Lord Porter:-

The appellant company are incorporated in Gibraltar and carry on business as an investment company. The appellant, John Mackintosh, is a director of that company. In May 1935 the appellants were anxious to borrow a large sum of Spanish pesetas as they did not wish to convert English pounds sterling into that currency, and at that time the respondent had on deposit at Barclays Bank in Gibraltar a credit of over 500,000 pesetas standing in the names of Messrs. Carrara King and Marsh who were trustees of her late husband. The respondent is an old lady 82 years of age, whose business affairs were managed by her nephew one Eugenic Gross. Mr. King, who was a friend of both Mr. Mackintosh and the respondent, having heard that the appellants desired to borrow pesetas approached Mr. Mackintosh and arranged with him that the respondent should lend and the appellants borrow the sum of 500,000 pesetas at 3½ per cent. interest per annum. Accordingly the appellants executed a bond dated 22nd May 1935, whereby they bound themselves to pay the respondent the sum of 500,000 pesetas on 22nd May 1936, and meanwhile to pay interest at 3½ per cent. per annum by half-yearly instalments on 2