Scottish Court of Session Decisions

The summons in this case concluded that the defender should be “ordained to make payment to the pursuer of the sum of ¤100 sterling, being the amount contained in an I O U, or acknowledgment of debt granted by the defender, the said John R. Cuthbert, to and in favour of William Cuthbert, commission merchant and insurance agent in Greenock, dated the 3d day of august 1855; and in virtue of an assignation thereof by the said

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William Cuthbert, in favour of the pursuer, the said poor Ann Wilson or Richards, dated 15th April 1863, with interest on said sum, from said 3d day of August 1855 until payment.”

The defender pleaded, inter alia, that the pursuer had no title to sue. The assignation was not granted until the year 1863; but in 1858 the estates of William Cuthbert (the cedent), were sequestrated under the bankruptcy statute, and although in 1861 he had been discharged, this was done without payment of a composition, and a discharge so obtained had not the effect of reinvesting the bankrupt in his estate. Besides, the trustee had never been discharged, and the sequestration process was still in dependence.

The Lord Ordinary (Jerviswoode) pronounced the following interlocutor:—

“ Edinburgh, 1 st February 1866.—The Lord Ordinary having heard counsel and made avizandum, and considered the Closed Record, Productions, and whole Process, Finds that the I O U, founded on by the pursuer against the defender, is addressed by the latter to William Cuthbert, and that therefore the same could not be transferred to the pursuer by mere delivery thereof to her by the said William Cuthbert: Finds that the said William Cuthbert was sequestrated as a bankrupt on or about the 31st of May 1858, previous to the date of the assignation (No. 10 of process), granted by him on the 18th April 1863, in favour of the pursuer: Finds that, in these circumstances, the I O U, and any debt thereby acknowledged to be due to the said William Cuthbert by John R. Cuthbert, the granter thereof, had been carried by virtue of the sequestration to the trustee on the estate of the said William Cuthbert, and that the said assignation was and is, consequently, ineffectual as a title to the pursuer to insist as in right of the said I O U in the present action: Therefore sustains the first plea in law for the defender—dismisses the action and decerns: Finds the pursuer liable to the defender in the expenses of process, of which allows an account to be lodged, and remits the same to the auditor to tax ant to report.”

The pursuer reclaimed.

Couper, for her, argued:—1. The pursuer avers that this I O U was handed to her by the creditor in it long previous to his sequestration for an onerous cause. She is therefore entitled to a proof of the circumstances under which the transference took place. Such inquiries have been allowed in regard to deposit receipts and bank cheques. 2. When the formal assignation was granted in 1863, the sequestration was practically at an end; the bankrupt was discharged, and although the trustee was not, he intimated that he did not intend to sue for payment.

Pattison and Burnet, for the defender, replied:—An I O U not transferable by delivery, and parole proof on the subject is inadmissible. Accordingly, this action is expressly laid upon a written assignation; but the party who granted it had no power to do so. The debt had passed by the sequestration which was still in dependence. Although the trustee resigned and has since died, the Bankruptcy Act provides a mode of appointing a new trustee. But the defender is not found to take steps for that purpose.