Grobstein v. Kouri

Grobstein v. Kouri

The bankrupt son only had a contingent expectancy—a mere chance of benefit under the joint life policy—which did not constitute 'property' falling within the Bankruptcy Act definition and therefore did not pass to the trustee; additionally, the father validly exercised his reserved contractual/statutory power to...

Source-derived case information.

Citation
[1936] SCR 264
Parties
Appellant Trustee in Bankruptcy: Nathan Grobstein; Respondent Bankrupt / Beneficiary Claimant: Khalil A. Kouri; Respondent Wife / Beneficiary Claimant: Dame N. Kouri; Mises En Cause Insurer: The New York Life Insurance Company; Mises En Cause Assignee / Secured Creditor: The Bank of Montreal
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
21 April 1936
Procedural Posture
Appeal Bankruptcy and Insolvency / Insurance Dispute / Supreme Court of Canada on Appeal From Court of King’s Bench, Appeal Side, Province of Quebec
Outcome
Appeal dismissed; trustee not entitled to proceeds of the policy
Legal Topics
Joint Life Insurance, Beneficiary Designation and Revocation, Trustee Rights in Bankruptcy, Exemption From Seizure Under Husbands' and Parents' Life Insurance Act, Contingent Interests Vs. Property
Source Language
english
Bankruptcy and Insolvency Insurance Law Property Law Civil Procedure Joint Life Insurance Beneficiary Designation and Revocation Trustee Rights in Bankruptcy Exemption From Seizure Under Husbands' and Parents' Life Insurance Act +1 more

Source-derived case record

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Parties

Nathan Grobstein

Appellant Trustee in Bankruptcy

Khalil A. Kouri

Respondent Bankrupt / Beneficiary Claimant

Dame N. Kouri

Respondent Wife / Beneficiary Claimant

The New York Life Insurance Company

Mises En Cause Insurer

The Bank of Montreal

Mises En Cause Assignee / Secured Creditor

Procedural Posture

Appeal Bankruptcy and Insolvency / Insurance Dispute / Supreme Court of Canada on Appeal From Court of King’s Bench, Appeal Side, Province of Quebec

Legal Issues

  1. 1 Did the bankrupt (son) have a proprietary right in the joint life policy that passed to the trustee?
  2. 2 Did the Husbands' and Parents' Life Insurance Act apply to this joint life policy and exempt proceeds from seizure?
  3. 3 Was the transfer/renunciation of the son’s interest to his mother valid and effective prior to or despite bankruptcy?

Ratio Decidendi

The bankrupt son only had a contingent expectancy—a mere chance of benefit under the joint life policy—which did not constitute 'property' falling within the Bankruptcy Act definition and therefore did not pass to the trustee; additionally, the father validly exercised his reserved contractual/statutory power to change the beneficiary to his wife so the trustee had no claim to the proceeds.

Court Disposition

Appeal dismissed; trustee not entitled to proceeds of the policy

Orders

  • Appeal dismissed with costs
  • Proceeds to be payable to the beneficiary (Mrs. N. Kouri) subject to the prior lien of the Bank of Montreal