Wilks v. Matthews

Wilks v. Matthews

The curator’s revocatory action is distinct from any private claim between the insolvent and the payee; where an insolvent pays a creditor who knew of the insolvency the payment is presumed fraudulent and recoverable for the benefit of creditors under art.1036 C.C., and the bar in art.1927 C.C. to recovery on gaming contracts does not prevent a curator from recovering assets wrongfully alienated to the prejudice of the mass of creditors; accordingly the payment of $13,743 was recoverable and the appeal must be allowed.

Citation
(1913) 49 SCR 91
Parties
Plaintiff/appellant; Curators to the Abandoned Estate of Charles D. Sheldon: Arthur C. Wilks et al., ès qualité; Defendant/respondent: Stephen C. Matthews
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
23 December 1913
Procedural Posture
Appeal From Court of King’s Bench, Province of Quebec; Action by Curator to Recover Preferential Payment / Appeal to the Supreme Court of Canada (final Judgment)
Outcome
Appeal allowed; judgment of the Court of King’s Bench reversed; action maintained for the appellants.
Legal Topics
Preferential Payment, Action Paulienne (revocatory Action), Knowledge of Insolvency, Gaming Contracts and Illegality, Recovery by Curator, Articles 1031–1036 and 1927 C.c.
Source Language
English
Bankruptcy and Insolvency Civil Law Contract Law Commercial Law Preferential Payment Action Paulienne (revocatory Action) Knowledge of Insolvency Gaming Contracts and Illegality +2 more

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Parties

Arthur C. Wilks et al., ès qualité

Plaintiff/appellant; Curators to the Abandoned Estate of Charles D. Sheldon

Stephen C. Matthews

Defendant/respondent

Procedural Posture

Appeal From Court of King’s Bench, Province of Quebec; Action by Curator to Recover Preferential Payment / Appeal to the Supreme Court of Canada (final Judgment)

Legal Issues

  1. 1 Whether payment by insolvent to creditor on eve of flight was voidable/recoverable under art.1036 C.C.
  2. 2 Whether the recipient knew of the debtor’s insolvency
  3. 3 Whether article 1927 C.C. (bar on recovery for gaming contracts) prevents the curator’s action

Ratio Decidendi

The curator’s revocatory action is distinct from any private claim between the insolvent and the payee; where an insolvent pays a creditor who knew of the insolvency the payment is presumed fraudulent and recoverable for the benefit of creditors under art.1036 C.C., and the bar in art.1927 C.C. to recovery on gaming contracts does not prevent a curator from recovering assets wrongfully alienated to the prejudice of the mass of creditors; accordingly the payment of $13,743 was recoverable and the appeal must be allowed.

Court Disposition

Appeal allowed; judgment of the Court of King’s Bench reversed; action maintained for the appellants.

Orders

  • Appeal allowed with costs
  • Judgment for appellants for the amount claimed of $13,743 with costs