Oastler v Dill, Smillie, & Wilson, Company
| Jurisdiction | Scotland |
| Judgment Date | 29 October 1886 |
| Docket Number | No. 5. |
| Date | 29 October 1886 |
| Court | Court of Session |
Lord Justice-Clerk, Lord Young, Lord Craighill, Lord Rutherfurd Clark.
Agent and Client—Liability of agent—Agent for both parties to a loan—Presumption.—
In an action brought by a client against a firm of law-agents for recovery of money invested through them on a bad security, it was proved that the agents acted for both parties, the borrowers being the brothers of the leading partner of the agents' firm. The client, a widow lady of middle age, handed the money, a sum of £400, to this partner, and he lent it at five per cent on the security of house property bought by the borrowers immediately before for £1350, and already burdened with a bond for £1000 and a feu-duty of £15. The pursuer averred and deponed at the proof that she had told her agent to lend her money on a first bond, and had given no further instructions; the agent, on the other hand, averred and deponed that he had arranged with a relative and adviser of the pursuer, since dead, before he met her, that this particular security should be taken, and that it was taken with her full approval and in knowledge of its being a postponed security. There was no other material evidence.
Held on the proof that the defender had been employed as agent for the pursuer, and that that agency was not limited, as the defender averred, and that, therefore, the security being such as no prudent agent should have taken for a client, the defender was liable for the loss.
Question (per Lord Justice-Clerk) whether the defender's allegation, even if proved, would have availed him.
Opinion (per Lord Craighill) that, the agency and receipt of the money being proved, the onus was upon the defender.
Observations (per Lord Justice-Clerk and Lord Craighill) on the impropriety of the same agent acting for both borrower and lender.
Mrs Beatsy Yates or Oastler, a widow lady of middle age, living in Glasgow, raised an action in March 1886 against the firm of Dill, Smillie, & Wilson, writers in Glasgow, Mr T. J. Smillie, the only surviving partner of the firm and the executor of Mr Wilson, who, with Mr Smillie, had carried on the firm's business as sole partners for some years. Mrs Oastler's summons concluded for a sum of £480, being a principal sum of £400 invested by her through the firm, and arrears of interest to the amount of £80. The principal sum she had in November 1874 placed in the hands of Mr Smillie, who acted for his firm throughout the transaction, and it was by him invested in a postponed bond at five per cent over house property in Braehead Street, Glasgow. This property was bought in November 1874 by George and Matthew Smillie, two brothers of the principal defender, at a sum of £1350. £350 of this only was paid, the balance being left as a first bond on the property. Besides this, the property was liable in a feu-duty of £15, 2s. Not having received interest for several years, Mrs Oastler raised this action for the principal and arrears of interest, offering to assign the bond on receiving payment.
She averred that she had given Mr Smillie ‘instructions to invest it in a first bond upon good heritable security.’ She further averred that she ‘did not learn till some considerable time afterwards that her money had been invested in the said second bond. She then, and frequently thereafter, complained to the defender Smillie about the transaction, but he put her off from time to time, stating that her money was all right, and that he would see she lost nothing.’
Defences were lodged for the firm and Mr Smillie. They denied the pursuer's averments, and averred that the firm had, before the purchase, got a valuation of the subjects at £1450 above the feu-duty. They further alleged that Mrs Oastler had consulted Mr Brownlee, her brother-in-law, as to investments. Mr Brownlee was a retired farmer, and was in the habit of advising her. He, it was averred, had called on the firm, and discussed several loan proposals. In particular, a proposal from the Smillies over the Braehead property was submitted to him, along with the valuation, and it was also explained to him how much had been paid for the property, and the amount of the first bond. The said George Brownlee was so satisfied that he accepted the loan for Mrs Oastler as an investment for her money, and he was to inform Mrs Oastler of the arrangements he had made for her.
It was also averred,—‘On the 7th of November Mrs Oastler called and stated that Mr Brownlee had informed her of the...
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