Durack v West Australian Trustee Executor and Agency Company Limited [1944] HCA 21

Durack v West Australian Trustee Executor and Agency Company Limited [1944] HCA 21

If it is established that parties signed the note intending to be liable as indorsers to the payee, the payee may recover from them despite the sequence of indorsements and delivery, as legal effect is given to that intention.

Parties
Appellants; Defendants: Durack & Others; Respondent; Plaintiff: West Australian Trustee Executor & Agency Company Limited
Jurisdiction
Australia
Procedural Posture
Appeal / Appeal From the Supreme Court of Western Australia
Outcome
Appeal dismissed (by majority).
Legal Topics
Bills of Exchange, Promissory Notes, Indorsement Liability, Ultra Vires Company Acts, Negotiability of Instruments
Commercial Law Company Law Bills of Exchange Promissory Notes Indorsement Liability Ultra Vires Company Acts Negotiability of Instruments

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Parties

Durack & Others

Appellants; Defendants

West Australian Trustee Executor & Agency Company Limited

Respondent; Plaintiff

Procedural Posture

Appeal / Appeal From the Supreme Court of Western Australia

Legal Issues

  1. 1 Whether individuals who signed a promissory note before delivery to the payee are liable as indorsers when the payee subsequently indorses below their signatures;
  2. 2 Whether the financing agreement for the purchase of company shares was ultra vires the company;
  3. 3 Whether a payee may recover against such indorsers despite not being a holder in due course.

Ratio Decidendi

If it is established that parties signed the note intending to be liable as indorsers to the payee, the payee may recover from them despite the sequence of indorsements and delivery, as legal effect is given to that intention.

Court Disposition

Appeal dismissed (by majority).

Orders

  • Judgment for the respondent (West Australian Trustee Executor & Agency Co. Ltd.) for £17,953 including interest and costs against the personal representatives of the indorsers (appellants).
  • Appeal dismissed with costs.