McDonald v. Cummings

McDonald v. Cummings

Majority held the assignment was void under the Statute of Elizabeth because the arrangement that increased the preferred creditor's claim relied on unenforceable promises to unnamed local creditors, thereby hindering and delaying those creditors and creating a possible secret advantage to the assignor.

Citation
(1895) 24 SCR 321
Parties
Appellant / Defendant: Hugh McDonald; Respondent / Plaintiff: Selden W. Cummings, Assignee of the Estate of Neil McKinnon
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
11 March 1895
Procedural Posture
Appeal / Appeal to the Supreme Court of Canada From the Supreme Court of Nova Scotia
Outcome
Appeal allowed; action dismissed with costs
Legal Topics
Assignment for Benefit of Creditors, Preferential Payment, Hindering and Delaying Creditors, Statute of Elizabeth
Source Language
English
Insolvency Property Law Priorities and Hypothecs Equity Assignment for Benefit of Creditors Preferential Payment Hindering and Delaying Creditors Statute of Elizabeth

Case Brief

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Parties

Hugh McDonald

Appellant / Defendant

Selden W. Cummings, Assignee of the Estate of Neil McKinnon

Respondent / Plaintiff

Procedural Posture

Appeal / Appeal to the Supreme Court of Canada From the Supreme Court of Nova Scotia

Legal Issues

  1. 1 Whether the assignment was void under the Statute of Elizabeth (13 Eliz)
  2. 2 Whether a preferred creditor could be allowed an inflated claim based on an understanding to pay other creditors not named in the assignment
  3. 3 Whether the arrangement hindered and delayed the unnamed creditors and thus vitiated the deed

Ratio Decidendi

Majority held the assignment was void under the Statute of Elizabeth because the arrangement that increased the preferred creditor's claim relied on unenforceable promises to unnamed local creditors, thereby hindering and delaying those creditors and creating a possible secret advantage to the assignor.

Court Disposition

Appeal allowed; action dismissed with costs

Orders

  • Appeal allowed with costs
  • Action dismissed with costs, including all costs in the court below