Scottish Court of Session Decisions

Subject_1 PRESUMPTION.
Subject_2 DIVISION III.

Donatio non præsumitur.
Subject_3 SECT. VIII.

Rights taken, in name of Third Parties not delivered.

Bayne
v.
M'Millan

Date: 12 July 1677
Case No. No 171.

Delivery of a bond not necessary to make it effectual where a debtor took it in his creditor's name, it being reputed as in security to that creditor.

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Mr John Bayne having charged Alexander M'Millan for payment of two bonds, he suspends on this reason, that he never borrowed any money from Mr John Bayne, but that he granted these two bonds to Sir James M'Donald and his son, for cattle bought from them, and gave the bonds blank in the creditor's name, which thereafter were filled up with Mr John Bayne's name, and he charged thereupon; but before the charge, the creditors of Sir James MacDonald, and his son, arrested in his hand, and obtained decreet for making forthcoming, whereupon he made payment, and referred to Mr John's oath that he received the bonds from Sir James M'Donald and his son, and that they were blank the time of the arrestment. Mr John depones, that one of the bonds was sent to him blank after the arrestment, but depones, the other was filled up before it was sent to him; and that by letters sent with it, it was signified, that in respect he was a creditor, the bond was taken in his name. At advising of the oath, it was alleged, That though the bond was taken in Mr John's name, and had never been blank, yet M'Donald, who got the bond for his cattle, was the true creditor, and not Mr John Bayne, whose name was only made use of under trust, for M'Donald's behoof; and therefore whoever takes a bond in another man's name, is not presumed to gift to him the sum, but to make use of his name under trust, and with confidence that he would denude in his favour when desired; and, therefore, the Lords did lately sustain process upon that account, though the creditors of the persons entrusted did vigorously oppose it. It was answered, That suppose the filling up of a third party's name who had no interest, might be presumed only a trust, yet that presumption is excluded by a stronger presumption, viz. when a creditor's name is made use of by his debtor, it is presumed to be in security to that creditor; and here Mr John Bayne was creditor to M'Donald before he made use of his name in this bond; and it is most frequent for debtors when they sell lands, to take bonds for the price in name of the creditors, who might by exhibition recover the bonds; and if the debtor did pursue them to denude, they would exclude him upon that presumption, that the bond was granted to them in security. It was replied, That so long as the bond was undelivered to the creditor in whose name it was taken, the receiver of the bond was still master of it, and so was a true creditor, and it was to be affected for his debt.

The Lords found, that a bond taken in the name of a creditor was not presumed to be in trust for the behoof of the procurer of the bond, but in security to that creditor, and could not be warrantably given up by the procurer of the bond, or affected with his debt, although it was not delivered to the creditor in whose name it was taken.

Fol. Dic. v. 2. p. 148. Stair, v. 2. p. 537.