Scottish Court of Session Decisions

William Addison Beatson, the defender in this action, entered the service of the Clydesdale Banking Company as an apprentice in the year 1874, and from October 1878 till the circumstances occurred which led to the present action had been employed as teller in a branch office, first in Ingram Street, and thereafter in George Street, Glasgow. Shortly after entering into the service of the bank he addressed the following letter, as usual with those entering the service of the bank, to the manager:—“I, William Beatson, presently apprentice to the Clydesdale Banking Company at Anderston, Glasgow, have received copies of the rules and regulations of the Officers' Guarantee Fund of the Clydesdale Banking Company, and which are engrossed in the minutes of the directors of the 16th day of June 1854 and 15th day of June 1870; I hereby, with the special advice and consent of my father, Andrew Beatson, Hope Street, Lanark, as my curator and administrator-in-law, agree to become a contributor to the said fund, and to be rated on the sum of £500 sterling, and express my approval and adoption of these rules and regulations, and agree to abide by and implement the same in every particular,”—along with a separate letter from his father, in which as his curator and administrator-in-law he expressly consented to and concurred in his son's obligation. His salary when he entered the branch office was £40 a-year, afterwards raised to £50, and ultimately from January 1881 to £60.

It was part of the defender's duty to give to Mr William Dickson White, the agent of the branch, on each Saturday, at the close of business, a statement of his transactions for the past week. On Monday the 27th February 1882 he began work as usual for the week with his accounts clear, and with the proper number and amount of notes and cash in his possession. He acted as teller during the whole of that week, and at the end of it, on Saturday 4th March, when his accounts were checked by the agent of the branch, they were found to show a deficiency of £901. Amongst his notes was one of the Commercial Bank for £100. The explanation he gave of this deficiency, according to the subsequent deposition of the agent, as well as in his own evidence, was substantially that contained in Statement VI. of his defences in this action, as follows:—“On

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the said deficiency being discovered, the said Mr William Dickson White suggested that the defender must have by mistake given to some-one notes of the bank to a larger amount than was intended, and the defender then recollected that amongst the many transactions of the forenoon of that day was one with a person who was a stranger to him, who came into the bank and asked the defender to oblige him with notes of £20 for a note representing £100, and that he, the defender, had drawn a folded up file of notes from a parcel which he had beside him, and gave them to the person in exchange for a £100 note of the Commercial Bank of Scotland. It turned out that the said notes which he gave away in exchange were a file or small parcel of ten, each note representing £100, instead of five representing £20 each. This was not intended by the defender, but was simply and purely an innocent mistake, arising chiefly from the hurry and multiplicity of the business which he had to transact. In that way notes representing £900 were accounted for. The remaining £1 was also accounted for by the following circumstance. A person to whom the defender had, in the course of business on the said 4th day of March current, given £15 in silver, returned to the bank and represented that he had only received £14 in the parcel of silver change he had got instead of £15. The defender at the time when this happened told the circumstances to Mr H. B. Bonglas, accountant in the said branch office of the pursuers' bank. Whether the silver so given away by the defender was short or not he had no means of knowing, as when silver is given away in large quantities it is not generally, and was not on this occasion, checked at the bank counter. The defender, however, took the person's word for the deficiency, and gave him an additional £1, trusting that some of the other parcels of silver in his possession, of which he had a number prepared for the business of the day, might contain an extra £1.”

On the following Tuesday, the 7th March, the defender wrote to the bank resigning his situation, and enclosing a declaration to the following effect:—“I declare that I cashed a £100 Commercial Bank note to a stranger on Saturday, 4th March 1882, between the hours of 11 and 12 o'clock a.M.; he asked for £20 notes, and in error I declare I gave £100 pound notes in mistake; after I served the first customer I had at no time £100 in £20 notes, consequently the error £900 short, as I gave a £1000 in lieu of £100. He was a man between 28 and 30 years of age; he was dressed in dark coat, sandy or brown mutton-chops side-whiskers and moustache, shaved on chin, wanted an upper tooth, had brown hat. The above description is to the best of my recollection. And in conclusion I maintain I checked said cash previous to business on Saturday morning, and found it to be correct.”

The bank then raised this action in the Sheriff Court of Lanarkshire for payment of the £901, on the ground that it had been lost by gross carelessness, culpable negligence, or fraud on the part of the defender.

The defence, as above stated, was that the defender had paid away the money which was amissing by an innocent mistake in the hurry of business. The defender averred that he had never been formally appointed a teller, and did not receive a salary such as is usually paid to a teller; that the mistake occurred on the 4th of the month, an unusually busy day at banks, especially when as on the 4th of March 1882 it fell on a Saturday, owing to the compression of business into a short period on that day. He attributed the mistake to the amount of work thrown upon him on that day, and averred that it was his duty, according to his instructions, to be obliging to strangers as well as to customers of the bank in giving change and otherwise He averred that the pursuers had not been called upon, and might never be called upon, to pay the sums represented by the notes he had accidentally given away, and that their business arrangements were defective in so far as not including a means of identifying the notes given out to the public. Lastly, he averred—“The defender, who obtained no benefit of any kind by or through said mistake, is not liable therefor, and it was not mentioned to him when he was put to the performance of the duties of a teller that he was to be liable for mistakes, and he did not receive a salary which would imply or infer liability.”

He pleaded, inter alia—“(8) The defender not having been employed by the pursuers as a teller, nor paid a sufficient salary for the performance of the duties of a teller, but being the subordinate servant of the said Mr William Dickson White, who alone called upon him to perform the duties of a teller, is not responsible for the duties of that office, and is not liable for the sum sued for.”

The Sheriff-Substitute ( Erskine Murray) allowed a proof.

The defender appealed to the Court of Session for jury trial.

After hearing counsel the Court of consent allowed a proof, which was taken by Lord Rutherfurd Clark. In the course of his evidence, William Dickson White, the agent of the branch, deponed that on the loss being discovered he asked defender “if he did not remember any transaction that had taken place in the course of the day whereby he could have put away any of these large notes. He said at first that he did not know, but afterwards he said that a man had come in and asked change for a £100 note. I asked what kind of notes the man inquired for, and he said twenties. I said, ‘You have given away £1000 in £100 notes instead of £100 in twenties.’ He said, ‘No, I could not have done that.’ I glanced down his book, and I saw he had only four £20 notes to start with in the morning, and I said, ‘I do not see how you could do that; you had not twenties to give.’ He thought for a moment, and then said, ‘Oh yes; that is how it has taken place!’ From the state of his cash that morning he had not change for £100 in £20 notes. If he counted his cash that morning, he must have been perfectly well aware of that. He told me it was a Commercial Bank note that change had been asked for. When a stranger comes to the bank with a £100 note for change, especially a note of another bank, we require a little care to be exercised. We do not change them to strangers as a rule. I do not think it is possible for a teller accustomed to his work to pass away ten £100 notes for five £20 notes. The feel of the bulk of the notes would tell him his mistake. They are double weight. (Q) The £100 notes are larger and heavier?—(A) Yes. (Q) And in that case he was giving twice

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as many in number as he would give of twenties?—(A) Yes. (Q) Which again would have called his attention to it if he had been attentive?—(A) Yes.”

John Harvie, secretary of the bank, gave on this point similar evidence, as quoted in Lord Craighill's opinion below. Mr Bouglas, who acted as accountant and teller in the same branch office in which defender had been employed deponed—“It was unusual for a stranger to come into the bank and ask a large note like that to be changed. I think it is likely I would have noticed if such a thing had happened. When I was acting as teller I knew to be very careful in changing a large note like that to any stranger. (Q) Would you have made some inquiry before you took from a stranger a note of that value belonging to another bank?—(A) I would have hesitated before changing it. I never heard defender complain of having too much to do. He was quite well able for all the work he had to do. I am now doing that work and superintending the accounting besides.”

The proof also showed that there had been various complaints of minor errors and irregularities by the defender, but it also appeared that such irregularities and mistakes occasionally happened with the other tellers in the pursuers' service, and that tellers are in the habit of making up small sums which go amissing in the course of their duties through accidental overpayments, short creditings, and the like causes.

The defender in his evidence repeated the account of the manner in which the money had been lost which is above explained. Other evidence was led for him, to the effect that such mistakes had occurred in the course of the conduct of business by tellers of much greater experience than he had. He also led evidence to show that the error would have been avoided if he had been provided with a drawer in his desk containing a sufficient number of compartments to enable him to keep separately the notes of various denominations of which he had charge.

Argued for pursuers—The defender's carelessness was a breach of his bargain at common law, according to the wording of his own and his father's agreement with the bank. If not bound at common law, he was at least by the special contract contained in the letter to the bank above quoted. Having voluntarily accepted the duties of teller, he was liable in the due amount of diligence which the law requires from one in that position.

Authority— Melville v. Doidge, 6 Cora. Bench, 450.

In the course of the discussion the pursuers departed from the ground of criminality or fraud. On the remaining ground of negligence urged against him the defender argued that the deficiency was not attributable to want of ordinary diligence, but was justified by the via major arising from the unusual press of business on the day in question. The bank did not pay him the usual salary of a teller, and could not demand from him the higher degree of diligence which would be prestable from one duly remunerated for the responsible duties of that position.

Authorities—Story on Bailments, 186 et seq.; 1 Bell's Comm. 488; Walker v. British Guarantee Association, 18 Ad. & Ell. 277; Gunn v. Ramsay, Home's Dec. 384.