LEVICK & Ors v W CADELL, SONS, and COMPANY (Court of Session)

Levick became bankrupt, and was sequestrated on the 24th March 1823. Messrs Cadell and Company were at that time his creditors by two bills, amounting, with interest, to L.229. 4s. 5d. Long before his bankruptcy, they had done diligence upon one of their debts, and used arrestments in the hands of James and Alexander Cormack, two of Levick's debtors. These arrestments, having been laid on more than sixty days before bankruptcy, were effectual, and secured a preference to the arresters over the sums due by the arrestees.

Cadell and Company lodged a claim in Levick's sequestration for the sum of L.229. 4s. 5d. ‘reserving all legal claim for preference secured by arrestments in the hands of Mr Alexander Cormack, merchant, Louisburgh, and Mr James Cormack, builder, Wick.’

Bills for the composition of twelve shillings on the pound upon all the debts proved, and, amongst others, upon the full debt to Messrs Cadell, were granted by Levick and his cautioners, payable at six, twelve, eighteen, and twenty-four months.

The Lord Ordinary in the suspension pronounced the following interlocutor:—‘In respect it is stated, and not denied in the record , that the respondents stipulated, that besides getting the composition on their whole debt, they should farther be entitled to draw the funds secured by their preferable arrestments, and that this was openly agreed to by the creditors; finds the letters orderly proceeded, and decerns,’ &c.

The Court was unanimously of opinion, that the letter of the chargers agreeing to accept of the composition did not bear the meaning for which they now contended, and that it could only be held as a reservation of the legal rights which they had acquired by their arrestments, according to the plea now maintained by the suspenders. Their Lordships, accordingly, altered the interlocutor, and suspended the charge.