objected on the part of Wishaw, That as some of these tacks, particularly that of Easter-Park and Birkenhill, though granted to M'Gregor and his heirs for a term of no less than 57 years, excluded assignees and sub-tenants, except by the special consent of the proprietor, such tacks were not adjudgeable.
IT was on the other hand contended for the creditors, That however effectual such clauses might be to exclude voluntary assignees, they could not be effectual to exclude the legal diligence of creditors by adjudication, especially in tacks such as these, for such a long term of years, granted to the leasee and his heirs, in which there could be no
dilectio personarum.
2dly, That whatever should be the judgment of the law upon this point, the tack of Easter-Park and Birkenhill was attended with such special circumstances as ought to distinguish it from the other leases containing the like clause; in so far as it was thereby conditioned, that M'Gregor should be at liberty to subset those parts of the lands which lay on the south side of the toll-road, during the first nineteen years of the lease; and in so far as it was thereby also conditioned, that Wishaw should be at liberty to make void said tack at the term of Martinmas 1799, upon his making payment to M'Gregor of
L.
70: 5: 2 Sterling. 3dly, As Wishaw had stated certain objections to the adjudications of the other creditors founded upon an alledged
pluris petitio,
and had thereupon prevailed in obtaining the whole of these other adjudications, that of James Graham only excepted, to be voided
in totum,
the creditors upon their part stated certain objections to Wishaw's adjudication, as sufficient to void it also
in totum,
whereby the other creditors and he would be so far in
pari casu.
THE result of all which was, that the Lord Auchinleck Ordinary, by several interlocutors stated in the reclaiming petition for both parties, sustained the objection pleaded for Wishaw, founded upon that clause of the tack of Easter-Park and Birkenhill, excluding assignees and sub-tenants; and found said seclusion effectual, not only against voluntary assignees, but also against legal assignees by adjudication; and consequently that the creditors of M'Gregor, by their adjudication of the tack of Easter-Park and Birkenhill, can take nothing, and have no title to compete with Wishaw.
2dly, As Graham's adjudication was free from the objection of the
pluris petitio,
and does,
inter alia,
adjudge the tack of Easter-Park and Birkenhill, his Lordship found the same effectual to carry so much of the lands of said tack as M'Gregor was at liberty to subset; and that it was equally effectual to carry the sum of
L.
70, which by said tack Wishaw was bound to pay to M'Gregor in the event of his taking advantage of the breach thereby allowed to him. 3dly, His Lordship repelled the objections stated by the other creditors to Wishaw's adjudication. The first and last of these points was submitted to your Lordship's review by a reclaiming petition at the instance of the other creditors, and which, with the answers thereto made on the part of Wishaw, is hitherto unadvised.
BUT Wishaw, not satisfied with the advantage thereby gained over the other creditors, at least equally onerous, has, alongst with his answers to the creditors petition, preferred a reclaiming petition upon his part, praying an alteration of those interlocutors whereby Graham's adjudication is found effectual to carry the aforesaid tack of Easter-Park and Birkenhill,
quoad
such part of the lands therein contained as M'Gregor was empowered to subset, as also to carry the
L.
70 which Wishaw was bound to pay to M'Gregor in the event of his taking advantage of the breach in the tack thereby allowed; which counter-petition being appointed to be answered, the following answers are humbly submitted.
AND in the entry it is proper to observe, That, if the creditors shall prevail by judgment of your Lordships in having it found, that the clause in all or any of the tacks granted to M'Gregor by Wishaw, excluding assignees or sub-tenants, does only exclude voluntary assignations, but not the legal diligence of creditors by adjudication, that will of course supersede any judgment upon the points stated in Wishaw's reclaiming petition: But uncertain, as the creditors are, what the judgment of the Court may be upon that capital point, they will confine what they are now humbly to offer in support of the Lord Ordinary's judgment, upon the other two points complained of by Wishaw.
IN the more early periods of the law, tacks were esteemed mere personal contracts, and therefore, however effectual against the granter and his heirs, were not binding upon third parties, singular successors in the lands; and viewing them in that light, were so strictly interpreted, as to exclude either assignees or sub-tenants, without any express covenant to that purpose: But when tacks were by statute rendered real rights, as the rigour and severity of the law in other particulars was gradually abated, and as it is now an established law that leases may be granted to subsist for any given length of time, it is adverse to every principle of justice, that any beneficial estate should be placed beyond the reach of lawful creditors, though this must be the unavoidable consequence of the doctrine here maintained on the part of Wishaw. The granting an assignment or sub-tack does not annul the principal tack; so that if this tack, however beneficial, was not to be adjudgeable, M'Gregor would be intitled to hold the same, and laugh at his creditors.
IN a tack of this endurance, which is nearly equal to a perpetuity, there could be no
dilectio personarum,
the heirs of the leasee being equally unknown to the leasor as any other persons. And if the creditors are well advised, this supposed
dilectio personarum,
in the choice of a particular person, is the only solid principle upon which the exclusion of assignees or sub-tenants can be justified. The seclusion of assignees and sub-tenants, by a clause in the tack itself, cannot operate more strongly than the exclusion by force of the law: So that as, in the one case, the diligence of creditors by adjudication was not understood to be excluded, no good reason can be assigned why, in the other case, the expressing what would be implied, supposing the tack had contained no such clause, should produce so much a stronger effect. Such is plainly the import of the clause respecting subsets, which could only be granted by the voluntary act and deed of M'Gregor; and there is equal reason that the same construction should take place with regard to assignments, the clause being one and the same as to both.
AND when to this is added the faculty or power of subsetting, allowed by this tack, of so large a part of this farm, for a term of no less than 19 years, it furnishes a strong handle, that the clause secluding assignees and sub-tenants, was only meant to exclude voluntary not legal assignees.
SUCH is plainly the import of the clause with respect to subsets. If M'Gregor had granted a subset for a term of 19 years of that part of the farm which he was specially authorised to subset, there cannot be a doubt that the same must have been effectual, and consequently, that the benefit arising to M'Gregor by that subset must have been adjudgeable by his creditors, as the law will never permit any beneficial right belonging to a debtor to be placed without the reach of his lawful creditors. It is true that M'Gregor has not in this case granted such subset, but by contracting debts he has done what is equivalent, as the law will adjudge every right that was in him, or that he had power to grant, in payment to his creditors. If M'Gregor had granted a subset of these lands to his creditors, with power to them to apply the surplus-rent over and above a just proportion of the total tack-duty, in satisfaction of the debts due by him to his creditors, a subset in these terms would not have been challengeable by Wishaw; or if he had granted such subset to any third person for an advanced rent, his lawful creditors must have been intitled to have taken the benefit thereof for payment of their debts; and there is no other method known in the law by which this could be obtained but by adjudication of his interest in the tack itself, and sub-lease, in so far as he had power to subset.
WISHAW is indeed pleased to contend, That the tack being
unicum quid,
for which one tack-duty is paid
in cumulo,
the creditors cannot be allowed to adjudge part of the tack for which no particular rent had been fixed by agreement between him and M'Gregor, and that he cannot be obliged to submit to the division of the rent by the conjectural estimation of witnesses.
BUT was this to be the consequence of the power and liberty to subset this part of the farm, Wishaw would have himself only to blame for granting the lease in those terms, which he ought to have foreseen might be productive of such consequences. There is no difficulty in ascertaining what part of the total rent corresponds to the different parts of this farm. This must have been in the view of parties, when liberty was granted to M'Gregor to subset a certain part thereof. The subset behoved to ascertain a rent or tack-duty payable by the sub-leasee for that part of the ground allowed to be subset. And as Wishaw could not have demanded from the sub-tenant more than the tack-duty payable by the subset, it is plain, that the division of the rents corresponding to the grounds retained or subset, must have been in the view of parties.
And as Wishaw has himself adjudged this tack, it demonstrates his own sense and understanding of the matter,
viz.
That the clause, secluding assignees and sub-tenants without the consent of him the proprietor, intended no more but an exclusion of voluntar assignees. The adjudication which he himself took, can bear no other construction. That is his only title in this competition; and if it was adjudgeable at his instance, it must be equally competent at the instance of M'Gregor's other creditors, especially as to that part of the farm which M'Gregor was empowered to subset.
WISHAW is indeed pleased to content, That there is a material difference between a power to assign and to subset, in this respect, that an assignation denudes the principal tacksman of the lease altogether, and vests the right wholly in the assignee; whereas a subset does not denude the principal tacksman, who remains still liable for the total rent.
THE creditors cannot agree to this distinction; because, however true it may be that an assignation transfers the whole right to the assignee, it will not from thence follow, that the cedent is thereby liberated from his original obligation for payment of the rent or tack-duty. The master may thereby have the superadded security of the assignee's being also bound for payment of the rent, but which can never liberate the original tacksman from the obligation which he had came under to make good the rent during the whole years of the lease; so that, in this respect, the assignee and sub-tenant are in
pari casu.
IF A, by minute of sale, shall dispone lands to B, his heirs and assigns, whereby B is taken personally bound in payment of a certain reddendo or duty, though B is at liberty to alienate the subject, and will no doubt stipulate relief from the disponee of the reddendo payable to his author A, that will never liberate B, the first disponee, from the personal obligation he had come under from being liable to A, in payment of the reddendo for which he was personally bound. And no reason can be assigned, why a different rule should obtain with respect to a lease containing a power to assign, as the granting such assignation cannot liberate the original leasee from the obligation which he had come under to pay the rent or tack-duty during the whole years of the lease. The assignee may be bound to relieve him thereof at the hands of the leasor; but he must still remain bound to the heritor for payment of the rent, in terms of his personal obgation.
THE power and faculty of subsetting so large a part of the farm demonstrates this proposition, That there was here no
dilectio personarum,
when M'Gregor was at liberty to subset to any person he thought proper; and as the granting such a subset must, in the nature of things, have required a division of the rent payable for the lands subset, from the total rent or tack-duty, the adjudications taken against M'Gregor must be effectual to carry his interest both in the tack and subset, so far as regards the lands which he was empowered to subset: And thus far the Lord Ordinary's interlocutor falls to be affirmed.
THE other point determined by the Lord Ordinary's interlocutors,
viz.
That the adjudications deduced against M'Gregor were equally effectual to carry the
L.
70 Sterling which Wishaw was bound to pay to M'Gregor, in the event of his taking advantage of the breach allowed by the tack, depends upon the same principles, and must be governed by the same rules,
viz.
That as every beneficial right or interest competent to a debtor must, in some shape or other, be attachable by his creditors; and as, by the aforesaid agreement,
L.
70 Sterling was ascertained to be the just value of the subjects therein mentioned, for the remaining years of the lease, in case Wishaw should take advantage of the breach allowed of by the tack; it would be a cruel case, if this sum, the agreed value of the tack for the remaining years thereof, should be pocketted up by Wishaw, in exclusion of the other creditors adjudgers.
THIS sum was the agreed estimation or value of the tack for the remaining years of the lease after the 1799. It cannot be of less value now, in the 1770, when Wishaw means to reassume the possession 29 years before the term specified in the breach. That may be a just consideration for enlarging the premium to be paid, but can never justify the attempt that is made to pocket up that sum, in exclusion of the other creditors.
FOR though it is true that Wishaw does not now claim the possession of these farms, in right of the stipulated breach, but in virtue of his adjudication, if by means thereof he is to reap that advantage at so much an earlier period than would have been the case if M'Gregor had continued in possession, justice requires that he should make good to M'Gregor and his creditors the
L.
70 Sterling, however short of the sums expended by M'Gregor in the improvement of these gounds.
AND therefore, to conclude upon this point also, it is hoped your Lordships will be of opinion with the Lord Ordinary, that the tack of those lands, so far as M'Gregor had power to subset the same, is carried by their adjudications preferably to or
pari passu
with Wishaw's adjudication, if the same shall be sustained.
In respect whereof, it is hoped your Lordships will not only affirm the Lord Ordinarys interlocutor's so far as complained of by Wishaw, but will alter the same so far as complained of by the creditors.
ALEX. LOCKHART.