Fleming and Douglas v. McLeod

Fleming and Douglas v. McLeod

Because the holders lacked proven knowledge of the indorser's correct address and reasonably forwarded protests to their Halifax agent who promptly sent registered notices, notice of dishonour to the indorser was sufficient; there was no binding agreement to give time to the maker that would discharge the indorser (and any alleged reservation preserved creditors' rights); payments must be appropriated in accordance with the written agreement (interest first); appeal allowed and judgment reversed.

Citation
(1907) 39 SCR 290
Parties
Appellants Payees/plaintiffs: John Fleming and James Douglas; Respondent Indorser/defendant: William McLeod
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
24 June 1907
Procedural Posture
Contract Promissory Notes / Suretyship / Appeal From the Supreme Court of New Brunswick to the Supreme Court of Canada
Outcome
Appeal allowed; judgment of the Supreme Court of New Brunswick reversed.
Legal Topics
Promissory Note, Protest and Notice of Dishonour, Indorser Liability, Discharge of Surety by Giving Time, Appropriation of Payments, Postal/agency Notice Transmission
Source Language
English
Contract Bills and Notes Suretyship Civil Procedure Evidence Promissory Note Protest and Notice of Dishonour Indorser Liability +3 more

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Parties

John Fleming and James Douglas

Appellants Payees/plaintiffs

William McLeod

Respondent Indorser/defendant

Procedural Posture

Contract Promissory Notes / Suretyship / Appeal From the Supreme Court of New Brunswick to the Supreme Court of Canada

Legal Issues

  1. 1 Whether notices of dishonour sent via agent in Halifax (after forwarding protests by first Canadian mail) satisfied the requirement of notice to an indorser whose address was not known to holders
  2. 2 Whether appellants had knowledge of the indorser's address such that sending notices via agent was insufficient
  3. 3 Whether an alleged agreement between holders and the maker to give time discharged the indorser

Ratio Decidendi

Because the holders lacked proven knowledge of the indorser's correct address and reasonably forwarded protests to their Halifax agent who promptly sent registered notices, notice of dishonour to the indorser was sufficient; there was no binding agreement to give time to the maker that would discharge the indorser (and any alleged reservation preserved creditors' rights); payments must be appropriated in accordance with the written agreement (interest first); appeal allowed and judgment reversed.

Court Disposition

Appeal allowed; judgment of the Supreme Court of New Brunswick reversed.

Orders

  • Appeal allowed with costs in all courts
  • Reference to the Registrar of the Supreme Court to compute the balance due on the basis of the agreement and appropriation principles; judgment to be entered for the amount found due and costs (Davies J. indicated a calculated figure of $30,717.57 up to June 1, 1907)