Herron v. Mayland

Herron v. Mayland

The court held the transaction was a bona fide sale with an option to repurchase rather than a loan or mortgage; parol evidence was insufficiently strong to convert the written sale/option into a mortgage or to imply a term awarding interim dividends to the optionor; consequently the dividend belonged to the registered holder and the appeal was dismissed.

Citation
[1928] SCR 225
Parties
Plaintiff/appellant: William Stewart Herron; Defendant/respondent: Albert Henry Mayland; Defendant/respondent: Royalite Oil Company, Limited
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
27 March 1928
Procedural Posture
Contract / Appeal to Supreme Court of Canada From the Appellate Division of the Supreme Court of Alberta
Outcome
Appeal dismissed; judgment of the Appellate Division of the Supreme Court of Alberta affirmed.
Legal Topics
Option to Repurchase, Sale Versus Mortgage, Parol Evidence Rule and Equity Exception, Entitlement to Interim Dividends, Implication of Contractual Terms, Construction of Written and Oral Bargain
Source Language
English
Contract Equity Property Company Law Evidence Option to Repurchase Sale Versus Mortgage Parol Evidence Rule and Equity Exception +3 more

Case Brief

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Parties

William Stewart Herron

Plaintiff/appellant

Albert Henry Mayland

Defendant/respondent

Royalite Oil Company, Limited

Defendant/respondent

Procedural Posture

Contract / Appeal to Supreme Court of Canada From the Appellate Division of the Supreme Court of Alberta

Legal Issues

  1. 1 Whether the transaction was a sale with an option to repurchase or a disguised loan/mortgage
  2. 2 Whether parol evidence was admissible and, if admissible, sufficient to show the transaction was a mortgage
  3. 3 Whether interim dividends declared during the option period belong to the registered holder or to the optionor on exercise or by implied term

Ratio Decidendi

The court held the transaction was a bona fide sale with an option to repurchase rather than a loan or mortgage; parol evidence was insufficiently strong to convert the written sale/option into a mortgage or to imply a term awarding interim dividends to the optionor; consequently the dividend belonged to the registered holder and the appeal was dismissed.

Court Disposition

Appeal dismissed; judgment of the Appellate Division of the Supreme Court of Alberta affirmed.

Orders

  • Appeal dismissed with costs
  • Judgment of Appellate Division affirmed