Disposition by a Bankrupt in favour of his whole Creditors.
The Creditors of Thomas Calderwood v. Borthwick of Cruickston
Date: 30 July 1715 Case No. No 236.
A person dispones his effects to his wife, for payment of her annuity, and of his debts. Effect is given to this disposition, so as to rank the creditors pari passu, in opposition to a creditor taking separate measures.
Click here to view a pdf copy of this documet : PDF Copy
Thomas Calderwood a little before his death, dispones to his spouse several sums, which is declared to be for the security and better payment of her liferent annuity, provided to her in her contract of marriage in the first place; and for payment of his just and lawful debts in the next place. Borthwick of Cruickston after Thomas's decease, pursues the relict upon the passive titles, and she is preferred in the first place by virtue of her said disposition, but declared accountable to Cruickston for the residue of the subject. After this interlocutor, (upon which nothing was extracted) the other creditors applied, and
Alleged, 1mo, That Cruickston and they were upon an equal footing as to the condition of their debts, all of them being only personal creditors to the defunct. 2do, There was as yet no legal diligence founded on, on either side.
Answered for Cruickston, That he having raised the first process, is preferable to all the rest.
Replied for the creditors, That the raising of the first process, never was in any such competition, found to be a ground of preference; for supposing the creditors interests had not been produced till Cruickston had extracted a decreet, and a multiple-poinding had brought all the rest into the field, even in that case Cruickston could not have been preferred to the other creditors, who were not obliged to have compeared in his decreet; much less therefore can he be preferred, when the matter stands yet only on the footing of an interlocutor. 2do, Since the relict's disposition is in general, in favour of the defunct's creditors, they must therefore be all preferred pari passu, and the relict decerned to denude in favour of them all pro rata, and effeiring to their respective debts.
Duplied for Cruickston, That he having pursued the relict to denude in his favour, and having obtained interlocutor, ordaining her to denude, the same ought to be considered as a step of diligence on his side, which ought to afford him preference; and that he was in pari casu as if the relict had been confirmed executrix to her husband, and that he had first cited her as executrix after six months from the defunct's decease; whereupon he would have been preferable to the other creditors, who had been more remiss in their diligence.
Triplied for the Creditors, 1mo, That Cruickston's action was not a process against the relict to denude, but a common action on the passive titles against her, as representing her husband; for though she was ordained to denude in his favour, yet that was not in consequence of any conclusion in his summons, he having simply pursued her for payment of his debt; so that the order to denude, was not the effect of any diligence at his instance. 2do, By the disposition all the creditors have a jus quæsitum to the subject, and the relict burdened with the payment of their debts, as far as the effects would go, with a bare preference to herself for her liferent; therefore no creditor can obtain any special advantage to the prejudice of the rest. And as to the ordinance to denude in Crickston's favour, that interlocutor must necessarily be understood so, as the relict should denude in his favour, in proportion to his debt. 3tio, Where the established forms of diligence, known in law, are neglected, law makes no distinction, but brings in all creditors pari passu. Now an action of constitution against a representative, is no step of diligence, it only tending to constitute the debt, but produces no jus in re. 4to, Cruickston's case differs from a creditor pursuing an executor within six months; for that is introduced by special statute in the case where there is a confirmation, and cannot be extended beyond the case specially contained in the statute. And it is absurd to say, that because he was the first mover of an action againg the relict for constituting his debt, he ought to be preferred to the other creditors, seeing her right is founded upon a voluntary conveyance of the defunct, and not upon a confirmation.
The Lords found Cruickston preferable for his expences, as the Ordinary should modify the same, to be paid out of the first and readiest of the subject, and found the whole creditors come in pari passu. See Competition. See Process.
For the Creditors, Hay.Alt. Ipse.Clerk, Gibson.
Bruce, No 134. p. 176.
