McCraken v. McIntyre

McCraken v. McIntyre

A bona fide purchaser for value who acquires shares represented and appearing to be fully paid-up, without notice of underpayment, is not personally liable to a judgment-creditor of the company for the unpaid portion of those shares under s.5, sub-sec.19 no.27 of 27 & 28 Vict., c. 23; the creditor’s statutory remedy does not permit imposing a greater liability on an innocent transferee than the transferee contracted to assume.

Citation
(1877) 1 SCR 479
Parties
Appellant / Plaintiff: Thomas McCraken; Respondent / Defendant: Peter McIntyre
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
28 June 1877
Procedural Posture
Appeal / Appeal to the Supreme Court of Canada From the Court of Appeal for Ontario (final Disposition)
Outcome
Appeal allowed; order of the Court of Appeal for Ontario reversed; verdict for Defendant (Appellant) restored.
Legal Topics
Shareholder Liability, Paid Up Shares, Ultra Vires Allotment, Bona Fide Purchaser, Creditor Remedies
Source Language
English
Commercial Law Company Law Corporate Law Securities Law Shareholder Liability Paid Up Shares Ultra Vires Allotment Bona Fide Purchaser +1 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Legal principles 4 Authorities cited 16 Party arguments 2 Amounts and remedies 8
Sign in to unlock

Parties

Thomas McCraken

Appellant / Plaintiff

Peter McIntyre

Respondent / Defendant

Procedural Posture

Appeal / Appeal to the Supreme Court of Canada From the Court of Appeal for Ontario (final Disposition)

Legal Issues

  1. 1 Whether a bona fide purchaser of shares represented and appearing to be fully paid-up is liable to a judgment-creditor of the company for the unpaid portion under 27 & 28 Vict., c. 23, s.5, sub-sec.19 no.27
  2. 2 Whether an ultra vires allotment of shares at a discount makes transferees liable to company creditors despite purchase for value without notice
  3. 3 Whether the creditor’s statutory remedy is independent of the contract between shareholder and company

Ratio Decidendi

A bona fide purchaser for value who acquires shares represented and appearing to be fully paid-up, without notice of underpayment, is not personally liable to a judgment-creditor of the company for the unpaid portion of those shares under s.5, sub-sec.19 no.27 of 27 & 28 Vict., c. 23; the creditor’s statutory remedy does not permit imposing a greater liability on an innocent transferee than the transferee contracted to assume.

Court Disposition

Appeal allowed; order of the Court of Appeal for Ontario reversed; verdict for Defendant (Appellant) restored.

Orders

  • Appeal allowed and judgment of the Court of Appeal for Ontario reversed
  • Verdict for Defendant (Appellant) reinstated