Aldercrest Developments Ltd. v. Hamilton Co-Axial Ltd.

Aldercrest Developments Ltd. v. Hamilton Co-Axial Ltd.

Aldercrest never became a holder because the note payable to order required endorsement; a transferee without endorsement acquires only the transferor's equitable title and is subject to defences and prior releases effective against the transferor; because Elmore released the company before it had notice, the release defeated the assignee and the appeal must be dismissed.

Citation
[1974] SCR 793
Parties
Plaintiff Appellant: Aldercrest Developments Limited; Plaintiff Co Plaintiff (trustee in Bankruptcy): Charles A. Cecil, Official Receiver, Trustee in Bankruptcy of Hudson R. Elmore; Defendant Respondent: Hamilton Co-Axial (1958) Limited
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
7 May 1973
Procedural Posture
Appeal Negotiable Instruments / Supreme Court of Canada Final Hearing on Appeal From Court of Appeal for Ontario
Outcome
Appeal dismissed with costs
Legal Topics
Demand Note, Unendorsed Transfer, Equitable Assignment, Notice to Debtor, Lack of Consideration, Release as Defence
Source Language
English
Bills of Exchange Contract Equity Bankruptcy Demand Note Unendorsed Transfer Equitable Assignment Notice to Debtor +2 more

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Parties

Aldercrest Developments Limited

Plaintiff Appellant

Charles A. Cecil, Official Receiver, Trustee in Bankruptcy of Hudson R. Elmore

Plaintiff Co Plaintiff (trustee in Bankruptcy)

Hamilton Co-Axial (1958) Limited

Defendant Respondent

Procedural Posture

Appeal Negotiable Instruments / Supreme Court of Canada Final Hearing on Appeal From Court of Appeal for Ontario

Legal Issues

  1. 1 Whether a transferee of a promissory note payable to order who receives it unendorsed becomes a holder entitled to enforce it
  2. 2 Whether an equitable assignee who has not given notice can be defeated by a release executed by the assignor before notice to the debtor
  3. 3 Whether lack of consideration between payee and maker constitutes a defence available against an assignee

Ratio Decidendi

Aldercrest never became a holder because the note payable to order required endorsement; a transferee without endorsement acquires only the transferor's equitable title and is subject to defences and prior releases effective against the transferor; because Elmore released the company before it had notice, the release defeated the assignee and the appeal must be dismissed.

Court Disposition

Appeal dismissed with costs

Orders

  • Appeal dismissed with costs