PEEL and Others v. TATLOCK. THIS 1799. April 30th. 12 Eaft, 227. 2 H. Bl. 613. 2 Camp. N. Pri. 415.437. If A. become bound to B. for the honefty of C. who embez action on the of the embezzle B leaft if A. was the circumitance from any other quarter, and B. does not appear to have con cealed it from oufly. A. will The cause was tried at the Guildhall fittings after laft Michaelmas term, before Heath J. and a Special Jury, when the following facts appeared in evidence. The guaranty was figned on the 5th October 1790: Goodrich continued in the Plaintiffs' fervice till March 1793, at which time he abfconded having embezzled money of the Plaintiffs to the amount of 1292l. 8s. 6d. In April following a correfpondence commenced between Goodrich and the Plaintiffs, in which the former, after stating that he had embezzled four bills, went on thus; "I fhould conceive it may not be un" reasonable to propose that the gentlemen should make a con"fideration of about 300l. for the extra exertions I have ufed for "the interest of the house, and the extra expences I have been at "by having no regular home in town: perhaps there may be him induftri"due to me on my own account about 100l. though of this I am not be discharged "not quite certain. If thefe propofals could be admitted, I fhould from his gua"then ftand a debtor to the house about 890l. My property at appear to have ranty though B. "home may have coft me about 150l. which I freely offer." given credit to He then fuggefted a plan (a) for balancing the books of the houfe, mount of the by which the Plaintiffs might keep his mifconduct fecret from fum embezzled. the other clerks, and having intimated an intention of retiring into the country and establishing a school, concluded thus, "What"ever I can obtain by labour and induftry above the common "neceffaries for exiftence fhall be faithfully appropriated to repay "the debt once a month or once a quarter into the hands of fome "perfon for your ufe." In anfwer to the above the Plaintiffs wrote a letter dated the 22d June 1793, containing the following expreffions; "We have no objection to your adopting your propofed "plan of tuition, and you may rcft free of apprehenfion from being difturbed in a laudable purfuit for fupport of yourself and (a) This was to be done by entering the deficiency as a loan to him in the private ledger of the partners, and carrying it into EE 2 the books to which the clerks had access, "family, C. for the a 1799. FELL V. TATLOCK. "family, taking it for granted that your reprefentations to us will "be found ftrictly true. Indeed by fuch endeavours it is poffible "that you in future may be in a fituation to make fome recompence "for paft misfortunes, and refpecting which in every converfa❝tion which we have been obliged to enter into we have uni"formly expreffed ourselves with great tendernefs towards you. "If we had no other motives for that, felf-policy would dictate "fuch conduct." The plan fuggefted by Goodrich for concealing his mifconduct from the clerks was adopted by the Plaintiffs. In the Summer of 1795 James Tatlock offered Goodrich, who was then out of employ, to procure him a place provided the Plaintiffs would give him a character: upon which Goodrich made an application to the Plaintiffs for that purpofe, and on the 15th September 1795 wrote them a letter in which were the following expreffions: "I have juft waited on Mr. Tatlock, and mentioned "in general what you remarked on my requeft, his reply was, he "would call on you himself this day; it would have pleased me "better had not that been the cafe; but as I could not with any "propriety forbid him, I must take the confequences. However 66 as I believe Mr. Tatlock knows no more of my concerns in your "house than what I have told him myself respecting Riley, "Barber &c.'s (a) loffes, you will have it in your power to speak " ingeneral terms refpecting your being confiderable lofers by my ❝ imprudence, and this done with tenderness on your part may ❝ induce him to be my friend. In regard to the bond, should he "mention it, and you think proper, perhaps making him the "offer of his name may be in my favour." No evidence was given of actual notice by the Plaintiffs to the Defendant or to any of the other fubfcribers to the guaranty of Goodrich's misconduct, and the lofs they sustained thereby, till July 1796, when actions were commenced against the Defendant, and against his brother James Tatlock and one S. Potter who were alfo fubfcribers; these were all confolidated. The learned Judge left it to the jury to say whether the Plaintiffs had waved the guaranty and exonerated the Defendant by making the whole of Goodrich's embezzlement a debt from him? The jury found a verdict for the Plaintiff. Le Blanc and Shepherd Serjts. on a former day fhewed caufe againft a rule nifi for a new trial, and contended, that the guaranty was not waved by any thing which paffed between Goodrich and the («) These were transactions which did not come within the scope of the prefent cafe. Plaintiffs, Plaintiffs, or by the length of time which had elapfed before notice was given to the Defendant; that with respect to the concealment it might have been dangerous for the house to have made public the mifconduct of their clerk and their lofs in confequence; that by the terms of the guaranty the Defendant was abfolutely bound to answer for the deficiencies in Goodrich's accounts, and that the effect of the length of time which had elapfed was a queftion for the jury who had decided that it was not a waver. They urged that the Defendant had not been injured by the delay, as Goodrich continued infolvent from the time that he committed the fraud to that of his death, which was just before the trial. Cockell and Heywood Serjts. contrà, infifted that the Plaintiffs had accepted Goodrich for their debtor, by giving him credit to the amount of the deficiency, and entering it in their books as a loan; that the danger the Plaintiffs might have incurred by making public the embezzlement in question, could not deprive the Defendant of his right to notice, as in the cafe of a bill of exchange, where notice of the drawer's default must be given on the earliest opportunity left his fituation fhould be altered, and that the fame rule held in cafes of bankruptcy, and ought to be obferved in all other mercantile tranfactions; and that the time within which notice fhould have been given was a queftion of law. 1799. PEEL V. TATLOCK. EYRE Ch. J. This cafe feems to involve many points of law 2 H. Bl. 613. deferving ferious confideration. The 1ft queftion is, whether a person who enters into a guaranty for the faithful discharge of duty by another be liable to answer for embezzlement of money by him at any indefinite period, or whether notice of fuch embezzlement ought not to be given within reafonable time? A 2nd queftion will be, whether the intentional concealment of fuch embezzlement will not discharge the guarantee from his liability? And a 3rd, whether that degree of credit has not been given to the party originally guilty, which may be fufficient to change the character of the tranfaction, and by affent of the Plaintiff to convert Goodrich's delinquency into a debt. And if fo, whether the guarantee be anfwerable on the foundation of the original embezzlement? These are queftions of real importance to the mercantile world, and I wish to have them deliberately confidered, not being prepared to give an opinion. BULLER J. Some things have been advanced in argument to which I do not agree. It has been faid that the rights of parties have been altered. If any new debt had been incurred, or if the demand 1799. PEEL 2. TATLOCK. May 6th. demand had been enlarged, that might have been a fraud on the guarantee. But that is not the cafe here. The Defendant was liable to make fatisfaction for the embezzlement of Goodrich to the amount of his fubfcription, and if the Plaintiffs endeavoured to obtain any thing from Goodrich before they called on the Defendant, that was only in aid of the Defendant and tended to relieve him. Unless fomething had taken place between the Plaintiffs and the guarantee, I do not fee how the responsibility of the latter could be given up, fince no favour fhewn by the former to Goodrich, nor any thing done between them which did not create an injury to the Defendant, could discharge the guaranty. HEATH J. This cafe differs from that of a bill of exchange inafmuch as the Defendant was not merely bound to pay the money in cafe Goodrich fhould not pay it, but was bound abfolutely to pay for his deficiency. Cur. adv. vult. EYRE Ch. J. On this day (abfentibus Buller & Heath Js.) referred to the letter of the 11th of September, and faid; I am much inclined to think that a reasonable inference may be drawn from this letter, which will go a great way towards laying out of the case the queftion how far those to whom a guaranty has been given may, by concealing the failure of the party for whom the guarantee is anfwerable, and giving him credit for the amount of the failure, be confidered as having taken upon themselves the whole lofs. I dare fay the jury were fatisfied that the Defendant was not kept in ignorance of the tranfaction. He did not put his cafe upon that ground; but the ground he has taken is, that the Plaintiffs had done enough to difcharge the guarantee; upon this I at first hesitated, but am now difpofed to agree with my Brothers that it is not fufficiently made out: this cafe therefore may ftand without breaking in upon the rules of law. ROOKE J. The points formerly stated by my Lord were all left to the jury, and I have no reafon to think that they decided wrong. Rule difcharged. Cockell now ftated to the Court that the letter alluded to by the Lord Chief Juftice on a former day, did not relate to the prefent Defendant but to his brother, and certainly could not affect S. Potter, the other guarantee. He urged that even if a communication between the Defendant and his brother could be prefumed yet that fuch prefumption could not be extended to S. Potter ; and and trufted therefore, that if the Court fhould ftill think this rule ought to be discharged, they would open the confolidation rule, in order to enable S. Potter to defend the action. EYRE Ch. J. The principal difficulty I felt in the cafe arofe on the ground of a fuppofed induftrious concealment by the Plaintiff not only from the fervants of the houfe, but from all the world, which on general principles of law might have had an effect on the liability of the guarantee. But looking through the cafe again, I think there is room to collect that there was no want of communication with the Defendant. The names of Tatlock and Goodrich are names not unknown at Guildhall, or in Weftminster-hall: whether the letter related to the Defendant or his brother, there is a plain allufion to the guaranty in it. Confidering either the probable iffue of another trial, or the value of the intereft, this is not a cafe in which the Court ought to open the confolidation rule. To prevent miftakes, I add that it is not to be taken to be the opinion of the Court, whatever my opinion might have been, that the cafe as it was ftated originally by the report was attended with much difficulty. 1799. PEEL V. TATLOCK is cution for more May 6th. A prifoner, whe taken in exethan 3col, and afterwards rebelow that fum is not entitled to be difcharged under the Lords' act in the next term reduced his debt unless it be allo duces his debt after he has fo THIS the next term after he was taken in exeru tion. |