Scottish Court of Session Decisions

On 26th May 1845 the late Mr William Moncreiff, C.A., was confirmed as trustee on the sequestrated estates of James Pedie, W.S., then deceased.

The bankrupt's creditors were mainly heritable creditors who held bonds over his heritable estate to the amount of about £12,257, but by arrangement with them Mr Moncreiff managed the bankrupt's heritable properties and accounted to them for the rents. The heritable properties were sold in 1850, and the proceeds were paid over or accounted for to the heritable creditors, though they were not sufficient to pay their debts in full.

Part of the sequestrated estate consisted of an annual feu-duty of £5, 5s., believed to be payable from subjects situated in Stock-bridge. As it could not be ascertained at the time of the distribution of the heritable estate under which of the securities this feu-duty was included, it was left over for investigation by the trustee's law-agent, who, however, died without clearing up the matter. The feu-duty continued to be paid to the trustee, and at his death on 31st August 1895 the accumulations amounted to £275, 7s. 4d.

Claims were lodged in the sequestration by ordinary creditors to the amount of £211, but no funds being available to meet them no dividend was declared thereon.

In these circumstances Mr Moncreiff's trustees and executors presented a petition to the Court in which they set forth the foregoing facts, and averred that both Mr Moncreiff and they had been unable to discover any of the creditors, whether heritable or ordinary, or their representatives. They therefore craved the Court to appoint a judicial factor on the bankrupt's sequestrated estates, or otherwise to pronounce such other orders or direct such other procedure to be taken as might seem proper to the Court with a view to the appointment of a trustee upon the said estates.

Answers were lodged by Mrs Halley, one of the children and executrix-dative quâ next-of-kin of the bankrupt, who averred that there were no claims outstanding against the bankrupt's estate. The heritable bonds had been discharged, or had prescribed, and the ordinary creditors had never been ranked by the trustee for the amounts of their respective claims. Mrs Halley accordingly claimed that the funds in the hands of the petitioners were payable to her as executrix-dative of her father, and as such entitled to take up the bankrupt's estate after payment or satisfaction of any claims thereon.

On 3rd December 1898 the Court pronounced the following interlocutor:—“Order and direct that in future the proceedings in the process of sequestration of the estates of the late James Pedie, W.S., shall, from and after this date, be regulated by the Bankruptcy (Scotland) Act 1856 (19 and 20 Vict. cap. 79) and Acts explaining and amending the same; further, remit to the Lord Ordinary officiating on the Bills to appoint a meeting of the creditor's of the said deceased James Pedie to be held at such time and place as his Lordship may fix, to elect a trustee or trustees in succession on the said sequestrated estates, with the whole powers conferred by the said statutes, and to appoint said meeting to be advertised in the Edinburgh Gazette, with power to remit to the Sheriff of the Lothians and Peebles at Edinburgh to proceed further in said sequestration in manner mentioned in the statutes.”

In terms of this remit the Lord Ordinary appointed a meeting to be advertised and held. The meeting, which took place on 21st December, was attended by the petitioners' and respondent's agents, and the sederunt-book and the claims of the ordinary creditors in the sequestration were, inter alia, produced. After delaying for half-an-hour beyond the hour at which the meeting was called, no creditors or representatives of creditors of Mr Pedie appeared,

Page: 501↓

and consequently no trustee or commissioners on his sequestrated estates were appointed.

On 26th December the Lord Ordinary ( Pearson), in respect of a minute from which it appeared that the meeting of creditors had proved abortive, reported the cause to the First Division.

Note,—… “The petitioners now move that I should appoint a judicial factor, in terms of the alternative prayer, their interest being to have some one appointed to whom they could make over the remaining asset of the sequestrated estate, and who could give a valid discharge for it. I should readily aid them in any competent steps to attain this object. But (1) the appointment of a factor does not fall within the terms of the remit, and (2) the proposal that I should make the appointment as under an ordinary petition is novel. The fund in question is an asset in an unexhausted sequestration which has been brought under the Bankruptcy (Scotland) Act 1856 by an order of Court, and I know of no authority for the appointment of a judicial factor by the Junior Lord Ordinary in such circumstances.”

The petitioners moved for the appointment of a judicial factor, and argued—There was no case in the books precisely analogous to the present one. But it fell within the class of cases in which the Court was in use to appoint a judicial factor, as defined by Lord M'Laren in Dowie v. Hagart, July 19, 1894, 21 R. 1052. The machinery of bankruptcy had broken down and must be replaced by something else. The respondent's claim was by no means so clear as to entitle her to payment of this fund.

Argued for the respondent—The radical right in his estates still remained in the bankrupt or his representatives, and no creditors being forthcoming the respondent was entitled to immediate payment of the money— Gavin v. Greig, June 10, 1843, 5 D. 1190; Air v. Royal Bank, March 9, 1886, 13 R. 734.