Security Co.

a duplicate of it and sent that to the record. Now, that was not the back-bond which had been granted and delivered to the defenders, and which is the only proper back-bond in this transaction. And therefore I am humbly of opinion that the back-bond was not recorded. But, for the reason I have already given, I do not think it of any consequence whether it was recorded or not. The back-bond did nothing more than this-it showed that under certain conditions the present proprietors of the subjects, the Heritable Security Company, were bound to convey the subjects to somebody else; but it did not make them one bit the less for the time absolute proprietors of the subjects. They were no doubt under an obligation to reconvey them to the party from whom they had acquired, but the mode of their acquisition remained the same; it was by disposition absolute. That is not an incumbrance upon lands that is created by such a disposition, because an incumbrance can be discharged, but this infeftment of the pursuers cannot be discharged. It can only be extinguished by a conveyance, and if by a conveyance to the original owner to whom the money has been advanced, it is a reconveyance no doubt, and it is a reconveyance in terms of an obligation contained in the back-bond. But that does not in the slightest degree affect the position of the pursuers as proprietors of the subjects. By means of their infeftment they are put in possession of the subject, because infeftment is the solemn and legal mode of taking possession of heritage, and if they refrained from drawing the rents, that was of their own accord, for they were just as much entitled to draw the rents payable by tenants as any other absolute proprietor was. They were entitled, without any of the provisions in that personal bond, to let leases of the subjects, and to deal with the estate in every respect as their own. They required no process of law to enable them to enter into possession as it is called, and if they had proposed an action of mails and duties, for example, for the purpose of enabling them to uplift the rents, it would have been an idle formality, and indeed incompetent, because it is only an incumbrancer that requires to use a process of mails and duties in order to give him a title in a question with the tenant to uplift the rents. But these absolute holders were just as much entitled to uplift the rents of these subjects as any singular successor deriving his right from the owner. Now, that being the nature of their title, the question comes to be, whether a party so situated can poind the ground? and I am humbly of opinion, with the Lord Ordinary, that he cannot. The authorities upon that subject are perfectly clear and distinct. Poinding the ground is not a diligence proper to an owner at all. He cannot poind his own ground, as it is expressed, and therefore upon that second reason assigned by the Lord Ordinary for his judgment I am entirely in accordance with him also. I am for adhering to the interlocutor.

LORD DEAS-(after narrating the facts)-There can be no doubt that there is in this bond very much as there was in the case of Wylie v. The Heritable Securities Investment Association, 22d December 1873, 10 Macph. 251, very stringent conditions made against the debtor, and with the very obvious effect, whether successful or not, of putting themselves in a very different position

from all ordinary creditors, and obtaining very large advantages over all ordinary creditors. I say nothing as to whether they may not be fairly entitled to do that if they can, but that is obviously what is here attempted. And when we find that that is proposed to be carried out by a sort of mongrel combination of, I may say, all the different kinds of securities known to the law of Scotland, it is the duty of the Court to be very cautious and careful before they sanction novelties of that description not hitherto known in our practice, and by which it is attempted not only to put debtors in a position in which they may be most harshly used, but to put the creditors in a position in which no other heritable creditors have ever been able or have ever attempted to place themselves. Now this, as I have said, was a loan, and without saying anything about judicial securities, which this is not, but confining one's attention to voluntary heritable securities, we all know that there are two classes into which these voluntary securities may be divided. The one class is that in which the security is avowedly and on the face of it in the form of an heritable security. The old form of a bond of annual rent and an heritable bond were both used as a bond and disposition in security, but in whichever of these forms a voluntary security may be used they are all on the face of them securities. But there is another mode which our law has recognised, and which is in many respects much more favourable for the creditors and less favourable for the debtors than those other forms in which it appears ex facie as a security, and that other mode is by executing an absolute disposition of the heritable subject generally, though not always accompanied by a back-letter or back-obligation, declaring that the deed, which on its face is absolute, is merely intended for a security. I say that is the most comprehensive and the most favourable form of constituting a voluntary heritable security that has ever been known in our law, because it sets all other creditors at defiance. They not only cannot interfere until that particular debt is fully satisfied, but there may be other debts of any amount contracted either before or after, and either connected with the loan or not connected with the loan, contracted by the debtors to the creditors, and for all these the creditor holding a security in the form of an absolute disposition with a back-bond is perfectly secure against all the world. There are other advantages which I need not enumerate of having that form of security. Debtors are, however, generally not willing to give that form of security, for no man likes to divest himself absolutely of his estate in favour of a creditor by a deed which has effects like these, and consequently it is not often conceded by the debtor. But it may be done, and when it is done the creditor has the advantages which I have mentioned, and various other advantages arising from that form of security. But I take it that while the law allows all that, it holds that he can only have the advantages which have been immemorially recognised by our law and practice as attending that form of security. law does not hold that he can make a combination at his own hand of a form of security never known in practice or recognised before, so that he shall have at one and the same time all the advantages of a creditor who holds a bond and disposition in security followed by infeftment,

The

and all the advantages of a creditor who holds his security in the form of an absolute disposition and back-bond. I know no law for that, and it is perfectly plain that that would not only give him the power of oppressing the debtor beyond that which is reasonable, but it would give him a preference to all other creditors holding heritable securities, voluntary or judicial-a preference over all such creditors which might be unjust to other creditors, and most prejudicial to the commercial interests and rights of the public in general. Now, that is what is proposed to be done here, and I know no law for that whatever. I agree with your Lordship in thinking that when a party chooses to take his security in this most powerful of all ways by an ex facie absolute disposition and back-bond, while he is entitled to all the benefits the law allows to that, he cannot combine with it all the benefits which will attend the other form of security, namely, that which is a security declared upon the face of it The only answer to all that is, that while the deed which follows that bond, and the infeftment following upon it, make these parties ex facie absolute owners, they are after all mere security holders, and therefore are entitled to the benefits of security holders, for that is the real nature of the transaction. That may be plausible enough if it had not been settled for centuries that it cannot be done. The undoubted law, which holds that a proprietor cannot poind his own ground, is applicable to a creditor who is in reality an heritable creditor, but who holds his security in the form of a disposition and back-bond. It is not necessary to go further back than the case of Garthland, Mor. 10,545, in order to see that that has been settled for a great deal more than 200 years. In that case, in March 1632, Spottiswoode's report is this "The Lord Jedburgh having wadset to the laird of Garthland some land, received a backtack for payment of 1200 merks yearly, Garthland raised a summons against him for payment of the back-tack duty, wherein he concluded likewise to have the ground poinded for it for all years to come; which conclusion the Lords would not sustain, for the pursuer being infeft in the property could not seek his own ground to be poinded for anything due to him out of the said lands." There is a much longer and fuller report on the next page by Durie, in which, among other explanations, it is mentioned-"This cause being called in præsentia Dominorum, the decision here noted was renewed, and it was found that the heritor could not desire the goods of his tacksman nor of his subtenant to be poinded by this pursuit for the tack-duty, but that he might and ought to pursue personally therefor." Now the whole practice and the whole authorities for these past centuries have been conform to that, and whatever might be said about this being a mere form of title, it is settled that in this very question of poinding the ground, the heritable creditor is exactly in the same position as if he were the undoubted and out-and-out proprietor, and there was no loan transaction at all. If he could poind the ground he would be in a position to exclude all other heritable creditors as well as personal creditors as long as he thought proper to exercise that right, because, as was decided in several of the cases, and laid down by Lord Stair, the poinding of the ground gives a man a paramount right. It

is not only good against all debts and past parties, but it is good against singular successors, and does not require even to be transferred against heirs. It is a constant continuing right that sets all the world at defiance in favour of that particular creditor. The poinder of the ground is preferable to all singular successors, and is preferable to all other creditors not only of his own debtor but of all other creditors. I am clearly of opinion with your Lordship that it is beyond all doubt that those parties who choose to take this form of their title, while they are entitled to all the rights and diligence belonging to such form of title, are not entitled to the inconsistent position of having the rights and remedies also of an heritable creditor. The Lord Ordinary puts that question second, but I think it is truly the first question, because it goes to show that this debt is not a debitum fundi. In order to a debt being a debitum fundi it must be a debt upon the face of the titles due to a creditor. If this were an ordinary heritable security it would be debitum fundi, but it is just because this is not an ordinary heritable security, because the party is not here in the position or an heritable creditor, being in the position of a proprietor, that it is perfectly clear that this is not a debitum fundi upon which he can proceed in this way. It is laid down by Lord Stair and all the authorities that a debitum fundi, that is to say, a debt made real upon the property, is necessary to found the diligence of poinding the ground. An heritable creditor has a debitum fundi, but to say that a man whose title is in the form of a proprietor has a right of poinding the ground is just at the same moment to say that he is a proprietor and that he is not. The one form of proposition follows from the other, and I am most clearly of opinion with your Lordship that either of these grounds, though I think they resolve into one and the same ground, is conclusive.

LORD ARDMILLAN-I feel rather reluctant also to separate the two grounds. I do not by any means venture to differ from your Lordship's view that this is not a debitum fundi, and I rather think that the grounds for holding that it is not a debitum fundi very much depend upon the other question, which is one of much interest. I am unable to see anything to distinguish the principle of this case from the principle laid down in the case of Garthland, so long ago as 1632. If there had been no recorded back-bond, this was an absolute disposition by the borrower of the money to the lender of money of the premises. The recording the back-bond is the mode by which the borrower who has given an absolute bond protects himself from the effects of giving an absolute disposition-protects himself by recording the back-letter, which qualities and makes the apparent proprietor in the position truly of an heritable creditor. In this case the proceeding in regard to the matter is a very singular one. I impute not the slightest blame to this Company. They are doing a business which is in itself perfectly fair and honourable, and which they are quite entitled to conduct, and they are quite entitled to make their securities as perfect as they can make them, but when they had got the heritable disposition, and granted a back-bond, which they did on 16th April 1874,

they gave one back-letter only to the borrowers of the money. The borrowers did not record that back-bond, and what did the lenders do? On the 1st of February they signed another letter, and that other letter, which they called a duplicate, they recorded on the 2d February. Now, I don't blame them for the motive, which is very obvious. If they had not signed that backletter and recorded it, they would have held an absolute disposition to this property, and they could not have poinded the ground upon that. They do not themselves profess that they could have done so; and so they first grant and then record a new back-letter, which they call a duplicate; and this they did in order to give them the rights of a creditor in addition to the rights of a proprietor, which they previously had, for as the proprietor they could not have used the diligence of poinding the ground. Therefore this granting and recording the back-letter by them was simply done to combine in their persons the inconsistent rights of a proprietor and of a creditor. Now, that I do not think they can do according to law. The case of Garthland was very well considered very long ago, and all our recent authorities. Mr Ross, Mr Bell, and Mr Duff, allude to the case as a standard authority, which I never in the least doubted. As Mr Ross says in his Lectures, "No title upon which a man may enter into the natural possession of land can be a foundation for the diligence of poinding the ground," or, as it is put in the judgment itself, the owner of the ground cannot poind his own ground. Now, these parties were truly the owners of the ground, unless the borrower of the money held the back-letter and recorded the back-letter to qualify the right. The recording of their own back-letter was an attempt which I think the law cannot sanction to clothe themselves with the two inconsistent rights. view I think really disposes of both points, because clearly there could be no debitum fundi when the party who calls himself the creditor held the rights to the subjects himself. There was no burden upon the property of another. The lender of the money and the holder of the bond was also the proprietor, and there could be no debitum fundi. Therefore I think that truly the two questions turn on the one point, and taking it in that composite view, I am very clearly of the same opinion as your Lordship.

That

LORD MURE-In the discussion of this case it was not disputed by either party, and it may be assumed as settled law-(1) That an heritable creditor, as holder of a debitum fundi burdening the land of his debtor, is entitled to have recourse to a poinding of the ground in order to operate payment of his debt; and (2) that this remedy is not open to a proprietor, because it is held to be incompetent for a party to poind ground belonging to himself. The law is so laid down by Mr Erskine in the passage which has been referred to by the Lord Ordinary in his note; and there are other authorities to the same effect.

In the present case the pursuer's title is not that of an heritable creditor by bond and disposition in security in the ordinary form, but is ex facie that of an absolute proprietor, with a separate back-bond or letter of reversion. The parties do not seem to be at one as to the date

as to

when the back-letter was granted, or whether it has been duly recorded. But it was not disputed by the defenders that such a letter had been granted; and it seems to be admitted that the transaction was substantially that of a security for debt, and intended to be so. Such being the nature and character of the transaction, it has been strongly contended on the part of the pursuers that they were entitled to the same remedies for recovery of their debt as other heritable creditors, including that of an action for poinding the ground.

The question thus raised is, in a general point of view, one of very considerable importance, and is, I think, attended with nicety; and if the matter were still open I should have had some difficulty in coming to the conclusion that the substance of this transaction was to be disregarded, and that because the title of the creditor was ex facie that of a proprietor he was not in a position to sue a poinding of the ground. But the question is, in my opinion, no longer an open one. For it seems to have for long been held that parties whose titles are ex facie absolute, although they may not be out-and-out proprietors, such as liferenters and wadsetters, are not entitled to have recourse to a poinding of the ground, but must operate payment of their debts in some other way. That was decided as regards a wadsetter in 1632, in the case of Garthland, referred to by the Lord Ordinary. Now, a wadset is defined to be "a conveyance of land in pledge for or in satisfaction of a debt or obligation, with a reserved power to the debtor to recover the lands on payment or performance; and that I apprehend is substantially the position of the pursuers in this case. Upon the authority of the case of Garthland, therefore, I have come to the conclusion that the interlocutor of the Lord Ordinary ought to be adhered to.

The Court adhered in both actions.

and low-water mark, including the space between high-water mark and the longitudinal walls or dykes which have been erected along or near to certain parts of the deepened channel of the said river, ex adverso of the estates of Erskine, Bishopton, and Northbar, in the county of Renfrew, and ex adverso of Kilpatrick and Dalnottar, and of Shorepark and Glenarbuck, in the county of Dumbarton, belonging to the pursuers, belongs in property to the pursuers, and is part and pertinent of the adjoining lands, but subject always to any rights of navigation or other rights which the public may have over the same, and subject also to any rights conferred upon the Trustees of the Clyde Navigation by their Acts of Parliament."

In defence the Crown stated-"The defender avers that the Trustees of the Clyde Navigation maintain that, under certain royal charters in favour of the city of Glasgow, and also under the Acts of Parliament by which the Trust is constituted, the foreshores of the river Clyde, including those ex adverso of the pursuers' property, belong to the Trustees, together with all the right and interest originally competent to the Crown. The respective rights and interests of the Crown and the Trustees have never been judicially ascertained; but whilst the defender does not admit that the full right of property has been transferred to the Trustees, the rights and interests conferred on the latter by the charters and Acts of Parliament foresaid are of so large and important a character as to render it expedient and necessary that they shall be made parties to the present process.'

The defender's first plea in law was-"The present action should be sisted till the Trustees of the Clyde Navigation are also called as defenders."

The Clyde Trustees appeared, and put in a minute stating that the foreshores of the Clyde, including those ex adverso of the pursuers' property, and the whole right and title thereto originally competent to the Crown, belonged to them, and craving the Lord Ordinary to sist them as defenders and allow them to lodge defences.

The defender's plea was repelled by the Lord Ordinary, and the motion of the Clyde Trustees was refused, on the ground principally that the question was res inter alios acta.

The defender reclaimed. At advising

LORD PRESIDENT-I cannot understand on what ground the pursuers resist the sisting of the Clyde Trustees in this process. It seems to be their clear interest to have that party sisted; but whether it be their interest or not, it is the duty of the Court to see that all parties asserting a right should have an opportunity of establishing their claim. If the pursuer's case is a good one, and he prevails, he can have a more effective judgment if all parties are convened, for he would then have a decree which would be valid against all. The peculiarity of this case is that both parties, the present defenders and those who ask to be sisted along with them, represent the public. The Dean of Faculty has said that the Crown stands only in a fiduciary position, while the Clyde Trustees are, and have been for nearly a century, in possession of the Clyde, and

more effectually represent the public. If the pursuers are right, their decree will affect the public, and from every point of view it is desirable that the Clyde Trustees should be sisted.

In the conclusion of the summons there is a reservation that the finding and declarator asked shall be "subject always to any rights of navigation or other rights which the public may have over the same, and subject also to any rights conferred upon the Trustees of the Clyde Navigation by their Acts of Parliament.' Mr Balfour admits that this was not intended to be a reservation of a claim of property, and it is not a reservation of such a claim as the Clyde Trustees are now maintaining.

The first plea in law for the defenders must be sustained.

LORD DEAS-It is an important rule of practice, laid down in the House of Lords, and affirmed here, that it is pars judicis to give an opportunity of appearing to any party that the Court sees in the course of the process to be interested in the result. In the present instance the deep interest of the Clyde Trustees is apparent, and seeing that, it is pars judicis to direct that they be called. The clause of reservation in the summons is the introduction to various statements on the part of the pursuers that the Clyde Trustees are interested in this action; and in the condescendence the pursuers think it necessary to set forth as part of their case that no right of property was conferred on the Clyde Trustees by their Acts of Parliament. But it is not necessary for the Court to consider whether this would entitle the Trustees to appear, for the first plea in law for the Crown, and their statement of facts, are enough for us to decide the point, and if anything further is necessary we find it in the minute which the Trustees have lodged.

I have no more doubt than your Lordship of the regularity and expediency of this course than of the abstract right.

LORDS ARDMILLAN and MURE concurred. The following interlocutor was pronounced:"The Lords having heard counsel on the reclaiming note for the defender, the Lord Advocate, against Lord Curriehill's interlocutor, dated 17th December 1875, Recal the said interlocutor; sist the Trustees of the Clyde Navigation as defenders in the action, in terms of their minute No. 22 of process; in respect of the sisting of said parties, find that the first plea stated for the defender, the Lord Advocate, has been satisfied and obviated; remit the cause to the Lord Ordinary to proceed further as shall be just; find the reclaimer entitled to expenses since the date of said interlocutor reclaimed against; allow an account thereof to be given in, and remit the same when lodged to the Auditor to tax and to report to the Lord Ordinary, with power to his Lordship to decern for the taxed amount of said expenses."

Counsel for Pursuer Balfour Hunter Agents-Skene, Webster, & Peacock, W.S.

Counsel for Defender-Dean of Faculty (Watson)-Ivory. Agent-Donald Beith, W.S.

Counsel for Clyde Trustees-Asher-Lorimer. Agents-Webster & Will, S.S.C.

Saturday, January 15.

FIRST DIVISION.

[Sheriff of Lanarkshire.

ROXBURGH & COY. v. BARLAS (YOUNG & ARMSTRONG'S TRUSTEE.)

Process-Appeal-Print.

In an appeal from the Sheriff-court, the titles of the pleadings being found defective in that the name of the respondents was not given, the appellants were ordered to amend the print by adding in manuscript on the margin the titles of the pleadings in the Sheriff-court, and the cause was continued for a week for that purpose. Proof-Parole-Cheque-Account.

Held, in a claim lodged with a trustee upon a bankrupt estate, that it was incompetent to prove by parole, or otherwise than by the bankrupt's writ-(1) The items below £100 Scots in an account-current between the claimants and the bankrupt; (2) that the bankrupts had received the money in a cheque drawn by the claimants in favour of themselves or bearer, and upon which the name of the bankrupt nowhere appeared.

The firm of Young & Armstrong, wine importers and spirit merchants, Glasgow, and Robert Young and William Armstrong, its sole partners, were sequestrated on 3d December 1874, and David Barlas, accountant, Glasgow, was appointed trustee upon the estate. An affidavit and claim was in due time lodged with the trustee by Roxburgh & Coy., in which it was alleged that the bankrupts were indebted to them in the sum of £1056, 17s. 94d., conform to an account-current produced. The trustee having rejected the claim in hoc statu on the ground of its not being properly vouched, and of the fact that the books of the bankrupts showed that in an account between the parties the claimants would be debtors to the bankrupts, appealed to the Sheriff,

A large part of the account consisted of cash advances, and Roxburgh & Coy. produced in corroboration of these a variety of bank cheques drawn by them, all of which bore to be payable "to self or bearer," but which, it was averred, were given to the bankrupts and cashed on their behalf. None of them bore the name of the bankrupts or were endorsed by them, and the trustee maintained that they were not proper vouchers, and not such as would be granted or accepted in the usual course of business for advances of money. The rest of the account was

composed (1) of £60, 15s. 3d. and £50, the amounts of two bills which Roxburgh & Coy. averred had been granted by the bankrupts in their favour in consideration of advances; (2) of a bill for £200, accepted by the bankrupts and retired by the appellants at maturity after the sequestration of the acceptors; (3) of an account for sugar, amounting to £62, 0s. 114d., the last item in which (an entry of "December 18, 1871, to cash 7s. 6d.," alone excepted) was dated August 22, 1871. In the account-current there were items charged of a lower amount than £100 Scots.

The trustee on the bankrupts' estate produced an account against Roxburgh & Coy., which after deduction of the amount claimed by them still left a balance due. Of this account they refused payment.

The Sheriff-Substitute (GUTHRIE) issued the following interlocutor:

66

Glasgow, 23d November 1875.-Having heard parties, allows the appellants a proof by the bankrupts' writ-First, Of the alleged loans of money set forth in the account lodged with their affidavit and claim; second, of their averments in regard to the bills for £60, 15s. 3d. sterling, and £50 sterling, being the items dated in said account, February 21, 1871, and August 14, 1872; and third, of the account per statement' for sugar and cash, amounting to £62, Os. 11 d. sterling, which forms the last item on the debit side of said account, and to the respondents a conjunct probation; and allows the respondents a proof by the writ or oath of the appellants of their averments relative to the bill for £200 sterling, which is the item dated February 5, 1874, in the said account, and to the appellants a conjunct probation: Grants diligence against witnesses and havers, and appoints the cause to be enrolled on the diet roll to fix a diet of proof.

"Note.-Although some of the sums alleged to have been advanced by the appellants to the bankrupts are less than £8, 6s. 8d., the alleged loans were contracted, so far as it appears, in such circumstances and between such parties, that writing was to be expected in evidence of them. It seems therefore to be consistent with the principles of the law of Scotland to confine the proof to writ or oath (Annand v. Annand's Trustees, February 6, 1869, 7 Macph. 526). Here, however, there can be no reference to the oath of the bankrupt, and the proof allowed is by writ only.

"The bills for £60, 15s. 3d. and £50 bear to be granted by one partner of the bankrupts' firm only, and not by the firm, and one of them is in favour, not of the appellants, but of Mr Gemmill. It is thought that the appellants' allegations must be proved also by writ.

The account for sugar appears to be prescribed, and the last item in it, 7s. 6d., of lent cash, appears to be a mere device for eliding prescription, which ought to be disregarded (Dickson on Evidence, 2 490). Besides, the account on the face of it is incurred not by the bankrupt firm, but by one of its partners before he joined the firm."

Roxburgh & Company appealed to the Court of Session.

When the case came on for hearing on 8th January 1876 the print of the appeal was found to be defective, especially in the titles of the pleadings in the Sheriff-court, in that it nowhere appeared who was the respondent. The Court refused to receive the appeal, and pronounced the following interlocutor: "The Lords having heard counsel on the note of appeal, appoint the appellants to amend the print by adding in manuscript on the margin the titles of the pleadings in the Sheriff-court, and for that purpose continue the cause till this day week: Find the appellants liable in the expenses of this day, which modify to £2, 2s. sterling, and for which