Scottish Court of Session Decisions

This is an action of reduction of a minute of reference, and an award following thereon. The defender David Jenkins is a writer in Kirkcudbright, and was law-agent for the late Adam Rankine, who incurred various business accounts to him. After Adam Rankine's death, which happened on 1st November 1862, his son and heir-at-law employed the pursuer, also a writer in Kirkcudbright, as his law-agent. In consequence of this employment the pursuer had various interviews with the defender in regard to the settlement

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of his accounts, and the transfer of Mr Rankine's title-deeds. And the pursuer averred—

Cond. 6. After several unsuccessful attempts to adjust the balance due, an agreement was ultimately come to between the pursuer, as acting for James Rankine on the one part, and the defender, David Jenkins, on the other, that, in consideration of the pursuer or his client paying to the said defender the sum of £50 to account of the balance due to the latter, and of the pursuer becoming bound, as cautioner for the said James Rankine, for payment to the defender of the remaining balance due to him, as it may be ascertained, a reference should be entered into between the said James Rankine and the pursuer, as his cautioner, on the one part, and the said defender, on the other, to Mr Anthony Mackenzie, writer in Kirkcudbright, as referee, to fix and ascertain the sum due.

Cond. 7. When the pursuer agreed with the said defender to become cautioner for James Rankine for payment to him of the balance that might be ascertained by Mr Anthony Mackenzie to be due to the defender, the defender fraudulently concealed from, at least did not explain to, the pursuer that he had any other or farther claims against the late Adam Rankine than those contained in his rendered accounts and states of debt, nor did he make any such explanation till after the reference had been entered into, and was in progress before the referee. The pursuer agreed to enter, and eventually did enter, into the reference as cautioner for James Rankine, solely on the understanding, induced by the defender's having fraudulently concealed from him, at least not having communicated to him, that he had any claims against the late Adam Rankine beyond what he had rendered; that the accounts which the defender had so rendered were alone to be the subject of reference, and that he was to become bound, as cautioner, only for such balance as might be ascertained to be due on those specific accounts

Cond. 8. Not only so, but on the 10th day of November 1863, being the day on which the minute of reference sought to be reduced was subscribed, the said defender exhibited to the pursuer his ledger, wherein were entered the originals or copies of the accounts, abstracts, and states which he had rendered to Mr Adam Rankine as before mentioned; and he pointed out to the pursuer the balance of £195, 5s. 10d. as what was claimed by him to be due, and the sum of £15 which had been paid to account of that balance by Mr Adam Rankine as already mentioned; and he fraudulently led the pursuer again to understand that the pursuer was to become cautioner for payment to him only of such balance as might be due on an adjustment of the accounts on which the balance before them was brought out, reduced to £180, 5s. 10d. by the payment of £15 to account of it by Adam Rankine as aforesaid.

Cond. 9. The pursuer accordingly, on 10th November 1863, made payment to the said defender of the sum of £50 to account of such balance as might be due on the foresaid accounts and states of debt, and on the faith of the representation contained in the said accounts and states, that the sums therein specified contained the defender's whole claims, the pursuer, on or about the same day, entered into the minute of reference which is the first document called for in the summons and sought to be reduced. In subscribing that minute of reference the defender did not reserve to himself the right to increase his claim by inserting new charges and making out new accounts after the death of his employer for business alleged to have been done for the deceased, and the pursuer understood that he was becoming cautioner, and intended to become cautioner, only for payment of such sum as might be ascertained by the referee to be due to the defender, Mr Jenkins, on an adjustment of the accounts which had been rendered by the said defender to Mr Adam Rankine, on which a balance of £195, 5s. 10d. was brought out, subject to deduction of the £15 paid by Adam Rankine to account as aforesaid.

Cond. 10. In so far as the said minute of reference in its terms binds the pursuer as cautioner for James Rankine for payment to the defender, David Jenkins, of anything further than the balance that should be ascertained to be due on an adjustment of the accounts and states which had been rendered to Adam Rankine as aforesaid, the pursuer's subscription thereto was obtained by fraudulent concealment on the part of the said defender of the extent of the claims for which he contemplated attempting to make the pursuer liable as cautioner; at least the pursuer was induced to subscribe the same under essential error, on his part, as to the amount of liability which he was thereby undertaking, induced by the defender's concealment or failure to communicate information (which in law he was bound to communicate) that he meant to claim, in the said reference, further sums, or a greater amount, than he claimed as due in the accounts which he had rendered to Adam Rankine.

The pursuer proposed the following issue:—

Whether the defender David Jenkins, by fraudulent concealment of claims by him against the defender James Rankine, induced the pursuer to become a party to the minute of reference, No. 29 of process as cautioner for the said James Rankine?

The Lord Ordinary (Barcaple) reported the case with the following

Note—The defender does not object to the form of the proposed issue, but he maintains that there are not relevant averments to entitle the pursuer to take it. His contention is, that owing to the alternative form of the statement in article 7 of the condescendence, the pursuer is not entitled to an issue on the first and higher averment of fraudulent concealment. It appears to the Lord Ordinary that there is a substantive averment of fraudulent concealment, separate from the lesser and alternative averment of non-communication, and that the pursuer is entitled to an issue in regard to the former, which, from the nature of the case, is alone relevant.

E. F. M.