Hood v. Caldwell

Hood v. Caldwell

Majority held plaintiffs failed to prove fraud and were debarred by laches and acquiescence from obtaining rescission or recovery; accordingly the appeal was dismissed (majority ruling) and plaintiffs could not maintain the action as individual shareholders.

Citation
[1923] SCR 488
Parties
Plaintiffs/appellants: Robert Hood and Others; Defendants/respondents: A.C. Caldwell and Others
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
1 May 1923
Procedural Posture
Action (shareholder/company) / On Appeal to the Supreme Court of Canada From the Appellate Division of the Supreme Court of Ontario
Outcome
Appeal dismissed
Legal Topics
Laches, Acquiescence, Promoter Transactions, Allotment of Shares, Ultra Vires, Directors' Conflicts of Interest, Rescission
Source Language
English
Company Law Equity Civil Procedure Contract Law Laches Acquiescence Promoter Transactions Allotment of Shares +3 more

Case Brief

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Parties

Robert Hood and Others

Plaintiffs/appellants

A.C. Caldwell and Others

Defendants/respondents

Procedural Posture

Action (shareholder/company) / On Appeal to the Supreme Court of Canada From the Appellate Division of the Supreme Court of Ontario

Legal Issues

  1. 1 Whether allotment of fully paid shares to promoters for the company assets was ultra vires or a colourable issue to issue shares at a discount
  2. 2 Whether individual shareholders could maintain an action for rescission of that allotment
  3. 3 Whether plaintiffs were barred by laches and acquiescence from obtaining relief

Ratio Decidendi

Majority held plaintiffs failed to prove fraud and were debarred by laches and acquiescence from obtaining rescission or recovery; accordingly the appeal was dismissed (majority ruling) and plaintiffs could not maintain the action as individual shareholders.

Court Disposition

Appeal dismissed

Orders

  • Appeal dismissed
  • Costs awarded to respondents