WILLIAM MITCHELL v THE WESTERN BANK OF SCOTLAND (Court of Session)

From the date of his appointment, down to the month of October 1834, the pursuer continued to act as Manager, and the Directors and Shareholders, none of whom were practical bankers, were led, from the representations of his proceedings made to them by the pursuer, to believe that he was managing the affairs of the bank with skill and judgment. Afterwards, however, the Directors became dissatisfied with the conduct of the pursuer as Manager, for reasons condescended on upon the record.

A demand was soon after made by the shareholders, and the Committee of Management of the Edinburgh branch, for the instant removal of the pursuer; and the Directors determined to exercise the powers conferred by the 26th clause of the contract, as well as by the pursuer's own bond of caution; and accordingly, at a meeting of the Ordinary Board of Directors, held on the 14th October 1834, at which all the Ordinary Directors were present, they unanimously resolved to dismiss the pursuer from his situation of Manager, and to appoint Mr Miller in his stead.

In support of his action the pursuer pleaded —1. The act by which the pursuer was dismissed from the office of Manager of the Western Bank being illegal and unwarrantable, and in violation of the engagements come under when he was appointed, as well as ultra vires of the Ordinary Directors, the defender is bound either to reinstate the pursuer in the office, or to make reparation to him for the whole loss and damage he has sustained, or may yet sustain in consequence of his dismissal.

As the charges of incapacity, gross mismanagement, supine negligence and malversation as manager of the bank, on which the defender attempts to justify the dismissal of the pursuer, are not true in point of fact, they cannot warrant the illegal and injurious act of which the pursuer complains; but, on the contrary, they aggravate the claims already competent to the pursuer.

Under the pursuer's engagement with the bank, the Ordinary Board of Directors had an absolute power to dismiss him either with or without cause; but, esto that the directors were bound to justify the pursuer's dismissal, that step was warranted by his incapacity for his situation, and by his mismanagement, negligence and malversation in the conduct of the bank's affairs.