Pringle's Trustees v. Wright [1903] ScotLR 40_396 (25 February 1903)

Pringle's Trustees v. Wright [1903] ScotLR 40_396 (25 February 1903)

Payments made in cash by an insolvent debtor to creditors in discharge of debts duly constituted and resting owing, even to close relatives, are not challengeable as illegal preferences or gratuitous alienations under the relevant statutes or at common law, provided the debts were bona fide and the payments were not gratuitous.

Citation
[1903] ScotLR 40_396
Parties
Pursuer: James Alexander Robertson—Durham, Trustee on the sequestrated estates of Robert Pringle; Defender: Mrs Janet Tait Pringle or Wright and her husband; Defender: Christina Pringle; Defender: Mrs Catherine Pringle or Crouch and her husband; Defender: Agnes Pringle; Defender: Nellie Pringle
Jurisdiction
Scotland
Judgment Date
25 February 1903
Procedural Posture
Civil (bankruptcy) / Appeal (reclaiming Motion) From Lord Ordinary to Inner House
Outcome
defenders assoilzied (absolved); action dismissed; judgment for defenders
Legal Topics
Illegal Preferences, Cash Payment by Insolvent Debtor, Reduction of Payments, Gratuitous Alienation, Constitution of Debt, Remuneratory Donation
Bankruptcy Insolvency Trusts and Estates Illegal Preferences Cash Payment by Insolvent Debtor Reduction of Payments Gratuitous Alienation Constitution of Debt +1 more

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Parties

James Alexander Robertson—Durham, Trustee on the sequestrated estates of Robert Pringle

Pursuer

Mrs Janet Tait Pringle or Wright and her husband

Defender

Christina Pringle

Defender

Mrs Catherine Pringle or Crouch and her husband

Defender

Agnes Pringle

Defender

Nellie Pringle

Defender

Procedural Posture

Civil (bankruptcy) / Appeal (reclaiming Motion) From Lord Ordinary to Inner House

Legal Issues

  1. 1 Whether cash payments made by an insolvent debtor to his daughters shortly before sequestration are recoverable by the trustee as illegal preferences or gratuitous alienations under the Act 1621, cap. 18 and Act 1696, cap. 5.
  2. 2 Whether the payments constituted discharge of bona fide debts or were gratuitous/fraudulent.

Ratio Decidendi

Payments made in cash by an insolvent debtor to creditors in discharge of debts duly constituted and resting owing, even to close relatives, are not challengeable as illegal preferences or gratuitous alienations under the relevant statutes or at common law, provided the debts were bona fide and the payments were not gratuitous.

Court Disposition

defenders assoilzied (absolved); action dismissed; judgment for defenders

Orders

  • Court adhered to Lord Ordinary's interlocutor assoilzieing defenders from the conclusions of the action.
  • No recovery of sums paid to daughters; defenders entitled to retain payments.