Purdom v. Baechler

Purdom v. Baechler

Majority allowed the appeal: Baechler was liable because either he adopted Purdom's payment by accepting credit in the stated accounts and covenanted to pay, or Nichol had authority to apply the accommodation note as collateral to the consolidated joint debt and when creditors realized it and credited the joint debt...

Source-derived case information.

Citation
(1888) 15 SCR 610
Parties
Appellant / Plaintiff: Thomas Purdom; Respondent / Defendant: David Nichol; Respondent / Defendant: Zavier Baechler
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
14 December 1888
Procedural Posture
Civil Appeal (contract / Partnership / Suretyship) / Final Appeal to the Supreme Court of Canada From the Court of Appeal for Ontario
Outcome
Appeal allowed; judgment of Court of Appeal reversed and judgment of Divisional Court restored
Legal Topics
Promissory Note, Accommodation Endorsement, Collateral Security, Novation, Adoption of Payment, Subrogation, Liability of Partner for Co Partner Debt
Source Language
english
Contract Partnership Equity/restitution Suretyship Promissory Note Accommodation Endorsement Collateral Security Novation +3 more

Source-derived case record

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Parties

Thomas Purdom

Appellant / Plaintiff

David Nichol

Respondent / Defendant

Zavier Baechler

Respondent / Defendant

Procedural Posture

Civil Appeal (contract / Partnership / Suretyship) / Final Appeal to the Supreme Court of Canada From the Court of Appeal for Ontario

Legal Issues

  1. 1 Whether an accommodation indorser (surety) can recover from a partner who became jointly liable when the creditor realized the indorser's note as collateral and credited it on the joint debt
  2. 2 Whether the transaction creating a new joint mortgage operated as a novation discharging the original indorser
  3. 3 Whether a debtor who adopts a voluntary payment made on his behalf is liable to reimburse the payer

Ratio Decidendi

Majority allowed the appeal: Baechler was liable because either he adopted Purdom's payment by accepting credit in the stated accounts and covenanted to pay, or Nichol had authority to apply the accommodation note as collateral to the consolidated joint debt and when creditors realized it and credited the joint debt Purdom could recover from the joint debtors; equitable subrogation further entitled Purdom to enforcement of creditors' covenant rights to the extent of his payment.

Court Disposition

Appeal allowed; judgment of Court of Appeal reversed and judgment of Divisional Court restored

Orders

  • Appeal allowed with costs
  • Judgment of the Court of Appeal for Ontario reversed and judgment of the Divisional Court restored