Lakeman v. Mountstephen

Lakeman v. Mountstephen

 (1874) LR 7 HL 17

(primary and secondary liability)

FACTS:

Plaintiff (P) was employed by the local board of health to construct the main sewer of a town. After the completion, the board directed the owners and occupiers of the adjacent property to connect their drains with the main system within 21days. In case of failure, the board was to undertake the work and charge public with the expenses. Board requested P to do this. P objected and insisted on proper order from proper authority. P agreed when the defendant (D) assured his competence and said “You go on and do the work, and I will see you paid.” D also promised  to procure a legally bound contract to P. After the completion, when P asked for their charges, D refused to pay on the ground that they had not ordered the work and denied all the promises.

ISSUE:

Whether there was evidence of an original liability on part of the defendant to pay the plaintiff on account of the work done by him (Cairns in house of lords).

HELD:

Trial Court (Devon Spring Assizes): favoured the plaintiff

Queen’s Bench: D’s promise did not amount to an undertaking to be primarily liable for the work, but only to an undertaking that, if P would do the work on the credit of the board, D would pay P, if the board did not. This way D had undertaken a liability on behalf of the Board and acted as a surety. This contract of guarantee, however, was oral and therefore could not be enforced.  The defendant’s plea of non-suiting the plaintiff was accepted.

Exchequer Chamber: Reversed the decision of QB.

HOUSE OF LORDS:

The Lord Chancellor (CAIRNS) (affirmed Exchequer Chamber): The conversation between P & D may be construed to mean that the liability was that of the board and if it failed to pay, D would be there as a backup. P could not be non-suited.

LORD HATHERLEY: Concurred with Cairns saying that that D’s words were capable of another interpretation but there the evidence was sufficient enough to prove that there was personal liability before the jury and therefore, P should not be non-suited.

LORD O’Hagan: Expressed the same opinion as the other judges.

LORD SELBORNE:  Expressed same opinion. In contrary to some of the judges of the QB, he said that there can be no surety-ship unless there be a principal debtor, who of course may be constituted in the course of the transaction by matters ex post facto, and need not be so at the time, but until there is a principal debtor there can be no surety-ship.