Wilson v. Ward

Wilson v. Ward

Where the true nature of a transaction is a loan secured on land, courts will admit parol evidence to determine that nature and will disregard any contractual provision conferring on the lender an absolute right to purchase the security as repugnant to the equitable right of redemption; applying that principle here, the document was a security for a loan and the purchase‑option provision could not be enforced.

Citation
[1930] SCR 212
Parties
Appellant / Plaintiff: David M. Wilson; Respondent / Defendant: Milton H. Ward
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
9 December 1929
Procedural Posture
Contract (dispute Over Characterization of Transaction: Sale Vs. Security) / On Appeal to the Supreme Court of Canada From the Appellate Division of the Supreme Court of Alberta
Outcome
Appeal allowed with costs; judgment of trial judge (Boyle J.) restored.
Legal Topics
Construction of Agreement, Parol Evidence Rule (admissibility to Show True Nature of Transaction), Equitable Right of Redemption, Clog on Redemption, Option to Repurchase, Estoppel and Post‑contract Conduct
Source Language
English
Contract Equity Property Law Mortgages and Security Interests Evidence Law Construction of Agreement Parol Evidence Rule (admissibility to Show True Nature of Transaction) Equitable Right of Redemption +3 more

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Parties

David M. Wilson

Appellant / Plaintiff

Milton H. Ward

Respondent / Defendant

Procedural Posture

Contract (dispute Over Characterization of Transaction: Sale Vs. Security) / On Appeal to the Supreme Court of Canada From the Appellate Division of the Supreme Court of Alberta

Legal Issues

  1. 1 Whether the 13 May 1927 transaction was in substance a loan secured on land (security/mortgage) or an absolute sale with an option to repurchase
  2. 2 Whether parol evidence is admissible to determine the true nature of the transaction despite the written instrument
  3. 3 Whether a stipulation granting the lender a contractual right to purchase is void as repugnant to the equitable right of redemption

Ratio Decidendi

Where the true nature of a transaction is a loan secured on land, courts will admit parol evidence to determine that nature and will disregard any contractual provision conferring on the lender an absolute right to purchase the security as repugnant to the equitable right of redemption; applying that principle here, the document was a security for a loan and the purchase‑option provision could not be enforced.

Court Disposition

Appeal allowed with costs; judgment of trial judge (Boyle J.) restored.

Orders

  • Appeal allowed with costs in this Court and in the Appellate Division; judgment of Boyle J. at trial restored.