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Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Walker v Walker [1835] CA 13_428 (7 February 1835)
URL: http://www.bailii.org/scot/cases/ScotCS/1835/013SS0428.html
Cite as: [1835] CA 13_428
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SCOTTISH_Shaw_Court_of_Session
Page: 428↓
v.
Subject_Bankruptcy—Process.—
1. A majority of creditors in value, at a meeting called and held in terms of the bankrupt statute, are entitled to remove the trustee and commissioners without assigning any cause. 2. In taking the votes at such meeting, the creditors duly Tanked and present are to be computed, reserving the effect of any scrutiny into their claims, in the question as to their right to dividend. 3. If a creditor sell his claim for a composition on its amount, the purchaser may vote to the same extent for which the seller was ranked; and he does not require to make a new claim and affidavit, but merely to intimate the assignation to the trustee. 4. Where a creditor acquires right to claims ranked, composing a majority in value of the whole, this does not form per se an objection to such creditor voting in respect of these claims, although they may give him the full control in the sequestration, provided that the claims are acquired in a fair and bona fide manner.
In the sequestration of the estate of William Cunninghame Walker of Sunnybank, his mother, Mrs Walker, was ranked a creditor, after making the usual claim and oath of verity. She afterwards bought up the claims of other creditors who were ranked on the estate, to whom she paid a price of 3s. 6d. per pound, which she alleged to be as much as the estate was likely to yield. She thus became possessed of claims ranked on the estate to an amount of £4844, being a majority in value
The meeting was called and held, when Mrs Walker, with Legget and other creditors ranked, forming a considerable majority in value, voted for the removal of the trustee and commissioners. A motion of an opposite nature was made, and supported by a minority in value; and each party protested as usual. Mrs Walker, and the other creditors forming the majority, presented a petition to the Court, to appoint a meeting for choosing a new trustee and commissioners. The former trustee and commissioners lodged answers, * and pleaded, that they were not effectually removed, because, 1st, Mrs Walker could only vote for the amount which she actually paid for such debts, and not for the amount on which her cedents were ranked; 2d, It was necessary for Mrs Walker, in so far as claiming on an assignation of other creditors' debts, to have lodged a new claim, and taken a new oath of verity as to them, before voting; and, 3d, If supported to the full amount, then she, the mother of the bankrupt, would be armed with the absolute control over her son's sequestration, as her single vote constituted a majority in value, which was contrary to the spirit of the Bankrupt Act. 1
The petitioners answered, 1st, That Mrs Walker was entitled to vote for the full amount of the debt assigned, as she had purchased and acquired the same right as that possessed by her cedents, who clearly might have voted, although their rankings constituted a majority in value. 2d, That it was not necessary for Mrs Walker to make an oath of verity on purchasing a claim already ranked, as the cedent's oath had already been taken, and it was enough if she notified the assignation to
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* On considering the answers, the Lord Ordinary allowed Mrs Walker to put in a minute (dated 10th April, 1834), stating, that she had no wish to derive any pecuniary benefit from the surplus, if any, arising from the sequestrated estate, and consented that suck surplus should belong to her son, the bankrupt. She also made an explanation as to her object in buying up the claims, which satisfied the Court that it was done fairly and in bona fide.
1 2 Bell, 337.
the trustee; but that she now produced an affidavit, which had been Subsequently taken by her; and, 3d, That she could have no control over the sequestration, except under the check of being liable to summary review by the Court; and, however large a creditor's claim might be, his vote must count proportionally to its value in this question.
Objections were also stated to the validity of several of the debts, hinc inde; but the petitioners pleaded, that, as they were all ranked, they must be entitled to vote in this question, leaving the validity for farther scrutiny, if necessary, before paying any dividend.
The Lord Ordinary pronounced this interlocutor:—“Having considered the petition, &c., and, particularly, minute of Mrs Elizabeth Walker, dated 10th April, 1834; In respect, Imo, That, by interlocutor of 27th September, 1833, acquiesced in, and now final, the petitioners were authorized to call a meeting of creditors for the special purpose of ‘considering the propriety of removing the trustee and commissioners, in terms of the 71st section of the bankrupt statute,' and that, in consequence of that authority, such meeting was accordingly held. 2do, That, at such meeting, so specially called, creditors, amounting to a majority in value, are entitled by law to remove the trustee and commissioners, without assigning any cause. 3tio, That the title of every creditor to vote upon questions of management relative to the bankrupt estate, and the extent of that title is, by uniform practice, fixed by the claim made by the creditor, and by the enrolment made by the trustee in the sederunt-book of the sequestration, whatever may be the ultimate drawing of the creditor from the funds of the bankrupt. 4to, That it is perfectly lawful for any creditor to sell or assign his claim on any bankrupt estate to the best advantage, and that, by so doing, the assignee is entitled to exercise the same rights that were competent to the cedent, and that the bankrupt law does not require that the assignee should make a new claim and a new affidavit on the debt, before he can exercise the right of a creditor, but merely to intimate his right in common form to the trustee. 5to, That no reasonable or just personal objection lies against Mrs Elizabeth Walker for claiming upon the debts acquired by her; on the contrary, it appears to the Lord Ordinary that the measures adopted by her were fair, proper, and reasonable in themselves, and were justifiable in law, and tended to benefit the common debtor, and to extricate him from his difficulties; and that, adverting to the case of Shand, 1 decided by the Court, and affirmed in the House of Lords, it is no legal objection per se, that, by so acquiring debts, she has obtained the command of the management of the bankrupt estate where the object has been so well explained, and the interest of the bankrupt protected. 6to, That, without entering into a minute investigation of the several debts claimed, it appears evident to the Lord Ordinary
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1 Feb. 13, 1834 (ante, XII. 431).
that a majority in value of the creditors did, at the meeting of 27th September, 1833, vote for the removal of the trustee and commissioners, and that the same must be held as removed accordingly. Lastly, That it appears to the Lord Ordinary as proper and highly expedient, from the whole circumstances of the case, that a disinterested and neutral respectable trustee should be appointed for the winding up of these complicated concerns in a proper and impartial manner; therefore appoints a meeting of the creditors, to be held within the Old Signet Hall, Edinburgh, upon August current, at o'clock, for the purpose of choosing a new trustee and new commissioners on the sequestrated estate, in room of the said William Walker, trustee, and of the commissioners removed as aforesaid, in terms of the 71st section of the statute, and decerns, previous advertisement of said meeting being given in terms of the statute.”
The respondents reclaimed, and contended, that, after the bankrupt's offer of composition had been entertained by a first statutory meeting, the trustee had a jus quæsitum in that proceeding, which made it incompetent to remove him until the offer was finally disposed of, in terms of the statute.
The Court adhered.
Solicitors: W. Mackersy, W.S.— A. Wilson, S.S.C.—Agents.