Grimmer v. Township of Gloucester

Grimmer v. Township of Gloucester

Where a statute authorizes a county council to issue bonds signed by municipal officers and sealed with the corporate seal, and provides the mechanism by which the county will levy and collect funds to pay principal and interest, such bonds constitute a direct and enforceable obligation of the municipality even if the bond text nominally declares the parish to be the debtor.

Citation
(1902) 32 SCR 305
Parties
Appellants (plaintiffs): John G. Grimmer and G. Dunell Grimmer, Administrators of the Estate of George S. Grimmer, Deceased; Respondent (defendant): County of Gloucester
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
15 May 1902
Procedural Posture
Municipal Bond Liability Appeal / Appeal to the Supreme Court of Canada From the Supreme Court of New Brunswick After Court En Banc Set Aside Trial Verdict and Ordered Nonsuit
Outcome
Appeal allowed.
Legal Topics
Liability of Municipality on Statutory Bonds, Construction of Statutory Authorization for Borrowing, Enforceability of Municipal Instruments
Source Language
English
Municipal Law Statutory Interpretation Public Finance Contract Law Liability of Municipality on Statutory Bonds Construction of Statutory Authorization for Borrowing Enforceability of Municipal Instruments

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Parties

John G. Grimmer and G. Dunell Grimmer, Administrators of the Estate of George S. Grimmer, Deceased

Appellants (plaintiffs)

County of Gloucester

Respondent (defendant)

Procedural Posture

Municipal Bond Liability Appeal / Appeal to the Supreme Court of Canada From the Supreme Court of New Brunswick After Court En Banc Set Aside Trial Verdict and Ordered Nonsuit

Legal Issues

  1. 1 Whether bonds issued under the Almshouse Act created a direct municipal obligation of the County of Gloucester
  2. 2 Whether a bond that states the parish is indebted can be interpreted to bind the county municipality
  3. 3 Whether the statutory scheme authorized the municipality to promise payment and to levy funds to satisfy the bonds

Ratio Decidendi

Where a statute authorizes a county council to issue bonds signed by municipal officers and sealed with the corporate seal, and provides the mechanism by which the county will levy and collect funds to pay principal and interest, such bonds constitute a direct and enforceable obligation of the municipality even if the bond text nominally declares the parish to be the debtor.

Court Disposition

Appeal allowed.

Orders

  • Appeal allowed with costs.
  • Trial verdict for plaintiff restored.