VALIDITY OF GUARANTEES FOR DEBTS OF MINORS
| Date | 01 January 1947 |
| DOI | http://doi.org/10.1111/j.1468-2230.1947.tb00036.x |
| Published date | 01 January 1947 |
| Author | E. J. Cohn |
VALIDITY
OF
GUARANTEES FOR
DEBTS
OF
MINORS
I.
In
Coutts
and
Co.
v.
Browne-Lecky and Others
(1946),
62
T.L.R.
421,
the second and third defendants had guaranteed
the amount of an overdraft granted by the plaintiff bankers
to the first defendant, an infant. The second and third
defendants contended that the plaintiffs could not recover from
them because under section
1
of the Infants Relief Act,
1874,'
they could not have recovered from the
fist
defendant.
All
the parties knew throughout that the first defendant was an
infant. Oliver,
J.,
held that the plaintiffs could not recover.
Under section
1
of the Infants Relief Act the loan to the first
defendant was
'
absolutely void
'.
There was therefore no
liability on the part of the infant. A guarantee was
a
contract
to make good
a
debt, default
or
miscarriage of another person.
But
in
this case there was no debt, because the statute says
so;
there was no default, because the first defendant
was
entitled to refrain from paying; for the same reason there was
no miscarriage. On principle there was therefore no liability
on the part of the second and third defendants. There was,
however, a dearth of authority in English law on the subject.
There was no English case in point, apart from
Wauthier
v.
Wilson,'
where two of the Judges in the Court of Appeal had
made
obiter
remarks to the effect that
a
guarantee of
a
trans-
action that was void under the Infant Relief Act would itself be
void. Thus the Court felt constrained to rely on two persuasive
authorities, one of them being
a
Scottish case and the other
a
quotation from Pothier. In
Swan
v.
Bank
of
ScotlandS
the
House of Lords held that under Scottish law
a
guarantee of
a
transaction that was void on the ground of illegality was
also
void.
'
The only difference between those facts and the
facts before me
',
said
Mr.
Justice Oliver,
'
is that there is no
illegality about the present transaction. Save for that differ-
ence, the facts in this case appear to me to be identical in
principle.' Pothier's views were not ascertained
from
his
original writings. Bench and Bar alike relied upon
a
citation
contained in de Colyar's work on
Contracts
of
G~arantee,~
1
37
dc
38
Vict.
c.
62.
2
(1912).28
T.L.R.
239.
3
(1836), 10
Bli.
(N.s.)
627.
4
3rd ed. (1897),
p.
210.
40
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