Lounsbury Company Limited v. Duthie and Sinclair

Lounsbury Company Limited v. Duthie and Sinclair

Upon repossession the vendor held an unconditional contractual duty to effect a provident sale and account to the purchaser for any surplus; that obligation could not be assigned or discharged by transferring the contract or goods to a third party without the purchaser's consent (no novation occurred), and the vendor was liable for damages equal to the market value of the repossessed goods at the time of repossession minus the unpaid balance.

Citation
[1957] SCR 590
Parties
Defendant/appellant: Lounsbury Company Limited; Plaintiff/respondent: George Duthie; Defendant/respondent: Earl Sinclair
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
26 June 1957
Procedural Posture
Appeal to the Supreme Court of Canada / On Appeal From Supreme Court of New Brunswick, Appeal Division; Final Disposition by Supreme Court of Canada
Outcome
Appeal dismissed; judgment of the Appeal Division in favour of respondent Duthie affirmed; appellant held liable for damages and costs; appeal as to Sinclair dismissed for lack of jurisdiction on costs order.
Legal Topics
Conditional Sale, Repossession and Resale, Assignment of Liabilities, Novation, Damages for Breach of Contract, Remedies of Unpaid Seller, Statutory Notice Under Conditional Sales Act, Appellate Jurisdiction on Costs
Source Language
English
Contract Sale of Goods Property Civil Procedure Commercial Law Conditional Sale Repossession and Resale Assignment of Liabilities +5 more

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Parties

Lounsbury Company Limited

Defendant/appellant

George Duthie

Plaintiff/respondent

Earl Sinclair

Defendant/respondent

Procedural Posture

Appeal to the Supreme Court of Canada / On Appeal From Supreme Court of New Brunswick, Appeal Division; Final Disposition by Supreme Court of Canada

Legal Issues

  1. 1 Whether the conditional vendor breached its contractual obligation to effect a provident sale and account for any surplus after repossession
  2. 2 Whether assignment of the vendor's interest to a third party (Price/Sinclair) without the purchaser's consent operated as a novation discharging the vendor's obligations
  3. 3 What is the proper measure of damages for failure to effect a provident sale

Ratio Decidendi

Upon repossession the vendor held an unconditional contractual duty to effect a provident sale and account to the purchaser for any surplus; that obligation could not be assigned or discharged by transferring the contract or goods to a third party without the purchaser's consent (no novation occurred), and the vendor was liable for damages equal to the market value of the repossessed goods at the time of repossession minus the unpaid balance.

Court Disposition

Appeal dismissed; judgment of the Appeal Division in favour of respondent Duthie affirmed; appellant held liable for damages and costs; appeal as to Sinclair dismissed for lack of jurisdiction on costs order.

Orders

  • Judgment entered in favour of George Duthie against Lounsbury Company Limited for $4,555.85
  • Appeal dismissed with costs (appellant to pay costs)