John Hamilton, - Appellant; James Watson, - Respondent
| Jurisdiction | England & Wales |
| Judgment Date | 11 March 1845 |
| Date | 11 March 1845 |
| Court | House of Lords |
English Reports Citation: 8 E.R. 1339
House of Lords
Mews' Dig. xi. 1217, 1255. Discussed in Lee v. Jones, 1864, 17 C.B. N.S. 482; North British Insurance Co. v. Lloyd, 1854, 10 Exch. 528; Wythes v. Labouchere, 1858, 3 De G. and J. 609; Mackreth v. Walmesley, 1884, 51 L.T. 20. Commented on in Phillips v. Foxall, 1872, L.R. 7 Q.B. 673. See also Durham (Mayor of) v. Fowler, 1889, 22 Q.B.D. 394, 404, 421 et seq.; Caxton and Arrington Union v. Dew, 1899, 68 L.J. Q.B. 380.
Bond - Concealment - Surety - Pleading.
[109] JOHN HAMILTON,-Appellant; JAMES WATSON,-Respondent [March 11, 1845]. [Mews' Dig. xi. 1217, 1255. Discussed in Lee v. Jones, 1864, 17 C.B. N.S. 482 ; North British Insurance Co. v. Lloyd, 1854, 10 Exch. 528 ; Wythes v. Labouchere, 1858, 3 De G. and J. 609; Mackreth v. Walmesley, 1884, 51 L.T. 20. Commented on in Phillips v. Foxall, 1872, L.E. 7 Q.B. 673. See also Du.rham (Mayor of) v. Fowler, 1889, 22 Q.B.D. 394, 404, 421 et seq.; Caxton and Arrington Union v. Dew, 1899, 68 L.J. Q.B. 380.] Bond-Concealment-Surety-Pleading. A surety is not of necessity entitled to receive, without enquiry, from the party to whom he is about to bind himself, a full disclosure of all the circumstances of the dealings between the principal and that party. If he requires to know any particular matter, of which the party about to receive the security is informed, he must make it the subject of a distinct enquiry. An obligation to a banker by a third party to be responsible for a cash credit to be given to one of the banker's customers, is not'avoided by the fact, that, imme- 1339 XII CLAEK & FINNELLY, 110 HAMILTON V, WATSON [1845] diately after the execution of the obligation, the cash credit is employed to pay off an old debt due to the banker. If the surety intends to rely upon such a fact for his defence, as shewing that there was a previous agreement between the banker and the customer to deal with the credit in a particular manner, to which he, if he had known it, should not have consented, he must bring such a defence before the Court by putting it on the record. This case originated in a suspension of a charge upon a cash credit bond for 750, granted to the Glasgow and Ship Bank by the appellant, as cautioner or surety for the late Peter Elles, merchant in Glasgow. The following are the circumstances of the case:- In March, 1835, the late Peter Elles obtained a cash account for 750 from the firm of Carrick, Brown, and Co., carrying on the business of bankers in Glasgow, under the name of the Ship Bank. A bond was then granted by Elles and by his father, with two other cautioners or sureties, Alexander Dewar, now deceased, and David Anderson, manuf acturer*in Glasgow. The whole of the sum thus credited was drawn out by [110] Elles before the end of the month, and the only other entries in the account were those of the addition of interest at the close of the years 1835 and 1836. Carrick and Co., on the 29th December, 1835, wrote to Elles announcing the death of Mr. Alexander Dewar, one of the obligants, and requesting that the credit might either be paid up, or renewed with additional security. This demand for a settlement was repeatedly renewed, but without effect. In July, 1836, a junction was formed between the bank conducted by Carrick and Co., and the Glasgow Bank Company. By a contract then entered into between these parties, it was agreed, that the banking business and firm of the Ship Bank should, from and after the 1st July, 1836, merge in the business of the Glasgow Bank, and be thenceforth carried on under the style and firm of " the Glasgow and Ship Bank Company," or such other style and firm as they might afterwards choose to adopt. It was farther stipulated, that the proprietors of the Ship Bank should transfer and convey to the new company their whole establishment, and their whole property, securities, bills, and other obligations, with certain exceptions specified in the contract, at a certain valuation put thereon; and on the other hand, the Glasgow Company became bound to transfer and make over 200 shares of original stock, estimated to be worth 32,000 sterling to the partners of the Ship Bank, as part of the stipulated price and value of the subjects made over to them. There was also a stipulation in the contract, that, if the Glasgow Bank Company should decline to take over any of the bonds, bills, or other obligations due to the Ship Bank at the full value, the same should remain with Mr. Kowand or Mr. Galloway, as trustee for Carrick and Co., for the purpose of recovering the same, the amount of the said obligations, with interest, being to be accounted for to the Glasgow Bank. On the 12th Aug. 1836, the...
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