Marc-André Gravel

The appellant acquired shares in a company and became a director and secretary, agreeing to stand surety for the company's debts to the respondent.

He later resigned and transferred his shares.

The respondent subsequently demanded the appellant discharge the company's debts.

The Supreme Court of Canada held that under art. 2363 of the Civil Code of Québec, a suretyship attached to the performance of special duties terminates upon cessation of those duties.

The Court found the appellant's suretyship was contracted in connection with his duties, discharging him from debts arising after January 1, 1994, when the new Code came into force, but remitted the matter to determine if any debts existed prior to that date.

The annuitants invested in an RRSP with Desjardins Trust, which deposited the funds in the Caisse and issued non-negotiable deposit certificates.

The annuitants later borrowed from the Caisse, granting a movable hypothec with delivery on the RRSP funds as security, and handing over the certificates.

The annuitants then made an assignment in bankruptcy.

The trustee rejected the Caisse's claim as a secured creditor, arguing that a non-negotiable instrument could not be the object of a pledge.

The Supreme Court of Canada held that a movable hypothec with delivery on a claim not represented by a negotiable instrument is valid under the Civil Code of Québec if the debtor transfers effective control of the claim to the creditor, the title is handed over, and the hypothec can be set up against the debtor of the claim.

The appeal was allowed.