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2. In the month of September, 1880, the defendant commenced the business of a tailor and draper in Berwick aforesaid, and he has since continued such business under the name or style of C. E. & Son.

3. The defendant, in the month of October, 1880, in writing, solicited many of the old customers of the said business which he had sold to the plaintiff to deal with him.

The plaintiff claims :

(1.) An injunction to restrain the defendant from carrying on in Berwick, aforesaid, the said business of a tailor and draper under the style or firm of C. E. & Son, and to restrain him, his servants and agents, from soliciting in any way the custom of persons who dealt with him before he sold the said business to the plaintiff.

(2.) Damages.

Contract of guarantee must be evidenced

by writing.

Guarantee (a).

1. Claim on a Guarantee for the Price of Goods setting out

Guarantee.

The plaintiff's claim is for the price of goods sold and delivered by the plaintiff to E. F. under the following gua

rantee:

Sir,-In consideration of your supplying goods to E. F., I
undertake to see you paid.
Yours, &c.,
C. D. (Defendant).

To Mr. A. B. (Plaintiff).

(a) A guarantee is a contract to answer for the payment of a debt, or the performance of a duty by another person.

The Statute of Frauds (29 Car. 2, c. 3), s. 4, provides (inter alia) that no action shall be brought whereby to charge the defendant on any special promise to answer for the debt, default, or miscarriage of another person unless the agreement on which such contract shall be brought or some memorandum or note thereof shall be in writing, and signed by the party to be charged therewith or some other person thereunto by him lawfully authorised.

By the 19 & 20 Vict. c. 97, s. 3, it was enacted that no such contract should be deemed invalid by reason only of the consideration for the promise not appearing in writing or by necessary inference from the written document. There must, however, still in fact be consideration for the promise; and though the consideration can now be shown by

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parol yet the promise must appear in the instrument without reference to extrinsic facts or arrangements. (Holmes v. Mitchell, 28 L. J. C. P. 381.) There are some agreements which at first glance present features strongly resembling guarantees, but which do not really possess the essential character of that contract, which is that there must be a third person primarily liable, and that the guarantor promises the creditor that if such third person, who is the debtor, will not pay, he (the guarantor) will. Therefore, if the promise is given in terms implying the acceptance The essenof a sole liability, as where A. says to a trader with regard to goods sup- tial characplied to B., "I will see you paid," and the price of the goods is charged teristic of to A., this is not a guarantee, as would be a promise that if B. did not the conpay A. would. So where the promise involves an extinction of the tract of original debt, or a transfer of it to the promissor. Thus, where before guarantee. the partial abolition of imprisonment for debt, and when arrest on a ca. sa., followed by discharge of the debtor from prison, put an end to the claim against him, if a person promised the creditor that he would pay the debt if the debtor were discharged, this was no guarantee, because there was no person primarily liable after the promise was made. (Goodman v. Chase, 1 B. & Ald. 297.) The doctrine is very clearly stated in Mountstephen v. Lakeman (L. R. 7 Q. B. 196, Ex. Ch. affirmed L. R. 7 H. L. 17; 43 L. J, Q. B. 188). It is there laid down that the fact of the original liability ceasing does not take away its character of a guarantee from the defendant's promise, and that it is sufficient to give it this character if the original or primary debtor continues liable during any time after the contract is made.

The promise must be made to the original creditor. (Eastwood v. Kenyon, 11 Ad. & E. 438; Reader v. Kingham, 32 L. J. C. P. 108.) Therefore a promise by A. to a County Court bailiff about to arrest B., a debtor, on a warrant of commitment, that if he would not arrest him he would pay the creditor, or surrender B. on a given day, was held in the last-mentioned case not to be within the statute.

The agreement to be answerable for the payment of goods sold by a del credere agent to his customers is not within the above provision, for although it may eventuate in a liability to pay the debt of another, that is not the immediate object of his promise. (Coutourier v. Hastie, 8 Ex. 40; 22 L. J. Ex. 97.)

The names of both parties to the contract of guarantee must appear in the note, though the signature of the guarantor only is necessary. (Williams v. Lake, 29 L. J. Q. B. 1.)

The promise must be made to the original creditor.

By 19 & 20 Vict. c. 97, s. 4, no promise to answer for the debt, default, Guarantees or miscarriage of another made to a person, or two or more persons, or given to a to one person trading under the name of a firm-and no promise to answer firm infor the debt, &c., of such firm, persons, or person, so trading-shall be validated binding on the maker in respect of anything done or omitted to be done by any after a change in any one or more of the firm or persons so trading, unless change in the intention that the promise shall continue to bind, notwithstanding the firm. such change, shall appear by express stipulation or by necessary implication from the nature of the firm or otherwise.

Defences. 1. A denial of the contract. A defendant may plead that he never made the contract, or that there was no consideration for it, or

2. Claim for the Price of Goods against the Principal Debtor and the Surety.

The plaintiff's claim is against the defendant, A. B., as principal, and against the defendant, C. D., as surety for the price

Defences to that it was not in writing as required by the Statute of Frauds. Here actions on the pleader must bear in mind Order XIX. r. 20, which provides that guarantees. where a contract, promise, or agreement, is alleged in any pleading, a bare denial of the same shall be construed only as a denial of the fact of the express contract, promise, or agreement alleged, or of the matter of fact from which the same may be implied by law, and not as a denial of the legality or sufficiency in law of such contract, promise, or agreement, whether with reference to the Statute of Frauds or otherwise. Therefore, if the defendant wishes to rely on the Statute of Frauds as his defence he must distinctly say so, and if he wishes to contend that there was no consideration for his promise, again he must distinctly say so.

Effect of the death of the guarantor.

What the

creditor is bound to communicate.

2. The death of the guarantor. To what extent a guarantee is determined by the death of the guarantor has been the subject of a great deal of discussion of late, and the law is still in a very unsettled state on the subject. In Coulthart v. Clementson (5 Q. B. D. 42), the present Lord Justice Bowen, acting upon the principle of Harriss v. Fawcett (L. R. 15 Eq. 311; 8 Ch. 866), decided that a continuing guarantee, in the absence of express provision, is revoked as to subsequent advances by notice of the death of the guarantor. In the later case of Lloyds v. Harper, 16 Ch. D. 291, the Court of Appeal affirming Fry, J., held that a guarantee the consideration for which is given once for all, cannot be determined by the guarantor, and does not cease with his death. James and Cotton, L.JJ., declined to give any opinion upon the soundness of the doctrine laid down in Coulthart v. Clementson, though Lush, L.J. expressed his approval of it. There is, however, as the Court of Appeal pointed out, a great distinction between a case where the guarantee is of a running account merely, and the person guaranteed is not bound to give any credit after the determination of the guarantee by notice, and a case where on the part of the person guaranteed the whole consideration has been performed. In the recent case of Beckett & Co. v. Addyman, 9 Q. B. D. 783, Lord Coleridge and Brett, L.J. assumed that the law was settled that in the case of a continuing guarantee it was in the power of the guarantor to determine his liability by notice. There the point decided was that the death of one of the co-sureties under a joint and several continuing guarantee does not by itself determine the future liabilities of the surviving co-surety.

3. Concealment of material particulars by the principal at the time the contract was made. The duty of the principal, i.e., what he is bound to disclose, is always a question for the jury, subject to the direction of the judge. The duty of the creditor towards a surety in such circumstances is laid down by Lord Campbell, in Hamilton v. Watson (12 Cl. &. F. 109). He says a surety is only entitled to the disclosure of any arrangement that may exist between the debtor and creditor that may make his position different from what he would reasonably expect; and hence, if a person undertakes to be responsible for a cash credit given to a customer of a banker, the banker is not bound voluntarily to communicate the fact that the intention is to apply the credit to an old debt due to the banker by the customer. But see Lee v. Jones, 34 L. J. C. P. 131, and compare North British Insurance Co. v. Lloyd, 10 Ex. 523; 24 L. J. Ex. 14, in which the Court adhered to Lord Campbell's opinion, and laid down that the rule which prevails in assurances upon ships or

of goods sold and delivered by the plaintiff to A. B., on a guarantee by C. D., dated 2nd February, 1882.

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3. Claim upon a Guarantee for the Honesty of a Brewer's Traveller.

1. The plaintiff's claim is upon a guarantee in writing of the 3rd of August, 1880, by which the defendant promised that he would make good to the plaintiff any loss which the plaintiff might suffer by reason of A. B.'s dishonesty while in his service as a traveller.

lives that all material circumstances known to the assured must be dis closed, though there be no fraud in the concealment, does not extend to the case of guarantee. In the latter case the concealment to vitiate the guarantee must be fraudulent.

4. Alteration of the position of parties.-Any change by a binding agreement in the relative position of the creditor and a principal debtor, whereby the latter is released or the remedy against him sus pended, or the risk of the surety is varied without his assent, will discharge the surety or guarantor. (Lewis v. Jones, 4 B. & C. 506 and 515 n.; Cragoe v. Jones, L. R. 8 Ex. 81; Wilson v. Lloyd, L. R. 16 Eq. 60.) But if the rights against the surety are reserved, the latter is not dis charged. (Bateson v. Gosling, L. R. 7 C. P. 9.) The alteration of the liabilities of the principal debtor by statute has the same effect as by agreement between him and the creditor. (Pybus v. Gibb, 6 E. & B. 902 ; 26 L. J. Q. B. 41.) See enactment of 18 & 19 Vict. c. 79, s. 4, cited ante, p. 303, as to effect of change in a firm on liability of guarantor of debts due to or by them.

5. The parting with or loss of any security held by the creditor against the principal debtor, even though the guarantor may not have known of i's existence, and though it may have been made or given subsequent to the contract of guarantee, will discharge the guarantor to the extent of the value of the security.

And neglecting to take advantage of a security will have the same effect as its loss in this respect as in the case of a bill of sale which the creditor neglects to register or enforce in the event of anticipated insolvency.

The effect of change in the position of the debtor or creditor.

The loss by the

creditor of any sccurity.

2. The said A. B., while in the plaintiff's service as a traveller, embezzled £151 belonging to the plaintiff.

The plaintiff claims £151.

Defence.

1. The defendant never contracted as alleged in the 1st paragraph of the statement of claim, or at all.

2. Section 4 of the Statute of Frauds has not been complied with.

3. The said A. B., while in the plaintiff's employment, did not embezzle the said sum of £151, or any part thereof.

4. Claim against Executors of a Surety upon a continuing Guarantee given by the Testator.

1. The defendants are the executors of the late J. B., Wigan.

of

2. On the 12th of May, 1876, the said J. B., deceased, in writing, promised the plaintiffs that, in consideration that they would make further advances to one M. P., of Wigan, he would guarantee any balance which might be owing by the said M. P. to the plaintiffs, to the extent of £500.

3. The plaintiffs have made further advances to the said M. P., and this is now due and owing by him to the plaintiffs, a balance largely in excess of the sum of £500. The plaintiff claims £500.

Defence.

1. The said J. B. died on the 1st of January, 1878, and the plaintiffs had forthwith notice of his death.

2. The moneys sought to be recovered in this action were advanced by the plaintiffs to the said M. P. long after they had received notice of the death of the said J. B.

3. The defendants do not admit that the sum of £500, or any other sum, is now due and owing by the said M. P. to the plaintiffs.

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