Scottish Court of Session Decisions

We have a rule that while bankruptcy continues a pursuer can only sue on condition of finding caution, but I am not satisfied that the true ground of that rule is that there is another person with a better title, namely, the trustee for creditors. My impression is that the motive of the rule lies in this. A man under bankruptcy has been publicly deprived of his property, the fact that he has been so deprived is made known to everyone by the act and warrant, and under these circumstances he is not allowed to litigate on the ordinary terms. But then the whole ground and motive for the rule is taken away whenever the bankrupt by his discharge is re-invested with the management of his affairs. No doubt he may not technically be re-invested in any unrecovered part of the sequestrated estate, but the status of a bankrupt is taken away, and he is reinstated in the ordinary rights and privileges of a subject for the rest of his life unless he should be so unfortunate as again to become bankrupt, and these privileges include the unqualified right of suing and appearing in the courts of law. No reason exists for ordering the pursuer to find caution which would not arise in every case where the defender was able to say that the pursuer was a person of no substance. Our practice is too well established to allow the adoption of any such rule. There are no doubt many actions brought by persons of no means entailing hardship upon the defenders, but that is a hardship to which under our present law they must submit. I think therefore that as the pursuer has been discharged, as his trustee has been discharged, and as there is no one at present except the pursuer in titulo to prosecute this claim, he must be allowed to do so without finding caution, and that the judgments of the Sheriff and Sheriff-Substitute should be recalled.

Lord Adam—I confess that it is with reluctance that I agree with Lord M'Laren's opinion, because I think there is something of a hardship to the defender in this recently discharged bankrupt being allowed to sue without finding caution, and if I could discover any authority for requiring him to find caution I should willingly give effect to it, but I am unable to discover any such authority.

The facts of this case must be attended to. The pursuer was at one time a bankrupt; he is so no longer. There was at one time a sequestration; that no longer exists, for the trustee has also been discharged. The result is, as in the case of Whyte and another case referred to, that the bankrupt, whether he has paid a composition or not, is re-invested in his estate. Now, if that be so, in what different position is the present pursuer from every other poor pursuer? It is said to be hardship to the defender that he is obliged to litigate with a man who has recently been a bankrupt, and consequently may be expected to be poor; but it has never been laid down that because a pursuer is poor he must find caution.

It was suggested that the trustee in bankruptcy did not regard this claim as good because he did not seek to vindicate it; but I do not find that because a trustee in bankruptcy may not be willing to incur the expense of prosecuting a claim, the claim must be so hopeless that the discharged bankrupt can only sue upon it after finding caution.

Again, it is said the pursuer here is really suing not for himself but for his creditors who may come in and revive the sequestration. I do not know whether if he were successful they could step in or not; that depends upon facts. Meanwhile the pursuer here is just in the position of any other poor pursuer, and is I think entitled to sue without finding caution.

Lord Kinnear—I am of the same opinion, although I agree with Lord Adam that if this were a question of discretion there would be some reason for exercising that discretion as the Sheriffs have done. I think, however, that the Sheriffs had no discretion, and that we have none. The pursuer has been discharged, and his trustee has also been discharged, and there is no one but the pursuer himself who has any apparent title to his estate. Whether he is solvent or not he has a good title to sue any action that may be necessary to enforce outstanding claims or to vindicate property. It is said this action is really in the interests of the pursuer's creditors, because although the bankrupt and trustee have been discharged, the creditors did not retrocess the bankrupt in his property. That may be so, but it is a question of fact as Lord Adam has said. The creditors may say that the discharge of the bankrupt was granted in ignorance or through inadvertence, and that their right to this claim may be set up unless it is proved to have been abandoned. But Lord Watson pointed out in the case of Whyte that it is not necessary that there should be retrocession of the bankrupt in order to bar the creditors from making such a claim, because the actings of the creditors might be such as to indicate that the bankrupt is to be regarded as master of the property, and that they have abandoned it.

It is therefore a question of fact whether the creditors are entitled to say they did not abandon this claim, or the bankrupt to

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