Scottish Court of Session Decisions

Subject_1 SOCIETY.
Subject_2 SECT. VII.

Effect of the Insolvency of a Partner.

Paterson and Cochran his Creditor-arrester,
v.
Grant and Keith

Date: 12 July 1749
Case No. No. 23.

Insolvency of a partner does not exclude him from a proportion of the profits.

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Where a sale is made to a bankrupt, who fraudulently induced the seller to sell, the seller prevailing to be free of the bargain, the obligation on the buyer becomes also extinct. But where partners buy, though one of them happens to be at the time insolvent, they cannot get free of the bargain; and the property being vested in the whole partners, the insolvent partner cannot be deprived of his share of the profits; and all that the other partners can do, is to apply to the Judge Ordinary, in respect of their partner's bankruptcy or insolvency, to have his share exposed to sale.

And, accordingly, the Lords varied the interlocutor of an Ordinary, who had “Found it relevant to assoilzie Grant and Keith, partners with Paterson, in a purchase of goods, to them delivered, from accounting to Paterson for any part of the profits, that Paterson was insolvent at the date of the bargain;” and found Paterson and his creditor-arrester entitled to a third share of the free profits.

Fol. Dic. v. 4. p. 286. Kilkerran, (Bankrupt), No. 11. p. 56.