Scottish Court of Session Decisions

Subject_1 PACTUM ILLICITUM.
Subject_2 SECT. XIV.

Turpis causa. - Sale to a White Bonnet at a Roup. - Obligation not to oppose reduction of a Verdict of Fatuity. - Transacting a Crime. - Transacting Church Penance. - British Subject purchasing a Captured British Ship. - Combination of Offerers at a Sale. - Combination to raise the rate of Wages. - Combination against receiving Money of a particular Coinage. - Pactum contra utilitatem.

James Grant of Delay
v.
George Smith

Date: 21 July 1758
Case No. No 94.

Sale of growing unripe corns, whether it transfers the property, so as to exclude the posterior diligence of other onerous creditors.

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James Grant of Delay, was creditor by bill for L. 476 Scots, payable at Whitsunday 1753, to one John Cuming, tenant in Tombea of Glenlivat.

Cuming, some time before sowing the crop of that year, had contracted various debts, and become insolvent.

The only subject of any value, for payment or satisfaction to his creditors, was the corn of that year's crop. Immediately after part of the corns were sown, and afterwards, in the months of June and July, while the corns were yet green, Cuming, being pressed by sundry of his creditors, who were about to poind his effects in virtue of their diligences, agreed with several of them, and made partial sales to them of so much of his growing corns in satisfaction of their debts; and soon after, the defender, George Smith, who was to succeed Cuming in his farm, and consequently needed the crop for stocking it, made a second bargain with these creditors, and bought from them the particular shares which each of them had got. These sales were publicly and openly made, and the corns delivered to the buyers by a sort of symbolical delivery, on the spot, and understood to be afterwards on the risk of the buyers.

The pursuer, thinking that sales of this nature could be no bar to lawful diligence, protested his bill, and raised horning thereon; and, on the 14th and 15th days of the month of September following, when the corns were quite ready for being cut down, he proceeded to poind them as they stood upon the ground. But in the execution of this poinding, he was stopped by the defender George Smith, who had purchased these corns from the creditors, and who had begun to cut them down.

The pursuer soon after brought a process before the Court against Smith for redress, and for having it found, that he had at least an interest pari passu with the rest of the creditors in these subjects, which had been carried off by partial sales from the common debtor in defraud of his debt, which was the most considerable one.

Pleaded for the pursuer, The principles of equity, the genius of our law, and the practice of the Court, unite to favour the claim of a just creditor, who has been cut out from sharing, in proportion with the rest, the only fund from which an insolvent person's debts can be paid. Our law has most justly restrained the voluntary and partial deeds of an insolvent debtor; and the Court has never failed to redress this sort of wrong and inequality, by bringing in all the creditors pari passu, where the preference arose from a total or considerable alienation made by the debtor, and the creditor aggrieved was not in mora to complain. It would be of very dangerous consequence, if such partial and premature sales were to be held good, and allowed to exclude other onerous creditors, seeing the bulk of the tenants in this country, when they become insolvent, have little or no other fund for payment of their debts but their crop upon the ground; and if they may lawfully and effectually dispose upon it before it is grown, or almost existing, upon pretence of paying particular debts, the greatest injustice would often be done. When corn is just sown, and perhaps until it is cut down and reaped, the right of property is complete in the debtor's person; yet there is no known or established course in law by which the just creditor can acquire or affect that right for security or payment of his debt: Shall then the partial deeds of the debtor transfer a right which the law cannot reach? If such sales to particular creditors are to be held good, a fortiori a sale of growing corns for ready money, to any friend or third party, knowing the debtor's insolvency, will transfer the property; and such purchaser will be secure: And thus the debtor wilfully to disappoint his creditors, may effectually convey the only subject of their payment, before it is possible for them to affect it. In the present case, there neither was nor could be any real or symbolical delivery to complete the sales; therefore the property remained with the debtor, and was lawfully affected by the pursuer's poinding; and, at any rate, as those sales could not be completed, nor the property transferred to the purchaser, till after they came to take possession of the corns, by reaping them, which was after the pursuer's diligence by horning and poinding; therefore, the sales are plainly reducible upon the act 1621.

Answered for the defender; The sales in question were publicly made, and not clandestinely gone about, by interposing persons, to give an unjust preference to particular creditors; some of Cuming's creditors having their diligences ready to poind his effects, which would have made them preferable to this pursuer, the corns were fairly sold to them in payment of their debts; and the sales were completed in every shape they were capable of, from the nature of the thing. The corns were delivered over to the buyers, and remained upon their risk, and servants were appointed by them to take care of them. That growing corns may be bought and sold, and the property transferred, as was done in the present case, is agreeable to the opinion of all our lawyers, and the universal practice over the whole country; and if these sales should be reduced and rendered ineffectual, a very common and necessary branch of commerce would be stopped, to the great detriment of the public. The pursuer, in this case, has the less reason to complain of these sales, which were openly made to onerous creditors, because, after these partial purchases, there remained upon Cuming's possession other corns and effects, more than sufficient to have paid the pursuer's debt, and which he could easily have poinded for that purpose, without interfering with what had been allotted to the other creditors.

“The Lords sustained the defences; and assoilzied.”

Act. Fra. Garden. Alt. Wal. Stuart. Fac. Col. No. 154. p. 274.