TRANSFERENCE OF LIABILITY

Press, Volume LXXII, Issue 21907, 7 October 1936, Page 7

TRANSFERENCE OF LIABILITY

THREE PARTNERS SUED

A reserved judgment In favour of the defendants was given by Mr F. F. Reid. S.M., in the Magistrate’s Court yesterday, when Lewis Anderson Graham, executor of Mary Graham, deceased, proceeded against J. C. Graham, R. Wilson, arid W. Smellie, drapers, formerly trading as Graham. Wilson, and Smellie, for the sum of £SB 12s Bd, being money .placed on deposit with the defendants. The defendants had decided to form themselves into a limited liability company, and wrote to those people who had money deposited with them requesting that the liability of the company be accepted in lieu of their personal liability. The company subsequently went into liquidation. The vital point, said the magistrate, was what happened in a conference between the three defendants and the plaintiff. He accepted Smellie’s evidence as to what took place. This was corroborated by the subsequent acceptance of money from the company by the plaintiff.

There could be little doubt that plaintiff had only “Hobson’s choice” in the matter, but having regard to the financial position of the three defendants before the formation of the company, he made the only practical election open to him, and agreed to the debt being taken over by the company Judgment was accordingly entered for the defendants.