Scottish Court of Session Decisions

Subject_1 BANKRUPT.
Subject_2 DIVISION I.

Reduction of Alienations made by Bankrupts where the Reducer has done no Diligence.
Subject_3 SECTION I.

Of Onerous Alienations.

Brown and Others
v.
Murray

Date: 6 July 1754
Case No. No 11.

A sale by a bankrupt, for a full price, so far reduced as to bring in the creditors ail pari passu.

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John Gillespie, possessed of a grass farm and a large stocking of sheep, &c. fell into labouring circumstances. He had been taken with caption, and let go upon payment. And apprehending a discovery of his circumstances, which Would bring all his creditors upon him, he assigned his tack, and sold his stocking to John Murray his son-in-law, at a price which was agreed on all hands to be equal. Whether he had any view in this transaction to benefit his favourite creditors, who lived all in the neighbourhood, or whether he meant only to prevent his effects from being carried off by poindings at an under value, is not certain; but this is certain, that the favourite creditors, most of them the bankrupt's near relations, got the start by arresting in the hands of the purchaser. “This produced a reduction of the bargain at the instance of the other creditors; and the bargain was accordingly reduced, not as to the purchaser, but only as to the creditors, to the effect of ranking them all pari passu upon the price.”

This interlocutor was carried, not upon any just principle, which seems not easy to be found, but upon a natural impuse to redress a wrong, which deserved redress had there been law for it. The difficulty is, that there is no foundation, either in common or statute law, to reduce a sale made by a bankrupt for a full price. Neither did the Court take upon them to reduce the sale. On the contrary, they held the purchaser bound, and ranked the creditors upon the price. So far I could have gone, as to find that the bankrupt's relations and neighbours could take no benefit from their arrestments against the more distant creditors, when the preference of the former was probably one of the bankrupt's motives for making the bargain. But unluckily it came out in the course of the process, that nine arrestments were laid on by creditors who were not parties to the process, and who had no such connection with the bankrupt, as to admit of a supposition that he had any view to prefer them. This was a pinching circumstance, because the pursuers had not arrested, nor done any fort of diligence against the bankrupt; and the Court could find no other means to come at what was reckoned material justice, but to pronounce the above interlocutor.

Sel. Dec. No 65. p. 85.