Mackenzie v. Monarch Life Assurance Co.

Mackenzie v. Monarch Life Assurance Co.

Majority: When statute and a company’s by‑laws designate officers to sign and seal stock certificates, a certificate executed accordingly and relied upon by a person who changes position operates as a representation binding the company and estops it from denying the certificate’s authority, even if one signing officer acted fraudulently for his own purposes.

Citation
(1911) 45 SCR 232
Parties
Plaintiff/appellant: Ewan Mackenzie; Defendant/respondent: The Monarch Life Assurance Company
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
6 November 1911
Procedural Posture
Civil Appeal to Supreme Court of Canada / On Appeal From the Court of Appeal for Ontario; Final Determination by Supreme Court of Canada
Outcome
Appeal allowed; judgment of the Court of Appeal for Ontario reversed (majority); appeal allowed with costs.
Legal Topics
Issue of Shares, Estoppel by Representation, Authority of Corporate Officers, Share Certificates, By Laws and Statutory Construction
Source Language
English
Commercial Law Company Law Equity Issue of Shares Estoppel by Representation Authority of Corporate Officers Share Certificates By Laws and Statutory Construction

Case Brief

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Parties

Ewan Mackenzie

Plaintiff/appellant

The Monarch Life Assurance Company

Defendant/respondent

Procedural Posture

Civil Appeal to Supreme Court of Canada / On Appeal From the Court of Appeal for Ontario; Final Determination by Supreme Court of Canada

Legal Issues

  1. 1 Whether a share certificate signed by officers authorized by statute and by-law binds the company against denying its validity
  2. 2 Whether a company is estopped from denying a certificate when a third party has changed position in reliance on it
  3. 3 Effect of fraudulent conduct by an officer who signs a certificate on the company’s liability

Ratio Decidendi

Majority: When statute and a company’s by‑laws designate officers to sign and seal stock certificates, a certificate executed accordingly and relied upon by a person who changes position operates as a representation binding the company and estops it from denying the certificate’s authority, even if one signing officer acted fraudulently for his own purposes.

Court Disposition

Appeal allowed; judgment of the Court of Appeal for Ontario reversed (majority); appeal allowed with costs.

Orders

  • Appeal allowed with costs
  • Judgment of the Court of Appeal for Ontario reversed