North Western National Bank of Portland v. Ferguson

North Western National Bank of Portland v. Ferguson

Majority held the communications constituted an absolute continuing guarantee up to $10,000, the guarantor left the temporal details to the bank and primary debtors, and the thirty‑day note and its renewal were matters of banking practice and evidencing of the continuing advance; accordingly renewal without the guarantor's consent did not discharge him and judgment was entered against the guarantor.

Citation
(1918) 57 SCR 420
Parties
Plaintiff / Appellant: North Western National Bank of Portland; Defendant / Respondent (guarantor): John Ferguson; Defendant / Respondent (primary Debtor): W.W. Ferguson
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
9 December 1918
Procedural Posture
Civil Appeal Guarantee and Suretyship / On Appeal to the Supreme Court of Canada From the Appellate Division of the Supreme Court of Ontario
Outcome
Appeal allowed
Legal Topics
Continuing Guarantee, Extension of Time, Renewal of Promissory Note, Surety Discharge
Source Language
English
Guarantee and Suretyship Banking Law Contract Law Continuing Guarantee Extension of Time Renewal of Promissory Note Surety Discharge

Case Brief

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Parties

North Western National Bank of Portland

Plaintiff / Appellant

John Ferguson

Defendant / Respondent (guarantor)

W.W. Ferguson

Defendant / Respondent (primary Debtor)

Procedural Posture

Civil Appeal Guarantee and Suretyship / On Appeal to the Supreme Court of Canada From the Appellate Division of the Supreme Court of Ontario

Legal Issues

  1. 1 Whether a guarantor is discharged when a creditor renews a short-term note without the guarantor's knowledge or consent
  2. 2 Whether the telegram/letter constituted a continuing guarantee covering successive or renewed advances up to a stated limit
  3. 3 Whether alleged misrepresentation by the bank discharged the primary debtor and thus affected guarantor liability

Ratio Decidendi

Majority held the communications constituted an absolute continuing guarantee up to $10,000, the guarantor left the temporal details to the bank and primary debtors, and the thirty‑day note and its renewal were matters of banking practice and evidencing of the continuing advance; accordingly renewal without the guarantor's consent did not discharge him and judgment was entered against the guarantor.

Court Disposition

Appeal allowed

Orders

  • Judgment entered for appellant North Western National Bank of Portland against defendant John Ferguson for the amount claimed with costs in all courts