Tolley v. Guerin

Tolley v. Guerin

Even assuming the Bulk Sales Act issue favored the respondent, Tolley's abandonment of contest did not defeat his equitable purchaser's lien; Guerin, having by fraud and breach of trust concealed securities and applied proceeds subject to a trust to his bank debt, is estopped from invoking his registered mortgage to...

Source-derived case information.

Citation
[1926] SCR 566
Parties
Appellant (purchaser): William F. Tolley; Respondent (defendant): Joseph H. Guerin; Respondent (defendant): Farmers and Merchants Bank of Sweet Grass, Montana; Defendant (vendor): Joseph Schwartz
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
5 October 1926
Procedural Posture
Appeal From Appellate Division of the Supreme Court of Alberta / Final Determination on Priority of Purchaser's Lien Over Registered Mortgage
Outcome
Appeal allowed; judgment of trial judge (Boyle J.) restored with modification
Legal Topics
Purchaser's Lien, Priority of Charges, Fraud and Breach of Trust, Estoppel, Land Titles Act, Bulk Sales Act, Registration Vs Equitable Relief
Source Language
english
Sale Equity Real Property Mortgages Statutory Interpretation Purchaser's Lien Priority of Charges Fraud and Breach of Trust +4 more

Source-derived case record

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Parties

William F. Tolley

Appellant (purchaser)

Joseph H. Guerin

Respondent (defendant)

Farmers and Merchants Bank of Sweet Grass, Montana

Respondent (defendant)

Joseph Schwartz

Defendant (vendor)

Procedural Posture

Appeal From Appellate Division of the Supreme Court of Alberta / Final Determination on Priority of Purchaser's Lien Over Registered Mortgage

Legal Issues

  1. 1 Whether purchaser Tolley had a priority purchaser's lien over Guerin's subsequently registered mortgage
  2. 2 Whether Tolley's abandonment of contest against seizure under the Bulk Sales Act barred his equitable claim
  3. 3 Whether the Land Titles Act ousted equitable jurisdiction to prevent a mortgagee profiting from fraud

Ratio Decidendi

Even assuming the Bulk Sales Act issue favored the respondent, Tolley's abandonment of contest did not defeat his equitable purchaser's lien; Guerin, having by fraud and breach of trust concealed securities and applied proceeds subject to a trust to his bank debt, is estopped from invoking his registered mortgage to defeat Tolley's lien, and the Land Titles Act does not remove the court's equitable jurisdiction; therefore Tolley's lien has priority over Guerin's mortgage (with a modification as to an erroneous costs addition).

Court Disposition

Appeal allowed; judgment of trial judge (Boyle J.) restored with modification

Orders

  • Judgment declaring plaintiff Tolley entitled to priority purchaser's lien for $5,500 over Guerin's registered mortgage restored
  • Modification: exclude the addition of trial costs to the $5,500 judgment that was mistakenly included