The Sun.
London, England, 1844-06-19 00:00:00

LAW INTELLIGENCE.
HOUSE OF LORDS, June 14

EDWARD RAILTON, APPELLANT, AND THOMAS GADD
MATTHEWS AND OTHERS, RESPONDENTS.
This was an appeal from the judgment of the second
division of the Court of Session, in an action at the suit
of the appellant, for setting aside a surety bond for
4,0001., which he had granted to them for the fidelity of
their agent or clerk at Glasgow, a person of the name of
Hickes. The cause was tried by the Lord Justice Clerk,
at Edinburgh, in August last, under the issue, " whether
the pursuer, Edward Railton, was induced to subscribe
the said bond of caution or surety by undue concealment
or deception on the part of the defenders, or either of them ;"
and the Judge having directed the jury, " that under this
issue the concealment must be, Ist, of things known to the
defenders, or which they had strong and grave ground
to suspect ; and, 2dly, that the concealment, therefore,
being undue, must be wilful and intentional, and with a
view to the advantage they were thereby to receive," ex-
ceptions were taken to the charge, and they being disal-
lowed by the Court, the cause was brought up here by
appeal, which, being heard, was sustained, and the fol-
lowing opinions delivered :
Lord COTTENHAM—My Lords, this is an appeal
from a judgment of the Court below. Entertaining an
opinion against the judgment pronounced there, if I had
34 felt any doubt upon the subject, or had considered it a
case which required more investigation of the facts than
it has received, I certainly should have been unwilling
to dispose of it without taking time for further con-
sideration ; but the facts are so simple, and the points
are so free from doubt, that I see no reason why the
the House should not at once dispose of this case.
My Lords, the real question is, whether the way in
which the Learned Judge put this case to the jury, and
described to them the duty they had to perform, was or
was not consistent with, and properly applicable to the
question and the issue raised for their consideration. The
issue in my opinion very clearly describes the point
which the Court wished to have investigated. The terms
of the issue must of course be construed as they stand,
but it is not material to look to the points raised
in the pleadings for the purpose of construction. If
there were any doubts upon the meaning of the terms
used, I would look to the summons for the reduction of
the instrument of suretyship, and I find several facts ap-
pearing as having passed between the party who was the
subject of the suretyship, and those by whom he had been
previously employed, and I find the matter stated in these
terms :—" That the parties totally failed to communicate
the said circumstances, or either of them, or the existence
of any balance on the agency accounts then standing
g against the said George Hickes, to the prisoner, or to
the said Henry William Hickes, and on the con-
trary, while they accepted and took possession
of the said bond, they fraudulently suppressed
, and concealed the said whole facts and circumstances
72 regarding the conduct and irregularities of the said
George Hickes." There is an imputation made of
direct fraud, or fraudulent intention, influencing the acts
of the parties, and there is a direct statement of such con-
cealment. It has not been contended, and it is impossible
to contend after what Lord Eldon lays down,
'134 in the case of " Smith v. the Bank of Scotland,"
%
that a case may not exist in which mere non-
communication would invalidate a bond of suretyship.
Lord Eldon states various cases in which a party
about to become surety would have a right to have
,% communicated to him circumstances within the know-
% ledge of the party acquiring the bond, and he states that
it is the duty of the party acquiring the bond to corn-
, municate those circumstances, and that the non-commu-
nication, or, as he uses the expression, the concealment
;5‘
of those facts, would invalidate the obligation, and release
the surety from the obligation into which he had entered.
Now, when the issue in this case was tried, such being
the points raised between the parties, we have nothing
3s. to do with the evidence in the cause, or the facts proved,
14 or the conclusion to which the jury might or might not
have come under the circumstances, but with the question
whether the charge which was made them was such a
/ charge as we conceive ought to have been made
,34 to them. The issue for their consideration was
, as a matter of fact, " whether the pursuer, Edward
Railton, was induced to subscribe the bond of
14 caution or surety by undue concealment, or decep-
Zlion, on the part of the defenders, or either of
them," raising these two propositions, which were raised
on the pleadings in the cause, either of which, if found in
% the affirmative, would lead to the conclusion of the
the cause. The question, looking at the terms in which
the matter was left to the jury, and the mode in which
the Learned Judge informed the jury they ought to
% perform their duty, is, whether there may not have been
a case brought before the jury for their consideration, of
improper and undue concealment, which I understand to

mean a non-communication of facts which ought to have
been communicated, which would lead to the relief of the
surety, although the non-communication might not be
26
45S wilful and intentional, and with a view to the advantage
which the party was thereby to receive. That which I
14 find here extracted from the charge of the Learned
4534 Judge, I understand to be one proportion. The Learned
17 Judge lays it down distinctly, that the concealment to
15 be undue must be wilful and intentional, with a view to
3414
934 the advantage they were thereby to receive. In my
15 opinion there may be a case of improper concealment, or
non-communication of facts which ought to be communi-
cated, which would affect the situation of the parties,
2 even if it was not wilful and intentional, and with a
view to the advantage the parties were to receive.
4 The charge, therefore, I conceive, was not consistent with
9 the rule of law. I think that it narrowed the question for
the consideration of the jury beyond the limits which
the rights of the parties required to have submitted to
% the consideration of the jury. Without going further
into the law which regulates the rights of these parties
73 than that which was stated by Lord Eldon, in the case of
70
34 " Smith v. the Bank of Scotland," we find that in a judg-
-85 ment of this House, in the case of an appeal from
602° Scotland; and, therefore, one peculiarly valuable in
37 the case now under consideration, that has been
72 declared to be the law. The terms used by the Learned
g? Judge in directing the jury, having limited the question
6734 for their consideration much more than the rule of law
13 would justify, it appears to be quite clear that this case
has not been properly tried, that the exceptions were
28 properly -taken, and that the House is bound to pro-
-17 nounce such a judgment as ought to have been pro-
nounced by the Court of Session.
30 Lord CAMPBELL—My Lords, this case has been very
V 7
$5 satisfactorily argued on both sides with great brevity,
35 but everything has been urged which could be for the
w advantage of the clients, or the assistance of your Lord.'
ships; and having listened to all which has been urged
4 on both sides, very attentively, I, without the smallest
'IS hesitation, comae to the conclusion that the bill of excep-!,
3% tions ought to be allowed, and that there must be a new
514 trial. The question really is, what is the issue which
the Court directed in this case--" whether the pursuer,
534
3 Edward Railton, was introduced to subscribe the said
bond of caution or surety, by undue concealment or
334
TA deception on the part of the defender, or either of them."
?-3i The material words are "undue concealment on the par
/36 of the defenders"—what is the meaning of those words?
,34 I apprehend, my Lords, the meaning of those word 4
it, is, whether Railton was induced to subscribe the
)4 bond by the defenders having omitted to
7.4 vulge facts within their knowledge which they were
Is bound, in point of law, to divulge. If there
%
7 were facts within their knowledge which they were
734 bound in point of law to divulge, and which they did
not divulge, the surety is not bound by the bond—there
534 are plenty of decisions to that effect both in the law of
8% Scotland and the law of England. If the defeltders had
6
3% facts within their knowledge which it was material the
7 surety shouldbe acquainted with, and which the del
#
3 fenders did not disclose, in my opinion the con;
• cealment of those facts, the undue concealment
of those facts, discharges the surety ; and whet
8"1 ther they concealed those facts from one
s% motive or another, I apprehend is wholly immaterial.
9 It certainly is wholly immaterial to the interest of the
544
534 surety, because, to say that his obligation shall depend
3 upon that which was passing in the mind of the party
„iv requiring the bond, appears to me preposterous ; for that
"'" would make the obligation of the surety depend on whe-
ther the other party had a good memory, or whether he
2gwas a person of good sense, or whether he had the factS
2 at the moment in his mind, or whether he was aware
7 3 that those facts ought to be disclosed. My Lords, the
7 liability of a surety must depend upon the situation in
3 which he is placed, upon the knowledge which is com-
municated to him of the facts of the case, and not upon
what was passing in the mind of the other party,
or the motive of the other party. If the facts were
such as ought to have been communicated, if
15i it was material to the surety that they should be
3 communicated, the motive for upholding them, I apm-
• hend, is wholly immaterial. Then we come to the
direction given by the Learned Judge. The Learned
' Judge says, " The concealment, therefore, being undue
[34 must be wilful, and intentional with a view" (that is,
with reference to the motive) " to the advantage
they were thereby to receive." Now, according to my
;II notion of the issue, that is an entire misconception of at
IS according to this direction, although the parties acquiring
the bond had been aware of the most material facts which
it was their duty to disclose, and the withholding of
which would avoid the bond, if they did not wilfully and
,34 intentionally withhold them—that is to say, if they had
forgotten them, or if they thought, by mistake, that in
point of law or morality, they were not bound to dis-
qv close them, then, according to the holding of the
% Learned Judge, it would not be a concealment. But the
Learned Judge does not stop there ; but he goes
on " With a view to the advantage they were
I thereby to receive, introducing those words conjunctively,
an and in effect saying, it was not an undue concealment
h unless they had their own particular advantage in view.
!C That appears to me a misconception. I will suppose
that their motive was kindness to Hickes, to keep back
from those who it was material to him should
continue to have a good opinion of him, the
./.6 knowledge of those racts, that it was a pure
,% kindness on their part to prevei 4-, those parties
entertaining a bad opinion of him, and not from any
selfishness this concealment took place ; although that
might be the motive, yet the fact that he was in arrear,
and had been guilty of fraudulent conduct, and that he
was a defaulter, were facts which it was most material
'34
) for the surety to be acquainted with. If those were
I - held back merely from a kind motive to Hickes,
and not at all from any selfish motive on the part
of those to whom the bond was to be executed,
the effect, in point of law, would be the same
; as if the motive were merely the personal benefit
of the parties to receive the bond. It appears to me,
'l4 „therefore, that the Learned JUdge has misunderstood
the meaning of the issue, and that having told the jxry
.14 that a concealment to be undue must be wilful and in-
tentional with a view to the advantage which the parties
!311 were to receive, that was a misdirection, and that it had
13ti a tendency to mislead the jury, that it was wrong in
point of law, and that the exception to the direction
ought to be allowed.
Interlocutor complained of reversed, bill of excep-
tions allowed, and a new trial directed.
For theiAppellarit—Mr,SergeanttTalfourd anAMr. Fle-
ming. George rarems, 4, Manchester-buildings, agent.