J.D.F. Builders Ltd. v. Albert Pearl (Management) Ltd.

J.D.F. Builders Ltd. v. Albert Pearl (Management) Ltd.

The promissory note was the corporate obligation of J.D.F. Builders Limited — Fienberg was not personally liable — and there was valid consideration for the full amount because antecedent debts and forbearance by the payee, in the context of the relationship between the individual and the company, supplied consideration for the whole note.

Citation
[1975] 2 SCR 846
Parties
Appellant and Cross Respondent: J.D.F. Builders Limited; Respondent and Cross Appellant: Albert Pearl (Management) Limited; Cross Respondent: John D. Fienberg
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
1 October 1974
Procedural Posture
Civil Appeal to Supreme Court of Canada (contract/bills of Exchange) / Appeal From Court of Appeal for Ontario; Cross Appeal to Supreme Court
Outcome
Appeal dismissed; cross-appeal allowed in part
Legal Topics
Promissory Note Execution, Personal Liability of Corporate Officer, Ostensible and Actual Authority, Consideration and Forbearance, Indoor Management (turquand) Rule
Source Language
English
Bills of Exchange Contract Corporations/agency Equity Promissory Note Execution Personal Liability of Corporate Officer Ostensible and Actual Authority Consideration and Forbearance +1 more

Case Brief

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Parties

J.D.F. Builders Limited

Appellant and Cross Respondent

Albert Pearl (Management) Limited

Respondent and Cross Appellant

John D. Fienberg

Cross Respondent

Procedural Posture

Civil Appeal to Supreme Court of Canada (contract/bills of Exchange) / Appeal From Court of Appeal for Ontario; Cross Appeal to Supreme Court

Legal Issues

  1. 1 Whether a single handwritten signature beneath a corporate stamp bound the individual shareholder personally
  2. 2 Whether the promissory note was the obligation of the corporation
  3. 3 Whether there was valid consideration for the full amount of the note including payments made for third‑party trusts

Ratio Decidendi

The promissory note was the corporate obligation of J.D.F. Builders Limited — Fienberg was not personally liable — and there was valid consideration for the full amount because antecedent debts and forbearance by the payee, in the context of the relationship between the individual and the company, supplied consideration for the whole note.

Court Disposition

Appeal dismissed; cross-appeal allowed in part

Orders

  • Judgment against J.D.F. Builders Limited for $151,982 plus interest at 7% per annum from March 1, 1967 until payment
  • Appeal dismissed with costs