Scottish Court of Session Decisions

In the first of these actions Wheatcroft & Turner who are wire and india rubber merchants in Derby, sued Hawthorns and Company, engineers in Leith, for the sum of £53, 8s., as the price of a quantity of india rubber goods which were sold and delivered to them by the pursuers on 23d September 1865. The defenders admitted the debt, but refused payment on the ground that they had been interpelled by an arrestment used in their hands against Thomas Turner, one of the individual partners of the pursuers' firm. This arrestment had proceeded on the dependence of an action of damages at the instance of M'Farlane & Son, wire merchants in Leith, against Turner, who had formerly been in their employment. The defenders averred that they were advised that it might be held that the said arrestment attached the share or interest of Turner in the sums sued for, and that they would not be in safety to make payment to the pursuers until the arrestment was withdrawn. By the law of England, an unincorporated partnership is not a distinct person, and cannot sue in the partnership name. Neither can it possess any property or funds, but what is called the property of the firm is the property of the partners composing it in the proportion of their respective shares in the copartnery concern. They therefore contended, in point of law, that the action was unnecessary, in respect (1) that they were and had been all along willing to make payment to the pursuers of the sum sued for, on the arrestment in their hands being withdrawn; (2) that they had and now again tendered payment of the proportion of the sum sued for effeiring to the partners of the pursuers' company other than Turner; and (3) that the action should be sisted till an action of multiplepoinding was brought to have the matter determined as among the whole parties interested. After lodging these defences in the action of constitution, Hawthorns & Company raised an action of multiplepoinding in which they called M'Farlane & Son and Wheatcroft & Turner as defenders. They maintained that in the circumstances which have been stated above there was double distress, and it was necessary and they were entitled to raise the multiplepoinding in which the rights and interests of all parties might be judicially determined. Defences and objections to the action were lodged by Wheat croft and Turner, in which they maintained that the fund in medio being due to them, and no arrestment having been laid against them in the hands of the raisers, there was no double distress nor any conflicting claim in reference to the fund or any part thereof, and that the action was unnecessary and incompetent. Hawthorns & Company moved to have the action of constitution sisted till the determination of the action of multiplepoinding, but this motion was refused by the Lord Ordinary. A record was thereupon made up in each action and both cases were debated together.

Fraser and Strachan argued for Wheatcroft and Turner, that their claims under these actions must be determined by the law of Scotland, and that there was no question of English law involved in the matter. It was a well-known and recognised rule of international law, that whatever the domicile of the parties or the origin of the right, the remedies and modes of proceeding must be determined by the law of the country where the action had to be enforced. They had nothing to do here with the constitution of English companies, or the respective rights and interests of the company and individual partners. These suits related to the enforcement or discharge of obligations to the company and fell to be determined by the lex fori. If it were held otherwise, no debt due to a foreign company could be recovered or discharged in this country without an inquiry as to the partnership laws of the country where the company was domiciled, and the individual rights of the various partners. The rights of Wheatcroft and Turner must therefore be dealt with in these actions on the same footing as if they were a Scotch company. It was settled by the law of

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Scotland, that a debt due to a company was not attached or in any way affected by an arrestment against an individual partner. (Ersk ., 3. 3. 24. Bell's Com., vol. 2. 612.) There was therefore no ground for the action of multiplepoinding. By the law of Scotland such an arrestment did not affect the company debt, and there was therefore no double distress, nor any ground for making the fund the subject of a multiplepoinding.

A. R. Clark and Maclean, for Hawthorns and Company maintained (1) that it was not clear that by Scotch law an arrestment against an individual partner did not attach company funds; (2) that it was a delicate question, into which they were not bound to enter, how far the law of England, as to the rights of partners and the status of a company, fell to be applied to the present case—this was a question for the claimants inter se; (3) that they were entitled to resist payment and raise the multiplepoinding if there were competing claims to the same fund, although one of these might appear to be much better founded than the others, and although only one claimant had done diligence; and (4) that they were not obliged as arrestees to litigate with any of the claimants, and were entitled to be kept free in paying from any risk of a second demand. Here, if they had paid to Wheatcroft and Turner, they were liable to be sued again by M'Farlane & Son. The effect of the arrestment was a question between M'Farlane & Son and Wheatcroft and Turner. In support of this argument they referred to Shand's Practice. vol. ii. 582–3, and cases there cited. Erskine, 4. 3. 23; Watson v. Crooks and Douglas, M. 9133; Lang v. Railton, 11th Feb. 1824, 2 S. 693; Sandilands v. Mercer, 30th May 1833, 11 S. 665.