The appellant guarantor executed a guarantee for a company's indebtedness to the respondent bank.
The bank also took an assignment of the company's book accounts but failed to register it properly, rendering it void against the trustee when the company went bankrupt.
The bank sued the guarantor.
The guarantor argued he was relieved of liability because the bank failed to preserve the security.
The Supreme Court of Canada held that a clause in the guarantee expressly permitted the bank to abstain from perfecting securities.
The Court rejected arguments that the clause was an exemption clause subject to strict construction, that it was onerous, or that it was procured by misrepresentation.
The Court also held that any alleged collateral oral agreement to preserve the security contradicted the written guarantee and was inadmissible under the parol evidence rule.
The appeal was dismissed.
