Gastonguay v. Savoie, (1899) 29 SCR 613

Supreme Court of Canada

Gastonguay v Savoie (1899) 29 SCR 613

Date: 1899-06-05

JOSEPH NARCISSE GASTONGGUAY (PETITIONER)

Appellant;

And

J. ALFRED SAVOIE (CURATOR) AND FRANCOIS THÉODE SAVOIE (INSPECTOR)

Respondents.

1899: May 17; 1899: June 5

PRESENT:—Sir Henry Strong C.J. and Taschereau, Gwynne King and Girouard JJ.

ON APPEAL FROM THE COURT OF QUEEN'S BENCH FOR LOWER CANADA, APPEAL SIDE.

Insolvency—Purchase by inspector—Mandate—Trusts—Arts, 1484, 1706 C. C.—Art. 748 C. P. Q.

An inspector of an insolvent estate is a person having duties of a fiduciary nature to perform in respect thereto and he cannot be allowed to become purchaser, on his own account, of any part of the estate of the insolvent. Davis v. Kerr, (17 Can. S. C. R. 235) followed.

APPEAL from a judgment of the Court of Queen's Bench for Lower Canada, (appeal side), affirming the decision of the Superior Court, District of Athabasca, which dismissed the appellant's petition with costs.

[Page 614]

The appellant petitioned for the cancellation of a sale of part of an insolvent estate sold under the provisions of the Code of Civil Procedure in the Province of Quebec upon the advice of the inspectors appointed by the creditors of the insolvent, on the ground, amongst others, that one of the inspectors had become purchaser on his own account of the property sold by the sheriff under an order by the court. The petition was refused by the Superior Court, and the present appeal is from the judgment of the Court of Queen's Bench affirming that decision.

Fitzpatrick Q.C. (Solicitor-General for Canada), and Crépeau, for the appellant, cited arts. 1484 and 1706 C. C. and art. 748 C. P. Q.

Geoffrion Q.C. and Coté for the respondents (Méthot with them). Articles 1484 and 1706 C. C. and art. 748 C. P. Q. do not apply to Sales made under judicial authority, nor to inspectors of insolvent estates. The powers and duties of inspectors are given by arts. 877-879 C. P. Q. They have not possession of the property and cannot control sales; their duties are merely advisory.

The judgment of the court was delivered by:

TASCHEREAU J.—Upon the ground that the inspector to an insolvent estate cannot be allowed to pur-chase any of the property of the insolvent as the respondent has done, I would allow the appeal and annul this sale. It is a principle of law which courts of justice are bound to strictly apply that no one having duties of a fiduciary character to discharge should be allowed to put his duties in conflict with his interest Davis v. Kerr ([1]), at page 246

Nous écarterons donc ces mandataires afin de ne pas les placer entre leur intérêt et leur devoir. Boitard, Proc. vol. 2, (10 éd.) p. 353 ([2]).

[Page 615]

That is the principle upon which are based articles 1484 and 1706 of the Civil Code, and article 748 of the Code of Procedure.

The respondent himself alleges that it was upon the advice of the inspectors that this property was sold as two separate lots. This shows that the inspectors have more to do with the sale of the insolvent's estate than he contended for at the argument. They advise merely, it is true, but that advice must be wholly disinterested, and, for instance, the very time or season chosen by them for the sale may be one where the property is likely to be sold at a lower rate, and if they are allowed to buy, their interest would be adverse to the creditors' interests. I cannot divest my mind of the opinion that it would be opening the door to frauds if the courts failed to forbid such dealings. Such was Mr. Justice Ouimet's opinion in the Court of Appeal, and I fully share in it.

Appeal allowed with costs, and petition to set aside sale granted with costs.

Appeal allowed with costs.

Solicitors for the appellant: Crépeau & Crépeau.

Solicitors for the respondent, J. A. Savoie: Méthot & Noël.

Solicitors for the respondent, F. T. Savoie: Colé & Girouard.