Supreme Court of
Canada
Segsworth v. Anderson, 24 S.C.R. 699
Date: 1895-01-15
Segsworth
and
Anderson
1894: October 16,
17; 1895: January 15.
Present: Sir Henry
Strong C.J., and Taschereau, Gwynne, Sedgewick and King JJ.
Insolvency—Assignment
in trust for creditors—Sale of estate to insolvent’s wife—Guarantee by creditor
and inspector—Trustee—Account for profit.
APPEAL from a
decision of the Court of Appeal for Ontario, reversing the judgment of the
Divisional Court in favour of the plaintiffs.
[Page 700]
The plaintiffs
(appellants) in this case were creditors of the insolvent estate of one
Jorgenson who had assigned under the Act relating to assignments and
preferences to creditors. The defendant Anderson was also a creditor, and the defendant
Lee an inspector of the estate. The assets of the estate were offered for sale
by tender and purchased by the insolvent’s wife who gave as security for
payment notes indorsed by defendant Anderson. After the tender of the purchase
had been approved by the inspectors, Anderson induced the defendant Lee to join
him in securing the payment, and they took a chattel mortgage on the stock so
purchased to protect themselves. The estate paid a small dividend, and the
plaintiffs brought an action to have defendants account for any profit they may
have made out of the sale of the stock.
On the trial judgment
was given for the plaintiff and a reference ordered to ascertain what profit
the defendants had received The Divisional Court varied this judgment by declaring
that plaintiffs should receive the difference between their claims against the
estate and what they would have received in common with the other creditors by
way of dividend, with liberty to apply to the court if the amount could not be
agreed upon. The Court of Appeal reversed the decision of the Divisional Court
and dismissed the action, holding that no loss to the estate had been proved.
The Supreme Court
allowed the appeal and restored the judgment of the trial judge. Taschereau J.
dissenting. The court held that the defendant Lee, as inspector, could not
obtain an advantage for himself from his position and that the creditors were
entitled to a reference to ascertain what profit, if any, he had derived from
the transaction.
Appeal
allowed with costs.
Moss Q.C. and
Parker for the appellants.
S.H. Blake Q.C.
for the respondents.
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