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Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Fraser v. Mackenzie [1874] ScotLR 12_74 (14 November 1874)
URL: http://www.bailii.org/scot/cases/ScotCS/1874/12SLR0074.html
Cite as: [1874] ScotLR 12_74, [1874] SLR 12_74
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SCOTTISH_SLR_Court_of_Session
Page: 74↓
Court of Session Inner House Second Division.
v.
Facts:
The sole partner of a firm became insolvent, and was sequestrated. On the same day he assumed as a partner his son, who was a clerk. Held that the firm were not entitled to carry on an action without finding caution for expenses.
This was an action at the instance of The Fauldhouse Coal Company, carrying on business in Glasgow; and John Thomson Fraser, writer in Glasgow; and William Fraser, clerk in Greenock, sole partners of the said company, and as trustees for behoof thereof, and as individuals,—against George Mackenzie and others, concluding for reduction of an assignation of a mineral lease granted by the trustees of the late Mr Renny to George Mackenzie and others. The pursuer John Thomson Fraser alleged that he held a prior lease of the minerals. The defender averred:—“Any right or interest the pretended Fauldhouse Coal Company may have acquired has been transferred by them to Mr George W. Muir, now or lately merchant in Glasgow, by whom the present action has been in reality raised and is being prosecuted. On 9th May 1873 Messrs Crawford & Guthrie, the agents for the pursuers, wrote a letter to Messrs Paterson & Romanes, W.S., the landlord's agents, intimating that Fraser and his son had transferred the lease in question to their client Mr Muir, and requesting the landlord to accept him as assignee. The present action has been raised on the instructions and employment of Mr Muir, and he has the entire control and direction thereof. He advanced the £50 paid to the trustee, and has a direct interest in the subject-matter of the litigation. He is the real pursuer of the action, and the true dominus litis therein.”
The Fauldhouse Coal Company consisted originally of one partner, John Thomas Fraser, who was sequestrated on 23d November 1872. On that day he assumed his son William Fraser as a
Page: 75↓
partner. The son was a clerk in Greenock, with a salary, the amount of which was not stated, but it was averred that his circumstances were such as to render the Company solvent. There were other questions between the parties; but the only questions which were argued were the relevancy of the action, and the motion by the defenders that the pursuer should be ordained to find caution for expenses. The Lord Ordinary allowed a proof, and the defender reclaimed.
At advising—
But the question remains, whether the pursuers are not bound to find caution. This is a question for the discretion of the Court. The circumstances are very peculiar. It is not the case of a company which is solvent but of which one of the partners is bankrupt. The company consisted originally of one partner, John Thomson Fraser, and he became bankrupt, and was sequestrated on 23d November 1872, and down to that date he was the sole partner. The company was therefore just as much bankrupt as the sole partner. But on the same day John Thomson Fraser assumed a new partner, his own son William Fraser, who was not in the coal trade. He was a clerk in Greenock, with a salary, the amount of which he will not tell us. He is represented as having so much solvency as to render the company solvent. There is an amount of fiction about all this that it is difficult to understand. This, coupled with the circumstance that Fraser is about to transfer his lease to Mitchel, puts the pursuers in such a position that I think they ought to be made to find caution for expenses.
The other Judges concurred.
Counsel for Pursuer— Dean of Faculty (Clark), and Maclean. Agents— D. C. Crawford & J. Y. Guthrie, S.S.C.
Counsel for Defenders— Solicitor-General (Watson) and Strachan. Agents— Walls & Sutherland, S.S.C.