Canadian Bank of Commerce v. Mothersill et al.

Canadian Bank of Commerce v. Mothersill et al.

The executors' notice under s.56(2) did not, by itself, bar the secured creditor from selling securities and recovering any contractual deficiency; the personal representative had to proceed under s.57(1) and obtain the statutory order to bar the creditor for failure to value, and absent such application and order the creditor retained its contractual right to recover the deficiency.

Citation
[1937] SCR 169
Parties
Plaintiff Appellant: Canadian Bank of Commerce; Executor and Trustee Respondent: John H. Mothersill; Executor and Trustee Respondent: The Trusts and Guarantee Company Ltd.
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
2 February 1937
Procedural Posture
Civil Appeal Concerning Trust/estate Administration and Secured Creditor's Rights / On Appeal to the Supreme Court of Canada From the Court of Appeal for Ontario
Outcome
Appeal allowed; judgment of the trial court restored; Court of Appeal reversed
Legal Topics
Executors' Notice to Creditors, Valuation of Security, Trustee Act Ss.56(2) and 57(1), Right to Recover Deficiency After Sale of Security, Construction of Statutory Duties and Remedies
Source Language
English
Trust Estate Administration Probate Secured Transactions Civil Procedure Executors' Notice to Creditors Valuation of Security Trustee Act Ss.56(2) and 57(1) +2 more

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Parties

Canadian Bank of Commerce

Plaintiff Appellant

John H. Mothersill

Executor and Trustee Respondent

The Trusts and Guarantee Company Ltd.

Executor and Trustee Respondent

Procedural Posture

Civil Appeal Concerning Trust/estate Administration and Secured Creditor's Rights / On Appeal to the Supreme Court of Canada From the Court of Appeal for Ontario

Legal Issues

  1. 1 Whether a secured creditor's failure to place a specified value on securities after a personal representative's notice under Trustee Act s.56(2) bars the creditor from recovering a deficiency after selling the securities
  2. 2 Whether the personal representative was required to apply under Trustee Act s.57(1) to secure relief for the creditor's failure to value
  3. 3 Whether the statutory notice imposes an election on the creditor between valuing security and relying solely on security rights

Ratio Decidendi

The executors' notice under s.56(2) did not, by itself, bar the secured creditor from selling securities and recovering any contractual deficiency; the personal representative had to proceed under s.57(1) and obtain the statutory order to bar the creditor for failure to value, and absent such application and order the creditor retained its contractual right to recover the deficiency.

Court Disposition

Appeal allowed; judgment of the trial court restored; Court of Appeal reversed

Orders

  • Appeal allowed with costs to the appellant throughout
  • Judgment of trial judge restored