Privilege of selling the predecessor's estate by a public auction.
George Haldane, and Others, v. Charleton Palmer
Date: 15 November 1791 Case No. No 46.
A decree of sale, at the suit of an apparent heir, is only held as an adjudication for the creditors of the ancestor, where it is within year and day of the first effectual adjudication.
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In the month of September 1775, a decree of adjudication was obtained by Charleton Palmer against the lands of Grange. And it afterwards became the first effectual one, by a charge against the superior of the lands.
Before this, however, and in the month of June 1775, a summons of sale was instituted by the apparent heir of the debtor; though the lands were not sold for many years after. In the mean while, several adjudications were led, and among others, one at the suit of Mr Haldane, in the year 1778.
In the ranking of the creditors, it was contended by Mr Haldane, and those creditors whose adjudications were not within year and day of the first effectual one, that the summons of sale, at the instance of the apparent heir, was to be considered as an adjudication for the whole creditors, and consequently that the whole were to be ranked pari passu. In support of this argument, Mr Haldane.
Pleaded; The law considers an apparent heir bringing his ancestor's estate to a sale, as a trustee for the creditors of the ancestor. On this principle it was found, with regard to the lands in question now sold*, that the summons of sale, by the apparent heir, barred a similar action at the suit of the creditors. For the same reason, it should seem, that, pending the sale, the creditors were not obliged to use any diligence for attaching the lands; as was found 29th January 1748, Irvine against Maxwell, No 27. p. 5264.
In that case, indeed, the decree of sale was within year and day of the first effectual adjudication. But it would be unreasonable, if the interest of the creditors were to depend on an event not in their power, and so entirely arbitrary. As in a voluntary trust, no creditor, by separate measures, can secure a preference over the rest; so in those established by statute the same rule must hold, otherwise the regulation, instead of being beneficial to creditors, would prove a snare to those who relied on it.
Indeed, after a summons of sale, the matter becoming litigious, no step can be taken by one creditor to the exclusion of the rest, Erskine, b. 2. tit. 12. § 65.
Answered; Prior to the enactment of 1661, the creditor who obtained the first decree of adjudication, was entitled to an exclusive preference; and although the general rule was then departed from in favour of those creditors who led adjudications within year and day of the first effectual one, it remained, in other respects, unaltered.
Before the commencement of the summons of sale, therefore, the first effectual adjudger in this case had a jus quæsitum, which could not be taken away. Actions of sale, indeed, instituted by apparent heirs, as being attended with less expense, are preferred to those at the suit of creditors, but there is nothing to prevent an attachment of the lands within year and day of the first effectual adjudication in the same manner as before; and consequently, if any of the creditors omitted to do this, they have no right to complain, Bankton, B. 3. t. 2. § 8. par. 112.
In cases, it is true, where the decree of sale has taken place within year and day of the first effectual adjudication, it seems to have been justly determined, that the creditors should be admitted to a rateable distribution; otherwise, from the act of the heir, much injustice might ensue. But the principle of that
* 5th March 1776, Not yet collected. See Appendix.
decision is not applicable to the present case. The supposition, too, of any parallel between voluntary and legal trusts, is equally erroneous.
Were an action of sale by an apparent heir supposed to be equivalent to an action of adjudication for the creditors at large, it must still be observed, that it is not the date of the summons in either case, but that of the decree, which regulates the preference. Besides, the cases are in no respect similar. An apparent heir bringing his ancestor's estate to sale, is so far held to be a trustee for the creditors, that every thing he does equally redounds to their advantage as to his own. But although, in this manner, the creditors reap the benefit of what the heir does, it does not follow that the heir, for their benefit, should be held to have done what he has omitted to do.
As to the maxim pendente lite, the effect of it is to prevent the granting of voluntary rights, and not to tie up the hands of competing creditors, 12th July 1785, Massie contra Smith, voce Litigious.
This question being reported on informations,
The Lords unanimously found, that, in the circumstances of this case, the creditors were preferable according to the diligences used by them respectively.
Lord Reporter, Hailes.For Palmer, W. Craig.Alt. Abercromby.Clerk, Sinclair.
Fol. Dic. v. 3. p. 259. Fac. Col. No 189. p. 394.
