Cooper v Baillie, Company
| Jurisdiction | Scotland |
| Judgment Date | 23 January 1878 |
| Date | 23 January 1878 |
| Docket Number | No. 88. |
| Court | Court of Session |
Lord Adam. I., Lord Justice-Clerk, Lord Ormidale, Lord Gifford.
Bankruptcy—Recall of Sequestration—23 and 24 Vict. c. 33, sec. 2.—
A Scotchman by origin, while residing and trading in England, contracted debt there to a large amount. He subsequently came to Scotland and obtained sequestration. A large majority of his creditors in number and value were resident in England. His assets consisted chiefly of shares in English mining and other companies, most of them unmarketable, which were pledged to certain of his creditors in security of their debts. The Court, on the petition of a creditor under the 2d section of the statute 23 and 24 Vict. c. 33, recalled the sequestration, chiefly on the ground that the bankruptcy was essentially an English bankruptcy, and that the object of resorting to sequestration in Scotland was to enable the bankrupt to obtain his discharge on loss stringent conditions than would have been imposed by English law, although it did not appear that the bankrupt had come to Scotland merely for the purpose of obtaining sequestration, and although a large majority of the creditors in number and value lodged answers stating their wish that the sequestration should proceed in Scotland.
This was a petition under the 2d section of the statute 23 and 24 Vict. c. 33, by John Robert Cooper, London, for recall of the sequestration of the estates of William Montague Baillie of whom Cooper was a creditor.
The circumstances were as follows:—
Mr W. M. Baillie was a younger son of Mr Baillie of Dochfour in Inverness-shire. He was forty-nine years of age. In 1851 he entered a bank in Bristol, of which his father was a partner, as a clerk, and some years after he was made a partner. Until 1874 he resided with his wife and family in or near Bristol, and took an active part in the management of the bank. During this time he also acted as his father's commissioner on the estate of Dochfour, but there were resident factors under him. In consequence of speculations, which turned out unfortunate, he was obliged to leave the bank in June 1874. From 1874 to 1876 he resided abroad. He returned to England in 1876, and early in 1877 took up his residence at Oban in Argyleshire. In June 1877, with concurrence of Anderson & Macdonald, solicitors, Inverness, as creditors to the required amount, he
obtained sequestration of his estates in the Bill-Chamber. All his debts, with the exception of a small claim for house rent in Oban, had their origin in England, and with two or three exceptions his creditors resided there.* His debts amounted to above £80,000, the largest creditors being the Credit Foncier Co. of England, and the bankrupt's father. With the exception of a very doubtful claim against his father, to which reference is made in the opinions of the Judges, the assets consisted entirely of shares in English joint stock companies and mines, unpledged to English creditors in security of their debts, but most of them apparently unmarketable.
The petitioner stated,—’The bankrupt's liabilities consist entirely of borrowed money, or money received in trust, with the exception of a few accounts due to solicitors and accountants. Most of the money was obtained by fraudulent, or, at least, false pretences.…The bankrupt's object in trying to obtain sequestration in Scotland is to escape the provisions of the bankruptcy laws in England, to which he is subject. According to the Bankruptcy Act of England, 32 and 33 Vict. c. 71, section 48, the bankrupt cannot obtain a discharge without paying 10s. per pound, unless the creditors certify that his inability to pay that composition arose from causes for which he is not responsible. The English Court has no power to grant a discharge on any other terms. He has in view also to escape the 49th section of the same Act, which provides that the discharge of a bankrupt “shall not release the bankrupt from any debt or liability incurred by means of any fraud or breach of trust, nor from any debt or liability whereof he has obtained forbearance by any fraud;” and the provisions of the other Bankruptcy Act of the same year, chap. 62, which provides, inter alia, that a person shall “be deemed guilty of a misdemeanour, and, on conviction thereof, shall be liable to be imprisoned for any time not exceeding one year, with or without hard labour, if, in incurring any debt or liability, he has obtained credit under false pretences, or by means of any other fraud.”’
Most of the bankrupt's creditors were desirous that the sequestration should proceed in Scotland, and lodged answers to that effect. The claims of these respondents amounted to about £67,000, while the petitioner's claim amounted to £5492. It was stated at the bar that Mr Baillie of Dochfour, the bankrupt's father, had promised to pay to all the creditors a composition of 3s. 6d. in the pound if the sequestration were allowed to proceed in Scotland.
After a proof, the Lord Ordinary on the Bills, on 18th December 1877, pronounced an interlocutor refusing the petition.†
The petitioner reclaimed.1
At advising,—
Lord Justice-Clerk.—There are circumstances in this case which cause me to view with regret the decision I have come to, that the Lord Ordinary's interlocutor should be recalled, and the petition for...
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