Traill's Trustees v. Traill's Creditors [1915] ScotLR 524 (12 March 1915)

Traill's Trustees v. Traill's Creditors [1915] ScotLR 524 (12 March 1915)

The Court held that neither the heritable creditors nor the ancestors' creditors had a preferential claim to the proceeds of the portraits, as no poinding had been executed and any right of preference by ancestors' creditors was cut off by the negative prescription. The trust-deed did not operate as a completed diligence or as a sequestration under section 102 of the Bankruptcy (Scotland) Act 1856. Accordingly, all creditors of James Christie Traill, secured and unsecured, were entitled to rank pari passu on the proceeds, with secured creditors required to value and deduct their securities before ranking.

Citation
[1915] ScotLR 524
Parties
First Party: John Little Mounsey, W. S., sole surviving trustee under the trust-disposition granted by the late James Christie Traill of Rattar; Second Parties: Creditors of James Christie Traill, and the creditors of his ancestors James Traill and George Traill; Second Parties: Heritable creditors of James Traill, who held bonds over properties other than Castlehill; Fourth Parties: Holders of bonds over Castlehill granted by George Traill; Fifth Parties: Holders of bonds over Castlehill and other properties granted by George Traill, and also creditors of James Christie Traill, holding bonds over the whole estates; Sixth Parties: Holders of bonds granted by George Traill over estates other than Castlehill; Seventh Parties: Unsecured creditors of James Christie Traill
Jurisdiction
Scotland
Judgment Date
12 March 1915
Procedural Posture
Special Case (court of Session, Inner House, Extra Division) / Judgment on Distribution of Proceeds From Sale of Moveable Property Under Trust Deed
Outcome
First, second, and third questions answered in the negative; fourth and fifth questions answered in the affirmative.
Legal Topics
Voluntary Trust Deed for Creditors, Right in Security, Poinding, Prescription, Bankruptcy (scotland) Act 1856, Sec. 102, Preference of Ancestors' Creditors, Distribution of Moveable Estate
Bankruptcy Trusts and Estates Property Law Voluntary Trust Deed for Creditors Right in Security Poinding Prescription Bankruptcy (scotland) Act 1856, Sec. 102 +2 more

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Parties

John Little Mounsey, W. S., sole surviving trustee under the trust-disposition granted by the late James Christie Traill of Rattar

First Party

Creditors of James Christie Traill, and the creditors of his ancestors James Traill and George Traill

Second Parties

Heritable creditors of James Traill, who held bonds over properties other than Castlehill

Second Parties

Holders of bonds over Castlehill granted by George Traill

Fourth Parties

Holders of bonds over Castlehill and other properties granted by George Traill, and also creditors of James Christie Traill, holding bonds over the whole estates

Fifth Parties

Holders of bonds granted by George Traill over estates other than Castlehill

Sixth Parties

Unsecured creditors of James Christie Traill

Seventh Parties

Procedural Posture

Special Case (court of Session, Inner House, Extra Division) / Judgment on Distribution of Proceeds From Sale of Moveable Property Under Trust Deed

Legal Issues

  1. 1 Whether creditors holding heritable securities over Castlehill are entitled to preference over proceeds of moveable property (portraits) under the trust-deed.
  2. 2 Whether ancestors' creditors have a preferential claim over the proceeds of moveable property traceable to the ancestor, or whether such claims are cut off by negative prescription.
  3. 3 Whether all creditors, secured and unsecured, are to rank pari passu on the proceeds under the trust-deed, and whether secured creditors must value and deduct their securities before ranking.

Ratio Decidendi

The Court held that neither the heritable creditors nor the ancestors' creditors had a preferential claim to the proceeds of the portraits, as no poinding had been executed and any right of preference by ancestors' creditors was cut off by the negative prescription. The trust-deed did not operate as a completed diligence or as a sequestration under section 102 of the Bankruptcy (Scotland) Act 1856. Accordingly, all creditors of James Christie Traill, secured and unsecured, were entitled to rank pari passu on the proceeds, with secured creditors required to value and deduct their securities before ranking.

Court Disposition

First, second, and third questions answered in the negative; fourth and fifth questions answered in the affirmative.

Orders

  • All creditors of James Christie Traill, secured and unsecured, are entitled to rank pari passu on the proceeds of the portraits.
  • Secured creditors must value and deduct their securities before ranking.