Scottish Court of Session Decisions

Upon the 23d October 1875, Joseph Kellock, cattle-dealer, Thornhill, presented a petition to the Sheriff of Dumfries and Galloway, praying, upon grounds therein set forth, for warrant for citing his debtor John Anderson, draper, Thornhill, to appear and show cause why sequestration of his estates should not be awarded, and thereafter to award sequestration and appoint a meeting of creditors, all in terms of the provisions of the “Bankruptcy (Scotland) Act, 1856.” The Sheriff-Substitute pronounced an interlocutor ordaining Anderson to appear within seven days, to show cause why sequestration should not be awarded, and the induciœ having expired, the Sheriff pronounced an interlocutor awarding sequestration of the estate.

On the 29th October Anderson, without any intimation to Kellock or his agent, applied for and obtained sequestration of his estates by the Court of Session. The concurring creditors in that petition were Messrs M'Laren & Co., Glasgow; and the petition bearing to be at the instance of a petitioner craving sequestration of his own estates, with concurrence of creditors to the statutory amount, sequestration was instantly awarded as a matter of course. The interlocutor awarding sequestration appointed a first meeting of creditors to be held in the Faculty Hall, Glasgow, on Tuesday, the 9th November 1875.

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In these circumstances Kellock presented a petition to the Lord Ordinary on the Bills ( Rutherfurd Clark) for recall of the sequestration obtained on petition by Anderson and M'Laren & Co. from the Court of Session, on the ground that that petition was incompetent and illegal, because ( first), There was, at the date of presenting it a pending process of sequestration in which the bankrupt and his creditors could have appeared and concurred; and ( second) Because it .was an attempt to alter the true date of sequestration of the bankrupt's estates in such a way as to endanger the rights of creditors, as fixed by the sequestration which followed on the petition at his own instance. The first deliverance on that petition was dated 23d October 1875, and (sequestration having since been awarded) that was the date of sequestration in all questions of preference; whereas, if Anderson's petition and the deliverance thereon were to be sustained, the 29th of October would be the date ruling the disposal of all such questions.

To this petition Anderson and M'Laren & Co. lodged answers, and also presented a petition for recall of the sequestration awarded on Kellock's application by the Sheriff-Substitute at Dumfries, on the ground that Kellock's proceedings and the deliverance following thereon by the Sheriff-Substitute, dated 2d November 1875, were incompetent and illegal, because the deliverance was granted and sequestration awarded notwithstanding of Anderson having appeared and shown cause to the contrary, and of the production of evidence and in the knowledge of sequestration of the estates having already been competently awarded, in terms of the Bankruptcy Statutes, in another Court, and being still undischarged. Even if not recalled simpliciter, inasmuch as the general body of creditors were in Glasgow, and considering that the estates could best and advantageously for them be administered at Glasgow, the sequestration awarded at Dumfries ought to be remitted to the Sheriff-court at Lanarkshire, under and in terms of the provisions of section 19 of ‘The Bankruptcy (Scotland) Act, 1856.’”

Kellock appeared and lodged answers to this petition.

Both petitioners were heard together by the Lord Ordinary. In Kellock's petition the following interlocutor with note were pronounced

Edinburgh, 23 d November 1875.—The Lord Ordinary having heard counsel and considered the petition, answers, and proceedings, Refuses the petition: Finds no expenses due to or by either party.

Note.—It was not disputed that the petition presented on 23d October to the Sheriff of Dumfriesshire was well-founded, and that but for the petition presented in the Bill Chamber on 29th October, and the proceedings following thereon, the Sheriff would have been bound to award sequestration. The date of the sequestration so awarded would of course be the date of the first deliverance.

It was maintained, however, that inasmuch as the sequestration had been awarded in the Bill Chamber on 29th October, it was incompetent for the Sheriff to award sequestration in the petition depending before him. The Lord Ordinary cannot take that view, because no evidence was produced to the Sheriff that sequestration had been awarded in another Court. If evidence of the sequestration awarded in the Bill Chamber had been produced, it would probably have been incompetent for the Sheriff to have awarded sequestration. But the Lord Ordinary does not think that this would have ultimately prevented the petitioning creditor from having sequestration awarded on his petition, though it might have necessitated the recal of the sequestration granted in the Bill Chamber, in order to enable the Sheriff to sequestrate. In the view of the Lord Ordinary, a creditor who has presented a petition for sequestration cannot be deprived of the rights under that petition by reason of a petition being subsequently presented in another Court. If this were so, it would be competent for the bankrupt by his own act to delay the sequestration by presenting a petition during the currency of the induciœ.

It was urged that it was of no consequence whether the sequestration was awarded on the 23d or 29th October, as the bankrupt was admittedly not our bankrupt on the former date. The Lord Ordinary thinks that he cannot enter into that question. It is impossible for him to determine it, and he cannot, as he thinks, dispose of the present case on the supposition that the date of the sequestration is of no importance.

But it was maintained that there was no ground for recalling the sequestration awarded in the Bill Chamber, even though the sequestration awarded by the Sheriff was to stand, and that the only lawful course was to remit the latter to the Sheriff of Lanarkshire, to whom the sequestration awarded in the Bill Chamber has been remitted. It is here that the Lord Ordinary has felt most difficulty. The 19th section of the Bankrupt Act deals with the case of sequestration awarded in the Bill Chamber and Sheriff-court, and directs that the Court or Lord Ordinary shall ‘remit the sequestration' to such Sheriff-court as shall be deemed most expedient. It was urged that this enactment required the Court to maintain both sequestrations, though of different dates, and that its only province was to remit them to the same Sheriff-court. Without going so far as to hold that it is incompetent to recal the sequestration granted in the Bill Chamber, the Lord Ordinary thinks that it is the safer course to remit the one sequestration to the other. In doing so, he follows the direct injunction of the Act in the case which has occurred; for he is of opinion that it is most expedient that the sequestration should proceed in the Sheriff-court of Lanarkshire. This is the wish of the great body of creditors, and it was stated by Mr Kellock that it was indifferent to him in which Court the sequestration proceeded.

“The Lord Ordinary thinks it right to record that it was admitted that Mr Kellock had no knowledge of the petition in the Bill Chamber till sequestration had been awarded. He has found neither party entitled to expenses, because neither party has been completely successful in the proceedings raised in this Court, taking these proceedings to be substantially one.”

In Anderson's petition the Lord Ordinary pronounced an interlocutor remitting the sequestration awarded by the Sheriff at Dumfries to the Sheriff-court of Lanarkshire, and referred to his note in Kellock's case.

Kellock reclaimed in both petitions. In the course of the discussion he stated he had no objection to the sequestration proceeding in Glasgow, as desired by the respondents.

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The following authorities were quoted:— Jarvies v. Robertson, 25 Nov. 1865, 4 Macph. 79; Love v. Anderson, 4 July 1846, 8 D. 1016.

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