Scottish Court of Session Decisions

The estates of Mr Robert Gibson Neill, farmer, were sequestrated in February 1871, and a trustee was appointed. In July 1873, more than two years after the date of his sequestration, he presented a petition to the Sheriff for discharge without consent of his creditors.

The Sheriff-Substitute ( Hamilton) pronounced the following interlocutor:—

“ Edinburgh, 18th July 1873.—The Sheriff-Substitute having resumed consideration of the foregoing petition, with the report by the trustee as to the petitioner's conduct, and other documents produced, and having heard counsel for the petitioner and the agent for the trustee—Refuses, in hoc statu, the prayer of the petition.

Note.—When a bankrupt applies for his discharge after the lapse of two years from the date of sequestration, without the consent of creditors, it is essential that the trustee's report as to his conduct, which is held to come in the place of such consent, should be favourable, at least upon the main points specified in the 146th section of the statute.

In the present case, while the application is presented in the circumstances referred to, the report of the trustee, so far from being favourable, is to the effect that the bankrupt ‘has not made a fair discovery and surrender of his estate; that he has attended the diets of examination, but has failed to make a proper disclosure of the state of his affairs; that he has been guilty of collusion and concealment of his estate; and that the bankruptcy has not arisen from innocent misfortunes or losses in business, sequestration having been awarded on the petition of the bankrupt when he had under his control funds sufficient to have settled with his creditors.’ It is impossible, in the face of such a report, to do otherwise than refuse the discharge.

In supporting the application, counsel for the bankrupt relied mainly upon the fact that when tried before the High Court of Justiciary in February last upon a charge of fraudulently putting away or concealment of his effects, or fraudulent bankruptcy, the bankrupt was acquitted by the unanimous verdict of the jury. It does not seem to the Sheriff-Substitute that that fact has any real bearing upon the present question.

At the most, it would suggest a doubt as to the accuracy of some of the statements contained in the trustee's report. The Sheriff-Substitute, however, is well acquainted with the circumstances of the sequestration, the lengthened public examination of the bankrupt having been taken before him, and he is satisfied that the trustee could not have reported otherwise than he has done.

It appears that, notwithstanding that the bankrupt has thrown every obstacle in the way of the discovery and realisation of the estate, the trustee has succeeded in recovering sufficient funds not only to meet the expenses of the sequestration, but to yield a dividend of 18s. in the pound for the creditors.

In these circumstances the bankrupt should have no difficulty in overcoming the opposition which the trustee has thought it right, in the interest of the creditors, to make to the present application.”

On August 1, 1873, the Lord Ordinary on the Bills remitted to the Accountant in Bankruptcy to report as to the matters contained in the trustee's report. The accountant concurred with the trustee in holding that the bankrupt's conduct had not been such as to entitle him to discharge.

The bankrupt appealed against the judgment of the Sheriff-Substitute.

At advising—