Scottish Court of Session Decisions

The pursuer, a builder in Glasgow, contracted in 1862 with John Steven Harkness, a joiner there, to execute the mason, brick, and digger work of three houses which Harkness intended to erect in Anderston of Glasgow. By letter dated 18th July 1862, Harkness bound himself to pay to Rennie certain specified instalments of the contract price (amounting together to £600 for each house), “and the balance when the work is completed.” The late Mr James Smith, architect in Glasgow, appended to the said letter the following obligation:—“Mr John

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Rennie.—Dear Sir—I hereby agree to see you paid the above instalments.—I am, Dear Sir, yours respectfully, James Smith.” Founding upon this obligation, the pursuer now sues Mr Smith's trustees for a balance remaining due by Harkness to him (after deducting £1200 paid to acount) of £241, 9s. 6 1 2d. One of the three tenements was not erected by the pursuer, except to a very small extent, and the balance now sued for includes the expense of the work which had been performed on the third tenement, in regard to which the first instalment never became due. The £1200 paid were the six instalments payable in respect of the other two tenements.

The defenders pleaded, inter alia, that even if the defenders should be held bound by the said letter of guarantee, it imported a guarantee for instalments only and not for the balance.

The Lord Ordinary (Jerviswoode) repelled this plea. He thought that the obligation, according to its fair construction, imported a liability for the balance as well as for the payments which are specially designated as “instalments;” and he referred to Bell's Principles (sec. 251), where it is said that “cautionary obligations are very strictly interpreted, though not so literally as to evade the true and fair construction of the engagement.” The defenders reclaimed, and the Court to-day unanimously altered the Lord Ordinary's interlocutor.