Brown v. Moore

Brown v. Moore

Majority held that the company’s charter implied power to sell acquired property short of disposing of its whole undertaking; Brown’s acquisition of control by buying the company’s shares in fact amounted in equity to exercise of the option with dishonest intent, so a court of equity may compel him to procure the conveyance necessary to vest in Moore a one-quarter undivided interest; appeal dismissed and remedy of specific performance (or alternative relief if impossible) available.

Citation
(1921) 62 SCR 487
Parties
Defendant Appellant: Frank K. Brown; Plaintiff Respondent: Phil H. Moore
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
21 November 1921
Procedural Posture
Appeal to Supreme Court of Canada / On Appeal From the Supreme Court of Nova Scotia
Outcome
Appeal dismissed with costs.
Legal Topics
Implied Corporate Powers, Ultra Vires, Specific Performance, Option to Purchase, Trusts, Share Acquisition, Fraud/bad Faith
Source Language
English
Commercial Law Company Law Equity Implied Corporate Powers Ultra Vires Specific Performance Option to Purchase Trusts +2 more

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Parties

Frank K. Brown

Defendant Appellant

Phil H. Moore

Plaintiff Respondent

Procedural Posture

Appeal to Supreme Court of Canada / On Appeal From the Supreme Court of Nova Scotia

Legal Issues

  1. 1 Whether a company authorized to purchase and hold lands has an implied power to sell such lands short of disposing of its whole undertaking
  2. 2 Whether an option to purchase the company’s property was ultra vires
  3. 3 Whether acquisition of company control by purchase of shares can amount in equity to exercise of an option and thus trigger obligations to transfer property or procure conveyance

Ratio Decidendi

Majority held that the company’s charter implied power to sell acquired property short of disposing of its whole undertaking; Brown’s acquisition of control by buying the company’s shares in fact amounted in equity to exercise of the option with dishonest intent, so a court of equity may compel him to procure the conveyance necessary to vest in Moore a one-quarter undivided interest; appeal dismissed and remedy of specific performance (or alternative relief if impossible) available.

Court Disposition

Appeal dismissed with costs.

Orders

  • Appeal dismissed with costs.
  • Decree directing appellant to assign and transfer or cause to be assigned and transferred to respondent an undivided one-quarter interest in the premises covered by the lease/option; further consideration reserved to permit the court to make supplementary orders or award damages in lieu of specific performance if...