United Kingdom House of Lords Decisions

Lord Chancellor (Loreburn)—In this case the only question which your Lordships have to consider is whether the assignment of the 15th January 1904 from the trustee in the bankruptcy of Slobodinsky was operative to convey to the respondent the claim of Slobodinsky against the appellants under the agreement of March 1902. Now, what was that claim? In the first place it was for a sum already due as bonus, with regard to which no question is raised, In the next place it was for damages against the appellants for not carrying out their contract. Now, when the appellants disabled themselves from carrying out their contract Slobodinsky could have brought an action on the breach. He did nothing, but his property and rights became vested in the trustee in his bankruptcy. In my opinion, the contract, although unperformed, was nevertheless not annulled, so as to prevent any person entitled to sue on it from bringing his action for damages for the breach of it. Accordingly, looking at the words of the assignment of the 15th January 1904, I am of opinion that amongst other things assigned was this contract, and the right to sue upon it. That concludes the case. I am therefore of opinion that the judgment of the Court of Appeal was right and should be affirmed, and I move your Lordships accordingly.

Lord Davey—In my opinion the case is not free from difficulty, for the question is one of great nicety, but on the whole I think that the decision of the Court of Appeal should be upheld. I desire, however, to say that in my opinion the word “debts” no doubt means something recoverable by an action for debt, and nothing can be recovered in an action for debt except what is ascertained or can be ascertained. A claim for an amount which is uncertain, and cannot be adjusted in an account, cannot, I think, be justly called “a debt.” But, on the other hand, I confess that I think that the word “contract” carries it, and is sufficient for the respondent's purpose. Read with the context the word “contracts” includes the benefit of any contract. No doubt the appellants had not only broken their contract but had made it incapable of performance, so that there was no contract which anyone could ask them to perform, for the simple reason that there were no customers of the business, and the amount of anybody's claim would depend upon how many other customers there were, in order that his share might be ascertained. Therefore I think that in that sense the contract had ceased to exist, but no doubt there is a contract which is capable of being sued upon, and that, I think, is the important matter for the purposes of this case. Therefore what Slobodinsky had at the time when he became bankrupt, and what passed to the trustee in his bankruptcy, was a right of action to recover damages for breach of contract, which has become effectually vested in the respondent. The contract was clearly one which appertained to the business, and therefore I think that the assignment was enough to carry the benefit of it, or, in other words, the right of suing upon it. I agree in the motion which has been proprosed.

Lord James of Hereford—I have entertained considerable doubts during the course of the argument, but I do not think that they are sufficient to justify me in dissenting from the motion which has been proposed.

Lord Robertson—I agree entirely with the judgment of the Lord Chancellor.