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Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Granger's Trustee v Hannay's Trustee [1835] CA 13_495 (20 February 1835)
URL: http://www.bailii.org/scot/cases/ScotCS/1835/013SS0495.html
Cite as: [1835] CA 13_495
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SCOTTISH_Shaw_Court_of_Session
Page: 495↓
v.
Subject_Agent and Client—Bankruptcy.—
A law-agent, who was also factor for his client, and had considerable factorial intromissions, took credit, in accounts docqueted, during the currency of his employment, for a sum in respect of agency in a pending process, and the balance was against him; but, on farther transactions, it was ultimately in his favour; decree for expenses having been obtained against the opposite party, and the client having become bankrupt, his trustee objected to decree going out in the agent's name for the expenses, in respect that the portion which had been stated in the docqueted account was as extinguished, and that, quoad ultra, he must claim as a common creditor—held, that the agent was entitled to decree in his own name for the whole expenses, these being less than the final balance due by his client to him.
In 1829, John Hannay, W.S. was appointed factor and commissioner by the executors of the late John Granger, W.S., for the purpose of realizing his estate. He had intromissions in that character to the amount of £4872. He also, as their law-agent, conducted several processes, including one against William Hamilton, writer in Hamilton. His factorship continued till April, 1833, when it fell, after the sequestration of his estates. Thereafter, the above process was brought to a conclusion by other agents, acting for the executors, and decree was obtained, in February, 1834, against Hamilton, finding him “liable in the expenses of the present process.”
Part of these expenses was incurred to Hannay prior to 17th January, 1832, at which date he rendered an account to the executors, in which he took credit for the amount. After doing so, there was still a balance due by him on his factorial intromissions. The accounts were approved of and docqueted. Between that date, and the period of Hannay's sequestration, a further account for law-agency was incurred to him, including a sum arising out of his agency in the process against Hamilton. On striking a balance on his accounts, and taking credit, inter alia, for the professional accounts due to him, there was now a balance due to him of £76, 13s. 3d., * in a question with Granger's executors. The executors became bankrupt, and executed a disposition omnium bonorum in favour of John Hunter, junior, W.S., as their trustee. When Hamilton was found liable in expenses, a claim for the part of them incurred to Hannay in the process with Hamilton, was made
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* A special point was raised, whether this balance was truly brought out in Hannay's favour, or only in a question with certain individuals of the executors. It was held, that be was entitled to state himself a creditor, as to this case, in a question with the whole executors.
by the trustee on Hannay's sequestrated estate, who craved that decree for the expenses should, to that amount, go out in his name. This was opposed by Hunter, as trustee for the creditors of Granger's executors, who pleaded, that the balance claimed embraced the sum incurred prior to 17th January, 1832; and as Hannay had then funds in his hands, and had taken credit for the sum due to him in settling and docqueting his accounts, it must be held that that part of his agency was paid. In so far as he came subsequently to be in advance for his clients, he (or his trustee) must just rank on their estate, and draw a share along with the other creditors. The reason for giving an agent a preference over the account of expenses was to protect him against his own client, and that reason entirely failed of application, in so far as his client had paid the account.
Hannay's trustee answered, that, in balancing accounts with a client, a law-agent and factor always stated the amount of law-agency due to him, as an item, and took credit for it accordingly. At the settlement on 17th January, 1832, Hamilton's process was pending, and the amount then incurred was accordingly stated in account; but as the balance on the whole accounts fluctuated from time to time, though it then happened to stand against Hannay, and as the final balance was in favour of Hannay, leaving him an ordinary creditor to a small amount, even if his preferable claim for expenses in Hamilton's process was sustained, it would be unjust to hold that he was barred from getting decree in his own name, merely from having adjusted accounts at a period when the balance happened temporarily to be against him. The period when expenses were decerned for was the time at which to decide on the preferable nature of an agent's claim, when he craved decree in his own name.
The Lord Ordinary “allowed decreet to go out, in name of Charles Pearson, for £62, 14s. 5d., being the taxed amount of the whole expenses disbursed by Mr Hannay.”
Hunter reclaimed, but the Court, after ordering minutes, adhered.
The other judges concurred.
Solicitors: Lockhart, Hunter, and Whitehead, W.S.—A. Gowan.—Agents.