ROBERT FINLAY v Mrs DONALDSON'S TRUSTEES (Court of Session)

Robert Finlay, merchant in Glasgow, having applied for a discharge under the sequestration statute, the following objections, amongst others, were stated by the respondents, as trustees for a claimant on his private estate.

An offer of composition having been reported by the trustee as accepted by the creditors, and submitted to the Court for their sanction on a closed record, and not having been judicially disposed of or withdrawn, it is incompetent for the bankrupt to apply for a discharge. By the 61st section of the statute it is declared lawful for the bankrupt to apply for discharge only in case of no proposal for a composition having been made, ‘or in case the same, when made, shall become ineffectual.’

Answered —It is not necessary that the application for approval of the composition should have been judicially disposed of; and with regard to its actual abandonment on the part both of the petitioners and the creditors by whom it was accepted, no better evidence of the fact could be adduced than the present application, founded on the concurrence of every one of these creditors. The enactment referred to by the respondents is applicable to compositions only, while that which authorises an application for discharge is quite distinct and unqualified.

There being in dependence a process of count and reckoning at the instance of the respondents against the bankrupt and others, for establishing a debt of a large amount, in reference to which the bankrupt is charged with embezzlement, and fraudulently withholding documents and information by which the claim might be ascertained, the present application ought to be superseded until the investigation which is in progress before an accountant, under a remit in that action, shall have been completed.

Answered —The allegations of fraudulent appropriation and concealment of funds are groundless and extravagant, unsupported by any prima facie evidence, and contrary to every fair and reasonable presumption. But a mere question of accounting between the parties, even supposing the respondent's claim apparently well founded, confessedly could not, upon any statutory ground, stand in the way of the petitioner's discharge, concurred in, as it has been, by all his creditors except the respondents.