Bankers and Banking.
642 Sect.
19.
Guarantees,
Chan~e^n ^ firml^^^
agreement to the contrary, any change which a guarantee is given puts guarantee (k). So in the case of a private bank any change in the partners of the bank would nullify the guarantee Where either the bank or the guaranteed as to future advances (l) party is a corporate body, joint stock or otherwise, internal change by transfer of shares, issue of new capital, change of directors, or the like has no effect (m). 1292. In the absence
of
in the constitution of the firm for
.
Absorption or amaigama-
Where guarantees are given to a corporate bank, its absorbing another bank would not affect the guarantees (n). But guarantees given to the absorbed bank would not enure for the benefit of the absorbing one (o) In the case of amalgamation as distinguished from absorption, guarantees given to either bank would probably be determined (p). .
Interest on bankruptcy.
<<
1293. Where a guarantee provides for payment of interest on money remaining due " from the principal debtor, no claim can
be maintained for interest accruing after the bankruptcy of the principal debtor (g). But it is otherwise where the words are until
repayment" Eemedies banker.
of
(r).
1294. The banker is not obliged to resort bands before proceeding against the surety (s).
to securities in his
Where
a continuing guarantee is given for a running account, doubtful at what time a cause of action accrues. In one case has been held that a cause of action arises as soon as any
it is it
Partnership Act, 1890 (53
(k)
to the contrary," stronger Act, 1856 (19 & 20 Vict.
&
54 Vict. c. 30), s. 18, " absence of agreement sect. 4 of the Mercantile Law Amendment
words than
c. 97), repealed by Partnership Act, 1890, " necessary implication from the nature of the tirm or otherwise." {I)
Ihid.
(m) The Partnership Act, 1890 (53 & 54 Vict. c. 39), only applies to "firms," Corporations remain the same entity notwithstanding any i.e., partnerships. change in their component parts. {n) See Capital and Counties Bank v. Bank of England (1889), 61 L. T. 516. (o) Prescott, Dimsdale cfc Co. v. Bank of England, [1894] 1 Q. B. 351. " An amalgamation between two banks need not necessarily cause (p) Ibid. the business thereafter carried on to be the same as was theretofore carried on by either," per A. L. Smith, L.J., at pp. 364, 365 London, Brighton, and South Coast Rail. Co. v. Goodivin (1849), 3 Exch. 320 Eastern Union Rail. Co. v. Cochrane (1853), 9 Exch. 197. Guarantees are not discharged by the amalgamation, but only by virtue of the provisions of the Partnership Act, 1890 (53 & 54 Vict,
c.
39).
Re Moss, [1905] 2 K. B. 307, Bankruptcy prevents the debt being recoverable against the bankrupt, so that it is not due and owing. Qucere whether the result would not be the same if the same words were used with regard to the principal sum. (r) Re FitzGeorge, [1905] 1 K. B. 462. (s) Ex parte Brett (1871), 6 Ch. App. 838, 841 (laying down the rule that the surety has no right or interest in the securities until he has paid the debt) ; Ewart V. Latta (1865), 4 Macq. 983, per Lord Westbtjry, at pp. 987, 989; Duncan Fox <h Go. v. North and South Wales Bank (1880), 6 App. Cas. 1, per Lord Selborne, at pp. 10, 14 per Lord Blackburn, at pp. 18, 20. The remarks of Lord Watson at p. 22 {ihid.) are explainable, inasmuch as the contest was not between the holder of the securities and the surety. As to the discharge of the surety by dealings with the principal, and as to the right of the surety to securities on payment of the debt, see title Guarantee. {q)
