Scottish Court of Session Decisions

Subject_1 ARRESTMENT.
Subject_2 In whose hands Arrestments may be used.

Cross and Bogle,
v.
John Moir, Factor for the Trustee and Creditors of David Loch

Date: 21 February 1775
Case No. No 83.

Arrestment used in the hands of a judicial factor, appointed in consequence of a sequestration awarded pending a process of cessio, and prior to the bankrupt-act, 1772, found effectual.

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Arthur Miller, merchant in Edinburgh, having become bankrupt, and applied for the benefit of the Cessio, a sequestration was awarded upon an application of his creditors, and, among others, David Loch, merchant in Leith; and David Cross, merchant in Glasgow, and George Young and William Cheap, merchants in Edinburgh, were appointed factors by the Court in 1767; but Messrs Cross and Young, with the concurrence of the creditors, afterwards granted a commission to William Cheap, impowering him to act as sole factor.

Thereafter, a submission was entered into by Miller and his creditors, and David Loch among the rest, to Mr Ludovick Grant, for the purpose of determining all disputes, ranking the creditors upon the funds, and dividing the same. Mr Cheap, however, was still continued factor.

In the course of the submission, David Loch produced sundry vouchers of debt due to him by Arthur Miller; and Messrs Cross and Bogle produced the vouchers of a debt due to them by David Loch, with an arrestment used at their instance, 21st September 1770, in the hands of Mr Cheap, the factor for the creditors; and,

Upon the 29th October 1773, Mr Grant pronounced his decree-arbitral, by which he found that the share of Arthur Miller's effects, belonging to David Loch, was L. 82: 14: 9 Sterling; which sum he decerned the factor to pay, with legal interest from Whitsunday 1773; but found that the said David Loch must purge the foresaid arrestment before drawing the dividend, and reserved to Messrs Cross and Bogle to insist for making the sum furthcoming to them, as accords.

Some time previously to this, David Loch did also become bankrupt; and, in August 1773, a sequestration, in terms of the late statute, was awarded upon the application of his creditors; John Moir, writer to the signet, being appointed factor; and Mr John Hay being afterwards appointed trustee, he granted a factory in favour of Mr Moir.

Soon after Mr Grant had pronounced his decree-arbitral, a multiplepoinding was brought in the name of Cheap, the factor on Miller's sequestrate effects, in which Mr Loch, and the trustee for his creditors, Cross and Bogle, were called as defenders.

The argument maintained on the part of Mr Moir the factor, was, That the arrestment founded on by Cross and Bogie is inept, as having been used not in the hands of Arthur Miller, the debtor to the common debtor, but in the hands of Mr Cheap, the factor; and, consequently, could not be sustained in a competition of this nature.

Answered upon the part of Cross and Bogle:—They have no occasion to maintain that an arrestment in the hands of a factor, properly so called; that is, of a servant or other person, employed to collect the rents of a particular estate, or to receive the proceeds of a particular subject, is to every purpose equally effectual with an arrestment used in the hands of the constituent. The case here is, that, during the dependence of the cessio bonorum, the creditors applied to the Court, and obtained a sequestration of the effects of Arthur Miller. In consequence of this, he Was totally denuded of the whole moveables in his possession; every debt due, and every claim competent to him, were effectually vested in the person of the factor suggested by the creditors, and appointed by the Court. The effects were scarcely sufficient to pay half a crown in the pound to the creditors. Arthur Miller had no claim upon the effects; and it will not be said that he could have dismissed the factor, taken the management from him, vested it in another, or assumed it himself. An arrestment, therefore, in the hands of the bankrupt himself, were totally inept, and can answer no manner of purpose. unless, therefore, it can he maintained, that there is no method known in law by which the dividend due to a creditor can be affected, it must be admitted, that an arrestment is effectually used in the hands of the judicial factor named by the Court, as the only other person in whose hands an arrestment can be laid.

The pursuer here of the multiplepoinding is not a factor, or steward, or trustee, with powers limited to the rents of a particular estate, as in the case of Campbell contra Faichney, which is that quoted by Mr Erskine, B. 3. t. 6. 34. from Faculty Collection, 1. 44. No 74. p. 742. but he is a general commissioner named by this Court, with powers of the most comprehensive kind, extending to the whole effects of the bankrupt. And if, by the rules of law, as admitted on the other side, an arrestment be sustained in the hands of a comissioner named by a private person in contradistinction to a mere factor, it seems to be a clear point, that an arrestment must be equally effectual, when used in the hands of a factor named by the Court, with powers as comprehensive as those of any commissioner. Thus, in a case observed by Home, 4th July 1738, Lockwood contra Wilson, No 68. p. 736. an arrestment in the hands of the clerk of Court, with whom money had been consigned, was not only sustained, but it was preferred to an arrestment used in the hands of the consigner.

‘The Court adhered to the Lord Ordinary's interlocutor preferring Cross and Bogle, upon their interest produced, to the sums in the hands of the raiser of the multiplepoinding.’

Act. G. Fergusson. Alt. Al. Abercrombie. Clerk, Campbell. Wallace, No 161. p. 41.