Crown Trust Co. v. Higher et al.

Crown Trust Co. v. Higher et al.

The commercial portion of the Trust Deed did not create a Quebec trust but an innominate commercial contract governed by general obligations; art.981i C.C. therefore did not shield the trustee from personal liability; the trustee breached its contractual obligation to apply subscribers' funds as promised (mortgage...

Source-derived case information.

Citation
[1977] 1 SCR 418
Parties
Appellant/defendant: Crown Trust Company; Respondents/plaintiffs: Oscar S. Higher et al.
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
26 June 1975
Procedural Posture
Civil Appeal (trust/contract) / On Appeal to the Supreme Court of Canada From the Court of Appeal for Quebec
Outcome
Appeals dismissed
Legal Topics
Breach of Contract, Innominate Contract, Trustee Liability, Rescission, Damages, Misrepresentation, Interpretation of Civil Code Arts. 981a, 981i, 1065, Mortgage/hypothec Term
Source Language
english
Trust Law Contract Law Quebec Civil Code Remedies Breach of Contract Innominate Contract Trustee Liability Rescission +4 more

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Parties

Crown Trust Company

Appellant/defendant

Oscar S. Higher et al.

Respondents/plaintiffs

Procedural Posture

Civil Appeal (trust/contract) / On Appeal to the Supreme Court of Canada From the Court of Appeal for Quebec

Legal Issues

  1. 1 Whether art. 981i C.C. shields the trustee from personal liability to subscribers
  2. 2 Whether the Trust Deed created a trust within the meaning of Quebec Civil Code or an innominate commercial contract governed by general obligations
  3. 3 Whether the trustee breached its contractual obligation to apply subscribers' funds as promised (mortgage amortization term)

Ratio Decidendi

The commercial portion of the Trust Deed did not create a Quebec trust but an innominate commercial contract governed by general obligations; art.981i C.C. therefore did not shield the trustee from personal liability; the trustee breached its contractual obligation to apply subscribers' funds as promised (mortgage amortization term), rendering it liable under art.1065 C.C. to reimburse capital and pay the promised 9% interest; the Court dismissed the appeals and upheld the damages remedy.

Court Disposition

Appeals dismissed

Orders

  • Appeals dismissed with costs
  • Upheld Court of Appeal judgment condemning appellant to reimburse capital payments and to pay interest at 9% per annum from January 1, 1968 to the respondents