Drummond v. Muirhead and Guthrie Smith [1900] ScotLR 37_433 (13 February 1900)

Drummond v. Muirhead and Guthrie Smith [1900] ScotLR 37_433 (13 February 1900)

A law-agent acting for both borrower and lender in a secured loan transaction retains a lien over the borrower's title-deeds for unpaid fees as against the borrower or his trustee in bankruptcy, except that the lien cannot be asserted to the prejudice of the lender. The assignation of writs to the lender does not extinguish the agent's lien against the borrower unless the lender asserts a competing right. The reservation of hypothec in the receipt upon taking a bond preserves the agent's right of lien if the bond is reduced.

Citation
[1900] ScotLR 37_433
Parties
Pursuer: Arthur Drummond, C. A., Edinburgh, as trustee on the sequestrated estates of James F. Waldie & Company, and of James Francis Waldie and George Kirk Goalen; Defenders: James Muirhead and John Guthrie Smith, as trustees for their firm of Muirhead & Guthrie Smith, writers, Glasgow
Jurisdiction
Scotland
Judgment Date
13 February 1900
Procedural Posture
Civil / Appeal (reclaiming Motion) From Lord Ordinary's Interlocutor
Outcome
Appeal dismissed; interlocutor of Lord Ordinary affirmed.
Legal Topics
Law Agent's Lien, Hypothec, Retention of Title Deeds, Conflict of Interest (dual Agency), Reduction of Security in Bankruptcy
Property Law Bankruptcy Law Legal Profession Law Agent's Lien Hypothec Retention of Title Deeds Conflict of Interest (dual Agency) Reduction of Security in Bankruptcy

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Parties

Arthur Drummond, C. A., Edinburgh, as trustee on the sequestrated estates of James F. Waldie & Company, and of James Francis Waldie and George Kirk Goalen

Pursuer

James Muirhead and John Guthrie Smith, as trustees for their firm of Muirhead & Guthrie Smith, writers, Glasgow

Defenders

Procedural Posture

Civil / Appeal (reclaiming Motion) From Lord Ordinary's Interlocutor

Legal Issues

  1. 1 Whether a law-agent acting for both borrower and lender retains a lien over title-deeds against the borrower or his trustee in bankruptcy.
  2. 2 Whether the law-agent's lien is extinguished or suspended by acting for both parties or by the assignation of writs to the lender.

Ratio Decidendi

A law-agent acting for both borrower and lender in a secured loan transaction retains a lien over the borrower's title-deeds for unpaid fees as against the borrower or his trustee in bankruptcy, except that the lien cannot be asserted to the prejudice of the lender. The assignation of writs to the lender does not extinguish the agent's lien against the borrower unless the lender asserts a competing right. The reservation of hypothec in the receipt upon taking a bond preserves the agent's right of lien if the bond is reduced.

Court Disposition

Appeal dismissed; interlocutor of Lord Ordinary affirmed.

Orders

  • Third plea-in-law for the pursuer repelled; defenders' right of lien over title-deeds affirmed as against the pursuer.