HECTOR KEMP v ALEXANDER MACKENZIE (Court of Session)

Kemp's estate having been sequestrated, he made an offer of composition at a general meeting of creditors, held 3d of September 1827, which was unanimously approved of by the creditors present; two of whom, Mr Alexander Mackenzie of Millbank, and Mr William Mackenzie of Contin, agreed to be cautioners for the same. Accordingly, the bankrupt, as principal, and these individuals, as cautioners, granted a bond in favour of the creditors for payment of the composition, and lodged it with the trustee.

Thereafter, the cautioners were allowed by the trustee to supersede him in the management, and to intromit with and appropriate to themselves the whole, or the greater part of the sequestrated estate and effects. Mr Mackenzie of Millbank afterwards became bankrupt; and nothing was done by the trustee to carry through the composition.

It was answered by the trustee—That it was not the practice, and the trustee was not bound to report the proceedings in question to the Court, without having evidence of the statutory acceptance of the offer by creditors, in regard to number and value; and that it was not his duty, but that of the bankrupt himself, to procure such acceptance, or to apply for the approval of the Court.

The Lord Justice-Clerk observed—That all the findings in the interlocutor, in point of law, were perfectly clear.

Lord Glenlee said—The trustee is not bound to take any steps as to the application to the Court for its sanction to a composition and the bankrupt's discharge, other than to prepare and transmit to the clerk of the sequestration a report of the proceedings of the meeting of creditors relative to the offer of composition. The trustee, in particular, has nothing to do with the obtaining of the consents of the creditors to the composition. Therefore, the first part of the prayer of the petition is incompetent, and not countenanced by any thing in the statute.