McCrae v. White

McCrae v. White

The appellant failed to prove that the debtor contemplated insolvency when executing the mortgage; the mortgage was executed more than thirty days before insolvency so no statutory presumption arose, and the surrounding facts (new stock obtained on credit, reduction of interest, extension of time, advance to pay interest and the debtor's sanguine temperament) indicated bona fide hope of business recovery; accordingly the mortgage was not an unjust preference and the appeal is dismissed.

Citation
(1883) 9 SCR 22
Parties
Appellant: John McCrae; Respondent: John White
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
19 June 1883
Procedural Posture
Bankruptcy and Insolvency Appeal / Appeal to the Supreme Court of Canada From the Court of Appeal for Ontario
Outcome
Appeal dismissed; judgment of the Court of Appeal for Ontario affirmed
Legal Topics
Unjust Preference, Fraudulent Preference, Contemplation of Insolvency, Burden of Proof, Pressure by Creditor
Source Language
English
Bankruptcy and Insolvency Unjust Preference Fraudulent Preference Contemplation of Insolvency Burden of Proof Pressure by Creditor

Case Brief

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Parties

John McCrae

Appellant

John White

Respondent

Procedural Posture

Bankruptcy and Insolvency Appeal / Appeal to the Supreme Court of Canada From the Court of Appeal for Ontario

Legal Issues

  1. 1 Whether the mortgage was made in contemplation of insolvency and thus void as an unjust preference
  2. 2 Whether the appellant satisfied the burden of proving the debtor contemplated insolvency at the time of the mortgage
  3. 3 Whether pressure from the creditor altered the validity of the transfer

Ratio Decidendi

The appellant failed to prove that the debtor contemplated insolvency when executing the mortgage; the mortgage was executed more than thirty days before insolvency so no statutory presumption arose, and the surrounding facts (new stock obtained on credit, reduction of interest, extension of time, advance to pay interest and the debtor's sanguine temperament) indicated bona fide hope of business recovery; accordingly the mortgage was not an unjust preference and the appeal is dismissed.

Court Disposition

Appeal dismissed; judgment of the Court of Appeal for Ontario affirmed

Orders

  • Appeal dismissed with costs