Grondin v. Lefaivre

Grondin v. Lefaivre

Because the appellant endorsed certificates in blank and the Canadian broker forwarded them to New York brokers, where they were merged into a general account in the broker's name and treated as collateral for the whole account, the appellant could not revendicate the certificates from the trustee unless the certificates remained separately identifiable and upon payment of all sums due; Quebec law does not permit following proceeds generally, so any surplus from liquidation forms a common fund to be distributed pro rata under bankruptcy rules; accordingly the appellant's claim against the trustee fails and the appeal is dismissed.

Citation
[1931] SCR 102
Parties
Appellant (petitioner): Siméon Grondin; Respondent (trustee): R. Ernest Lefaivre; Insolvent (debtor): Neuville Belleau
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
10 June 1930
Procedural Posture
Appeal From Court of King's Bench (bankruptcy Matter) / On Appeal to Supreme Court of Canada
Legal Topics
Revendication (recovery) of Securities, Blank Endorsement, Stockbroker Obligations and Mandate, Right to Follow Proceeds (droit De Suite), Collateral and Pledge, Bankruptcy Distribution
Source Language
English
Bankruptcy Securities Agency Law Property Law Conflict of Laws (contractual Locus of Dealing) Revendication (recovery) of Securities Blank Endorsement Stockbroker Obligations and Mandate +3 more

Case Brief

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Parties

Siméon Grondin

Appellant (petitioner)

R. Ernest Lefaivre

Respondent (trustee)

Neuville Belleau

Insolvent (debtor)

Procedural Posture

Appeal From Court of King's Bench (bankruptcy Matter) / On Appeal to Supreme Court of Canada

Legal Issues

  1. 1 Whether appellant could revendicate (recover) stock certificates from the trustee in bankruptcy
  2. 2 Whether a blank endorsement by the customer conferred apparent authority on the broker to use the certificates
  3. 3 Whether certificates sent by the Canadian broker to New York brokers and merged in a general account became collateral for the whole account and thus not separately revendicable

Ratio Decidendi

Because the appellant endorsed certificates in blank and the Canadian broker forwarded them to New York brokers, where they were merged into a general account in the broker's name and treated as collateral for the whole account, the appellant could not revendicate the certificates from the trustee unless the certificates remained separately identifiable and upon payment of all sums due; Quebec law does not permit following proceeds generally, so any surplus from liquidation forms a common fund to be distributed pro rata under bankruptcy rules; accordingly the appellant's claim against the trustee fails and the appeal is dismissed.