1813. 11 The Royal Bank of Esq. their Cashier, for their Behoof, Crediters of Scott, Smith, Stein, and Company, late Bankers in Edinburgh, and Petitioners for a Sequestration of the Estates of that Company, and of John and Robert Stein, individual Partners thereof, against James Cuthbert and Others, stating themselves to be Assignees under a Commission of Bankruptcy issued Robert Stein, James ents. what are we to do with this Difficulty? Let the Legislature settle it. It is their Province and not ours. And here I must notice the Sort of Answer that is made on the Part of the Royal Bank, to many of the Arguments used on the other Side, viz. That they call upon us to exercise the Powers of Legislators, and not of Judges. But it appears to me, that this may be more truly said of the Arguments used by the Bank. They apply to us much more as Legislators than the other Party. Nothing can be more in this Way than to say, that though by Law the first judicial Transfer extends to both Parts of the Island, yet we are to be required to say, No, it shall not extend to Scotland. If we ask, why do you call upon us to do this? They answer, the Commission is collusive. Our Reply is, try this before the Chancellor; go to him and plead your Collusion. The Law of England and of Scotland is presumed to be equally good. If a Bankrupt is to have his Choice between the two, that may possibly be an Evil, but let the Legislature correct it. In the mean Time, we cannot quash a legitimate Proceeding already issued in England. If any Measure were to be adopted upon this Subject, it seems to me that the useless Subtilty of the Law of England should be corrected, which requires a special Act of Bankruptcy to be committed there, by each individual Bankrupt, before issuing the Commission against him. Why not award the Con> mission at once, as we do a Sequestration? Lord BANNATYNE. A great Deal has been said on the Part of the Royal Bank, with Regard to the Collusion that is said to have taken Place before issuing the Commission. But I think the Circumstance of the Bank withdrawing the Petition, is a sufficient Ground for holding this Allegation to be unfounded in Point of Fact. An Affidavit is presented to the Chancellor on the other Side, expressly denying the Collusion, which is acquiesced in; and therefore I am intitled to hold, that this proceeded from the Bank's own Sense of their Averment being erroneous. Another Question is, whether the Edinburgh and London Companies were the same, apparently they were different. They had dif ferent Trades, different Firms, and the one carried on Business in London, and the other in Edinburgh. But the Fact is, that they were not different, and of this we have now satisfactory Evidence, because we have the original Contract of Co-partnery, by which it is proved that they were originally, and have been all along, one and the same commercial Company. As they had a Domicile in both Countries, they were equally liable to the Operation of the Bankrupt Laws in the one Country, and in the other; that being the Case, how can the Line be drawn? Whoever is entitled to the Benefit of these Laws, has his Option to take the Benefit of the one or of the other. But if he take the Benefit of the English Commission, he cannot take the Benefit of the Sequestration; Sequestration; and if he take the Benefit of the Sequestration, there can be no Commission. It is a Maxim of universal Law, that Moveables follow the Person; and therefore it is clear, that these must be carried either by the Sequestration or by the Commission, according as the one or the other is first issued. Suppose a Sequestration were issued against a Man not domiciled in Scotland; this cannot receive Effect in England. In the same Manner, although a Commission of Bankrupt was ever so fairly obtained; yet if it be produced here, and we are satisfied that the Party is not domiciled in England, but in Scotland, I should hold in that Case, that we are not bound to give Effect to the Commission. With Regard to the Estates of these Companies, there is no Room for either of these Difficulties. But it does appear to me that there is a Difficulty: for here there is an Application for a Sequestration, not only of the Company Estates, but of the individual Estates. These Individuals were both domiciled in Scotland; they carried on two great Distilleries, which made no Part of the Company Funds; and I confess, I have very considerable Doubt, how far we ought not to sequestrate their individual Estates. But as this Application at present stands, I am for refusing the Petition. Lord CRAIGIE. In general I agree with all that has been stated by your Lordships. I think it right to refuse this Petition for Sequestration; at the same Time, I beg Leave to reserve my Opinion when another Case happens, which in Substance may be that which the present Case was said to be in the Bill Chamber. I think if this Case had come before me there, that I, as an Ordinary, would have awarded Sequestration, although it was said, that a Commission of Bankrupt had been issued in England: that might have been done for the very Purpose of evading a Sequestration. Suppose the Bankrupt had died immediately, so as he could have executed no Conveyances, the Estates would have remained without Management of any Kind, unless a Sequestration had been issued. To be sure, the Effect of a Sequestration would have been an after Question; and when the Assignees came and stated the Fact of the English Commission having been issued, then I should have decided which of the two should prevail. I have no Idea, that, ipso jure, an English Commission destroys the Operation of Diligence in Scotland. Lord Justice CLERK. This is a Case of very great Importance. I do not think it necessary to enter at large upon the Consideration of the preliminary Questions, because I agree entirely in the Observations which have been made. The Case stands now upon a totally different Footing from what it did in the Bill Chamber. Had I been called upon to say, whether as a Judge bound to give Effect to the Act of Parliament, by KK granting VOL. I. 1813. The Royal Bank of Scotland, and for their Behoof, Smith, Stein, and titioners for a Se questration of the Stein, individual Robert Stein, James Trade in London, under the Firm of Stein, Smith, and Co. and against the said Thomas ents. 1813. The Royal Bank of Esq. their Cashier, for their Behoof, Bankers in Edinburgh, and Petitioners for a Sequestration of the Estates of that Company, and of John and Robert Stein, individual Partners thereof, against James Cuthbert and Others, stating themselves to be Assignees under a Commission of against Thomas Smith, John Stein, Smith, carrying on granting Sequestration, whenever the Conditions of the Statute, prima facie, appeared; I fairly confess, I should have felt great Difficulty in saying, how far I could have been justified in refusing to award that Diligence. But now, undoubtedly, the Case is in a very different Situation. We have now the Notoriety, the absolute Confession of the Bank, that they have been proceeding in England, upon the Foundation that the Commission has been issued. The Difficulty that I have in this case is, that this is an Application not only for Sequestration of the Company, but of the Individuals who have been rendered bankrupt according to the Law of Scotland. But I do not think We are now to de it necessary to go upon this Ground at present. cide the great Question, whether a Commission of Bankrupt issued with all due Form and Solemnity in England, ought or ought not to carry the Estates of Parties, who have been rendered bankrupt in England, but who have Effects in Scotland. I agree with all the Opinions given by your Lordships upon this general Point, because I conceive that such Opinions are only giving Effect to previous solemn Judgments. I therefore would not be disposed to do any Thing that can shake the Principles determined by these Judgments; and I should have thought the Bank would have seen the Expediency for Bankruptcy issued their own Cause, of granting the general Point in the Argument. But the Question is, whether there is any Thing in this Case, either as to the Company or Individuals, that can create a Doubt with Regard to granting or refusing the Petition. I shall add nothing to the Statement of the inextricable Difficulties that would follow, from allowing two Systems of Management to go on pari passu. But the Circumstance that has always struck me was, whether there was or was not any Thing in the Conduct of the Parties; any Thing that could create a Doubt, as to the Application of the Principle. Now I Smith, John Stein, fairly confess, after all I have heard, I remain of Opinion that it was not a Duty incumbent on Mr. John Stein to go out of: nor do I think that he ought to have quitted Scotland for the Purposes that have been mentioned (a). His Domicile was in Scotland; he was an ostensible Partner of a Scotch House; his large personal Property was in Scotland. But the Question that results from this is, whether your Lordships in any Documents before you, have sufficient Evidence that there was any Collusion between him and the Assignees; any Thing, in short, which can entitle you to interfere in this Case. I feel most certainly, the Force of the Observations which have been made by such of your Lordships as have spoken upon this Point. The proper Place was to have gone before the Chancellor; and certainly the Parties did put in Averments upon their Part to this Effect. But we have the said Thomas Robert Stein, James Stein, and Robert Smith, Respond ents. (a) Mr. Clerk on Behalf of Mr. Stein, stated, that he had never refused his Concurrence to a Sequestration here; that his only Object was to act for the general Benefit of his Creditors; and that in the Step he had taken, he had been guided by his Advice. undoubted they undoubted Evidence that the Petition was dismissed, and therefore the Trial of this Point, you are entitled to say, has already proceeded and been determined. The Difficulty stated by Lord Robertson is very strong, that your Lordships, acting ministerially, are bound to make your Orders conformable to the Statute. Now, the Petition prays for Sequestration of the whole Estate and Effects wherever situated; say, indeed, that they will be content to take a Sequestration quoad Scotland only. But I really do not see how it is possible for your Lordships to get over the Difficulty. I must either grant or refuse the Prayer of the Petition, and however strong a View I may take of Mr. Stein's individual Conduct, I feel that I cannot grant the Prayer of this Petition. The Commission of Bankrupt cannot be controlled by us; and there is no Doubt, certainly, that under this Commission the whole Effects of the Company and the four Partners fell under the Operation of the Bankrupt Law of England: but then, so far as John Stein was concerned, were not all the Proceedings that took Place just the Consequence of his voluntary Aet in going to England; and I must say, in distinct Terms, evading the Diligence against him? Giving full Effect, therefore, to the general Principle, I apprehend, on the other Hand, unless it can be shown that you are barred by any Thing that has taken Place, you are bound to watch lest any Proceedings shall be carried on by Persons domiciled in Scotland, which can interfere with the Application of your own Rules of Law: for, with all the Respect that I feel to the Law of England, I am bound to direct my Conduct by the Law of Scotland: and surely it is a great Anomaly, that a Debtor, merely by stepping across the Boundaries of the two Countries, should have it in his Power most deeply to affect the Interests of his Creditors: especially as I believe that the Affairs of every Bankruptcy can be settled at much less Expence in Scotland than in England. As to the real Estates situated in Scotland, it is admitted, that without the private Conveyances nothing could have affected them. Now, seeing that all these were the individual Proceedings of Mr. Stein; that the Transactions were by a House carrying on Business in this City, of which he was the principal Partner; the Sequestration, so far as concerns his Estate, is a Part of this Case on which I have great Difficulty: but still, under the Act of Parliament, I feel that I cannot give Effect to the View which I have taken of the Case, because we cannot interfere with the Chancellor's Commission. Lord GLENLEE Was present, but did not deliver any Opinion. 1813. The Royal Bank of Scotland, and Smith, Stein, and Company, late. Bankers in Edinburgh, and Pe- . titioners for a Se questration of the Estates of that Company, and of John and Robert Stein, individual Others, stating Assignees under Robert Stein, James Smith, John Stein, Smith, Respond. ents. The Judgment of the Court was as follows: Upon Report of Lord Bannatyne, and having advised the mutual In 1813. The Royal Bank of George Mitchel, Esq. their Cashier, Creditors of Scott, Partners thereof, against James Cuthbert and Others, stating themselves to be Assignees under a Commission of formations for the Parties, and resumed Consideration of the Petition of the Royal Bank of Scotland and their Cashier, the Lords refuse the Desire of said Petition, dismiss the same, and decern. Upon this Judgment, the Bank gave in a reclaiming Petition; which, on being advised with Answers, was unanimously refused. The Bankrupts having obtained their Certificate, John Stein and Robert Stein presented Bills of Suspension (a), praying for Letters of Suspension, without Caution or Consignation of the Charges given in by the Royal Bank, upon the Bills of Exchange in Question, upon the Ground, that the Certificate was a Discharge of all Debts contracted prior to the Date of the Commission, whether English or Scotch. The Royal Bank objected, that the Certificate could only discharge Debts due to English Creditors, and could have no Effect in Scotland. The Court were unanimously of Opinion, that the Certificate was a complete Discharge of every Debt that could be proved under the ComBankruptcy issued mission, whether English or Scotch; and passed the Bills of Suspension, without Caution or Consignation. against Thomas Smith, John Stein Stein, and Robert Smith, Respond. The Solicitor General, Mr. Bell, and Mr. Maconochie, for the Royal Bank. Mr. Clerk, Mr. Cathcart, Mr. Cranstoun, and Mr. Skene, for Messrs. Steins and the Assignees. (e) January 20, 1813. ents. TABLE |