Scottish Court of Session Decisions

Subject_1 DECISIONS of the LORDS OF COUNCIL AND SESSION, reported by SIR DAVID DALRYMPLE, LORD HAILES.
Subject_2 FRAUD -
Subject_3 Of one purchasing goods, knowing himself to be insolvent.

William Sandieman and Company
v.
Thomas Adair, Factor on the Sequestrated Estate of Gavin Kemp

Date: 15 December 1786

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[Faculty Collection, IX. 428; Dictionary, 4,947.

Eskgrove. It is too late to alter the rule established in the case of the Creditors of Cave. But here is a question of actual fraud, which would be good after three months as well as after three days. The giving a promissory-note is not inconsistent with the proposal of discounting. Kemp never meant to pay the price.

Hailes. This matter may be simplified in this way: Kemp knew, when he bargained with Sandieman, what we now know, that the goods were to have been received clandestinely, shipped in like manner for America, with the property fictitiously transferred to a bankrupt: supposing Kemp to have premised his commission, with this brief narrative, would Sandieman and Company have trusted him to the value of sixpence? There is deliberate cool fraud in every step of the business.

Braxfield. Joseph Cave bought the goods bona fide: but the Court found that he could not bona fide receive them within three days of his bankruptcy. I do not understand this: the maxim, that sales of goods delivered infra biduum vel triduum of the bankruptcy are null, proceeds on this principle, that the buyer, just about becoming bankrupt, knew the situation of his affairs, and so could not purchase what it was to be presumed he could not pay. Had the common creditors of Joseph Cave shown from his books that he was solvent infra biduum vel triduum, or a very short space, and that his bankruptcy was occasioned by the loss of ships, the perishing of goods, or emerging cautionary obligations,—I think that the judgment ought to have been different: in other words, that the presumption in such case is juris, but, not being de jure, may be redargued. I suppose that the bona fides of Joseph Cave consisted in this: that he knew not of his being a bankrupt, because he either did not keep regular books or did not consult them on every emergency.

President. In a case like this I should have been very sorry to have seen any difference of opinion. Kemp is a notorious bankrupt, and well merits punishment. I am glad, however, that none of the creditors have brought any complaint. [He ought not to have said so: a judge ought not to be glad to see a guilty man escape by the parsimony of creditors.]

On the 15th December 1786, “The Lords preferred Sandieman and Company to the goods in medio.”

Act. Cl. Boswell. Alt. H. Erskine. Reporter, Rockville.