Beausoleil v. Normand

Beausoleil v. Normand

Majority held the private weekly deposits constituted a legitimate pledge/gage perfected by delivery to the bank and were not in fraud of creditors or in contravention of the Insolvent Act or Civil Code; the arrangement furthered the agreed composition by securing the last instalment and did not unjustly prefer the surety over creditors, therefore the assignee was not entitled to recover the deposited sums.

Citation
(1883) 9 SCR 711
Parties
Assignee of the Estate of J.p. Godin (appellant): Cleophas Beausoleil; Respondent; Endorser/surety: Telesphore E. Normand
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
18 June 1883
Procedural Posture
Appeal to the Supreme Court of Canada From the Court of Queen's Bench (lower Canada) / Judgment on Appeal (1883 06 18)
Outcome
Appeal dismissed (majority); judgment of Court of Queen's Bench affirmed
Legal Topics
Preferential Transfer, Fraud on Creditors, Pledge/gage, Endorsement and Suretyship, Validity of Security in Insolvency
Source Language
English
Bankruptcy and Insolvency Contract Suretyship Property (pledge) Civil Law (quebec) Preferential Transfer Fraud on Creditors Pledge/gage +2 more

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Parties

Cleophas Beausoleil

Assignee of the Estate of J.p. Godin (appellant)

Telesphore E. Normand

Respondent; Endorser/surety

Procedural Posture

Appeal to the Supreme Court of Canada From the Court of Queen's Bench (lower Canada) / Judgment on Appeal (1883 06 18)

Legal Issues

  1. 1 Was the private agreement by which the debtor deposited weekly sums in the name of the surety a fraudulent preference or void under the Insolvent Act?
  2. 2 Was the deposit in the bank to the credit of the surety a valid pledge/gage under the Civil Code of Quebec?
  3. 3 Was the debtor insolvent (in law) at the time of the arrangement and did that status render the transaction voidable?

Ratio Decidendi

Majority held the private weekly deposits constituted a legitimate pledge/gage perfected by delivery to the bank and were not in fraud of creditors or in contravention of the Insolvent Act or Civil Code; the arrangement furthered the agreed composition by securing the last instalment and did not unjustly prefer the surety over creditors, therefore the assignee was not entitled to recover the deposited sums.

Court Disposition

Appeal dismissed (majority); judgment of Court of Queen's Bench affirmed

Orders

  • Appeal dismissed with costs
  • Judgment of the Court of Queen's Bench for Lower Canada affirmed