Bergeron v. Lindsay

Bergeron v. Lindsay

When a promissory note signed by two or more persons is paid in full by one of them, the payer is subrogated by operation of law to the creditor's rights for the shares of co-debtors; that subrogated claim retains the commercial character of the original note and is therefore governed by the five-year prescription in Civil Code art.2260(4), with arts.1117-1118 simply limiting recovery to each co-debtor's portion.

Citation
[1940] SCR 534
Parties
Appellant / Plaintiff: Thomas-Louis Bergeron; Respondent / Defendant: Errol Lindsay
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
29 June 1940
Procedural Posture
Contract (promissory Note) / Appeal to Supreme Court of Canada From Court of King's Bench, Province of Quebec
Outcome
Appeal dismissed with costs
Legal Topics
Promissory Note, Subrogation, Co Debtor Contribution, Prescription Period, Nature of Claim (commercial Vs Civil)
Source Language
English
Contract Commercial Law Civil Procedure Civil Obligations (subrogation) Prescription (limitation) Promissory Note Subrogation Co Debtor Contribution +2 more

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Parties

Thomas-Louis Bergeron

Appellant / Plaintiff

Errol Lindsay

Respondent / Defendant

Procedural Posture

Contract (promissory Note) / Appeal to Supreme Court of Canada From Court of King's Bench, Province of Quebec

Legal Issues

  1. 1 Whether an action by a co-debtor who paid a promissory note to recover a co-debtor's share is governed by five-year commercial prescription or thirty-year prescription
  2. 2 Whether payment by one co-debtor effects subrogation to the creditor's rights and preserves the commercial character of the claim
  3. 3 Interaction of Civil Code arts.1117,1118,1156,2242,2260(4) with Bills of Exchange Act s.139

Ratio Decidendi

When a promissory note signed by two or more persons is paid in full by one of them, the payer is subrogated by operation of law to the creditor's rights for the shares of co-debtors; that subrogated claim retains the commercial character of the original note and is therefore governed by the five-year prescription in Civil Code art.2260(4), with arts.1117-1118 simply limiting recovery to each co-debtor's portion.

Court Disposition

Appeal dismissed with costs

Orders

  • Appeal dismissed with costs.