Laird&Son v. Bank of Scotland and Others [1910] ScotLR 794 (15 June 1910)

Laird&Son v. Bank of Scotland and Others [1910] ScotLR 794 (15 June 1910)

Fraser and the Bank of Scotland, as holders of delivery orders and bills of lading for specifically identified timber, acquired good title in good faith and for value, valid against unpaid sellers and liquidators, despite the underlying contract being induced by fraud. Delivery orders granted in further security of prior debt within sixty days of insolvency are invalid under Act 1696, c. 5. Security rights require specific identification of goods prior to insolvency to be effective.

Citation
[1910] ScotLR 794
Parties
Pursuers and Nominal Raisers: John Laird & Son; Claimants (unpaid Sellers, Reclaimers): Price & Pierce, Limited; Purchasers (liquidators Also Claimants): Buchanan & French, Limited; Claimant (lender, Respondent): G. L. Fraser; Claimant (rider on Fraser's Claim, Respondent): Bank of Scotland; Claimants (reclaimers): T. & R. Duncanson
Jurisdiction
Scotland
Judgment Date
15 June 1910
Procedural Posture
Multiplepoinding and Exoneration / Inner House, First Division, Reclaiming Notes
Outcome
Fraser's claim and the Bank of Scotland's rider claim sustained and preferred to proceeds of identified timber; Price & Pierce preferred to balance; Duncanson's claim repelled; Bank's separate claim repelled.
Legal Topics
Fraudulent Preference, Bills of Lading, Security Rights, Rescission for Fraud, Identification of Goods, Good Faith Acquisition, Act 1696, C. 5
Bankruptcy Commercial Law Property Law Fraudulent Preference Bills of Lading Security Rights Rescission for Fraud Identification of Goods +2 more

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Parties

John Laird & Son

Pursuers and Nominal Raisers

Price & Pierce, Limited

Claimants (unpaid Sellers, Reclaimers)

Buchanan & French, Limited

Purchasers (liquidators Also Claimants)

G. L. Fraser

Claimant (lender, Respondent)

Bank of Scotland

Claimant (rider on Fraser's Claim, Respondent)

T. & R. Duncanson

Claimants (reclaimers)

Procedural Posture

Multiplepoinding and Exoneration / Inner House, First Division, Reclaiming Notes

Legal Issues

  1. 1 Whether third parties acquired good title to timber purchased under a contract induced by fraud
  2. 2 Whether delivery orders and bills of lading constituted valid security rights against unpaid sellers and liquidators
  3. 3 Whether delivery orders granted within sixty days of insolvency are invalid under Act 1696, c. 5

Ratio Decidendi

Fraser and the Bank of Scotland, as holders of delivery orders and bills of lading for specifically identified timber, acquired good title in good faith and for value, valid against unpaid sellers and liquidators, despite the underlying contract being induced by fraud. Delivery orders granted in further security of prior debt within sixty days of insolvency are invalid under Act 1696, c. 5. Security rights require specific identification of goods prior to insolvency to be effective.

Court Disposition

Fraser's claim and the Bank of Scotland's rider claim sustained and preferred to proceeds of identified timber; Price & Pierce preferred to balance; Duncanson's claim repelled; Bank's separate claim repelled.

Orders

  • Fraser and Bank of Scotland ranked and preferred to proceeds of 1166 logs and 416 logs marked 17 F, after deduction of raisers' expenses.
  • Price & Pierce ranked and preferred to balance of fund after deduction.