Inglis v Robertson
| Jurisdiction | Scotland |
| Judgment Date | 18 March 1897 |
| Docket Number | No. 139. |
| Date | 18 March 1897 |
| Court | Court of Session |
Ld. Kyllachy, Lord President, Lord Adam, Lord M'Laren, Lord Kinnear, Lord Kincairney, Lord Stormonth-Darling, Lord Low, Lord Pearson, Lord Justice-Clerk, Lord Young, Lord Trayner, Lord Moncreiff.
ForeignArrestmentCompetition as to right in moveables in warehouse in Scotland.
Right in SecurityPledge of documents of titleDelivery-ordersFactors Act, 1889 (52 and 53 Vict. cap. 45), sec. 3Factors (Scotland) Act, 1890 (53 and 54 Vict. cap. 40), sec. 1.
Goldsmith, a domiciled Englishman, resident in London, was the owner of certain whisky lying in a bonded warehouse in Glasgow, and held a warrant for the whisky granted by the warehouse-keepers, bearing that they held the whisky to order of Goldsmith or assigns by indorsement hereon. By contract executed in London, Goldsmith borrowed 3000 from Inglis, also a domiciled Englishman, on the security of the whisky, and indorsed and delivered the warrant to Inglis. There after, Robertson & Baxter, creditors of Goldsmith, arrested the whisky in the hands of the warehouse-keepers.
In a competition between Robertson & Baxter and Inglis who maintained that by the law of England the indorsement and delivery of the warrant gave him a right to the whisky which was preferable to that of any creditor of Goldsmith doing diligence subsequently, held by a majority of the whole Court (diss. Lord Young) that the competition fell to be determined by the law of Scotland.
The Factors Act, 1889 (extended to Scotland by the Factors (Scotland) Act, 1890), enacts, sec. 3, that a pledge of the documents of title to goods shall be deemed to be a pledge of the goods; and sec. 1For the purposes of this Act(5) the expression pledge shall include any contract pledging or giving a lien or security on goods, whether in consideration of an original advance or of any further or continuing advance or of any pecuniary liability.
Goldsmith, the owner of certain whisky in a bonded warehouse, for which he held the warrants of the warehouse-keeper, bearing that the whisky was held to the order of Goldsmith or assigns by indorsement hereon, borrowed a sum of money from Inglis, and granted him a letter bearing that he deposited the whisky with him in security of the loan, with power of sale. At the same time he indorsed and delivered the warrants to Inglis. There-after Robertson & Baxter, creditors of Goldsmith, arrested the whisky in the hands of the warehouse-keeper, who had received no intimation of the indorsement and delivery of the warrants to Inglis.
In a competition for the whisky between Inglis, who founded on sec. 3 of the Factors Act, 1889, as giving him vi statuti constructive possession of the goods and a real right therein as pledgee, and Robertson & Baxter, founding on their arrestment, held (by a majority of the whole Court) that the claim of Robertson & Baxter, as arresting creditors, fell to be preferred, in respect (a) that at common law the indorsement and delivery of the warrants to Inglis, without intimation to the warehouse-keeper, left the property of the goods in Goldsmith, and so liable to the diligence of his creditors; and (b) that, assuming that sec. 3 of the Factors Act, 1889, applied to pledging by owners of goods as well as by agents, and assuming that the transaction between Goldsmith and Inglis was to be regarded as a pledging of documents of title to goods, the section did no more than confer on Inglis a personal right to have the goods delivered in pledgediss. Lord Young, on the ground that both at common law and under the Act the indorsation and delivery of the warrants effectually transferred the whisky to Inglis in competition with any creditors of Goldsmith doing diligence thereafter.
Opinions (per the Lord Justice-Clerk, and Lords kinnear, Trayner, Kyllachy, Stormonth-Darling, and Low) that sec. 3 of the Factors Act, 1889, does not apply to pledges of documents of title to goods by the owners thereof.
Opinions contra per the Lord President, and Lords Young, Adam, M'Laren, and Kincairney.
On 14th December 1893 Robertson & Baxter, wine and spirit-merchants, Glasgow, sold to Walter C. Goldsmith, wine-merchant, London, certain parcels of whisky, which were duly delivered to Goldsmith, and thereafter lay at his order in the bonded store in Glasgow, belonging to the Clyde Bonding Company, conform to warrants or delivery-orders in the following terms, issued by the Clyde Bonding Company to Goldsmith:
Office, 56 Hope Street,
Glasgow, 17th December 1894.
Warrant for ten hhds. whisky transferred in our books and held to the order of Walter C. Goldsmith or assigns by endorsement hereon.
Rent commences 3/6/95.
94/859 $31/40 Ten hhds. Whisky.
(F) (O)
p. Clyde Bonding Co.
(3d. Stp.)
Jno. W. Mathieson.
In December 1894 Goldsmith entered into an agreement of deposit or hypothecation with Mr Robert William Inglis, of Bigods Hall, Dunmow, in the following terms:
London, December 18th, 1894.
To Robert William Inglis, Esq.
In consideration of your advancing to me the sum of 3000, I hereby deposit with you (having fall power and authority to do so) the wines and spirits specified in the schedule hereto, as a security for the payment of the said sum of 3000, with interest thereon until the date of payment at the rate of 7 per centum per annum, with full power for you to sell the same without farther consent from me, either by public or private sale, at your option, in the event of my not paying the said amount and interest when demanded; and after reimbursing yourself out of the proceeds, all charges, commissions, and expenses of every description attending such sale or sales, and consequent upon my making default in payment of the said principal and interest, you are to apply the remainder of such proceeds in payment of the principal and interest for the time being owing on this security; and in case of deficiency I will make up and pay to you such deficiency on demand: And I agree to pay all charges of every description in connection with the said wines and spirits and the deposit thereof until redeemed by me. [Then followed the schedule referred to, which included the whisky sold by Robertson & Baxter.]
Walter C. Goldsmith.
WitnessW. J. Bruty, solr.,
40 New Broad Street, E.C.
Goldsmith also indorsed and transferred to Inglis the warrants or delivery-orders granted by the Clyde Bonding Company for the whisky sold by Robertson & Baxter. The indorsation bore no date.
On 11th February 1895 Robertson & Baxter arrested the whisky in the hands of the Clyde Bonding Company, to found jurisdiction against Goldsmith, and thereafter raised an action against him, on the dependence of which they arrested the whisky on 18th February 1895. In this action Robertson & Baxter obtained decree against Goldsmith for 1000, 10s. 6d., with interest and expenses.
By memorandum of agreement, dated 3d and 5th April 1895, entered into between Robertson & Baxter and Alfred Cotton Harper, chartered accountant in London, as trustee under a deed of assignment for behoof of Goldsmith's creditors, it was arranged that the whisky should be released from the arrestment upon consignation upon deposit-receipt with the British Linen Company Bank, Edinburgh, in name of Irvine, Hodges, & Borrowman, solicitors, London, and Muirhead & Guthrie Smith, writers, Glasgow, of the sum of 1000, to be held as a surrogatum for the whisky itself, and as subject to the arrestments and claims of all parties interested in the same way as the whisky itself might have been before the agreement was entered into.
In October 1895 Irvine, Hodges, & Borrowman, and Muirhead & Guthrie Smith, raised the present action of multiplepoinding for determination of competing claims to the 1000 lodged on deposit-receipt, which was the fund in medio.
Robertson & Baxter, founding upon their arrestments and the decree in their favour, claimed the whole fund in medio.
A condescendence and claim to the whole fund in medio was also lodged for Inglis, who averred, inter alia;
(Cond. 1) In the month of September 1894 Mr Walter Charles Goldsmith, of No. 40 Great Tower Street, London, wine-merchant, applied to the claimant for a loan of 3000 upon the security of certain wines and blended spirits. The claimant accepted the proposal submitted to him, and advanced the said sum in loan to the said Mr Goldsmith, from whom he received an agreement of deposit or hypothecation, dated December 18th, 1894. The substance of the above agreement was then set forth, and at the time the said advance was made and the letter of deposit or hypothecation delivered, there were also delivered and endorsed to the claimant by Mr Goldsmith, who held the same, the warrants for the several parcels of whiskies or blended spirits which had been issued by the said bonding company. The transaction in question was entered into between the claimant and the said W. C. Goldsmith in England, both parties being domiciled in that country. The said agreement was executed in England, and the warrants endorsed and delivered in England. By the law of England the said agreement, endorsement, and delivery effected a transfer of the ownership of the whiskies to this claimant, or otherwise pledged the said goods to this claimant, so as to give him a right to said goods preferable to any arrestments subsequently used by creditors of the said W. C. Goldsmith, or otherwise transferred to this claimant a right in security preferable to any right or claim founded on the arrestments used by the said Robertson & Baxter.
Robertson & Baxter made the following answer to the foregoing averment:(Ans. 1) Admitted that the claimant Inglis advanced to Goldsmith the sum of 3000 on loan, and that both he and Goldsmith were domiciled in England, and this loan transaction was entered into in that country. The agreement and warrants mentioned are referred to for their terms. Admitted that the fund in medio consists of the proceeds of whisky referred to in said...
To continue reading
Request your trial