Sutherland v. W. M. Low & Co., Ltd [1901] ScotLR 38_710 (19 June 1901)

Sutherland v. W. M. Low & Co., Ltd [1901] ScotLR 38_710 (19 June 1901)

The bond was reduced as against both the debtor and the creditor because the creditor, W. M. Low & Company, Limited, instructed and encouraged the debtor, Robert Thomson, to procure the pursuer's signature by misrepresentation and by actively dissuading him from consulting his legal adviser, taking advantage of the pursuer's facility. The creditor's conduct made them responsible for the objectionable manner in which the security was obtained, and justice required the pursuer to be restored to his prior position.

Citation
[1901] ScotLR 38_710
Parties
Pursuer: Benjamin Sutherland; Defender: W. M. Low & Company, Limited; Defender: Robert Thomson; Defender: Robert Hunter
Jurisdiction
Scotland
Judgment Date
19 June 1901
Procedural Posture
Civil / Appeal (reclaiming Note) From Lord Ordinary's Interlocutor
Outcome
appeal refused; interlocutor of Lord Ordinary adhered to
Legal Topics
Cautionary Obligation, Reduction of Deed, Fraud, Misrepresentation, Facility and Circumvention, Suretyship, Creditor Conduct
Contract Law Equity Commercial Law Cautionary Obligation Reduction of Deed Fraud Misrepresentation Facility and Circumvention +2 more

Case Brief

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Parties

Benjamin Sutherland

Pursuer

W. M. Low & Company, Limited

Defender

Robert Thomson

Defender

Robert Hunter

Defender

Procedural Posture

Civil / Appeal (reclaiming Note) From Lord Ordinary's Interlocutor

Legal Issues

  1. 1 Whether a cautionary bond procured by misrepresentation and facility can be reduced against both debtor and creditor
  2. 2 Whether the creditor is responsible for the debtor's misrepresentations to the cautioner when acting on the creditor's instructions
  3. 3 Whether the conduct of the creditor in discouraging legal advice to the cautioner invalidates the bond

Ratio Decidendi

The bond was reduced as against both the debtor and the creditor because the creditor, W. M. Low & Company, Limited, instructed and encouraged the debtor, Robert Thomson, to procure the pursuer's signature by misrepresentation and by actively dissuading him from consulting his legal adviser, taking advantage of the pursuer's facility. The creditor's conduct made them responsible for the objectionable manner in which the security was obtained, and justice required the pursuer to be restored to his prior position.

Court Disposition

appeal refused; interlocutor of Lord Ordinary adhered to

Orders

  • Reduction of the bond as far as it affects the pursuer
  • W. M. Low & Company, Limited, found liable in expenses to the pursuer