Bankers and Banking.
640 Sect. 19.
Guarantees.
Disclosure,
Guarantee limited in
amount.
Determination of guarantee.
Continuing guarantee.
for the existing debt at the request of the guarantor. This may be implied from the nature of the transaction as between business men and the fact of forbearance (^). Forbearance for a definite period is not essential (k). If one only of several accounts is to be covered by a particular guarantee, this must be clearly expressed. The term " ultimate balance " by itself signifies the ultimate balance owing, combining all existing accounts (I). A banker is not bound to volunteer to an intending guarantor information as to the state of the account or whether the customer was or was not in the habit of overdrawing. If asked by the intending guarantor, however, he must give the information, this being sufficient reason for disclosing the customer's account (m). During the continuance of a guarantee for an overdraft the banker is bound, on request, at any time to acquaint the guarantor with the amount of his then liability, but not to give further information as to the account or to allow inspection of it (n).
1290. Where the guarantor's liability is limited to a specified sum, it depends on the wording of the guarantee whether the surety is surety for the whole debt with the specified limitation to his total liability, or whether he is surety only for part of the debt. The difference becomes material in case of the bankruptcy of the principal debtor (o), but is generally neutralised by special terms. 1291. A guarantor is, in general, entitled to determine the guarantee as to future advances by giving notice and paying what Where the guarantee is under seal this right is then due (p). appears to exist in equity (q), and would possibly be recognised even though the guarantee were expressed to be for a definite period, if the banker were not under contract with the principal debtor to make further advances to him (?•)• But it would appear that a continuing guarantee could not be revoked so as to exclude outstanding liabilities properly undertaken (i)
Miles
Bank of Ireland, [1903] A. C. 309, 316. Compare Zealand Alford Estate Co. (1886), 32 Ch. D. 266, jper Bowen, L.J., at
Fullerton v. Provincial V.
New
p. 290. (k) Ihid.
It
is,
however, advisable to have such consideration expressed in the
guarantee.
Mutton V. Peat, [1900] 2 Ch. 79. Welton v. Somes (1889), 5 (m) Hamilton v. Watson (1845), 12 CI. & F. 109 T. L. R. 184 and contrast Stone v. Compton (1838), 5 Bing. (n.c.) 142. See also Seaton v. Burnand, [1900] A. C. 135, and p. QAZ, post. {n) This view is adopted by the Institute of Bankers, see Questions on Banking Practice, 5th ed., Nos. 938, 939. See Hardy v. Veasey (1868), L. R. 3 Exch. 107. (o) Midland Banking Go. v. Chambers (1869), 4 Ch. App. 398 Ex parte National Provincial Bank of England (1881), 17 Ch. D. 98 and see Ex parte Hope (1844), 3 Mont. D. & De G. 720. These cases recognise the principle as to a surety for part of the debt, but in each case the surety had by the guarantee contracted himself out of his rights. See also Re Sass, [1896] 2 Q. B. 12, where the security was for the whole debt, but the surety had also contracted out. Lloyd's v. Harper (^) Beckett & Co. v. Addyman (1882), 9 Q. B. D. 783, 791 (1880), 16 Ch. D. 290, per Lush, L.J., at p. 319. and see Lloyd's v. Harper, supra. (g) Re Crace, [1902] 1 Ch. 733,738 (r) No direct authority but see Lloyd's v. Harper, supra, per James, L.J., at It would not be equitable to determine the guarantee if the banker was p. 314. bound to make further advances to the principal debtor. He is not released from such obligation by the withdrawal of the guarantee by the third party. [1]
