Kruse Estate et al. v. Oakwood Construction Services Ltd. et al., (1981) 9 Man.R.(2d) 182 (CoCt)

• Court: Provincial Court of Manitoba (Canada)
• Case Date: June 12, 1981
• Jurisdiction: Manitoba
• Citations: (1981), 9 Man.R.(2d) 182 (CoCt)

Kruse Estate v. Oakwood Constr. (1981), 9 Man.R.(2d) 182 (CoCt)

MLB headnote and full text

Kruse v. Oakwood Construction Services Ltd., Hokanson, Hokanson, DeLorenzo, Cesario, Home Fire Magic, River Valley Store Fixtures (1976) Ltd., Royal Bank of Canada and Bank of Montreal

Indexed As: Kruse Estate et al. v. Oakwood Construction Services Ltd. et al.

Manitoba County Court

Krindle, C.C.J.

June 12, 1981.

Summary:

This case arose out of a motion to determine the priorities between an unregistered equitable mortgage and registered judgments.

The Manitoba County Court held that an unregistered equitable mortgage took priority over registered judgments only if the equitable mortgage crystallized before registration of the judgments. Because the equitable mortgage in the form of a guarantee did not crystallize by the making of a demand on the guarantors, the judgments took priority.

Guarantee and Indemnity - Topic 2638

Discharge and other defences of surety - Acts of parties - After default by obligor or principal debtor - Demand to surety - The Manitoba County Court held that the liability of a guarantor arose only on demand, where the guarantee provided that the guarantor could be required on demand to pay a debtor's debts - See paragraphs 30 to 45.

Real Property - Topic 7968

Title - Registration of instruments - Priorities - Equitable interest - The Manitoba County Court held that an equitable interest in land could take priority over a registered instrument only after it had crystallized - The court held that an equitable mortgage in the form of a guarantee payable on demand did not crystallize until a demand was made on the guarantor - See paragraphs 19 to 45.

Cases Noticed:

Dominion Lumber Winnipeg Ltd. v. Winnipeg District Registrar (1963), 41 W.W.R.(N.S.) 343, appld. [para. 23].

Re Brown's Estate, [1893] 2 Ch. 300, appld. [para. 33].

Bradford Old Bank Ltd. v. Sutcliffe, [1918] 2 K.B. 833, appld. [para. 34].

Canadian Petrofina Ltd. v. Motormart Ltd. et al. (1969), 7 D.L.R.(3d) 330, appld. [para. 35].

Statutes Noticed:

Real Property Act, R.S.M. 1970, c. R-30, sect. 64 [para. 20]; sect. 72 [para. 21].

Authors and Works Noticed:

Halsbury's Laws of England (4th Ed.), vol. 20, para. 158 [para. 32].

Rowlatt on Principal and Surety (3rd Ed. 1936), p. 91 [para. 31].

Counsel:

Charles A. Sherbo, for Canadian Imperial Bank of Commerce;

J.L. Hentleff, for Oakwood Construction Services Ltd. and Raymond John Hokanson;

Blair Graham, for River Valley Store Fixtures (1976) Ltd.;

G. de Lucia, for Gaetano DeLorenzo and Aldo Cesario.

This case was heard at Winnipeg, Manitoba, before KRINDLE, C.C.J., of the Manitoba County Court, who delivered the following judgment on June 12, 1981: