Farquhar v. Zwicker

Farquhar v. Zwicker

Majority held that the owner by his words and conduct (retaining the order and stating "it would be all right" after the architect's assurance) intended to assume the contractor's debt or accept an equitable assignment, thereby effecting a novation that discharged the contractor and made the owner directly liable to the subcontractor; the order was not a bill of exchange accepted as such and the circumstances supplied the necessary consideration/function of assignment to support the promise to pay.

Citation
(1908) 41 SCR 30
Parties
Plaintiff/appellant: James Farquhar; Defendant/respondent: F. Gordon Zwicker
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
10 November 1908
Procedural Posture
Contract (novation / Subcontractor Claim) / Appeal to the Supreme Court of Canada From Supreme Court of Nova Scotia
Outcome
Appeal allowed with costs; judgment for plaintiff at trial restored.
Legal Topics
Novation, Equitable Assignment, Consideration, Mechanic's Lien, Bill of Exchange/acceptance
Source Language
English
Contract Security for Payment Insolvency Novation Equitable Assignment Consideration Mechanic's Lien Bill of Exchange/acceptance

Case Brief

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Parties

James Farquhar

Plaintiff/appellant

F. Gordon Zwicker

Defendant/respondent

Procedural Posture

Contract (novation / Subcontractor Claim) / Appeal to the Supreme Court of Canada From Supreme Court of Nova Scotia

Legal Issues

  1. 1 Whether the owner's oral undertaking and retention of the contractor's order effected a novation releasing the contractor and substituting the owner as debtor
  2. 2 Whether the order was to be treated as a bill of exchange and accepted as such
  3. 3 Whether there was consideration or required writing for a promise to pay another's debt

Ratio Decidendi

Majority held that the owner by his words and conduct (retaining the order and stating "it would be all right" after the architect's assurance) intended to assume the contractor's debt or accept an equitable assignment, thereby effecting a novation that discharged the contractor and made the owner directly liable to the subcontractor; the order was not a bill of exchange accepted as such and the circumstances supplied the necessary consideration/function of assignment to support the promise to pay.

Court Disposition

Appeal allowed with costs; judgment for plaintiff at trial restored.

Orders

  • Appeal allowed with costs
  • Judgment of the learned trial judge restored in favor of the plaintiff