Thomson & Balfour (A Firm) v Boag & Son [1935] ScotCS CSIH_5 (11 October 1935)

Thomson & Balfour (A Firm) v Boag & Son [1935] ScotCS CSIH_5 (11 October 1935)

The new partnership and Mr Bruce are not liable for the debts of the old firm because the partnership agreement expressly excluded such liability, Mr Bruce made a substantial capital contribution, and there was no express or implied assumption of liability for the old debts. Any confusion in the accounts was due to Mr Boag's conduct and not with Mr Bruce's consent or knowledge.

Citation
[1935] ScotCS CSIH_5
Parties
Pursuer: Thomson & Balfour (A Firm); Defender: Boag & Son; Defender: David Bruce; Pursuer: Francis Walkingshaw & Co.; Pursuer: Lawrie Brothers
Jurisdiction
Scotland
Judgment Date
11 October 1935
Procedural Posture
Civil / Appeal (reclaiming Motion) Before the First Division, Court of Session
Outcome
appeal allowed; defenders assoilzied except for admitted liability
Legal Topics
Liability of New Partners, Assumption of Debts, Partnership Agreements, Transfer of Business Assets, Presumption of Liability
Partnership Law Commercial Law Liability of New Partners Assumption of Debts Partnership Agreements Transfer of Business Assets Presumption of Liability

Case Brief

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Parties

Thomson & Balfour (A Firm)

Pursuer

Boag & Son

Defender

David Bruce

Defender

Francis Walkingshaw & Co.

Pursuer

Lawrie Brothers

Pursuer

Procedural Posture

Civil / Appeal (reclaiming Motion) Before the First Division, Court of Session

Legal Issues

  1. 1 Is a new partner or new partnership liable for debts of the old firm incurred prior to the new partner's entry?
  2. 2 Does the conduct of the partners or the manner of carrying on the business create an implied assumption of liability for old debts?

Ratio Decidendi

The new partnership and Mr Bruce are not liable for the debts of the old firm because the partnership agreement expressly excluded such liability, Mr Bruce made a substantial capital contribution, and there was no express or implied assumption of liability for the old debts. Any confusion in the accounts was due to Mr Boag's conduct and not with Mr Bruce's consent or knowledge.

Court Disposition

appeal allowed; defenders assoilzied except for admitted liability

Orders

  • Recall of Lord Ordinary's interlocutor
  • Decree for pursuers only to the extent of £6, 15s. 9d. (admitted liability)