Ewing v. Dominion Bank

Ewing v. Dominion Bank

On receiving a bank notice that a promissory note purportedly in the merchant’s name was held by the bank and requested to be provided for, the merchant had a duty to promptly repudiate if the signature was forged; failure to do so, where that silence reasonably led to prejudice (payment of proceeds) to the bank, estops the merchant from denying the signature and renders him liable on the note for its full amount.

Citation
(1904) 35 SCR 133
Parties
Defendants/appellants: William Ewing; J.H. Davidson (Ewing & Co.); Plaintiff/respondent: The Dominion Bank; Payee / Alleged Forger (not Party): Thomas Phosphate Company (payee) / T.C. Wallace (forger)
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
8 June 1904
Procedural Posture
Collection Action on Promissory Note; Appeal to Supreme Court of Canada / On Appeal From the Court of Appeal for Ontario; Judgment on Appeal
Outcome
Appeal dismissed; judgment of Court of Appeal and trial court affirmed for plaintiffs
Legal Topics
Duty to Notify Holder, Estoppel by Silence, Adoption/ratification of Signature, Prejudice Requirement for Estoppel, Communication Methods (telegraph/telephone)
Source Language
English
Estoppel Forgery Negotiable Instruments Banking Law Evidence Duty to Notify Holder Estoppel by Silence Adoption/ratification of Signature +2 more

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Parties

William Ewing; J.H. Davidson (Ewing & Co.)

Defendants/appellants

The Dominion Bank

Plaintiff/respondent

Thomas Phosphate Company (payee) / T.C. Wallace (forger)

Payee / Alleged Forger (not Party)

Procedural Posture

Collection Action on Promissory Note; Appeal to Supreme Court of Canada / On Appeal From the Court of Appeal for Ontario; Judgment on Appeal

Legal Issues

  1. 1 Whether receipt by a merchant of a bank notice that a promissory note purporting to be his was held by the bank imposes a legal duty to promptly notify the bank if the signature is forged
  2. 2 Whether silence by the merchant, where the bank is prejudiced by payment of proceeds, estops the merchant from denying the signature
  3. 3 Whether liability should be limited to actual loss caused by the silence or extend to full amount of the instrument

Ratio Decidendi

On receiving a bank notice that a promissory note purportedly in the merchant’s name was held by the bank and requested to be provided for, the merchant had a duty to promptly repudiate if the signature was forged; failure to do so, where that silence reasonably led to prejudice (payment of proceeds) to the bank, estops the merchant from denying the signature and renders him liable on the note for its full amount.

Court Disposition

Appeal dismissed; judgment of Court of Appeal and trial court affirmed for plaintiffs

Orders

  • Appeal dismissed with costs
  • Judgment entered for The Dominion Bank for $2,000 (amount of the note)