Williams Machinery Co. v. Graham

Williams Machinery Co. v. Graham

Because the appellant, when required under s.31 of the Creditors' Trust Deeds Act, proved its claim without valuing or asserting the full insurance security and participated in collective litigation and arrangements for the benefit of creditors, it thereby abandoned or is estopped from asserting a later preferential secured claim to the insurance proceeds; accordingly it can only rank as an ordinary creditor.

Citation
(1918) 57 SCR 229
Parties
Appellant/plaintiff: Williams Machinery Company; Respondent/defendant (assignee): John Graham
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
21 October 1918
Procedural Posture
Insolvency Appeal / Appeal to the Supreme Court of Canada From the Court of Appeal for British Columbia
Outcome
Appeal dismissed with costs; judgment of the Court of Appeal for British Columbia affirmed
Legal Topics
Proof of Claim, Security Valuation, Abandonment of Security, Estoppel, Priority of Creditors, Assignment of Choses in Action, Statutory Interpretation (creditors' Trust Deeds Act)
Source Language
English
Bankruptcy and Insolvency Insurance Law Equity Civil Procedure Proof of Claim Security Valuation Abandonment of Security Estoppel +3 more

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Parties

Williams Machinery Company

Appellant/plaintiff

John Graham

Respondent/defendant (assignee)

Procedural Posture

Insolvency Appeal / Appeal to the Supreme Court of Canada From the Court of Appeal for British Columbia

Legal Issues

  1. 1 Whether a creditor who proved as an ordinary unsecured creditor after failing to value or claim a security under s.31 of the Creditors' Trust Deeds Act can later assert a secured claim to insurance proceeds recovered by the assignee
  2. 2 Whether the proof as filed amounted to abandonment of the security or created an estoppel preventing assertion of a preferred claim
  3. 3 Proper construction of insurance phrase 'loss, if any, payable to the party named as his interest may appear' and limits of insurable interest

Ratio Decidendi

Because the appellant, when required under s.31 of the Creditors' Trust Deeds Act, proved its claim without valuing or asserting the full insurance security and participated in collective litigation and arrangements for the benefit of creditors, it thereby abandoned or is estopped from asserting a later preferential secured claim to the insurance proceeds; accordingly it can only rank as an ordinary creditor.

Court Disposition

Appeal dismissed with costs; judgment of the Court of Appeal for British Columbia affirmed

Orders

  • Appeal dismissed with costs
  • Judgment of the Court of Appeal for British Columbia affirmed