GEORGE HUTCHFUL V. HAMILTON KWEKU BINEY
August 27, 2025FARMART PRODUCE & SHIPPING LINE LTD V. ESTABLISHMENT DE COMMERCE GENERAL
August 27, 2025Legalpedia Citation: (1971) Legalpedia (SC) 11811
In the Supreme Court of Nigeria
Fri Oct 15, 1971
Suit Number: SC 104/1970
CORAM
ADEMOLA, CHIEF JUSTICE, NIGERIA
OBASEKE, JUSTICE, SUPREME COURT
MADARIKAN, JUSTICE, SUPREME COURT
PARTIES
CHIEF S.L. EDU APPELLANTS
RESPONDENTS
AREA(S) OF LAW
SUMMARY OF FACTS
The plaintiff, the National Bank of Nigeria Ltd. at the request of the 2nd defendant, having been duly guaranteed in writing by Chief S. L. Edu the 1st defendant, advanced on the basis of overdraft facilities to the 2nd defendant a total sum of £11,366-9s-3d inclusive of interest. The plaintiff thereby claimed from the 2nd defendant the amount outstanding in respect of the loan.
HELD
The Court allowed the appeal and set aside the judgment of the trial court on the ground that there is no personal liability of any kind imposed upon the 1st defendant/appellant by virtue of the document (exhibit A).
ISSUES
Whether by virtue of the document (exhibit A), the 1st defendant/appellant had pledged his personal credit or not.
RATIONES DECIDENDI
THE EXTENT OF LIABILITY OF A SURETY OR GUARANTOR
In comparatively modern commercial practice, the pledge (not, as a rule, of hawks or similar chattels, but more commonly of documents of title to choses in action) has again become common practice, often, for obvious reasons, divorced from any wider obligation to be answered in person or in other property available for execution. These considerations have satisfied me that it would be unsound to treat the phrase surety or guarantor as necessarily connoting a personal liability, and as failing to cover the very case on which the whole conception of suretyship and guarantee appears as a matter of history to be founded, of a person who had provided a pledge without undertaking liability beyond the pledge.”
Per Madarikan, JSC quoting Clauson L.J. in Re Conley
THE EXTENT OF LIABILITY OF A SURETY OR GUARANTOR
In comparatively modern commercial practice, the pledge (not, as a rule, of hawks or similar chattels, but more commonly of documents of title to choses in action) has again become common practice, often, for obvious reasons, divorced from any wider obligation to be answered in person or in other property available for execution. These considerations have satisfied me that it would be unsound to treat the phrase surety or guarantor as necessarily connoting a personal liability, and as failing to cover the very case on which the whole conception of suretyship and guarantee appears as a matter of history to be founded, of a person who had provided a pledge without undertaking liability beyond the pledge.”
Per Madarikan, JSC quoting Clauson L.J. in Re Conley
CASES CITED
Re Conley (1938) 2 All E.R. 127
Smith v. Wood (1929) 1 Ch. 14
STATUTES REFERRED TO
The Bankruptcy Act, 1914
