Scottish Court of Session Decisions

At advising—

Lord President—The sequestration of which the petitioner asks recall is the sequestration of the estate of Patrick Murphy, awarded on the 7th of August last by the Sheriff of Midlothian on the application of the bankrupt himself with the concurrence of one of his creditors, or alleged creditors, named James M'Connen. The amount of the alleged debt was £56, 19s. 9d., and the affidavit lodged by the concurring creditor in the application for sequestration was quite in proper form, and was instructed by four vouchers of debt. These were in the form of promissory-notes, two of them being for £10 each, one for £24, 2s. 2d., and one for £12, 17s. 7d. They are all ex facie quite regular, and said to be in the handwriting of the bankrupt himself, and are subscribed by him. We are further informed by the trustee that in the bankrupt's books sums corresponding to the amounts in these promissory-notes are entered as due by him to the concurring creditor, with one variation (which certainly does not take from the value of the documents of debt), which is accounted for by the amount of interest charged on the original bill for which this was substituted. The bankrupt himself when examined made a statement to the effect that these sums were undoubtedly owing by him to M'Connen. It is in these circumstances that the petition for recall is presented, the sequestration having been followed up by the appointment of a trustee and the examination of the bankrupt. The ground of the petition is an allegation that the debt is a mere pretence, that it was not really owing by the bankrupt, but was simply concocted in order to enable him to apply for sequestration. It is a question of great practical importance whether that is an allegation which ought to be sent to proof, or whether we have a relevant ground which entitles us to recall the sequestration. I am disposed to think that this allegation is not a relevant ground on which to recall the sequestration. It is too vague and general to justify the Court in interfering with a pending sequestration, and there would require to be something more explicit than a statement like this. The petitioner would require to state what were his means of knowledge of the alleged fact that there was something wrong, and to show in what manner he would establish that the debt was not due. One can hardly see how this is possible, for if he means to prove it by the oath of the two parties, the bankrupt and the concurring creditor, then it must be remembered that they have both given their statement on oath, the one in his affidavit, the other in his public examination. It is not very probable therefore that he could establish his case in that manner, and on that general ground I am disposed to adhere to this interlocutor.

Where the debt of the concurring creditor is sworn to by a regular affidavit, and is accompanied by appropriate vouchers, then unless there is something irregular on the face of the claim or of the vouchers such an averment as this will not afford a relevant ground of recall.

I am fortified in this view by a case not cited to us in argument, probably because it is only reported in Mr Stuart's reports. That is the case of M'Nab, Dec. 13, 1851, 1 Stuart 164. There the concurring creditor, who was also appointed trustee in the sequestration, turned out himself to be an undischarged bankrupt, and consequently could not be truly creditor in the debt on which sequestration was awarded. That appears to me to be a much more serious case than the present, yet there the Court did not think there were sufficient grounds to enable them to recall the sequestration. The Lord Ordinary on the Bills, before whom the case first came, remitted to the Sheriff to inquire into the proceedings in the sequestration, and to report. When the case came up again, Lord Fullerton, the new Lord Ordinary, refused the petition for recall, and in a note to his interlocutor says he “cannot hold that there was any such incompetency in the step taken by him (the creditor) in concurring in the application for the sequestration of Hunter, as to demand the recall of the last sequestration after it had been adopted by the general body of the creditors. It was clearly a step taken for the benefit of Hunter's creditors as well as of his own; and accordingly the petitioner does not dispute that his only interest in applying for the recall is to secure a preference in virtue of an arrestment which he has used in the hands of a creditor of the bankrupt.” M'Nab, the objector, reclaimed, and as soon as the reclaiming-note had been opened the Lord Justice-Clerk (Hope) asked—“Do you know any case where the debt being vouched, and an affidavit produced along with it, the Court have interposed?” No such case could be found, the

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