Liquidators of the Linlithgow Oil Company, Ltd, v Earl of Rosebery

A resolution for the voluntary winding up of the Linlithgow Oil Company, Limited, was passed at an extraordinary meeting of the shareholders on 13th February 1902. By interlocutor of 22d February 1902, the winding-up was placed under supervision of the Court, and the further procedure was remitted to Lord Low. John Scott Tait, C.A., Edinburgh, and John Young, 7 Royal Bank Place, Glasgow, were appointed liquidators.

The Company's mines, pits, and other works at Ochiltree, in the county of Linlithgow, had been carried on under a lease, dated 2d and 23d April, and recorded 27th May 1884, between the Earl of Rosebery, the owner of the minerals, and Thomas Spowart and others, the original lessees, who under powers to that effect in the lease assigned their rights to the Company by assignation dated 28th May and recorded 10th July 1884. The lease was for thirty-one years from and after Whitsunday 1884, with breaks at the tenant's option at specified periods of three years, beginning at Whitsunday 1886. The lessees were taken bound to pay certain rents and royalties, modified by subsequent agreements as regards the period after Martinmas 1898 to the following, vix., a fixed rent of 825, or otherwise, in lieu of the said fixed rent, and in the option of the said Earl of Rosebery, to a lordship or royalty on shale, as specified in an agreement dated 8th August 1899.

On 11th February 1902 the Earl of Rosebery took out a sequestration for rent against the Company.

The sequestrated effects were inventoried, but further proceedings in the sequestration were brought to an end by the supervision order.

By affidavit and claim in the liquidation, the Earl of Rosebery claimed a preferable ranking for the sum of 2675, 2s. 5d., for which he claimed to have attached the moveable effects of the Company inventoried in the sequestration.

The liquidators rejected this claim (reserving the claimant's right to claim for an ordinary ranking) as regarded, inter alia, the sum of 1,596, 18s. 2d. representing lordships due under the lease for the year 1901, on the ground that lordships were not covered by the landlord's hypothec.

A similar claim by Stair Hathorn Johnston Stewart, Esq., of Champfleurie and Physgill, was disposed of in a similar way by the liquidators.

A note having been lodged for the liquidators for authority to intimate deliverances on preference claims, answers were lodged for the Earl of Rosebery and by Mr Stewart, objecting to the above deliverance.

On 22d July 1903 the Lord Ordinary (Low) pronounced the following interlocutor:Recalls the deliverances of the liquidators in so far as they have refused to the respondents a preferable ranking in respect of royalties or lordships, and remits to the said liquidators to give to the said respondents a preferable ranking in respect of the said royalties or lordships, to the extent to which they may be entitled thereto upon the footing that the landlord's right of hypothec applies to royalties and lordships as well as to fixed rents: Further, recalls the said deliverances in so far as discount is deducted from certain of the sums for which a ranking is given: Quoad ultra sustains and approves of the said deliverances: Appoints the said liquidators to lodge in process amended deliverances giving effect to this interlocutor, and reserves in the meantime consideration of the question whether the respondents are entitled to immediate payment of the whole sums for which...