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United Kingdom House of Lords Decisions |
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You are here: BAILII >> Databases >> United Kingdom House of Lords Decisions >> Mr Archibald Murray, et al., Trustees for the Creditors of John Lowis of Merchistoun v. The Honourable Francis Charteris and his Guardians [1734] UKHL 6_Paton_667 (3 April 1734) URL: http://www.bailii.org/uk/cases/UKHL/1734/6_Paton_667.html Cite as: [1734] UKHL 6_Paton_667 |
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Page: 667↓
(1734) 6 Paton 667
CASES DECIDED IN THE HOUSE OF LORDS, UPON APPEAL FROM THE COURTS OF SCOTLAND.
No. 110
Page: 668↓
House of Lords,
Subject_Bankruptcy — Act 1696 — Heritable Bonds — Infeftments— Usury — Onerous Causes. —
(1) Heritable bonds granted long before the bankruptcy, but no infeftments taken upon them until within sixty days thereof, held ineffectual, reserving objection to the bonds otherwise. (2) Objection was stated to the bonds otherwise on the grounds of usury, and that they were not granted for onerous causes. Held usury not relevant; but held the bonds sufficient to instruct their onerous causes. In the House of Lords affirmed as to usury, but reversed quoad ultra, and held the bonds did not instruct their onerous causes without some farther proof thereof.
John Lowis, Esq. of Merchistoun, was apparent heir, and succeeded to a very opulent estate, real and personal; but soon after being possessed thereof, his affairs fell into disorder, and he became bankrupt. Thomas Menzies of Lethem and William Scott Blair of Blair, having been engaged along with him in several transactions, became bankrupt also.
It was agreed between the creditors and the bankrupts, that the bankrupts should convey and make over all their estates real and personal, to the appellants, as trustees for the whole creditors, towards payment of their debts, which was done accordingly.
Amongst the creditors was Colonel Francis Charteris, now deceased, who appeared and claimed as a creditor of Mr Lowis, by two heritable bonds, one for £3745, 4s. 4d., and the other for £1000, upon which bonds he had taken no infeftment for many years, till the bankruptcy came to be discovered; but then, the appellants alleged, the infeftments were taken with the view of establishing in him a preference for his debts, in prejudice of all the other creditors, whose debts were secured by personal bonds only.
The claim lodged, amounted, principal and interest, to the sum of £6000, which made it necessary for the appellants to investigate the grounds of it. Upon doing which, they found that Mr Lowis never borrowed or received one shilling from Colonel Charteris,—that the foundation and origin of the whole claim was, the misfortune of losing about £200 at gaming, for which he gave his note or bill, which came into the hands of Mr Charteris, and that Mr Lowis, fearing the consequence of having the matter discovered to his father, was induced to grant new bills, notes, bonds, &c., for such money forbearance, &c., till, by frequent renewal of securities,
Page: 669↓
The appellants brought an action against the Colonel to have these bonds and securities set aside and declared void, as being obtained by imposition, and without valuable consideration.
The appellants also superadded another action, founded on the statute of 12th Queen Anne, against usury.
Separately, it was contended by the appellants under the Act concerning notour bankrupts, “That all bonds upon which infeftment may follow, granted by the said bankrupt, should only be reckoned as to this case of bankruptcy, to be of the date of the sasine lawfully taken thereon.” And, that in virtue of this Act, the Colonel's infeftments were void, because his heritable securities must be considered as of the date of the sasines, and these having been taken within sixty days of bankruptcy, were consequently void, and therefore he could have no preference in virtue thereof. Further, that the bonds were granted in security of prior debts.
Feb. 10, 1731.
The Lord Ordinary, after condescendence and production of documents, pronounced an interlocutor, finding “That both the said bonds bearing date so many years before Mr Lowis' bankruptcy fell under the Act 1696, in regard the infeftments were not taken till within sixty days of Mr Lowis becoming bankrupt, reserving to the creditors to be heard how far the bonds were reducible otherwise, and that they were usurious and illegal.”
June 19, 1731.
On reclaiming petition the Court adhered.
On a further production of documents with a reclaiming petition, the Court found that some of the old bonds for which the heritable bonds had been replaced, were granted for onerous causes, and that two heritable bonds were merely corroborative securities, and consequently to the extent of the said sums, fell under the description of the said Act 1696.
The cause coming before the Lord Ordinary, his Lordship reduced the two infeftments, and decerned, reserving to the appellants any objections to the bonds themselves on which these infeftments followed. *
_________________ Footnote _________________
* The grounds on which the Court went in this part of the case which was not appealed, were, “That an heritable bond for money borrowed, granted long before the bankruptcy, if infeftment is not taken till after, or within sixty days of the bankruptcy, falls under the Act 1696.”— Vide Elchies, vol. i, “Bankrupt” No. 5.
Page: 670↓
Thereafter the appellants insisted in their second action on the ground of usury, and sought to have these bonds set aside on that ground, because more than 5 per cent, had been charged and taken, and that usury was exacted and taken by the Colonel, by his charging and receiving double interest for several years, upon £500, under cover of double securities, and that, therefore, his bonds should be declared void. They also alleged, that the bonds were not onerous, and that they did not instruct their onerous causes.
The Colonel having died, the action was revived against the respondent, Mr Charteris.
Nov. 15, 1732.
Jan. 11, 1733.
Feb. 21, 1733.
July 6, 1733.
The Lord Ordinary reported the case to the Court, and the Court, of this date, found “the documents adduced for instructing usury, not relevant, and find the bonds in question sufficiently prove their onerous causes without the necessity of farther astriction.” On reclaiming petition, the Court adhered to the first part of the interlocutor in reference to usury; but found “that the narratives of the bonds in question did not sufficiently instruct the onerous causes of the said bonds.” The respondents reclaimed against the interlocutor, and the Court was pleased to alter the last interlocutor, and to adhere to their interlocutor of 15th November, finding “the bonds in question sufficiently prove their onerous causes, without the necessity of farther astriction.”
The appellants reclaimed against this interlocutor, but the Court adhered.
Against these interlocutors the present appeal was brought to the House of Lords.
After hearing counsel,
Journals of the House of Lords.
It was ordered and adjudged by the Lords Spiritual and Temporal in Parliament assembled, That the former part of the said interlocutor of the 15th November 1732, whereby the Lords of Session found the documents adduced for instructing usury not relevant, be, and the same are hereby affirmed; but that the latter part of the same interlocutor, finding the bonds in question, sufficiently prove their onerous causes, without the necessity of further astriction, be, and is hereby, reversed. And it is further ordered and adjudged, That the said interlocutor of the 11th January 1833, whereby the Lords of Session adhered to the first part of their former interlocutor, but found, that the narrative of the bonds
Page: 671↓
Counsel: For the Appellants,
Rob. Dundas,
J. Strange,
A. Hume Campbell.
For the Respondents,
Dun. Forbes,
W. Murray.
