Representations, otherwise falling within sec. 6 of the Mercantile Law Amendment Act 1856, are not excluded from the operation of that section by the fact that the person making them does so fraudulently and with the ulterior purpose of benefit to himself.
In an action of damages against bank, and against S, the agent of the bank, the pursuers founded upon representations alleged to have been fraudulently made to them by S. for the purpose, and with the effect, of inducing them to sign bills for the accommodation of the firm of D., R., and Co. the pursuers alleged that these representations were made by S. in order to enable the bank to apply the bills so procured in reduction of an overdraft which was then due to it by the firm of D., R., and Co. The representations, which it was admitted were made verbally, were (1) that D., R., and Co. Were in a sound condition financially and only required temporary accommodation; (2) that the sum due by them to the bank was very trifling; (3) that D., R., and Co. had made up the losses which they had previously sustained through the failure of a certain firm, by fortunate speculations; (4) that no portion of the proceeds of any acceptances by the pursuers would be applied towards the extinction of the bank’s debt or of any obligation to the bank.
Held ( rev. judgment of the Second Division) that the action was irrelevant, in respect that the first, second, and third representations were not in writing or subscribed by the person making them, as required by the statute, and could not therefore be admitted to proof, and as regards the fourth representation, that there was no averment on record that the bank had in fact applied the proceeds of the bills in a manner inconsistent with that representation.
Judges:
Lord Chancellor (Halsbury), Lord Watson, Lord Herschell, and Lord Davey
Citations:
[1896] UKHL 533, 33 SLR 533
Links:
Jurisdiction:
England and Wales
Banking
Updated: 27 April 2022; Ref: scu.634016