An heritable creditor found preferable in a ranking not only for principal and inrest, but for the penalty, to the extent of all expenses incurred in recovering the debt.
Click here to view a pdf copy of this documet : PDF Copy
In a process of ranking of the creditors of Alterlies, William Duff being preferred, primo loco, for the principal and interest contained in an heritable bond and infeftment; he also claimed preference for the penalty, to the extent of the expenses of infeftment, of the costs of suit in this competition, and further, of the costs of suit in a former competition for the same debt, upon another estate, which belonged to a co-obligant in the bond, but wherein he had been cast.
Chapman admitted that Duff should be preferred for the expenses of the infeftment, and of diligence, if any, against the debtor; but objected to the costs of suit in both competitions; 1mo, For that the terms of this bond were, “for security of the principal sum, annualrents thereof, that shall happen to fall due, and penalty if incurred, and the other sums, charges, and expenses, contained in the reversion, if they be debursed and expended in the debtor's default. Now, the expenses in neither of the competitions were incurred through the debtor's default; and, 2do, The expenses of the first competition were incurred in a different ranking with other creditors upon an estate belonging to another person, and were incurred by reason of the pursuer's litigiousness; for he was postponed. 3tio, Granting he had a claim against the debtor for the penalty, to the extent of these costs, yet he ought to have no preference in competition with other creditors; because it was an absurdity that lands should be affected by an infeftment for a debt taken before the debt existed.
Answered to the first and second, That all the costs justly expended in the recovery of the debt, and by consequence the expense of competition, are incurred through the debtor's default.
To the third, That infeftment is given for the penalty, which is held to be an existing debt, though the Lords, from their nobile officium, generally restrict-it to the expenses really debursed.
“The Lords found, That William Duff was entitled to be preferred for his penalty, to the extent of the expenses in recovering his debt.”
Act. Hamilton Gordon.Alt. Burnet.Clerk, Kirkpatrick.
Fac. Col. No 142. p. 213.
