ITT Commercial Finance Ltd. v. Co-op Centre Credit Union Ltd., (1986) 75 A.R. 321 (QB)

• Judge: Forsyth, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: November 03, 1986
• Citations: (1986), 75 A.R. 321 (QB)

ITT Commercial v. Co-op Centre Credit (1986), 75 A.R. 321 (QB)

MLB headnote and full text

ITT Commercial Finance Ltd. v. Co-Op Centre Credit Union Ltd.

(No. 8401-14044)

Indexed As: ITT Commercial Finance Ltd. v. Co-op Centre Credit Union Ltd.

Alberta Court of Queen's Bench

Judicial District of Calgary

Forsyth, J.

November 3, 1986.

Summary:

The financier of a motor home dealer's acquisition of new motor homes for retail sale took security in the form of conditional sales agreements on the new motor homes. The conditional sales agreements provided that the financier was entitled to the proceeds of retail sales up to the amount owing under the agreements. The dealer took two used motor homes as trade-ins on the purchase of new motor homes, then gave chattel mortgages on the used motor homes to its bank. The financier claimed entitlement to the used motor homes over the bank.

The Alberta Court of Queen's Bench allowed the financier's actions and held that the chattel mortgages were void as against it.

Conditional Sales - Topic 1005

Rights of third parties - Loss of title to subsequent purchaser - Resale by trader in ordinary course of business - Consent of owner to possession of trader - What constitutes - The financier of a motor home dealer's acquisition of new motor homes for retail sale took security in the form of conditional sales agreements on the new motor homes - The conditional sales agreements provided that the financier was entitled to the proceeds of retail sales up to the amount owing under the agreements - The dealer took two used motor homes as trade-ins on the purchase of new motor homes, then gave chattel mortgages on the used motor homes to its bank - The bank claimed entitlement in priority to the financier on the ground that it took title from the dealer as a mercantile agent in possession with the financier's consent under s. 2(1) of the Factors Act - The Alberta Court of Queen's Bench held that the chattel mortgages were void as against the financier, because it did not consent to the dealer being in possession of the used motor homes as a mercantile agent, but only to satisfy the amounts owing to the financier under the conditional sales agreements.

Conditional Sales - Topic 1506

Remedies - General - Seller's remedies - Right to proceeds of subsequent sale - Proceeds - What constitute - Trade-ins - The financier of a motor home dealer's acquisition of new motor homes for retail sale took security in the form of conditional sales agreements on the new motor homes - The agreements provided that the financier was entitled to the proceeds and the retail sales up to the amount owing under the agreements - The Alberta Court of Queen's Bench held that the financier was entitled to the trade-ins taken on retail sales as part of the proceeds - See paragraphs 9 to 12.

Cases Noticed:

Ford Tractor v. Grundman Estate Trustee (1969), 72 W.W.R.(N.S.) 1, consd. [para. 9].

Borg-Warner Acceptance Canada Ltd./Ltee v. Mercantile Bank of Canada et al., [1985] 5 W.W.R. 605, refd to. [para. 10].

Royal Bank of Canada v. General Motors Acceptance Corp. of Canada Ltd. (1985), 67 N.S.R.(2d) 306; 155 A.P.R. 306; 18 D.L.R.(4th) 201, refd to. [para. 10].

Allis-Chalmers Credit Corporation of Canada Ltd. v. Leon's Mfg. Co. Ltd. et al., [1983] 3 W.W.R. 230; 45 A.R. 175, consd. [para. 16].

Dalgleish v. Western Truck Cap Sales Ltd. (1977), 5 A.R. 28; 2 Alta. L.R.(2d) 261, appld. [para. 22].

Statutes Noticed:

Factors Act, R.S.A. 1980, c. F-1, sect. 2(1) [para. 15].

Authors and Works Noticed:

Black's Law Dictionary [para. 11].

Counsel:

F. Zinkhofer, for the plaintiff;

C.L. Kenny, for the defendant.

This case was heard at Calgary, Alberta, before Forsyth, J., of the Alberta Court of Queen's Bench, Judicial District of Calgary, who delivered the following judgment on November 3, 1986: