Scottish Court of Session Decisions

On December 16th 1884, James Stewart, accountant, Motherwell, lodged a claim in the sequestration of Peter Dunsmore, merchant in Blantyre, for the sum of £301, 5s. 2d., being the amount of two bills at three months granted him by Dunsmore on 12th June (£100) and 1st August 1884 (£200) respectively, with the interest due on the first of said bills.

The claim was rejected by Alexander Gordon, S.S.C., the trustee in Dunsmore's sequestration.

Stewart appealed to the Sheriff.

On 22nd May 1891 the Sheriff-Substitute ( Birnie) appointed parties to lodge minutes prepared in terms of the statute within six days, each to be exchanged, revised, and re-lodged within six days thereafter.

The following minute was lodged for Stewart—“The appellant submits and avers that the bills on which his claim is founded were granted for value, and that therefore he is entitled to succeed in this appeal.”

The following minute was lodged for Dunsmore's trustee—“(1) The claimant acted as factor for the bankrupt, and collected rents and other moneys belonging to him, and has all along failed to account to his trustee for his intromissions. (2) In the commencement of the sequestration a petition was presented in this court for the examination of the claimant, and to have him ordained to produce an account. Repeated diets were fixed for his examination and the production of these, but claimant never attended but made continual excuses. Up to this date he has produced no account. (3) The bills on which the claim is made were given by the bankrupt to cover advances to be made by the claimant on behalf of the bankrupt in the management of his affairs, and not for cash advanced at their dates. The claimant has made no advances and he has all along failed to satisfy the trustee that the bankrupt was indebted to him in anything at the date of the bills or the sequestration.

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On the contrary, on an accounting there is, the trustee believes, a large balance due by the claimant to the trustee, and the trustee therefore rejected the claim. (4) The claimant is not entitled to a ranking until he satisfies the trustee of his intromissions with the funds of the bankrupt. (5) The claimant is an undischarged bankrupt.”

On 29th June the Sheriff-Substitute refused a motion by Dunsmore's trustee that Stewart should be ordained to find caution.

“ Note.—The appellant's claim is founded on bills, and he is virtually a defender. No doubt he has failed to convince the trustee, who has no interest except to do justice, that the bills were granted for advances at their dates, but having in view the more recent decisions this is not to my mind sufficient to compel the appellant to find caution.”

Dunsmore's trustee appealed. In addition to the statements made in the minute lodged for him, he stated that Stewart's trustee had been discharged, but that before his discharge he had considered the propriety of taking action upon this claim, and had decided not to do so.

He argued—Whether Stewart was to be looked upon as in the position of a defender or not, he should in the circumstances be ordained to find caution— Stevenson v. Lee, June 4, 1886, 13 R. 913. Further, the Sheriff was mistaken in thinking Stewart virtually a defender. He was claiming a sum of money, and his position was like that of a pursuer in a petitory action, while the answers of the trustee—viz., (1) Compensation, (2) No value given—were of the nature of defences. The ordinary rule should therefore be applied, and he should be ordained to find caution.

There was no appearance for Stewart.

At advising—