Scottish Court of Session Decisions

Subject_1 COMPENSATION - RETENTION.

Sir William Maxwell
v.
Creditors of Sir Godfrey M'Culloch

Date: 2 January 1739
Case No. No. 6.

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Sir William Maxwell being debtor to Sir Godfrey M'Culloch in 1683, became afterwards creditor to him in some debts wherein he had- been cautioner for Sir Godfrey, and had paid, and for which he had security in the liferent escheat by the donator's backbond in Exchequer, and therefore became creditor by other debts purchased, for which he had no other security than the other creditors; and in the competition the other creditors, in order to diminish his credit upon the escheat, having proponed compensation on the debts due by him to Sir Godfrey in 1683; Sir William proponed recompensation upon Sir Godfrey's debts last acquired by him, and which were not secured upon the liferent escheat. The Lord Ordinary first found that the compensation must operate betwixt those debts due by Sir William Maxwell in 1683, and such of Sir Godfrey's debts as thereafter came first into Sir William Maxwell's person; but having afterwards reported it, the Lords found that compensation being proponed against the debts, for which Sir William had security on the liferent escheat, he may recompence on any other debts in his person prior to the proponing the compensation; and upon a reclaiming bill, it appearing that Sir William had already proponed recompensation in part upon three debts secured on the escheat, which was sustained and decreet extracted, they found that that decreet must stand; but as to the balance remaining of the debts due by Sir William, they adhered to their former interlocutor. Vide 9th November, 1739, Forbes against Innes, voce Indefinite Payment.—N. B. The Lords thought a debtor of a bankrupt cannot compense on debts of the bankrupt acquired after the bankruptcy, but the point not being argued, they remitted it to the Ordinary. (See Dict. No. 7. p, 2550.)