Scottish Court of Session Decisions

On 28th March 1899 Messrs Blair Company, brewers, Alloa, who are creditors of David Mackenzie, hotel-keeper, Bridge Hotel, Hawick, presented a petition in the Bill Chamber praying for sequestration of his estates, on which petition they obtained the usual order for intimation to the bankrupt and advertisement in the Gazette. In presenting this petition these creditors also lodged in the Bill Chamber a consent to provide against the contingency of the debtor presenting a petition at his own instance with the consent of another creditor craving immediate sequestration under section 29 of the Bankruptcy Act of 1856, and which is usually granted de plano. In this case the debtor did take the above course, for on 3rd April 1899 he (with the requisite concurrence) presented (also in the Bill Chamber) a petition craving sequestration. Lord Kinnear (Ordinary officiating on the Bills) appointed a hearing in the caveat lodged against a debtor's petition, and on 5th April 1899, after considering the argument, pronounced the following interlocutor:—“In respect of the dependence in the Bill Chamber of a petition presented on 28th March last, at the instance of Messrs Blair & Company, Alloa, creditors of David Mackenzie, the present petitioner, craving sequestration of his estates, and the induciæ upon which it is stated will expire to-day, sists procedure in this petition for three days, to allow the petition presented by the said creditors to be disposed of.”

Thereafter upon 7th April 1899 Messrs Blair & Company, in the petition for sequestration at their instance, lodged the usual minute with certificates of intimation, Edinburgh Gazette, and productions, &c., showing Mackenzie to be notour bankrupt, and craved for and obtained an award of sequestration of his estates. At the same diet they also moved Lord Kinnear to dismiss the second or debtor's petition for sequestration. The motion was granted, and Lord Kinnear pronounced the following interlocutor and note:—“Recals the sist, and in respect of the award of sequestration made of this date in the petition at the instance of Blair & Company, Alloa, for sequestration of the estates of the present petitioner David Mackenzie, dismisses the petition and decerns.”

Note.—“Before this petition was presented the first deliverance had been already pronounced in the petition at the instance of Messrs Blair & Company. These petitioners had thus acquired for themselves and the general body of creditors rights which could not be defeated by the bankrupt. In Jarvie v. Robertson, November 25, 1865, 4 Macph. 79, Lord Curriehill expresses the opinion that in such circumstances the Court is not bound to award sequestration upon a second petition by the bankrupt, and the reasons given by his Lordship appear to me unanswerable. If it were otherwise, the date of a sequestration might be postponed, and rights already acquired by the creditors might be defeated by the act of the bankrupt himself. It is true the Court has no discretion to award or refuse sequestration. But this is not a question of discretion. The question is whether in the present case the right conferred upon the bankrupt by the 29th section is not excluded by the prior right already vested in the creditors under the same statute. No reason has been given for presenting this petition, and sequestration ought, in my opinion, to be awarded, not upon it, but upon the earlier petition, so as to protect the rights of creditors from prejudice. It was stated that the petitioner is not aware of any preference that would be obtained if the other course were followed. But this cannot be ascertained at present, and I cannot proceed on the assumption that the date of the sequestration is of no importance.”