Scottish Court of Session Decisions

The Bankruptcy (Scotland) Act 1856 (19 and 20 Vict. cap. 79) provides, sec. 164—“It

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shall be competent to one or more creditors of parties deceased to the amount of one hundred pounds, or to persons having an interest in the succession of such parties, in the event of the deceased having left no settlement appointing trustees or other parties having power to manage his estate or part thereof, or in the event of such arties not accepting or acting, to apply by summary petition to either Division of the Court for the appointment of a judicial factor, and … the Court may appoint such factor …” Sec. 171 Where any judgment of the Lord Ordinary is to be brought under review of the Inner House, the same shall be done by a reclaiming note in common form presented within fourteen days from the date of the judgment …”

The Act of Sederunt of 25th November 1857, for regulating the procedure of judicial factors under the Bankruptcy Act 1856, provides, sec. 29—“All proceedings, which in this Act are appointed to take place by or before the Court, shall, although the same be addressed to the Lords of Council and Session, be brought before, dealt with, and disposed of by the Junior Lord Ordinary officiating in the Outer House or by the Lord Ordinary officiating on the Bills in time of vacation, subject to the review of the Inner House, in conformity with the 4th section of the statute 20th and 21st Vict. cap. 56 (The Distribution of Business Act 1857).

The Distribution of Business Act 1857 (20 and 21 Vict. c. 56) provides, sec. 4—“All summary petitions and applications to the Lords of Council and Session which are not incident to actions or causes actually depending at the time of presenting the same shall be brought before the Junior Lord Ordinary officiating in the Outer House, who shall deal therewith and dispose thereof as to him shall seem just; and in particular all petitions and applications falling under any of the descriptions following shall be so enrolled before and dealt with and disposed of by the Junior Lord Ordinary, and shall not be taken in the first instance before either of the two Divisions of the Court, viz. …” (Here follows a list of petitions and applications.) Sec. 6—“It shall not be competent to bring under review of the Court any interlocutor pronounced by the Lord Ordinary upon any such petition, application, or report as aforesaid with a view to investigation and inquiry merely, and which does not finally dispose thereof upon the merits; but any judgment pronounced by the Lord Ordinary on the merits … may be reclaimed against.…”

J. M. M'Leod, C.A., Glasgow, was in 1899 appointed judicial factor on the estate of the deceased James M'Cardle, late of Carnlough, in the county of Antrim, farmer, and of 124 Trongate, in the city of Glasgow , on a petition at the instance of his widow, Mrs Ellen Mullin or M'Cardle, brought under section 164 of the Bankruptcy (Scotland) Act 1856.

The factor entered into management of the estate, and ultimately, with a view to winding up the factory and obtaining his discharge, lodged his accounts, which were in ordinary course remitted to the Accountant of Court, who lodged a report upon them.

Mrs M'Cardle lodged objections to the Accountant's report, maintaining, inter alia, that as her husband was a domiciled Irishman at his death, his executry was an Irish executry, for which she was responsible, and that the rights hinc inde must be determined on that footing. She also averred that the factor had allowed no value for the goodwill of a lodging-house business in Trongate, Glasgow, which had belonged to the deceased.

The Lord Ordinary ( Johnston) on 23rd December 1905 pronounced an interlocutor allowing the parties proof on the question of the deceased's domicile and the goodwill of the Trongate business.

Mrs M'Cardle reclaimed against the interlocutor.

The judicial factor, on the reclaiming note appearing in the Single Bills, objected to its competency, arguing—The factor having been appointed under sec. 164 of the Bankruptcy Act 1856, the proceedings were regulated by sec. 29 of the Act of Sederunt of 25th November 1857. The effect of that section was to add petitions and applications brought under the Bankruptcy Act 1856 to the list of those petitions and applications contained in the fourth section of the Distribution of Business Act 1857, in which review of any interlocutor pronounced with a view to investigation and inquiry merely, and which did not finally dispose of the merits, was expressly excluded by sec. 6 of that Act.

Argued for the reclaimer—It was sec. 171 of the Bankruptcy Act 1856 that dealt with review, and it contained no limitation as to the nature of the interlocutor that could be reclaimed against. Further, sec. 29 of the Act of Sederunt of 25th November 1857 referred only to sec. 4 of the Distribution of Business Act 1857, and made no mention whatever of sec. 6, which was the only section that limited the right of review.