tion was spontaneous. 3. That a recommendation spontaneously given, if expressed in general terms, speaking merely of the respectability, regular conduct, and good credit of the person introduced, is an introduction only, not a letter of credit; but where there is a distinct allusion to a particular transaction, and an assurance of safety in entering into it, this, where spontaneous, is held to amount to a guarantee, even where it is only a colloquial or verbal expression of assurance."

In questions between country people, whose intentions are not always clearly expressed by the words they use, letters are not so literally construed as when they are written by men of business; and evidence as to the character of the transaction and the intention of parties, will convert into a guarantie, terms that in other circumstances would not receive that interpretation.

Such recommendations or guaranties are strictly limited to the transactions which the granter may have had in view, and if he has referred to transactions with any particular person in the character of creditor, no other person can found upon the recommendation.3 A person was introduced to a dealer with the words, "I hope she will be a good customer; and I am sure will pay you at the time she may fix with you; so you are quite safe with her, as Mr Goodsir can also inform you." The person to whom this was addressed not having the article wanted, sent the bearer to another dealer, representing the letter to him as a guarantie. The court held that it would have been a guarantie to the person to whom it was addressed, but was not so in favour of the other dealer. Where a person had guaranteed a draft by A. on B., it was not held that he guaranteed a draft by a third party on B., though payable to A.5 Where the letter of Guarantie was addressed to "Watson and Company," and that firm had been dissolved a few days before, and the two persons who composed that firm taking a third into partnership, constituted the firm of Watson, MacNight, and Company, the guarantie did not cover goods furnished by that company.6 Where it was the original intention that there should be two sureties, and one only signed a guarantie, beginning" We, the undersigned," &c., which was changed

1 B. C. i. 371, 372.- Hardie v. Macdonald, 24th Feb. 1844.—3 B. C. i. 573-575.- Philip v. Melville, 21st February 1809.- Ross v. Greig, 11th February 1834.-6 Bowie v. Watson, MacNight, and Company, 11th June

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223 to "I," he was found not to be liable.1 Any limitation or presumed limitation in time will be interpreted with the same strictness, but if there is no limitation, the guarantie lasts until it is recalled. Where one had become bound to any persons who would furnish goods to another, to see them paid in six months after delivery," this was held not to imply that the fulfilment should be demanded within the six months, but that it was exigible after the lapse of that period. Where the terms were, "I engage to see you paid for stuffs furnished to J. B. to the extent of £200 at the usual credit of four months," this was held a current guarantie, and the plea that the use of the past participle "furnished" applied only to transactions anterior to its date was not admitted.4 Where a person limits his guarantie to a certain sum, he becomes liable to that extent, though the credit given to the principal should have exceeded it.5 Any condition under which the guarantie is given must be strictly fulfilled. Where parties abroad obtained a guarantie for a consignee for "the payment of any bills drawn [on him] from and after the date hereof Bills of lading

and invoice having been regularly forwarded," and the consigners shipped goods to a third party who transferred part of them to the person whose credit was guaranteed, the guarantie was held not to cover that transaction. It would seem that where there is a regular guarantie, it covers the price, not only of effects sent to the party in whose favour it is conceived, but such as are sent to others on his order.7

SECT. 2.-Del Credere.

A del credere commission is not, properly speaking, an act of cautionary, it is merely held to involve a guarantie. It is an authority to an agent or factor to dispose of goods, an additional commission being paid by the vendor, on condition of the factor becoming responsible for the price. Professor Bell says that it is "an engagement to be answerable as if the person so binding himself were the proper debtor. Where a factor, employed to sell goods, receives a del credere commission, he is liable to the principal for the price to be recovered, whether he ever receive it or not. He

1 Loudon v. Jackson, 19th February 1825.- B. C. i. 377.-3 Fraser v. M'Turk, 25th June 1822.- Barr v. Downies, 13th November 1840.5 Cochrane & Co. v. Mathie, 22d June 1821.- Grieve v. Dow, 16th May 1839. Raimes v. Galloway, 14th March 1842.

is placed, in relation to the principal, precisely in the same situation as if he had actually received in loan the money of the principal; and no payment that would not be effectual as between debtor and creditor will discharge his responsibility. This sort of guarantie is not, on the one hand, a cautionary obligation, in the common sense of that expression, for the factor with a del credere commission is liable directly, and without any benefit of discussion; neither is it, on the other, to all intents and purposes, a delegatio debiti ; for, if the guarantee* fail, the principal is entitled to resume his character, and recover from the proper debtor, if he have not previously paid to the guarantee." Though this doctrine should be acted on in Scotland, however, it is clear that the law of England makes the holder of the del credere commission simply a guarantor, who has the benefit of discussion.2 "A factor or broker," says an English writer, acting under a commission del credere, is a surety to his principal for the solvency of those with whom the principal deals through his agency. He is in no case, as regards his own employer, himself the principal in any contract which he may make for him, and is liable only in default of those with whom he deals. It follows, therefore, that, before he can be charged, it must be averred in the declaration, and proved at the trial, that the principal debtor has made default."3

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SECT. 3.-Cautioners to Cash-credits.

A bond of cash-credit with a bank is an obligation by which, in consideration of the bank permitting the principal to operate on a cash-account to a limited amount, certain parties become bound for the payment of the balance which the bank may, at any time during the currency of the security, show against the principal, within the sum limited. In other words, the cautioners become bound to pay the drafts and discounts of the principal with legal interest on them, deducting deposits and payments, with bank-interest on them. The obligation is generally conjunctly and severally, as against all parties, principal and cautioners; by which means the bond is not struck at by the septennial limitation, and the bank is not compelled to discuss the principal in the first place. (See above, pp. 213, 217.) It has been

That is to say the guarantor.-B. C. i. 378.- Ellenborough, C. J., in Morris v. Cleasby, 4 M. and S. 566. See Br. St. 922, n.-3 Paley on P. and A. 111, Lloyd's n.- B. C. i. 368.

found, however, that the arrangement does not deprive the sureties of the other equities in favour of a cautioner, in the constitution of the obligation; and so, where certain parties were described as the obligants in the bond, and one of them had not signed it, the others were held not to be liable.1

Where one granted a guarantie for a person who had a cash-credit, saying, "Mr G. D. has mentioned to me that he may have occasion to overdraw his account to the extent of £3000; and, if he should do so, I hereby become bound to repay the same to you, in the event of his failing to do it;"-this was held not to be merely a guarantie for one advance, but to be an addition to the cash-credit, covering like it the balance on a series of transactions. Where, of three co-obligants in a cash-credit, two granted a letter requesting that it might be continued "in terms and to the extent of the bond," on the holder's decease, in favour of his son,they were held conjunctly liable, though in terms of the bond there was a third obligant to share the responsibility with them, and they alleged that they granted the letter only as a continuance of their liability under the bond.3 Under a cash-credit in the regular form, the bank may introduce discounts of bills and other charges against the principal party, which have not properly formed part of his cash-account. The transactions charged on however must be strictly legal and regular. It was found on appeal, that the bank could not pursue cautioners on drafts drawn beyond the statutory distance (which was then ten, but is now fifteen miles), or wrong dated, where the bank-agent was aware of these circumstances; and this though the drafts were entered in accounts doqueted by the principal. In a continuation of the same case, it was found that the bank was not entitled to impute indefinite payments in the first place to the extinction of the drafts destitute of the statutory requisites. A cautioner in a cash-credit for all bills on which C. F.'s name might appear, was liable for bills discounted to C. F. & Co., a concern in which C. F. had no partner.6

The rapidity of the transactions, and the frequency of the change of the relative positions of the lender and borrower towards each other, appear to give the cautioner in a cashcredit less benefit than other cautioners, from concealment of

Paterson v. Bonar, 9th March 1844.-2 Sir W. Forbes, &c. v. Dundas, 4th June 1830.-3 Blair v. Taylor, 1st July 1836.- Swan v. Bank of Scotland, 6th July 1835, 2 S. & M'L. 67.-5 Swan v. Bank of Scotland, 21st November 1839.-6 Booth v. Commercial Bank, 16th May 1823.

circumstances which affect his risk, or from latitude being given to the debtor. In one case, the whole amount of the cash-credit had been at once drawn out. After more than a year had elapsed, some applications for payment having been made, in the mean time the bank joined another, and a new firm was made. The new firm gave the debtor a new cash-credit, with his old cautioners and a new one added. He exhausted this credit in one draft, and applied the sum in paying up the previous one. Though the new cautioner was not informed of the circumstances, the transaction was sustained.1

The bank, on being paid by the cautioners, must assign to them whatever securities or negotiable documents they hold from the principal. The cautioners may terminate their responsibility by notice to the bank; and, unless such notice be given, a cautioner and his representatives will remain indefinitely liable.3 It is generally a stipulation in such obligations that an account made up from the books of the bank, and certified by an officer of the bank, shall be registrable for execution, so as to enable the bank to obtain summary diligence against the cautioners, as if they had bound themselves to pay a specific sum.4 (See Index, Diligence.) A cash-credit may be founded on heritable security.

SECT. 4.-Surety for faithful Performance.

*

Cautionary obligations for faithful performance generally embrace periods of time and successive courses of transactions. If the original engagement with the principal be terminable at the will of the parties, the cautioner will be at liberty so to terminate his obligation at pleasure, if a particular continuance be not specified. If, however, the original engagement be not terminable, and there is but one definite obligation extending over the period (as in the case of apprenticeship), the cautioner cannot release himself. species of obligation may be united to a cautionary of solvency, as in the case of a commercial agent. The party creditor in the obligation is frequently better acquainted with the risk to be run in giving caution than the cautioner himself, and any concealment on his part will have the effect of fraud, and render void the obligation. Thus the Bank of Scotland finding it necessary, from the suspicious and irregular con

This

Hamilton v. Watson, 8th December 1842.-2 B. C. i. 369. Ibid.— * Ibid. 364. Br. St. 938.-* See below, Part XII. Chap. II.— Br. St. 928.