Schell v. McCallum & Vannatter

Schell v. McCallum & Vannatter

The telegram was ambiguous and, when read in context of the parties' dealings and the absence of consideration or a stipulated premium for a payment-guarantee, it should be construed as an assurance of the agreement's bona fides and the parties' and property's standing rather than an undertaking to pay the principal debt; therefore the defendants were not liable for payment of the purchase-money balance.

Citation
(1918) 57 SCR 15
Parties
Appellants (plaintiffs): Malcolm S. Schell and Others; Respondents (defendants): McCallum & Vannatter
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
10 June 1918
Procedural Posture
Contract Appeal / Appeal to the Supreme Court of Canada From the Supreme Court of Saskatchewan
Outcome
Appeal dismissed with costs; judgment of the Supreme Court of Saskatchewan affirmed.
Legal Topics
Guarantee, Construction of Contract, Bona Fide Agreement
Source Language
English
Contract Law Guarantee Construction of Contract Bona Fide Agreement

Case Brief

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Parties

Malcolm S. Schell and Others

Appellants (plaintiffs)

McCallum & Vannatter

Respondents (defendants)

Procedural Posture

Contract Appeal / Appeal to the Supreme Court of Canada From the Supreme Court of Saskatchewan

Legal Issues

  1. 1 Whether the defendants' telegram and confirming letter constituted a guarantee of payment of the balance of the purchase price under the agreement for sale
  2. 2 Proper construction of an ambiguous guarantee in light of prior correspondence and surrounding circumstances
  3. 3 Whether prior negotiations requiring a 5% fee for a guarantee displace an implied guarantee of payment

Ratio Decidendi

The telegram was ambiguous and, when read in context of the parties' dealings and the absence of consideration or a stipulated premium for a payment-guarantee, it should be construed as an assurance of the agreement's bona fides and the parties' and property's standing rather than an undertaking to pay the principal debt; therefore the defendants were not liable for payment of the purchase-money balance.

Court Disposition

Appeal dismissed with costs; judgment of the Supreme Court of Saskatchewan affirmed.

Orders

  • Appeal dismissed with costs.
  • Judgment of the Supreme Court of Saskatchewan affirming dismissal of the plaintiffs' action is affirmed.