ings is repeated, the dividend being payable after expiration of twelve months from the date of the sequestration (§§ 108, 109).

Other Dividends.-The like proceedings take place from time to time until the funds are exhausted, in such manner that each dividend is payable on the first lawful day after expiry of four months from the immediately preceding one (§ 110).

Postponement. The commissioners may postpone a dividend till the period for making the next ensuing dividend, directing the trustee to give notice in the Edinburgh Gazette. Notwithstanding the postponement, the trustee's state must be made up and the accounts audited, an abstract of the state being sent by post to each creditor, unless the commissioners direct otherwise (§ 111).

SECT. 14.-Composition Contract.*

Earliest Period for Offer.-At the meeting for electing a trustee (see above, p. 385), the bankrupt or his friends, or in case of his decease his representatives, or in case of a company, one or more of the partners, may offer a composition with security for its payment. If a majority in number, and nine-tenths in value, of the creditors present, resolve that the offer be entertained, the trustee must advertise in the Edinburgh Gazette a notice that it has been made and entertained, and that it will be decided upon at the meeting to be held after the examination, specifying the hour, day, and place. He must also "transmit by post letters to each of the creditors claiming on the estate, or mentioned in the bankrupt's state of affairs, containing a notice of such resolution, and of the day and hour at which, and the place where the said meeting is to be held, and specifying the offer and security proposed, and giving an abstract of the state of the affairs and of the valuation of the estate, so far as the same can be done, to enable the creditors to judge of the said offer and security" (§ 113).

Disposal.-If, at the meeting after the examination a majority in number and nine-tenths in value accept the offer, a bond by the bankrupt and the proposed cautioner

*The plan of a voluntary composition contract as a method of superseding a portion of the judicial proceedings in a sequestration, for some time practised in Scotland, was at a later period incorporated with the bankrupt law of England (6 Geo. IV. c. 14, §§ 133, 134), and with that of Ireland (6 & 7 Wm. IV. c. 14, §§ 151, 152).

must be lodged with the trustee. The trustee then subscribes and transmits a report of the resolution with the bond to the bill-chamber or sheriff-clerk for the approval of the Lord Ordinary or Sheriff (as the trustee may select); who, after hearing any objections, if he find that the offer with the security has been duly made, and is reasonable, and has been properly assented to, pronounces a deliverance of approval. If the Ordinary or Sheriff refuse to sustain the offer, or reject the vote of any creditor, he must specify the grounds of refusal or rejection (§ 114). Before the judicial approval, the trustee's accounts must have been audited, the balance due by him fixed, his remuneration ascertained; and the remuneration with the expense of the sequestration must have been provided for (§ 117).

Subsequent Period for Offer.-At the meeting held after the examination, or at any subsequent meeting called for the purpose by the trustee with the consent of the commissioners, an offer may be made in a similar manner, and may be entertained by a majority in number and four-fifths in value. The offer is decided on at a meeting held not less than twenty-one days thereafter, of which fourteen days' notice is given in the manner and to the effect above specified. The offer may be finally accepted by a majority in number, and fourfifths in value, subject to judicial approval as above (§ 115).

Second Offer.-If an offer have been made, and is rejected, or has become ineffectual, no second offer can be entertained, unless the amount of composition and terms of payment be subscribed by the cautioner, and nine-tenths of the creditors in number and value give a written assent to entertain it. On these preliminaries the trustee calls a meeting, and the offer may be presented for judicial approval as above, if a majority in number and nine-tenths in value of those present at the meeting accept, and if nine-tenths in value of all the creditors who have produced oaths assent (§ 121).

The sequestration proceeds in the usual manner, notwithstanding an offer of composition, and is not interrupted until the bankrupt's discharge is pronounced or confirmed by the Lord Ordinary; the trustee and his cautioner being liable to account for his proceedings to the bankrupt and his cautioners, on their petitioning the Lord Ordinary (§ 118).

Neither the bankrupt nor the cautioner can object to any debt which the bankrupt has given up in his "state" (see above, p. 394), or which he has admitted without question to be reckoned in the acceptance of the offer, nor to any security, unless the debt or security have been objected to

in the offer, and written notice have been sent to the creditor (§ 119). The cautionary obligation ought to cover not only the claims advanced but all that may be brought forward; and so under the old act the court would not admit a deposit of a sum equal to the amount of the composition on the debts ranked, as an equivalent.1

Prescription in favour of Cautioner.—No creditor who has not produced his claim before the date of the judicial approval of the composition has any claim against the cautioner after two years from that date, reserving his claim for the composition against the bankrupt (§ 120).

As to the bankrupt's discharge on a composition, see above, p. 408.

SECT. 15.- Winding up and Disposal of Unclaimed

Dividends.

"If, on the lapse of twelve months from the date of sequestration, it shall appear to the trustee and commissioners expedient to sell the heritable or moveable estates not disposed of, and any interest which the creditors have in the outstanding debts and consigned dividends, they shall fix a day for holding a meeting of the creditors to take the same into consideration; and the trustee, besides advertising the same in the Edinburgh Gazette, shall, fourteen days before the day appointed, send by post to each creditor claiming on the estate a notice of the time and place of the meeting, with a valuation of the estate and effects, and a list of the outstanding debts and of the consigned dividends; and if three-fourths of the creditors in value assembled at the meeting shall decide in favour of a sale in whole or in lots, the trustee shall cause the same to be sold by auction, after notice thereof published at least once in the Edinburgh Gazette one month previous to the sale, and in such other newspapers as the creditors at the meeting shall appoint" (§ 112).

When the trustee has deposited the unclaimed dividends in a bank at the direction of the bill-chamber clerk (see p. 393), they are entered in an "account of unclaimed dividends." A book is to be kept in the office of the bill-chamber clerks, entitled Register of Unclaimed Dividends," containing a list of the names arranged alphabetically, of all the creditors entitled to such unclaimed dividends, and stating in what bank they are deposited, patent to all persons.

66

M'Vicar, 28th November 1829.

B

After the discharge of the trustee, any person producing evidence of his right may apply for authority to receive a dividend, to the Lord Ordinary, who, being satisfied of the claimant's right, grants warrant for payment. The claimant is not entitled to interest, all such interest going into a general fund, of which an account must be kept by the bank, to be called "The Interest Account of Unclaimed Dividends," "and which fund shall be applied in such manner as shall be regulated by any act of parliament; and if at the end of twenty-five years from the date of closing any sequestration there shall remain in the bank any unclaimed dividends belonging to the estate, the same shall be vested in government stock, and the dividends thereon shall be regularly accumulated for the purpose of forming a fund for defraying the expense of proceedings in bankruptcy, or otherwise as parliament shall hereafter direct; and the said banks shall once yearly at least balance the said accounts, and accumulate the interest with the principal sum, so that both shall thereafter bear interest as principal; and if any such bank fail to do so, such bank shall be liable to account as if such money had been so accumulated" (§ 135).

SECT. 16.-Frauds and Offences.

Collusive Preferences.-"All preferences, gratuities, securities, payments, or other consideration not sanctioned by this act, granted, made, or promised, and all secret or collusive agreements and transactions, for concurring in, facilitating, or obtaining the bankrupt's discharge, either on or without an offer of composition, and whether the offer be accepted or not, or the discharge granted or not, shall be null and void." If any creditor be knowingly connected with such a transaction, the trustee is entitled to retain his dividend, and the trustee or any ranked creditor may petition the Lord Ordinary or Sheriff that such creditor shall be found to have forfeited his debt, and be ordained to pay to the trustee double the amount of the preference, or other consideration. If decree be pronounced accordingly, the sums so recovered, under deduction of expenses, are to be distributed among the other creditors under the sequestration. If the sequestration have been closed, any creditor who has not received full payment may raise a multiplepoinding in name of the person who has obtained the preference, &c.; and on the value or amount being ascertained, double the same, together with the amount of the debt of the colluding creditor,

will be ordered to be consigned by him, to be divided among those creditors who were ranked, or entitled to be ranke and have not received full payment, who lodge claims in the multiplepoinding, according to their respective rights and interests. If any surplus be thus produced, it goes to the account of unclaimed dividends (§ 124).

The bankrupt, if cognizant of any such proceeding, forfeits the privileges of the act, and if he has not made a fair surrender, he may be prosecuted by the trustee (§§ 125, 126). (See above, p. 394.)

Perjury. Any person taking a false oath or affirmation under the act may be prosecuted by the Lord Advocate, or (if the prosecution be authorized by a majority in value at a meeting called for the purpose), by the trustee with concurrence of the Lord Advocate. A person convicted, besides the legal punishment, forfeits all claim on the estate, any sum he would be entitled to being distributed as above (§ 137).

SECT. 17.-Jurisdiction, and Miscellaneous Arrangements.

Appeals, against Resolutions of Meetings, Proceedings of Trustee, &c.-The resolutions of creditors, at meetings, may be appealed against to the Lord Ordinary or the Sheriff, by note of appeal lodged with the bill-chamber clerk, or the sheriff clerk, within fourteen days. Deliverances of the trustee may be appealed against to the Lord Ordinary, or the Sheriff, within thirty days, calculated in the case of dividends from the date of the Gazette notice. The interim-factor,— sheriff-clerk acting as factor,-trustee, commissioners, and the individual creditors, are amenable to the Lord Ordinary and the Sheriff, and may be proceeded against by petition and complaint (§§ 127, 105, 64). The Lord Ordinary or the Sheriff will bring parties before him, and hear verbal pleadings, and decide with or without a record, the sheriff assigning his reasons, and if he proceed without a record, specifying the facts. Where the resolution of a meeting is appealed against, the judge may direct it to be re-considered by a new meeting (§ 127). Any decision of a sheriff, unless it be declared in terms of the act to be final, may be brought under review of the Inner-House, within twenty-one days, unless it be against a deliverance declaring the election of a trustee, when there are special regulations. (See above, p. 387.) During vacation, the Ordinary on the bills decides, subject to review by the Inner-House (§ 128). Judgments of the Lord Ordinary are reviewed in common form (§ 129).