United Kingdom House of Lords Decisions

Subject_Cautioner for Bank Agent — Bond of Relief — Fraud, Concealment, and Misrepresentation.

This was an action brought by the respondent upon a bond of relief granted by the appellants to him as security for his nephew, agent for the British Linen Co.’s Bank at Montrose. The defence stated to the action was, that at a time when the respondent knew his nephew's affairs were getting involved, and when he knew he should suffer a loss under his cautionary obligations to the bank, he had applied to the appellants to relieve him; and that they had been induced by fraud, concealment, and misrepresentation in regard to the nephew's affairs, to grant him the bond of relief in question. The nephew became bankrupt, with £3422 owing to the bank. The Court of Session held that the appellants had failed to state relevant facts to infer that the respondent had been guilty of fraud. Affirmed in the House of Lords.