Scottish Court of Session Decisions

This was an action at the instance of Thomas M'Naught, S.S.C., Edinburgh, against William J. Milligan, Writer, 183 St Vincent Street, Glasgow, for payment of the sums of £61, 16s. and £7, 1s. 1d.

The pursuer averred that he had acted as Edinburgh agent for the successive firms of Stark, Niven, & Milligan, Stark, Niven, Milligan, & Crawford, and Stark, Milligan, & Company, Writers in Glasgow, and that the sums sued for were due to him for business done on their behalf. He further averred that the defender had been a partner of each of these firms,

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and pleaded that as such he was liable in solidum for the debts due by them.

The defender denied that he was indebted to the pursuer, and pleaded—“(1) The pursuer's averments are irrelevant and insufficient to support the conclusions of the action. (2) The action is incompetent, being brought against an individual partner for payment of alleged debts said to have been incurred by various firms of which he was a member, without the alleged debts being constituted against the firms. (3) All parties are not called.”

The Lord Ordinary ( Lee) on 16th June 1885 sustained the first and second pleas-in-law for the defender, and dismissed the action.

“ Opinion.—The present action concludes for payment of two sums of £61, 16s. and £7, 1s. 1d., alleged to be due to the pursuer by the three firms of Stark, Niven, & Milligan, Stark, Niven, Milligan, & Crawford, and Stark, Milligan, & Co. (of each of which the defender was a partner), and by the defender, in respect of various accounts incurred by these firms to the pursuer for law business done in Edinburgh on their behalf. It seems to be admitted that the pursuer was aware of the various changes in the constitution of the firms of which the defender was a partner during the period embraced in the accounts (1881, 1882, and 1883), and that he has had transactions with another partner (Mr Stark) regarding the same accounts. But the only partner called as defender in the present action is Mr Milligan. None of the firms of which the defender was a partner is called. The alleged debt is not constituted against any of them. It appears from the allegations to be due by the several firms only in parts according to the time of the employment. It is not said to be due by any of the firms in whole. But it is claimed in slump against the defender as having been a partner of all the firms.

It is pleaded inter alia—‘The action is incompetent, being brought against an individual partner for payment of alleged debts said to have been incurred by various firms, of which he was a member, without the alleged debts being constituted against the firms.’ And ‘(3) All parties are not called.’

The pursuer did not maintain before me that he could insist in the action without calling the other partners of the several firms; but he contended, on the authority of the case of Muir v. Collett ( 24 D. 1119), that it was unnecessary to constitute the alleged debt against any of the firms.

I think that the case of Muir v. Collett has no application here. It was the case of an action against a partner of a Bombay company which had been long dissolved. The ground of action was that the defender personally had made the contract in this country on behalf of the firm. The defender alone was subject to the jurisdiction. It was decided that the objection in that case was bad, because it was not possible, according to the law of the domicile of the company, to constitute the debt against the firm as a separate persona. The authority of the case of Reid & M'Call v. Douglas (June 11, 1814, F.C.) was distinctly recognised as binding in regard to cases where the debt can be constituted against the company.

In the present case the action relates to a debt or debts due by a firm in Glasgow. I suppose there is no doubt that such a company, which is not said to be bankrupt and finally dissolved, subsists to the effect of paying its debts, and suffering such debts to be constituted against it. And the grounds of action appear to me to illustrate the necessity of constituting the alleged debt against the firm which was the primary debtor. For it is not the case of a single account incurred by one firm. The claim is made up of a series of accounts incurred by a succession of firms, of which there were different partners, although the defender and another are said to have been partners in all.

In such a case I think that there is good ground for the plea in equity that the action cannot be maintained against an individual partner without constituting the debt against the company; and it appears to me that the judgment given in Muir v. Collett is entirely favourable to the plea in such a case.

I shall only add that in my view the calling of the other partners as defenders would in no way mend the pursuer's case. Some of the partners are interested in one part of the sum sued for, others in another. Only one other partner is said to be interested in the whole, and the pursuer's answer to statement 5 implies that he has been settled with. I am clearly of opinion that the present action cannot be allowed, because it is not in shape, even if the other partners were called, to enable the defender to plead any decree which may be obtained as fixing the amount for which he is entitled to claim relief against the other partners of the several firms.”

The pursuer reclaimed, and argued that the action should be sisted until a supplementary summons was brought calling all the partners of the firms which were dissolved. When a firm was dissolved then all the partners became correi debendi, and in order to constitute the debt it was enough to call all the partners of the dissolved firm—Clark on Partnership, ii. 676. When a firm was in existence it was necessary before suing any one of the partners to constitute the debt against the firm. But here that was impossible, because all the firms had ceased to exist, and therefore it would be sufficient to call all the partners of the dissolved firms— Muir v. Collett, June 17, 1862, 24 D. 1119; M'Tavish v Saltoun, Feb. 3, 1821, F.C.; Edinburgh and Glasgow Bank v. Ewan & others, Feb. 28, 1852, 14 D. 547; Geddes v. Hopkirk, June 2, 1827, 5 S. 697; Dewar v. Munnoch, Feb. 23, 1831, 9 S. 487; Bell v. Williamson, 1 Shaw's App. 220; Shand's Bract. 188; Mackay's Pract. i. 351.

The defenders argued that the action was incompetent as the debt had not been constituted against the firms, and that it should be dismissed, as was done in Reid & M'Call v. Douglas, June 11, 1814, F.C.