Scottish Court of Session Decisions

Mr Drummond, as official liquidator of the Army, Navy, & Family Supply Association, lodged with Mr Balgarnie, the trustee in bankruptcy of Messrs Wormald & Anderson, a claim amounting to £918, 7s.; from this there was admittedly to be deducted two sums of £197, 7s. 7d. and £89, Os. 10d. respectively, as counter claims by Mr Wormald. Mr Balgarnie deducted a further sum of £118, 7s. 1d., being the amount of an account due by the Supply Association to Messrs Small & Greig, for which Wormald had become cautioner, and for which Small & Greig had ranked on his estate. The appellant objected to this deduction.

The Sheriff-Substitute ( Hamilton) pronounced the following interlocutor:—

“ Edinburgh, 20 th October 1876.—The Sheriff-Substitute having resumed consideration of the foregoing appeal, and having again heard parties’ procurators—Finds that the respondent now offers to rank the appellant on the estate of Wormald & Anderson to the extent of £513, 5s. 6d., conform to state now lodged, and finds that the appellant, while willing to accept the proposed ranking otherwise, objects to the deduction therefrom of £118,13s. Id., being the last item of said state: Finds, with reference to said item, that it represents the price of goods supplied by Small & Greig, therein mentioned, to or for behoof of the Army, Navy, & Family Supply Association (Limited), now in course of liquidation, and of which the appellant is the official liquidator: That said goods were ordered, and payment of the price thereof was guaranteed by J. D. Wormald, partner of Wormald & Anderson, as secretary, or otherwise acting for the said Association: That Small & Greig sued Wormald and his firm for payment of said price, obtained decree against them, and have been ranked on their sequestrated estate for the amount of the decree, being said sum of £118, 13s. 1d, and that the respondent now seeks relief against the said Association, and the appellant as official liquidator, and has produced

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in process a letter from the agent of Small Greig, undertaking on their behalf not to claim or rank for said debt on the estate of the said Association: Finds that, in the circumstances above set forth, the respondent is warranted in making the deduction of the sum of £118, 13s. 1d. referred to: Therefore approves of said state: Recals the deliverance appealed against, and directs the respondent to rank the appellant on said estate of Wormald & Anderson to the extent of £513, 5s. 6d.: Finds the respondent entitled to expenses; modifies these to the sum of £2, 2s. sterling, and decerns.

“ Note.— Parties are substantially agreed upon the facts connected with the sum of £ 118, 13s. 1d. The appellant referred to the case of Ewart v. Latta, 10th June 1863, as supporting his contention that the respondent was not entitled to make the deduction in question. The Sheriff-Substitute has read that case attentively, but it does not seem to be in point. The only difficulty he has had is connected with the fact that the respondent has not obtained a regular assignation to Small & Greig's claim. Mr Skinner's letter, however, almost amounts to such an assignation; and, at all events, it seems sufficient to secure against a double ranking upon the estate of the Supply Association.”

The appellant appealed.

Authorities quoted—for the appellant— Ewart v. Latta, 10th June 1863, 1 Macph. 905, H. of L., 3 Macph. 36. For the respondent — Hall v. Donaghy, 24th November 1866, 5 Macph. 57; Sec. 170 of the Bankruptcy Act; Anderson v. M'Kinnon, 17th March 1876, 3 Ret. 608.

At advising—