Robb v. Gow Brothers & Gemmell [1905] ScotLR 43_120 (17 November 1905)

Robb v. Gow Brothers & Gemmell [1905] ScotLR 43_120 (17 November 1905)

The stockbrokers were not liable for the losses caused by their clerk's fraud because the fraud was not committed within the scope of his employment or for the benefit of the firm. The pursuer's delay and negligence in not demanding the certificates and in using unsafe payment methods (bearer cheques) precluded recovery. The contractual obligation to deliver certificates was not breached as the pursuer left them in the office by choice, and payment was not proved to have been made to the firm.

Citation
[1905] ScotLR 43_120
Parties
Pursuer: Andrew Robb; Defenders: Gow Brothers & Gemmell
Jurisdiction
Scotland
Judgment Date
17 November 1905
Procedural Posture
Civil / Appeal (reclaiming Motion) From Lord Ordinary to Inner House
Outcome
Appeal refused; judgment for defenders; pursuer's claim dismissed.
Legal Topics
Stockbroker Liability, Principal and Agent, Fraud by Employee, Negligence, Breach of Contract, Payment by Cheque, Bearer Instruments, Limitation and Delay
Contract Law Agency Law Tort Law Commercial Law Stockbroker Liability Principal and Agent Fraud by Employee Negligence +4 more

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Parties

Andrew Robb

Pursuer

Gow Brothers & Gemmell

Defenders

Procedural Posture

Civil / Appeal (reclaiming Motion) From Lord Ordinary to Inner House

Legal Issues

  1. 1 Are stockbrokers liable for losses caused by the fraudulent acts of their accredited clerk in misappropriating share certificates and proceeds?
  2. 2 Does failure to deliver share certificates constitute breach of contract where the client left them in the broker's office?
  3. 3 Is payment by bearer cheque to a clerk or by post sufficient to discharge the client's obligation to pay the broker?

Ratio Decidendi

The stockbrokers were not liable for the losses caused by their clerk's fraud because the fraud was not committed within the scope of his employment or for the benefit of the firm. The pursuer's delay and negligence in not demanding the certificates and in using unsafe payment methods (bearer cheques) precluded recovery. The contractual obligation to deliver certificates was not breached as the pursuer left them in the office by choice, and payment was not proved to have been made to the firm.

Court Disposition

Appeal refused; judgment for defenders; pursuer's claim dismissed.

Orders

  • Adherence to Lord Ordinary's interlocutor assoilzieing (absolving) defenders from conclusions of the summons.