Brigham v. Banque Jacques-Cartier

Brigham v. Banque Jacques-Cartier

Secretly arranging and securing a preference for a creditor by paying an inspector (or by a third party guaranteeing payment) subverts the statutory scheme of equal distribution and public policy; instruments executed to effect such preference (promissory note and bonus cheque) are corrupt, fraudulent and void and unenforceable; appeal allowed and action dismissed.

Citation
(1900) 30 SCR 429
Parties
Appellant/defendant: Thomas George Brigham; Respondent/plaintiff: La Banque Jacques-Cartier
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
12 June 1900
Procedural Posture
Bankruptcy and Insolvency Appeal / Appeal to Supreme Court of Canada From Superior Court (sitting in Review)
Outcome
Appeal allowed; action dismissed without costs in Supreme Court; no costs to be allowed in courts below.
Legal Topics
Fraudulent Preference, Bribery of Fiduciary Officer, Void for Illegality, Promissory Note Enforceability, Duties of Inspectors in Insolvency, Equal Distribution of Assets
Source Language
English
Bankruptcy and Insolvency Civil Procedure Contract Law Equity Public Policy Fraudulent Preference Bribery of Fiduciary Officer Void for Illegality +3 more

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Parties

Thomas George Brigham

Appellant/defendant

La Banque Jacques-Cartier

Respondent/plaintiff

Procedural Posture

Bankruptcy and Insolvency Appeal / Appeal to Supreme Court of Canada From Superior Court (sitting in Review)

Legal Issues

  1. 1 Whether a secret agreement to grant a creditor a preference over other creditors is void as a fraud on creditors
  2. 2 Whether a promissory note given to secure such a preference is enforceable
  3. 3 Whether payment to an inspector to induce withdrawal of opposition constitutes a bribe rendering the transaction void

Ratio Decidendi

Secretly arranging and securing a preference for a creditor by paying an inspector (or by a third party guaranteeing payment) subverts the statutory scheme of equal distribution and public policy; instruments executed to effect such preference (promissory note and bonus cheque) are corrupt, fraudulent and void and unenforceable; appeal allowed and action dismissed.

Court Disposition

Appeal allowed; action dismissed without costs in Supreme Court; no costs to be allowed in courts below.

Orders

  • Appeal allowed with costs in the Supreme Court.
  • Action of respondent dismissed without costs.