Marshall & Co. v. Pennycook [1907] ScotLR 227 (29 November 1907)

Marshall & Co. v. Pennycook [1907] ScotLR 227 (29 November 1907)

A co-cautioner who intervenes to complete a contract upon the principal's default, with the creditor's consent and in the interests of all cautioners, is entitled to recover from the other co-cautioner a proportionate share of the loss, including reasonable supervision fees, provided the intervention minimized loss and the conditions for retention of certified sums as security did not arise under the contract.

Citation
[1907] ScotLR 227
Parties
Pursuer: James Marshall & Company and James Marshall; Defender: James Pennycook
Jurisdiction
Scotland
Judgment Date
29 November 1907
Procedural Posture
Civil Appeal / Appeal From Sheriff Court to Court of Session Inner House Second Division
Outcome
appeal dismissed; interlocutor of the Sheriff affirmed
Legal Topics
Co Cautioners' Contribution, Completion of Contract by Cautioner, Release of Security Funds, Supervision Fees, Liability for Loss in Completion
Contract Law Suretyship Construction Law Co Cautioners' Contribution Completion of Contract by Cautioner Release of Security Funds Supervision Fees Liability for Loss in Completion

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Parties

James Marshall & Company and James Marshall

Pursuer

James Pennycook

Defender

Procedural Posture

Civil Appeal / Appeal From Sheriff Court to Court of Session Inner House Second Division

Legal Issues

  1. 1 Is a co-cautioner entitled to recover contribution from another co-cautioner after intervening to complete a contract on the principal's default?
  2. 2 Does payment of certified sums to third parties with cautioner's consent release the other co-cautioner from liability?
  3. 3 Is a cautioner entitled to charge reasonable fees for personal supervision in the calculation of loss?

Ratio Decidendi

A co-cautioner who intervenes to complete a contract upon the principal's default, with the creditor's consent and in the interests of all cautioners, is entitled to recover from the other co-cautioner a proportionate share of the loss, including reasonable supervision fees, provided the intervention minimized loss and the conditions for retention of certified sums as security did not arise under the contract.

Court Disposition

appeal dismissed; interlocutor of the Sheriff affirmed

Orders

  • Defender to pay pursuer £93, 14s. 8d. as half the loss incurred in completing the contract, including reasonable supervision fees.