Scottish Court of Session Decisions

John Alfred Hope presented a petition in the Sheriff Court of Lanarkshire for sequestration of the estates of Robert Macdougall. The petition prayed the Court in the usual form “To grant warrant, in terms of the Bankruptcy (Scotland) Act 1856, and Acts explaining and amending the same, to cite the defender to appear before the Court to show cause why sequestration of his estates should not be awarded; to grant diligence against witnesses and havers, to recover evidence of the defender's notour bankruptcy and other facts necessary to be established, and thereafter to award sequestration of the estates.”

The defender having lodged a caveat, the Sheriff-Substitute ( Erskine Murray) on 5th September 1893 pronounced this interlocutor:—“Appoints the 7th day of September current, at ten o'clock forenoon, within the chambers of the Sheriff-Substitute, Mr Murray, County Buildings, 50 Wilson Street, Glasgow, as a diet for disposing of the caveat lodged by the defenders to-day, with certification.”

The defender thereafter lodged the following note of objections—“The said Robert Macdougall objects to the jurisdiction of the Sheriff of Lanarkshire on the ground that he is not subject thereto in terms of the Bankruptcy Statute.”

On 7th September the Sheriff-Substitute pronounced this interlocutor:—“Allows the note of objections to be received, and having heard parties' prors., before answer and primo loco allows a proof on the question of jurisdiction, and assigns Monday first, at 10·15 a.m., before Sheriff Spens, as a diet.”

Proof was accordingly taken, and thereafter the Sheriff-Substitute ( Spens) pronounced this interlocutor:—“Having heard evidence, finds respondent has been carrying on business in Glasgow within the twelve mouths preceding the date of presentation of this petition, therefore repels the plea of no jurisdiction: Quoad ultra, having considered the foregoing petition with the writs produced, grants warrant to cite, in terms of the statutes, the therein designed Robert Macdougall to appear in Court on an inducice of seven days from the date of such citation, to show cause why sequestration of his estates should not be awarded; directs intimation of this warrant, and of the diet of appearance on the said inducice, to be forthwith made in the Edinburgh Gazette in terms of the statute; and grants diligence against witnesses and havers to recover evidence of the notour bankruptcy of the said Robert Macdougall, and of the other facts necessary to be established for obtaining the sequestration, and commission to the Clerk of Court or any of his deputes to take the examinations of witnessess and havers, and to report.”

Section 26 of the Bankruptcy Act provides—“When a petition for sequestration is presented without the consent of the debtor, or for the sequestration of a debtor who is dead, without the consent of the successor, the Lord Ordinary or Sheriff to whom it is presented shall grant warrant to cite the debtor, or if dead his successor, to appear within a specified period … to show cause why sequestration should not be awarded, and the Lord Ordinary or the Sheriff shall, if desired, grant diligence to recover evidence of the notour bankruptcy or other facts necessary to be established.”

Section 30 provides as follows—“When the petition is not by or with the concurrence of the debtor, or if dead of his successor, and if the debtor, or if dead his successor, do not appear at the diet of appearance, either in person or by his counsel or agent, and show cause why the sequestration cannot be competently awarded, or if the debtor so appearing do not instantly pay the debt or debts in respect of which he was made bankrupt, or produce written evidence of the same being paid or satisfied, and also pay or satisfy, or produce written evidence of the payment or satisfaction of the debt or debts due to the petitioner or to any other creditor appearing and concurring in the petition, the Lord Ordinary

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or Sheriff, on production of evidence of the citation and of the foresaid requisites of sequestration, shall award sequestration in manner and to the effect before mentioned.” …

The defender then appealed to the First Division of the Court of Session, and on 29th September the Lord Ordinary on the Bills ( Trayner) dismissed the note of appeal, affirmed the deliverance of the Sheriff appealed from, and remitted to the Sheriff to proceed in terms of the statute.

The defender reclaimed, and argued—(1) The petitioner had failed to show that the defender carried on business in Glasgow, and it was admitted he did not reside in the sheriffdom. The Sheriff had therefore no jurisdiction to award jurisdiction. (2) The Sheriff had, however, acted quite competently in allowing a proof, and the defender who through missing his train had failed to attend the proof, should be allowed an opportunity to produce evidence in support of his note of objection. Before awarding sequestration the Sheriff had to be satisfied that he had jurisdiction—sections 18 and 30. That question could not be determined in many cases without proof. (3) An appeal prior to the awarding or refusing of sequestration was quite competent— Cuthbertson v. Gibson, May 31, 1887, 14 R. 736. If the right of appeal was not expressly excluded by the statute, it existed— Marr & Sons v. Lindsay, June 7, 1881, 8 R. 784; Scott v. Roy, January 17, 1885, 22 S. L.R. 346.

The petitioner argued—(1) The Sheriff had come to a right conclusion in sustaining his jurisdiction. (2) He had, however, not acted in terms of the statute in entertaining the defender's objection to the jurisdiction at the date he did. On the petition being presented he should have granted warrant for citation of the debtor, and diligence for the recovery of evidence of the facts necessary to be established, and, inter alia, of the fact that he had jurisdiction—section 26. At the diet of appearance it would have been his duty, on production of evidence of the debtor's citation and of the requisites of sequestration, to award sequestration—section 30. (3) The appeal was incompetent. No appeal was allowed against the interlocutor awarding sequestration—section 31; and there was an express provision authorising appeals against interlocutors pronounced after the award of sequestration—section 170. The necessary inference was that there was in the general case no right of appeal against interlocutors pronounced prior to sequestration. In Cuthbertson's case, which was the only case quoted by the defender of an appeal taken prior to sequestration, the appeal was against an interlocutor appointing a judicial factor under section 16 for the interim preservation of the estate, and appeal was expressly authorised by that section. The defender could derive no benefit from the fact that he had lodged a caveat, for that was a proceeding entirely unwarranted by the statute.

At advising—