Continuing guarantee limitation runs from breach, while recovery is confined to the proved balance after excluding unsubstantiated debits.

A suit to enforce a continuing guarantee for a running overdraft account was held not barred by limitation, because time began to run from breach of the guarantee and not from each individual debit entry. The guarantor's written acknowledgments also supported the account remaining live. On quantum, the decree could stand only for the balance actually proved and claimed after excluding unsubstantiated debit items; the court held that the deducted items had to be removed from the amount sued for, with interest applied to the corrected balance. The appeal therefore succeeded only in part, with partial relief confined to the reduced recoverable sum.

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Issues: (i) Whether the suit on the continuing guarantee was barred by limitation; (ii) whether the order of remand and the subsequent proof of disputed debit items could sustain the decree, and what amount, if any, remained recoverable from the defendant.

Issue (i): Whether the suit on the continuing guarantee was barred by limitation.

Analysis: The liability sued upon was not an independent claim on each debit entry in the overdraft account, but enforcement of a continuing guarantee. On the true construction of the bond, the guarantor undertook to answer for the balance due on the account from time to time, and limitation did not begin to run merely because individual debits were made. In a continuing guarantee, time runs only from breach, and the account remained live because amounts continued to be credited and the defendant herself acknowledged liability in writing.

Conclusion: The suit was not barred by limitation and this issue was decided against the appellant.

Issue (ii): Whether the order of remand and the subsequent proof of disputed debit items could sustain the decree, and what amount, if any, remained recoverable from the defendant.

Analysis: The earlier remand, even if open to criticism, had enabled both sides to adduce evidence and had resulted in substantial justice between the parties. The defendant's signatures on the contemporaneous letters of acknowledgment were treated as reliable confirmation that the account statements had been checked. At the same time, some debit items were not proved and had to be excluded. The Court held that the High Court erred in deducting the excluded items from the larger amount mentioned in the plaint instead of from the amount actually sued for, and the net decree had to reflect only the sum claimed in the suit after deduction of the unproved debits with interest.

Conclusion: The decree was sustained only to the extent of the reduced balance, and the appellant obtained partial relief.

Final Conclusion: The appeal succeeded in part: the plaintiff's claim was confined to the corrected balance after exclusion of unproved debit items, while the finding on limitation and the enforceability of the continuing guarantee stood against the appellant.

Ratio Decidendi: A suit to enforce a continuing guarantee for a running account is governed by limitation from the date of breach of the guarantee, not by the dates of individual debits, and any decree must be confined to the amount actually proved and claimed after excluding unsubstantiated entries.

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