Stephens v. Boisseau

Debtor and creditor - Payment debtor - THE JUSTICE.-The facts are fully stated in the judgment of Mr. Justica Maclennan and I need not repeat them.

Unless the appellant can show that some statutory provision has been contravened by the respondent he cannot possibly be entitled to any relief, inasmuch as at common law preferential payments are unimpeachable.The able.

Justice. Then how can it be maintained that there was in the case before us any transaction between Giles and the respondent which offended against the provisions of the 2nd section of Revised Statutes of Ontario, ch. 124 ? The validity of the mortgage itself was not questioned.

The sale to Huston was made at the instance of the respondent and could not have been carried out without his assent.

Had all the debt which the mortgage was given to secure, that is to say the $4,000 for new goods, the $2,338 for the composition notes as well as the $1,165 unsecured debt, been due, and had there been one sale including both stocks of goods for an amount equal to or in excess of the $7,970, the aggregate debt secured and unsecured, the case would have presented the same question of law as that which has actually arisen.

It would have been quite within the respondent's rights in the supposed case, as I think it was in the present, that he should have sold all the mortgaged goods and received the proceeds.

Then as regards the surplus which would have been lawfully in his hands, he could have properly appropriated a due proportion to the payment of his secured debt, leaving in his hands a balance equal to or exceeding the unsecured debt. What would there have been in that case to have disentitled the respondent if sued by the assignee for the balance to the benefit of section 23 of the Revised Statutes Ontario, chapter 124 ? This section provides that : It would have been out of the question to have said that there was in the case actually before us any agreement or arrangement bringing it within the exception of cases of fraud contained in this section.

Then, the case put, in all its legal aspects, is indistinguishable from the present, and that being so the same consequences must follow here as in that supposed.

The only way in which the right which was acquired by the respondent, by reason of his having to realize his security by sales of the mortgaged property, could have been obviated, was by redemption by Giles or his assignee before the sales which would have deprived the respondent of the benefit of the set-off under the 23rd section, by means of which he has, without in any way infringing the law against preferences, gained an advantage over the other creditors.

The appellant not having chosen to exercise this right of redeeming must abide by the consequences.

The appeal is dismissed with costs.

Appeal dismissed with costs.