Liquidator of the Lochee Sawmills Co., Ltd v. Stevenson & Johnston [1908] ScotLR 469 (08 February 1908)

Liquidator of the Lochee Sawmills Co., Ltd v. Stevenson & Johnston [1908] ScotLR 469 (08 February 1908)

The law agents' lien was not effectual because they held the title-deeds as agents for both the company and the secured creditors, and the secured creditors could have demanded delivery at any time. There was no surplus or reversion after satisfying the secured creditors, so the lien could not attach to any asset. The mere reservation of lien under section 115 did not entitle the law agents to preference over the general assets.

Citation
[1908] ScotLR 469
Parties
Petitioner: Liquidator of the Lochee Sawmills Company, Limited; Respondent: Stevenson & Johnston
Jurisdiction
Scotland
Judgment Date
08 February 1908
Procedural Posture
Liquidation Preference Dispute / Reclaiming Note (appeal) Against Lord Ordinary's Interlocutor
Outcome
Reclaiming note refused; interlocutor adhered to.
Legal Topics
Law Agent's Lien, Preferential Ranking in Liquidation, Secured Creditors' Rights, Companies Act 1862 Section 115
Insolvency Company Law Property Law Law Agent's Lien Preferential Ranking in Liquidation Secured Creditors' Rights Companies Act 1862 Section 115

Case Brief

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Parties

Liquidator of the Lochee Sawmills Company, Limited

Petitioner

Stevenson & Johnston

Respondent

Procedural Posture

Liquidation Preference Dispute / Reclaiming Note (appeal) Against Lord Ordinary's Interlocutor

Legal Issues

  1. 1 Whether law agents (Stevenson & Johnston) were entitled to a preferential ranking in the liquidation of the company by virtue of a reserved lien over title-deeds under Companies Act 1862, section 115.

Ratio Decidendi

The law agents' lien was not effectual because they held the title-deeds as agents for both the company and the secured creditors, and the secured creditors could have demanded delivery at any time. There was no surplus or reversion after satisfying the secured creditors, so the lien could not attach to any asset. The mere reservation of lien under section 115 did not entitle the law agents to preference over the general assets.

Court Disposition

Reclaiming note refused; interlocutor adhered to.

Orders

  • Refusal of the reclaiming note (appeal) by Stevenson & Johnston.
  • Adherence to the Lord Ordinary's interlocutor disallowing preference for the law agents' claim.