Caldwell v. Hamilton [1918] ScotLR 678 (01 June 1918)

Caldwell v. Hamilton [1918] ScotLR 678 (01 June 1918)

The salary earned by the bankrupt under a continuing employment contract existing at the date of sequestration, so far as it exceeds a suitable aliment, forms part of the sequestrated estate and must be paid to the trustee for the benefit of creditors. The Bankruptcy (Scotland) Act 1913 and Scots common law entitle the trustee to claim such surplus income. The Lord Ordinary's contrary view, based on prior Outer House authority, is overruled.

Citation
[1918] ScotLR 678
Parties
Petitioner: James Caldwell; Trustee/petitioner: Henry Moncrieff Steele; Respondent: John Hamilton
Jurisdiction
Scotland
Judgment Date
01 June 1918
Procedural Posture
Bankruptcy/sequestration Petition / Appeal (reclaiming Motion) From Lord Ordinary to Inner House
Outcome
Lord Ordinary's interlocutor recalled; petition granted in part; bankrupt ordered to pay surplus salary to trustee.
Legal Topics
Sequestration of Estate, Salary of Bankrupt, Surplus Income, Aliment, Attachment of Earnings, Trustee Rights, Bankruptcy (scotland) Act 1913
Bankruptcy Insolvency Scots Law Sequestration of Estate Salary of Bankrupt Surplus Income Aliment Attachment of Earnings +2 more

Case Brief

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Parties

James Caldwell

Petitioner

Henry Moncrieff Steele

Trustee/petitioner

John Hamilton

Respondent

Procedural Posture

Bankruptcy/sequestration Petition / Appeal (reclaiming Motion) From Lord Ordinary to Inner House

Legal Issues

  1. 1 Whether the trustee in sequestration is entitled to claim a portion of the bankrupt's post-sequestration salary as part of the sequestrated estate.
  2. 2 Whether surplus income over suitable aliment must be paid to the trustee.
  3. 3 Whether salary earned under a continuing but terminable employment contract vests in the trustee.

Ratio Decidendi

The salary earned by the bankrupt under a continuing employment contract existing at the date of sequestration, so far as it exceeds a suitable aliment, forms part of the sequestrated estate and must be paid to the trustee for the benefit of creditors. The Bankruptcy (Scotland) Act 1913 and Scots common law entitle the trustee to claim such surplus income. The Lord Ordinary's contrary view, based on prior Outer House authority, is overruled.

Court Disposition

Lord Ordinary's interlocutor recalled; petition granted in part; bankrupt ordered to pay surplus salary to trustee.

Orders

  • Find that John Hamilton is in receipt of a salary of £500 per annum as employee of William Beardmore & Company, Glasgow.
  • Find that the cumulative amount of salary and incomes is in excess of suitable aliment by £150 per annum.