Scottish Court of Session Decisions

Subject_1 SALE.
Subject_2 DIVISION II.

Sale of Moveables.
Subject_3 SECT. I.

Sale, when completed. - Price not stipulated. - Where the Buyer's faith is followed.

Hunter
v.
Chalmers and Co

Date: 4 January 1766
Case No. No 36.

In what cases is it understood that a factor employed to purchase goods can bind his constituent?

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George Chalmers and Co extensive dealers in the corn-trade, employed Philip Scott, who kept a grocery-shop in Berwick, to purchase corn for them in Berwickshire and Northumberland. In these counties, the rents being paid in money, the farmers must have ready money for their corn, in order to pay their rent. Chalmers and Co. accordingly took always care to lodge cash in the hands of Philip Scott, to enable him to pay ready money for all the corn they commissioned him to purchase, for which he was to have two and half per cent. Business was thus carried on for several years till Philip Scott became bankrupt indebted to the company, and indebted to several tenants in Berwickshire, from whom he purchased corn, without paying the price, somewhat above L. 1000. These tenants, in name of John Hunter, their assignee, insisted in a process against Chalmers and Co. for payment of this sum, upon the following medium, That Philip Scott was factor or agent for the defenders, who consequently are liable to pay the price of the corn purchased by Philip for their behoof.

It was admitted for the pursuer, that when a merchant here commissions wine from Bourdeaux, the factor there is understood to purchase the wine in his own name, because the vender knows nothing of the Scotch merchant, and would not trust him; for which reason, the Scotch merchant paying the price to his factor, is not liable to pay it a second time to the person who sold it to the factor. The present case is apposite. It was necessary that Scott should be empowered to bind the company his constituents; for he, an unknown person, had no credit. Therefore, in dubio, it must be presumed, that Scott purchased in name of the company, not in his own name; not to mention, that it would have been folly in him to bind himself for the price without necessity.

On the other hand, it was urged that in the present case it was a ready money commerce which required no trust; and, upon that plan, it was not necessary that Philip Scott should either bind himself or his constituents. He purchased from the farmers at a price prescribed by his constituents, and either did, or ought to have paid, ready money; and he was bound to deliver to his constituents the corn purchased upon his receiving the commission of two and a half per cent. To fortify this, it was observed, that in giving a commission to purchase goods, one especially that is to run on for years, is not rashly to be presum d, that the person commissioned would be trusted with powers to bind his constituents; because it is a most dangerous trust, such as no prudent man would give, if possible to be avoided. At that rate, the constituent may lie open for forty years to the price of all the goods purchased upon his account, though he has paid the money to his agent, or even though he has not received the goods.

Found no evidence in this case, that the defenders empowered Philip Scott to bind them for the price of the corns purchased by him; and upon that medium they were assoilzied.

Fol. Dic. v. 4. p. 250. Sel. Dec. No 236. p. 310.