Scottish Court of Session Decisions

Lord President—The position disclosed here is somewhat peculiar. The actual motion arises in this way. Brown is pursuer in an action against the trustees of the late George Bayley. In that action the Lord Ordinary has sustained the first plea-in-law for the defenders, which is that the pursuer's averments are irrelevant, and has dismissed the action. Against that interlocutor a reclaiming note was taken so long ago as 10th March 1909, and when the case came up in the Single Bills we were then told that Brown was sequestrated, and the ordinary motion was then made that intimation should be given to his trustee in order that he might say whether he would take up the action or not—the ordinary sequel to that being, of course, that if the trustee took up the action he would become liable for the expenses, or if he did not, then the bankrupt would be ordered to find caution. We were then told that an arrangement was pending whereby the sequestration would be got rid of, and we were asked to put off the case for a little, because it was represented with force that it was scarcely useful to make the trustee inquire into the merits of the case with a view of considering whether or not there was a good chauce of success, seeing that shortly he might have no interest in the matter one way or other. Accordingly, we did grant that indulgence, and we put off the matter for a month. The month has now expired, and the trustee comes before us and discloses what I must say is a rather startling state of affairs. Taking advantage of the 35th section of the Bankruptcy Act, a proposal has been made for a deed of arrangement; and the Sheriff in the sequestration, with the view of seeing whether that deed of arrangement would “be carried through or not, has sisted the sequestration for two months, and he has appointed the trustee to be judicial factor on the estate.

Now of course in this matter the Sheriff's action is not directly before us, and we cannot interfere with it, but I am bound to say that I cannot see any warrant for what the Sheriff has done. It seems to me contrary to principle. He has proceeded, I suppose, on fancied powers in the 37th section of the Act, which provides that in the event of an application for a sist of sequestration—with a view to a deed of arrangement—being granted, the Sheriff may make such arrangement for the interim management of the estate as he shall think reasonable, if any shall appear to be necessary. Primarily speaking, it seems to me that that section applies only to the case where a deed of arrangement is proposed before the trustee is appointed, and then of course in a case like that it would be perfectly proper to appoint a judicial factor. But after a trustee has been appointed, it seems to me more than doubtful whether the appointment of a judicial factor is of any use at all, because you would then have two people vested with the management of the estate. I should have thought that the meaning of the section, in the case where a trustee had been appointed, was this—that the Sheriff should give such directions to the trustee as might be thought necessary. I do not think the sisting of the sequestration was wrong — that was necessary in order to prevent the running of the various statutory periods, which make it imperative that certain things should be done within certain dates. It was quite proper to make the sist, but I think the appointment of a judicial factor when a trustee was already in office was really putting a fifth wheel on the coach, for which there is no authority in the Act of Parliament. I never heard of any such practice, and counsel did not seem to know of any either.

But while I say this to prevent such a thing happening again, the appointment is there, and the question is what is to be done? In the circumstances we cannot order the judicial factor to sist himself,

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