Scottish Court of Session Decisions

On 22nd February 1912 the Sheriff-Substitute ( Taylor) pronounced the following interlocutor—“Finds the following facts are admitted—(1) The estates of Hugh Kerr were sequestrated on 28th July 1911; (2) the first statutory meeting was held on 8th August 1911, and defender was appointed trustee; (3) the said Hugh Kerr was confirmed executor of the late Mrs Elizabeth M'Lean, or Dimond, or Wallace, or Kerr, on 12th August 1910; (4) pursuer was appointed judicial factor on the trust—estate of the said Mrs Kerr on 18th August 1911; (5) the state of affairs lodged by the said Hugh Kerr contained no statement of any claim against him at the instance of himself as executor aforesaid; (6) to entitle creditors to participate in the first dividend, oaths and grounds of debt fell to be lodged on or before 28th November 1911; (7) no notice was sent to the pursuer by defender intimating the date by which olaims required to be lodged in order to participate in the first dividend; (8) intimation of a possible claim at the instance of pursuer was received by defender in the letter of 30th September 1911; (9) a claim in the sequestration at pursuer's instance for £754, 6s. 5d. was lodged on 9th December 1911; (10) the commissioners on the sequestrated estate met on 30th November 1911, and decided to divide all available sums amongst the creditors whose claims had been timeously lodged: Finds in law that the pursuer is entitled to the interdict craved.”

The defender appealed, and argued—The Sheriff-Substitute should have refused interdict. The circumstances in the case of Scobie v. Hill's Trustees, November 23, 1869, 8 Macph. 161, 7 S.L.R. 98, on which the Sheriff-Substitute had founded, were quite different. In Scobie's case the trustee did not fulfil his duty, here he did, and further in that case the creditor did not know of the sequestration, here he did. The respondent had abandoned the ground of judgment of the Sheriff-Substitute, that the cause of the omission was the fault of bankrupt attributable to the trustee. The respondent was a professional man and ought to have looked after his own interests. He could, in any event, have appealed against the deliverance of the commissioners—Bankruptcy (Scotland) Act 1856 (19 and 20 Vict. cap. 79) sec. 169; Steele v. Ligertwood, February 17, 1865, 3 Macph. 587. The respondent was alone to blame, and he ought to ask to have the process sisted and apply to the nobile officium of the Court.

Argued for the respondent—The Sheriff-Substitute was right. There were two questions in the case (1) Did pursuer's lateness forfeit his right to participate in the first dividend; (2) did his lateness forfeit his right to have money set aside to meet his claim. As to the former the only authority was Scobie v. Hill's Trustee ( cit. sup.), which rested on a principle which was applicable even though the trustee was not in fault. Here there were two special circumstances in favour of the pursuer—(1) his representative capacity, and (2) the fact that the claim required some investigation before it could be put forward. But further, respondent asked interdict to prevent the estate being distributed so as not to allow sufficient for a second dividend. It was in contemplation of the statute that the estate should not be entirely divided up at once, but provision made for contingencies—secs. 123, 125, and 130 of the Bankruptcy (Scotland) Act 1856. The commissioners were bound to consider the contingency of a second dividend. The present case was a fortiori of Steele v. Ligertwood ( cit. sup.). There was no period of finality in the statute before the expiry of the fourteen days. The policy of the Court all through had been not to press the limits of time— Porteous & Mitchell v. Aitken's Trustee, November 18, 1828, 7 S. 22; Mitchell v. Wilson's Trustee, July 7, 1829, 7 S. 841.

Lord Salvesen—[ After narrating the facts]—Now the Sheriff has held that the defender must be interdicted from distributing the estate so as to prejudice the pursuer, and his ground is that the “pursuer got no formal notice owing to the fault of the bankrupt, and as the case against him rests on defender's having strictly complied with all statutory provisions he is entitled to insist on that notice.”

Now I do not think it was contended before us that there was any fault on the part of the bankrupt. It is quite true that the bankrupt did not in the state of affairs that he requires to lodge with his trustee include this claim as one of the debts due by the estate, but the circumstances show quite clearly that he did not do so because he maintained, and has always maintained, that it was not a good claim against him. His case was that he never fingered a penny of the money, but that the money was appropriated by his law agents, whom he had properly employed to conduct the affairs of the executry. Therefore I cannot see that there was any fault in the bankrupt's not including in his state of affairs as a debt a claim which he did not recognise and which he had reasonable cause for not recognising as a debt against him.

Fault on the part of the trustee is not alleged. The trustee appears to me to have acted here perfectly properly and fairly. There is no suggestion of any desire on his part to take any undue advantage of the pursuer. He acted entirely in discharge of his statutory duties.

Now, is it to be said that in such circumstances, where a claim is not lodged simply through want of vigilance on the part of the person who is vested in it, that the a

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