Scottish Court of Session Decisions

On 27th September 1866, John Jeffrey, with concurrence of Patrick Flannigan, pawnbroker, Falkirk, representing himself as his creditor to the requisite amount, presented a petition to the Sheriff of Linlithgowshire for sequestration of his estates. The account, upon which a sum of £57, 10s. was said to be due by Jeffrey, was produced, and also Flannigan's oath to that effect; but two of the items in the account—viz., “Cash lent you, £10,” and “Amount of goods, £17”—were not vouched as is required by the statute. Sequestration was awarded by the Sheriff of Linlithgowshire, and Mr Barr was appointed trustee. A petition for recal of the sequestration was presented within forty days by Ballantyne, as a creditor of Jeffrey to the extent of £200, 2s. 6d.

The Lord Ordinary (Mure) refused the petition, on the ground that the petitioner must be held to have acquiesced in the sequestration. His Lordship added the following note explaining the grounds of judgment:—

“The question for consideration is whether, when the concurring creditor is truly a creditor to the extent required by law, it is necessary to recal a sequestration granted on an affidavit ex facie regular, and which is not said to have operated injuriously as regards the interest of the petitioner, or any others of the creditors on the estate, because vouchers for certain of the items in the account to which the affidavit relates, were not produced before the Sheriff when sequestration was awarded.

The Lord Ordinary has felt this question to be attended with considerable difficulty, as the provisions of the Bankrupt Act are very precise as to the necessity of producing vouchers to instruct accounts. But on examining the authorities, he has come to be of opinion that the present case may be held to fall within the operation of the rules applied in the cases of M'Nab, December 13, 1851, and Ure, May 28, 1857, rather than in that of Campbell, 27th May 1853, relied on by the petitioner. For the decision in the case of Campbell appears to have proceeded on the ground that the concurring creditor was not in any sense a creditor of the bankrupt, and that there could therefore be no concurrence. The objection, however, now under consideration arises on the assumption that there was a debt of the requisite amount due to the concurring creditor, and it rested on the fact that when the Sheriff awarded sequestration, certain items of the account were not properly vouched. This is an objection, however, which, in the opinion of the Lord Ordinary, is not necessarily fatal to the sequestration, but one which may be waived or acquiesced in by a creditor so as to preclude him from on that ground applying to have the sequestration recalled.

Now, it appears from the proceedings in the sequestration, that this is what occurred in the present case. For the petitioner granted a mandate to Mr Thomson, an accountant, who appeared and acted for him at the meeting for the election of trustee. At that meeting Mr Thomson proposed himself as trustee in opposition to the respondent; and the concurring creditor also appeared, and having produced the bill for £27 granted by the bankrupt, was allowed to vote without objection. Mr Thomson was not elected, but no protest or appeal was taken against the vote of the concurring creditor, or the resolution of the creditors to elect the respondent, whose appointment was duly confirmed on the 13th of October 1866. Upon this being done, the creditors proceeded, at meetings called in terms of the statute, to entertain and dispose of an offer of composition made by the bankrupt, and that without intimation of any objection on the part of the petitioner until the date of the present application. In these circumstances it appears to the Lord Ordinary that the petitioner must be held to have acquiesced in the sequestration, and is now foreclosed from seeking to have it recalled.”

The petitioner reclaimed.

Scott, for him, argued—There being no proper

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account and vouchers produced as required by the statute, the petition for sequestration ought, under the statutory direction, to be dismissed. There is no alternative but dismissal.

M'Lennan, for the respondent, answered—It is admitted that, had the objection to, the account and vouchers been taken when the petition for sequestration was before the Sheriff, the petition must have been dismissed. But review of the judgment on that petition is expressly excluded by the statute, which provides instead of it for a petition to recal. The grounds are not specified in the statute on which recal should be pronounced, and the Court has in various cases held it to be in their discretion whether to recal or not. There are here two main reasons against recal—1. That the petitioner had acquiesced in the sequestration by taking part by his mandatory in a contest for the trusteeship, for which his mandatory was a candidate. In Ure v. M'Cubbin, 28th May 1857, 19 D. 758, an act only a little stronger was held to constitute a personal bar to suing a petition for recal. 2. The whole of the creditors, except the petitioner, were content, and the sequestration proceedings were practically at an end through their accepting an offer of composition made by the bankrupt. In Macnab v. Hunter, 13th Dec. 1851, 14 D. 183, recal was refused on this ground, although the concurring creditor, being an undischarged bankrupt, was, in strict law, no creditor at all of the petitioner for sequestration. In Macnab's case, as in that of Ure, the Court had distinctly claimed and exercised a discretionary power as to recal, and there was no principle on which that discretion should be limited. Where there was no concurring creditor (according to strict law), as in Macnab's case, they refused recal, and it was hard to see why they should not refuse it where there was a creditor, as here, to the statutory amount, the only objection being that his account and vouchers were out of form. The case of Johnstone, 18th July 1840, 2 D. 1463, decided that such an account as was here objected to might be remodelled, a debt of the proper amount subsisting. The Court, therefore, in the whole circumstances, should refuse the petition, and give the concurring creditor an opportunity of remodelling his account.

At advising,