Brossard v. Dupras

Brossard v. Dupras

Majority held the advance secured by the mortgage was a bona fide loan to assist payment of the debtor's composition; the debtor had the right to pledge part of his assets to secure that loan and the respondents lacked the status as compounding creditors or subrogation rights to defeat the transaction; accordingly the mortgage and associated note were valid and the lower courts' annulment was reversed.

Citation
(1891) 19 SCR 531
Parties
Appellant (defendants): Moise Brossard et al.; Respondent (plaintiffs): Calixte Dupras et al.; Co Defendant / Insolvent Debtor: Charles Lamoureux
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
16 November 1891
Procedural Posture
Appeal Contract/mortgage Dispute Arising From Creditor Composition / Appeal to Supreme Court of Canada From Court of Queen's Bench for Lower Canada (quebec)
Outcome
Appeal allowed with costs; judgments below reversed
Legal Topics
Composition With Creditors, Fraudulent Preference, Mortgage Validity, Subrogation, Prescription/limitation
Source Language
English
Contract Property Law Insolvency Civil Procedure Equity Composition With Creditors Fraudulent Preference Mortgage Validity +2 more

Case Brief

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Parties

Moise Brossard et al.

Appellant (defendants)

Calixte Dupras et al.

Respondent (plaintiffs)

Charles Lamoureux

Co Defendant / Insolvent Debtor

Procedural Posture

Appeal Contract/mortgage Dispute Arising From Creditor Composition / Appeal to Supreme Court of Canada From Court of Queen's Bench for Lower Canada (quebec)

Legal Issues

  1. 1 Whether a mortgage given to secure a loan made to assist payment of a composition is void as a fraud on creditors or an undue preference
  2. 2 Whether parties who became creditors after the primary composition could attack earlier secret transactions or were subrogated to the bank's rights
  3. 3 Whether the plaintiffs' action was prescribed under art.1040 C.C.

Ratio Decidendi

Majority held the advance secured by the mortgage was a bona fide loan to assist payment of the debtor's composition; the debtor had the right to pledge part of his assets to secure that loan and the respondents lacked the status as compounding creditors or subrogation rights to defeat the transaction; accordingly the mortgage and associated note were valid and the lower courts' annulment was reversed.

Court Disposition

Appeal allowed with costs; judgments below reversed

Orders

  • Appeal allowed with costs
  • Judgments of Superior Court and Court of Queen's Bench (appeal side) set aside and transaction/mortgage upheld