A loan had been made, secure by a deposit by a third party. The company was said to have repaid the secured overdraft to secure the release of the deposit and its release from the hands of the general creditors. The court was asked whether the person providing the security had acted as a ‘surety or guarantor’ within section 44 of the 1914 Act. The depositor argued that since a bare deposit had not created a personal liability, she could not be a surety.
Held: She could be so treated under the Act.
Citations:
[1938] 2 All ER 127
Statutes:
Jurisdiction:
England and Wales
Cited by:
Cited – Tam Wing Chuen v Bank of Credit and Commerce Hong Kong Ltd PC 1996
The Board considered a banking transaction and the application of a chargeback by the bank, under which a loan was made only after a deposit by a third party against which it was secured, and particularly in the context of the insolvency of the bank . .
Lists of cited by and citing cases may be incomplete.
Insolvency
Updated: 18 May 2022; Ref: scu.617852