The appellant bank claimed over $122,000 from the heirs of a deceased surety based on two continuing letters of suretyship.
The bank had made advances to the principal debtor after the surety's death, knowing of the death, but failed to inform the heirs of the existence of the revocable suretyships.
The Supreme Court of Canada held that while the obligation to cover future debts is a true suretyship that passes to heirs, the bank committed a fault by failing to disclose the suretyships to the heirs when it took the initiative to inform them of other debts.
This fault gave rise to a fin de non-recevoir, precluding the bank from recovering the post-death advances from the heirs.
