Effect of purchasing Goods by Persons who know themselves to be Insolvent.
M'Kay of Bighouse v. William Forsyth Merchant in Cromarty
Date: 20 January 1758 Case No. No 44.
Found in conformity with the above.
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To purchase goods in actu proximo of becoming bankrupt, without prospect or purpose to pay the price, is a gross cheat; which the court of equity in every country repairs by ordering restitution of the goods to the vender. The only thorny point is to ascertain the animus of the purchaser, and his intention to defraud the vender. In the case of Joseph Cave, No 41. p. 4936, the presumptive fraud was confined to three days before the cessio bonorum; but in that case Cave the purchaser was in good credit, till he called a meeting of his creditors in order to surrender his effects to them. There may, however, be other circumstances concurring with insolvency to enlarge this period. Gilbert Barclay merchant in Cromarty, was in labouring circumstances, and owed much more than he was worth, when he made a purchase of salmon from M'Kay of Bighouse; and, before the delivery, several of his creditors proceeded to diligence against him. A few days after delivery, he made over the salmon to William Forsyth, another merchant of the same town, in part payment of a debt due to Forsyth, who was in the knowledge that Barclay was in labouring circumstances, and that the price of the salmon was not paid. Diligence thickened more and more upon him, and he broke in ten days or a fortnight after the salmon were delivered to Forsyth. From these circumstances, the Court presumed an intention in Barclay to defraud Bighouse; and considering that Forsyth's purchase was not made bona fide, they found him liable to pay to Bighouse the value of the salmon.
