Scottish Court of Session Decisions

This was an action by David Simpson Young, farmer, Bonnington, North Berwick, against the Clydesdale Bank for reduction of a letter of guarantee addressed by the pursuer in favour of the bank for behoof of his brother Robert Young, cattle salesman, Glasgow.

The pursuer averred that in the course of the years 1884 and 1885 he had granted accommodation bills to his brother to the extent of about £300 or £400 which had all been retired at maturity. In February 1886 he asked him to come to Glasgow, and there explained that he was in want of money, which he could get more cheaply for himself and with less trouble to the pursuer if the latter would sign a document to the defenders. “Condescendence 2.—… The pursuer, in the belief and understanding that he was to sign a document to the defenders in which he would be liable only for about a similar amount to what he had granted a bill for on previous occasions—that is, about £300 or £400—agreed to do so.”

The pursuer averred that he, his brother, the latter's manager Robert Baillie, and Baillie's brother-in-law William Mathieson, thereupon went to the bank and met the bank agent Mr Junor, who produced a document, and fraudulently represented to the pursuer, who is comparatively ignorant of business, that it was a mere matter of form for the purpose of being shown at the head office of the bank. Relying upon this false and fraudulent statement as to the nature of the said document, and under the essential error induced by the same, the pursuer and the said William Mathieson signed a document which they discovered subsequently to be a letter of guarantee in these terms:—“Gentlemen,—We, David Simpson Young, farmer, Bonnington, and William Mathieson, joiner, Dalrymple, Ayrshire, hereby jointly and severally guarantee you payment of any advances made, and which may hereafter be made, to Robert Young, cattle salesman, Glasgow, whether by way of overdrafts or by bills, promissory-notes, cash orders, or other obligations discounted and held or to be discounted and held by you.”

The pursuer averred that the letter was not read over by or to him, and he was unaware of its nature until an action by the bank for £5303 was raised against him. Inquiries had satisfied him that on 22d February 1886 his brother owed the bank £5000. “Condescendence 5.—… This was a material fact which it was the duty of the defenders to have communicated in the circumstances to the pursuer, but which was fraudulently concealed from him by them. Mr Junor, the agent for the bank, was personally liable to the bank for the amount of said overdraft.” He would not have signed the document if he had known of this debt, or that the obligation in the letter was for past and future advances.

The defenders denied the averments of fraudulent representation, and explained that in accordance with their desire for security Robert Young had submitted the names of his brother and Mathieson. “The defenders accepted them, and when the letter of guarantee, which is expressed in the ordinary terms, was ready for the signatures being adhibited thereto, Robert Young took the sureties to the bank for that purpose. Before the document was signed, it was handed to them by Mr Junor that they might read it and satisfy themselves of its contents. Having done so, they signed the letter of guarantee on the date it bears.”

The pursuer pleaded—“(1) The letter of guarantee libelled having been obtained from the pursuer by the false and fraudulent representations of the defenders, as condescended on, should be reduced in terms of the conclusions of the summons. (2) The pursuer is entitled to have the said letter of guarantee libelled reduced, in respect it was granted by him under essential error, induced by the false and fraudulent representations condescended on.”

The defenders pleaded—“The pursuer's statements are irrelevant and insufficient in law to support the conclusions of the action.”

On June 16th 1888 the Lord Ordinary ( M'Laren) pronounced this interlocutor—“Finds that the guarantee libelled is ex facie valid and regular, and that the summons of reduction does not disclose any valid or relevant objection thereto on extrinsic grounds: Sustains the defence, dismisses the action, and decerns, &c.

“ Opinion.—This action is instituted for the purpose of reducing a guarantee granted by the pursuer and another person in favour of the Clydesdale Bank, Limited. The instrument purports that the subscribing parties guarantee payment of advances made or to be made by the bank to Robert Young, the pursuer's brother. Two issues are tendered which have reference respectively to the obtaining the deed by means of fraudulent representations and by fraudulent concealment of material facts.

In support of the first issue it is averred that the bank agent, by whom the guarantee was prepared, fraudulently represented to the pursuer that the document prepared for his signature ‘was a mere matter of form for the purpose of being shown at the head office of the bank’ (Cond. 3).

It is not said that these words were used by the bank agent, but I assume that

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such is the representation of which proof is offered. Now, there are only two meanings which I can attribute to the words quoted; they mean either that the document was not to have any effect, or that it was not to subject the pursuer to any obligation or pecuniary liability.

In the first view of the meaning of the representation it seems to have neither relevancy nor substance. In order to entitle a pursuer to relief under an issue of fraudulent representation, there must be a representation untrue in fact made by the one party and believed by the other party. Now, I cannot take it off the hand of a man capable of transacting business that he had signed a deed in the belief that it was to have no effect.

It is, however, a perfectly intelligible defence that a party to a deed subscribed the deed in the belief that he was signing something which was not to subject him to personal liability. A person, for example, may be requested to sign something as a trustee, and the deed, unknown to him, may contain a clause putting him under personal obligations. Or it may be that a deed altogether different from the one which he agreed to sign is substituted for it by the creditor or grantee, which would be undoubtedly a case of gross fraud.

I have then to consider whether a circumstantial case of this nature is set forth in the summons, because I conceive it to be a matter of settled practice that such cases are only sent to trial where a circumstantial case is set forth which if supported by evidence would entitle the party to relief by reduction.

Now, in condescendence 2 the pursuer states explicitly that before going to the agent's office he had agreed to become security to the bank for his brother, and also that this security was not to be given in the way that it had been given on previous occasions, viz., of accommodation bill, but by a ‘document.’ The only meaning that I can attach to this point of the condescendence is that the pursuer had agreed to give a guarantee for his brother, and that he was going to the bank to sign it. He adds, no doubt, that he expected it would be for about £300 to £400, the amount of his undertaking on previous occasions.

Now, if the averment had been that the agent put the guarantee before the pursuer representing it to be a guarantee limited to £400, and that the pursuer signed it without reading it, this would have been a case for inquiry. But the representation put forward is that the deed was ‘a mere matter of form’—that is to say, the pursuer came to the bank office prepared to sign an obligation for £400, but, instead of doing so, he signed something which he was led to understand created no obligation. No explanation is offered of this altered state of the pursuer's mind as to the nature of the deed he was signing, and it is evident that no explanation can be given. The story is intrinsically incredible. It is very likely that the pursuer did not examine the deed with sufficient care, and did not fully apprehend the extent of the liability that he was undertaking, but he signed the deed knowing that it was a deed of guarantee or security for his brother, and I think it must be taken that he was willing to become security in such terms as the bank might submit for his signature.

The second issue raises the question whether the deed was obtained by fraudulent concealment of the state of the principal debtor's indebtedness? The answer is that in such cases there is no duty of disclosure incumbent on the creditor.

In the circumstances of the case I consider this to be a sufficient defence, because the bank agent is not charged with acts of positive concealment. The case against him is merely this—he did not disclose the state of the debtor's account. In practising this reserve, I am of opinion that the bank agent only did his duty to his employers, and that from such non-disclosure no claim of reduction can arise.”

The pursuer reclaimed.

On 6th November 1888 their Lordships of the First Division recalled this interlocutor, and remitted to the Lord Ordinary, before answer, to allow parties a proof of their averments.

The pursuer deponed that on the 22nd February 1886 he went, as requested, to his brother in Glasgow, who asked him to sign a document at the bank instead of renewing the bills originally given. He thought the amount would be about the same as before, and he was willing to undertake that liability. “I went with him to the Clydesdale Bank, where I was introduced to Mr Junor, the agent of the bank. One of the tellers brought him to us in the bank office, and then my brother, Mr Junor, and I went into the side-room off the bank. Baillie and Mathieson had followed just behind us, and they joined us after we had been in the room just a minute or so. Before they came nothing had been said about what we had come for. We spoke about the weather and general topics before they came in. There was a paper lying on the table—on a desk in the room. After Baillie and Mathieson came in the paper was produced for signature. Mr Junor produced it. I believe Mathieson made some remarks about the contents of the paper. Mr Junor did not say anything about reading it. Mathieson was wanting it to be read; he said something about reading it. It was not read. (Q) Did you get it into your hands at all?—(A) No, I never was asked to read it or take it into my hand either. (Q) Was any explanation given to you of what were its contents?—(A) Mathieson made some remark, and Mr Junor said it was a mere matter of form—that he would require to show it to the head-office, or words to that effect. (Q) When Mr Junor said that were you quite willing to sign it?—(A) Yes, because I had every confidence; I was quite willing to sign it. I did not ask to have it read or see it, because I was under the idea that I knew what I was going to sign for before I went to the bank. (Q) When Mr Junor used the expression about a matter

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of form, what did you understand by that? —(A) It was something like a bill, but only in a different form; instead of being for a noted or dated time, it was to go on running till he would be able to do without the money. When I signed it I understood I was becoming bound to the same extent as the bill—£200 or £300. I had not the least idea what was the state of my brother's account with the bank at that time. I did not ask him a question about that. The banker never spoke about my brother's affairs at all. (Q) If you had known that your brother was due the bank about £5000, would you have signed that document?—(A) Certainly not. (Q) Or if you had known that the document was an unlimited guarantee, would you have signed it?—(A) No.”

Mathieson deponed—“I was taken to the Clydesdale Bank in Miller Street. When Baillie and I got there we found the two Youngs and the bank agent in the agent's room. (Q) Did you see any paper lying on the table?—(A) Yes, there were papers lying on the table. (Q) What took place then?—(A) I think Mr David Young signed the paper first, and then I was asked to come round and sign it too; but I wanted to know something about it before I would sign it, and I was going to read it, but I had forgot my specs and could not read it; and I said to the bank agent that I could not read it, as I had not my specs., and he said he was sorry he could not assist me, for his were for a short-sighted person. He said there was no danger—there was no danger—it was only a mere matter of form, so I thought there was no danger in me signing the paper when I had both Baillie's word for it and his. Baillie said there was no danger either. He said that at Dalrymple when he first wanted me to sign the paper. (Q) And after the bank agent said that you signed it?—(A) Yes. The document was not read over to me. (Q) Can you tell us whether it was before David Young signed or after he signed that the bank agent said that about its being a matter of form?—(A) It was before the thing was signed. (Q) Before it was signed by any body?—(A) Yes. (Q) When the bank agent said that, did that satisfy you and make you sign it?—(A) Yes, of course; I thought the thing was more sure when he said that. (Q) And after the bank agent had said that, all the parties signed it?—(A) Yes. I think he pointed out to me the place where I was to sign. (Q) Was anything said at this time about how much you were becoming responsible for?—(A) No, there was no sum mentioned. Nothing was said about the amount that Young was due to the bank. (Q) If you had known that he was due £5000 to the bank, would you have signed it?—(A) It is not likely.”

Robert Young, the principal debtor, deponed—“I told him (the pursuer) I required a little accommodation, and asked him to go down to the bank to sign a paper—that I would require a little money the same as usual, and if he signed this paper I would get it cheaper, and not require to have bills always running on. I did not tell him that he was going to sign an unlimited guarantee. (Q) Did you say anything to him about the amount which you were wanting?—(A) I do not think I mentioned the amount, but I made him believe it was the same amount as I was usually getting from him. (Q) And when you told him that, did he agree to do it?—(A) Yes. When my brother and I got to the bank I introduced my brother to Mr Junor. Baillie and Mathieson arrived about a minute after us. I did not observe a document lying on the table when I went in, but after we had introduced one another Mr Junor lifted a document and laid it on the table. It was lying on one of the writing tables, and he put his hand on it and laid it down on the desk. My brother came forward and said to me, ‘Is this right?’ Mr Junor took the word out of my mouth and said, ‘It is just a matter of form,’ and after that my brother signed the paper. Mr Junor said, ‘It is merely a matter of form, to show to the head office.’ (Q) And when Mr Junor had said that, did your brother then sign the paper?—(A) Yes, so far as I remember. Mathieson was there. He came forward also, and, so far as I remember, I think he said to Mr Junor that he would like to know more about it, but he had not his glasses and he could not read it, and Mr Junor said, ‘It is all right; it is a matter of form.’ I had not read the document myself at that time; I never saw it till that morning. (Q) Who got the document prepared?—(A) I do not know; it was Mr Junor. It was not got by me at any rate. I think it was Baillie who arranged that with Mr Junor. I had never seen Mathieson before. I think I was due the bank about £4000 at that time (Q) Did you deliberately keep your brother in the dark as to what he was undertaking?—(A) I did. (Q) You intended to deceive him, and did so?—(A) I would not have deceived him if I had not been hard pressed by Mr Junor to get security. (Q) But, hard pressed or not, you intended to deceive your brother, and did deceive him?—(A) Well, I did deceive him that day.”

Baillie deponed—“When Mathieson and I arrived at the bank we went into the agent's room and found the two Youngs and Mr Junor there. I suppose I introduced Mathieson to Mr Junor, but I am not quite sure as to that. There was a paper lying. I am not sure whether it was lying on Mr Junor's desk. Mathieson sat down next to me, and the next was Robert Young, and David Young was standing opposite Mr Junor's desk. A general talk went on at first, and the paper was produced, but whether David Young had it in his hand or not I cannot say. Mr Junor pointed out the place to David Young where to sign when it was lying on the table. Mathieson before the paper was signed said he would like to know more about it. Mr Junor asked if he would read it, and he said no, he could not, because he had not his spectacles with him, and Mr Junor said something about not being able to assist him. Mathieson asked it to be explained, and Mr Junor said it was all right — there was no danger, it was a mere matter

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of form, or words to that effect. The document was signed after that. That was said before any of the parties had signed. Cross.—I knew the amount of the overdraft. I knew that the security was wanted to cover the overdraft. I did not know it was to cover future advances. (Q) Was the account, as you understood, to be closed when the security was got?—(A) No. (Q) Then was it not to go on, and was not the guarantee asked to enable the account to go on?—(A) Yes. (Q) Did you not understand it was to cover both the existing overdraft and future advances?—(A) I knew it was for that purpose.”

The account of what took place at that meeting, as given by Mr Junor, the bank agent, was as follows:—“After the parties came in I went to the accountant in the general office for the document, and brought it back. I handed it to Baillie to satisfy himself and his friends as to what was in the document. That is the usual course I adopt. I do not read such documents; I prefer to hand them to the parties that they may read them for themselves. Baillie took the document, and my impression is that he read it. I stood aloof towards the fire-place, and left the parties with the document to satisfy themselves. (Q) Can you say whether Baillie read it aloud?—(A) He seemed to be reading it. The three of them—David Young, Mathieson, and Baillie — were bending over the paper. After they seemed to have satisfied themselves they handed the document to me. (Q) Did any time elapse before they handed it back to you?—(A) I really cannot say—a minute or two—sufficient to read it and examine it. After they handed it back to me it was taken to the table. I called in Jamieson, the ‘accountant, to witness it, and then it was signed. After it was signed it was witnessed by Jamieson and Baillie. Nothing further transpired. I have told all that passed to the best of my recollection. (Q) Did you at any time during that interview say to Mathieson or David Young or anybody that the document, or the signing of the document, was a mere matter of form? —(A) Never. (Q) Or that there was no danger?—(A) Never. (Q) Or that it was merely something to show to the head office?—(A) Never. (Q) Or words to that effect?—(A) I cannot conceive me saying anything to that effect; of course the idea was not in my mind. (Q) Can you conceive your having said anything of that kind and forgotten it? (A) Well, I cannot tell, when we have had the long printed documents concerning a cash-credit, and when people were beginning to read, I may have said on these occasions—but not on this occasion—“that is the usual formal document of a cash-credit.’ (Q) As explaining that the document was in the usual form?—(A) Yes. (Q) But have you any recollection of even having said that on this occasion?—(A) No. This document was all in writing. (Q) Can you think of anything you could have said which might have led anybody to imagine you had said anything of the kind?—(A) No, I cannot think of anything. (Q) And are you positive you did not say anything of the kind?—(A) Yes, I am quite positive; I had no object in saying anything. (Q) Had you any desire to deceive these gentlemen?—(A) Not in the least. (Q) Or any motive for deceiving them?—(A) No, my impression was that they were acquainted with the whole thing from beginning to end. (Q) You assumed that Robert Young had informed his friends what the document was?—(A) Doubtless… . Mathieson did not read the document. (Q) Did he hear it read?—(A) Not by me. (Q) It was not read aloud?—(A) —(A) Baillie read it. (Q) Did you see Baillie read it?—(A) I saw them together, and I concluded he was explaining or reading the document. I did not hear him or anybody read it aloud. I did not give any explanation as to its contents to anybody. (Q) Did any person in your presence give any explanation?—(A) Mr Baillie seemed to be explaining. (Q) Did you hear Baillie say anything about that document which you can now repeat?—(A) No, but he was reading it to them as I understood. (Q) Aloud?—(A) Not sufficient for me to hear. I mean he had the attitude of reading the document, and they were leaning over it apparently listening. I was about five or six feet from them. (Q) And if he read it aloud to those people could you have failed to hear it?—(A) It would depend on the tone in which he did it. (Q) Do you suggest he read it in a tone which would prevent you hearing?—(A) It seemed to be so, for I could not hear it. (Q) Can you give any reason for him reading it in a tone which would be audible to them and not audible to you?—(A) I can give a reason now, but I could not give a reason then; if Baillie did not read it aloud, it must have been to keep from them what was in it, as I now understand they did not know what was in it. (Q) Did it not strike you as an odd mode of proceeding that a document of that description should be read in a tone which was inaudible to you?—(A) I did not think anything about it, for I did not suspect any wrong or concealment. I gave the document to the parties, as I thought, in the fairest and justest way to inform themselves, and they came, as I assumed, fully informed of what they were to do.”

Correspondence between Junor and Robert Young showed that from September 1884 the bank had been pressing him for security for the overdraft. It was never settled between them what form the guarantee was to take, although in some of Junor's letters he spoke of a cash-credit. On 15th February 1886 he wrote—“The guarantee to the bank by your brother and Mr Mathieson for payment of your overdraft is being prepared. The manager expects, however, that you will get your friend in the north, when he is sufficiently recovered, to take part in this guarantee, or, if failing him, some other responsible party.”

On 18th January 1889 the Lord Ordinary ( Kinnear) sustained the defences and assoilzied the defenders from the conclusions of the action.

“ Opinion.—The pursuer's case is that he was induced by fraud to sign a guarantee, which if it should be enforced would render

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him liable for upwards of £5000, in the belief that he was becoming security for £200 or £300 only. It is not maintained, as I understand the argument, that there was any duty on the defender's agent to give information as to the state of the principal debtor's account. But it is said, first, that Mr Junor the agent is chargeable with improper concealment, equivalent to misrepresentation; and secondly, that at the time when the guarantee was executed he was guilty of actual misrepresentation, by means of which he induced the pursuer to sign.

The fact which Mr Junor is alleged to have improperly concealed is that the guarantee is for ‘advances made and to be made to Robert Young,” without limitation of amount. It is said that the arrangement between him and Robert Young, the pricipal debtor, was that the latter should and security for the actual amount of the overdraft on his account at the time the guarantee was signed; and that nevertheless Mr Junor, without notice to Young, had caused an unlimited guarantee to be prepared, and presented it to the pursuer for signature, as if it were an instrument in exact accordance with the arrangement which had been made.

It is not suggested that the pursuer knew anything of the antecedent arrangement between his brother and the bank. But it is said that Mr Junor was bound to assume that both of the intending cautioners had been made aware of it, and therefore that it became his duty to inform them of the contents of the document which he had taken it upon himself to draw up, inasmuch as he knew that it created a higher liability than any guarantee which they were prepared to sign. But there is no evidence that any definite arrangement had been made with Robert Young either as to the limits of the guarantee, or as to its terms in any other respect. The bank had been pressing Young to find security for his overdraft, but no definite proposal had been made on either side as to its terms, and nothing had been fixed between them, except that the bank had agreed in the meantime to accept the pursuer and Mr Mathieson as cautioners, and that they should come to the branch office in Miller Street at a certain time, in order to sign the guarantee. There was nothing out of the ordinary course of business in Mr Junor's conduct when in pursuance of that arrangement he caused a guarantee to be prepared at the head office in the form which the bank required, and presented it to the intending cautioners for signature. If he made any false statement as to its meaning or effect by which they were misled, they may be entitled to have it set aside. But if he said nothing on the subject, but gave it to the cautioners that they might read it for themselves, I cannot see that he is chargeable with any improper concealment. It is a perfectly clear and unambiguous document, and no intelligent person could read it without seeing that it was an unlimited guarantee for advances made and to be made. It was not his duty to explain to the cautioners the meaning or legal effect of a document which they read, or ought to have read for themselves, and his silence on the subject cannot, in my judgment, be considered as undue concealment, giving ground for a reduction.

The question remains whether he was guilty of actual misrepresentation. The pursuer's case upon this point, as it was presented in argument, is that the pursuer had on previous occasions undertaken liabilities for his brother to an amount of between £300 and £400, by signing accommodation bills on his behalf; and that on the morning of the day on which the guarantee was signed, his brother told him that he wanted more money, and asked him to sign a document at the bank; and that he understood from his brother's statement that the effect of the document he was asked to sign was to subject him to the same kind of liability as he had undertaken by the accommodation bills, but in a different form, so as to avoid the expense and trouble consequent upon the frequent renewal of bills. With this understanding, and in the belief that he was about to undertake liability to the extent of two or three hundred pounds, he went to the bank along with his brother, the other cautioner, Mr Mathieson, and Baillie, his brother's clerk. He does not say that his brother told him the amount for which he wished him to become security, or explained the precise form in which the security was to be given; nor does he say that he put any question to his brother or to anybody else upon either of these points. He gives no very satisfactory reason, therefore, for the understanding upon which he says that he acted. But his statement is that he went to the bank in the belief that he was going to sign a document by which he should undertake a liability to the extent of £200 or £300, and no more. In this state of mind he says that he heard, Mr Junor, the bank agent, say in answer to an observation by the other cautioner, Mathieson, that it was ‘a matter of form,’ and that in reliance upon that statement, which was in accordance with the belief induced by his brother's representations, he signed the guarantee without reading it or asking it to be read.

I do not understand it to be suggested that in using the words ascribed to him Mr Junor intended them to convey the exact meaning which the pursuer attached to them—that is to say, that the guarantee about to be executed was a mere substitution of a new form of obligation for an old form, which could not subject the pursuer to any higher liability than he had already undertaken. It is hardly possible that this should have been his intention, because he knew nothing of the statement which Robert Young had made to his brother, and he did not even know, and had no reason to suppose, that the bills to which the pursuer was a party were accommodation bills. Nor is it very intelligible why the pursuer should have interpreted the words used by Mr Junor in the way he alleges. They were not addressed to him but to Mathieson, and he had no reason to think that Mathieson

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was under any previous obligation to the bank by way of security for his brother. It is not obvious, therefore, why such a statement to Mathieson should be supposed to mean that the pursuer was undertaking no higher obligation than he had undertaken already.

But the argument is, that with whatever intention the statement was made, it was certainly a false statement, and that a person in the position of a bank agent could not have made it innocently. It was made to one of two intending cautioners in the presence of the other at the moment when they were about to sign a guarantee to the bank. Whatever the bank agent meant by it, he must have intended the cautioners to act upon it, and if they did so act, the guarantee must be held to have been obtained by the false representations of the bank agent.

I do not think it necessary to consider how far this case could be supported in law, because I am of opinion that it is not proved in point of fact. It is in the highest degree improbable that a bank agent of experience should have used the words imputed to Mr Junor. He had no motive of deceiving the cautioners, and if he had desired to deceive them it is hardly credible that he should have tried to do so by telling them that to sign a guarantee was a mere matter of form. He knew nothing of the pursuer or Mr Mathieson, except that they had been engaged in business, and he could not fail to know that to make such a statement to men of ordinary experience in affairs could have no other effect than to excite their suspicion that something was wrong. He denies most positively that he said anything of the kind, and it is impossible to sustain the charge which is made against him, in the face of his denial, unless it is proved by clear and satisfactory evidence. but I think the evidence adduced is the reverse of satisfactory. Two of the witnesses—Robert Young and his clerk Baillie — are, on their own showing, altogether unworthy of credit. But not only is their evidence valueless in itself; I think it goes to discredit the whole story. I see no reason to impute anything like wilful falsehood to the pursuer, but I think his evidence confused and unsatisfactory. The other cautioner, Mathieson, appeared to be a very respectable person, and I have no doubt an honest witness, and it is impossible to regard the unfortunate position in which he is placed without great commiseration. But I do not think it would be safe to rely on his exactness of observation and distinctness of recollection in such a matter. On the other hand, I think Mr Junor's evidence is entitled to credit. He does not profess to remember all the details of the interview, and it would be somewhat singular if he did. But he is perfectly distinct and positive in his statement that he did not say anything of the kind imputed to him, and it is impossible that he could have done so and forgotten it. The question is one of credibility, and I cannot say I have any hesitation in preferring the evidence of Mr Junor to that adduced by the pursuer.

I think it is highly probable that the words which Mr Junor is said to have uttered were uttered in fact, but not by him. That Robert Young and Baillie had said something of the kind to the pursuer and Mathieson before going to the bank, there can be no question, and it is very probable that one or other, or both of them, may have repeated it in the back parlour. It is equally probable that the pursuer and Mathieson may have persuaded themselves, or have been persuaded, that Mr Junor used expressions which were really used by another person. But whatever may be the explanation of their testimony I am unable to accept it as sufficient evidence of the very grave charge they make against Mr Junor.

It is said that Mr Junor did not read the guarantee to the cautioners before signing. It was not his duty to read it, and he could not have done so without undertaking a responsibility which did not properly belong to him. I think he took the proper course in giving them the document to read for themselves. Pursuer had every opportunity of reading it, and he could not have read three lines of it without seeing that it was a guarantee without any pecuniary limit. It is very possible that, relying as he did upon his brother, he may not have read it with sufficient care. But the defenders and their agent cannot be made responsible for his carelessness or his overconfidence.”

The pursuer reclaimed.

After a short discussion the Court allowed the pursuer to amend his record, and the defenders to answer.

The pursuer deleted from Condescendence 2 the words “about a similar amount,” and substituted for them the words, “a limited sum to be advanced by the defenders similar in amount.” He averred that during 1884 Robert Young's overdraft amounted to about £4000, and that the bank repeatedly urged him to reduce his overdraft or give security for it. “In the autumn of 1884 the defenders, through their said agent, informed the said Robert Young that he must provide some security for his overdraft if it was to continue, and he not having done so, it was in the autumn of 1885 arranged between the said Robert Young and the defenders, through their said agent, that the said Robert Young should give the defenders a bond of cash-credit with co-obligants. A bond of cash-credit imports an obligation for a definite and limited amount.” He set out the communications between Mr Junor and his brother as to the security desired, the last of which was the letter of February 15; repeated that Mathieson and he heard of the matter first on the 22nd February; and averred further that “neither the pursuer nor his brother Robert Young, nor any other of the parties present at the said meeting at the bank on the 22nd February, except Mr Junor, had seen the said letter, or knew that it was a guarantee for an unlimited amount. No intimation had been made to the said Robert Young that the security proposed to be granted had been changed

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from a cash-credit bond, such as the defenders' agent had been pressing him to grant, to an unlimited guarantee. In these circumstances it was the duty of Mr Junor, when the parties came to the bank on 22nd February, to explain to them that the guarantee which had been prepared by the officials of the bank, and which the pursuer and Mr Mathieson were asked to sign, was not a guarantee for a limited and fixed amount, but for an altogether unlimited amount. Mr Junor, however, failed to perform this duty. He made no explanation as to the nature of the guarantee, and did not even ask the pursuer and Mr Mathieson to read it, and did not read it to them himself. In so acting Mr Junor was guilty of concealment of a material fact, which it was his duty to disclose.” The pursuer also averred he was under essential error when he signed the letter of guarantee.

The defenders denied any arrangement as to or application for a cash-credit bond. They averred that Mr Junor was entitled to assume that the pursuer and his cocautioner had been made aware by the principal debtor of the state of his account, and of the obligation they were about to undertake, and that he had handed them the document to read in order that they might satisfy themselves of its contents.

Argued for reclaimer—As the parties signing this guarantee were not business men, there was a duty on the bank agent to see that they fully understood the liability they were undertaking; the cautioners believed that they were signing for a limited amount, and if the bank contributed to that mistake by concealment they could not take advantage of a deed so obtained; it could be reduced on the ground of essential error— Smith v. Bank of Scotland, January 14, 1829, 7 Sh. 244, and H. of L. 1 Dow, 272. What the parties thought they were signing was a cash-credit bond, which was an obligation of limited character—Bell's Prin. sec. 299 — and not a guarantee for an unlimited amount. The facts disclosed a case of essential error if not fraud— Railton v. Mathews, January 27, 1844, 6 D. 536, and H. of L. 3 Bell App. 56; Montgomery Bell's Convey., p. 267. The actings of the bank agent enabled the principal debtor to secure this guarantee from the pursuer, and amounted to misrepresentation— Falconer v. North of Scotland Bank, March 20, 1863, 1 Macph. 704. If there was error in the essentials of the contract, that error could be pleaded although res non errant integrae. But error would also void a contract when it was founded on by the party inducing it— Earl of Wemyss v. Campbell, June 6, 1858, 20 D. 1090. The reason why the bank agent acted as he did was clear; he was personally bound for the overdraft, and he had a direct inducement to relieve himself, and by concealing the true state of matters to get the pursuer to sign the guarantee.

Argued for the respondent—(1) On the question whether there was error from concealment, the pursuer could not plead ignorance as to the rules of business; he was a prosperous farmer carrying on a good business. Besides, the pursuer had failed to prove that the bank agent had done anything in the way of concealing from him the true state of matters. It was no part of the bank agent's duty to read over or to explain the letter of guarantee. He laid it before the parties and left it to them to examine it, and satisfy themselves; for a cash-credit was never arranged, but was merely suggested in correspondence. What the bank wanted was a reduction of or security for the overdraft. (2) If there was no concealment there was no relevant case on record; on the other hand, if the pursuer alleged concealment the facts showed sufficient disclosure.— Smith v. Bank of Scotland, supra, did not apply, because there there was a duty to disclose, while here there was none. This was an onerous deed— res non errant integrae—money had been advanced on the faith of the deed, and in such a case there was no room for essential error. The defenders ought not to be in a worse position than if a limit had been inserted in the guarantee, for the pursuer would have been liable up to that limit. Caution for an overdraft meant security for any balance, which might be standing against the name of the principal debtor in the books of the bank— Forbes v. Dundas, June 4, 1830, 8 Sh. 865; Caledonian Banking Company v. Kennedy's Trustees, June 15, 1870, 8 Macph. 863; Hamilton v. Watson, December 8, 1842, 5 D. 280, 4 Bell's App. 67; Falconer v. North of Scotland Banking Company, December 19, 1862, 1 Macph. 177.

At advising—