If a movable hypothec is registered under an alias, case law considers the error to be fatal.
The identification of a legal entity raises certain questions, especially when it does business under an assumed name.
Thus, a legal entity formed under the Quebec Law with a numerical designation and also doing business under the name "Goe Foresterie" mortgages its movable assets in favor of a financial institution. At the time of publication, an error was made in taking the guarantees. Indeed, the constituent of the chattel mortgage was designated as "9076-3355 QUEBEC INC." and its assumed name, instead of its true name "9076-3335 QUEBEC INC.".
The company having gone bankrupt, the trustee refuses to recognize the validity of the mortgage. The financial institution, citing a clerical error, turns to the Court* and requests that the mortgage be recognized as valid.
Considering that such an error in a company number is not comparable to a spelling mistake in a natural person's name, any change in one of the digits of the company number necessarily creates a completely different set of numbers and, therefore, a completely different name. Even if the mortgage was also published under the constituent's assumed name, third parties cannot be expected to conduct multiple searches in the personal files of the movable register.
The Court deems the error to be fatal, as the registration had to be precise and disclose complete information through a simple search for third parties.
In daily life, one can use aliases, nicknames, or descriptive terms, but not when taking chattel mortgages. Let "pitou," "minou," and "ti-loup" take note of that.
*CA 200-09-003837-017, 2003-08-08
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