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Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Hay v. Dufourcet & Co. [1880] ScotLR 17_669 (18 June 1880)
URL: http://www.bailii.org/scot/cases/ScotCS/1880/17SLR0669.html
Cite as: [1880] ScotLR 17_669, [1880] SLR 17_669
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SCOTTISH_SLR_Court_of_Session
Page: 669↓
Court of Session Inner House Second Division.
[
v.
Facts:
Held that arrestment in the hands of an individual partner of a debt due by his firm is not a good arrestment so as to found jurisdiction against a creditor of the firm.
This was an action of damages raised by the pursuer Alexander Hay, a merchant in Leith, against Charles Dufourcet & Company, merchants, 18 Billiter Street, London. The damages were claimed for breach of a contract made on the 4th November 1879 between them, by which defenders were to deliver at Ayr a cargo of bone-shavings. On arrival the cargo was found to be not according to contract, and was therefore rejected by the pursuer.
On the 3d of June 1880 the defenders sold this cargo to Messrs Alexander Weir & Co., merchants, Ayr, which firm consisted of two partners, Mr Alexander Weir and Mr M'Geachy, and had an office in the town of Ayr, their business being carried on under the company name of Alexander Weir & Company.
The pursuer, desirous of being recouped for the loss sustained by the breach of his contract with the defenders, and in order to make them subject to the jurisdiction of the Court, on 7th January 1880 used an arrestment ad fundandam jurisdictionem in the hands of Mr Alexander Weir as an individual for the balance of the sum of £300 remaining unpaid. The arrestment was left with a servant in the private dwelling-house of the said Alexander Weir, at Newton Head near Ayr. The said arrestment was not served personally upon Alexander Weir, nor at the office of the firm in Ayr.
The defenders pleaded—“(1) No jurisdiction. (2) No funds belonging to the defenders having been competently arrested in the hands of Alexander Weir & Company, the arrestment used is inept to found jurisdiction against the defenders.”
The Lord Ordinary (
Craighill ) repelled these pleas-in-law, holding that (1), failing payment by the said Alexander Weir & Company, the said Alexander Weir was individually liable to the defenders for their debt; (2) that the defenders' claim against the said Alexander Weir, and the sum covered by it, were open to arrestment by creditors of the defenders; (3) that the said arrestment was apt to attach, and did attach, this fund; and (4) that jurisdiction against the defenders had been thereby created.The defenders reclaimed, and argued—(1) An arrestment of a company debt must be made in the same way as an intimation to a company of an assignation of debt, that is, to each individual partner unless a manager be formally appointed—arrestment in the hands of one who is de facto managing partner being not sufficient—Bell's Princ. 2276, Note G, and cases; 1464, Note A, and cases. (2) Action must be first maintained against the company for a company debt. Here
Page: 670↓
the debt was never constituted against the company—Bell's Com., ii., 508. The pursuer argued—The arrestment used in the hands of Alexander Weir was good—Bell's Com., ii. 555; Elliot v. Aiken, June 23, 1869, 7 Macph. 894.
At advising—
The forum is in England, but on a rule of the law of Scotland the pursuer says he has arrested a debt in Ayr due to Dufourcet & Company by a debtor there, in which case the action may be pursued against the English debtor in Scotland. The propriety of this rule is questionable, and it is a rule which is not to be given effect to unless the arrestment be good in all respects.
The debt due to Dufourcet & Company was the balance of the contract price of bones sold by the defenders to Weir & Company in Ayr. The contract was in writing, and perfectly distinct. In it the defenders were the sellers, and Weir & Company the buyers, and the contract price had been paid. The arrestment was used in the hands of Alexander Weir, and was of any sums of money due by him to the defenders, and that is contended to be a good arrestment of the debt of the company.
I am of opinion that arrestment of a company debt should be in the hands of the company, and bear to be for money owing to the company, and arrestment in the hands of an individual partner for sums of money due by him will not found jurisdiction against a party to whom a debt is owed by the company. I cannot arrive at any other conclusion on principle or authority. I am therefore of opinion that the Lord Ordinary's interlocutor is wrong.
During the discussion several tests have been put before us. (1) Suppose arrestment had been used in the hands of Alexander Weir or M'Geachy on the one hand, and of the company on the other, and a competition arose as to which was to prevail, it is admitted that it would be that in the hands of the company. (2) Suppose arrestment had been used in the hands of Weir, as here, that would not prevent the company from paying its debt. This arrestment so used did not attach any of the company's debts.
These tests appear to me conclusive in addition to the principle that a company has a separate persona; and therefore sequestration against a company does not comprehend the assets of an individual partner unless he be the only partner. Then, and only then, are his effects carried by such a sequestration.
I am therefore of opinion that the Lord Ordinary's interlocutor should be recalled and the action dismissed.
The
The Court recalled the Lord Ordinary's interlocutor and dismissed the action.
Counsel for Reclaimers— Trayner— Wallace. Agents— Boyd, Macdonald, & Co., S.S.C.
Counsel for Respondent— Guthrie Smith— Strachan. Agent— David Hunter, S.S.C.