Segsworth v. Anderson

Segsworth v. Anderson

An inspector (and a creditor acting through the inspector) cannot obtain an advantage from his position in relation to the sale of estate assets; where such an advantage is alleged the defendants must account and the creditors are entitled to a reference to determine any profit — the appeal is allowed and the trial judge's judgment ordering an account and reference is restored.

Citation
(1895) 24 SCR 699
Parties
Plaintiff/appellant/creditor: Segsworth; Defendant/respondent/creditor: Anderson; Defendant/inspector: Lee; Insolvent/assignor: Jorgenson
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
15 January 1895
Procedural Posture
Bankruptcy and Insolvency Appeal / On Appeal to the Supreme Court of Canada From the Court of Appeal for Ontario
Outcome
Appeal allowed with costs; judgment of trial judge restored
Legal Topics
Assignment in Trust for Creditors, Sale of Estate Assets to Related Party, Inspector Fiduciary Duty, Account for Profits, Chattel Mortgage, Creditor Guarantees
Source Language
English
Bankruptcy and Insolvency Trusts and Fiduciary Law Equity Assignment in Trust for Creditors Sale of Estate Assets to Related Party Inspector Fiduciary Duty Account for Profits Chattel Mortgage +1 more

Case Brief

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Parties

Segsworth

Plaintiff/appellant/creditor

Anderson

Defendant/respondent/creditor

Lee

Defendant/inspector

Jorgenson

Insolvent/assignor

Procedural Posture

Bankruptcy and Insolvency Appeal / On Appeal to the Supreme Court of Canada From the Court of Appeal for Ontario

Legal Issues

  1. 1 Whether an inspector or creditor may obtain an advantage from their position in relation to the sale of estate assets
  2. 2 Whether defendants must account for any profit derived from purchase/security arrangement
  3. 3 Whether approval of the sale by inspectors or lack of proven loss to the estate bars liability

Ratio Decidendi

An inspector (and a creditor acting through the inspector) cannot obtain an advantage from his position in relation to the sale of estate assets; where such an advantage is alleged the defendants must account and the creditors are entitled to a reference to determine any profit — the appeal is allowed and the trial judge's judgment ordering an account and reference is restored.

Court Disposition

Appeal allowed with costs; judgment of trial judge restored

Orders

  • Appeal allowed with costs
  • Restore trial judgment for plaintiffs