Scottish Court of Session Decisions

Subject_1 EXPENSES.
Subject_2 SECT. I.

Expenses laid out in re commune.

The Creditors of Auchinvole
v.
The Daughters of Blair of Auchinvole

Date: 25 July 1718
Case No. No 5.

The expense in rankings and sales of bankrupt estates comes equally off all the creditors.

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The lands of Auchinvole being sold at a roup, and the daughters of the former heritor being ranked amongst the creditors, the expense of the sale and ranking was divided and proportioned upon every creditor, according to the shares they were to draw of the price. The onerous and stranger creditors alleged, That the whole expense of the sale and ranking ought to affect the share of the daughters, whose preference was founded on bonds of provision, or contracts of marriage, who never could compete with onerous creditors. It was answered, That the expenses of sales and ranking were ordered, by an act of sederunt 23d November 1711, to be proportioned and divided as has been done in this case: The words are, ‘That the account of the whole expense be produced before the Ordinary of the sale, and by him considered, liquidated, and stated upon the price, at so much upon the L. 100; which is immediately to be paid by the purchaser, and detained by him off the creditors having right, as accords.’ It was replied, That rule was only applicable to onerous creditors; but provisions to children being quoad them to be reckoned gratuitous, they could draw nothing until the other creditors were paid of all; for, as the creditors could recur upon the debtor if he had purchased a separate estate, in so far as the rents were diminished, so could they recur upon children.

It was duplied; When sales were first introduced, the practice was, that the factor of the sequestrated estate advanced the necessary expense, which was allowed in his accounts; whereby the subject of the estate was diminished; and by consequence the whole expense fell upon the last creditor; and often it happened that some creditor was thereby wholly excluded. But the Lords taking a general consideration of the case, they found that rankings and sales were a common benefit to the creditors, and therefore the charges ought to be a common burden, affecting first and last creditor equally and proportionally. And if the grounds of law pleaded against the daughters were good, the former abuse would still continue; for the first creditor is as much preferable for his whole demand to the second, and the second to the third, &c. as the whole onerous creditors are to the daughters: And the ground of preference to creditors is the act of Parliament 1621. And it often happens in ranking, that debts reduced upon the said act of Parliament, in competition with more timely diligence of others, and ranked in the next place, do nevertheless bear no greater share of the common expense, than the creditors reducing, and preferred by virtue of the said act. Besides, it is to be observed, that bonds of provision for daughters, or obligements in their mothers contracts, do state these daughters as true and onerous creditors; though others may be preferred on the account of latency, and they are not in the same case as heirs of provision; but they plead upon the general ground of law, that whatever creditor obtains a place in the ranking falling within the price, all must bear their share of the common expense.

The Lords found, that the common expense did affect the whole creditors in their ranking equally and proportionally, according to the shares they draw of the price.

Fol. Dic. v. 1. p. 286. Rem. Dec. v. 1. No 13. p. 26.