Scottish Court of Session Decisions

This was a case of a special nature. The late William Hamilton, bank-agent at Hamilton, for the Paisley Union Bank, was removed from the agency in 1816. At this time he was liable to the Bank in arrears on bills discounted by him, to the amount of £3186. The late General Baillie of Carnbroe, and David Marshall of Neilsland, were Hamilton's cautioners under a bond for £3000. It appeared that the Bank, at their request, delayed, for a considerable period, to enforce the bond against them, in order that certain legal proceedings against the proper obligants on the bills might be taken, so as to reduce the amount of the arrears ultimately due by Hamilton. In following out these proceedings the Bank had allowed their name to be used. The law-agent during great part of these proceedings was Thomas Paterson, writer in Hamilton, who was expressly employed by the cautioners. He was necessarily in frequent communication with the Bank, respecting them.

In 1835 he raised an action against both the Bank and the cautioners for payment of a balance remaining due on his agency accounts. He libelled in the summons that “he was instructed by the said David Marshall and General Baillie, to take the charge of the recovery of the several outstanding debts and of several processes to which these had given rise;” that he obtained the requisite vouchers from the Bank, and corresponded with the Bank and their cashier, and one of the directors, and “the said Bank, and the said cashiers and director made no stipulation that they were not to be liable to the complainer for the expenses incurred, and they took the benefit of the complainer's agency therein.”

The bank denied that they had ever employed Paterson, or had derived any benefit from his agency, as the cautioners were liable to relieve them of the arrear on the outstanding bills, and they alone had employed Paterson, although the bank had lent their name for the accommodation of the cautioners, as was known to Paterson.

The Lord Ordinary “sustained the defence of the Paisley Bank, that under this summons, and in the circumstances of the case as applicable thereto, they are not liable for the accounts of which payment is now sought; assoilzied them, and decerned; and found them entitled to their expenses.”

Paterson reclaimed.