Provincial Bank of Ireland, Ltd v Florence Donnell
| Jurisdiction | Northern Ireland |
| Judgment Date | 01 January 1934 |
| Date | 01 January 1934 |
| Court | Court of Appeal (Northern Ireland) |
"In consideration of advances heretofore made or that may hereafter be made" - Construction - Consideration- No intention of making further advances -No threat of legal proceedings - Forbearance to sue.
The defendant's husband's account with plaintiff's branch Bank at L. was overdrawn and the plaintiffs had, as security for this overdraft, mortgages of two policies of insurance upon the life of the husband. One policy with which the case was concerned was subject to a yearly premium of £24 12s., payable in two equal moieties. The plaintiffs subsequently required the husband to obtain security for the payment of the premiums, and on the 7th November, 1924, the defendant signed a document not under seal which provided that in consideration of advances heretofore made or that might hereafter be made from time to time by the plaintiffs to her husband she undertook to pay the premiums. It was also provided that in the event of the Bank having to pay the premiums or any other sums necessary for keeping on foot the policy, the defendant should pay such sums on demand with interest at Irish Banks' current rate. It was admitted on behalf of the plaintiffs that their anxiety was to secure the overdraft and that they had no intention of making any further advance to the plaintiff's husband. The defendant was not at any time informed as to the state of her husband's account or that the plaintiffs would not make advances to her husband. On 2nd January, 1931, the defendant at the request of the plaintiffs signed a second guarantee which was simply a renewal, which the defendant was told would make no change in her obligations. The plaintiffs had not threatened to take proceedings against the defendant's husband when the first guarantee was signed, and they did not do so subsequently, and "there was no talk about an agreement not to sue." The first default of the defendant's husband was in respect of the premium payable in December, 1931. This was paid by the defendant on 13th January, 1932. Further default occurred in respect of the June and December, 1932, premiums, and ultimately, these together with a sum for overdue charges were aid by the plaintiffs who sought to recover them by civil bill. Held, by the Court of Appeal (Andrews and Best, L.JJ.), that there as no sufficient consideration to support the guarantee because, (a) as regards past advances the agreement could not be construed as a...
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...for a subsequent guarantee is also evident from a decision of the Northern Ireland Court of Appeal in Provincial Bank of Ireland v Donnell [1934] NI 33, also cited by McDermott J. In the latter case, Andrews LJ stated:- “… The real defence argued was that as the guarantee was not under seal......
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