Kirk v. Chisholm

Kirk v. Chisholm

The assignment was within the s.10 exception to the Bills of Sale Act and therefore did not require the affidavit of bona fides, but the instrument was void as against execution creditors under the Statute of Elizabeth because, taken together, (1) a first preference was given to a firm of which the assignee was a member with interest accruing at seven percent, (2) the assignor was permitted to continue possession and control and the assignee furnished stock and permitted ongoing business, (3) the deed authorized payment of costs and expenses to accommodation endorsers, and (4) the deed limited the assignee's liability to moneys actually received or to gross negligence/fraud — these...

Citation
(1896) 26 SCR 111
Parties
Appellant / Assignee / Plaintiff: Aubrey Kirk; Respondent / Defendant / Sheriff: Duncan C. Chisholm
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
24 March 1896
Procedural Posture
Appeal / On Appeal to the Supreme Court of Canada From the Supreme Court of Nova Scotia
Outcome
Appeal dismissed with costs; assignment declared void as against execution creditors
Legal Topics
Assignment for Benefit of Creditors, Preferences Among Creditors, Chattel Mortgage / Bills of Sale, Affidavit of Bona Fides, Statute of Elizabeth (fraudulent Conveyances), Trustee Liability, Accommodation Paper Indemnity, Validity of Assignment
Source Language
English
Insolvency Property Equity Commercial Law Civil Procedure Securities and Mortgages Assignment for Benefit of Creditors Preferences Among Creditors +6 more

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Parties

Aubrey Kirk

Appellant / Assignee / Plaintiff

Duncan C. Chisholm

Respondent / Defendant / Sheriff

Procedural Posture

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

Legal Issues

  1. 1 Whether the deed was an "assignment for the general benefit of creditors" under R.S.N.S. ch.92 s.10 and thus exempt from the affidavit of bona fides requirement in s.4
  2. 2 Whether provisions indemnifying accommodation endorsers converted the deed into a chattel mortgage under s.5
  3. 3 Whether the assignment was void under the Statute of Elizabeth as tending to hinder or delay creditors

Ratio Decidendi

The assignment was within the s.10 exception to the Bills of Sale Act and therefore did not require the affidavit of bona fides, but the instrument was void as against execution creditors under the Statute of Elizabeth because, taken together, (1) a first preference was given to a firm of which the assignee was a member with interest accruing at seven percent, (2) the assignor was permitted to continue possession and control and the assignee furnished stock and permitted ongoing business, (3) the deed authorized payment of costs and expenses to accommodation endorsers, and (4) the deed limited the assignee's liability to moneys actually received or to gross negligence/fraud — these...

Court Disposition

Appeal dismissed with costs; assignment declared void as against execution creditors

Orders

  • Appeal dismissed with costs.
  • The assignment is void as against execution creditors (voidable under the Statute of Elizabeth).