United Kingdom House of Lords Decisions

In pronouncing this decision the Judges of the Court below were unanimous; the Lord President M'Neill observing:—

The right of the Petitioner to sue a sequestration under the 2 & 3 Vict. c. 41. is the question we have to deal with. That statute has extended the application of the process of sequestration to various classes of cases to which it was not previously applicable. Among others, it has extended it to the estates of persons deceased. That is, in some respects, treated in the statute as an exceptional class, and special provisions are made in regard to it; but I do not see that anything in this case turns on these special provisions. This is a case in which more than six months had elapsed from the death of the party, and in such a case the petitioning creditor is not required to prove the insolvency of the estate in order to get diligence on his petition. But in every case of sequestration of the estate of a deceased debtor, the leading requisites of the statute are, in the first place, that the deceased party, whose estate is sought to be sequestrated, shall have been a debtor—a deceased debtor; and, in the second place, that the party who petitions for sequestration shall be in the position of a creditor of the deceased to a certain amount. The present case turns on the question whether these relations subsist between Mr. Wryghte and the late Sir Francis Walker Drummond, with reference to the sum of 14,000 l. mentioned in the affidavit, and on which the present application is rested.

I do not think that, in regard to the 14,000 l., Sir Francis Walker Drummond can be regarded as a deceased debtor in the sense of the statute 2 & 3 Vict., or that Mr. Wryghte can be held to be a creditor having a debt to that amount against Sir Francis. Mr. Wryghte is the official manager appointed under the Winding-up Acts, and the 14,000 l., as I trace it, is the amount of a call made by him in virtue of the powers conferred on him by these Acts, to make calls on those persons whom the statute describes as contributories.

A call so made is a statutory demand of a very peculiar kind. The liability for it is a statutory liability. The right to make it, and the liability to satisfy it, both spring from statute. They had no legal existence before the date of the statute, so far as has been explained to us. The Company was an English Company, but we have not been told, as matter of fact, that, according to the law of England, such a demand could have been made and enforced before the date of the statute. We know that by the law of Scotland it certainly could not. The statute does not extend to Scotland, except in certain portions of it. So far as it does extend, our duty, of course, is to apply it. I am now dealing with the peculiar character of the claim on which Mr. Wryghte rests his title in this case.

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I will now advert to the affidavit of the Petitioner in support of his title. From this affidavit it appears that the sum of 14,000 l., upon which Mr. Wryghte rests his title, is the amount of a call made by him under the authority of the statute, for the purposes and with the qualities to which I have referred. He states in the affidavit that Sir Francis Walker Drummond was, before his death, liable to make payment of 3,850 l., as the balance of a contribution of 50 l. per share on the 140 shares held by him of the capital stock of the Company. This application, however, is not for sequestrating the estate in respect of the nonpayment of that sum. The Petitioner says farther, that Sir Francis Walker Drummond is liable to make payment “for what other additional sums might fall on him as his proportional share of the losses incurred by the said Company.” This is not a claim for any such proportional share of the losses of the Company. It does not appear from this affidavit that there was any such loss; there were no ascertained losses, and no apportionment of loss to each shareholder. The demand for sequestration is not rested on any such claim. The statement made in the affidavit may be true; and if so, it is equally true that, if a claim be made habili modo for relieving those liabilities, the law of Scotland affords the means of making it good. But such claims are not the subject-matter of this demand. The ground of this demand is a sum of 14,000 l.

The Petitioner says that a liability for this 14,000 l. was incurred by Sir Francis Walker Drummond anterior to his death, and that the same is now due from his estate to the Deponent, as official manager. I do not know how that can be. It is not deducible from any facts stated. It is not stated that any such liability was possible by the law of England prior to his death, or otherwise than under this statute. But the statute did not exist for years after his death ^(a). What meaning is attached in the affidavit to the word “liability,” I do not know. The term may, in the law of England, be appropriate to such a case, and the meaning attached to it by the maker of this affidavit no doubt enables him to swear that there is a liability. But we are now dealing with a matter of remedy according to the law of Scotland. We are dealing with a remedy sought under the statute 2 & 3 Vict. c. 4l., and the call of 14,000 l. is clearly not a debt due by the deceased Sir Francis Walker Drummond in the sense of the statute. Sir Francis must have been a deceased debtor in that 14,000 l. I cannot see any way of construing the facts so as to bring matters into that position, nor can I see how this 14,000 l. had any shape or subsistence while Sir Francis was alive. It was the creature of statute, brought into existence after his death. No doubt, Parliament could make his estates liable for debts contracted by anybody else,—it is omnipotent,—but we have not that kind of

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( a) The Winding-up Act, 12 & 13 Vict. c. 108. (1st August 1849).

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liability to deal with here, and no statute has said that the estate of a deceased debtor is to be liable to sequestration for such a claim as this. We must, in this proceeding, read the claim with reference to the 41st section of the Act of 2 & 3 Vict., and I do not find in the whole of this affidavit, or in the history of this sum, anything to constitute Sir Francis Walker Drummond a deceased debtor for the sum of 14,000 l, referred to, or to make the claimant a creditor of Sir Francis in a debt of his for that sum. Sir Francis Walker Drummond is not in the list of contributories. If Sir Francis had been in the list, and had died pending proceedings, I pronounce no opinion whether the Act of 2 & 3 Victoria might not have come into play; for it might then have been held to be a debt in some sense of the word. But Sir Francis is not in that list, and the question is not whether there is any remedy against the estate of Sir Francis, but whether this particular remedy of sequestration of his estate can follow upon such a demand as this. The Petitioner does not possess the relation to the deceased which the statute of 2 & 3 Victoria requires prior to authorizing the issuing of sequestration.

Lord Deas: The Winding-up Acts do not apply to Scotland, except in so far as specially provided. It is provided that an order of the Master, registered here, shall have the same effect against the person named in the order as a registered bond by that person would have had. But a bond executed by Sir James for this 14,000 l. would not have entitled the official manager to the particular remedy now sought against the estate of Sir Francis under the statutes 2 & 3 Vict. c. 41. and 16 & 17 Vict. c. 53. The fact would have remained, that Sir Francis was not a deceased debtor on this 14,000 l. in the sense of these statutes.

The official manager, Mr. Wryghte, appealed.

Mr. Daniel, Mr. Anderson, and Mr. Roxburgh for the Appellant.

Mr. Rolt and Sir Hugh Cairns for the Respondent. At the close of the argument the following opinions were expressed by the Law Peers.