Majority
journalier le jour de 1'accident et le nombre de jour de travail de la victime, h Port-Alfred; puis, en multipliant ce 13 taux journalier par ce nombre de jours de travail. Le mon- 10 tant ainsi obtenu repr6sentait le salaire regu pendant trois mois. On a adopt6 cette base pour d6terminer " le salaire " moyen annuel du difunt au moment de 1'accident " A $669.24. L'indemnit6 allou6e par la Cour du Bane du Roi comprend une somme 6gale h quatre fois le salaire moyen annuel ainsi 6tabli, plus $50 pour les frais de m6decin et de fun6railles, suivant les prescriptions de la section 4 de la loi. L'indemnit6 efit certainement t6 plus forte si on l'avait calcul6e conform6ment au paragraphe 3 de la section 9 de la loi. L'appelante n'a donc pas lieu de se plaindre.
Sur les deux points qu'elle a soulevis, nous sommes d'avis que son appel doit 6tre rejet6 et le jugement de la Cour du Bane du Roi est, en cons6quenoe, confirm6 avec d~pens.
Solicitors for the appellant: Foster, Place, Hackett, Mulvena, Hackett & Foster.
Solicitors for the respondent: Boulianne & Martel.
J. R. LALIBERTE
LARUE, TRUDEL & PICHER
& LES APPARTEMENTS LAFONTAINE,
LIMITEE fer but indicate that the intention of the parties was to hypothecate the property as security for the bonds. The words " en gage" modify not only the word " donne," but also the words " chde " and "transporte LARuE so that the instrument should be read as if " en gage " were after each word. Smith J. dissenting.
The words "to cede and transfer ", in s. of the Special Corporate Powers Act, R.S.Q., 1925, c. 227, do not imply an absolute transfer, but merely a transfer in warranty, in view of the addition of the words " for the same purposes ", thus referring to the words " purposes therein set forth " immediately proceding, which purposes are to secure any bonds, etc. Anglin CJ.C. and Smith J. contra. Per Duff, Newcombe, and Rinfret JJ.-T-he modification effected in the existing civil law, as to hypothec and pledge, by 4 Geo. V, c. 51, when it inserted articles 6119a, 6119b and 6119c into the Joint Stock Companies Act of 1909, has been merely to extend the principle of conventional hypothec to moveables and future property and to make future proporty susceptible of being pledged; but the main change was to enact that ",the mortgagor or pledgor (will) be permitted by the trustee to remain in the possession and use of the property so mortgaged or pledged"
(art. 6119b)-The translation of the words "nantir" and "nantissement"
by "mortgage"
and "mortgaging ", in the English version of the statute, is not appropriate and may be misleading; there is no connection between the "nantissement " of the civil law and the "mortgaging" of the English common law. Therefore that statute should not be interpreted according to the rules governing "mortgage"
of the English common law; and the power given to the debtor by the statute to hypothecate and pledge his property as security for the payment of the bonds does not constitute a "trust " within the meaning of the equity jurisprudence, the idea of " trust " never having found place in the civil law in Quebec.
Per Duff, Newcombe and Rinfret JJ.-The system of civil law in Quebec does not admit the notion of the English common law as to beneficial ownership residing in one person and legal title in another. In Quebec, both are invariably united upon the same head, the right of ownership being indivisible.
Per Smith J. (dissenting)
.-The words " cede and transfer " imply the passing of the ownership to the transferee, with power to take possession and sell, according to the ordinary meaning of the words. These words in Art. 61,19a must be given the same interpretation; otherwise they do not add anything to the words, "hypothecate, mortgage and pledge " which immediately precede them.
Judgment of the Court of King's Bench Q.R. 48 K.B. 390) aff., Smith J. dissenting.
APPEAL from the decision of the Court of King's Bench, appeal side, Province of Quebec (1) affirming the judgment of the Superior Court, Letellier J. and dismissing appellants' petition.
The material facts of the case and the questions at issue are fully stated in the judgments now reported.
The appellants were granted special leave to appeal to this court on December 9, 1929, by
J.-The bankrupt company was authorized to make an issue of bonds on the security of its property, consisting mainly of land and an apartment building that it was about to construct on it. It made a deed to a trustee of this property, ceding and transferring the property, as provided in the statute, 14 Geo. V, c. 63, s. 1, on the strength of which bonds were sold to the amount of over $400,000.
The building was partly constructed, and a contractor, who was a director to whom a large amount was owing, applied to have the company declared bankrupt, and an order was made accordingly.
Certain of the bondholders, claiming to hold bonds to an amount exceeding twenty-five per cent., petitioned the trustee to take possession of the property, pursuant to a term in the trust deed imposing upon the trustee the duty of taking possession on presentation of such petition and the deposit of a sufficient amount to guarantee his costs and disbursements. No amount was deposited for this purpose, and the trustee took no action.
The liquidator in bankruptcy applied to the court for an order for sale of the property, which was granted. The appellants, a committee of bondholders acting for themselves and others in these proceedings, made to the Superior Court a request in the form of an opposition to the judgment for sale, which request was refused, and on an appeal to the Court of King's Bench in appeal, the judgment of the Superior Court was sustained, and the present application is for leave to appeal to this court.
The judgments below are put upon the sole ground that the appellants have no status in the matter, as any proceedings on their behalf should be taken by the trustee under the trust deed. It is contended before me on behalf of the appellants that there was no jurisdiction in the courts below to order a sale of the property in question, because, under the trust deed, the ownership of the property passed to the trustee for the bondholders, and that only the equity of redemption of the property passed to the liquidator in bankruptcy. The order for sale in question purports to deal with the whole interest in the property, that is, with the ownership or legal estate.
On behalf of the liquidator it is argued that under the law of Quebec legal ownership under the trust deed rev.s mained in the bankrupt company, and that the trustee for the bondholders would have a right only to rank on the property in the hands of the liquidator according to the priority of the various creditors; and that the statute referred to above does not in fact alter this rule of the Quebec law. This is a question concerning which there may be considerable doubt, and it is one of very great importance.
It is also a matter of doubt as to whether the holders of bonds would not have a direct interest to prevent the property which stands as their security, being sold and disposed of by an order of the court where, as alleged, there was no jurisdiction to make such order. This is a point quite different from the mere matter of the trustee taking possession, and may not come within the section of the trust deed referred to, which provides merely for what is to be done to oblige the trustee to take possession. It may be, if the legal estate and ownership of the property was vested in the trustee for the bondholders, that it was the duty of the trustee to oppose any attempt to dispose of the property so vested in him without his consent, and that failing in that duty the bondholders for whom it is his duty to act had a right to act on their own behalf, because of a direct interest in preventing the disposal of their property under an order of the court acting without jurisdiction.
In view of the large amount involved and the great importance of these questions to the bondholders, and in view of the importance to bondholders in general holding bonds under trust deeds made in Quebec in this form under the statute referred to, I think that leave to appeal should be given.
Terms, however, should be imposed because leave involves a stay of the sale, and considerable expense for the care and preservation of the property in the meantime. The building has not been completed, but is enclosed, and is provided with oil heating apparatus. The expense of a caretaker and of fuel will continue, and the extra expense caused by the delay of the sale should be paid by the applicants from the date of the postponement until a new date can be fixed after the disposal of the proposed appeal or until possession is obtained on behalf of the bondholders.
The amount required as security for the appeal is $500, and an additional amount will be required for the purpose indicated, making a bond in all of $2,500.
Upon supplying such bond to the satisfaction of the registrar, leave is given to appeal, and all further proceedings are stayed in the meantime.
The argument on the appeal was first heard before this court on the 12th and 13th of February, 1930; and, on April 10, 1930, the following judgment was rendered. CouRT.-The appellants contend that the trust deed executed by Les Appartements Lafontaine, Limit6e, to the Sun Trust Company had the effect of transferring to the latter, as trustee for the bondholders, the ownership of the property described in the deed.
In the course of the consideration so far given to this appeal, it has become apparent that, should this court hold the view of the appellants to be correct, it might follow that the Superior Court sitting in bankruptcy had no jurisdiction to make the order now impeached and that the liquidators had no authority to sell; nor could such authority be vested in them by the assent of the trustee for the bondholders.
This would give the appellants a status to come into court to protect their security thus being surrendered contrary to their rights under the trust deed.
But we are satisfied that the adjudication upon the questions so raised would indirectly, if not directly, affect the position of the majority of the bondholders and of the trustee, The Sun Trust Company.
A judgment setting aside the order authorizing the sale by the liquidators on the ground that the trustee for the bondholders is the owner and thus defining his duties in the future should not, in our opinion, be rendered before he has been given an opportunity of being heard. On the other hand, such judgment, if given now, would not bind him, and, if the trustee should elect not to act according to it, would only lead to further litigation, without any immediate or practical advantage being secured.
It is important, in the interest of all concerned and to avoid further useless expense from the care and preservation of the property, that the matter be finally disposed of with as little delay as possible.
Under the circumstances, before expressing any view upon the merits of the appeal now before us, and so that the judgment to be delivered by us may be more fully effective, we direct that this appeal shall stand over and that, at the instance of the appellants, The Sun Trust Company, Limited, in its capacity as trustee for the bondholders herein, be made an additional party to the appeal, as provided by Rule 50 of the Rules of the Supreme Court of Canada. Upon the necessary suggestion being entered by the appellants and notice thereof duly served, the appeal may be inscribed at the head of the Quebec list for the next term of the court, when The Sun Trust Company, Limited, may be heard to have the suggestion set aside, should it be so advised, and, in any event, upon the merits of the pending appeal.
The rehearing on the appeal took place on the 1st of May, 1930, the trustee for the bondholders being then represented by counsel.
L. G. Belley, K.C., and R. V. Sinclair, K.C., for the appellants.
L. St. Laurent, K.C., for the respondents.
J. L. Perron, K.C., for the trustee.
C. J. C.-While I am entirely convinced by the reasoning of my brother Smith that it is impossible to disregard the presence of the words " cade et transporte " inserted in the statute, or to give to them any other effect than that of vesting in the trustee for bondholders where the trust instrument conforms precisely to the statute, as so amended, the properties to be held as security for payment of the bonds, I find myself unable to accept his view that the contract now in question has that effect. On the contrary, it seems to me that the addition to the words " cede" and " transporte" of the words " et donne en gage, au mgme titre ", (clause 1, c. III, of the trust deed), makes it reasonably clear that the intention of the parties was merely to hypothecate the property as security for the bonds. I regard the word " en gage " as modifying not only the word " donne ", but also the words " code " and " transporte " and that the instrument should be read as if " en gage " were after each word, viz., " cMe en gage, transporte en gage et donne en gage, au mgme titre." For this reason I agree with my brother Rinfret that the appeal should be dismissed with costs.
ca.c. J.-After much fluctuation of opinion, I have come to concur with my brother Rinfret. I desire to emphasize one point, and it is this. If my brother Smith's view of the statute be the right one, then it introduces into the law of Quebec a legal institution which is virtually a new one. If the intention had been to do that, which would be nothing short of a revolutionary proceeding, I think it would have been expressed in language quite unmistakeable, language to which no other meaning could be ascribed. I ought, I think, to add this, that at the conclusion of the first argument, and indeed for some time after the second argument, I thought my brother Smith was right, and more than once expressed myself in that sense. But I have changed my opinion and to that opinion I must now give effect.
The judgments of Newcombe and Rinfret JJ. were delivered by
J.-Les Appartements Lafontaine, Limitie, une compagnie incorporee en vertu de la loi des compagnies de Qu6bec (S.R.Q. de 1925, c. 223), dans le but de construire une maison de rapport, a d6cid6 de faire un emprunt de $900,000 au moyen d'une 6missiori d'obligations.
A cette fin, un contrat, appe16 acte de fiducie, fut consenti par la compagnie en faveur de The Sun Trust Company, Limited, qui fut choisie comme fiduciaire et h qui furent transf6r6s les biens donnes en garantie de l'emprunt ainsi que les pouvoirs juges n6cessaires pour accomplir sa mission A 1'6gard des porteurs d'obligations.
La compagnie est tomb6e en faillite et les intim6s ont 6t6 nomm6s syndics. Le seul actif 6tait la maison de rapport, construite avec le produit de 1'emprunt, qui 6tait alors en la possession de la compagnie et apparemment affect6e de plusieurs privilges enregistris par des ouvriers, des fournisseurs de mat6riaux et des constructeurs.
Les syndics obtinrent 1'autorisation de vendre cette maison atix enchbres, par jugement de la Cour Supirieure si6geant en matibre de faillite rendu le 12 juin 1929. Cette autorisation fut accord6e sur une requite, il 6tait alligu6 que compagnie 6tait propriitaire de 1'immeuble, et bas6e sur Particle 45 de la Loi de faillite qui pourvoit A la vente Rinfret J. par le syndic, dans la province de Qu6bec, d'un bien immobilier sur lequel existe une hypothbque ou un privilge. Les appelants, qui sont des porteurs d'obligations, ont pr6tendu que leurs int6rits 6taient 16s6s par ce jugement dans une affaire oii ni eux, ni le fiduciaire qui les reprisente n'ont t6 appel~s.
Ils ont form6 tierce-opposition (Art. 1185 C.P.C.; Loi de Faillite, rigle 173) concluant ' ce que le jugement autorisant la vente soit cass6 et annul6 et A ce que la maison de rapport
Cette tierce-opposition a 6t6 rejet~e par la Cour Sup& rieure et par la Cour de Banc du Roi (1) sur le motif que les appelants 6taient sans int6rat comme sans droit d'intervenir pour empicher la vente par les syndics, vu que cette initiative appartenait uniquement au fidiciare, except6 si vingt-cinq pour cent en valeur des porteurs d'obligations s'unissaient pour le requ6rir et avaient
Ce sont en effet, deux conditions sp6cifides dans le contrat de fiducie. Il n'est mime pas alligu6 que les appelants repr6sentent vingt-cinq pour cent en valeur des porteurs d'obligations et il est admis qu'ils n'ont pas indemnis6 le fiduciaire.
A moins de remplir ces conditions, nul porteur d'obligation ne peut contraindre le fiduciaire ' agir ou ne peut agir individuellement.
Ces restrictions se rencontrent d'habitude dans les contrats de ce genre. Elles ont pour but d'assurer au fiduciaire la discr6tion convenue dans l'exercice de ses pouvoirs et surtout de concentrer entre ses mains l'institution des proc6dures et 1'adoption contre la compagnie des recours exigis par les circonstances, afin d'6viter pr~cisiment que le bon fonctionnement de la fiducie ne soit compromis par les activitis d'une petite minorit6 ou m~me d'un seul des porteurs d'obligations, dont le nombre et le personnel varient suivant le jeu des n6gociations. est reconnu que ces stipulations tendent A prot6ger l'int6r~t g6n6ral. En pareille matibre, la compagnie contracte avec le fiduciaire pour le compte des obligataires g6n6ralement et non pour chacun d'eux individuellement.
Ici, le fiduciaire-qui n'6tait pas partie aux procedures devant la Cour Sup6rieure ou la cour du Banc du Roi-a Rinfret 6t0 mis en cause par cette cour. II a d6clar6 qu'il ne croyait pas devoir s'opposer A la vente qui a 6t6 ordonn6e. La raison en est que cette vente, faite par le syndic et permettra done de conf&rer A 1'acheteur un titre absolument clair, tandis que le fiduciaire ne pourrait vendre que sujet aux privilges enregistris sur la propri6t6-ce qui affecterait s6rieusement les enchbres ou les offres d'achat et, par consequent, les chances de disposer de l'immeuble. La d6cision du fiduciaire parait proc6der d'une sage discr6tion.
II faut done dire que les jugements ports en appel sont justifies par le contrat de fiducie et sont l6galement bien fond6s, A moins que les appelants n'aient raison de pr6tendre
Dans ce cas, la Cour Sup6rieure 6tait sans juridiction pour en ordonner la vente sous 1'empire de cette loi, et les appelants, dans les circonstances, devraient Stre admis A intervenir pour protdger leurs droits. C'est sur ce point que la permission d'appeler a t6 avec raison accord6e et c'est celui qu'il nous reste maintenant A examiner.
La question de savoir si la maison de rapport dont il s'agit faisait partie des biens de la compagnie qui, lors de sa faillite, sont divolus aux syndics, d6pend 6videmment des termes du contrat de fiducie. Sans doute, ce contrat a t pass6 en vertu de la Loi des pouvoirs sp~ciaux de certaines corporations (S.R.Q. 1925, c. 227), mais c'est le contrat, et non le statut, qui doit d6terminer la nature des relations de la faillie, du fiduciaire et des porteurs d'obligations.
II peut 6tre utile toutefois de r6f6rer au statut pour mieux p6n6trer le sens du contrat, car il est avird que ce dernier est calqub sur le premier, et nul ne pr6tend que le contrat outrepasse les pouvoirs conf6r6s par le statut.
Il faut bien pr~ciser, d6s 1'abord, que nous n'avons pas ici
A d6clarer si le fiduciaire pouvait, aprbs la d6claration de faillite, r~clamer la possession de l'immeuble a 1'encontre des syndics. Nous avons vu que le fiduciaire ne fait pas cette demande.
II affirme mime qu'il n'est pas dans 1'intirft des porteurs d'obligations de la faire. C'est la situa- -u tion oppos~e a celle qui fut jug6e dans la cause de Cana- J. dian Brass and Bedstead v. Duclos & La Socigtg d'Administration Generale (1), que les appelants nous ont cit6e. L'arr~t de la Cour du Banc du Roi dans La Manufacture des Seaux de Trois-Rivieres v. Bisson (2), qu'ils ont 6galement invoqu6, ne s'applique pas davantage puisque, dans cette affaire, le fiduciaire avait pris possession avant la faillite.
Nous n'avons pas a trancher ici une question de possession, mais une question de propri6t6.
Or, il convient peut-6tre de souligner que le systime de droit de la province de Qu6bec ne comporte pas la conception de la common law qui reconnait le beneficial ownership dans une personne et le legal title dans une autre. Dans le Qu6bec, les deux sont invariablement r6unis sur la mame tote. La propri6t6 est unique. L'usufruit, la substitution, la fiducie, le nantissement, le gage, 1'hypothbque, le privi- 1ge conf~rent sur la chose des droits plus ou moins 6tendus (Arts. 94, 944, 981a, 1966, 1968, 1983, 2016 C.C.) mais ne transmettent jamais la propri6t6.
Pour nous limiter aux pouvoirs dont parle le statut: " hypothiquer, nantir ou mettre en gage " (Art. 227, s. 10), l'hypothique n'accorde au cr6ancier que le droit de
(Art. 2016 C.C.).
Le d6biteur qui a consenti une hypoth6que reste propridtaire et en possession.
Le nantissement et le gage constituent un mime contrat avec la seule diff6rence que le premier s'adresse aux immeubles et le second, aux meubles (Arts. 1966, 1967, 1968 C.C.). Le d6biteur qui donne en gage ou en nantissement demeure propri6taire (Art. 1972 C.C.), mais ne conserve pas la possession (Art. 1970 C.C.).
En vertu du code, 1'hypoth6que, le gage ou le nantissement ne peuvent Stre cri6s que sur des biens presents; I'hypothique ne s'applique qu'aux immeubles (Art. 2016 C.C.).
L'innovation apport6e par le statut 4 Geo. v, c. 51, en introduisant dans les statuts refondus de 1909 les articles 6119a, 6119b et 6119c (maintenant les articles 10, 11 et 12 du c. 227 des Statuts Revis6s de 1925) a done 6t6-et a 6t6 seulement:
(1) d'6tendre 1'hypothbque conventionnelle aux biens mobiliers et aux biens futurs;
(2) d'appliquer le nantissement ou le gage A des biens qui pouvaient 6galement tre futurs, mais surtout A des biens dont le d6biteur " conservait la possession et l'usage ".
Pour le reste, ce dont parle le statut, c'est I'hypothbque telle qu'elle a toujours exist6, ce sont le nantissement et le gage tels qu'ils ont toujours 6t0 congus dans le droit frangais et dans le r6gime l6gal de la province de Qu6bec.
importe done de noter que, dans la version anglaise du statut, les mots " mortgage " ou " mortgaging " comme 6quivalents de " nantir " ou " nantissement " de la version frangaise sont: ou bien une impropri6t6 de langage qui peut malheureusement pr~ter A confusion ou bien 1'emploi d'un mot anglais dans une acception toute autre que celle qui lui est attribu6e dans le systime de droit pr6valant dans les autres provinces du Canada. Il n'y a pas de connexit6 entre le "nantissement"
du droit civil et le "mortgage"
de la "common law
Mais il est certain que le sens du statut est conforme A la conception du " nantissement " et oppos6 A celle du " mortgage ", puisque le statut lui-mime le d6clare:
(Voir tout l'article 12 du c. 227). Il faut done bannir toute id6e de " mortgage ", dans l'acception que lui donne la common law, de l'interpr6tation du statut et, par cons6quent aussi, de l'interpr6tation d'un contrat bas6 sur ce statut.
De m~me (sauf A discuter 'article 13), le statut ne confire A la compagnie rien autre chose que le pouvoir d'hypothiquer, de nantir ou de mettre en gage les biens destin6s A garantir le paiement des obligations.
Comme nous venons de le voir, ces d6nominations sont employ6es dans le sens qu'elles ont au code civil. Elles n'impliquent done aucunement le " trust ", tel qu'on 1'envisage en droit anglais. Le statut dit que l'hypoth6que, le nantissement ou le gage " peuvent 6tre constitubs " par " acte de fid6icommis " et la version anglaise s'exprime: " by trust deed ". Il est A peine besoin d'insister pour d~montrer que c'est seulement un nom ou une 6tiquette que 1'on donne au contrat. Le "trust sauf dans la forme restreinte oii on le trouve au chapitre de la fiducie (Code civil, livre troisibme, titre Rinfret J. deuxibme, chapitre IVa), n'a jamais exist6 dans le systeme 16gal de la province de Qubbec, qui ne comprend d'ailleurs aucun micanisme (machinery) pour le faire fonctionner. 11 serait inconcevable que le 16gislateur, par l'usage, non pas mime du mot " trust ", mais de l'appellation " trust deed ", efit voulu introduire d'un seul coup le " trust " anglais avec sa complexit6 et ses multibles aspects si fonci~rement 6trangers h l'6conomie du droit de Qu6bec.
On ne cr6e pas, de fagon aussi sommaire, une revolution aussi profonde. D'ailleurs, l'expression " trust deed " se rencontre dans 'article 11 en rapport, toujours et seulement, avec 1'hypoth6que, le nantissement ou le gage que la compagnie peut, d'aprbs l'article 12, consentir suivant les rfgles du code civil. Cela est d6cisif.
Ce n'est pas en l'appelant " trust deed " que l'on modifiera le caractbre de l'acte par lequel la compagnie peut accorder une hypothique, un nantissement ou un gage rigis par les principes du droit civil.
De mime que nous avons banni de notre interpr6tation le conception du " mortgage " de la common law, pour les raisons que nous venons de donner, il convient done 6galement d'en 6carter la conception du " trust " anglais.
Nous en venons maintenant h 'article 13 du chapitre 227 (S.R.Q. 1925).
Il a t ins6r6 dans la loi en 1925, alors que les articles 10, 11 et 12 remontent h 1914. Il se lit comme suit:
Nous ne voyons pas que cet article modifie la fagon de voir que nous avons jusqu'ici exposbe.
Les mots " ceder et transporter " employ6s seuls comportent une alination absolue. Mais ils ne sont pas employes seuls dans cet article. Au point de vue 16gal, il y a la m~me difference qu'entre les expressions " donner " et " donner en gage ". La phrase se lit:
" Pour les mgmes fins " r6f6rent aux " fins mentionnees auxdits articles ", qui les pr6cident imm6diatement dans la m~me phrase.
Or, " les fins mentionn6es auxdits articles " et pour lesquelles la compagnie est autoris6e A " hypothiquer, nantir et mettre en gage " sont (art. 10): " pour garantir le paiement des bons, obligations etc ". Cder pour garantir, transporter pour garantir, c'est la m~me chose que c6der ou transporter en garantie; et ce n'est pas ceder et transporter d'une fagon absolue.
Une cession ou un transport pur et simple est final et constitue une ali~nation d6finitive. Une cession ou un transport en garantie implique une ide de retour. Les mots " c~der et transporter " ne sont donc pas employds ici dans leur sens intigral et ne signifient pas une ali4nation de la propri6t6. Ils sont qualifies par les mots qui seraient parfaitement inutiles si " ceder et transporter" devaient 6tre pris dans le sens d'alibner. Il est clair qu'une ali6nation de la propriet6 emporterait le pouvoir de prendre possession, d'administrer et de vendre.
Il serait absolument oiseux de le dire.
On ne peut supposer que le 1gislateur a parl6 pour ne rien dire. Les rigles ordinaires d'interpritation exigent que tous les mots employds trouvent leur utilit6. Ici, la raison d'8tre de ces mots est expliqu6e par le code civil. Une hypothique, en droit civil, ne permet pas au cr6ancier de prendre possession et de vendre lui-mame. II faut qu'il fasse saisir et vendre par l'autorith judiciaire. De mgme, un nantissement ou un gage, suivant le code, ne confire pas le droit de disposer du bien gag6 (Art. 1971 C.C.), h moins d'une stipulation sp6ciale. C'est pour assurer au fid6icommissaire ces pouvoirs, que le code ne donnait pas, que l'amendement de 1924 (14 Geo. V, c. 63), devenu Particle 13, a 6t6 adopt&. Le prianbule du statut de 1924 le d6montre. Il d6bute:
II n'entrerait jamais dans 1'esprit d'un l6gislateur du Quebec de dire " qu'il y a des doutes " sur la question de savoir si le pouvoir " d'hypoth6quer, nantir et mettre en gage " comprend le pouvoir de " c6der et transporter " en pleine pro- J.pri~t6. Nous avons vu que les deux pouvoirs sont distincts au point de se repousser l'un l'autre. Mais il pouvait certainement y avoir " des doutes " si une compagnie autoris~e A " hypoth6quer, nantir et mettre en gage " pouvait en m~me temps permettre au fiddicommissaire,
C'est ce doute que le statut de 1924 (maintenant 1'art. 13 du c. 227) a voulu faire disparaitre. Par il est devenu certain qu'un contrat de ce genre pouvait se faire. C'est un contrat particulier avec des stipulations spiciales, en dehors de celles pr6vues dans les chapitres du code relatifs au nantissement, au gage et A 'hypothique, mais restant quand m~me subordonni aux rigles du droit commun dans ses principes g6ndraux et dans tout ce qui n'est pas d6clard y d6roger express6ment.
Bien entendu, ce n'est pas le " trust" dans le sens du common law. Le texte m~me de 'article 13 le prouve. Il est admis que jusque l le " trust " n'existait pas dans la loi de Qu6bec. Or, 1'article 13 est d6claratoire. Il sp~cifie qu'il n'institue aucun droit nouveau. II dit que ce qui est permis par cet article " est et a toujours 6t loisible ". Ce ne peut dont 6tre le " trust ".
Comme par une coincidence assez curieuse, si elle n'est pas voulue, on trouve dans le code civil, au chapitre de la fiducie, le mot " transporter " employd dans un sens 6galement restreint. L'article 981a permet A " toute personne capable de disposer librement de ses biens " de " transporter des propri6t6s mobilibres ou immobilibres A des fiduciaires
*
*
* pour le b6nifice des personnes etc.". Dans ce texte, le mot " transporter " est moins qualifi6 qu'il ne 1'est dans 1'article 13 du statut. Cependant, il n'a pas pour effet de transmettre le titre de propri6t6 aux fiduciaires. L'article suivant (981b) le dit:
Il est impossible de ne pas voir l'analogie entre ces articles du code et le statut que nous 6tudions. Il est naturel et logique que nous en tenions compte. Sur ce point, il est int6ressant de lire le jugement du Conseil Priv6 re O'Meara JuBERFA v. Bennett (1).
L'analyse que nous venons de faire du statut va nous
Rit aider A comprendre l'acte de fiducie que nous sommes ap- Rinfret J. pel6s A interpr6ter et dont, nous le r6pitons, d6pend la nature des droits respectifs de la faillie ou de ses syndics, d'une part, et du fiduciaire, d'autre part.
Ayant pos6 le principe que, suivant le droit de Quebec, la maison de rapport doit 6tre ou bien hypothiqu6e, nantie ou mise en gage, (et alors elle est encore dans le domaine de la faillite) ou bien ali6n6e (et alors c'est le fiduciaire qui doit en revendiquer la propri6t6); ayant reconnu qu'entre ces deux possibilit6s, il n'existe pas de r6gime interm6diaire semblable au trust de la common law, nous sommes d'avis que l'acte de fiducie qui est devant nous appartient A la premibre cat6gorie. Dans l'intention des parties, c'est un contrat de garantie et non un contrat d'ali~nation; c'est un emprunt et non un transfert de propri6t6.
Cela ressort d'abord de la d6claration de la compagnie par laquelle d6bute l'acte de fiducie:
c. La Compagnie a besoin pour les fins de son entreprise de faire un emprunt de $900,000, au moyen d'une 6mission d'obligations garantie par hypothbque sur tous ses biens meubles et immeubles, pr6sents et futurs.
Par toute la suite de 1'acte, on ne r6fire, en aucun cas, aux biens affect6s par le contrat, autrement que comme biens hypoth6qu6s:
Chapitre I, art. 2: "privilfges et hypoth&ques cri6s par le present acte de fiducie ".
Chapitre II, art. 7: " Ils jouiront des b6ndfices de 1'hypothique que comporte pr6sent acte ".
art. 19-(2e. sous-parag. a): "pouvant prendre rang avant Finscription hypoth6caire pr6sentement donn6e ".
art. 19. (2e sous-parag. b): "aucune hypothique prenant rang avant celle des pr6sentes ".
art. (2e sous-parag. c. 3e alin6a): "pouvant passer antdrieurement
A Phypothique cr66e par le pr6sent acte ".
Chapitre IV.-La compagnie s'engage:
art. 3-" De maintenir et respecter les garanties er66es par le pr6sent acte etc."
art. 4--" De payer toutes taxes qui pourront affecter les biens hypoth6ques ".
art. 5.-" De ne faire aucune d6molition ni changement aux immeubles hypothdquis art. 6a.-" De maintenir les biens hypothdqu6s".
(1) [1922] A.C. 80, at p. 85.
Chapitre VII, art. 2: " devra prendre possession des biens hypoth6qu6s". ILMa art. 3: "ni proc6der i la vente forc6e des biens hypoth6qu6s ". Chapitre VIII, art. 10: " prendre possession des biens hypoth6quis" LARUE
" pourra remettre h la Compagnie les biens hypoth6qu6s Rinfret J.
Nous ne voulons pas attribuer trop d'importance aux mots, mais ce qui donne de la force a ceux-ci, c'est que nulle part dans le contrat les biens ne sont d~crits sous une autre forme, sauf en deux endroits auxquels nous reviendrons.
Par ailleurs, les clauses de l'acte de fiducie sont celles d'un contrat d'hypothique et de gage et non celles d'un contrat de cession. Il est pass6
&fin de garantir * * * le paiement des obligations (c. III, art. I). La compagnie * ** consent A ce que l'hypothbque, le gage et le transfert que comportent les pr6sentes aient leur plein effet et garantissent par priorit * * * le paiement des obligations (Chapitre III, dernier paragraphe.)- La Compagnie pourra avec le consentement du fiduciaire, vendre pour le tout ou en partie, les biens meubles et immeubles dont elle n'aura plus besoin et le fiduciaire, advenant telle vente, devra donner quittance et d6charger de l'hypoth6que pr6sentemen-t 6tablie sur ees biens (C. VIart. I).
L'article 2 du chapitre VI est au m~me effet. Si, dans le cas de d~faut de la compagnie, le fiduciaire prend possession des biens et les vend, il pourra en donner bons titres, pour et au nom de la Compagnie.
(C. VIII, art. Les argents provenant de l'administration des biens hypoth6qu6s (toujours la mime d6signation) ou de la vente d'iceux par le fiducisire seront d'abord imputis aux frais et d6boursis, au paiement des int6rets et du principal des obligations, et " le surplus, s'il y en a, sera remis A la Compagnie " (c. X, art. 2). La clause 16e du chapitre IX pr6voit le cas oii 1'ensemble des obligations permettra
A la Compagnie de cr6er et d'6mettre d'autres obligations et valeurs prenant rang pari passu avec les obligations 6mises en vertu des pr6sentes, ou avec priorit6 sur icelles.
Chacune de ces clauses n'est compatible qu'avec l'id6e du titre de propri~t6 reposant sur la tote de la compagnie. Aucune d'elle ne se concilie avec un droit de propri6t6 appartenant au fiduciaire, surtout si l'on considbre que par la sixibme des clauses finales de l'acte, la Compagnie " constitue le fiduciaire son mandataire irrivocable ".
Mais voici qui, a notre humble avis, est d6cisif. C'est la clause H du chapitre VIII, qui r~git la manibre dont la fiducie prend fin:
Sur preuve du paiement ou du rachat de toutes les obligations, ou sur preuve qu'il a t6 pourvu & leur paiement en la manibre prescrite aux prfsentes, et sur paiement de tous ses frais et dbbours~s ainsi que de sa r6mundration, le fiduciaire devra b la r6quisition de la Compagnie et aux d6pens d'icelle, lui donner quittance finale et mainlev6e de toutes les hypothbques prises en vertu des pr6sentes.
LARuS Ainsi, le titre de propri6t6 est bien rest6 entre les mains Rinfret J. de la compagnie, puisque, sur paiement des obligations, on ne pourvoit pas A une r6trocession A la compagnie. suffit au fiduciaire de donner quittance finale et mainlev6e de toutes les hypothiques prises en vertu des prbsentes.
L'acte de fiducie, d'un bout A l'autre, ne confire au fiduciaire que les droits d'un crdancier hypothicaire ou gagiste et non ceux d'un propriitaire. Le sens de 1'acte, tant dans son texte que dans son esprit, est celui du contrat d'hypothbque et de nantissement.
II faut y ajouter le texte des obligations elles-mames, dont les appelants sont porteurs, et qui se lit
Elle est garantie pari passu par premiere hypothbque sur tous les biens de la Compagnie sujette A toutes les conditions et restrictions de l'acte de fiducie etc.
Si l'obligation donne & son porteur une hypothique sur " tous les biens ", elle ne peut en mime temps, par l'intermidiaire du fiduciaire, le constituer propriitaire d'aucun des biens.
Bref, dans tout ce long document de vingt-neuf pages imprim6es, les seuls mots sur lesquels les appelants puissent s'appuyer pour leur pr6tention sont " cede et transporte " dans la phrase: " cede, transporte et donne en gage " de Particle I du chapitre III, et " cid6s " dans la phrase: " hypothiqu6s, ced6s et mis en gage " du chapitre V. Voici comment ils s'y rencontrent:
CHAPITRE III
Hypothiques
I. En considbration du paiement de un dollar, que lui fait le fiduciaire, dont quittance, afin de garantir 6galement et proportionnellement, "pari passu le paiement des obligations A 6tre 6mises en vertu des pr6sentes, dont le principal s'616ve & la somme de neuf cent mille piastres (8900,000), afin de garantir en outre le paiement d'une somme additionnelle de cinquante mille piastres ($50,000) pour couvrir, de prf6rence au capital des obligations, le montant des int6rats, frais, d6penses et autres accessoires, et pour assurer l'accomplissement de toutes les conditions et conventions du pr6sent acte, la Compagnie bypothhque, grave et affecte, jusqu'd concurrence de la somme de neuf cent cinquante mille piastres ($950,000) en faveur du fiduciaire, acceptant, pour lui-mgme et pour les porteurs d'obligations, et lui cede, transporte et donne en gage, au mime titre, tous ses biens meubles et immeubles, de quelque nature qu'ils soient, pr6sents et futurs, situ6s dans la province de Qu6bec, y com- , pris ses entreprises, franchises, clientile, achalandage, priviliges et contrats et plus spcialement les bien et 'actif ci-prs au long dcrits, savoir: LARus
Cet immeuble connu comme 6tant les subdivisions numbros deux cent soixante-dix et trois cent trente-quatre du lot originaire num6ro quatre Rinfret J. mille trois cent quatre-vingt-un-A (4381-A-270 et 334) du cadastre officiel pour le quartier Montcalm de la cit6 de Quebec, formant ensemble un emplacement born6 en front au sud-est par la Grande Allie, en arribre au nord-ouest par les subdivisions num6ros deux cent soixante-neuf ettrois cent trente-trois du mime lot, d'un c8t6 au nord-est par l'Avenue Turnbull, et au sud-ouest par l'Avenue de la Tour, mesurant cent cinquante-six pieds de largeur par cent trente-deux pieds et six-dixibmes sur l'Avenue Turnbull, et cent trente-trois pieds et quatre dixibmes sur l'Avenue de la Tour, formant une superficie totale de vingt mille sept cent quarante-sept pieds carrds, plus ou moins, mesure anglaise, avec les bAtisses actuellement en construction, circonstances et dspendances. Le susdit emplacement a 6t0 acquis par la Compagnie de M. Rodolphe E. MacKay, de la Cit6 de Qu6bec, notaire, par un acte de vente pass6 devant Me Georges Michel Giroux, notaire b, Qu6bec, le vingt-six mai, mil neuf cent vingt-huit, et enregistr6 h Qu6bec, le trente mai suivant sous le num6ro 211,992.
Garantie de la Compagnie
La Compagnie dsclare que les immeubles, biens, droits et franchises ci-dessus d6sign6s lui appartiennent par bons titres et elle consent A ce que 1'hypothique, le gage et le transfert que comportent les prsentes aient leur plein effet et garantissent par priorit6 d'abord le paiement des accessoires et en second lieu le paiement des obligations qui seront 6mises en vertu des dispositions du pr6sent acte de fiducie.
CHAPITRE V.
Possession' et usage des biens hypothqu6s.
La Compagnie, 4 moins qu'elle ne soit en d6faut, gardera pour les fins de son industrie et de son commerce, la possession et la jouissance de tous les biens pr6sentement hypoth6qu6s, cidis et mis en gage, avec droit d'en employer les loyers, profits et revenus comme elle l'entendra. Apres ce que nous avons dit au sujet de ces mimes mots ("cder et transporter ") dans 1'art. 13 du statut, a fortiori devons-nous conclure que, en vue du contexte et de l'ensemble de l'acte, ils doivent s'interpriter ici comme voulant dire " chde en gage, transporte en gage et donne en gage dans l'article I du chapitre III, et " c6d6s en gage ", dans le chapitre V.
C'est, en effet, la seule manibre d'emp~cher qu'ils ne se trouvent en conflit avec tout le reste du contrat, comme nous l'avons vu; ou mime de leur donner un sens qui soit logique. Autrement cette phrasiologie signifierait que la compagnie aurait h la fois ali6n6 et mis en gage les mimes biens, ce qui est l6galement impossible.
II a t sugg6r6 qu'on pourrait consid6rer la phrase comme " distributive ", c'est-h-dire que les mots " hypothique, grave et affecte " s'appliqueraient h certains biens, et les mots "chde et transporte " A d'autres biens. Mais, en outre qu'il n'y a rien dans tout le contrat, qui pourvoit A l'exercice par le fiduciaire des droits d'un propri~taire, la premiere des " clauses finales " rend les dispositions de l'acte applicables " A tous les biens dont la Compagnie fera subs6quemment 1'acquisition "; et surtout: il ne s'agit en cette cause que de la maison de rapport.
L'immeuble qui la constitue (terrains et constructions) est le seul qui soit d6crit dans l'acte parmi les biens que la compagnie " hypoth6que, grive et affecte * *
* cede, transporte et donne en gage ". Or, dans le chapitre I des " d6finitions et interpr6tations " du contrat, on trouve:
La maison de rapport est le seul immeuble A qui les mots " les biens sp6cialement hypoth6quis " puissent s'appliquer, conformiment A l'article 2042 du Code civil.
En lisant, comme nous l'avons dit: " chde en gage, transporte en gage et donne en gage ", tout se concilie.
On ne fait aucune violence au texte et l'on a un sens qui se tient et qui est en harmonie A la fois avec l'ensemble de 1'acte et avec le droit civil et la loi g6ndrale de la province de Qu6bec.
Nous sommes, en consequence, d'avis que la maison de rapport n'a jamais cess6 d'6tre la propri6t6 de la faillie. Comme telle elle est divolue aux syndics, et la Cour Sup&rieure, si6geant en matibre de faillite, avait juridiction pour en ordonner la vente ainsi qu'elle l'a fait.
L'appel doit 6tre renvoy6 avec depens.
Le syndic est autoris6 A effectuer la vente dans le mrme d6lai A partir du present jugement que celui qui lui avait 6t6 accord6 par le jugement de la Cour Sup6rieure. SMITH J. (dissenting).-Les Appartements Lafontaine, Lt6e. is a joint stock company that is in bankruptcy. Prior to the bankruptcy, it was the owner of a parcel of land in the city of Quebec on which it proposed to erect an apartment building.
By by-law of the 26th May, 1928, its shareholders authorized an issue of bonds aggregating $900,000 to be secured by a trust deed to a trustee, the proceeds to be used for the erection of the building.
A trust deed was accordingly executed to the Sun Trust Company as trustee for the bondholders of the company's property and assets present and future, and bonds to the amount of $460,000 were sold to the public, and a contract was entered into with T. E. Rousseau, one of the directors of the company, for the construction of the apartment house. After the building had proceeded far enough to be enclosed, the contractor, claiming that there was $163,165 due to him and his sub-contractor, suspended operations and presented a petition in bankruptcy against the company, upon which it was declared bankrupt, and on the 12th of January, 1929, the respondents were appointed interim receivers, and took possession of the property. On the 30th April, 1929, the respondents were appointed trustees, with five inspectors, one of whom was the manager of the Sun Trust Company.
The trustee for the bondholders filed a claim under the trust deed for $463,000, declaring that the same was secured on the property of the bankrupt.
On the 11th June, 1929, the inspectors gave the trustees in bankruptcy permission in writing to sell the real estate of the bankrupt, in accordance with section 45 of the Bankruptcy Act, and on the 12th June, 1929, Chief Justice Lemieux made an order authorizing the trustees to sell accordingly.
The present appellants thereupon filed an opposition to this order, and on the presentation of the petition before Mr. Justice Letellier, the trustees in bankruptcy and the trustee for the bondholders appeared, by counsel, and opposed the objection. The learned judge held that the petitioning bondholders had no status, and that the trustee for the bondholders represented them.
An appeal was taken to the Court of King's Bench (appeal side), and was dismissed. There is no specific reference, either in the petition or in the reasons for judgment, to the effect of R.S.Q. (1909) s. 6119a, enacted by 4 Geo. V., and 14 Geo. V., c. 63, s. 1, now R.S.Q. (1925), c. 227, s. 10 and 14 inclusive, but Mr. Justice L6tourneau, reading the judgment of the court, says:
A It is doubtful if the learned judge had here in mind the effect of a trust deed of a corporation made to secure a LUJERTA bond issue in pursuance of the Acts referred to, which is VU the question here to be considered.
- Smith J By the Civil Code, a hypothec does not pass the title and ownership of the property to the mortgagee as in the case of a mortgage at English common law, and only entitles the creditor to have the property sold and to have a preference on the proceeds. Arts. 2016, 2053 C.C.
Moveables are not ordinarily susceptible of hypothecation; Art. 2022 C.C.
Both immoveables and moveables may be pledged, and the pledge of immoveables is subject to the rules contained in the second chapter, relating to pawning, in so far as they can be made to apply. Art. 1967 C.C. The pledging of moveable property is called " pawning ", and the pawning of a thing gives to the creditor a right to be paid from it by privilege and preference before other creditors; and the privilege subsists only while the thing pawned remains in the hands of the creditor or the person appointed by the parties to hold it. Arts. 1968, 1969, 1970 C.C. Immoveable property, to be acquired, in future, cannot be hypothecated; Art. 2037 C.C.; and, as moveable property to be acquired cannot be given into possession, it cannot ordinarily be pledged.
The ownership of things does not pass to the pledgee. Art. 1972 C.C.
By 4 Geo. V., c. 51, s. 1, there was introduced into the R.S.Q. (1909) the following articles:
6119a. Notwithstanding any existing law any joint stock company, incorporated under an Act of the legislature of the province of Quebec, or by letters-patent, or any company so incorporated outside the province, if empowered thereto by its charter or its letters-patent, may by authentic deed-for the purpose of securing any bonds, debentures or debenture stock which it is by law entitled to issue-hypotheoate, mortgage or pledge any property, moveable or immoveable, present or future, which it may own in the province.
6119b. Such hypothecation, mortgage or pledging may be by trust deed to any trustee, and such security shall be good and valid, notwithstanding that the mortgagor or pledgor may be permitted by the trustee to remain in the possession and use of the property so mortgaged or pledged.
6119c. The rights which such hypothee and mortgage give upon immoveables, and the manner in which they must be registered, shall be governed by the provisions of the Civil Code in the title of Privileges and Hypothecs and that of Registration of Real Rights, and they shall be subject thereto.
The mortgaging and pledge of moveables shall confer a privilege upon LIB_
. moveables present and future, ranking immediately after the other privi- LIusurr on moveables enumerated in articles 1994, 1994a, 1994b and 1994c LR of the Civil Code. Such hypothec and such privilege shall take effect only from the date of the registration of the deed by which they are Smith J constituted, in the Registry office of the registration division in which the company has its head office in the province, and also in any other division in which it has a place of business.
The Registrar shall inscribe the trust deed creating a hypothec upon or a pledge of the moveables, in a register which he shall keep for that purpose, and which shall be at all times, during office hours, open to inspection by the public. The registrar may exact, for such registration and for such inspection, the fee which shall from time to time be fixed by the Lieutenant-Governor in Council.
By 10 Geo. V, c. 72, s. 1, new articles were substituted for articles 5957 to 6090 R.S.Q. (1909)
inclusive, article 6009c of which provides that, if authorized by bylaw, the directors may, notwithstanding article 2017 of the Civil Code, hypothecate, mortgage, or pledge the moveable or immoveable property, present or future, of the company, to secure any such debentures, or other securities, or give part only of such guarantee for such purposes; and constitute the hypothec, mortgage or pledge mentioned in this subparagraph, by trust deed, in accordance with articles 6119b and 6119c, or in any. other manner. By 14 Geo. V., c. 63, it is enacted as follows:
Whereas doubts have arisen as to whether, under articles 6119a and following of the Revised Statutes, 1909, as enacted by the Act 4 George V, chapter 51, section 1, a company may cede and transfer to a trustee, with power, in the event of the failure of the company to fulfil the conditions of the trust deed, to take possession of, administer and sell the properties which it is authorized to hypothecate, mortgage and pledge: Therefore, His Majesty, with the advice and consent of the Legislative Council and of the Legislative Assembly of Quebec, enacts as follows:
1. It is and always has been lawful for a company falling under articles 6119a and following of the Revised Statutes 1909, besides hypothecating, mortgaging and pledging for the purposes set forth in the said articles, to cede and transfer, for the same purposes, the said properties to the trustee, with power in the event of the failure of the company to fulfil the coiditions of the trust deed, to take possession of the properties ceded and transferred, to administer and sell them for the benefit of the bondholders.
Articles 6119a, 6119b and 6119c, and s. 1 of 14 Geo. V., c. 63, are now sections 10, 11, 12 and 13 of the Special Corporate Powers Act, R.S.Q. (1925), c. 227; and article 6009c of 10 Geo. V., c. 72, is now s. 67c of the Quebec Companies Act, c. 223, R.S.Q. (1925), slightly varied, the first lines reading, " Notwithstanding the provisions of the Civil Code ", and the final part reading:
By trust deed in accordance with sections and 12 of the Special Corporate Powers Act (c. 227).
A corporation may acquire, alienate and possess property, art. 358 C.C.; and it is suggested that a corporation has the right to cede and transfer its property to secure its bonds independently of these statutes. A joint stock company is a creature of statute law, and when it is given, Sm J. by express statutory provision, power to secure its bonds on its property by a specific method, as here, it may be limited by implication to that method, and we must therefore determine what is authorized by these statutes dealing with the matter.
It is argued that a trust deed, made in terms authorized by this legislation, has not the effect of passing the ownership of the property to the trustee in derogation of articles 1972 and 2053 because article 6119c provides that the rights which such hypothec and mortgage give in immoveables shall be governed by the provisions of the Civil Code in the title of privileges and hypothecs; and the rights conferred by the mortgage and pledge of moveables are stated to be a privilege ranking after certain other privileges set out in the code.
We must first note the language at the beginning of article 6119a: "Notwithstanding any existing law ", indicating that the very object of the article was to give to companies the right, by authority of this article, to do what it was thought could not otherwise be done by reason of existing law. It is, however, contended that the special rights, which the statute purports to give, are those set out in the article itself, namely, the right to hypothecate, mortgage and pledge immoveable and moveable property, present and future, and the power to make valid securities of the kind mentioned, though the mortgagor or pledgor be permitted to remain in possession.
There could be no doubt about the legislation going to this extent, expressly provided for, in derogation of the provisions of the Civil Code. The statute of 14 Geo. V., c. 63, however, recites that doubts had arisen as to whether, under articles 6119a and following, a company may cede and transfer to a trustee, with power, in the event of the failure of the company to fulfil the conditions of the trust deed, to take possession of, administer and sell the properties which it is authorized to hypothecate, mortgage and pledge. It is then enacted that it is and has always been lawful for a company, falling under the articles referred to, besides hypothecating, mortgaging and pledging for the purposes set forth in the articles, to cede and transfer, for the same purposes, the said properties, with the powers J mentioned in the recital.
This is a declaration by the legislature that these special rights are given by the articles in question, in addition to those expressly mentioned, notwithstanding anything in the Civil Code and notwithstanding the provisions of art. 6119c.
A deed that cedes and transfers property passes the ownership to the transferee, according to the ordinary meaning of the words. If this is not the intention of the Act, what do the words " cede and transfer the property" give in addition to what is given by the other words, " hypothecate, mortgage and pledge," already appearing in article 6119a?
It is argued that the question intended to be set at rest by 14 Geo. V., c. 63, was the right of the trustee to take possession of the properties, and to administer and sell them for the benefit of the bondholders. If that was all that was intended, it was only necessary to declare that it is and always has been lawful, under article 6119a, to hypothecate, mortgage and pledge, with power to the trustee to take possession, etc.
By the language of the statute, it is to a trust deed which cedes and transfers the property that the power to take possession and sell attaches. The construction contended for would attach the power to take possession and sell to every hypothec and pledge, and would give no effect to the words, " cede and transfer." It seems to me that the very object of the statute was to declare that it is and always has been lawful for the company under article 6119a to do something more than hypothecate, mortgage and pledge property to a trustee for the purposes named, namely, to cede and transfer the same; that is, to transfer the ownership of it to a trustee, with the powers mentioned. This is the right that a company has under the English common law, which gives to a trustee for bondholders higher rights than are given by hypothec and pledge under the Civil Code. The object, therefore, seems to be to extend to a trustee for bondholders of a company having property in Quebec the fuller rights over the property given in security that would be given by a mortgage under the English common law, which transfers the ownership to the trustee.
Article 6119c was in the statute when 14 Geo. V., c. 63, was enacted, and, if I am right as to what was intended by the latter statute, the provisions of this article become subject to whatever modification is necessary to give full effect to article 6119a, according to the interpretation to be placed on it, as declared by the later statute of 14 Geo. V. It remains to be determined whether or not we have in this case a trust deed made in pursuance of the power given by the statute in terms that transfer to the trustee the ownership in the property with the powers there mentioned. The language of the deed is:
It is contended that the later words of conveyance should be read " cde en gage, transporte en gage et donne en gage which amount only to the creation of a " droit de gage and leaves the ownership in the debtor company until the property has been appropriated by the trustee in satisfaction of his claim, after default, or has been sold for that purpose. It is pointed out that throughout the document it is described as " hypothec " and " garantie ", and that many of its provisions have reference only to a document of that character. It has, however, the words " cede and transfer ", and gives power to the trustee to take possession of the property and " administer the affairs of the company ", and to sell the property. These powers are not connected with the words " cede and transfer ", as in the statute, and they are not set out in the exact language of the statute where the power is to take possession of the property, " to administer and sell for the benefit of the bondholders ". In the clause giving power to sell it is not stated to be for the benefit of the bondholders, and nothing is said as to what is to be done with the proceeds. On a sale by the trustee, he is empowered to deliver the property sold to the buyer on receipt of the price, and to give him "bons titres, pour et en nom de la Compagnie ".
I think the words of the conveyance, " cede et transporte " found in the document, have the effect of transferring the ownership, and the trustee, having thus become vested with the ownership, is bound to deal with the the V.UE property as provided in the deed. It may, I think, be implied that power given by the deed to the trustee to administer the affairs of the company and to sell, is for the benefit of the bondholders, and that, therefore, the trust deed, though badly drawn, comes within the description in the statute.
The property, therefore, became vested in the trustee for the bondholders, and all that passed to the liquidator was the right that the bankrupt had to get it back on payment of the bonds.
The order in question, however, authorizes the liquidators to sell and convey this property in full ownership, though they are not possessed of the ownership. The authority relied on for this is s. 45 of the Bankruptcy Act. That section relates only to hypothecs and pledges, and this being a security of a different character, having a different effect, that section does not apply. The sections of the Bankruptcy Act which give jurisdiction to the liquidator to sell property the ownership of which is vested in a creditor as security for his debt are those under the heading "Proof by Secured Creditors ", commencing with s. 106.
There were no proceedings taken to bring these sections into operation.
It was argued that the trustee for the bondholders had a right to represent them, and appeared by counsel to oppose the opposition and to express approval of the order. -It is quite clear, as has been held in the court below, that the appellants failed to establish default on the part of the trustee by failure to take possession of the property at the request of certain bondholders, because they did not fulfil the conditions set out in the trust deed required to be fulfilled before the trustee was under obligation to take possession. If, however, the view that I have expressed as to the effect of the trust deed is correct, the liquidators had no authority to sell, and the court no jurisdiction to authorize a sale, and the trustee could not by assent vest the liquidators with authority to sell. The trustee had the ownership of the property vested in it to hold for the bondholders, and, on the assertion by the liquidators of an adverse title to ownership, the trustee took the attitude, quite possibly in good faith under the impression that the
Cases cited
- A.C. 80 A.C. 80 p 85
Statutes and regulations cited
-
Unresolved citations
- section 4
- section 9
- art. 6119b)
- s. 1
- s. 10
- section 45 of the Bankruptcy Act
- 14
- section 1
- sections 10
- 11
- 12
- 13 of the Special Corporate Powers Act
- s s. 45 of the Bankruptcy Act
- s. 106