Whitman v. The Union Bank of Halifax

Whitman v. The Union Bank of Halifax

The deed was void under 13 Eliz. c.5 because it combined preference and a release mechanism with a resulting trust provision that would return any surplus to the debtors, thereby imposing unreasonable conditions on unpreferred creditors and evidencing an intent to hinder or defraud creditors; accordingly the appeal is dismissed and the deed set aside.

Citation
(1889) 16 SCR 410
Parties
Appellants (defendants/assignors): The Hon. George Whitman and Others; Respondent (plaintiff): The Union Bank of Halifax
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
18 March 1889
Procedural Posture
Appeal / Final Judgment on Appeal From Supreme Court of Nova Scotia
Outcome
Appeal dismissed with costs; judgment of Supreme Court of Nova Scotia affirming setting aside of the deed upheld.
Legal Topics
Assignment for Benefit of Creditors, Preference Among Creditors, Release Clause, Resulting Trust, Statute of Elizabeth (13 Eliz. C.5), Fraud on Creditors, Security for Costs Bond Form
Source Language
English
Trusts Insolvency Equity Property Civil Procedure Assignment for Benefit of Creditors Preference Among Creditors Release Clause +4 more

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Parties

The Hon. George Whitman and Others

Appellants (defendants/assignors)

The Union Bank of Halifax

Respondent (plaintiff)

Procedural Posture

Appeal / Final Judgment on Appeal From Supreme Court of Nova Scotia

Legal Issues

  1. 1 Whether the deed of assignment was void under 13 Eliz. c.5 as intended to delay, hinder or defraud creditors
  2. 2 Whether the combination of preference, release clause and resulting trust made it unreasonable to expect unpreferred creditors to join
  3. 3 Whether indemnity clause and trustee's limited liability rendered deed fraudulent

Ratio Decidendi

The deed was void under 13 Eliz. c.5 because it combined preference and a release mechanism with a resulting trust provision that would return any surplus to the debtors, thereby imposing unreasonable conditions on unpreferred creditors and evidencing an intent to hinder or defraud creditors; accordingly the appeal is dismissed and the deed set aside.

Court Disposition

Appeal dismissed with costs; judgment of Supreme Court of Nova Scotia affirming setting aside of the deed upheld.

Orders

  • Appeal dismissed with costs.
  • Deed of assignment set aside (order below affirmed).