Ottawa Dairy Co. v. Sorley

Ottawa Dairy Co. v. Sorley

Where a subscription and note were delivered to a promoter under circumstances indicating a conditional transaction tied to a transfer of goodwill and no express authority to make an unconditional application was shown, the company could not treat the promoter's acts as binding; the company bore the onus to show implied authority and the appeal was dismissed because such authority was not established.

Citation
(1904) 34 SCR 508
Parties
Appellant (plaintiff): Ottawa Dairy Company; Respondent (defendant): James Sorley
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
27 April 1904
Procedural Posture
Appeal From Court of Appeal for Ontario Corporate/share Subscription Dispute / Hearing and Final Judgment at Supreme Court of Canada (1904 04 27)
Outcome
Appeal dismissed with costs.
Legal Topics
Subscription for Shares, Promoter Authority, Agency, Conditional Application, Calls on Shares, Promissory Note
Source Language
English
Commercial Law Company Law Agency Law Contract Law Subscription for Shares Promoter Authority Agency Conditional Application +2 more

Case Brief

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Parties

Ottawa Dairy Company

Appellant (plaintiff)

James Sorley

Respondent (defendant)

Procedural Posture

Appeal From Court of Appeal for Ontario Corporate/share Subscription Dispute / Hearing and Final Judgment at Supreme Court of Canada (1904 04 27)

Legal Issues

  1. 1 Whether a promoter in possession of a signed subscription and promissory note can bind the signer and the company without the company inquiring into the promoter's authority
  2. 2 Whether a conditional agreement tied to a transfer of goodwill can be converted into an unconditional subscription by the promoter
  3. 3 Whether the appellant company's notices and the defendant's attendance and silence constituted ratification or acceptance of the allotment

Ratio Decidendi

Where a subscription and note were delivered to a promoter under circumstances indicating a conditional transaction tied to a transfer of goodwill and no express authority to make an unconditional application was shown, the company could not treat the promoter's acts as binding; the company bore the onus to show implied authority and the appeal was dismissed because such authority was not established.

Court Disposition

Appeal dismissed with costs.

Orders

  • Appeal dismissed with costs.