Scottish Court of Session Decisions

Lord Deas—When the case was first discussed before us, almost the only objection taken to the Lord Ordinary's judgment was based on near relationship of the parties, but in the matters which have been debated before your Lordships to-day I quite agree in the result which I understand your Lordships have arrived at. I can see no difference in the statute between the qualifications necessary for voting and in order to claim a dividend. If these votes had been votes of strangers to the bankrupt, I should have held that they were not sufficient to sustain the claim, for in a question of this kind documents of debt not properly vouched are of no avail whether the claims are made by relatives or strangers. I wish to say that I think relationship in itself is no valid objection, and the same vouchers which would be satisfactory in the case of strangers, would in my opinion hold good in the case of relatives. But, as your Lordship has explained, there are grave omissions which would be fatal to the votes in any case, and it it is on these grounds, and not on the ground of relationship, that I proceed.

Lord Mure—I am of the same opinion, and have little or nothing to add to what your Lordships have already said. The parties here are in the relation of conjunct and confident persons, and when that is the case and bills are granted which are not operated on for years, and no explanation is afforded, nor any satisfactory voucher produced, then I think we are entitled to reject such votes.

The case of Anderson v. Guild, reported in 14 D. 866, was a case in which a competition for the office of trustee turned upon the vote of the bankrupt's mother-in-law, who produced a promissory-note dated eighteen months prior to the sequestration, and payable sixty days after sight, which bore a noting dated within three days of the sequestration. The affidavit gave no explanations of the debt nor of the noting, but merely said that the debt was due, and the vote was rejected. In the opinion of Lord Colonsay the following passage occurs:—“The principle seems to be that a conjunct and confident creditor who holds the bankrupt's acknowledgment of debt must produce along with such document, before he can be allowed to vote, some corroborative vouchers such as detailed account, excerpts from books, or other writings, or failing them must explain in his oath the nature and history of the transactions between him and the bankrupt which led to the granting of the acknowledgment founded on.” Now, this clearly applies to the promissory-note for £2000 referred to in the objections to the fourth vote. The objections urged against the sixth vote are still clearer; the statutory provisions have not been complied with, and the vote cannot be allowed.

Lord Shand—I think that the votes here objected to cannot stand. Sec. 49 of the Bankruptcy Act of 1856 provides that “To entitle a creditor to vote or draw a dividend he shall be bound to produce at the meeting, or in the hands of the trustee, an oath to the effect and taken in manner hereinbefore appointed in the case of creditors petitioning for sequestration, and the account and vouchers necessary to prove the debt referred to in such oaths.”

In the case of a creditor asking a ranking for a claim the law and practice requires that the proof should be of a very rigorous kind. I think that some relaxation has been admitted, and that a somewhat less strict rule has prevailed where a claim to vote was preferred and not a claim to rank. I think also that by a series of decisions a distinction has been drawn as to the nature of the vouchers required in cases of conjunct and confident persons, and of strangers, and I feel obliged to express my dissent from the view just explained by Lord Deas. I think a very clear statement of the law is to be found in a very careful note by Sheriff Glassford Bell in the case of Anderson v. Guild. If merchants in the course of their transactions have bills passing, and one should be drawn six weeks before sequestration, such a bill would be a perfectly good voucher. But it would be a very different matter if such a bill was drawn by a father upon his son. I think that by a long series of cases it is clear that a claim so vouched would be insufficient whether for voting or for ranking, and the reason is that in the one case the claim is by a conjunct and confident person, and the other is not.

The two claims we have here to deal with are by conjunct and confident persons—brothers and law-agents. Such claims must be very narrowly examined. They may no doubt be good, but to guard against fabricated documents concocted for the purpose of controlling the sequestration, some satisfactory explanation is required of the debt and some adminicle of evidence along with it—as, for example, a reference to a book, or the counterfoil of a cheque-book, the markings on a bill showing it has been in the circle—anything, indeed, supplying some independent evidence to sustain the vote. In the case of No. 4 here the only documents produced are these passing between the bankrupt and his brother. The same remarks apply to the objections stated to vote No. 6. A little care might perhaps have made both this vote and the one previously objected to good; but in the latter case a promissory-note granted on the same day as a deed executed in favour of creditors, and with no satisfactory vouchers, cannot be sustained.

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