McLaws v. Minister of National Revenue, 72 DTC 6149, [1972] CTC 165, [1974] S.C.R. 887 -- summary under Capital Loss v. Loss

When a corporation owned by the taxpayer was facing bankruptcy, the bank proposed to call its loans, but offered to extend additional credit to keep the corporation going provided that the taxpayer gave a personal guarantee secured by the deposit of securities with the bank. The loss sustained by the taxpayer when he was required to honour his guarantee a year later was a capital loss. Although he was entitled to receive guarantee fees from his corporation, it was found that he gave the guarantee in order to protect and preserve a source of income, rather than to earn the guarantee fees.