John Mactaggart, jun., and Others, - Appellants; William Watson-Respondent
| Jurisdiction | Scotland |
| Judgment Date | 01 January 1835 |
| Date | 01 January 1835 |
| Court | Court of Session |
English Reports Citation: 6 E.R. 1534
FROM THE COURT OF SESSION.
Mews' dig. xi. 1262, S.C., 10 Bli. N.S. 618. Commented in Guardians of Mansfield Union v. Wright, 1882, 9 Q. B. D., 685, 686, and Durham (Mayor of) v. Fowler, 1889, 22, 2 B.D., 405, Mayor of Kingston-upon-Hull v. Harding (1892), 2 Q. B. 508.
[525] APPEAL from the court of session. JOHN MACTAGGART, jun., and Others,-Appellants; WILLIAM WATSON - Respondent. [Mews' Dig. xi. 1262, S.C., 10 Bli. N.S. 618. Commented in Guardians of Mansfield Union v. Wright, 1882, 9 Q. B. D., 685, 686, and Durham (Mayor of) v. Fowler, 1889, 22, 2 B.D., 405, Mayor of Kingston-upon-Hull v. Harding (1892), 2 Q. B. 508.] Watson undertook by bond jointly and severally with the trustee of a bankrupt estate in. Scotland to answer to the extent of £1000 that the trustee should faithfully discharge his office, account for his management of the estate, etc. The creditors of the bankrupt, according to the bankrupt law in Scotland, chose commissioners to act for them, and to superintend the proceedings of the trustee. The trustee having managed the estate for thirteen years without censure, was, in the fourteenth year, found to have, by various contrivances amounting to fraud, abstracted from the bankrupt estate a large sum, and his accounts were deficient to the amount of £1008. The bond being put in suit against Watson, the co-obligor and surety, he pleaded that the commissioners, by neglect and connivance, had caused and permitted the trustee's default, or, knowing it, had concealed it from him, but of this imputation he did not give any proof, and it was denied by the commissioners: Held, by the Lords, reversing the judgment of the Court belo w, that [526] the surety was not discharged from his obligation by the alleged neglect of the commissioners in not detecting the fraud and malversation of the trustee. The estates of the Gorbals' cotton-spinning and manufacturing company, and of Alexander M'Kerlie as a partner thereof, having been sequestrated under the Bankrupt Act, (54 Geo. 3, c. 137,) in the month of September 1815, Mr. William Jeffrey was elected and confirmed trustee on the sequestrated estates on the 10th of October next following, and the Respondent became cautioner or surety for his fidelity in office, and for a faithful account of his intromissions, to the extent of £1000. The bond granted by them on that occasion, after reciting the sequestration, etc., proceeded thus:-" Therefore I, the said William Jeffrey, as principal, without limitation, and I the said William Watson, as cautioner, surety, and full obligant, with and for the said William Jeffrey, to the foresaid extent of £1000 sterling, hereby bind and oblige ourselves jointly and severally, renouncing the benefit of discussion, and our heirs, executors and successors whomsoever, that I, the said William Jeffrey, shall and will manage the said estate in all respects conform to the statute under which the sequestration was awarded, and that I shall and will hold just count and reckoning, and make payment to the said creditors according to their several claims ranked upon the said sequestrated estate, or the trustees or trustee that may be afterwards named by the creditors to succeed me, for my whole management, 1534 MACTAGGART V. WATSON [1835] III CLARK & FINNELLY. receipts and intromissions as trustee foreaaid, with the property of the said estates, or any part thereof, of whatever kind or denomination, and wherever situated, which may come into my hands as trustee foresaid, and that from [527] time to time, when required," etc. Commissioners were soon afterwards elected by the creditors, according to the requisitions of the said Act, to superintend the trustee's administration of the sequestrated estates, from which he soon realized a considerable sum, and a dividend of 2s. in the pound on the proved debts was declared by order of the commissioners, and paid before the statutory period. A further dividend of 6d. in the pound was declared in May 1820, when the trustee presented a report of his management and intromissions with the estate to the commissioners, who examined the same and found it to be correct. He again, in May 1826, presented to them a report accompanied with a statement of his whole accounts up to that period. The commissioners examined this statement, and found upon the face of it a balance of £67 lls. lid. in favour of the trustee, which was caused by the disbursements made by him, with the sanction of the creditors, in resisting, in a long course of litigation, various claims made on the bankrupt estate by Mr. John Mactaggart of London (see Mactaggart v. Jeffrey, 4 Shaw and W. 361). With the exception of the property involved in that litigation, the estate was, at this period, considered as wound up and recovered; and there was no call for an audit of the accounts again until January 1829, when the new commissioners then elected, on the resignation of the former commissioners, called upon the trustee to exhibit a state of the funds. Upon the investigation which was then made into the accounts, Mr. Jeffrey was found to owe to the estate £1008 12s. 2d. On that discovery he resigned the office of trustee, and Mr. James Kerr having been elected in his place, after several ineffectual applications to him, and to [528] his cautioner, the Respondent, for a settlement of the said deficiency, raised an action against them for payment of the £1000, the amount of the bond. One James William Robertson was also a defendant to the action, in respect of the share which it was alleged that he had taken in the management of the bankrupt estate, as a partner of Jeffrey. The summons concluded to the effect, " First, that the said W. Jeffrey and J. W. Robertson should be decerned, conjunctly and severally, to hold just count and reckoning with the pursuer, as trustee foresaid, for the whole of their joint and individual actings and management, in regard to' the said sequestrated estates, and for that purpose to exhibit a full and accurate state of their accounts, and of their whole joint and individual intromissions with the said estates, with the vouchers for the same, whereby the balance due by them, or either of them, to the pursuer, may appear, and be ascertained ; and they should be decerned to make payment, conjunctly and severally, of such sum as shall appear, upon a proper accounting, to be the true balance remaining due by them, or either of th'em, on account of the said sequestrated estates, etc. Secondly, that the said W. Watson, as cautioner aforesaid for the said W. Jeffrey, and also as full obligant along with him, in terms of the foresaid bond, should be decerned, conjunctly and severally, with the said W. Jeffrey and J. W. Robertson, or with the said W. Jeffrey, to' make payment to the pursuer, as trustee foresaid, of the sum of £1000 sterling, being part of...
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