St. Stephens Bank v. Bonness

St. Stephens Bank v. Bonness

The trial jury's finding that proceeds would be applied to the note did not, as a matter of law, warrant a verdict discharging the indorser; acceptance of security from the makers does not discharge an indorser unless there is an express agreement to that effect, therefore a new trial was required to resolve the legal sufficiency of the jury's finding.

Citation
(1895) 24 SCR 710
Parties
Appellant / Plaintiff: St. Stephen's Bank; Respondent / Defendant: Bonness
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
6 May 1895
Procedural Posture
Appeal Collection on Promissory Note / Judgment on Appeal to the Supreme Court of Canada; New Trial Ordered
Outcome
Appeal allowed.
Legal Topics
Consideration, Accommodation Indorsement, Discharge of Indorser, Taking Security, Agreement Between Payee and Indorser
Source Language
English
Bills of Exchange Promissory Notes Contract Law Consideration Accommodation Indorsement Discharge of Indorser Taking Security Agreement Between Payee and Indorser

Case Brief

Summary, issues, holding and outcome

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Parties

St. Stephen's Bank

Appellant / Plaintiff

Bonness

Respondent / Defendant

Procedural Posture

Appeal Collection on Promissory Note / Judgment on Appeal to the Supreme Court of Canada; New Trial Ordered

Legal Issues

  1. 1 Whether an indorser who indorsed as an accommodation is discharged when the payee subsequently takes security from the makers
  2. 2 Whether the bank's acceptance of security from the makers amounted to an agreement discharging the indorser
  3. 3 Whether the jury's factual finding that proceeds would be applied to the note legally warranted the defendant's verdict

Ratio Decidendi

The trial jury's finding that proceeds would be applied to the note did not, as a matter of law, warrant a verdict discharging the indorser; acceptance of security from the makers does not discharge an indorser unless there is an express agreement to that effect, therefore a new trial was required to resolve the legal sufficiency of the jury's finding.

Court Disposition

Appeal allowed.

Orders

  • Appeal allowed.
  • New trial ordered.