Scottish Court of Session Decisions

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^* “The Lord Ordinary is of opinion, that, after the decisions in the three cases of Brock v. Brown's Trustees, March 8, 1825 ; Maclean v. Robertson, &c., November 20,1825 ; and Gibson v. Stephenson, &c., June 26,1832, it is not at all possible now to hold that an heritable creditor can be made liable for any part of the expenses of a sequestration of his debtor's estate. Even though he were a party claiming in it, this could not be held consistently with the decisions ; but still less could it be so, where, as in the present case, the pursuers confessedly were not claimants at all.

“ Neither does it appear to the Lord Ordinary, that the special circumstances founded on by the defender in the debate, can have any effect to take this case out of the general rule of law. The pursuers were not even in the ordinary situation of heritable creditors, who may proceed at any time on their bonds. By the terms of their bond, they had no right to require payment of the principal debt for fifteen years, provided the interest was paid in the terms stipulated. That they knew of the trust and sequestration, and of the trustee's possession and management of the estate, would be of no relevancy in any case, to subject such heritable creditors to any expenses of the proceedings or management in the sequestration contrary to the established principle; and still less can it be relevant where, not only by the statute, the heritable creditors could take no part in the proceedings, but by the terms of the bond itself, the creditor had no power to do any thing. Notwithstanding this, the pursuers had an evident interest to attend to what was done; and the trustee, in behalf of the personal creditors, had a plain interest also to keep them informed of his proceedings; but the Lord Ordinary has no idea that there is any thing in this which can require a departure from the general law in the present case. Indeed it appears to him to be a case in which it applies a fortiori.

“The Lord Ordinary conceiving the law to this extent to be fully settled, and its application to the present case to be very clear, thinks it his duty, with reference to the pleas maintained before him, to give his judgment to that effect before making any remit to an accountant, in order that the limits of the enquiry may be so far fixed, and that the accountant may not proceed on the supposition that any doubt is entertained of the application of the law to the case. Though the defender's counsel said that they did not controvert the first conclusion of the summons, the Lord Ordinary thinks that the pursuers are entitled to have declarator in terms of it, in respect of the very particular entry in the Sederunt-book, referred to in the letters in March, 1832, on the second and third pages of the printed correspondence, and because of the general scope of the pleas maintained against them. He thinks that the second, third, and fourth findings of the interlocutor are rendered indispensable by the course which the debate took. For, after he had supposed that the general principles of the law were admitted by the opening counsel for the defender, he was led to think that the same full concession was not given by the senior counsel in his concluding reply; and, in particular, he understood it to be broadly maintained, that if the heritable creditor leaves the management of the estate with the trustee (and this even in a case where he had no power by his bond to do otherways), he must be liable for all the expense of such management, at least if prudent and beneficial, even although there were a reversion for the personal creditors. The Lord Ordinary understands the law to be settled otherways: And the reversal of the judgment in Cuthbertson v. Gardner (Sh. App. Cases, II., p. 291), though proceeding on a specialty, takes away all authority from that judgment, and has led to the subsequent departure from the principle both of it and the case of Godwin v. Brown.

“ But though the Lord Ordinary has no hesitation in going thus far to lay down the principles applicable to the case, he is sensible that a possible state of the case may arise of a more doubtful nature. If it should turn out that the price to be got for the heritable estate is not equal to this heritable debt, or will leave no reversion, it may be a serious and somewhat doubtful question, whether the expense of the ordinary management of it, in so far as that management may be shown and held to have been beneficial not generally, but specially for the heritable creditor, should be defrayed from such price, or in other words, should be borne by the heritable creditor, or should fall either on any other funds in the hands of the trustee, if there are such funds, or on the creditors who have ranked in the sequestration The Lord Ordinary does think, that before giving any judgment on that question hypothetically, it is desirable to see distinctly, in the report of an accountant, what the particular expenses are, for which the defender now claims credit in the first instance against the heritable creditor, in an accounting for rents intromitted with, and as far as possible to be informed, to what extent such management was necessary, and directed to the special benefit of the pursuers, as distinguished from any expected benefit to the creditors claiming in the sequestration. Such information may supersede a great deal of discussion, and enable the Court to see more definitely the precise point on which any question of law to arise may hinge. He has, therefore, after the general findings, made the remit before answer on the pleas of the parties in this part of the case.

“The accountant's name is not filled up, because it is a particular case. If the parties agree about that, it will be so settled. If they differ, the Lord Ordinary will name.”

“Finds, decerns, and declares, in terms of the first conclusion of the summons: Finds, that the defender, as trustee, is bound to render to the pursuers a full account of his intromissions with the rents of the estate, covered by their heritable bond, since the 2d day of February, 1831: Finds, that in rendering such account, the defender is entitled to take credit, in the first instance, for such expenses as may have been incurred in the actual sales of parts of the heritable subjects, in so far as such expenses were laid out beneficially for the pursuers: Finds, that he is not entitled to take credit generally, for any of the expenses of the sequestration, or for any commission to himself as trustee under it; but, before answer as to the claim for allowance of expenses incurred in the ordinary management of the estate over which the heritable security extends, in so far as it may ultimately appear that such expenses have been laid out beneficially for the pursuers, and that there is no reversion of the price after satisfying the debt of the pursuers, remits the states of accounts produced by the defender to with instructions to him to report quamprimum the just and true state of the accounts, giving effect to the above findings; and also to report, so far as the materials in process, or to be furnished to him, will enable him, whether any or what part of the expenses of management of the said estate, for which the defender at present takes credit in his accounts, has been laid out beneficially for the pursuers, as preferable heritable creditors, with power to him to call for all necessary vouchers of the said accounts, and for all information or explanations which may appear to him to be calculated for enabling him to answer fully the objects of this remit; and in the meantime reserves all question of expenses.”

The defender reclaimed, but