BANK of SCOTLAND v PADON (Court of Session)

One of these circulars was said to have been sent to the proper officers of the bank, and received by them.

The credit, however, continued to be operated upon, as formerly, by the firm of James and Andrew Tod and Company till the failure of the Messrs Tod in 1823, when it appeared that a balance stood against the Company exceeding the amount of the credit.

The Bank having demanded payment of this sum from Padon, he raised a suspension; and the Lord Ordinary ‘found it proved that notice was given to the Bank of the retirement of John Padon from the firm of James and Andrew Tod and Company, which, in the bond, was described to consist of these two individuals and John Padon; and in respect of that, and that the debt due to the Bank at said retirement had been paid, and the charge was given for a sum advanced to the company after said retirement, suspended the letters simpliciter , and decerned.’

The only conceivable purpose of framing bonds for cash-credits in the terms in question, is just that they may remain in force against all the obligants, notwithstanding the retiring of individual partners from the company, which continues to operate on the credit under the original firm; and the chargers are prepared to instruct that this is conformable to the universal understanding and usage of bankers; Phillips' Law of Evidence , ed. 1822, vol. i. p. 564.

The intimation, therefore, that Padon had ceased to be a partner, was not sufficient to liberate him from future liability under the bond. It was indispensible, for that purpose, that he should have withdrawn his separate obligation as surety for the company; Bell's Com. vol. i. p. 282; and vol. ii. p. 645; Speirs v. Royal Bank, 22d June 1822 (not reported).