The appellant and a mutual life insurance society were undivided co-owners of two immovables, subject to indivision agreements that included a waiver of partition and a mandatory sale clause if one party became insolvent.
When the society was ordered wound up, the appellant sought to enforce the mandatory sale clause to purchase the society's share at 75 percent of its market value.
The liquidator refused, arguing the agreements could not be set up against it.
The Supreme Court of Canada held that the indivision agreements were valid and could be set up against the liquidator, as the liquidator acts for the insolvent company rather than as a third party.
The Court concluded that the mandatory sale clause must be complied with, provided it does not create an unjust preference prejudicial to other creditors.
