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Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Railton v M'Laren [1835] CA 13_1076 (8 July 1835)
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Cite as: [1835] CA 13_1076
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SCOTTISH_Shaw_Court_of_Session
Page: 1076↓
v.
Subject_Banlkruptcy—Sequestration—
A candidate for the office of trustee on a sequestrated estate privately made alterations on an account, as deponed to by an absent creditor, for whom he was mandatary; and altered the affidavit of another absent creditor, for whom he was also mandatary; and used the account and affidavit be altered as if they were genuine—held disqualified fur the office of trustee, though he alleged that the alterations made were intended merely to remove inaccuracies, and had actually done so, and had not since been objected to by the respective creditors.
In the sequestration of John Love, merchant in Glasgow, a competition arose for the office of trustee between Edward Railton, notary-public in Glasgow, and Neil Campbell M'Laren, accountant there. The competition ultimately turned upon a personal objection to Railton, who had the majority of votes. One of the creditors of Love was a person named Mahon, residing in Dublin. The printed form of an affidavit, with an annexed account, was sent to Mahon to depone and sign it. Mahon made some alterations on the account, and then deponed to it, and returned it with the affidavit to be used by Railton in his own favour at the election. On receiving it, Railton tore away the account, and indorsed an account, containing a change in some items, on the back of the affidavit. At the meeting for election, he appeared and voted as mandatary for Mahon, “conform to affidavit, account indorsed thereon, bill, and mandate produced.” Railton alleged that the account indorsed presented the true state of the accounts as between the parties; that its gross amount was the same with that which was transmitted from Ireland; that Mahon, the creditor, had since adopted and ratified it; and that any change in the details was merely made to avoid erasures, and remove some inaccuracies.
In the account and relative affidavit of another creditor, named Hunter, Railton inserted the words, “and sole partner of said concern,” as descriptive of the bankrupt. It was not said that this statement was false in point of fact; but it was done without the knowledge or consent of Hunter.
In reference to these proceedings, M'Laren pleaded, that the object of obtaining a creditor's affidavit was to secure the accuracy of the statement of the debt claimed on, and to expose any party claiming to the pains of perjury, if he gave a false oath. But if the details of an account, or the description of the debtor, as deponed to, were afterwards to be altered by any third party, the vote was not only vitiated, as there was no longer the creditor's affidavit to support it, but the party making the alteration disqualified himself from holding the office of trustee in that sequestration. Ho was guilty of uttering a fabricated document, and supporting it by imposing upon the creditors an affidavit as relative thereto, while he knew it to have been emitted in reference to another document. As Railton had done this, for the purpose of supporting his election as trustee, and had used these fabricated claims, he was disqualified. And as this objection had not been taken at the meeting for election, from all of whom the grounds of it were concealed at the time, it would be requisite to have a new election.
Railton answered, that he was ready to prove, that any alterations made did not introduce any falsehood into either of the claims, but left them correctly stated; and, in particular, though some change was made in the items of Mahon's debt, they were corrections of the claim, and left the sum total the same as before, and Mahon still founded on the claim as it now stood, so as to adopt and ratify the alteration. Thus there was no immoral act committed by Railton; and, even if these two votes were to be set aside, he ought not to be held disqualified for the office of trustee, and, as he would still possess the majority of votes, his election ought now to be confirmed. *
The Lord Ordinary “made avizandum to the Court.” †
_________________ Footnote _________________
* There were other minor objections discussed, which are noticed in the note of the Lord Ordinary.
† “ Note.—This is a competition by two petitioners for the trusteeship on the sequestrated estate of John Love.
“Nine creditors voted at the election, of whom seven voted for the petitioner, Edward Railton, and two for the other, Neil M'Laren. These two were M'Laren himself and a brother of the bankrupt.
“Votes on both sides are objected to; but there has been no scrutiny, because the parties wish certain personal objections that have been taken to Railton to be disposed of first, as his rejection on this ground might of itself lead to the confirmation of his competitor.
“If these objections are repelled, the scrutiny roust be gone into. But though they be sustained, this won't imply the immediate success of M'Laren; because the minutes show that no objection was stated till after the vote had been taken, and till after Railton had declared his acceptance, and bad named his cautioner, and had been declared duly elected; so that his being now found disqualified would only lead to a new election. I cannot help considering the fact of these objections, several of which were unquestionably known at the time, being kept back from the meeting, as justifying rather an unfavourable impression of them. They cannot be appreciated, and scarcely even understood, without taking into view the fact (not disputed on either side) that Love is not a very creditable bankrupt. There are two sequestrations subsisting against him; the benefit of the cessio was twice refused to him; and it seems impossible to hear almost any statement touching his affairs, without discovering suspicious appearances.
“If it were necessary to have every circumstance that is deemed regularly established, the case would be very little advanced in without a tedious proof. But in these competitions this is not necessary; and I have thought that there is enough already in process on the record to warrant my reporting the case as it stands. The material objections are these:—
“1st, That Railton is a defender in two actions of damages, which the bankrupt has instituted against him, one for libel, and one for oppression, in these very matters (Cond. Arts. 2 and 4). This is almost the only fact which led me at one time to hesitate about his eligibility. Because it would undoubtedly be hard to interfere with the justice due between two parties by unnecessarily putting them in the position of bankrupt and trustee. But, on the other hand, nothing could be more dangerous than to enable a bankrupt to deprive his creditors of the trustee they wish, by bringing an action of damages against him, and, therefore, the circumstances must be looked to.
“The first action is founded solely on the fact, that, in writing to a creditor after the sequestration, Railton, who is also a mandatary for a creditor, described Love as a ‘practised swindler.’ Now, assuming this expression to have been rash, it will be observed, 1st, That, in the case of Torrance, 2lst November, 1834, 1 the Court decided that such statements among creditors were privileged, and are therefore not actionable, unless when proceeding from malice. Malice is averred here, but nothing is stated to make its existence probable. 2d, The action was instituted just three days before the meeting for election, but was not mentioned till the election was over. Does not this make it savour of an election trick?
“The other action rests on the statement, that Railton incarcerated the bankrupt in the face of a personal protection, and under the pretence of acting for Hunter, a creditor, his employer. This action was raised about ten or eleven days after the election. The answer to it is, 1st, That Railton held the papers of Hunter, which was a sufficient authority to act for him. 2d, That no lawful protection had been obtained, and that, therefore, though liberation was granted by the Lord Ordinary, the imprisonment could easily have been defended and continued if it had been insisted on, but that the diligence was withdrawn; and that the resolution of a pretended meeting to concur in the protection was a mere trick. There is some confusion in the statements; but I am inclined to think both of these answers good. The meeting, which is said to have concurred in the protection, seems to have consisted only of the bankrupt's brother and a Mrs Kelly; and, at the election of trustee, all the creditors present, except his brother and the now competing candidate, resolved that the bankrupt ‘is not entitled to personal protection.’ It is for the Court to say, whether such action, raised at a time calculated to affect this competition, ought to interfere with the creditors' choice?
_________________ Footnote _________________
1 Ante, p. 72.
“2d, That Railton lodged an Information of fraud against the bankrupt with the procurator-fiscal, who, after enquiry, abandoned the proceedings (Cond. 3). In answer to this, it is said that the informer was Goold, mandatary for a creditor, and not Railton. But let it be Railton. The lodging of the information was not only a right, but a duty. The facts are explained in Statement, Art 13. The answer to that article is entirely evasive. According to the bankrupt's own letters, his being referred to the procurator-fiscal was not an unreasonable step.
“3d, That Railton instituted certain proceedings against the bankrupt in the names of creditors without their authority, and which they disclaimed (Cond. 5 and 6). The answer is, that their letters of disclamation are produced, and these show, 1st, That none of the creditors deny their having originally given authority. 2d, That they only disclaim de futuro. The bankrupt had begun his action of damages.
“4th, That, after the meeting for electing an interim-factor was over, Railton pretended to hold a second meeting, and irregularly made out a minute of what took place (Cond. Art .7.) The true circumstances are set forth in Statement 2. Their import seems to be, that Railton adopted a mode of defeating a manœuvre by the bankrupt or his friends, which was perhaps inept, but which could not be very unfair, since the result and the object was, so far as he could, to put the estate under the care of the sheriffclerk.
“5th, That, in consequence of this proceeding, the bankrupt accused Railton of fraud to the procurator-fiscal, who took a precognition, under which he was committed for trial, but was liberated on the act 1701 (Cond. Art. 8.)
“The explanation is contained in Stat. Art. 16. I was satisfied that the proceedings under this precognition were influenced by the bankrupt and his associates, and that the charge was groundless. But, at any rate, being discharged under the act 1701, the accused is judicially clear of that imputation.
“6th, That he fraudulently imposed on the creditors, by altering an account claimed on by one Mahon, after it had been sworn to (Cond. 10.) The facts are, that the creditor, who was in Dublin, though he was correct as to the amount of the debt to which he swore, in setting down the items made a trifling mistake, and that Railton, who was in Glasgow, where the voucher was, corrected this error. Very possibly this was an improper way of proceeding; but it is said to be common for agents on the spot to correct such accounts, provided the affidavits and the sums be untouched; and, at any rate, the charge endeavoured to be made out of it seems quite extravagant. The creditor adopts the correction, and still claims on this affidavit and account.
“These objections cannot be disposed of correctly by concluding in general, that, upon the whole, it may be expedient to dispense with Mr Railton. The creditors have a right to have him, if he be eligible; and since charges have been made against him, he has a right to have them considered articulately. Their accumulation, instead of increasing, diminishes any plausibility they may have; and the reported case, M'Laren and Love v. Railton, 21st February, 1835, 1 shows the unnecessary complexity of proceedings to which he has been exposed. Enmity to the bankrupt has been decided to be an objection to a trustee (Lowe, 14th February, 1835 1); but imputation and litigation, to which any man is liable, is no proof of enmity.
1 Ante, p. 512.
The Court pronounced this interlocutor:—“Find Edward Railton disqualified from being elected trustee in this sequestration; therefore, annul the election,” &c.
Solicitors: J. Cullun, W.S.— C. F. Davidson, W.S.—Agents.
“If I had disposed of the case, I would have repelled the objections with expenses.”
_________________ Footnote _________________
1 Ante, p. 465.