Pioneer Bank v. Canadian Bank of Commerce

Pioneer Bank v. Canadian Bank of Commerce

The guarantee was unenforceable because the bills of lading attached to the draft did not give the guarantor or its customer exclusive control of the goods but instead left control with the consignors by permitting delivery without production of the bills; the essential contractual condition was not fulfilled and the bank was deprived of the security it stipulated for.

Citation
(1916) 53 SCR 570
Parties
Appellant (plaintiff): Pioneer Bank; Respondent (defendant): Canadian Bank of Commerce
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
24 June 1916
Procedural Posture
Civil Appeal / On Appeal to the Supreme Court of Canada From the Appellate Division of the Supreme Court of Ontario
Outcome
Appeal dismissed; judgment of the Appellate Division of the Supreme Court of Ontario affirmed
Legal Topics
Guarantee Interpretation, Bill of Lading Form and Effect, Delivery of Goods, Failure of Consideration, Trade Custom
Source Language
English
Guarantee and Suretyship Bills of Lading Sale of Goods Contract Commercial Law Guarantee Interpretation Bill of Lading Form and Effect Delivery of Goods +2 more

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Parties

Pioneer Bank

Appellant (plaintiff)

Canadian Bank of Commerce

Respondent (defendant)

Procedural Posture

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

Legal Issues

  1. 1 Whether the bills of lading attached to the draft complied with the terms of the bank's guarantee
  2. 2 Whether the form of the bills of lading deprived the guarantor of the security it required by allowing delivery without production of the bills
  3. 3 Whether the guarantor could be held liable when the documentary security did not confer exclusive control of the goods to the guarantor or its customer

Ratio Decidendi

The guarantee was unenforceable because the bills of lading attached to the draft did not give the guarantor or its customer exclusive control of the goods but instead left control with the consignors by permitting delivery without production of the bills; the essential contractual condition was not fulfilled and the bank was deprived of the security it stipulated for.

Court Disposition

Appeal dismissed; judgment of the Appellate Division of the Supreme Court of Ontario affirmed

Orders

  • Appeal dismissed with costs
  • Judgment of the Appellate Division of the Supreme Court of Ontario affirmed