Irving v. Burns [1914] ScotLR 189 (17 December 1914)

Irving v. Burns [1914] ScotLR 189 (17 December 1914)

The Court held that the first three alleged representations by the defender fell within section 6 of the Mercantile Law Amendment Act (Scotland) 1856 and, not being in writing, were of no effect. The fourth representation was irrelevant as there was no averment of knowledge of falsity. On the warranty of authority claim, even if the defender lacked authority, the pursuer suffered no loss because the company was insolvent; thus, no damages were recoverable.

Citation
[1914] ScotLR 189
Parties
Pursuer: John Irving; Defender: Charles T. Burns
Jurisdiction
Scotland
Judgment Date
17 December 1914
Procedural Posture
Civil / Appeal From Sheriff Court to Court of Session Inner House, Second Division
Outcome
action dismissed
Legal Topics
Fraudulent Misrepresentation, Warranty of Authority, Liability of Agent, Mercantile Law Amendment Act (scotland) 1856, Company Director Qualification, Proof Requirements for Representations
Contract Law Company Law Agency Law Tort Law Fraudulent Misrepresentation Warranty of Authority Liability of Agent Mercantile Law Amendment Act (scotland) 1856 +2 more

Case Brief

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Parties

John Irving

Pursuer

Charles T. Burns

Defender

Procedural Posture

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

Legal Issues

  1. 1 Whether verbal representations by a company secretary regarding the company's financial position can found liability for damages in absence of written evidence under section 6 of the Mercantile Law Amendment Act (Scotland) 1856.
  2. 2 Whether an agent (secretary) is personally liable for breach of warranty of authority when the principal (company) is insolvent and the contract is not enforceable.

Ratio Decidendi

The Court held that the first three alleged representations by the defender fell within section 6 of the Mercantile Law Amendment Act (Scotland) 1856 and, not being in writing, were of no effect. The fourth representation was irrelevant as there was no averment of knowledge of falsity. On the warranty of authority claim, even if the defender lacked authority, the pursuer suffered no loss because the company was insolvent; thus, no damages were recoverable.

Court Disposition

action dismissed

Orders

  • Find that the representations alleged to have been made by the defender are of no effect unless made in writing and subscribed as required by statute.
  • Find that the averments regarding the directors providing security are irrelevant.