McCuaig v. Barber

McCuaig v. Barber

Because the plaintiff, as sole owner of the assigned covenant, agreed with DuVernet to postpone claims until remedies were exhausted against the lands and purchasers, she so dealt with the collateral security as to divest herself of power to restore it unimpaired; consequently she had no present right of action on the mortgage covenant against the mortgagor and any extent of impairment can only be determined by exhausting the remedies specified in the agreement.

Citation
(1898) 29 SCR 126
Parties
Defendant Appellant: C. McCuaig; Plaintiff Respondent: Eliza Barber
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
21 November 1898
Procedural Posture
Mortgage Action (civil) / Appeal to the Supreme Court of Canada From the Court of Appeal for Ontario
Outcome
Appeal allowed with costs; judgment of the trial judge (Mr. Justice Rose) restored
Legal Topics
Assignment of Covenant, Collateral Security, Indemnity Covenant, Exhaustion of Remedies, Release of Surety, Right of Action on Mortgage Covenant
Source Language
English
Mortgages Property Law Priorities and Hypothecs Suretyship Contract Assignment Assignment of Covenant Collateral Security Indemnity Covenant +3 more

Case Brief

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Parties

C. McCuaig

Defendant Appellant

Eliza Barber

Plaintiff Respondent

Procedural Posture

Mortgage Action (civil) / Appeal to the Supreme Court of Canada From the Court of Appeal for Ontario

Legal Issues

  1. 1 Whether assignment of mortgagor's indemnity covenant and plaintiff's agreement to exhaust other remedies deprived mortgagee of present right to sue mortgagor on the mortgage covenant
  2. 2 Whether the mortgagor became a mere surety upon sale of equity of redemption and whether creditor's dealing with assigned covenant released the surety
  3. 3 Whether the assignee's undertaking to exhaust remedies against purchasers and lands constituted a material impairment of the collateral security, discharging mortgagor

Ratio Decidendi

Because the plaintiff, as sole owner of the assigned covenant, agreed with DuVernet to postpone claims until remedies were exhausted against the lands and purchasers, she so dealt with the collateral security as to divest herself of power to restore it unimpaired; consequently she had no present right of action on the mortgage covenant against the mortgagor and any extent of impairment can only be determined by exhausting the remedies specified in the agreement.

Court Disposition

Appeal allowed with costs; judgment of the trial judge (Mr. Justice Rose) restored

Orders

  • Appeal allowed with costs
  • Judgment of Mr. Justice Rose dismissing action against defendant restored