Scottish Court of Session Decisions

On 29th June 1882 the Second Division of the Court pronounced an interlocutor in an appeal for the pursuers in an action at the instance of William M'Creadie and John M'Creadie against James Douglas, by which interlocutor the Court sustained the appeal for the pursuers John and William M'Creadie, found Douglas liable in the expenses of the appeal and a portion of those in the Inferior Court, and authorised the Sheriff of Dumfries and Galloway, before whom the case had originally depended, to decern for the amount of these expenses as taxed. The amount as taxed was £112, 6s. 2d., and the Sheriff on pursuers' motion gave decree therefor in name of William Ross Garson, the M'Creadies' agent, as agent-disburser. Thereafter, on 27th July 1882, Douglas was rendered notour bankrupt as the result of the diligence of certain creditors on a promissory-note granted by him.

In September 1882 the M'Creadies presented this petition in the Sheriff Court of Dumfries and Galloway at Stranraer, in which they asked the Court to grant warrant to cite Douglas to appear and show cause why sequestration of his estates should not be granted, and further to appoint a judicial factor on his estate in terms of section 16 of the Bankruptcy (Scotland) Act 1856, which provides that “it shall be competent for the Court to which a petition for sequestration is presented, whether sequestration can forthwith be awarded or not, on special application by a creditor, either in such petition or by a separate petition, with or without citation to other parties interested as the Court may deem necessary, or without such special application, if the Court think proper, to take immediate steps for the preservation of the estate either by the appointment of a judicial factor … or by such other proceedings as may be requisite; and such interim appointment or proceedings shall be carried into immediate effect; but if the same have been

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made or ordered by the Sheriff they may be recalled by the Court of Session on appeal taken in manner hereinafter directed” (by section 170, quoted infra.) With regard to the prayer for the appointment of a judicial factor the petitioners averred—“There is danger of the estate of the said James Douglas being consumed by him, to the prejudice of his creditors, prior to the appointment of a trustee in the sequestration, and it is necessary for the interim preservation of the estate that a judicial factor be appointed thereon.” The debt sworn to in the petitioners' affidavits was the sum of £112, 6s. 2d., which, as above explained, had been decerned for by the Sheriff as the expenses of the appeal, and for which decree had gone out in name of Mr Garson as agent-disburser. The petition for sequestration was signed by him as the M'Creadies' agent. The Sheriff granted warrant to cite Douglas to show cause why sequestration should not be granted, and meantime appointed Hugh Adair, banker, Stranraer, as judicial factor, with all the powers necessary for the interim preservation of the estate, including the power to recover debts, and granted warrant to the judicial factor to take possession of bank-notes, money, bonds, bills, cheques or drafts, deposit-receipts, or other moveable property belonging to the debtor, and if necessary for that purpose to open lockfast places and search the person and premises of the debtor.

Against this interlocutor an appeal was taken on 2d October to the First Division of the Court of Session, under section 170 of the Bankruptcy (Scotland) Act 1856, for the purpose of having the appointment of the judicial factor recalled, on the ground that the petitioner had no title to present the petition for sequestration. This section is in these terms—“It shall be competent to bring under review of the Inner House of the Court of Session.. any deliverance of the Sheriff after the sequestration has been awarded, except when the same is declared not to be subject to review, provided a note of appeal be lodged with and marked by the Sheriff,” &c.

Argued for appellant—The pursuer in the Sheriff Court action had no title to present this application or to get a judicial factor appointed. No notice of this application was given until the appointment had been made. As the sequestration can be successfully opposed, so also can the appointment of a judicial factor.

Argued for respondents—(1) The contention for the appellant was, that as there was no existing debt the appointment should be recalled. The question whether there was a debt or not was a question for the Sheriff. (2) The Sheriff must have been satisfied from information supplied that this estate was in danger, or he would not have appointed a judicial factor.