A cautioner in a suspension found not liable for the debt, when the charger's right had been set aside by reduction brought by one not a party to the suspension.
Click here to view a pdf copy of this documet : PDF Copy
A charge of horning having been used against the acceptors of a bill of exchange, they obtained suspension on this ground, That the persons in whose behalf the charge was given, were debtors to them to a much greater amount.
The original holder of the bill in question, Edward Cowan, instituted an action for setting aside the charger's right. After this process of reduction had been conjoined with the suspension, he insisted for a decreet, not only against the suspenders, but also against John Marshall, who had become their cautioner in the suspension.
In support of this demand, so far as regarded the cautioner, Edward Cowan
Pleaded: The purpose of introducing cautionary obligations in suspensions was, that the sums contained in the decreet under challenge, might be recovered, if ultimately found due. The obligation of the cautioner is therefore, by the modern usage, sustained to the same extent with that of the principal party; nor can the former be discharged while the latter remains bound. Erskine, book 3. tit. 3. § 71.; Act of Sederunt, 29th January 1650, Hamilton against Calder, No 24. p. 2091.; Act of Sederunt 23d November, 1717.
Answered: Where a suspender does not controvert the validity of the charger's claim, but only insists, as in multiple-poindings, that he shall pay with safety, his cautioner is justly found liable, though another party should, in the competition, be preferred to the charger. It is the true meaning of such an interposition, that upon the suspender's being warranted against future claims, the surety, in his default, shall make good the debt. In like manner, when during the pendency of a suspension, a third party is brought by arrestment or assignation into the place of the original charger, the benefit of the cautionary obligation, as accessorial to the right itself, will at the same time be transferred to the assignee or arrester.
The difference, however, between cases such as these and the present, is sufficiently obvious. Here, in the question between the original chargers and those who obtained the suspension, the plea of compensation urged by the latter was unquestionably relevant to free them from every claim. The same defence would have been equally effectual, in a question with the pursuer, if coming by assignation into the place of the original chargers; and it is only by means of a reduction, in which the charger's right is set aside, from circumstances entirely unknown when the suspension was obtained, that any thing can be demanded from the suspenders themselves. Agreeably, therefore, to the decisions quoted on the other side, in which the cautioner was held to be bound, not according to the words merely, but to the spirit of his engagement, his obligation in the present case must be completely dissolved. The state of the question, to which his interference was solely applicable, is now in every respect essentially altered and departed from. Fount. 5th July 1706, Macdougal, No 74. p. 2148.
The Lord Ordinary found, ‘That, in respect there was a relevant reason of suspension against the original chargers, the cautioner in the suspension must be free, although, in the final event of the conjoined processes of reduction and suspension, the pursuer should succeed in the reduction, and in consequence thereof should be entitled to a decreet finding the letters orderly proceeded.’
Upon advising a reclaiming petition, with answers, the Lords adhered to the judgment of the Lord Ordinary.
Lord Ordinary, Braxfield.Act. Maclaurin.Alt. Cullen.Clerk, Menxies.
Fol. Dic. v. 3. p. 121. Fac. Col. No 186. p. 291.
