Scottish Court of Session Decisions

On 31st May 1888 Miss Maggie Simpson, Dundee, obtained in the Sheriff Court of Forfar a decree in absence against the Rey. James C. Jack, minister of the parish of Kingoldrum, for payment of a sum of £1000 as solatium and damages in respect of the defender's breach of his promise of marriage to the pursuer. The decree contained in common form a warrant to charge the defender for payment within, seven days under pain of poinding.

Simpson having charged the defender, proceeded to poind on 23rd June, which poinding was on the 27th June reported to the Sheriff for a warrant of sale of the poinded effects.

On 6th July the first order was pronounced by the Sheriff in a petition by Mr Jack for the benefit of cessio. In this petition for cessio Mr Jack stated that in consequence of the expired charge on Simpson's decree he was notour bankrupt, and that he was willing to surrender his whole estate to his creditors.

On 9th July 1888 Mr Jack lodged in the poinding a caveat, praying to be heard before warrant to sell should be granted, and the Sheriff-Substitute heard parties thereon, and on Simpson's motion for warrant to sell.

On 16th July the Sheriff-Substitute ( Robertson) pronounced in the poinding an interlocutor, by which he refused in hoc statu warrant to sell.

“Note.—This poinding of the Rev. Mr Jack's effects was reported on the 27th June. A warrant to sell would have been granted thereafter as a matter of course, but since that date Mr Jack has been declared to be notour bankrupt, and has applied for cessio. This makes his estate litigious, and equalises all diligences within sixty days prior to the bankruptcy, and within four months thereafter. The trustee in the cessio will use diligence for behoof of all the creditors, so that the poinding creditor will gain nothing by selling the effects now. The trustee will sell to greater advantage, and with less expense to all concerned. I decided the same point a few years ago, and Lord Trayner, who was then Sheriff-Principal, affirmed the judgment.”

On 24th July Mr Jack was examined in the process of cessio. No creditor appeared but Simpson, who was represented by her agent. From the deposition and state of affairs it appeared that Mr Jack was assistant and successor in the parish of Kingoldrum, and that on the death or retirement of the incumbent he would receive the whole emoluments; that the living was a small one, being worth, including an allowance from the Smaller Livings Fund of the church, £172, 12s. 5d., of which Mr Jack was receiving £91, with the manse and glebe, the latter of which was worth about £10 per annum. His emoluments thus amounted to about £100 a-year in all. He had several other creditors besides Miss Simpson. He was unmarried. His assets (including the household furniture in the manse poinded at Miss Simpson's instance, and valued at £41, 19s. 6d.) amounted to £73, 16s. 6d., while his liabilities, including the £1009, 12s. due to her, were £1114, 12s.

On 31st July the Sheriff-Substitute pronounced in the cessio the following interlocutor:—“Finds him entitled to the benefit of

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the process of cessio bonorum, and he having taken the statutory deposition, grants the benefit of the process of cessio bonorum, and decerns, assigns, and adjudges the pursuer's moveable property to and in favour of James Forrest junior, solicitor, Kirriemuir, as trustee for behoof of the pursuer's whole creditors, without prejudice to the pursuer granting a disposition omnium bonorum if required: Finds the pursuer entitled to expenses as prayed for, of which allows an account to be given in, and remits the same when lodged to the Auditor of Court to tax and report: Further appoints the trustee, before acting, to find caution to the extent of £100 sterling, in terms of the statute and relative Act of Sederunt, and directs the moneys coming into the trustee's hands to be lodged in the National Bank at Kirriemuir, &c.

Note.—I was asked to make it a condition of cessio being granted that the reverend petitioner should hand over a certain proportion of his stipend to his creditors. I can see no authority for this in the Cessio Acts. Mr Goudy, in his book on Bankruptcy, p. 451, seems to think that there is no way of recovering such estate for the benefit of creditors in cessio under the Debtors Act. And I certainly was not referred to any case where this had been done.

Under the older bankruptcy law there is a case where a clergyman's stipend was conveyed to his creditors after leaving him £95, 6s. 1d. as beneficium competentiæ— A B v. Sloan, 3 S. 195 — and possibly, if I were to convert this cessio into a sequestration under the 11th section of 44 and 45 Vict. c. 22, the trustee might attach part of the reverend petitioner's salary. This step would entail considerable expense to the creditors, and might not avail them after all, for in the case Barron v. Mitchell, 8 R. 933, it is evident, from a perusal of the Lord Ordinary's interlocutor, that they would be met with a difficulty, and looking to the small sum, if any, that would be left after leaving the petitioner a competent livelihood, I am unwilling to take this step. For if the Court in 1824 thought a clergyman could not live decently under £95, 6s. 1d. a-year, probably now that the expense of living has increased, a larger sum would be allowed. If so, there would be little or nothing over for the creditors. The petitioner is only an assistant and successor in the parish, and his whole present means are required to keep him decently in his clerical position.

“Should he apply for his discharge hereafter it will be open for his creditors to object.”

Miss Simpson took an appeal from both these interlocutors to the Sheriff ( Comrie Thomson), who in both cases dismissed the appeal.

In disposing of the appeal from the Sheriff-Substitute's interlocutor of 16th July, refusing a warrant to sell the poinded effects, the Sheriff appended to his interlocutor the following note:—“I express no opinion as to the effect of a decree of cessio in equalising diligences. The question raised here is within the discretion of the Sheriff, and he does not seem to be entirely deprived of the power of exercising that discretion by the terms of the 26th section of the Personal Diligence Act. The only interest opposed to the course which has been followed is that of the poinder, who has a completed diligence. But her rights, including her claim for expenses, are sufficiently secured by the provisions of the statutes.”

In dealing with the appeal from the Sheriff-Substitute's interlocutor of 31st July, which granted Mr Jack the benefit of cessio, the Sheriff added this note to his interlocutor:—“I am of opinion that it is not competent at this stage of process of cessio to entertain the proposal that as a condition of granting the benefit of that process the petitioner should hand over a certain proportion of his stipend to his creditors. I do not say whether his refusal to do so may be a good ground for refusing or delaying his discharge; that matter will come up in due time, unless what seems eminently desirable happens, namely, a settlement of the case.”

Miss Simpson appealed both these interlocutors of the Sheriff to the Court of Session.

Argued for the appellant— In the poinding—The Sheriff-Substitute was in error in refusing a warrant to sell the poinded effects, and so all that followed upon his interlocutor of 16th July was irregular. No “lawful cause,” as required by section 26 of the Personal Diligence Act, had been shown why this sale should not have been proceeded with. A cessio was not a “lawful cause” for refusing a warrant of sale. For “lawful cause”—Mackay's Practice, vol. ii. p. 211. Even if the Sheriff had under the Personal Diligence Act a discretion, yet it must not be arbitrarily exercised— Clark v. Hinde, Milne, & Company, December 18, 1884, 12 R. 347; Bell's Comm. (5th ed.) p. 596. The appellant's interest was in the present case paramount, and she ought to be allowed to carry out her diligence. The debtor became notour bankrupt on the 20th of June 1888, because at that date there was insolvency concurring with a duly executed charge for payment along with an execution of poinding of the debtor's moveables. Both at the date of the debtor's insolvency and at the present time the appellant was the only person interested in the diligence, as no other creditor had done diligence—Bankruptcy and Cessio Act 1881 (44 and 45 Vict. c. 2), sec. 11. In the process of cessio—For the law as to cessio, which has not undergone any change, see 2 Bell's Comm. p. 595; as to the arrestability of clergymen's stipends—Connal on Teinds, ii. p. 99. In the case of Scott v. M'Donald, 1 Sh. App. 362, a clergyman had to assign half of his salary as a condition of obtaining the benefit of cessio — Dove Wilson's Sheriff Court Practice, p. 673, and Learmonth v. Paterson, January 21, 1858, 20 D. 418. In the case of Davidson, March 1818, F.C., an officer had to give up one-half of his pension as the condition of his obtaining cessio—see also Shand's Practice, p. 820. In the present case the respondent was abusing the process of cessio. He allowed decree in absence to pass, and then claimed a cessio in order to get the damages assessed. The Court should refuse cessio, or grant it conditionally on the respondent assigning a portion of his stipend to his creditors. The appeal to the Sheriff was competent, as the clause of extract in the interlocutor of 31st July was not intended to preclude appeal.

Argued for the respondent— In the poinding—The appeal of the interlocutor of 16th July refusing a warrant of sale was incompetent,

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in respect that there was no final judgment. Section 26 of the Personal Diligence Act merely put a ministerial duty on the Sheriff; here there was merely a ministerial duty of sale. Notour bankruptcy did not terminate a poinding, it merely let all the creditors share in the benefit of the existing diligence, and the purpose of a cessio was to give the bankrupt immunity from diligence. No doubt there was a material difference between a trustee in a cessio and a trustee in a sequestration, for the latter was in a position to equalise all diligences. In the cessio—The interlocutor of 31st July 1888 was not appealable, because an appeal was not taken before the decree was extracted—Sheriff Courts Act 1876 (39 and 40 Vict. c. 70), sec. 26, sub-sec. 4, secs. 32 and 83, and the case of Tennents v. Romanes, June 22, 1881, 8 R. 824. The extract allowed by the Sheriff was reasonable, and an opportunity of appeal was allowed to the appellant, but was not taken advantage of. The object of the Sheriff Court Act of 1868 was to shorten the time for appeal.

At advising—