Scottish Court of Session Decisions

This was an action at the instance of Mrs Elizabeth Crowe or Alexander, executrixdative qua relict of the late Alexander Alexander, M.B., C.M., medical practitioner at Pulteneytown, Wick, against John Alexander, M.D., Wick, sole surviving partner of her husband's late firm of J. & A. Alexander, medical practitioners, Wick, as such partner, and also as an individual. The action concluded for count and reckoning as to the profits due to the pursuer, as executrix, for the period between the last balance-sheet and division of profits and the dissolution of the firm by her husband's death, and for payment of the amount of such profits, or, in the event of failure to account, the sum of £185, 19s. 2d.

The pursuer averred, inter alia, that between 31st January, the date of the last balance-sheet, and 21st July, the date of the agreement after mentioned, certain sums due in respect of business done by the firm prior to the death of the deceased, which took place on 15th April 1894, were ingathered by the defender Dr Alexander, and that after deduction for expenses half of the balance, amounting to £185, 19s. 2d., was due to the pursuer.”

The defenders produced an agreement, dated 21st and 26th July 1894, between the pursuer as executrix, and Mr Samuel Elliot, M.D., Wick, who, prior to the death of Dr Alexander Alexander, had been salaried assistant of the firm of J. & A. Alexander, whereby she agreed to sell, and Dr Elliot agreed to purchase, “the deceased's whole right and interest in the practice carried on by the said firm, and now belonging to the first party as his executrix-dative qua relict, consisting of (first) the deceased's share, right, and interest in the horses, harness, machines, and others belonging to the said firm of J. & A. Alexander; (second) the deceased's share, right, and interest in the medical and surgical instruments and medical books belonging to the said firm; (third) the deceased's share, right, and interest in the book debts, including the goodwill of the business belonging to the said firm, all at the sum of four hundred and eighty-five pounds sterling,” upon the condition, inter alia, that the pursuer and the representatives of the deceased were to be freed and relieved by Dr Elliot of all debts and obligations due by the firm in any manner of way whatsoever.

With regard to this agreement the pursuer averred as follows:—“(Cond. 6) In respect of said agreement the pursuer lays no claim in the present action to any sum in consideration of the deceased's interests disposed of to Dr Elliot under the said agreement, and limits her claims to the deceased's share of the partnership funds actually recovered and in bonis of the firm prior to the date of the said agreement.”

The defender Dr John Alexander pleaded—“(1) No title to sue; and (2) All parties not called.”

Dr Elliot was thereafter allowed to sist himself as a defender, and lodged defences and pleaded, inter alia—“(2) No title to sue.”

On 26th February 1896 the Lord Ordinary having heard counsel in the Procedure Roll issued the following interlocutor:—“Sustains the first plea-in-law for the defender Dr Alexander, and the second plea-in-law for the defender Dr Elliot, and therefore assoilzies the defenders from the conclusions of the action, and decerns,” &c.

Opinion.—“The pursuer here is the widow of the late Dr Alexander Alexander of Wick, who died in April 1894. He was, it seems, for some years before his death, in partnership with his brother, the defender Dr John Alexander, and the compearing defender Dr Elliot was their assistant.

The pursuer concludes, as executrix of her husband, for an accounting for the profits of the firm or copartnery effeiring to the period between 31st January 1894, when there was a division of profits between the two brothers, and the 15th of April 1894, when the firm was dissolved by the death of the pursuer's husband. The defence is, or rather one defence is, that the pursuer has no title to sue, in respect that the whole interest of the deceased in the assets of the firm was assigned by the pursuer by a certain agreement of 21st July 1894 to the defender Dr Elliot.

Now, that being so, the question I have to decide is a question upon the construction of that agreement. It is on the one hand maintained that the agreement dealt merely with certain corporeal moveables belonging to the firm, with the goodwill of the firm, and with certain book debts which were outstanding at the date of the agreement of July 1894. The other view—the view of the defenders—is that the agreement covered the whole assets of the firm, and that in particular it covered all book debts, whether collected or uncollected, which had been outstanding at the date of the deceased's death, and whether these debts had been incurred prior to 31st January 1894, the date of the last division of profits, or between that date and 15th April 1894, when, as I have said, the partnership was dissolved. It appears that between January 1894 and the date of dissolution a number of book debts—that is to say, fees—due by patients were ingathered and put in bank; and it also appears that certain further collections were made by the surviving partner between the date of dissolution and the date of the agreement of July. And the point really in controversy is how far the book debts thus collected and placed in bank are to be dealt with as within the agreement. Now, I have had a good deal of difficulty about that matter. The agreement, I must say, does not seem to me to be very well expressed—it is, indeed, very loosely expressed—but after full consideration I have not seen my way to hold otherwise than that the agreement covers the whole assets of the firm, including the whole book debts, whether collected or uncollected, whether they remain payable by customers, or have been paid by them and lodged in bank. Of course so far as they were in that position they were not book debts in the popular

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sense, but debts due by the firm's bankers to the partners. Still, I think they must be held to have been book debts in the sense of the agreement.

That being so, the result is that I sustain the first plea-in-law for the defender Dr Alexander, and the second plea-in-law for Dr Elliot, and therefore assoilzie the defenders from the conclusions of the action with expenses.”

The pursuer reclaimed, and argued—The agreement applied only to the debts outstanding at its date, and not to sums in the coffers of the firm or in bank. For all that was assigned to Dr Elliot was “book debts,” and money already collected was not a book debt. A sum in the possession of a surviving partner of a dissolved firm was in possession of the firm, which still existed for winding-up purposes, and was not a debt due by him to the firm. A balance in bank was not a book debt— In re Stevens, Stevens v. Kelly, May 2, 1888, W.N., pp. 110 and 116. See also Official Receiver v. Tailby, Nov. 20, 1886, 18 QBD 25, per Lord Esher, M.R., at p. 29. A book debt was a debt on open account or current account—Bell's Comms., i. 347 (ed. M'L.). What was assigned to Dr Elliot was here particularly specified, and this specification did not include moneys collected. The maxims specialia derogant generalibus and enumeratio unius est exclusio alterius applied—Trayner's Latin Maxims, 230 and 182; Earl of Kintore v. Lord Inverury, April 16, 1863, 4 Macq. 520, per Lord Westbury, L.C., at p. 522; Ersk. Inst., iii., 4, 9. The doctrine relied on by the defenders applied only to mortis causa, and not to inter vivos conveyances. The pursuer's right to her husband's share of the moneys collected and not still owing at the date of the agreement had therefore not been assigned to Dr Elliot under the agreement, and she was entitled to an accounting from Dr Alexander with reference to them.

Argued for the defender Dr Elliot—The intention of the agreement was to convey to Dr Elliot the deceased's whole interest in the business and all his rights as against the old firm. The enumeration of the particular things of which the practice was said to consist did not derogate from the generality—M'Laren on Wills and Succession, 623, and cases there quoted. The specialia here were merely illustrative— Dean v. Gibson, February 26, 1867, L.R., 3 Eq. 713. The expression book debts must be read in view of the intention of the agreement, and so read it covered the book debts already collected as well as those still due. The pursuer's rights, as regards the moneys collected, had therefore been assigned by her to Dr Elliot and she was not entitled to an accounting.

Counsel for the defender Dr Alexander adopted the argument for the defender Dr Elliot.