Pursuer John Grant was a creditor of John Taylor, who became insolvent and unable to repay Grant. Grant obtained two letters of horning against Taylor for his failure to repay. Grant learned that defender George Thomson, an innkeeper in Leith, was a debtor of Taylor. Grant used arrestments to bring an action against Thomson for the sum he owed to Taylor. Thomson had granted two bills payable to Taylor for the sum owed, which were then indorsed by Taylor to defender Alexander Ogilvie as clerk of the Edinburgh rope-work company. (Taylor owed money to this company for the purchase of ropes and sails.) The defenders argued that sums due by bill were not subject to arrestment. Grant conceded that this was true in the case of a bona fide indorsee. Grant maintained, however, that the bills were subject to arrestment where transactions were used to shield a debtor's assets from creditors. The defenders responded that the transactions at issue were bona fide and arms-length transactions.

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