Scottish Court of Session Decisions

This was an appeal from the Sheriff-court of Edinburgh at the instance of Mr Hugh Miller, C.A. Edinburgh, who was sometime trustee on the sequestrated estate of William Taylor Keith. Mr Miller had been appointed trustee by the creditors on the bankrupt estate, and in the course of his transactions as trustee all the available funds were swallowed up. Keith had been committed to prison by the Sheriff-Substitute (Hamilton) for failing to give a satisfactory explanation as to a certain sum of money at his examination, and as legal proceedings had been instituted thereafter in the Court of Session, at the instance of the bankrupt, to effect his liberation, Miller, having no funds in his hands belonging to the estate, had resigned his office. J. D. Ferrie was therefore appointed trustee in his room. A meeting of creditors was held on 21st August for the purpose of deciding on

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a composition, and at that meeting were present Mr Ferrie, Mr Macqueen, agent in the sequestration, and David Craig, clerk to Mr Macqueen. A composition of 1s. per £1 was there offered and accepted.

In regard to Mr Miller's account for commission and expenses, it was agreed to offer a composition of £20, payable by a bill at four months after the date of the bankrupt's discharge. The total account was £60, 5s. 5d., of which £42, 19s. 11d. was for the law expenses of the sequestration, and £17, 5s. 6d. was for outlay and charge and trouble. The cautioners for the amount of the bill were the bankrupt himself and a Mr William Woodhead, a surgeon's assistant, said to reside at Abbeyhill, but who could not be found there. The trustee (Ferrie) then made a report to the Sheriff to the effect that the account had been audited by the Commissioners, the ballance ascertained, and the remumeration of the trustee fixed, and also that the expenses of taking out the sequestration had been satisfactorily provided for. It was represented to the Sheriff for the appellant that that was not a report in conformity with the 141st section of the Act, in so far as it merely reported that part of the expenses had been allowed to the former trustee (Miller).

The Sheriff-Substitute pronounced the following interlocutor and note:—

“ Edinburgh, 16 th November 1872.—The Sheriff-Substitute having considered the foregoing report, minute of meeting of creditors, and bond of caution therein referred to, together with the trustee's additional report and relative productions, and having heard the parties on 30th October last, and again since the lodging of said additional report, finds that the offer of composition, with the security therein mentioned, has been duly made, and is reasonable, and has been unanimously accepted by the creditors or mandatories of creditors assembled at said meeting; therefore approves of the said offer with the security; but before granting a discharge, appoints the bankrupt to appear and emit the statutory declaration.

“Note.—At the hearing on 30th October, Mr Macara, W.S., appeared for Mr Hugh Miller, C.A., formerly trustee in the sequestration, and objected that the expenses incurred during Mr Miller's tenure of office, including his remuneration, had not been paid or provided for, in terms of the 141st section of the Bankrupt Act. As'the objection appeared to be a relevant one under the statute, and was, in point of fact, borne out by the terms of the trustee's report, the Sheriff-Substitute was unable at once to pronounce a deliverance approving of the offer of composition, and superseded consideration of the application for discharge until the bankrupt should arrange, to the satisfaction of the trustee and commissioners, for the settlement of the expenses referred to. This has now been done, as appears from the additional report lodged by the trustee, and the minute of meeting of commissioners therein referred to and produced.

“The Sheriff-Substitute would have hesitated to sustain Mr Miller's title to oppose the bankrupt's discharge upon any other than the special ground above mentioned.”

Miller appealed.

It was argued for him, that in the above interlocutor the Sheriff-Substitute had approved of a report which was not in conformity with the provisions of the statute, and that the trustee had had no opportunity of being heard before the Sheriff, as allowed by the Act.

It was argued for the respondents that the question here was whether Mr Macara, the former agent, and Mr Miller, the former trustee, had a right to get remuneration and their expenses. What remedy Mr Miller might have against the present trustee, or against the bankrupt, was not a matter at present before the Court, but the point of dispute was whether the appellant had a locus standi under the 141st section of the Bankruptcy Act, and whether there was any ground for interference with the commissioners' deliverance under that Act. It was submitted that the appellant had no locus standi under the Bankruptcy Act, and that the commissioners' deliverance was in accordance with the provisions of the Act.