United Kingdom House of Lords Decisions

Earl of Selborne—This appears to be an extremely clear case, so far as the question of the competency of the Court of Session was concerned, to make an order in a sequestration for the appointment of a new trustee. For the last thirty years there has been such a practice in the case of funds which have not been got in or distributed at the time of the discharge of the trustee in bankruptcy. No doubt a practice which has continued so long may be wrong, but it is needless to say the presumption is the other way. The case rests upon this proposition, that when a trustee has been discharged, all funds not at that time distributed vest by law in the bankrupt for his own benefit, although the creditors have not been paid 20s. in the pound. I confess I had great difficulty in following that argument, having regard to the express provisions of the Act, as well as for the general purpose for which it was passed. The general purpose was to enable a debtor who could not pay his way to get his discharge upon the footing of giving up the whole of his property for the benefit of the creditors. From the beginning to the end of the Act there is nothing to cut down the right given to the creditors, in accordance with the general purposes of the Act, to have all the funds which vested in the trustees divided among them. But it was argued that the trustee in this case having been discharged, a fund which ought to have gone to the creditors reverted to the bankrupt. I cannot accept that proposition. For my part I look upon the reappointment of a trustee as a mere machinery for giving effect to the rights given by the Act, and I would go the length of saying it was necessarily implied in the Act. It would be very difficult to imagine a clearer case than this, and I move that the appeal be dismissed, but without costs, as the appellant sued in forma pauperis.

Lord Watson, Lord Bramwell, and Lord Morris concurred.