On a bank's appeal from dismissal of an action on a promissory note signed by a spouse as co-signor of an investment loan, the court held that absent a fiduciary duty the lender had no obligation to disclose its concerns about the investment's quality, and failure to follow internal lending policies on independent advice did not itself render the loan unenforceable.
The majority held there is no categorical presumption of undue influence arising from a spousal relationship; rather, the party alleging undue influence must show a de facto relationship of trust and confidence in financial matters sufficient to support the presumption.
Although the lender was on constructive notice of potential wrongdoing because the transaction was disadvantageous to the spouse and arose within a marital relationship, the majority found no wrongdoing established and, alternatively, any presumption was rebutted.
The appeal was allowed and judgment granted to the bank, but no costs were awarded.
