Stewart, Moir, and Muir v Brown
| Jurisdiction | Scotland |
| Judgment Date | 24 May 1871 |
| Date | 24 May 1871 |
| Docket Number | No. 134 |
| Court | Court of Session (Inner House - Second Division) |
Sheriff of Lanarkshire.
I.
Cautioner—Liberation—Bill—Giving time.—
THIS was an appeal from the Sheriff-court of Lanarkshire.
Brown, grocer, Glasgow, granted a letter of guarantee to Stewart, Moir, and Muir, muslin manufacturers there, in the following terms:—’156 Woodlands Road, 10th April 1869.—Messrs Stewart, Moir, and Muir.—I hereby become security to you for all goods supplied by you to Messrs J. Nelson Ramsay and Company, 11 West Nile Street, between the sum of twenty-five and seventy-five pounds sterling; that is to say, when their account exceeds twenty-five pounds I will be responsible for the difference between that and seventy-five pounds, you assuming the responsibility of the first twenty-five pounds.’ (Signed) ‘JOHN BROWN.’ Stewart, Moir, and Muir brought this action against Brown for the sum of £50 for goods supplied to Ramsay and Company from 20th April to 21st May 1869, amounting to £85, 7s. 7d., for which, to the extent of £50, they held Brown liable under the guarantee.
The defender, inter alia, pleaded;—(5) The pursuers took bills or promissory-notes from J. Nelson Ramsay and Company for the amount of the account in question, and discharged the said account; or otherwise, they, without the defender's knowledge or consent, gave to the said J. Nelson Ramsay and Company time and indulgence beyond the ordinary period of credit, and they, by one or other of these acts, freed and liberated the defender from his liability, if it ever existed.
In the course of a proof Moir, one of the pursuers, deponed:—’Before the guarantee we had limited the time within which Ramsay and Company should pay their accounts to one month from the 20th of each month, to which time the accounts were made up and rendered. That is the usual credit in the trade. If paid on the expiry of the month the discount was 2½ per cent. If within the month one per cent was added for “prompt payment.”‘
Macgregor, the pursuers” cashier, deponed:—’The terms of credit with J. N. Ramsay and Company were (as I was told by Mr A. Moir) “prompt,” which means accounts rendered up to the 20th of each month, paid on the first Tuesday or Friday (first cash day) of the following month. The discount, in case of payments not “prompt,” was 2½ per cent. A special arrangement was made with that firm, by which they got 4 per cent additional for prompt payment—making 6½ in all. That course of dealing was followed throughout the account, except that full discount of 6½ was allowed even when payments were not “prompt.” About 1st June 1869 I took to the bankrupt's place of business for acceptance the two bills exhibited by the witness Taylor. I cannot say whether I gave a receipt or discharged the accounts. It is likely that if I got a bill for payment of an account I would discharge it in the words “payment by bill.” The account should have been paid, in the ordinary course of dealing, on or about 1st June. A bill was taken because the debtor could not pay cash.’
And Taylor, clerk to the trustee on Ramsay and Company's estate, deponed:—’I exhibit two bills drawn by the pursuers on and accepted by the bankrupts, dated 1st June 1869, for £4.5 and £39, 11s. 7d. respectively, at one month's date.’
The Sheriff-substitute (Dickson) found that by taking the bills the pursuers had liberated the defender. The Sheriff (Glassford Bell) recalled that finding, and decerned against the defender.∗
The defender appealed to the Second Division.1
The pursuers referred to the cases cited below.2
At advising,—
Terms of a letter of guarantee which held to be a general guarantee against loss in a course of dealing, and therefore held that the cautioner was not liberated by the creditor taking a bill at one month from the debtor in payment of an account for goods furnished.
∗‘NOTE.—The...
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