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Scottish Court of Session Decisions >>
Malcolm Hamilton v John Carlisle & James Dunlop. [1766] Mor 8227 (13 June 1766)
URL: http://www.bailii.org/scot/cases/ScotCS/1766/Mor2008227-006.html Cite as:
[1766] Mor 8227
Intimation of advances not necessary to give recourse on the granter of a letter of credit.
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In 1762, James Douglas, merchant in Glasgow, wrote to Malcolm Hamilton of London, that he wanted to raise L. 500, by drawing bills on London at long dates, and remitting bills at short dates to replace them, and asked leave to draw on him for that purpose, promising to get the security of John Carlile and James Dunlop, with whom he was engaged in a copartnery trade.
The proposal was agreed to, and a letter subscribed by Carlisle and Co. referring to Douglas's letter; and engaging their security for such sums as Douglas should draw for.
In January 1763, Malcolm Hamilton, who had hitherto traded by himself, assumed a partner into his house, but continued to answer the bills drawn by Douglas, as he had done before, till August 1763, when he was in advance of about L. 608.
Carlisle and Co. stopped payment in November 1763, and Douglas accepted bills for the balance due; but he having also failed, Malcolm Hamilton brought an action against John Carlisle and James Dunlop, the guarantees.
Pleaded in defence, The defenders are not liable for the bills drawn by Douglas, in respect they were not intimated to them. And, admitting, that that it was not necessary to intimate every individual draught, yet intimation ought to have been made when any material circumstance occurred, such as might have led them to withdraw their security, or warned them to look to their relief. Two periods were condescended on, the one when Malcolm Hamilton assumed a partner in January; the other, when his dealings with Douglas came to an end, in August 1763.
Answered, The pursuer could be bound no farther than to comply with the conditions of the mandate. But the letter contains no clause requiring intimation of the advances, of which the defenders, the partners of Douglas, could not be ignorant. And there was no reason for a particular intimation, upon the pursuer's assuming a partner, which made no alteration upon the credit.
“The Lords found, That the letter of credit libelled on granted by the defenders, extends only to the sum of L. 500 Sterling, and that the company is liable to that extent.”
Act. Lockhart, Geo. Wallace.Alt. Montgomery, Wight.
Fac. Col. No 33. p. 255.
