Scottish Court of Session Decisions

Subject_1 RIGHT in SECURITY.
Subject_2 SECT. VIII.

Where the Creditor is empowered by the Debtor to sell his Land.

Robert Brown
v.
Andrew Storie

Date: 11 June 1790
Case No. No 31.

An authority given to a creditor to sell the lands of his debtor, may be exercised without declarator, or other judicial proceedings.

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Storie disponed to a creditor of his certain lands which belonged to him, redeemable at Martinmas 1782, on payment of the sums then due.

After the elapsing of this period, the creditor was authorised, at any time before Martinmas 1784, upon six months notice, or after that term, without any previous intimation, to sell the lands by public roup, the time and place being advertised at stated intervals in the public newspapers.

It was declared, that this might be done without any judicial proceedings, the right of reversion formerly competent to the debtor being voided ipso facto; but the surplus of the price after payment of the sums due was to belong to him.

In 1788, the creditor proceeded to dispose of the lands, in the form above described, to Robert Brown, who brought an action of multiple-poinding and a declarator, in order to try the efficacy of the sale. Storie being cited as a defender, objected to the proceedings, and

Pleaded; The only method by which a creditor can dispose of a land-estate belonging to his debtor, is that of a judicial sale under the statutes of 1681 and 1690, as enlarged by the act 23d Geo. III. cap. 18. Although it were to be agreed, that after a certain period he should have a power of selling, our law, justly jealous of the advantage which may thus be obtained over an indigent debtor, has required a previous action of declarator, for the purpose of trying the fairness of the transaction. This is agreeable to the Roman law with regard to the sale of goods impledged, the creditor, though authorised to sell, being obliged to have the sanction of the Prætor; Karnes's Law Tracts, vol. 2. p. 71.; Voet. ad tit. Dig, de Pign. et Hypoth.; Id. ad tit. De Distract. Pign.; Heinec. Antiquit. Lib. 2. Tit. 1. § 2,; Ibid. Lib. 2. Tit. 17, 18, 19. § 11.; Vinn. ad Inst. Lib. a. Tit. 8. § 1.

Answered; Every person having the administration of his own affairs, may either directly dispose of his lands, or authorise another in his name to take the measures which are necessary for that purpose. It is expedient that those who are so incumbered with debts as to be unable to pay what they owe, and whose property is at the same time too inconsiderable to bear the expense of a judicial sale, should be enabled to enter into agreements of this kind. Nor do the authorities quoted on the other side support a contrary doctrine. In the Roman law, a creditor in general could not, without the interposition of a judge, expose to sale those subjects which had been impignorated to him. But if a power of selling was given, it might have been exercised without any such interference. And although in all agreements of the nature of the pactum legis commissoriæ, it has been held, that the irritancy being truly penal, must be recognised in a declaratory action, an extension of the same rule to such a case as the present, would be equally inexpedient and unjust.

Though securities conceived in the form of the present one have been in use for many years, this is the first instance in which their validity was ever disputed; Voet. Lib. 20. Tit. 20. § 1.; Lib. 20. Tit. 1. § 22.; Perezius ad Tit. Cod. De Distract. Pign.; Bruneman. Comment. ad Lib. 4. De Pignorat. act.; Vinn. Lib 2. Tit. 8. § 1.; Stair, B. 1. Tit. 13. § 14.; Bankton, B. 1. Tit. 17. § 5.

The Lord Ordinary having taken the question to report on informations, the Court were unanimously of opinion, that the sale was liable to no exception.

“The Lords decerned in the action of declarator,” &c.

Reporter, Lord Henderland. Act. M. Ross, Honyman. Alt. W. Baillie. Clerk, Mitchelson. Fol. Dic. v. 4. p. 239. Fac. Col. No 137. p. 272.