Assets Co. Ltd v. Phillips' Trustees [1904] ScotLR 41_559 (28 May 1904)

Assets Co. Ltd v. Phillips' Trustees [1904] ScotLR 41_559 (28 May 1904)

The discharge granted to Phillips was invalid because he failed to disclose shares in the Scotia Shipping Company in his statement of assets, as required by the terms of the discharge and the Act. The obligation was to disclose all assets, regardless of perceived value; the liquidators, not the contributory, were entitled to judge value. The right to challenge such discharges was assigned to the Assets Company, giving them title to sue. The majority held that the omission invalidated the discharge and reduction should be granted.

Citation
[1904] ScotLR 41_559
Parties
Pursuer: Assets Company Limited; Defender: Phillips' Trustees
Jurisdiction
Scotland
Judgment Date
28 May 1904
Procedural Posture
Civil / Appeal From Lord Ordinary to Inner House, Then to Seven Judges
Outcome
interlocutor of Lord Ordinary recalled; decree of reduction pronounced in favour of pursuers
Legal Topics
Title to Sue, Assignation of Assets, Statutory Construction, Reduction of Discharge, Fraudulent Concealment, Liquidation, Damages
Company Law Banking Law Trusts and Estates Title to Sue Assignation of Assets Statutory Construction Reduction of Discharge Fraudulent Concealment +2 more

Case Brief

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Parties

Assets Company Limited

Pursuer

Phillips' Trustees

Defender

Procedural Posture

Civil / Appeal From Lord Ordinary to Inner House, Then to Seven Judges

Legal Issues

  1. 1 Whether the Assets Company Limited had title to sue for reduction of a discharge granted to a contributory by the liquidators of the City of Glasgow Bank.
  2. 2 Whether omission to disclose certain shares in a statement of assets constituted fraud or invalidated the discharge.
  3. 3 Whether the value or marketability of the omitted shares affected the obligation to disclose them.

Ratio Decidendi

The discharge granted to Phillips was invalid because he failed to disclose shares in the Scotia Shipping Company in his statement of assets, as required by the terms of the discharge and the Act. The obligation was to disclose all assets, regardless of perceived value; the liquidators, not the contributory, were entitled to judge value. The right to challenge such discharges was assigned to the Assets Company, giving them title to sue. The majority held that the omission invalidated the discharge and reduction should be granted.

Court Disposition

interlocutor of Lord Ordinary recalled; decree of reduction pronounced in favour of pursuers

Orders

  • Recall the interlocutor reclaimed against.
  • Reduce, decern, and declare in terms of the reductive conclusions of the summons.