Eansor v. Eansor

Eansor v. Eansor

The Supreme Court restored the trial judge's finding that a binding contract existed for the sale of 234⅔ shares and ordered specific performance; the Court held that the prohibition in s.96 R.S.O. 1937, creating statutory liability for loans to shareholders, did not void the contract or bar equitable relief between the parties (the company was not the contracting party), though potential statutory liabilities and rights of indemnity between parties could be addressed when properly raised; clause ordering a personal debt of $798.20 to the company was deleted.

Citation
[1946] SCR 54
Parties
Plaintiff/appellant: Alfred W. Eansor; Defendant/respondent: Norman D. Eansor; Defendant/respondent: Lloyd C. Eansor; Defendant/respondent (company): T.J. Eansor & Sons Limited
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
21 December 1945
Procedural Posture
Contract / Appeal to Supreme Court of Canada From the Court of Appeal for Ontario
Outcome
Appeal allowed in part; trial judgment restored except for deletion of clause 5 (declaration ordering $798.20 as a personal debt to the company).
Legal Topics
Specific Performance, Loans to Shareholders (prohibited Loans), Directors' Liability Under Statute, Sale and Transfer of Shares Including Estate Interests
Source Language
English
Contract Company Law Equity Specific Performance Loans to Shareholders (prohibited Loans) Directors' Liability Under Statute Sale and Transfer of Shares Including Estate Interests

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Parties

Alfred W. Eansor

Plaintiff/appellant

Norman D. Eansor

Defendant/respondent

Lloyd C. Eansor

Defendant/respondent

T.J. Eansor & Sons Limited

Defendant/respondent (company)

Procedural Posture

Contract / Appeal to Supreme Court of Canada From the Court of Appeal for Ontario

Legal Issues

  1. 1 Whether a binding contract existed for sale by Norman D. Eansor to Alfred W. Eansor of 234 2/3 shares
  2. 2 Whether specific performance was an appropriate remedy
  3. 3 Whether loans made by the company to shareholders to effect the purchase violated s.96 R.S.O. 1937 and if that illegality barred specific performance

Ratio Decidendi

The Supreme Court restored the trial judge's finding that a binding contract existed for the sale of 234⅔ shares and ordered specific performance; the Court held that the prohibition in s.96 R.S.O. 1937, creating statutory liability for loans to shareholders, did not void the contract or bar equitable relief between the parties (the company was not the contracting party), though potential statutory liabilities and rights of indemnity between parties could be addressed when properly raised; clause ordering a personal debt of $798.20 to the company was deleted.

Court Disposition

Appeal allowed in part; trial judgment restored except for deletion of clause 5 (declaration ordering $798.20 as a personal debt to the company).

Orders

  • Order for specific performance: N.D. Eansor to convey his interest in 234 2/3 shares to A.W. Eansor
  • A.W. Eansor to hold the shares as trustee for himself and L.C. Eansor in equal shares and to transfer one‑half (117 1/3 shares) to L.C. Eansor in accordance with trial findings