Fortune v Young
| Jurisdiction | Scotland |
| Judgment Date | 18 October 1917 |
| Docket Number | No. 1. |
| Date | 18 October 1917 |
| Court | Court of Session |
Lord Hunter, Lord Justice-Clerk, Lord Dundas, Lord Guthrie.
CautionerRepresentation as to creditLetter of guarantee subscribed by individual in name of his firmLiability of individualLetter not addressed to anyoneMercantile Law Amendment Act (Scotland), 1856 (19 and 20 Vict. cap. 60), sec. 6Partnership.
Robert Young, a partner of a firm known as James Tait & Co., appended the firm-name (without the authority of the firm) to a letter guaranteeing the financial standing of an applicant for the lease of a farm. This letter did not bear to be addressed to anyone, but Young knew of the application for the farm, and contemplated that the letter would be shown to the proprietor of the farm or his factor. In consequence of the letter the farm was let to the applicant, and at the sale of the outgoing tenant's crop and stock the factor, who as clerk of the roup had guaranteed payment of the price to the seller, in reliance on the letter, sold part of the crop and stock to the applicant.
The applicant having become bankrupt, and having failed to pay the price for the subjects sold, the factor, who had himself to make good the price, brought an action against Young, in which, founding on the letter, he sought payment of the amount of his loss.
Held (1) that, as the letter had been subscribed by the defender, although in the firm-name, it complied with the requirements as to signature of section 6 of the Mercantile Law Amendment Act (Scotland), 1856; (2) that the letter was effectual as a guarantee notwithstanding that it was not addressed to anyone; and (3) that, in the circumstances, the pursuer was entitled to found upon it; and decree granted against the defender.
Robinson v. National Bank of Scotland, 1916 S. C. (H. L.) 154, followed.
On 17th December 1915, George Robert Fortune, Colinsburgh, Fife, factor for A. J. Rintoul, proprietor of the farm of Lahill Craig, brought an action against Robert Young, builder, Penicuik, concluding for payment of the sum of 380, 8s. 4d., with interest, or alternatively of the sum of 450 with interest.
The pursuer averred, inter alia, that during the summer of 1914 he advertised the farm of Lahill Craig as being to let at Martinmas following. Among the inquirers was a Mr George Renton Fortune, Penicuik, to whom the farm was ultimately let. As the pursuer was not acquainted with the financial position of Mr Fortune, he asked him to satisfy him on this point, and Mr Fortune, in answer to this request, handed to the pursuer a letter in the following terms:Penicuik, October 19, 1914.The bearer, Mr Fortune, we have known for a long number of years, and have pleasure in testifying as to his good and straightforward character, and guarantee that his financial standing is all in order in accordance with his statement to the extent of from sixteen to eighteen hundred pounds stg. James Tait & Co. This letter was holograph of, and the signature of James Tait & Company was adhibited thereto by, the defender. The pursuer also averred that, in the circumstances which are set forth in the passage from the Lord Ordinary's opinion quoted below, he, acting on the faith of the guarantee in the letter, allowed Mr Fortune to become indebted to him in the sum first sued for, viz., 380, 8s. 4d., of which he had been unable to recover payment. The sum of 450 claimed under the alternative conclusion of the summons was, as the pursuer averred, the loss and damage sustained by him through acting on the faith of the guarantee in the letter, for which the defender was responsible in respect that the statements in the letter were false and fraudulent, or were made by the defender recklessly and without caring whether they were true or false.
The defender admitted that the letter was written and the signature adhibited by him, but averred that it was not intended as a guarantee, and that it was not addressed to or delivered by the defender to the pursuer. The defender also denied the pursuer's averments as to fraud and recklessness.
The pursuer pleaded, inter alia;(1) The defender having guaranteed payment of the said George Renton Fortune's account to the pursuer to the extent of 1600, decree should be pronounced in terms of the first alternative conclusion of the summons.
The defender pleaded, inter alia;(3) The pursuer has no title or interest to sue this action, and has no title to found upon the letter libelled. (5) The alleged letter of guarantee not being signed by the defender, et separatim not being addressed to the pursuer or delivered to him, the defender should be assoilzied.
On 10th March 1916 the Lord Ordinary (Hunter) allowed a proof before answer. The defender having reclaimed against this interlocutor, the Second Division, on 19th October 1916, adhered. Thereafter a proof was led in the action.
The material facts established at the proof are set forth in the following passage from the opinion of the Lord Ordinary:
This is an action to recover loss sustained by the pursuer through giving credit to a Mr George Renton Fortune on the faith of an alleged letter of guarantee issued by the defender. The pursuer acts as factor for Mr Rintoul of Lahill, Fifeshire, of which estate the farm Lahill Craig forms part. During the summer of 1914 the pursuer advertised the said farm to let at the term of Martinmas 1914. Among the inquirers was George Renton Fortune, Herbertshaw, Penicuik, to whom the said farm was ultimately let.
As the pursuer was not acquainted with the financial position of the said George Renton Fortune, he asked him to satisfy him on the point. The said George Renton Fortune accordingly approached the defender and obtained from him a letter in the following terms [His Lordship quoted the terms of the letter and continued]The defender, who wrote and signed the letter, is a partner of the firm of James Tait & Co.
On its face the letter does not bear to be addressed to anyone, but the defender quite frankly admitted that he granted the letter with a view to its being handed to the proprietor or factor of a farm in Fifeshire, about which George Renton Fortune was negotiating with a view to...
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Promontoria (ram) Limited Against John Moore
...reference to Waydale Limited v DHL Holdings (UK) Limited (No 2) 2001 SLT 224 per Lord Hamilton at paragraphs 22 and 23; Fortune v Young 1918 SC 1 and Royal Bank of Scotland v Brown 1982 SC 89. [11] Mr Anderson went on to submit that reading the terms of the Guarantee as a whole, a reasonabl......
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Waydale Limited V. Dhl Holdings (uk) Limited (no.2)
...The present position was to be contrasted with situations where a guarantee was not addressed to any particular person (Fortune v Young 1918 S.C. 1; Robinson v National Bank of Scotland 1916 S.C. (H.L.) 154.) In this case, while the opening sentence did not expressly state that the guarante......