Bonar (Trustee of the Edinburgh and Leith Bank), - Appellant; William Macdonald and Others, - Respondents
| Jurisdiction | England & Wales |
| Judgment Date | 09 August 1850 |
| Date | 09 August 1850 |
| Court | House of Lords |
English Reports Citation: 10 E.R. 87
House of Lords
Mews' Dig. xi. 1212. S.C. 14 Jur. 1077; 7 Bell, 379. Considered and adopted in Pybus v. Gibb, 1856, 6 E. and B. 913. Explained in Skillett v. Fletcher, 1866-67, L.K. 1 C.P. 223; L.R. 2 C.P. 472.
Principal and Surety - Banker - Alteration of Agreement.
[226] BONAR (Trustee of the Edinburgh and Leith Bank),-Appellant; WILLIAM MACDONALD and Others,-Respondents [Feb. 28, 1849; August 9, 1850]. [Mews' Dig. xi. 1212. S.C. 14 Jur. 1077; 7 Bell, 379. Considered and adopted in Pybus v. Gibb, 1856, 6 E. and B. 913. Explained in SkiUett v. Fletcher, 1866-67, L.K. 1 C.P. 223 ; L.R. 2 C.P. 472.] Principal and Surety-Banker-Alteration of Agreement. A variance in the agreement to which a surety has subscribed, which variance has been made without the surety's knowledge or consent, and which may prejudice him, or amount to the substitution of a new agreement for a former one, will 87 Ill H.L.C., 227 BONAR V. MACDONALD [1850] discharge the surety, though the original agreement, notwithstanding such variance, may be that on which the liability is substantially incurred. A. became surety for B.'s conduct as a clerk in a bank. B. was subsequently appointed to a better situation in a branch of the same bank, and A. extended his suretyship to this new situation. B. afterwards, while remaining in the same situation, undertook, on having his salary raised, to become liable to one fourth of the losses on discounts. No communication of this new arrangement was made to A. B. allowed a customer considerably to overdraw his accounts, and thereby the bank lost a sum of money: Held, that the surety could not be called on to make good this loss, though it fell within the terms of the original agreement, as the fresh arrangement was the substitution of a new agreement for the former one, and A. was thereby discharged. This was an appeal against a judgment of the First Division of the Court of Si ssion, pronounced in a suit instituted against the respondents as securities for one David Baird, on a bond of security and guarantie given by them to the directors of the Edinburgh and Leith Bank In the month of January, 1839, Baird had obtained the appointment of teller in the bank, and on the 16th of that month the bond was executed. The bond described the parties to be David Baird for himself, and William Macdonald, Archibald Torrance, and [227] William Ballantyne as sureties for Baird, and declared " that we as cautioners, sureties, and full debtors for and with the said David Baird, bind and oblige ourselves, conjunctly and severally, and our respective heirs, executors and successors whomsoever, without the benefit of discussion,* that, so long as I, the said David Baird, shall continue to hold the aforesaid office of teller of the said Edinburgh and Leith Bank, in consequence of the. said election, or by annual re-election, or otherwise, I shall have no business of any kind, nor be connected in any shape with any trade, manufacture, or mercantile co-partnery, in any manner or way whatsoever, and that I shall carefully and diligently attend to the business of the said Edinburgh and Leith Bank, and faithfully discharge the duties of teller aforesaid, to the best of my skill and ability; and shall well, fully and truly account to the manager or to the directors of the said Edinburgh and Leith Bank for the time, for behoof of said Bank, for all sums of money, whether in specie or bank notes, bills, discounts, debentures, or other securities with which I shall be entrusted from time to time, or which shall come in any way into my [228] hands in the execution of the trust committed to me; and shall pay and deliver to the said manager or directors for the time, all sums of money belonging to the said bank in my custody, whenever required so to do; and whatever loss, damage, skaith, or expense the said bank shall happen to sustain or incur, by or through me, the said David Baird, teller aforesaid, I the said David Baird, as principal, and we, the said William Macdonald, William Ballantyne, and Archibald Torrance, as cautioners, sureties, and full debtors for and with the said David Baird, under the declaration after mentioned, do hereby bind and oblige ourselves, conjunctively and severally, and our respective foresaids to make good, refund, and pay to the said Edinburgh and Leith Bank, or to the manager thereof for the time, for the use of the said bank, and that immediately upon their sustaining or incurring the said loss, damage, skaith, or expense, with a fifth part more of penalty over and above the payment, and the legal interest of all such loss, damage, skaith or expense, from the time the same shall be incurred till payment thereof, declaring always as it is hereby specially provided and declared, that we, the said cautioners, are and * The effect of this phrase is thus described by Bell, " Dictionary of the Law of Scotland," tit. " Discussion: "-" Where a cautioner is bound simply as cautioner, and not conjunctly and severally with the principal debtor, he may insist that, before the creditor uses diligence against him, the principal debtor shall be discussed; that is, not merely that the debt shall be demanded, but that the creditor shall carry personal diligence...
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