Union Bank of Canada v. McKillop & Sons

Union Bank of Canada v. McKillop & Sons

The guarantee given 13 March 1907 was ultra vires of the defendant company under R.S.O. 1897, ch.191 and therefore void; the Companies Act 1907 did not validate the pre‑existing guarantee and there was no evidence of lawful ratification, so the appeal fails.

Citation
(1915) 51 SCR 518
Parties
Appellant / Plaintiff: Union Bank of Canada; Respondent / Defendant: A. McKillop and Sons, Limited
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
24 June 1915
Procedural Posture
Appeal (civil Collection) / On Appeal to the Supreme Court of Canada From the Appellate Division of the Supreme Court of Ontario
Outcome
Appeal dismissed with costs.
Legal Topics
Ultra Vires, Guarantee / Suretyship, Corporate Powers, Statute Interpretation, Ratification
Source Language
English
Company Law Commercial Law Contract Law Banking Law Ultra Vires Guarantee / Suretyship Corporate Powers Statute Interpretation +1 more

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Parties

Union Bank of Canada

Appellant / Plaintiff

A. McKillop and Sons, Limited

Respondent / Defendant

Procedural Posture

Appeal (civil Collection) / On Appeal to the Supreme Court of Canada From the Appellate Division of the Supreme Court of Ontario

Legal Issues

  1. 1 Whether a company incorporated under R.S.O. 1897, ch. 191 had power to guarantee the indebtedness of an unrelated customer
  2. 2 Whether the guarantee executed 13 March 1907 was ultra vires and therefore void
  3. 3 Whether the Companies Act 1907 or subsequent conduct of the company validated or ratified the pre‑existing guarantee

Ratio Decidendi

The guarantee given 13 March 1907 was ultra vires of the defendant company under R.S.O. 1897, ch.191 and therefore void; the Companies Act 1907 did not validate the pre‑existing guarantee and there was no evidence of lawful ratification, so the appeal fails.

Court Disposition

Appeal dismissed with costs.

Orders

  • Appeal dismissed with costs.
  • Judgment of the Appellate Division of the Supreme Court of Ontario affirmed.