Isbester v. Ray, Street & Co.

Isbester v. Ray, Street & Co.

The prior verdict in the action against the defendant as endorser did not adjudicate whether he was a member of the firm and therefore did not operate as res judicata to bar a subsequent action against him as a maker/partner; however, the earlier judgment was conclusive as to liability on that particular note because the record showed it was endorsed for the accommodation of the plaintiffs with an agreement that he should not be liable on it.

Citation
(1896) 26 SCR 79
Parties
Respondents (plaintiffs): Ray, Street & Company; Appellant (defendant): James Isbester; Defendant (did Not Defend): Malcolm Isbester
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
18 February 1896
Procedural Posture
Civil Appeal (contract/partnership) / On Appeal to the Supreme Court of Canada From the Court of Appeal for Ontario
Outcome
Appeal and cross-appeal dismissed with costs
Legal Topics
Partnership Liability, Promissory Notes, Res Judicata, Estoppel, Endorsement, Accommodation Endorsement
Source Language
English
Contract Partnership Commercial Law Partnership Liability Promissory Notes Res Judicata Estoppel Endorsement +1 more

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Parties

Ray, Street & Company

Respondents (plaintiffs)

James Isbester

Appellant (defendant)

Malcolm Isbester

Defendant (did Not Defend)

Procedural Posture

Civil Appeal (contract/partnership) / On Appeal to the Supreme Court of Canada From the Court of Appeal for Ontario

Legal Issues

  1. 1 Whether a prior judgment in an action against the defendant as endorser operates as res judicata to bar a subsequent action against him as a partner/maker
  2. 2 Whether a person who holds himself out as a member of a firm is liable as maker of promissory notes signed by the firm
  3. 3 Whether plaintiffs' conduct in purchasing and administering the bankrupt estate estops them from suing the defendant as partner

Ratio Decidendi

The prior verdict in the action against the defendant as endorser did not adjudicate whether he was a member of the firm and therefore did not operate as res judicata to bar a subsequent action against him as a maker/partner; however, the earlier judgment was conclusive as to liability on that particular note because the record showed it was endorsed for the accommodation of the plaintiffs with an agreement that he should not be liable on it.

Court Disposition

Appeal and cross-appeal dismissed with costs

Orders

  • Appeal dismissed with costs
  • Cross-appeal dismissed with costs