Scottish Court of Session Decisions

Lord Deas concurred.

Lord Mure—I concur in the result. I think the ground your Lordships have assumed with reference to this discharge—a separate ground from the case of Rose v. Spaven, and on which the Lord Ordinary went in disposing of the case—is well founded, and that the pursuer is precluded from recovering the £450 by having come to an agreement without taking the Assurance Company with him.

As to the other matter, it was argued that the case of Rose v. Spaven did not apply to this case. There are certain distinctions in matters of fact between the two cases, but substantially it appears to me that this was a thing done by Renton on the same lines as in Rose v. Spaven, and the evidence on which the Court proceeded being very much the same as here, I think the defenders are entitled to prevail. I think the evidence of Dickison just shows this, that he speculated with Renton in other matters, and that he put his whole affairs into his hands, signed the bond, and allowed Renton without inquiry to apply the money in any way he thought fit. He thus placed Renton in a position to do as he did, and therefore I am quite satisfied that the pursuer has no case against the defenders.

Lord Shand—Though this action concludes for reduction of a security for £1000, it has been explained that it is insisted in only for the purpose of recovering £450; for admittedly the pursuer received the benefit of a security for the £1000 he advanced, and would have had the benefit of the security for the entire sum had he not become involved in another action relating to it, and paid £450 for a settlement. But taking it so, I think there are three grounds of defence, each of which separately forms a sufficient answer to the claim.

In the first place, it is, I think, proved that Renton had the authority of the pursuer to borrow £1000 from the company, and as the money was lent, the pursuer must bear the consequences. There was a meeting at which the pursuer expressly told Renton he might borrow £1000 from a lender. The authority was quite general, and having got general authority, Renton applied to the defenders and got the money from them. Now, I am of opinion that if Renton afterwards embezzled the money, it was the pursuer's money he embezzled. It is true that the pursuer gave Renton the authority on a false representation by him, but that was unknown to the company and cannot affect them. Renton cheated the pursuer, but the pursuer gave him the authority on which he and the company acted. Even if there had been no discharge, I should have held that the company were safe in the advance made. It is also clear that for considerably more than two years their fund remained as a standing advance, and interest on it was paid by Renton, and subsequently by the pursuer himself, in the full knowledge of what had taken place.

But, in the second place, the pursuer says he agreed to borrow £1000 only on condition of getting a discharge. He got the discharge, however, not at the time, it is true, but two years afterwards. The condition he desired was fully implemented; it is so stated now on the record; and as in point of fact he got the security he stipulated for, his action fails.

But there is yet a third answer to this claim. The discharge having been challenged, the pursuer compromised the action. It is clear enough that had he defended it he must have been successful. From the reported case of Molleson, decided after the compromise, it is plain that he had a good defence; but he paid a sum of money and made an arrangement by which the discharge should be allowed to stand. I do not say he was foolish in coming to a settlement. I think counsel are often well advised in such cases, particularly when questions of some difficulty are raised, in recommending that each party should put in a sum and make a settlement, all suffering abatement. But then he could only do so on the footing of abandoning any claim against the Assurance Company. He should either have maintained his defence or taken the company with him in the arrangement—at least to the effect of reserving with their consent all claims against them. But he seems to have done neither, and I think it is impossible now to make the company liable.

On these three separate grounds I am of opinion that the defenders in this action are entitled to succeed.

Lord President—I think it right to say, in consequence of what has fallen from Lord Mure and Lord Shand, that if the facts in Rose v. Spaven had been the same as we have here, or at all like them, I should have concurred in the judgment of the majority of the Court in that case.