Rountree v. Sydney Land & Loan Co.

Rountree v. Sydney Land & Loan Co.

The company was entitled to recover commissions paid for an ultra vires conversion because the secretary, as an officer who countersigned cheques benefiting himself, must be presumed to have known the transaction lacked authority; a subsequent shareholder resolution did not ratify the payments because shareholders were not fully informed; mistake of law by the officer did not bar recovery.

Citation
(1907) 39 SCR 614
Parties
Appellant/defendant: Meredith Rountree; Respondent/plaintiff: The Sydney Land And Loan Company
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
13 December 1907
Procedural Posture
Civil Appeal (trust and Company Law) / Appeal to the Supreme Court of Canada From the Supreme Court of Nova Scotia; Final Disposition on Appeal
Outcome
Appeal dismissed with costs; judgment for respondents affirmed as to recovery of commissions.
Legal Topics
Ultra Vires, Ratification, Recovery of Moneys Illegally Paid, Mistake of Law, Fiduciary Duties, Conflict of Interest, Countersigning Cheques
Source Language
English
Trust Company Law Equity Restitution Ultra Vires Ratification Recovery of Moneys Illegally Paid Mistake of Law +3 more

Case Brief

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Parties

Meredith Rountree

Appellant/defendant

The Sydney Land And Loan Company

Respondent/plaintiff

Procedural Posture

Civil Appeal (trust and Company Law) / Appeal to the Supreme Court of Canada From the Supreme Court of Nova Scotia; Final Disposition on Appeal

Legal Issues

  1. 1 Whether commissions paid to company secretary for converting preferred stock into bonds (an ultra vires act) were recoverable by the company
  2. 2 Whether a subsequent shareholder resolution ratified the payment of the commissions
  3. 3 Whether the secretary's mistake of law or lack of bad faith barred recovery

Ratio Decidendi

The company was entitled to recover commissions paid for an ultra vires conversion because the secretary, as an officer who countersigned cheques benefiting himself, must be presumed to have known the transaction lacked authority; a subsequent shareholder resolution did not ratify the payments because shareholders were not fully informed; mistake of law by the officer did not bar recovery.

Court Disposition

Appeal dismissed with costs; judgment for respondents affirmed as to recovery of commissions.

Orders

  • Company entitled to recover moneys paid to appellant as commission for the ultra vires conversion.
  • Appeal dismissed with costs to the respondents.