Scottish Court of Session Decisions

B. & H. M'Guire, wholesale butter and egg merchants, South Wellington Street, Glasgow, raised an action of damages for alleged slander against Albert Robert Smith, export and produce merchant, Cavendish Quay, Bandon, County Cork, Ireland, and arrested funds due to the defender in the hands of another merchant in Glasgow for the purpose of founding jurisdiction.

The alleged slander complained of was contained in the following memorandum:—“From A. R. Smith, Cavendish Quay, Bandon, to B. & H. M'Guire, Glasgow, February 15th 1889. We are very sorry to have settled with you, as still you have the best of us. We should have preferred exposing to the public your swindling practices. We think it our duty to try and prevent others falling into your trap.”

In answer 1 the defender “admitted that in his capacity of manager to Edward Dartnell of No. 60 Grand Parade in the city of Cork, egg and seed merchant, and carrying on business at Bandon under the style of A. R. Smith,” he had done business with the pursuers.

The pursuers averred—“Arrestments to found jurisdiction have been used by the pursuers, and have arrested sums in Scotland, due to the defender, who is thus subject to the jurisdiction of the Scotch Courts. The statements in answer are denied.”

The defender answered—“Denied. Explained that the goods, the price of which had been arrested by the pursuers, did not belong to the defender, but to the said Edward Dartnell. The defender is merely the servant of the said Edward Dartnell, paid by a fixed salary and a share of profits. This state of relationship between the defender and the said Edward Dartnell has existed since July 1886. Any sums that have been arrested by the pursuers are monies belonging to the said Edward Dartnell, and not to the defender.”

The defender pleaded—“(1) No jurisdiction.”

The Lord Ordinary ( Wellwood) allowed to both parties a proof of their respective averments on the question of jurisdiction.

In the course of his evidence A. R. Smith admitted having written the letter complained of. The other facts established are sufficiently set forth in his Lordship's opinion.

The Lord Ordinary upon 17th July 1889 pronounced the following interlocutor “Finds that the arrestments used by the pursuers did not attach any sums due to the defender A. R. Smith as an individual: Therefore sustains the first plea-in-law for the defender, dismisses the action, and decerns: Finds the defender entitled to one-half of his expenses as taxed, &c.

“ Opinion.—This is an action of damages raised in consequence of a libellous letter said and proved to have been written by the defender A. R. Smith, and quoted in the third article of the condescendence. The defender being a domiciled Irishman, the pursuers used arrestments in the hands of certain parties indebted to ‘A. R. Smith, Cavendish Quay, Bandon.’ In his defences the defender averred that he carried on business under that, his own, name, not on his own account, but as manager to Edward Dartnell, of 60 Grand Parade, in the city of Cork; and that the sums arrested were due to Dartnell, and not to him, the defender.

A proof was allowed on the question of jurisdiction, and the result is, I think, that it is clearly proved that Dartnell was the sole proprietor of the business in question, and that the defender was merely his manager, entitled to £40 a year as salary, and ten per cent. on the profits. This being so, the sums arrested were due to Dartnell and not to the defender; and that, I think, is conclusive of the question of jurisdiction. There is no question here as to A. R. Smith's liability for the debts of the concern in respect of holding himself out as proprietor or partner; neither is there any question of the right of a debtor to the concern to plead compensation on a debt due to him by A. R. Smith as an individual. The only question is whether the sums arrested belong to A. R. Smith, and could be taken in execution for a personal debt due by him. I think they clearly could not, first, because they are the property of Dartnell; and secondly, because the letter complained of was not written by Dartnell, or with his authority, express or implied.

I therefore sustain the first plea-in-law

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for the defender, and dismiss the action; but as the confusion has been caused in a great measure by the defender himself, who, for his own convenience, at present carries on no less than three businesses in the name of ‘A. R. Smith,’ I have modified the expenses found due to him to one-half.”

The pursuers reclaimed, and argued—The Lord Ordinary had proceeded upon the assumption that the action was laid against an individual, whereas the action was against a person who might for all they could know be either an individual or a firm. They had proceeded against the only person of whom they had any cognisance, the person with whom they had done business, in whose name they had made out their cheques, who had discharged their accounts, who could sue them for the price of goods supplied, and who had slandered them. They had arrested funds due to the same person by another merchant. That was enough for their case. But if there was a partnership, whether the respondent was a partner or not he had held himself out as such, and consequently must be regarded as such so far as his liability to the reclaimers was concerned. That was well-settled law, and it was a legitimate deduction that the arrestment of funds due to him founded jurisdiction against the firm. A slander by a partner might be a company debt. It depended upon circumstances, but that question did not fall to be answered at this stage.

Argued for the respondent—A slander justified an action of damages against the person uttering it, but not against any firm of which he might be a partner: Here the action was against an individual. No funds of that individual had been arrested, but only funds belonging to another individual with whom the respondent was proved not to have been in partnership. Accordingly no jurisdiction had been established over him.

At advising—