Scottish Court of Session Decisions

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¹ Sheriff v. Steele, Nov. 23, 1809 (F. C.)

² Megget, July 10, 1830 (ante VIII. 1063); Duncan, June 3, 1834 (ante XII. 678).

* “The statute (sect. 10) seems to require that some expenses should be paid by a patty wishing to add to a record ‘facts emerging since the commencement of the action.’ This seems rather a hard condition, especially where (as in this case) the facts, not having emerged till after the record was closed, could not, by any diligence, have been stated at an earlier period. The act, however, having left the modification of those expenses to the judge's discretion (the expression is, ‘such expenses as may be deemed reasonable by the Lord Ordinary or the Court'), the Lord Ordinary thinks he has exercised this discretion soundly, in the modification he has adopted. The new fact emerging is no less than the actual granting of the advocator's discharge. The plea in law founded on the cedent's concurrence in his original application for such discharge, is by no means a new plea, but is distinctly stated on the record in the court below, and disposed of per expressum by the sheriff's interlocutor.

“On the merits, the case is attended with a good deal of difficulty, and it is very material to keep the facts and the dates in view. The debts for which the respondent raised his action before the sheriff in 1829, were owing by the bankrupt to two persons of the name of Sinclair and Young, anterior to his sequestration in 1818. These persons severally claimed, and were ranked on the sequestrated estate, and drew a dividend of 5s. in the pound in 1820; and in 1823, they both regularly concurred in his application for a discharge, and respectively subscribed a minute or mandate to the trustee, to reckon them as concurring creditors, which concurrence they never afterwards attempted to withdraw. No actual application, however, was then made for a discharge; and in May 1829, the respondent obtained assignations, not only to the grounds of debt held by these persons, but expressly to the benefit of their ranking on the estate, under deduction of the dividend already received. Upon these assignations, he raised the action before the sheriff in August 1829, concluding personally against the bankrupt for full payment of the debts, under deduction of the past dividends, and for expenses. Some groundless objections were, no doubt, stated by the bankrupt; but his main defence all along was, that which the Lord Ordinary has now sustained, viz. that the pursuer was barred, by the consent of his cedent's, to his application for a discharge, and that, if they could not have sued him after that consent, no more could their assignee.

“To the extent of holding that the assignee was in all respects in the same situation with the cedents, the Lord Ordinary has no difficulty in adopting the views of the advocator. This he apprehends to be the general rule as to assignations; but it has been specially decided as to this very case, of a debt assigned, after a consent by the cedent to a discharge in a sequestration, Sheriff v. Steele, November 23, 1809, F.C. The report bears it to have been the unanimous opinion of the Court, in that case, that it was incompetent, by such a transference, to deprive the debtor of that ‘consent, which had been once fairly and regularly given, and in which he had acquired a jus qusesitum, and that the debt, if afterwards purchased, must be taken cum omni onere, and the bankrupt be entitled to rank it among the number of con. senting votes.’ The Lord Ordinary, therefore, must deal with this case exactly as if the action had been brought before the sheriff by the original ranked and concur ring creditors, Sinclair and Young, in their own persons; but, even on that supposition, it is not free from difficulty.

“In the first place, he cannot adopt the general and sweeping doctrine of the advocator, that no creditor who has once claimed and drawn dividends on a sequestrated estate can afterwards sue the debtor in an action of constitution. It may generally be unnecessary, and often oppressive to proceed in this way, but the Lord Ordinary does not think it incompetent. The trustees ranking gives no right to any thing but a dividend from the sequestrated estate, and after one dividend is paid, such ranking may even be retracted upon farther consideration before another, and at all events, it is no warrant either to attach future acquisitions by the bankrupt, or to do diligence against his person. Yet these are all the legal rights of all creditor by decree, and there is no provision in the law of sequestration which declares or implies that they cannot be acquired by any creditor who has once claimed or drawn dividends from the estate. If there was no more in the case, therefore, the Lord Ordinary would be inclined to hold the action competent, and the judgment of the sheriff right. He has put his judgment, therefore, entirely on the effect of the cedent's consent to the discbarge, which the bankrupt has (since the advocation, no doubt) actually obtained. Such a consent necessarily limits the right and interest of the creditor to the dividends which the funds in the hands of the trustee may yield, and, beyond all question, imports a renunciation of all right, either to attach acquirenda, or to do diligence against the person of the bankrupt. It seems, therefore, utterly inconsistent with the existence of any title or interest to convene him In a personal action for any prior debt.

“The respondent scarcely ventured generally to dispute those propositions, but rested chiefly on the specialty, that though his consent was given in 1823, no application was actually made for a discharge for ten years after, and that it was in the middle of this long interval, when all notion of such a thing seemed abandoned, viz. in 1829, that he acquired right to the debt by assignation, and brought his action before the sheriff, and he referred to the case of Megget, 10th July, 1830 (8 Shaw, 1063), and to that of Duncan and Cunninghame, 3d June, 1834 (12 Shaw, 678), to show that a consent of this sort may be retracted on sufficient grounds, and does not operate as a perpetual bar to other proceedings. But these cases do not apply. In that of Megget, the bankrupt having attempted to vary the conditions on which the creditors had consented to his discharge, they signified that they would withdraw their consent, and the Court ‘having intimated an opinion’ (for there was no judgment), that in such circumstances they would be entitled to withdraw, the bankrupt abandoned his new conditions, and the discharge was awarded. In Duncan's case, the discbarge had been deliberately refused by the Court, and there seemed to be no purpose of again applying for it, when action was raised against the bankrupt, upwards of eleven years afterwards; and accordingly this concurrence was never founded on as a ground of defence. In the present case, it is not pretended that the discbarge was ultimately sought on any other conditions than those to which the concurring creditors originally assented; and the discharge, instead of being refused, was granted, though no doubt after a long interval, on the very first application.

“The only difficulty in the case, therefore, arises from this long interval, during which nothing was done to render the concurrence available, and before the lapse of which the action was raised, and decreet given by the sheriff. But though the Lord Ordinary feels that it raises a very considerable difficulty, he thinks that the circumstances, when properly attended to, sufficiently warrant the conclusion to which he has come. There was not only no refusal of the discharge, and no change of circumstances to justify a retractation of the consents given in 1823; but, in point of fact, no attempt was made to retract them—and they were actually taken into account when the discharge was ultimately granted in 1834. There was some misapprehension upon the subject, at first, during the debate; but the facts turned out to be these: When the discharge was at last applied for in 1833, the minute of 1823, containing the consent of Sinclair and Young, and of several other creditors, was produced along with a more recent minute, containing the consent of other creditors, and both were taken into computation in making up the statutory concurrence, no new consents being given for those who had subscribed the minute of 1823. The respondent, no doubt, objected to Sinclair and Young being reckoned as consenting creditors, as he contended that this would interfere with his pleas in this depending advocation, and, as it turned, put that there was a suffcient concurrence without taking them into account. The Lord Ordinary merely states this fact in a note to the interlocutor granting the discharge, and gives no judgment on the merits of the objection.

“The result of the matter, then, is, that the consents given In 1823 were not held to have fallen by the long period of inaction that had followed, or to require to be renewed when the discharge was at last applied for; and, if this was the case in 1834, still less could these consents have fallen or ceased to be operative and binding in 1829, when the respondent brought his action against the bankrupt; and it is upon this ground mainly, that the Lord Ordinary has proceeded in holding that the defence founded on these consents ought to have been sustained.

“Nothing is said in the interlocutor as to the advocator's right to withdraw a plea of compensation advanced by him, and sustained in the Inferior Court, or to have his right of action on the compensating claim reserved to him; and the Lord Ordinary means to give no decision on these points. The plea of compensation will probably be thought to have fallen, when the debt against which it is stated is disallowed in toto; and if the advocator has a legal right still to insist in his counter? claim, it needs no reservation.”