Smart & Co. v. Stewart and Another [1909] ScotLR 8 (20 October 1909)

Smart & Co. v. Stewart and Another [1909] ScotLR 8 (20 October 1909)

The pursuer's averments, if proved, are relevant to support a claim for restoration of the appropriated estate or payment of the debt. The Lord Ordinary erred in dismissing the action without allowing proof. The authority of Crawford v. Black and Others supports the pursuer's right to proceed. Proof before answer is appropriate to ascertain the facts.

Citation
[1909] ScotLR 8
Parties
Pursuer: J. Smart & Company; Defender: George D. Stewart; Trustee (called for Interest, No Defences): A. L. Kennaway, W.S.
Jurisdiction
Scotland
Judgment Date
20 October 1909
Procedural Posture
Civil (action by Creditor for Restoration of Estate or Payment of Debt) / Reclaiming Motion (appeal) Against Dismissal at First Instance; Interlocutor Recalled and Proof Before Answer Allowed
Outcome
Interlocutor of Lord Ordinary recalled; proof before answer allowed; case remitted for further proceedings.
Legal Topics
Illegal Preference, Creditor Remedies, Appropriation of Debtor's Estate, Competency of Action by Creditor, Relevancy of Averments
Bankruptcy Insolvency Commercial Law Illegal Preference Creditor Remedies Appropriation of Debtor's Estate Competency of Action by Creditor Relevancy of Averments

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Parties

J. Smart & Company

Pursuer

George D. Stewart

Defender

A. L. Kennaway, W.S.

Trustee (called for Interest, No Defences)

Procedural Posture

Civil (action by Creditor for Restoration of Estate or Payment of Debt) / Reclaiming Motion (appeal) Against Dismissal at First Instance; Interlocutor Recalled and Proof Before Answer Allowed

Legal Issues

  1. 1 Whether a creditor of an insolvent firm can maintain an action against another creditor who appropriated the debtor's business and goodwill for restoration or payment of debt.
  2. 2 Whether the pursuer's averments are relevant and sufficient to allow proof before answer.

Ratio Decidendi

The pursuer's averments, if proved, are relevant to support a claim for restoration of the appropriated estate or payment of the debt. The Lord Ordinary erred in dismissing the action without allowing proof. The authority of Crawford v. Black and Others supports the pursuer's right to proceed. Proof before answer is appropriate to ascertain the facts.

Court Disposition

Interlocutor of Lord Ordinary recalled; proof before answer allowed; case remitted for further proceedings.

Orders

  • Recall of Lord Ordinary's interlocutor dismissing the action.
  • Remit to allow proof before answer.