Bank of Scotland v Henry Butcher & Co & Ors

Bank of Scotland v Henry Butcher & Co & Ors

The guarantee was binding on HB&Co because it was given in connection with partnership business, as required by section 5 of the Partnership Act 1890, and was an integral part of a validly adopted consultancy agreement. Even if the partnership was not bound, the individual partners who signed were bound by the express terms of clause 17. The alteration to the guarantee after execution was not prejudicial and thus did not invalidate the guarantee.

Parties
Claimant (respondent): Governor and Company of the Bank of Scotland; Defendants (appellants): Henry Butcher & Co and others (Colin Morley, Nicholas Schofield, Peter Harriman, Christopher Derry)
Jurisdiction
England and Wales
Judgment Date
13 February 2003
Procedural Posture
Civil Appeal / Appeal From High Court (chancery Division) to Court of Appeal
Outcome
Appeal dismissed
Legal Topics
Guarantees, Authority of Partners, Execution of Deeds, Material Alteration of Instruments
Commercial Law Partnership Law Guarantees Authority of Partners Execution of Deeds Material Alteration of Instruments

Case Brief

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Parties

Governor and Company of the Bank of Scotland

Claimant (respondent)

Henry Butcher & Co and others (Colin Morley, Nicholas Schofield, Peter Harriman, Christopher Derry)

Defendants (appellants)

Procedural Posture

Civil Appeal / Appeal From High Court (chancery Division) to Court of Appeal

Legal Issues

  1. 1 Is the partnership (HB&Co) bound by the guarantee?
  2. 2 If not, are the individual partners who signed the guarantee bound?
  3. 3 Does the alteration of the guarantee after execution invalidate it?

Ratio Decidendi

The guarantee was binding on HB&Co because it was given in connection with partnership business, as required by section 5 of the Partnership Act 1890, and was an integral part of a validly adopted consultancy agreement. Even if the partnership was not bound, the individual partners who signed were bound by the express terms of clause 17. The alteration to the guarantee after execution was not prejudicial and thus did not invalidate the guarantee.

Court Disposition

Appeal dismissed

Orders

  • Appellants to pay respondents’ costs of the appeal, subject to detailed assessment on the standard basis if not agreed