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Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Anderson v Rutherfurd [1835] CA 13_488 (19 February 1835)
URL: http://www.bailii.org/scot/cases/ScotCS/1835/013SS0488.html
Cite as: [1835] CA 13_488
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SCOTTISH_Shaw_Court_of_Session
Page: 488↓
v.
Subject_Partnership—Compensation—Agent and Principal.—
After the dissolution of a company of law-agents was notified to a debtor, he made choice of one of the partners as his sole agent, and employed him to effect a loan, and apply part of it in payment of the company debt; the agent effected the loan, but failed to apply any part of it to the company debt, and his estates were sequestrated: held, that the debtor must still pay the debt due to the company, and could not plead that it was extinguished by the funds which he had placed in the hands of his agent.
Henry Charles Rutherford, of Redfordgreen, was a client of the firm of Lockhart and Swan, W.S., and contracted an account to them. The partnership was dissolved, of mutual consent, in May, 1831, and the dissolution was intimated in the Gazette, but no person was specified as authorized to uplift the debts. Special notice of dissolution was immediately sent to Rutherfurd, and he selected Swan as his sole agent, and intimated this to Lockhart. He employed Swan to effect a loan of £1500 on his property (a part of which was to be applied in extinction of the accountdue to Lockhart and Swan), and Swan accordingly effected the loan. Lockhart having raised an action of count and reckoning against Swan, * Messrs Anderson and M'Nab, writers in Edinburgh, were appointed to uplift the company debts and discharge them. Swan's estate was sequestrated in March, 1832; and Rutherfurd claimed, on the estate, the full amount of the loan of £1500, as a debt due by Swan to him, and neither compensated, nor secured, to any extent. Messrs Anderson and M‘Nab, with concurrence of Lockhart and of Swan's trustee, afterwards raised an action against Rutherfurd for payment of the account due to the late company of Lockhart and Swan. Rutherfurd pleaded, that, although the company was dissolved, and the dissolution notified to him, yet, as no person was then appointed to collect the debts, he was entitled, while both parties continued solvent, to pay a company debt, bona fide, to either partner, and so to extinguish the claim of the company. The pursuers answered, that the facts of the case were exclusive of any such defence, as Rutherfurd, after the dissolution of the company, selected Swan as his sole agent, and, in that character, empowered him to
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* The money received by Swan has been stated by him to have been deposited in bank, and arrested on the dependence on 7th Dec. 1831.
raise a loan, and pay off the debt to the company with it; and, accordingly, Rutherfurd had ranked on Swan's estate for the whole loan, as a debt due to himself, and wholly uncompensated and unsecured.
The Lord Ordinary “repelled the defences, and found the pursuer entitled to expenses of process.” *
Rutherfurd reclaimed, but
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* “ Note.—Considering, that, even after dissolution, a partnership is understood to continue to the effect of settling the company's affairs, and that on the present occasion, the notice of dissolution contained no specific appointment of a person to receive payment of the company debts, the Lord Ordinary rather thinks that a payment bona fide made by the defender after the dissolution of the company to Swan as a partner, and a discharge granted by him in name of the company, would have been good. But there is no room for entering into the discussion of this question here, because the defender's averments on the record amount to no more than that, after the dissolution of the company, the defender, then employing Swan individually as his own agent, allowed him, in that character, to draw a large sum of money, under the impression that, among other purposes, part of it was to be applied to the discharge of the company debt. The Lord Ordinary cannot hold this to be a payment of which the defender, in settling with the company, is entitled to the benefit.”
The Court adhered.
Solicitors: Lockhart, Hunter, and Whitehead, W.S.— A. Dun, W.S.—Agents.