Guarantee – Relief – Arrestment – Trust – Proof – Oath of Bankrupt.- Two parties became guarantee for a company, on the latter depositing bills due to them in their hands as a security. This was done, and a list of the bills drawn out and handed over, and a receipt granted by the guarantees. They were immediately delivered to one of the partners of the company, who discounted and used some of them for company purposes. Held, on failure of the company, that the guarantees, though they had thus parted with possession, were to be preferred to an arresting creditor. The oath of one of the bankrupts of the company allowed to be taken to prove that he had the bills returned to him, not for behoof of the company, but in trust for the guarantees.
[1776] UKHL 2 – Paton – 387
Bailii
Scotland
Contract
Updated: 13 January 2022; Ref: scu.561839