Mullen v White; Eadie v Mullen and another; Mullen v Mullen

Guarantee – Enforcing guarantee. The absence of a document signed by two guarantors (NM and C), in respect of loans to a company, recording the intended guarantee concerning two further loans made by NM's father to the company, prior to his death, meant that the purported guarantee was not enforceable against either of them by the father's estate. The Chancery Division so ruled in determining issues which arose out of various loans made to a company, which had subsequently gone into liquidation. The court further held that NM and C were jointly and severally liable to make good the company's default in respect of the secured part of a debt, namely a total loan of £200,000 by the father to the company, which they had guaranteed under the terms of a written agreement, plus interest, but that the effect, in equity, of NM and his brother proving the father's will (and NM being made his creditor's executor), had been that the debt had been released. The court held that the result was that the debt, which was deemed to have been paid by NM to himself as executor, became part of the general assets of the estate. Further rulings were made concerning, among other things, contribution rights in relation to the relevant loan obligations.