Scottish Court of Session Decisions

This was a note of suspension presented against George Douglas, trustee on the sequestrated estate of George Stiven, bleacher at Murton Mill, Forfar, by James Rankine, merchant in Dundee, an unsuccessful competitor for the trusteeship. The note set forth—“That the complainer is threatened to be charged, at the instance of the said George Douglas, to make payment of the sums decerned for in a judgment by the Sheriff-Substitute of Forfarshire at Forfar, dated 1st June 1871, by which ‘the Sheriff-Substitute having heard parties' procurators on the notes of objections lodged to the appointment of George Douglas and James Rankine to the office of trustee on the sequestrated estate of George Stiven, and having made avizandum with the affidavits, minute of meeting of creditors, and whole process, sustains the objections to the appointment of the said James Rankine, repels the objections to the appointment of George Douglas, and declares him to have been duly elected trustee; but, before confirmation, appoints him, at his own expense, to call another meeting of the creditors for the purpose of deciding on the sufficiency of the caution to be offered by him, as required by the Act; finds the unsuccessful competitor, James Rankine, liable in expenses, of which allows an account to be lodged and taxed, and decerns;’ most wrongously and unjustly, as will appear to your Lordships from the annexed statement of facts and note of pleas in law.”

The minutes of the meeting called for the purpose of electing a trustee showed that four creditors, to the amount of £146, voted for Mr Douglas, and two creditors, to the amount of £432, for Mr Rankine; that objection was taken to the election of Mr Rankine by Mr Douglas and those who voted for him, on the ground that his debt consisted of a large illiquid claim of damages against the bankrupt. “The meeting fixed that the trustee to be confirmed should find caution for his intromissions and the performance of his duties to the extent of £100 sterling; and Henry Nicol, one of the creditors, being proposed as cautioner for the said James Rankine, the meeting declared themselves satisfied with the sufficiency of the cautioner. The meeting thereafter proceeded to the election of three commissioners, and nominated and appointed the said James Young, George Douglas, and James Scott, to be commissioners, with all the powers conferred by the statute.” It will thus be seen that though the amount of caution to be found by the trustee was fixed at the meeting, no cautioner was proposed by Mr Douglas, or approved of by the meeting.

The proceedings at this meeting were brought before the Sheriff on a competition for the office of trustee, in which process he pronounced the interlocutor sought to be suspended. The following note was appended:—“Two creditors only vote for James Rankine. It is true their claims are so large that they constitute a majority in value. But the Sheriff-Substitute thinks there are circumstances connected with their votes and claims that make it desirable not to appoint their candidate to the office of trustee.” ( The Sheriff-Substitute here detailed the circumstances which led him to reject Mr Rankine). “He therefore selects Mr Douglas as trustee; the objections to him are more technical than essential, and can be got over by his resigning his commissionership and supplying an omission at the meeting of creditors, where he did not nominate a cautioner. This can be done to the satisfaction of the creditors before confirmation.”

The complainer pleaded, inter alia:—“1. The judgment complained of ought to be suspended as incompetent and ultra vires, in respect—(1) It declares the respondent to have been duly elected trustee, who had not complied with the statutory requirement of offering caution, and having its sufficiency decided on at the meeting for the election of trustee. (2) It declares the respondent, who had been elected commissioner, and accepted and holds that office, to have been duly elected trustee. (3) It sustains the objection to the appointment of the complainer, who had in all respects complied with the statute, and had been duly elected trustee in terms thereof. (4) It appoints the respondent to call a meeting of creditors for the purpose of deciding on the sufficiency of the caution to be offered by him, a meeting not authorised by the Act.”

The respondent pleaded, inter alia:—“1. The interlocutor of the Sheriff-Substitute is final.”

The Lord Ordinary on the Bills ( Mackenzie) refused the note of suspension, and added the following note to his interlocutor:—“The note of suspension is presented against the deliverance of the Sheriff-Substitute of Forfar, declaring the respondent to be duly elected as trustee in the sequestration of George Stiven. Besides various alleged irregularities in the proceedings, the complainer avers that the respondent did not offer caution at the meeting for the election of a trustee, so as to enable the creditors to decide at that meeting on the sufficiency of that caution, in terms of section 72 of the Bankruptcy (Scotland) Act, 1856; and he pleads that this was fatal to the election of the respondent as trustee.

“The Lord Ordinary is of opinion that he is not

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entitled to consider and decide the question raised by the complainer, because the Bankruptcy (Scotland) Act, 1856, commits to the Sheriff, where there is competition for the office of trustee (sects. 69 and 70), the decision of the question who has been elected trustee, and provides (sect. 71) that ‘the judgment of the Sheriff, declaring the person or persons elected to be trustee or trustees in succession, shall be given with the least possible delay; and such judgment shall be final, and in no case subject to review in any Court, or in any manner whatever.’ The judgment complained of being thus declared final, and in no case subject to review in any manner whatever, the Lord Ordinary does not see how he can review that judgment in the present case, or get behind the statutory finality for that purpose.”

Against this interlocutor the complainer reclaimed.

Orr Paterson for him.

Birnie for the respondent.

At advising—