Judgment of the Court
Du~r C.J.-It will be convenient at the outset to quote the section of the statute of 1906 (R.S.C. 1906, c. 69, s. 24) from which the authority to grant the re-issue patent must be derived if such authority exists:
24. Whenever any patent is deemed defective or inoperative by reason of insufficient description or specification, or by reason of the patentee claiming more than he had a right to claim as new, but at the same time it appears that the error arose from inadvertence, accident or mistake, without any fraudulent or deceptive intention, the Commissioner may, upon the surrender of such patent and the payment of the further fee hereinafter provided, cause a new patent, in accordance with an amended description and specification made by such patentee, to be issued to him for the same invention, for any part or for the whole of the then unexpired residue of the term for which the original patent was, or might have been granted.
2. In the event of the death of the original patentee or of his having assigned the patent, a like right shall vest in his assignee or his legal representative.
3. Such new patent, and the amended description and specification, shall have the same effect in law, on the trial of any action thereafter commenced for any cause subsequently accruing, as if the same had been originally filed in such corrected form before the issue of the original patent.
4. The Commissioner may entertain separate applications, and cause patents to be issued for distinct and separate parts of the invention patented, upon payment of the fee for a re-issue for each of such re-issue patents.
First of all, the invention described in the amended description or specification and protected by the new patent must be the same invention as that to which the original patent related.
Second, it is plain that the authority to issue a new patent in accordance with the amended description or specifica- E
' tion is an authority by the exercise of which it is intended that the original patentee, or those claiming under him, shall have relief in respect of certain strictly specified things.
These things, for our present purpose, are in- J. sufficient description or insufficient specification,-obvi- Cj. ously, insufficient description or insufficient specification of the invention to which the original patent related.
Thirdly, such insufficiency of description or specification in respect of which relief is authorized under this section must have arisen from inadvertence, accident or mistake. These conditions necessarily imply that the inadvertence, accident or mistake must be inadvertence, accident or mistake affecting the sufficiency of the description or specification in the original patent, and it is only in respect of such inadvertence, accident or mistake that the statute contemplates relief.
The statute does not contemplate a case in which an inventor has failed to claim protection in respect of something he has invented but failed to describe or specify adequately because he did not know or believe that what he had done constituted invention in the sense of the patent law and, consequently, had no intention of describing or specifying or claiming it in his original patent. The tenor of the section decisively negatives any intention to make provision for relief in such a case.
In this connection it is to be observed that, while the section provides for relief where the patentee claims too much, there is no provision for relief where the patentee fails to claim something to which he may be entitled. In this last mentioned case, he can only obtain relief if he can bring himself within the condition relating to insufficiency of description or specification arising from inadvertence, accident or mistake affecting the sufficiency of the description or specification.
It is to be noted that the section is retroactive in an important respect. The amendment speaks from the date of the original patent as regards causes of action arising after the date of the new patent. Even on the strictest construction, a serious injustice may arise from the operation of this provision where people have made arrangements and expended money on the faith of the specification in the patent between the date of the original patent and of the re-issue patent,-a period which in this case extended to five years.
It is our duty, I think, in the r A'. circumstances, not to extend the language of the section pa beyond cases clearly within its intendment.
It will be unnecessary to discuss at length the introduc- A. tory words, " Whenever any patent is deemed defective or C. inoperative by reason
*
* *," but one observation naturally arises out of the circumstances of the present appeal. There is no suggestion that the original patent was inoperative or could be deemed inoperative. It is essential, therefore, to enable the appellants to invoke the section, that the original patent should have been deemed defective by reason of insufficiency of description or specification arising from inadvertence, accident or mistake. It is immaterial to my present purpose whether the word "deemed"
contemplates the view of the Commissioner or the view of the Court before whom the question of the validity of the re-issue patent comes for decision, or the view of the parties concerned.
At the lowest, the statute must contemplate some kind of reasonable ground for apprehension on the part of the original patentee that the patent is defective in the sense of the section It would, in my opinion, be an abuse of this language to apply it to a case in which it is obvious that a patent completely fulfils the intention of the applicant, where there is plainly neither insufficiency of description nor specification, for the purpose which the applicant had in view; where, in other words, the invention in respect of which the patentee intended to obtain protection is quite certainly and sufficiently described and specified. In such a case, the patent is not in any proper sense of the phrase defective.
There is another view of the statute advanced by the appellants which I shall discuss later; but, in the view just expressed, the appellants necessarily fail; first, because the pertinent documents, the original application for the United States patent, the specification and claims in the original Canadian patent, conclusively negative any intention on the part of the applicant Arnold to describe or to specify any of the inventions, so-called, embraced within the amendments in so far as they are material to the present appeal; second, because, having regard to the evidence properly before us as to the state of the art at the time E I of the application for the Canadian patent, and at the time when Arnold is alleged to have conceived and perfected the inventions in respect of which relief is claimed by the appellants, it is highly improbable that Arnold believed he was entitled to obtain the protection of the law in respect of these so-called inventions; and that the balance of probability supports the concluson that Arnold was not entitled to the protection of the patent law for these improvements, in respect of which protection is claimed. In giving my reasons for these conclusions, I shall first consider the documents themselves; which constitute most weighty evidence. The two documents, the importance of which I shall emphasize, do not differ from one another in any material respect; they are Arnold's application for his United States patent, and the specification and claims in the original Canadian patent. Both these documents are signed by Arnold. There is, of course, a presumption, which is a presumption of law, that Arnold, in signing these documents, knew the nature of their contents. This presumption of law is fortified by a very powerful presumption of fact. There is quite sufficient evidence in the record to show, what nobody disputes, that Arnold was an accomplished physicist, a most competent radio engineer and master of the radio art and an experienced inventor. The documents before us, which include a number of specifications signed by him, make it quite clear that he was skilled in the art of scientific exposition, and that, also, nobody disputes.
At the material times, Arnold was associated with Richards, to whom reference will be made later, as assistant of Dr. Colpitts in the laboratory of the Western Electric Company, and with his staff was engaged in investigating radio communication and the practical and theoretical problems connected with it. It would hardly be disputed that few people were better fitted than he to appreciate the value of a given improvement or to form a just judgment upon the merit of it. He was an inventor accustomed to framing specifications and we may assume that he was little likely to be misled upon the point whether a given improvement gave evidence only of the application by a skilled engineer of principles and methods well known among skilled radio engineers, or of something exceptional involving invention. We must proceed upon the view, in the absence of some evidence to the contrary, that Arnold knew the contents of the documents I am now about to discuss and that he knew the effect of them in accordance with their proper construction.
On the 31st of August, 1915, Arnold signed his application for the original U.S. patent. The meaning of the application in its relevant aspects is not doubtful. The first two paragraphs are as follows:
The next paragraph states the object of the invention: which is to provide means by which a definite upper limit is set upon the amount of power that may be communicated to a receiving circuit or apparatus. Then, in the next paragraph, the desirability of such a limitation is explained, and the explanation given is that "foreign disturbances" which are often "of large magnitude compared with that of the normally received signals" may thereby be reduced to a value not exceeding that of such signals. Then it is stated that this object is attained by an arrangement of audions described, which will be conveniently referred to hereafter as the push-pull arrangement, and by causing the thermionic currents in audions so arranged to flow such purpose being to put a definite upper limit upon the amount of power communicated to the receiving apparatus. Then there is an explanation of the accompanying drawing which is said to represent a "receiving system" embodying the invention.
It will be observed that, up to this point, the invention is specifically stated to consist in a method for limiting the- "electrical power" which may be transmitted to a receiving instrument in a system for radio communication.
A draw- Esmvaic ing is attached to the application for the purpose of communicating a fuller understanding of the nature of the pHO invention and for that purpose alone; and represents a receiving system for radio communication in which the invention, the power limiting device, operates in the final stage of amplification and restricts the amount of power transmitted therefrom to the ultimate receiving apparatus. The inventor declares:
The specification then proceeds to trace the construction of the network by reference to the numbered parts of the drawing with explanations in some instances of the functions of those parts; and, the explanation having arrived at " amplifier 38," proceeds:
Then we are told:
Referring now to the first and second paragraphs, it is self evident that it is in the apparatus to the right of 44 that are to be found the devices limiting the amount of power which may be communicated to the final receiving circuit or apparatus; and in the conception and design of which resides the invention. It is in respect of these devices that the inventor declares he has produced an invention, and only in respect of these devices. A description of the apparatus to the right of 44 follows.
In explaining the operation of the system it is summarily stated that power received by the antenna is transferred to the circuit 5, 6, is augmented by the amplifier 7, is then communicated to the circuit 19, 20, is then transformed into low frequency form by rectification in element 21, is then augmented by amplifiers 31 and 38; and after this summary reference to the anterior parts of the drawing, the inventor states that the power is finally
Then follow three paragraphs in which the operation of the power limiting device comprised in the apparatus to the right of 44 is explained. Here again it is self evident a that it is the power limiting device whose operation he is A. explaining.
Once again, the claims are explicitly limited to this power limiting device, with the exception of claim 1, which appears to be a combination claim for a combination of the c. power limiting device with the enumerated antecedent elements of a receiving system: an antenna, a tuned receiving circuit, and so on.
As I have already said, the inventor has left no room for doubt as to the meaning and effect of his application. He has invented, he says in his introductory paragraph, certain new and useful improvements in radio communication; and in what follows, he declares in emphatic words, he has given a full, clear and exact description of the new and useful improvements he has invented and for which in his claims he claims protection. This invention he sets forth as constituting an improvement both new and useful in a receiving circuit for radio communication.
There is no other invention described. There is no suggestion that he has invented any other new and useful improvement or any other improvement, or that he has made any other invention of any description.
It would be an abuse of language to aver, for any purpose relevant to any controversy on this appeal, that this application describes or relates to any other invention. The drawing, as I have said, was produced solely with the object of enabling the reader to comprehend the invention; that is to say, the invention with which the application is concerned.
The drawing cannot be legitimately construed in any other way.
The parts of the drawing to the left of 44 are obviously, as matter of construction, there for the purpose of enabling the reader to realize the kind of network in which the invented devices operate and thereby the better to comprehend their purpose and mode of operation.
To read the drawing in the other way is to read it as contradicting, not as illustrating, the text.
The application, therefore, with the appended drawing, construed in the only way in which it can properly be construed, negatives (as within the contemplation of the application) any claim by the inventor to having invented ELCM0 any improvement for which he is entitled to the protection of the law, in respect of any part of the apparatus disclosed by the drawing which is not involved in the invention explicitly claimed and set forth.
It is, therefore, of no relevancy in determining the inw. vention to which this application relates that, by Arnold's instructions, sets of a " receiving system " of which the drawing, so far as it goes, would be a correct delineation, were or had been constructed; the existence of such physical objects is of no relevancy because the application has plainly no relation to any such particular physical things or contemplated physical things. There is not a syllable in the application, there is nothing in its detail, there is nothing in its general scope, there is nothing in the drawing, which can afford a foundation for the proposition that the application relates to some actually existing physical " receiving system." Indeed, it obviously could not be so. An actually existing physical system in operation, or capable of being put into operation, would be of fixed dimensions, of determined physical quantities. The windings of the transformers primary and secondary, for example, would be capable of exact mathematical description. So as to audions,--when actually existing in operation, or ready for operation, they must have certain physical constants, in an amplifier, an amplification factor, and so on. So also as to the condensers. There is no conceivable means by which any engineer could, from this drawing, construct any such actually existing physical system. Obviously, such a particular physical system as a whole, in all its various parts, was an invention not contemplated by this application. These physically existing sets, therefore, can be of no value in assisting us in determining what is the invention to which the application relates; they add nothing to the drawing.
They could not properly be resorted to for the purpose of explaining or for the purpose of limiting the scope of the invention expressly claimed. You could not properly, for example, restrict Arnold's claim in respect of his power limiting device to a claim for a power limiting device employing audions of the precise dimensions and physical constants of the audions found in these receiving sets. Nor can you find anything in the documents as they stand which justifies the introduction of the elements of these physical receiving sets as elements to be considered in the determination of the meaning of the document. drawing is there and may be used as illustrating the text, throwing light upon the meaning of it, but only for that purpose. I shall come later to the contention already mentioned that, for the purpose of applying the statute, these receiving sets serve as a link establishing the identity of the invention to which the original patent relates and the invention to which the amendments refer. For the present, I am concerned with applying the statute according to the interpretation above mentioned which limits admissible amendments to such as may be necessary to correct any insufficiency of description or specification arising from the error of the patentee in failing adequately to describe or specify an invention in respect of which he intended to apply for protection and arising from inadvertence, accident or mistake. These observations apply equally to the specification in the surrendered Canadian patent.
Now, I have no hesitation in drawing the inference that Arnold fully understood the scope and effect of the application of May 22nd, 1916, and of the specification in the original Canadian patent. He understood, that is to say, that he was excluding from the invention specified and claimed by him those devices and arrangements which are described and specified and claimed in the amendments in so far as we are presently concerned with such amendments. It is also very clear on the material before us that in the proceedings before the Commissioner leading up to the grant of the reissue patent no evidence was adduced to show that the specifications, the description or the claims of the original patent were insufficient to give effect to the intention of Arnold.
Still less was there any evidence adduced to show that Arnold had failed to describe or to specify sufficiently the invention in respect of which he was claiming protection by reason of inadvertence, accident or mistake. Nor, indeed, is there any allegation to that effect. Again, no evidence was adduced at the trial directly bearing upon either of these points.
I have examined the proceedings before the Commissioner and I cannot find there any statement made by c Arnold personally that there was any such insufficiency of description or specification or any such inadvertence, accident or mistake.
Indeed, there is not, I think, among these documents any statement by Arnold personally that he was the inventor of the alleged improvements to which the amendments relate. There is no reference in any of these documents to the receiving systems physically constructed upon which the appellants so much rely; still less any suggestion anywhere that the invention in respect of which the reissue patent is prayed for is to be found embodied in these existing physical things.
There is a letter signed in Arnold's name by R. R. Adams, attorney, which contains an argument, an ingenious argument, that the amendments contain nothing but permissible explanations of the drawings and the summary expressions in the text of the specification of the surrendered patent. The first paragraph is in these words:
Then, the statement concludes:
The ground upon which the application for the reissue patent is based is that everything in the amendments is to be found by implication in the specification of the original patent when read with the drawings. I have pointed out that, on the true construction of the specification, this is a wholly inadmissible proposition. What is material for my present purpose is that this letter contains no allegation that, in point of fact, it was Arnold's intention to claim or to describe or to specify the alleged invention with which the proposed amendments are concerned; or that, by reason of inadvertence, accident or mistake, he was led into some insufficiency of description or specification.
Still less is there any reference to any material adduced as evidence in support of an allegation of inadvertence, accident or mistake. I shall have a word later to say with regard to these proceedings.
It seems perfectly plain that the reissue patent ought not to have been granted and that, unless we are at liberty to empty the provisions of the enactment under which the J. conditions for the grant of a reissue patent are laid down, of all substance, we are inevitably forced to the conclusion that the grant of the reissue was an unauthorized and unwarranted act. For the present, however, I am concerned only with this: the proper conclusion from the documents, including the proceedings on the application for the reissue patent, is that there was no defect in the original patent in the statutory sense, no reasonable ground for apprehending that the patent was defective in failing sufficiently to describe the inventions in respect of which Arnold was intending to claim invention; no mistake on Arnold's part in respect of the description or the specification of the invention to which his application related. Accident is not suggested nor is inadvertence in the pertinent sense; that is to say, no inadvertence in respect of any insufficiency of description or specification of the invention that the applicant had in mind. The statutable conditions governing the exercise of the authority to grant the reissue patent are all absent. This, in itself, is, of course, sufficient to dispose of the appeal.
But it is necessary to examine the validity of the reissue patent from a point of view which stands upon a view of the statute different from that which I have expressed and which I am satisfied is the true view. The appellants say that a number of " receiving systems," to employ Arnold's own expression, all of them answering the description to be found in the specification in the surrendered Canadian patents (including the drawing), had actually been constructed and set up and put in operation before the date of Arnold's application for the original Canadian patent. Invoking the interpretation clause of the Patent Act, each one of these receiving systems, it is said, embodied the devices and arrangements claimed in the amendments in the reissue patent and in question in this litigation. These physically existing things were, it is argued, inventions within the definition in the interpretation clause of the Patent Act. The original patent, it is argued, was a patent in relation inter alia to these things and so was the reissue patent. Identity of invention, it is said, is established and we are asked to say that, consequently, the authority under the statute was exercisable.
DufCJ.
This argument is not convincing.
First of all, the case of the appellants at the trial was that the inventive idea in respect of which Arnold was entitled to claim protection was not the condensers, the resistances, the coils, as physical things, but the use for which Arnold employed them. That is hardly consistent with the view that these physical things in themselves constituted the invention in respect of which the surrendered Canadian patent was granted.
On the argument before us, counsel for the appellants said, " What the patent was directed to was a physical object." The case at the trial was not that the patent was directed to a physical object, but to certain physical objects employed in a certain way and for a certain purpose, and that it was in this employment that the merit of the inventive idea lay.
The argument involves, of course, the proposition that it is sufficient, in order to obtain relief under the statute, to show that the drawing in the original patent exhibits a device in respect of which the patentee might have claimed protection if he had asked for it and sufficiently disclosed the nature of the invention. This, of course, is to discard the parts of the statute that I have been emphasizing, which make it very plain that the design of the statute is to afford relief only in respect of an invention clearly conceived as such, for which the original patentee intended to claim protection, but in respect of which, through the causes defined by the statute, there is insufficient description or specification. Identity of invention is only one of the conditions of the statute.
Then, as I have already pointed out, there is nothing in the original patent or in the specification of the original patent or the specification of the re-issue patent, or in the material before the Commissioner on the petition for the granting of the re-issue patent, dealing with these physical instruments. I have already given my reasons, and I will not repeat them, for the conclusion that it would not be sufficient to show that the devices in these physical instruments constituted improvements in respect of which Arnold A. might have obtained protection if he had asked for it but had no intention of asking for it, either because he was deliberately abandoning them to the public, or because he A. was satisfied they were not inventions in respect of which he could properly claim protection, or because he overlooked the merit of them from the point of view of invention. That is not sufficient because the inadvertence, accident or mistake in respect of the sufficiency of description or specification must constitute a defect in the patent in the sense that it fails adequately to give effect to the intention of the applicant; I repeat, these physical sets add nothing to the drawing.
As I have already indicated, the weight of evidence appears to me to support the conclusion that the devices and arrangements in question in this litigation were not regarded by Arnold as inventions in respect of which he was entitled to a patent, and that this conclusion is that which best accords with the balance of probability arising from all the circumstances.
I shall deal specifically with the alleged patentable features of the alleged inventions which are described in the pertinent parts of the amended specification and claims in the re-issue patent. Before doing so, it is convenient to sketch some facts in the development of the instrument known as the audion. The audion, as invented by DeForest about the year 1906 or 1907, was a valve having three electrodes.
The record contains the specifications in several patents granted to him in respect of improvements in the audion and circuits in which the audion was a part. A fact which it is useful to keep in mind in considering the evidence before us, and the arguments presented to us, is that the audion, as conceived and devised by DeForest, operated by a current of electricity passed through a gaseous medium. I do not wish to be misunderstood. In modern vacuum tubes a very high degree of evacuation has been achieved and the pure electron stream which passes from the cathode to the anode is not in any way dependent upon the conductivity of the small amount of residual atmospheric air or gas that may remain within the tube. But the audion, as conceived by DeForest, was an instrument in which the conductivity of a gaseous content was made use of purr posely, and the term " audion," which was applied by DeForest to his instrument, continued, at all events, down to the end of the period with which we are concerned in this appeal, to be applied to that type of instrument; cl. although for the last twenty years or so it may have been used to describe a vacuum tube having the general features of the audion as invented by DeForest but evacuated as completely as the pumps and other means at the command of engineers and manufacturers make possible.
There is some oral evidence with regard to these matters which is not very satisfactory and I have been obliged to resort to the documents in the record to obtain information upon them. Specifications of United States patents applied for by DeForest on the 14th February, 1906, 27th August, 1906, and 25th October, 1906, and 29th January, 1907, are in evidence. The first paragraph of the claim in the first of these is thus expressed:
In the second, the description of the invention contains this sentence:
In the third, there is described a three-electrode device, in other words, an audion, in which the first claim is expressed as follows:
In the last of them, the objects of the invention are thus stated:
This specification describes a particular type of audion which is referred to later in a specification of a patent issued to Arnold upon an application of the 28th May, 1914. The invention, the specification states, is for " new and useful improvements in gaseous repeaters in circuits of low impedance."
The specification proceeds to state that, of these improvements, the " following is a full, clear, concise and exact description ":
February 18, 1914, ought to be February 18, 1908, as appears from the serial number 841,568.
It will be observed that the specification describes improvements in "gaseous repeaters." The DeForest audion and the Von Lieben repeater, both of which make use of the conductivity of the gaseous content, are given as typical examples of thermionic repeaters of the type to which the specification relates. Entire exhaustion of the atmosphere is not contemplated.
Now this specification shows in the plainest way that such gaseous repeaters were, in the mind of Arnold, properly designated by the term "audion."
Indeed, in his description of his invention he invariably selects the "audion" as the gaseous repeater which exemplifies it, although he does not exclude other types-the repeaters are " preferably audions."
In explaining the drawings the repeaters are always described as " audions."
Claims 1, 2, 3, 4, 6 and 7 use the term " thermionic repeaters," of which, as already mentioned, the typical examples given are the DeForest audion and the Von Lieben repeater; while in claim 5, the term " vacuum discharge repeaters " is employed which, as already mentioned, contemplates a repeater from which the atmosphere is not entirely exhausted.
This, let it be noted, is Arnold's conception of the term " audion," as appears from a patent dated the 2nd March, 1915, granted on an application dated the 22nd March, 1914.
In the application for Arnold's U.S. patent in respect of the invention which is now in question, dated the 31st August, 1915, the repeaters which are employed in the power limiting device, that is to say, in the apparatus immediately to the right of number 44 in the diagram of the network attached to the application, are described in the claims as " thermionic repeaters " and " thermionic elements."
In the body of the specifications these strucpH'W tures are said to be "of the audion type"; and in the claims in the surrendered Canadian patent they are (in claims 2, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13 and 14) described as "audions"; D C. while in claim 1 they are referred to as "thermionic elements" and in claim 3 as "thermionic repeaters." There is not a suggestion in either the specification or the claim that the term "audion" in these documents does not designate repeaters of the type described as audions in Arnold's patent of the 2nd March, 1915, and his application of the 28th May, 1914. Indeed, the specification contains a reference which is definitely at variance with any such suggestion.
In describing the power limiting device and the means for securing uni-lateral conductivity, he distinguishes his own device from that invented by E. H. Colpitts and described in U.S. patent 1,128,292, by the circumstance that in Arnold's own device the electromotive force employed for driving the plate current operates through a high impedance and by that circumstance alone.
Now, turning to Colpitts' patent which was applied for on the 3rd of January, 1914, and granted on the 16th of February, 1915.
We have a careful description of Colpitts' push-pull arrangement; the arrangement which Arnold adopts subject to the alteration mentioned. "This invention," Colpitts says,
He adds:
Colpitts would appear to have been an experienced and competent engineer, and it will be observed that he mentions as a characteristic feature of the audion that the current can flow in one direction only in "the ionized stream" and that the function which he ascribes to the heated filament is that it is " a source of ionization." Turning now to the claims,-in the first claim the repeating apparatus is said to comprise a
In claim 7, the combination of the two repeating elements is said to comprise " a common source of ionization." This document appears to have been signed by Colpitts on the last day of December, 1913. The patent, issued on the 16th of February, 1915, as I have already observed, must have been present to Arnold's mind when he signed his application for the United States patent on the 31st August, 1915.
There is another patent of Colpitts for which application was made on the 18th May, 1914, the patent being granted on the 27th April, 1915, five days before the grant of Arnold's patent for improvements in audions which, as already pointed out, he gives as the preferable type of " gaseous repeaters" for his purposes. Colpitts' repeaters are described by him as audions. The space within the audion between the plate and filament is described as "the ionized space."
The claims comprise "means for producing a state of ionization in the evacuated vessel."
In a patent applied for on the 24th of June, 1913, and granted to DeForest in 1921, the repeaters are described as audions, and the electrodes within the evacuated vessel as being surrounded by a gaseous conducting space. The specification in a patent granted to Richards on the 14th of July, 1914, on an application of the 8th of February, 1913, relates to devices intended for use in connection with relays of the "gaseous type, such, for instance, as disclosed in letters patent [of] January 15th, 1907, and February 18th, 1908, granted to Lee DeForest."
device," it is stated,
The objects of the invention, it is stated,
It is obvious," it is said, that the improvement disclosed herein may be applied to any of the various types of audions and similar gaseous relays without the exercise of invention.
IrD.
It seems to follow from these documents, which would appear to be the most reliable evidence of contemporary usage, that, at the time of Arnold's application for his Canadian patent in 1916, the term " audion " was known among engineers and specialists in radio engineering as a Duff CJ. term originally applied by DeForest to a repeater employing a conducting gaseous content and normally designating a repeater of that character; although there may be room for conjecture that shortly afterwards it came to be loosely used also as applying to any three-electrode repeater. Light is thrown upon the use of the term by another set of contemporary documents. Reference will first be made to a patent granted to Langmuir on the 23rd of July, 1918, upon an application of the 29th of December, 1913. " The electron discharge tube " is described in these words: In carrying my invention into practice I make use of an energy storing device arranged in co-operative relation with electron discharge tubes.
By the term " electron discharge tube " I mean to imply the use of a highly exhausted envelop containing at least two electrodes one of which is provided with means for causing it to emit electrons. A device of this nature when connected to a source of current operates selectively in such a manner as to allow current to flow between the electrodes in only one direction; that is, there will be a flow of negative electricity from the electron emitting electrode to the other electrode or electrodes, but no flow in the opposite direction. In order that this result -may be obtained when a potential of more than 20 or 30 volts is applied it is necessary to have the highest possible exhaustion of the envelop. Otherwise there will be a heavy ionization of the gas present and this will render the device useless for my purpose.
By improved methods of exhausting the envelop, however, such a high vacuum may be secured that for any voltage which is applied there is no appreciable gas ionization but the flow of current is the result of a pure electron discharge and is entirely independent of any gas conductivity.
That is the way in which a scientist and an engineer familiar with radio engineering and its terms of 'art describes, at the relevant period, an instrument which operates without appreciable gas ionization and whose current is the result of a pure electron discharge independently of any gas conductivity. " The electron discharge tube " had evidently been described in -applications filed on the 16th October, 1913, and it is explained with similar explicitness in the specification under a patent granted 24th April, 1917, and applied for July 15th, 1914.
This device is also described in the specification of a patent granted to Alexanderson on the 22nd of February, 1916, for which application was made on the 29th of Octo- ECmic ber, 1913. The invention was for a selective tuning sys- =A. tem. The system as described includes Langmuir's " electron discharge tube" but it is said that the invention is not confined to a relaying device operating with a pure electron discharge. In other words, the invention was not c. confined to a device operating independently of gas conductivity.
It results from all this that, according to the usage of the time, the claims in Arnold's Canadian patent embrace audions in the proper sense of the term, audions as described by DeForest, by Colpitts, by Richards and by Arnold himself, as is shown in his specification for improvements in " gaseous repeaters."
His invention is stated in his application for his U.S. patent and in his surrendered Canadian patent to be a "power limiting device" and relates to appliances to be found to the right of the figure 44 in his sketch.
The power limiting device included audions arranged in push-pull relation after the manner, subject to the qualification mentioned, explained in Colpitts' patent, and there is nowhere the slightest suggestion, or the slightest ground for a suggestion, that " the thermionic repeaters " which form a part of the network are repeaters of the character described by Langmuir and Alexanderson as " electron discharge devices " operating with a pure electron stream through a medium exhausted in the manner described by Langmuir.
It will be convenient now to quote from the appellants' factum a very concise description of the features of Arnold's 1915 receiving system to which it is alleged that the claims sued upon in the re-issue patent relate:
As to the first of these alleged patentable features of Arnold's "receiving system," three things are admitted,that Colpitts, in the patent already referred to, had patented a push-pull arrangement which Arnold, with the p.,,,, modification mentioned in his specification, was virtually adopting.
It is plain enough from the explanations of Colpitts that this arrangement was intended as one stage in a system of amplification.
(2) It is admitted that a system by which a series of audions were so arranged that each one successively amplified the output of the last was well known.
And (3) the system was well understood under which one push-pull arrangement immediately succeeded another push-pull arrangement.
These things being given, I find it difficult to perceive the invention involved in Arnold's arrangement; I do not doubt that Arnold regarded it as an arrangement well within the range of competent engineering skill.
It was argued that Arnold for the first time perceived that distortion is reduced when the electric energy fed into the incoming circuit of an audion is " well within the capacity," according to the phrase used, of the audion. Now, there is not a word in the specification of the surrendered Canadian patent, nor is there a suggestion in the drawings, to indicate such a limitation of the power fed from audion 38 into the push-pull arrangement. Nor, indeed, is this condition of the effectiveness of the arrangement set forth in the re-issue patent. If such was the condition of the practical working of this combination and invention was involved in the appreciation of it, then it should have been clearly and plainly stated and, in the absence of such a statement, the disclosure is, in my judgment, insufficient. However, the conclusive answer to this contention is that it was well known that with the audion of that period the amplifying circuit worked satisfactorily only on limited amounts of incoming energy.
That is stated by Richards in the specification in his patent, to which reference has already been made, for which he applied on the 8th of February, 1913, and which was granted on the 14th of July, 1914. Richards explains that the relays of the type to which his invention relates, and to which this observation applies, which he describes as relays of the gaseous type, are relays such as those disclosed in the patents to DeForest already referred to which are dated January 15, 1907, and February 18, 1908. Such devices, he says, are known in the art and are termed El "audions."
A. I shall have to refer to Richards' actual invention on the pso point next discussed and, in that connection, to a note of Richards dated the 21st of November, 1912.
Richards and Arnold had been associated and Arnold signs Richards' note as a witness. It is quite plain that Richards in his specification is referring to a condition well understood and that his invention aims at providing a remedy. It was very freely suggested in the course of the trial and on the argument that Richards was dealing with a type of instrument that went out of vogue before Arnold's invention was complete.
Richards, it was argued, was directing his attention to totally different conditions. I shall point out why this view is inadmissible.
As regards the second feature, the employment of a resistance for the purpose of improving the operation of, or the fidelity of reproduction by the audion is the substance of the patent of Richards to which I have just referred; and it is now necessary to examine the evidence adduced bearing upon the employment of this device by Arnold. Arnold and Richards, let me repeat, were associated as the assistants of Colpitts. Arnold witnessed the note that I am just about to quote. The circumstances all point to the conclusion that Arnold was familiar with Richards' idea of employing the resistance and that he did not in any way regard it as an invention of his own. On the 21st of November, 1912, Richards made a note in the following words, which note was signed by Richards, his signature being witnessed by Arnold:
The note seems to show that the condition restricting the usefulness of audions was well recognized, viz., that signals in which the current is excessive impair the efficiency of the repeater circuit; and the proposal is that the grid and plate of the audion shall be shunted for the purpose of correcting He appears to suggest an inductive and a noninductive resistance in series for that purpose. Then he adds that, in a circuit newly constructed, this shunt has been employed with success.
The conception of Arnold's invention, it seems to be suggested, was complete in March, 1914, and was embodied in circuits which were constructed in the summer of 1914. Now, there are two notes of Arnold, one on the 10th of March, 1914, and one on the 4th of March, 1914, as follows: The first thing to be observed about these notes is that they all refer to " audions " and, as already pointed out, the contemporary documents show plainly that the term " audion " at that time was used as designating a gaseous conductor. As to the notes of the year 1912, there can be no manner of doubt that Richards and Arnold were dealing with the same type of repeater,-the audion of DeForest described by Arnold, Richards and Colpitts as a " gaseous repeater."
Kendall, it is true, says the standard B audion was the standard " high space current audion." There is no explanation of that term. Its natural meaning is an audion having space current of high value. That is, I presume, a high plate filament current. There is nothing in that to suggest an instrument of the character of the " electron discharge repeater " described by Langmuir and exhausted as explained by Langmuir with precision. There is no reason for thinking that Arnold in 1912 when he used the term " audion " had in his mind a repeater different in character from the gaseous repeater well known, as Richards says, in the art as the " audion," invented by DeForest and referred to by Arnold himself in the specification in his patent of the 2nd of March, 1915, as the audion of the usual type. There is, to be sure, a statement by the appellants' witness Johnson in rebuttal that when gas did appear in the DeForest tubes it was an abnormal condition. It is, of course, perfectly plain from what has already been said that at the relevant times the presence of gas in a DeForest tube was the normal condition.
But the consideration which is entirely conclusive upon this point is the fact that in his Canadian specification, Arnold, as has been pointed out, uses the term " audion" Eo. L to describe the type of repeaters which his invention contemplates. In October, 1913, Langmuir had applied for patents in respect of his " electron discharge tube " and in p
February, 1916, a year and a half before Arnold's Canadian r patent was granted, Alexanderson had received a patent Due CA in which he described the " electron discharge " tube as a device having a vacuum so high that gas ionization by collision is substantially absent.
It was stated categorically by the witness Johnson that Arnold was the first to use in 1913 a tube which he spoke of as the high vacuum tube. He was obliged to admit that he was speaking from hearsay, and then finally said such tubes were known in 1913. If Arnold, in his note of 1912 and his notes of 1914, had in mind a repeater of this description and not the type of repeater which he and Richards and Colpitts had been in the habit of describing as an audion, it seems extraordinary that something was not said about it, and still more extraordinary that something was not said about it in the specification for the Canadian patent which issued in October, It is impossible to maintain the contention that Arnold's resistance is something different from Richards' resistance on the ground that Arnold was dealing with one type of repeater and Richards with another.
Then it is sought to get rid of the Richards patent by labelling his patent a "'blue glow preventer."
It is abundantly plain from the documentary evidence before us that the blue glow was merely evidence of a condition of instability which, unless prevented, paralyzed the operation of the repeater. No doubt the high evacuation of the tube achieved by Langmuir greatly aided this prevention, and, perhaps, completely accomplished it, but, I repeat, we are not concerned with Langmuir's " electron discharge " device, we are concerned with the " audion."
Much the same considerations apply to the negative bias on the grid. As far back as April, 1912, Lowenstein had applied for a patent of a means for coping with the distortion arising from the unequal magnification of weak and strong signals and high and low frequencies in which he employed the negative grid bias. It is perfectly true that his patent contemplated the presence of some gaseous content in the repeater as DeForest's previous patent did, and Arnold's and Colpitts' subsequent patents did. But the pm problem is stated and the solution is given.
In May, 1914, Colpitts applied for a patent which was granted in April, 1915, a patent which has already been CJ. referred to. There appears in the drawings the combination of the negative bias on the grid and the resistance in shunt to the input electrode. And again, in an application made by Van der Bijl on the 21st of August, 1915, there is an association of resistances in shunt, grid bias and potentiometer shown in the drawings. Although this association is plainly disclosed, there is, by Colpitts, not even a reference to any of these devices in his specification, and none that I can discover in Van der Bijl.
These facts are important as showing that such an association was something well understood and this may properly be regarded as throwing light upon the fact that in Arnold's application for his U.S. patent, which is dated the 31st of August, 1915,-one year later than Colpitts' application and some months later than Colpitts' patent, and a week later than Van der Bijl's application-he passes over this association in the same way without comment. Having regard to all these circumstances, it seems improbable that the employment by Arnold in 1914 of the negative bias and variable high resistance in combination was regarded by him as involving any advance not well within the scope of the skill of a trained specialist in these matters having a knowledge of what was generally known among such specialists; that is, on all the facts, the most natural explanation of the fact that he did not claim protection for this arrangement as an invention.
As to the third feature in respect of which protection is claimed, I would simply say that I see no satisfactory evidence of invention.
The form of Arnold's specification in the surrendered patent is, therefore, in my opinion, capable of the very simple explanation I have mentioned: that in respect of these matters in controversy in this appeal, he did not regard them as new or as inventions of his.
The appellants complain that the learned trial judge did not act upon the evidence of their experts. I regret to say that a large part of the evidence given by experts on both E"' sides consists of material which ought not to be present in the record, for the plain reason that it is not legal evidence and cannot properly be taken into consideration by this Court, which, it hardly seems necessary to state, is a court of law. Some of the evidence given by the experts bearing upon the state of the art, what for brevity I have called the radio art, at a time when they were practitioners in that art, and are, therefore, competent to speak about it, is not only admissible but of weight and value. Some of it, although, perhaps, technically admissible, given by the witnesses in relation to the state of the art at a time when they had not much more than entered upon their studies as engineering students, is of no value. Some of it ought never to have been given. It is contradicted by the documents in the case and is obviously wrong. On the other hand, as I have said, there is a great mass of it which could not be properly taken into account by this Court, but the presence of which in the record substantially increases the labour of the Court, which is obliged to separate the legal from the irrelevant evidence. I mention two examples only- The witness Johnson, who left the University of North Dakota in 1913-14 and entered Yale in the following year, professed to give evidence as to the problems with which Arnold was confronted from 1912-14 when he was perfecting his alleged invention, and, after descanting at great length about what Arnold had in his mind and was trying to do, was compelled to admit on cross-examination that he had never met Arnold before 1916, and that everything he said was an inference drawn by him from the specifications in the original patent and in the re-issue patent. In point of fact, it is quite obvious from perusal of his evidence that he is mainly speaking from the re-issue patent. Now, it was a part of the case advanced by the appellants, a substantive part of their case, to establish that the devices and arrangements in question in these proceedings were inventions of Arnold, and any inference with regard to that to be drawn from Arnold's specification signed by him in 1915, if any such inference could be drawn, was matter of fact for the Court and not a matter upon which it was competent to any expert witness to pronounce. The NORTHERN opinions of such persons on such matters are entirely with- Ez niic out legal relevancy and cannot be considered in this Court. Co. LTD.ouleare
E.
Again, the respondent's witness Kelley had put in his hands Arnold's original patent and was asked broadly to explain what Arnold was trying to do. The issue touching uL.' the identity of the invention to which Arnold's original Du C. patent related was a substantive issue in the action and upon that issue no expert witness should have been permitted to express an opinion.
The proper limits of expert testimony are well understood; the subject has, however, recently been the subject of comment by Lord Tomlin, and I think it is desirable to reproduce in full what Lord Tomlin said upon it (British Celanese, Ld. v. Courtaulds, Ld. (1)):
The area of the territory in which in cases of this kind an expert witness may legitimately move is not doubtful. He is entitled to give evidence as to the state of the art at any given time. He is entitled to explain the meaning of any technical terms used in the art. He is entitled to say whether in his opinion that which is described in the specification on a given hypothesis as to its meaning is capable of being carried into effect by a skilled worker. He is entitled to say what at a given time to him as skilled in the art a given piece of apparatus or a given sentence on any given hypothesis as to its meaning would have taught or suggested to him. He is entitled to say whether in his opinion a particular operation in connection with the art could be carried out and generally to give any explanation required as to facts of a scientific kind.
He is not entitled to say nor is counsel entitled to ask him what the specification means, nor does the question become any more admissible if it takes the form of asking him what it means to him as an engineer or as a chemist. Nor is he entitled to say whether any given step or alteration is obvious, that being a question for the court.
In the present case much time was occupied and substantial parts of the shorthand notes have been filled with questions and answers which in my opinion were not admissible.
To illustrate what I mean I will venture to call your Lordships' attention to a few examples taken at haphazard.
Evidence, Vol. 1, p. 16. Q. 150. Now there are in the alleged anticipations cases for the spinning of nitro silk where downward spinning is proposed?-Yes.
Q. 151.
I ask you quite generally-I am going to take them laterdo you find in any of those any assistance in reaching the process the subject of this first patent?-No.
P. 19, Q. 184. Do you find in this (i.e., Clark's Specification) although there is downward spinning, any suggestion of outside winding?-No. P. 20, Q. 187. * * * Is that language consistent with what you inferred from the statement about the chamber being steam tight?- Yes. *
* *
(1) (1935) 52 R.P.C. at 196-8.
P. 23, Q. 224. Now turn to Boullier, No. 15015 of 1908. First of all you might tell my Lord what you understand Boullier to describe?- -- r Boullier has got some idea of heating the filaments by radiation. * * * P. 210, Q. 1807. *
* * I suggest that means by the capacity of the apparatus to squirt?-Yes.
Q.
So that we have here downward spinning and outside PHOTO winding?-Yes, but which end of the filament do you imagine he takes hold of?
Q. 1810. Not the one in the jet, at all events?-I do not think it means "continuous"
at all. What I read here is that he squirts until Duff CJ. he has a tangle of his filament on the bottom of his apparatus.
P. 211, Q. 1815. It does not say anything about waiting on the bottom?-I think it does.
Evidence, Vol. II, p, 867, Q. 9537. Then it continues: "but is usually only very short so that the filaments can be spun at a high speed and need only travel a relatively short distance in the casing." Does that passage there convey to your mind the necessity or desirability of a long casing?-No. Rather the reverse.
Q. 9538. Then just going on from line 50: "By way of example we have found that in most cases the volatile liquids are sufficiently evaporated and the filaments sufficiently solidified by a travel of one to two seconds exposed to a warm air current of about 30 deg. to 50 deg. C. in the casing."
Just bearing in mind that with the Provisional there are no drawings, does that passage enable you to gather anything as regards the speed of spinning?-No.
Q. 9542. I just want to ask one question on that paragraph. You see at line 115 it is dealing with guides, and I just want you to explain to his Lordship what you understand by this paragraph: " The said guide or guides may be located in the aperture or apertures through which the filaments leave the casing, or when the associated filaments pass round or over more than one guide in the casing, the last of each series of these may be placed in the issue apertures." What does that convey to your mind?-The possibility of carrying the filaments in a zig-zag path to and fro inside the casing, in order to get the requisite length of travel, without needlessly extending the length of the easing. Of course, it also includes a case in which the filaments pass direct to an outlet, and over a single guide.
P. 887, Q. 9681. Then at line 21: " Under the conditions above described, the matter is expelled in the form of a continuous thread whose length is only limited by the capacity of the apparatus." What does that convey to your mind?-It conveyed to my mind the limit as to the amount of material he can expel by his piston from his containing vessel. He has spoken of expelling the thread by means of a piston at page 2, line 15, and I assume he was speaking of a sort of charge which he could put in such a cylinder and expel by the piston.
Q. 9682. He goes on: " The thread or filament coagulated as above described after traversing the coagulating medium is drawn out by its extremity and wound on a roller or reel whence it is rewound on bobbins or into balls or skeins or by any suitable means, which it is unnecessary to describe." Does that convey anything to your mind as regards the position of the winding or the time when it takes place after the coagulation?-Yes; it does suggest that after traversing the coagulating medium the thread is drawn out by its extremity. That suggests to my mind that it is drawn out of the espparatus and conveyed direct to a roller or reel on which it is wound.
P. 893, Q. 9762. Do you find in Boullier's Specification any direction No"'""' as to whether there would be a casing or an enclosed space or not?- Yes. He suggests that at any rate the back and sides should. be closed Co.IIID. in and that there should be a front put on where you want to limit the loss of heat by radiation.
P. 986, Q. 9797. Just look at the last lines in Suvern. "By this arrangement, the recovery of the solvent is also facilitated, since the same evaporates in comparatively only narrow chambers "?-Yes, that I think is quite obvious.
Q. 9798. So that you have narrow chambers- Duff CJ.
Sir Arthur Colefax:
Please do not lead here because it is absolutely in conflict with what this discloses.
Sir Stafford Cripps: I did not appreciate that there was any conflict upon this at all.
Q. 9799. Do you therefore find that Suvern tells you as an engineer that narrow chambers were used?-Yes.
P. 902, Q. 9868.
What does that convey to your mind?-The film is formed by evaporation, or elimination of solvent and coagulation or coming together of the particles of viscose to make a relatively solid film, much as milk will coagulate on a heated liquid. The surface then will consist of a more coagulated body, substantially solid, but still containing a good deal of liquid.
P. 904, Q. 9875. I am coming back afterwards to ask you a question on page 250, but I want to deal with the viscose point first, if I may. I have read you the middle of page 250, except the last two lines, where he says: "However, provision has then to be made for hardening them that is the filaments-" as rapidly as possible, so that they may be reeled up. While viscose coagulates by itself in the air, too much time would in the case in question be required for the purpose."
When it speaks of coagulating by itself in the air, bearing in mind the paragraph we have been looking at on page 132, where he tells you how that happens, what do you imagine he means there?-He means that if you tried to form a filament by allowing the viscose to coagulate in air at an ordinary temperature, the process would be altogether too slow to enable you to carry out that process and make a filament.
Q. 9878. I will just read to the end of the paragraph: " and the viscose threads after having been stretched to a certain length must be further treated according to this principle"; what do you understand "this principle" to mean?-Continued heating, probably after the threads have been formed and wound up, sufficient to convert the solidified viscose into viscoid.
P. 905, Q. 9886.
Now: "For the purpose of converting the fluid viscose thread into the solid viscoid thread a current of hot air ascends in the shaft through which the thread sinks down "?-Yes.
Q. 9887. Would that be what is called counter current?-Yes, but he would not get it 'converted in such a shaft during its formation into a true viscoid. I think the word is used loosely there.
The disadvantages of these methods are two-fold.
In the first place time is wasted and money spent on what is not legitimate. In the second place there accumulates a mass of material which so far from assisting the Judge renders his task the more difficult, because he has to sift the grain from an unnecessary amount of chaff. It is advisable, I think, to repeat, for the purpose of emphasizing it, what I have said about the proceedings leading to the grant of the reissue patent. There can be little doubt that, as already observed, in granting the reissue patent, the conditions laid down by the statute were entirely disregarded.
One is struck with amazement when one observes the utter absence of any attempt on the part p of the applicants to offer evidence to establish the existence of the statutory conditions. As I have said, the fact upon which the appellants mainly rely in this appeal, viz., the existence in operation of certain " receiving systems "
answering the description provided by the drawing in the original patent, is not mentioned in the application. There was produced literally no evidence of inadvertence or accident or mistake. It is too plain that the grant was quite destitute of legal authority.
As to Kendall's patent, I am satisfied there was no infringement.
The appeal should be dismissed with costs.
Appeal dismissed with costs.
Solicitors for the appellants: Smart & Biggar.
Solicitors for the respondents: Chauvin, Walker, Stewart
& Martineau.
See BRoXER
APPEAL-Leave to appeal to Supreme
Court of Canada-Criminal law-Conflict of judgments-Circumstantial evidence-Rule as to inference of guilt- Section 1025 Cr. C.1-When the conviction of an accused is grounded exclusively on circumstantial evidence, the rule acted upon by the decisions on several courts of appeal throughout Canada has been that "in order to justify the in- "ference of guilt, the inculpatory facts
"must be incompatible with the inno- "cence of the accused and incapable of
"any other reasonable hypothesis than
"that of his guilt"; and when that principle is compared with the principle expounded in this case by the reasons of judgment of the appellate court, it must be held that there exists, between the above decisions and the judgment appealed from, the conflict required by section 1025 of the Criminal Code; and, therefore, leave to appeal to this Court should be granted, as such rule of law is of sufficiently general importance to justify such leave.
v. THE
KINa ..........................
2-Jurisdiction-Appeal from dismissal of appeal from order granting interim injunction-" Final judgment " within
Supreme Court Act (R.S.C. 1927, c. S5)- Power and control of Supreme Court of
Nova Scotia as to course of proceedings.] Plaintiff, a shareholder in a company, sued (on behalf of himself and other shareholders) for repayment to the company of moneys alleged to have been illegally paid to its manager in compliance with an invalid resolution passed at a meeting of the company, and for an injunction restraining the company from holding any meeting for the purpose of attempting to ratify or confirm said payments; and obtained an interim injunction to that effect until the trial. From dismissal by the Supreme Court of Nova
Scotia in banco (9 M.P.R. 437) of an appeal from the order of interim injunction, defendants appealed to this Court.
Held: Appeal quashed for want of jurisdiction. It was clear that the ground of the judgment appealed from was that plaintiff, in support of his application for an interim injunction, had produced a prima facie case sufficient to satisfy the court that it was " just or convenient"
to hold matters in statu quo until final determination of the issue. There was
APPEAL-Continued no final determination of any substantive right in issue in the action, and, therefore, the judgment appealed from was not a final judgment within the contemplation of the Supreme Court Act. The court pointed out that an interim injunction, like all interlocutory orders, bears in gremio a reservation of leave to apply; and, further, that the Supreme Court of Nova Scotia has full control over the course of the proceedings; has full power, if convenience or justice so demand, to direct that the issue concerning the holding of a meeting for a specified purpose shall be tried and determined before the issue arising on the claim for repayment is finally disposed 3-Practice - Failure to obtain approval of security and allowance of appeal within the sixty days fixed by a. 64 of Supreme Court Act (R.S.C., 1927, c. 85)-Secs. 64, 67, 70 of the Act-Appeal from Registrar's order refusing to approve security and affirm Court's jurisdiction-Procedure-Rules 1, 2, 8, 86, 87, 88 of Rules of Supreme Court of Canada.) To bring an appeal to the Supreme Court of Canada in compliance with s. 67 of the Supreme Court Act (R.S.C. 1927, c. 35), it is not sufficient to give notice of appeal and pay $500 into court as security within the 60 days fixed (except as otherwise provided) by s. 64: there must be also, within the said time limited, approval of the security and allowance of the appeal. An order of the Registrar, on a motion made returnable after expiry of said period of 60 days, refusing, on above ground, to approve the security and affirm the Court's jurisdiction to hear the appeal, was affirmed by the Court. The question arising out of the fact that the allowance of the appeal was not obtained within the said period of 60 days, was considered as raising the question of the Court's jurisdiction to hear the appeal
(Ohene Moore v. Akesseh Tayee, [1935] A.C. 72); and hence the appeal from said order of the Registrar was dealt with, not as one governed by rules 86, 87 and 88 of the Rules of the Supreme Court of Canada, but as one governed by rule 3 thereof, which provides for an appeal from the Registrar's order to the Court, and fixes no delay within which the notice of APPEAL-Concluded appeal must be served.
RE
ELECTRIc Ry. Co.-STREET v. BRITISH
4-Leave to appeal-Rule nisi granted as to costs only-Leave refused-May be granted if rule nisi maintained by judgment below-Liberty of subject at stake
-Special reasons for granting of leave to appeal under section 41 of the Supreme
Court Act.]
Leave to appeal to this
Court will not be granted from a judgment of the appellate court upholding a judgment of the Superior Court (which had refused to maintain a rule nisi except as to costs), where the appeal from the judgment of the Superior Court involves only a question of costs and that from the appellate court a question of procedure.
While, even if leave was granted, it is highly improbable that this
Court would interfere with such judgments, it should not be lost sight of the fact that special reasons must be shown why leave should be granted under section 41 of the Supreme Court Act.
Semble that, if the rule nisi had been granted, the liberty of a subject being at stake, there would be a question of sufficient importance to justify this
Court to grant leave to appeal. FoRcIER v. ......................
5--Presentation of matter after argum ent ............................
6 - Criminal la--Tria--Circumstantial evidence-Rule as to evidence consistent with innocence or guilt of accused-Verdict of guilty by the jury- Proper direction as to rule-Conviction affirmed by appellate court-Appeal to the Supreme Court of Canada-Whether this Court should interfere with the verdict of the jury..................
7-Bankruptcy--Application for special leave to appeal to Supreme Court of Canada-Time of notice-Jurisdiction to hear application-Bankruptcy rule 72.
..........
.................
8--Costs on dismissal of application of trustee in bankruptcy for special leave to appeal to Supreme Court of Canada.
ASSESSMENT AND TAXATION-Constitutional law-The Special Income Tax
Act, Man., 1933, c. 44 (Part I: Taxation of Wages)-Constitutionality-Direct or iindirect taxation-Whether tax imposed on employee or upon wages in employer's hands-Application, effect, and validity of the Act as to pay, allowance, or wages, received by an officer of the permanent force of the active militia of Canada, or by a civil servant of the Dominion Government-B.N.A. Act, ss. 92 (2), 91 (7) (8).]
The imposition of the tax on wages by Part I of The Special Income Tax Act of Manitoba, 1933, c. 44, is direct taxation, and is intra vires. The tax is imposed upon the employee; it is not in substance a tax on the employer's pay roll.
Sees. 4, 5, 6 and the second part of s. 7 of the Act do not attempt to impose the tax as such upon the employer but merely provide for the collection and recovery of the tax. The appellants, both resident within the province, one an officer of the permanent force of the active militia of Canada, the other a civil servant of the Dominion Government, were each held to be liable for the said tax in respect of the pay, allowance or wages received by him from the Government of Canada. Abbott v. City of Saint John, 40 Can. S.C.R. 597, cited and applied. Judgments of the Court of Appeal for Manitoba, 42 Man. L.R. 540, 569, affirmed. Cannon and Crocket JJ. dissented. Per Duff CJ.: (1) Even assuming everything in said ss. 4, 5, 6 and second part of s. 7 which iimposes any duty or liability upon the employer to be struck from the Act as ultra vires, there would still stand enactments valid and complete for the purpose of making the taxes in question exigible from the taxpayer. (2) Said ss. 4, etc., read by the light of well settled and well known canons of construction, do not extend to the Crown or to the officers of the Crown in the right of the Dominion or of any province, other, at all events, than Manitoba, or to the revenues of the Crown in these respective rights; and further, even if this were not so, the form and character of the legislation is such that the enactments, in so far as they relate to such governments and such revenues, must be treated as severable, and the enactments would still have their full operation as regards other employers and other revenues.
(3) Sec. of The Manitoba Interpretation Act, R.S.M. 1913, c. 105. precludes the extension of said ss. 4, etc., at least to the Crown in right of the Dominion or in right of any province other than Manitoba. Per Cannon J. (dissenting): A provincial government cannot by a tax such as that in question affect the salary or wages paid, or the pay or allowance made, by the Government of Canada, to a Dominion civil servant or a soldier of the permanent force. To do so would impair the status and essential rights of such civil servant or soldier, which are under exclusive Dominion authority. Abbott v. 6g82
City of Saint John (supra) cannot be regarded as binding in the present case, owing to changes in conditions, and is distinguishable in regard. to the nature of the tax there in question. Caron v. The
King, 64 Can. S.C.R. [19241 A.C.
999, is distinguishable, having regard to the nature of the position of the person there objecting to the tax. Moreover, it is at least doubtful if the pay and allowances to a soldier of the permanent force of the active militia of Canada are
" wages " within the meaning of the Act in question, and in construing it (a taxing Act) the subject should be given the benefit of that doubt.
Moreover,
Part I of the Act attempts to strike first directly at the source of wages, before they reach the employee, expecting direct payment from the employer, and through him to reach the employee indirectly;
such legislation is ultra vires; and, having regard to the design of the Act, the part so ultra vires cannot be severed from the provision in s. 7 for payment by the employee, so as to save the latter provision from invalidity (Attorney-General for Manitoba v. Attorney- General for Canada, [1925] A.C. 561, at
568). Per Crocket J. (dissenting)-The primary purpose and effect of Part I of the Act is to impose the tax, not upon the employee or upon the income from wages received by him, but upon the earned and accruing wages of the employee in the hands of the employer before they are paid to the employee;
and so fax as its provisions seek to tax federal salaries or other pay or allowances in the hands of the Government of
Canada they are entirely void and inoperative.
The provisions of s. 7 purporting to impose upon the employee the liability to pay the tax only in the event of its not having been deducted from his wages and paid by the employer, cannot reasonably be severed, in an action brought against an employee of the Dominion Government, from the provisions of the previous sections, which in their application to the salaries, pay and allowances of civil and other employees of the Dominion Government are ultra vires of the legislature, the liability for payment of the tax having been primarily placed upon the employer, and only secondarily or conditionally on the employee.
The secondary liability of the employee cannot fairly be held, in a taxing statute, to stand alone if the -primary liability out of which it arises or for which it is substituted is unconstitutional and void.
2-Business assessment - Clause (cc) (added in 1988, c. 2, s. 2) of s. 9 (1) of Assessment Act, R.S.O. 1927, c. 238- " Distribution premises" for goods supplied to a chain of retail stores-Submission of questions under s. 84 of said Act.] Clause (cc) (added in 1933, c. 2, s. 2) of s. 9 (1) of the Assessment Act, R.S.O. 1927, c. 238, imposes upon "every person carrying on the business of selling or distributing goods
* * * to a chain of more than five retail stores or shops in Ontario" a business assessment for a sum equal to 75 per cent of the assessed value of the land occupied or used "in such business for a distribution premises, storage or warehouse " for such goods, or for an office used in connection with the business. Appellant company owned a chain of retail grocery stores and had in Toronto, Ontario, a large warehouse building in which it had its general administrative offices, and in which it stored goods until required by its stores, and from which it distributed goods by trucks to its stores. In respect of this building (and the land on which it stood) appellant was assessed under said clause (cc); this assessment was not in dispute. In 1934 appellant acquired land and built thereon, across a street from the said older building (and not connected with it except by a small pipe tunnel under the street for housing pipes and wires for conveying steam heat, water, electricity and gas to the new building), a building used, (1) for a garage for housing appellant's trucks, (2)
as a repair shop for its trucks, and for servicing its cars used by its store supervisors in making inspections, and (3) as a carpenter, paint and repair shop for repairing shelving and other fixtures in the retail stores and doing repairs to said stores. In respect of this building also (and the land on which it stood), and as a parcel in itself. appellant was assessed by the City of Toronto under said clause (cc); and the question in dispute, on a case stated by a County Court Judge under s. 84 of said Assessment Act, was whether appellant was (in respect of the latter building and land) properly so assessed. Held: Appellant was not assessable under said clause (cc) in respect of the building and land secondly above described. It could not be said that the land was occupied or used by appellant in its business for distributive purposes in the sense thatr the two buildings taken together were occupied and used in its business for the storage and distribution of its goods. The occupation or use of the particular land assessed must be looked at; and the new building could not be said to come plainly within the words " distribution premises " within clause (cc), strictly read. The contention that the finding in the courts below that the land and building in question were used as distribution premises was a finding of fact which should not be interfered with, was rejected. The question raised was the proper construction of the statute (Sedgwick v. Watney,
119311 A.C. 446).
The only questions that may be submitted by a County
Court Judge under said s. 84 are questions directly affecting the particular assessment in appeal before him. It was not proper in the present case to submit further a general question whether the premises were assessable for business tax under any of the provisions of the
Co. v.
CITY ..............
3- Income tax-Income Tax Act, Man.
(CA. 1994, c. 91) as amended in 1930, c. 28-Ss. 8 (4), 4 (p)-Exemption of profits of a company "accumulated prior to and undistributed at" December 31,
1929 (s. 4 (p))-Exemption not available to company in respect of dividends received by it in 1934 from another company out of latter's profits accumulated prior to and undistributed at December
81, 1929-Construction of statutes.] S.
8 (4) (enacted in 1930, c. 22) of the
Income Tax Act, Man. (CA. 1924, c. 91)
provided that every joint stock company
(other than a personal corporation) pay a tax upon the amount of its income within the province during the preceding year; that this tax be paid on April 30,
1931, and annually thereafter.
S. 4 (p)
(enacted in 1930, c. 22) provided that
" profits of a * * * joint stock company * * * accumulated prior to and undistributed at " December 31, 1929, be not liable to taxation under s. 8 (4).
In 1935 appellant. company was assessed for income tax in respect of moneys received by it in 1934 as dividends from
N. Co., which moneys were part of profits of N. Co. accumulated by N. Co.
prior to and undistributed at December
31,
Held: Appellant company was properly so assessed.
4 (p) would be wholly unnecessary, was not sufficient to overcome the language of the statute. Judgment of the Court of Appeal for Manitoba (44 Man. L.R.
228) affirmed in the result.
IN RE THE
(MAN.)-Taos. JAcxsoN & Sons v. TEB
..................
4- Income assessment-Company subject to business assessment in respect of occupation of office premises-Company also assessed for income
Question whether assessed income was derived from the business in respect of which the company was subject to business assessment-Assessment Act,
TononTo ................ See BANKS
BANKRUPTCY-Insurance, life-Joint life insurance policy-Both lives not insured-Death of one insured-Other insured becoming bankrupt-Right of the trustee to the proceeds of the policy -Transfer of policy to a third person- Insured party to tranefer-Validity of the transfer-Bankruptcy Act, R.S.C. [19271, c. 11, section 2, as. f-Husbands' and Parents' Life Insurance Act, R.S.Q., 1925, c. 244.1 On February 4, 1927, one Aboosamra Kouri and his son Khalil Kouri, one of the respondents, insured their lives jointly with the New York Life Insurance Company, the policy being what is known as a "joint life insurance policy."
Under this policy, issued on two applications made individually by the father and the son, both were called the insured; and the insurance company agreed to pay to the survivor of them the sum of $24,947, upon receipt of due proof of the death first occurring of either of the insured, whereupon the contract would cease and determine. The premiums were payable during the joint lifetime of the insured. Shortly after the issue of the policy, on February 18, 1927, the respondent Khalil Kouri signed a letter addressed to his father, declaring he had no interest in the policy and stating that, in the event of his father's death before his, he renounced in favour of his mother, the other respondent, the full amount of the policy; and the latter concurrently accepted in writing the benefit of her son's interest in the policy. In each of the applications attached to the policy and so forming part of the contract, each insured had reserved unto himself the right and power "to change the beneficiary from time to time "; and accordingly, on March 8, 1934, the father and the son joined in signing a document by which the wife of one and the mother of the other respondent was designated as beneficiary under the policy; such appropriation was duly noted and endorsed on the policy by the insurance company. The father also, by his will dated December 24, 1931, bequeathed all his life insurance policies BANKRUPTCY-Continued to his wife.
On March 19, 1930, the respondent Khalil Kouri went into bankruptcy and the appellant was appointed trustee. On June 10, 1934, the father died; and the proceeds of the policy were deposited into court by the insurance company, after satisfying a lien of the Bank of Montreal, to which both the insured had assigned the policy as security for a loan. The appellant trustee in bankruptcy then brought the present action to effect a cancellation of the transfer of the policy by the son to his mother and to claim the proceeds of the policy. Held, affirming the judgment appealed from (Q.R. 60
K.B. 114) but for different reasons, that the appellant was not entitled to claim any right to the proceeds of the insurance policy. Per Rinfret, Cannon and
Kerwin JJ.-The bankrupt debtor had not really a right under the policy; he held a mere chance of benefit, a mere possibility; and neither that chance of benefit nor that possibility came within the definition of property as contained in subsection ff of section 2 of the Bankruptcy Act; consequently, it did not pass to the appellant trustee. The trustee might have claimed the proceeds of the policy, if the insolvent son were still the beneficiary at the death of his father; but the latter exercised his right to change the beneficiary mother then became the sole beneficiary in the event of the death of her busband. The fact that the son joined his father in signing the appropriation document whereby the latter revoked him as his beneficiary could not and did not affect the validity of the document. At the time the new appropriation was made, the father enjoyed full liberty to make it, and it does not matter that his son was then bankrupt and undischarged or even that the father would have been moved to act as he did precisely because his son was then bankrupt; the creditors were not thereby deprived of anything to which they could make a valid claim. Per Davis J.
appellant cannot succeed on the ground raised by him, that the proceeds of the policy belong to the insolvent son's estate because the policy was not within the Husbands' and Parents' Insurance Act, it being a "joint insurance policy" of father and son. Under such a policy, the two lives of the father and the son were not insured; but one of them; that of the one who died first.
The policy by its terms came to an end with the death of that one. That one in this case was the father who predeceased his son. The son's life was only conditionally insured in the event of his
BANKRUPTCY--Continued predeceasing his father and the father's life was insured conditionally in the event that he predecease the son; and that event happened.
Accordingly this case should be decided, as would be decided the simple case of a father insuring his life in favour of his son and subsequently designating his wife as preferred beneficiary; there would be no doubt of the right of the widow to the proceeds of the insurance policy.-A "joint insurance," as the one in this case, should be construed as an insurance "by each of the other's life and not as an insurance by each of his * * * own life." Vaughan Williams L.J. in Griffithe v. Fleming, ([19091 1 K.B. 805, at 815).
GRonsmIN v. Koui..... 264 2-Appeal - Application for special leave to appeal to Supreme Court of Canada-Time of notice-Jurisdiction to hear application - Bankruptcy rule 72.]
The competency of the Supreme Court of Canada in bankruptcy proceedings is to be looked for exclusively in the Bankruptcy Act (R.S.C. 1927, c. and the rules properly made under it; it is not controlled by the sections of the Supreme Court Act dealing with the Court's ordinary jurisdiction.
A trustee in bankruptcy applied to a Judge of this Court for leave to appeal from a decision of the Court of Appeal made on June 29, 1936.
The court of original jurisdiction in bankruptcy, acting under s. 163 (5)
of the Bankruptcy Act, on September 8, 1936, extended the time (which otherwise would have expired on July 29) within which to apply for such leave, its order providing that notice of motion for leave be served on or before September 28, and be made returnable on or before October
The notice was served on September 26 and made returnable on October 9; so it was not served " at least 14 days before the hearing thereof " as prescribed by bankruptcy rule 72. Held: The motion could not be heard.
A Judge of this Court has no power to excuse a party from compliance with rule 72, nor to abridge the time of notice thereby prescribed. Assuming the court of original jurisdiction in bankruptcy had power to abridge the time of notice, its said order did not do so. In re Hudson Fashion Shoppe Ltd., [19261 Can. S.C.R. 26; In re Gilbert, [19251 Can. S.C.R. 275; In re North Shore Trading Co., [1928] Can. S.C.R. 180, and Boily v. McNulty, [19271 Can. S.C.R. 275, cited. The motion was dismissed; but with reservation of any right in the applicant to obtain from the court having jurisdiction to grant it a further extension of time to renew the application.
IN CowNas.. 609 BANKRUPTCY-Concluded
3--Costs-Costs on dismissal of application of trustee in bankruptcy for special leave to appeal to Supreme Court of Canada-Settlement of minutes of judgment-Costs against trustee as trustee, not against him personally-Tariff applicable-Costs given to trustee in other proceedings in the bankruptcy not to be embraced in the order so as to allow for set-off.] Upon application for settlement of the minutes of the judgment delivered on application by the trustee in bankruptcy for special leave to appeal to this Court, and reported ante, p. 609: Held: (1) The trustee appeared (on said application for leave)
in his capacity as trustee and the dismissal of his application with costs could affect him only as trustee and not personally; costs were payable by him out of the funds in his hands.
(2) Upon appeals to this Court in bankruptcy matters the tariff which applies is that provided for in the Rules (91 et seq.)
of this Court, and contained in Form I set out in the schedule thereto; and the costs of said. application for leave should be taxed according to that tariff, and not according to the tariff prevailing in the bankruptcy courts. The judge hearing said application was not empowered to adjudicate otherwise.
(3) Certain taxable costs given the trustee in other proceedings in the course of the bankruptcy should not be embraced in the order now in question so as to give right to a set-off.
Moreover, contentions to the effect that the costs should be adjudicated against the trustee personally, that they should be taxed according to the tariff prevailing in the bankruptcy courts, and request that a set-off be provided for as aforesaid, could not now be raised for the first time on settlement of the minutesthey were contrary to the intention of the said judgment, and were equivalent to asking amendment thereof; which there was no reason to grant.
(Paper
Machinery Ltd. v. J. 0. Ross Engineering Corpn., [19341 Can. S.C.R. 186, referred to).
IN ....... 613
BANKS AND BANKING-Priorities- Bank Act, R.S.C. 1927, c. 19-Security under section 88 of the Act-Subsequent lien under section 79 (2) of the Workmen's Compensation Act, R.S.N.S. 1983, c. 129-Whether Dominion and provincial statutes conflict-Direct taxation for provincial purposes - Section 98 (2)
B.N.A.
Act-Banking-Section 91 (15)
B.N.A. Act.]
The lien of the Workmen's Compensation Board, under section 79 (2) of the Workmen's Compensation Act takes priority over the secur- BANKS AND BANKING-Concluded ity under section 88 of the Bank Act. Judgment appealed from (8 M.P.R. 482) aff.
Per Duff, Rinfret, Crocket and Kerwin JJ.-Although the provisions of section 88 of the Bank Act are provisions which strictly relate to Banking and are therefore within the competency of the Dominion Parliament under section 91 (15)
of the B.N.A. Act, the Parliament, in enacting them, did not intend to remove any property, which might be assigned to a bank by way of security thereunder, from the operation of any statute by the legislature of the province, in which the property is situated, in the legitimate exercise of its power in relation to direct taxation for provincial purposes under section 92 (2) of the B.N.A. Act.-The assessment authorized by section 57 of the Workmen's Compensation Act is a direct tax upon the employers in each of the specified classes of industry, imposed for provincial purposes within the meaning of section 92 (2) of the B.N.A. Cannon J. expressing no opinion as to whether or not such assessment is an indirect tax. Per Davis J.-On the particular facts of this case, if the assessment and levy of these workmen's compensation dues is taxation, it is direct taxation within the province and competent to the provincial legislature.- The securities under section 88 of the Bank Act do not operate to transfer absolutely the ownership in the goods, but such transaction is essentially a mortgage transaction and subject to the general law of mortgages except where the statute has otherwise expressly provided. Bank of Montreal v. Guaranty Silk Dyeing and Finishing Co. Ltd. ([19341
O.R. 625)
ref.
ScolA... 560 BARRISTERS AND
SOLICITORS- Legal Profession Act, R.S.A. Disbarment by Law Society Powers of Society-Procedure-Lack of essential proceedings-Nullity of order of disbarment-Appeal not taken-Question as to acquiescence, waiver, or estoppel-Whether Law Society liable in damages.] Under the Alberta Legal Profession Act, R.S.A. 1922, c. 206, the benchers of the Law Society of Alberta were to appoint and maintain a " discipline committee,"
consisting of at least three members, who were to deal with complaints against any member of the Society, and might recommend that the benchers strike the name of the member off the rolls, and the benchers might order the same to be done. There were provisions for procedure before the discipline committee.
member might appeal "from the decision of the committee and of the benchers " to the
Appellate Division of the Supreme Court of Alberta, the appeal to be by notice to the benchers and "founded upon a copy of the proceedings before the said committee and the benchers, the evidence taken, the committee's report and the order made by the benchers thereon. The benchers had appointed R. as chairman, and all the other benchers as members, of the discipline committee.
On complaints lodged against plaintiff
(a member of the Law Society), R. appointed three benchers as a special committee to examine into them, receive evidence, and report. They held meetings, of which notice was given plaintiff, who had full opportunity to, and did, hear the evidence, cross-examine, and adduce evidence. This special committee then reported to the convocation of benchers that they had found the complaints proven, that plaintiff had been guilty of improper professional conduct, and they recommended that his name be struck from the rolls of the Society.
This recommendation was received and adopted by the convocation on July 5,
1923; it was further recorded that plaintiff was found to have been guilty of improper professional conduct; and it was ordered that his name be, and it was, struck off the rolls.
Plaintiff did not appeal.
In 1924, 1926, 1927, and
1930, he applied for reinstatement.
He did not know until 1925 that the committee before which he had appeared was not the official discipline committee. In 1928 he sued the Law Society of Alberta, alleging that his name had wrongfully and without legal right been struck off the rolls, and praying for a declaration that he was still a member of the Society, entitled to practise, and claiming damages. Held: (1) Plaintiff was entitled to have his name restored to the rolls. The benchers' order striking it off was null and void. Under the
Act such an order could be made only after investigation and recommendation by the discipline committee, which never took place.
The fact that the official discipline committee comprised all the benchers who eventually received and adopted the recommendation of the special committee, could not, even apart from the fact that those benchers adopting it had made no investigation of their own, overcome the statutory requirement of the acting by the discipline committee as a distinctive body. (Per
Duff CJ.: The discipline committee, in ascertaining the facts, may proceed through the agency of one or more of its members for the purpose of taking evidence and getting the facts. But in
BARRISTERS AND SOLICITORSdeciding upon their recommendation the discipline committee must, under the Act, give the member charged an opportunity of appearing before them and presenting his defence.
It might be that, had plaintiff been heard in his defence by the benchers in convocation, the report of the special committee, notwithstanding the form of the proceedings, might have been considered as adopted by the benchers, sitting as a discipline committee, after hearing plaintiff, as the Act requires; and that the proceedings might have been considered as conforming in substance to the statutory procedure. The error of substance was in not giving plaintiff a hearing before the members comprising the discipline committee; and this defect sterilized the proceedings as regards legal consequences).
It was not a case where plaintiff should have appealed under the Act, because (1) there was no recommendation of the discipline committee from which he could appeal, and (2) the benchers' order was a nullity. Nor could plaintiff by his conduct be taken to have abandoned by waiver or consent his rightful objections to the validity of the proceedings and of the order; moreover, since the benchers' lack of power deprived the order of any effect, and the legislation in question must be looked at from the viewpoint of public interest, estoppel on the ground of acquiescence could not be invoked.
(2) The act of the benchers, obviously done in good faith, was not such as would entail any liability on defendant in damages. In exercising their power of striking a member's name from the rolls, the benchers perform a function not merely ministerial, but discretionary and judicial. In this case they were intending, in what they did, to do what they were entitled to do, viz., to perform their statutory public duties. They made the order in what they bona fide believed to be the exercise of a judicial discretion, and they, or the defendant society which they represented, were not subject to an action in damages because the report which they adopted as the foundation of their order happened, without their actual knowledge, to lack authority and validity (Partridge v. General Council of Medical Education, 25 QB.D. 90).
Judgment of the Appellate Division, Alta., [19351 1 W.W.R. 735, dismissing the action, reversed in part. v. BROKER - Agency - Secret profit-Company law-Liability of directors--Customer employing brokerage company to buy shares on margin, BROKERS-Continued and depositing other shares as collateral security - Company failing to carry shares for customer and thereby, and by use of customer's shares, and by buying in on falling market for delivery to customer, making profit for itself-Claim by customer against directors of company-Customer's retention of shares delivered to him, as election precluding claim for conversion-Basis of claim, form of action and essentials for right to recover.] Defendants S.
and M., who had as partners conducted a brokerage business, turned it over, on
May 1928, to a Dominion company, which they had organized and of which they were officers and almost the sole shareholders.
That company, on November 30, 1928, transferred the Ontario portion of the business to an Ontario company which S. and M. had organized and of which they were high officials and directors. The Dominion company owned practically all the shares of the Ontario company.
On October
16, 1929, plaintiff employed the Ontario company (hereinafter called the company) as his agent and broker to buy
7.000 shares of a certain stock on the
Toronto
Stock Exchange at market prices on margin, and deposited, at varying intervals, in all, 14,000 shares of the same stock (hereinafter called the collateral) as security to maintain the margin.
This Court found, or accepted findings of, the following facts:
The company, while it did go upon the
Exchange and buy 7,000 shares, virtually nullified that purchase by selling shares on its own account, the effect of this, under the Stock Exchange practice, being that the company took delivery of few, if any, of the shares so bought, and it did not get or carry shares from which it could make delivery to plaintiff if and when required. Though any asserted marginal requirement was always met by plaintiff promptly, the collateral was disposed of, in most instances, immediately it was deposited;
in all, 11,800 of said 14,000 shares were disposed of for about $65,320.
On January 1930, plaintiff called for delivery of the 7,000 shares.
The company bought upon the market (which had fallen) 7,000 shares for about 825,000 and delivered them to plaintiff as and for the shares which he had ordered in
October.
Plaintiff accepted the shares and paid the amount demanded ($50,- 334.92 for price, brokerage and interest), believing that the shares were those which he had ordered in October.
The company also repurchased upon the market $00 shares for about $32,000, and these, along with the 2.200 shares which it had not sold, it delivered to
BROKERS-Continued plaintiff as the collateral, retaining the secret profit of about 833,320 which it had made on the sale and repurchase. The company's conduct, both as to the 7,000 shares and the collateral, was in pursuance of a general system, which had been inaugurated by S. and M. when partners as aforesaid, and which had been carried on continuously since by the successive owners and operators of the business.
S. and M. controlled and directed all the business and practices of the company.
A judgment against the company and S. and M. (for the difference betwen what the company charged plaintiff for the 7,000 shares and what it acquired them for when delivery was requested, and for the difference between what the company received and paid for the collateral; with adjustment for interest and brokerage) was, as to S. and M. reversed by the Court of Appeal for Ontario, which dismissed the plaintiffs action as against S. and M.
Plaintiff appealed to this Court. Held: (1) As to the 7,000 shares: Under the terms of the accepted order to buy and the representations regarding its execution, there was a legal duty on the company to get delivery of the shares bought and to carry always a sufficient number of shares available for delivery to plaintiff when demanded (Conmee v. Securities Holding Co., 38 Can. S.C.R. 601; Solloway v. Blumberger, [19331 Can. S.C.R. 163, at 167); which duty was not fulfilled. The October order to buy was never fully executed and so came to naught. This relieved plaintiff of any contractual obligation to take any shares at any price. He was not obliged to take or retain the shares bought in January, but he had by his conduct after discovering the facts elected to retain the shares, thereby adopting the company's action in buying the shares as his agent, and defeating his claim, which he might otherwise have had, for conversion (his retention of the shares being a denial that they had passed to anyone else, and, further, the retention after election amounting in law to waiver of the con-. version, not only against the converting company, but against all who participated-the waiver extending to the entire cause of action, absolving all the joint tort-feasors-Buckland v. Johnson, 15 145). Plaintiff's remedy was for a strict accounting as agent. On the pleadings (and rejecting any claim for plaintiffs claim must be taken as based on agency, the purchase adopted as that of January, and the claim as being for the overcharge against him for the shares then bought by the company. This claim plaintiff was en- BROKERS-Continued titled to recover from the company, and was now merged in his judgment against it.
Although that judgment stood unchallenged, it could not be regarded as the measure of the directors' liability in respect of the frauds (Solloway v. Johnson, [19341 A.C. 193, at
Before a director can be held liable for the acts of his company there must be established, (1) fraud of the company, and (2) loss or damage to the customer attributable to that fraud, or benefit accruing to the director from the fraud (Solloway v. Johnson, supra, at 207-8).
In the present case, both fraud of the company and loss or damage (consisting in the excess or overcharge paid by plaintiff as aforesaid, the return of which he had been unable to secure) were established.
should have judgment against S. and M.
(and the company) to the extent of the moneys paid by him to the company for the 7,000 shares in excess of the actual market price as paid by the company for them on January 1930, and the proper brokerage charges based oa that price; and interest on that excess from January 1930.
(2) As to the collateral: Plaintiff's claim for damages for conversion was defeated by his retention of the shares delivered to him as return of the collateral.
As to a claim based on agency: Judgment, obtained against the company, for the profits, could be obtained against the directors only on proof of the two elements aforesaid, fraud and loss, "loss"
including benefit accruing to the directors attributable to the fraud.
By retaining the shares plaintiff had elected to treat them as being the very shares that he deposited as collateral.
Securing their return had not cost him anything.
The withholding of the profits from him was not in itself a loss to him, because any right he might have to recover them was based, not upon a theory that they belonged to him or that he had lost what the agent had gained, but rather upon the broader doctrine of morality,-that good faith and honest dealing forbid an agent to make secret profits and require him to account for any made.
(Parker v.
McKenna, L.R. 10 Ch. App. 96, at 118;
Hutchinson v. Fleming, 40 Can. S.C.R.
Therefore plaintiff could not be said to have suffered " loss or damage in respect of the collateral.
His claim for the secret nrofits (necessarily, for reasons aforesaid, based on assumption of agency, and procluding all ground partaking of the nature of tort) could only be allowed against the directors on proof that they had either received the profits or derived some benefit
BROKERS-Concluded attributable to the fraud. They could not have made profit directly, because they were not, the company alone being, the plaintiff's agent. While plaintiff had a right to sue them for profit (as inferentially appears from Solloway v. Johnson, supra, at 207), yet no foundation was laid, either in the pleadings or evidence, upon which a conclusion could be based that they secured profits, or any benefit to themselves attributable to fraud.
On this branch, therefore, plaintiff's appeal failed. Judgment of the Court of Appeal for Ontario, [19341 O.R. 464, reversed in part. BUSINESS ASSESSMENT
CASUALTY INSURANCE
CIVIL CODE-Arts. 499, 500, 501, 503, 508 (Servitude) .................... 2- Art. 1241 (Presumption).... 351 3- Arts. 1608, 1609, 1642, 1657, 1667, 1670 (Lease and Hire)............ 177 4- Art. 1919 (Transaction) ...... 5- Art. 1935 (Suretyship) ....... 6- Art. 2535 (Insurance)....... 573 CODE OF CIVIL PROCEDURE-Art. 50 (Superior Court) .............. COMPANY LAW
COMPETITION
FOR
SCHOLAR- SHIP-Encouragement of music-Special jury-Examination of competitors- Verdict-Subsequent discovery of errors and partiality-Right of official body to revise verdict-Whether jury is functus officio-An Act for the Encouragement of Music, R.S.Q., 1925, c. 139-Art. 50 C.C.P.]
The Academy of Music, in virtue of "An Act for the Eucouragement of Music"
(R.S.Q., 1928, c. 139), was receiving a yearly grant of $5.000, so that a scholarship called "Prix d'Europe" could be awarded. upon the verdict of a special jury of five members appointed by the Academy, to the competitor who would obtain the highest number of marks. In the year 1932, a competition was held; and, after the examination had been completed and all the judges had handed over to the secretary of the jury the ballots on which each of them had inscribed the 6gg SHIP-Continued respective number of marks allowed to each candidate, on each subject, and the number of marks for each candidate had been added up and arranged, it was found that mis-en-cause
Pich6 ranked first with 81*9 marks and the respondent, Payment, with 81-1 marks.
Thereupon, one of the examiners, Morin, expressed the opinion that respondent's marks should be increased so that the scholarship be awarded to him because in his opinion he deserved it; and another examiner, Bernier, in order to obtain such result, got back his ballot from the secretary and granted five marks more to respondent.
The latter was accordingly declared the winner of the scholarship.
A few days after the examination, another competitor, one
B61anger, wrote to the vice-president of the Academy that he had not been awarded for his musical dictation the marks he thought he was entitled to.
The officers of the Academy ascertained the fact that an obvious error had occurred in B61anger's case and thought that it would be expedient that the whole examination should be reviewed.
The president of the Academy then called a meeting of the members of the jury and of the officials of the
Academy, which took place on July 21,
At that meeting, mistakes and errors in the allocation of marks to the respondent and Pich6 were admitted by the members of the jury, a rectification was made accordingly, and, as a result, the mis-en-cause Pich6, having obtained 84-8 marks, while the respondent had only 76-9, was awarded the scholarship. The respondent, under art. 550 C.C.P., then took an action against the Academy of Music and the members of the jury for a declaration that he had won the scholarship and, all the advantages deriving therefrom, and, also, for $5,000 damages.
The trial judge dismissed the action, holding that the respondent had not won the scholarship, that the Academy of Music rightly refused to award it to him and that the Academy of Music could not be held liable for fraud committed by some of the examiners, and mistake by the others. The Court of
King's Bench reversed this judgment, holding that the examiners were arbitrators, that they had become functi officio the moment they had signed their first report; that court annulled the decision of the jury rendered on July 21,
1932, and condemned the appellant to pay $1,000 damages to the respondent.
Held, reversing the judgment appealed from (Q.R. 59 K.B. 121) Cannon J. dissenting, that under the circumstances of this case, the respondent was not
COMPETITION FOR SCHOLAR- SHIP-Concluded entitled to claim the scholarship and that the appellant was right in refusing to award it to him. Even admitting that the decision reached at the meeting of July 21, 1932, (which, according to the facts, cannot be considered as a second verdict, but as a rectification of the first verdict). was illegal and null, this Court had still the right and the duty to decide, what the court appealed from has failed to do, whether the first verdict was valid and legal, as such verdict had been contested by the appellant in its plea. It was not only the right, but also the duty, of the appellant, as mandatory of the legislature in the distribution of public moneys, to investigate the proceedings of the jury and, after having found evident errors and illegalities, which were admitted by the members of the jury at the meeting of July 21, 1932, and have been held as proven by the trial judge, to award the scholarship to the competitor who had obtained "the highest number of marks " according to the statute. Per Cannon J. (dissenting).-The only regular competition for the scholarship of 1932 and the only official examination of the competitors had taken place on June 16 and 17, 1932. The respondent is entitled to claim the benefit of the unanimous decision of the jury rendered on June 17 and of the official document, bearing the seal of the Academy, which stated that he was the winner of the scholarship. The jury, after having rendered its verdict, had no more powers to act as such (functus officio). The proceedings subsequent to the first verdict as well as the second verdict were illegal, as the statute incorporating the Academy does not provide for any appeal from the decision of the jury to the executive committee of the Academy or to the members of the jury individually or collectively. If the officials of the Academy were of the opinion that there had been fraud, partiality or errors in the conduct of the competition, they should have proceeded by way of action under art. 50 C.P.P. to annul the verdict of the jury.-IACADEMIE QUt- CONSTITUTIONAL LAW-Assessment and taxation-The Special Income Tax Act, Man., 1988, c. 44 (Part 1: Taxation of Wages)-Constitutionality-Direct or indirect taxation - Whether tax imposed on employee or upon wages in employer's hand-Application, effect, and validity of the Act as to pay, allowance, or wages, received by an officer of the permanent force of the active militia of Canada, or by a civil servant of the Dominion Government-B.N.A. Act, ss.
92 (2), 91 (7)
(8).]
The imposition of the tax on wages by Part I of The
Special Income Tax Act of Manitoba,
1933, c. 44, is direct taxation, and is intra vires. The tax is imposed upon the employee; it is not in substance a tax on the employer's pay roll.
Sees.
4, 5, 6 and the second part of s. 7 of the Act do not attempt to impose the tax as such upon the employer but merely provide for the collection and recovery of the tax.
The appellants, both resident within the province, one an officer of the permanent force of the active militia of Canada, the other a civil servant of the Dominion Government, were each held to be liable for the said tax in respect of the pay, allowance or wages received by him from the
Government of Canada.
Abbott v.
City of Saint John, 40 Can. S.C.R. 597, cited and applied. Judgments of the
Court of Appeal for Manitoba, 42 Man.
L.R. 540, 569, affirmed. Cannon and
Crocket JJ. dissented. Per Duff C.J.:
(2) Said ss. 4, etc., read by the light of well settled and well known canons of construction, do not extend to the Crown or to the officers of the Crown in the right of the Dominion or of any province, other, at all events, than Manitoba, or to the revenues of the Crown in these respective rights; and further, even if this were not so, the form and character of the legislation is such that the enactments, in so far as they relate to such governments and such revenues, must be treated as severable, and the enactments would still have their full operation as regards other employers and other revenues.
(3) Sec. of The
Manitoba Interpretation Act, R.S.M.
1913, c. 105, precludes the extension of said ss. 4, etc., at least to the Crown in right of the Dominion or in right of any province other than Manitoba.
Per Cannon J. (dissenting)
: A provincial government cannot by a tax such as that in question affect the salary or wages paid, or the pay or allowance made, by the Government of Canada to a Dominion civil servant or a soldier of the permanent force.
To do so would impair the status and essential rights of such civil servant or soldier, which are under exclusive Dominion authority. Abbott v. City of Saint John
(supra) cannot be regarded as binding in the present case, owing to changes in conditions, and is distinguishable in regard to the nature of the tax there in question. Caron v. The King, 64 Can. S.C.R. 255, [19241 A.C. 999, is distinguishable, having regard to the nature of the position of the person there objecting to the tax. Moreover, it is at least doubtful if the pay and allowances to a soldier of the permanent force of the active militia of Canada are "wages" within the meaning of the Act in question, and in construing it (a taxing Act) the subject should be given the benefit of that doubt. Moreover, Part I of the Act attempts to strike first directly at the source of wages, before they reach the employee, expecting direct payment from the employer, and through him to reach the employee indirectly: such legislation is ultra vires; and, having regard to the design of the Act, the part so ultra vires cannot be severed from the provision in s. 7 for payment by the employee, so as to save the latter provision from invalidity. (Attorney-General for
Manitoba v. Attorney-General for Canada, [19251 A.C. 561, at 568).
Per Crocket J. (dissenting)
-The primary purpose and effect of Part I of the Act is to impose the tax, not upon the employee or upon the income from wages received by him, but upon the earned and accruing wages of the employee in the hands of the employer before they are paid to the employee; and so far as its provisions seek to tax federal salaries or other pay or allowances in the hands of the Government of Canada they are entirely void and inoperative. The provisions of s. 7 purporting to impose upon the employee the liability to pay the tax only in the event of its not having been deducted from his wages and paid by the employer, cannot reasonably be severed, in an action brought against an employee of the Dominion Government, from the provisions of the previous sections, which in their application to the salaries, pay and allowances of civil and other employees of the Dominion Government are ultra vires of the legislature, the liability for payment of the tax having been primarily placed upon the employer and only secondarily or conditionally upon the employee. The secondary liability of the employee cannot fairly be held, in a taxing statute, to stand alone if the primary liability out of which it arises or for which it is substituted is unconstitutional and void. AroRNEY-GEN- ............ .40 2-Section 498A Cr. C.-Persons engaged in trade or commerce or industry-Certain acts by them declared to be criminal offences-Whether section is intra vires of Parliament of Canada- Whether subsection (a) encroaches upon legislative authority of the provinces.- B.N.A. Act as.
Subsections (a),
(b)
and (c)
of section 498A of the
Criminal Code, which enact that "every person engaged in trade or commerce or industry is guilty of an indictable offence and liable " to punishment in respect thereof who does any of the acts or series of acts denoted by these subsections, are intra vires of the Parliament of Canada, being enactments creating criminal offences in exercise of the powers vested in Parliament in virtue of the 27th head of section 91 of the
B.N.A. Act (Criminal law). Cannon and
Crocket JJ. (dissenting)
as to subsection
(a). Per Cannon and Crocket JJ.--Subsection (a) deals directly with matters of civil rights and describes an act which lacks every element of what is ordinarily associated with criminal law.
Its incorporation in the Criminal Code is a mere colourable attempt on the part of the Parliament of Canada to encroach upon the legislative authority of the provinces.
IN REFER- 498A
CODE,
1935.........
3-Dominion Trade and Industry Act
Agreements between persons in same industry to modify undue competition - National
Research Council-" Canada Standard"
as trade-mark-Director of Public Prosecutions.] Section 14 of the Dominion
Trade and Industry Act provides inter alia that agreements between persons engaged in any specific industry, entered into in order to modify wasteful or demoralizing competition existing such industry, may be approved by the
Governor in Council on the advice of the Commission. Held that said section is ultra vires of the Parliament of Canada. Its enactments are not necessarily incidental to the exercise of any powers of the Dominion in relation to criminal law, nor can such section be sustained as legislation in relation to the regulation of trade and commerce.
Sections
16 and 17 of the same Act enacts inter alia that, in addition to its powers and duties, under any other statute or law, the National Research Council shall, on the request of the Commission, study, investigate, report and advise upon all matters relating to commodity standards as defined in the Act; and subsection 3 of section provides that such advices and reports shall be privileged. Held that these two sections are intra vires of the Parliament of Canada. In view of the responsibilities of the Dominion Parliament in respect of the criminal law and trade and commerce, Parliament may exercise a wide latitude in prosecuting investigations for ascertaining the facts with regard to fraudulent commercial practices, including adulteration. Sections and 19 of the same Act provide that the words "Canada standard" or initials "C.S." shall be a national trade-mark vested in His Majesty in the right of the Dominion of Canada which may be used only under the conditions prescribed, including the condition that the commodity, to which such trade-mark is applied, shall conform to the requirements of a commodity standard for such commodity or class of commodity established under the provisions of an Act of the Parliament of Canada. Held that both sections are ultra viies of the Parliament of Canada. The socalled trade-mark is not a trade-mark in any proper sense of the term and the function of the letters " C.S." as declared by subsection 1 of section 18 is different from the function of an ordinary trade-mark: that subsection is really an attempt to create a civil right of novel character to use it Crown in right of the Dominion. Subsection 2 of section 18 is also objectionable as attempting to control the exercise of a civil right in the provinces. Section 20 of the same Act provides that the Commission may receive complaints respecting unfair trade practices and may investigate the same and recommend prosecutions if of opinion that the practice complained of constitutes offence against any one of the Dominion Laws mentioned in 2 (h) of the Act. Held that such section is intra vires of the Parliament of Canada in so far as the enactments enumerated in section 2 (h) of the Act may be intra vires. Sections 21 and 22 of the same Act provide for the appointment of an officer to be called the Director of Public Prosecutions to assist in the prosecution of offences against any of these laws mentioned in section 2 (h) of the Act. Held that these sections (as applicable to the criminal offences created by such of the enactments enumerated in section 2 (h) as may be intra vires) are not ultra vires of the Parliament of Canada. Authority of the Parliament to enact these provisions is necessarily incidental to the exercise of legislative authority in relation to the criminal offences created the laws "prohibiting unfair trade practices" validly enacted in such of the statutes enumerated in section 2 (h) as may be competent.
Gao. V, C. 59
4- The Farmers' Creditors Arrangement Act - Bankruptcy and insolvency-B.N.A. Act,
1867, 91, ss. 21.1 The Farmers' Creditors Arrangement Act, which is entitled
Arrangements between
Farmers their Creditors," provides by its enactments a procedure whereby a farmer may make a proposal for a composition, extension of time or a scheme of arrangement, to his creditors. If the proposal is accepted by the ordinary creditors and the secured creditors whose rights are affected concur, it is submitted to the
Court for approval. If it is not accepted by the ordinary creditors or if a secured creditor whose rights are affected referred to a Board of Review to formulate a proposal.
If the proposal is accepted by the creditors and approved by the Court or if it is formulated by the
Board of lIeview and is approved by the creditors and the debtor, or if, though not so approved, it is confirmed by the
Board of Review, it shall be binding upon all the creditors and the debtor.
Held, Cannon J. (dissenting)
, that the Act is intra vires of the Parliament of Canada. The power of the Parliament to enact this statute is derived from subdivision 21 of section 91 of the B.N.A.
Act, in virtue of which the exclusive legislative authority of the Parliament of Canada extends to the subject of
Bankruptcy and Insolvency.
The provisions of the statute affect farmers who are in such a situation that they are unable to pay their debts as they fall due; and it is competent to Parliament, of bankruptcy and insolvency, to treat this condition of affairs as a state of insolvency. Per Cannon J. dissenting:- In view of the accepted aims and past history of the bankruptcy and insolvency legislation, the Parliament of
Canada, in enacting the Act, has exceeded the domain of bankruptcy and insolvency to which its jurisdiction is limited. More particularly, the Act does not provide, as in the case of an insolvent person, for the rateable distribution of the assets of the debtor among his creditors nor for the discharge of the debt. Section of the Act, which fixes the rate of interest, is intra vires of the Parliament of Canada under ss.
19 of section 91 of the B.N.A. Act. IN V,
1935, 25-26 V, C. 20 .......... 5-The Natural Products Marketing Act, 1934, 24-25 Geo. V, c. 57, as amended in 1935 by 25-26 Geo. V, c. 64- Constitutional validity - Regulation of trade.] The Natural Products Marketing Act, 1934, and The Natural Products Marketing Act Amendment Act, 1935, are ultra vires of the Parliament of Canada. In effect, these statutes attempt and, indeed, profess, to regulate in the provinces of Canada, by the instrumentality of a commission, or commissions appointed under the authority of the statute, trade in individual commodities and classes of commodities. The powers of regulation vested in the commissions extend to external trade and matters connected therewith and to trade in matters of interprovincial concern; but also to trade which is entirely local and of purely local concern. Regulation of individual trades, or trades in individual commodities in this sweeping fashion, is not competent to the Parliament of Canada and such a scheme of the distribution of legislative powers enacted by the Constitution Act, without the co-operation of the provincial legislatures" (Board of Commerce case, [19221 1 A.C. 191, at 201).
The legislation is not valid as an exercise of the general authority of the Parliament of Canada under the introductory words of section 91, B.N.A. Act, to make laws "for the peace, order and good government of Canada."
1934, ACT, 1935, ........... 6- The Employment and Social Insurance Act, 25-26 Geo. V, c. 38-Constitutional validity-Taxation-Property and civil rights.] The Employment and Social Insurance Act provides (Part I, sections 4 to 9 inclusive) for the administration of the Act by a Commission consisting of three members to be called the Employment and Social Insurance Commission, whose duties are defined in these sections. Part II (sections 10 to 14 inclusive) of the Act provides for the organization and administration by the Commission of an employment service for the Dominion of
Canada with regional divisions and a central employment office and employment offices within each division. Part
III (sections 15 to 38 inclusive) of the
Act provides for the establishment of an Unemployment Insurance Fund out f which unemployment insurance benefits would be payable to all persons of the age of sixteen years and upwards who are engaged in any of the insurable employments specified in the Act.
Such fund is to be derived partly from moneys provided by Parliament and partly from compulsory contributions by employers and workers.
The statutory conditions governing the eligibility and ineligibility of insvred contributors for the receipt of benefits are defined in the
Act. Penalties are provided for fraudulently obtaining benefits or evading payment and for other violations of the
Act or the regulations under it.
Part
IV (sections 39 to 41 inclusive) of the
Act, under heading
"National
Health," charges the Commission with the duty of collecting information concerning any scheme, actual or proposed, for providing medical, dental, surgical and hospital care, and compensation for loss of earnings due to ill-health or accident. (Further particulars of the Act are contained in the judgments reported.) Held, per Rinfret, Cannon, Crocket and Kerwin JJ., that the Act is ultra vires of the Parliament of Canada; Duff
CJ. and Davis J. holding that the Act is intra vires. Per Rinfret, Cannon,
Crocket and Kerwin JJ.-The validity of the legislation cannot be supported either as an exercise of the residuary power to make laws for the peace, order and good government of Canada, or as an exercise of the power to regulate trade and commerce.
The proposition tha' the Act could be supported in virtue of the power of the Dominion
Parliament concerning statistics or criminal law need not retain our attention.
The legislation is not based on the
Treaty of Peace (1919) and, therefore, no reliance for its validity can be made on section 132 of the B.N.A. Act. Nor can it be supported under "the power to raise money by any mode or system of taxation," or " the power to appropriate public money for any public purpose." The statute, in its substance, is not an exercise of those powers.
clearly indicates that the Parliament of
Canada intended primarily to legislate with regard to employment service, to unemployment insurance and to health matters. It is not concerned either with public debt and property or with the raising of money by taxation. Its provisions for levying contributions for the creation of the Unemployment Insurance Fund are nothing more than provisions to enable the carrying out of the true and only purpose of the legislation.
These contributions (or taxes, if they are to be so called) are mere incidents of the attempted regulation of employment service and unemployment insurance. It being well understood, and in fact conceded, that the subjectmatters of the Act fall within the legislative authority of the provinces, the Dominion Parliament may not, under pretext of the exercise of the power to deal with its property or to raise money by taxation, indirectly accomplish the ends sought for in this legislation. The effect of the Act under submission is " to attach statutory terms to contracts of employment"
(Lord Haldane Workmen's
Compensation Board v. Canadian Pacific Railway, [1920] A.C. 184); and its immediate result is to create civil rights as between employers and employees.
The Dominion Parliament cannot use its power of taxation to compel the insertion of conditions of that character in ordinary employment contracts. Per Duff C.J. and Davis J. dissenting.-The aims stated in the preamble of the Act are legitimate, provided, of course, that the enactments themselves are within the ambit of the legislative powers possessed by Parliament. Reading subdivision 1 of section 91 and subdivision 3 of the B.N.A. Act together, the proper conclusion is that Parliament has exclusive authority to raise money by any mode or system of taxation for disposition by Parliament for any purpose for which it is competent to Parliament to apply the assets of the Dominion in virtue of subdivision 1. In effect, subdivision 1 endows the High Court of Parliament with full discretionary authority to dispose of the public assets of the Dominion, and no other court is invested with jurisdiction to examine any purported exercise of that authority with a view to pronouncing upon its validity, subject only to the rule that the courts are always entitled to determine whether, in truth, any given enactment of Parliament professing to be an exercise of a given authority is not really an enactment of that character; but one relating to a subject over which Parliament has no The provisions requiring compulsory contributions by employers and employed possess the essential elements of legislation respecting taxation. On their true construction, they have that character because, first, it would not be competent to a provincial legislature to enact them in the context in which they stand, which demonstrates that the contributions are exacted for the purpose of raising moneys for exclusive disposition by Parliament; and, second, there is no adequate ground for holding that they are, either in purpose or in immediate effect, outside the ambit of the powers under subdivision 3.
So also as regards the enactments concerning the disposition of the proceeds of the levies upon employers and employed and of the contribution from the
Dominion treasury.
They are not enactments in respect of property and civil rights in any one province or in all of the provinces They would not be competent as enactments by any or all of the provincial legislatures and there is no adequate ground for affirming that these enactments are not legislation in relation to the subjects within the scope of subdivision 1. Parliament can in the legitimate exercise of its exclusive authority under subdivisions 1 and 3 of section 91 of the B.N.A. Act, levy taxes for the purpose of raising money to constitute a fund to be expended, in conformity with the directions of Parliament, in unemployment benefits, and provide for a contribution to that fund from the Dominion treasury, and in executing these exclusive powers.
Parliament is not subject to any control by the courts as to the form of the taxation or the incidence of it or as touching the manner or conditions of the payment of benefits.
Complete discretionary authority respecting the form and incidence of taxation under subdivision 3, and respecting the disposal of all public assets under subdivision 1, are essential to enable Parliament to discharge the responsibilities entrusted to it. Legislation for raising money for disposition by Parliament under subdivision 3 of section 91, and directing the disposition of it under subdivision
1, is necessarily excluded from the jurisdiction of the provinces by the concluding words of section 91; and there is no sufficient ground for affirming that, in the enactments of this statute, Parliament is not exercising its powers under these subdivisions, or, in other words, that under the guise of doing so it is invading a provincial field from which it is excluded, for the purpose of attaining a result which it has full power to attain by legislating within fields in which it has exclusive authority. IN
THE EMPLOY- 1935 ........................
7-The Weekly Rest in Industrial Undertakings Act, 25-26 Geo. V, c. 14- The Minimum Wages Act, 25-26, Geo. V c. 44-The Limitation of Hours of Work Act, 25-26 Geo. V, c. 68-Constitutional validity-Treaty of Peace of Versailles, 1919-Art. 405 of the Treaty -League of Nations-Draft Conventions of the International Labour Conference-Approval of Treaty by Dominion Parliament-B.N.A. Act, s. 182- Property and civil rights-B.N.A. Act, s.
The Weekly Rest in Industrial Undertakings Act, which gave effect to the Draft Convention of the Internstional Labour Conference on that subject, applies to industrial undertakings as defined in art. 1 of the Draft Convention, and requires employers to grant a rest period of at least twenty-four consecutive hours in every seven days to all employees, with the exception of persons who hold positions of supervision or management or who are employed in a confidential capacity. The rest period is, wherever possible, to be granted to the whole staff simultaneously, and to coincide with the Lord's Day as defined by the Lord's Day Act, R.S.C. 1927, c. 123.
The Minimum Wages Act is designed to give effect to the provisions of the Draft Convention concerning the creation of minimum wage-fixing machinery adopted by the International
Labour
Conference By s. 4 (1), the Governor in Council, on the recommendation of the Minister of Labour may create and by regulation provide for the operation, by or under the Minister, of machinery whereby minimum rates of wages can be fixed for workers in specified rateable trades.
Employers and workers concerned are to be associated in the operation of such machinery in such manner as the Governor in Council may by regulation determine, but in any case in equal numbers and on equal terms. "Rateable trades" are defined in accordance with the terms of the Convention as "those trades or parts of trades particular, homeworking trades) in which no arrangements exist for the effective regulation of wages by collective agreement or otherwise and wages are exceptionally low." "Trade" includes manufacture and commerce and " worker" includes any employed person not under 16 years of age. By s. 4 (2), Minimum wages so fixed are to be binding on employers and workers concerned so as not to be subject to abatement by means of individual agreement, or, except with the general or particular authorization of the Minister, by collective agreement.
The Limitation of Hours of Work Act gives effect to the Draft Convention of the International Labour Conference adopted in
1919, limiting hours of work in industrial undertakings as defined in article
1 of the Convention.
Held, per Duff
CJ. and Davis and Kerwin JJ., that these Acts are intra vires of the Parliament of Canada; per Rinfret, Cannon and Crocket JJ., that they are ultra vires. Per Duff CJ. and Davis and
Kerwin JJ.-From two main considerations, the conclusion follows that legislative authority in respect of international agreements is, as regards Canada, vested exclusively in the Parliament of
Canada. First, by virtue of section 132 of the British North America Act, jurisdiction, legislative and executive, for the purpose of giving effect to any treaty obligation imposed upon Canada, or any one of the provinces of Canada, by force of a treaty between the British
Empire and a foreign country, is committed to the Parliament and Government of Canada.
This jurisdiction of the Dominion the Privy Council held, in the Aeronautics case and in the Radio case ([19321
A.C. 54 and 304) is exclusive; and consequently, under the
British North America Act, the provinces have no power and never had power to legislate for the purpose of giving effect to an international agreement: that, as a subject of legislation, is excluded from the jurisdiction envisaged by section 92.
Second, as a result of the constitutional development of the last thirty years
(and more particularly of the last twenty years) Canada has acquired the status of an international unit, that is to say, she has been recognized by His Majesty the King, by the other nations of the
British Commonwealth of Nations, and by the nations of the world, as possessing a status enabling her to enter into, on her own behalf, international arrangements, and to incur obligation under such arrangements.
These arrangements may take various forms.
They may take the form of treaties, in the strict sense, between heads of states, to which His Majesty the King is formally a party.
They may take, inter alia, the form of agreements between governments, in which His Majesty does not formally appear, Canada being represented by the Governor General in
Council or by a delegate or delegates authorized directly by him. Whatever the form of the agreement, it is now settled that, as regards Canada, it is the Canadian Government acting on its own responsibility to the Parliament of Canada which deals with the matter. If the international contract is in the form of a treaty between heads of states, His Majesty acts, as regards Canada, on the advice of His Canadian Government.
Necessarily, in virtue of the fundamental principles of our constitution, the Canadian Government in exercising these functions is under the control of Parliament. Parliament has full power by legislation to determine the conditions under which international agreements may be entered into and to provide for giving effect to them. That this authority is exclusive would seem to follow inevitably from the circumstances that the Lieutenant- Governors of the provinces do not in any manner represent His Majesty in external affairs, and that the provincial governments are not concerned with such affairs; the effect of the two decisions above referred to is that in all these matters the authority of Parliament is not merely paramount, but exclusive.
The first of the two cardinal questions raised by the contentions of the provinces has two branches, and may be stated thus: Has Parliament authority to legislate for carrying out a treaty or convention or agreement with a foreign country containing stipulations to which effect can only be given by domestic legislation changing the law of the provinces (a) in matters committed by the British North America Act (in the absence of any such international agreement) to the legislatures of the provinces exclusively, and (b) in relation to such matters where they are ex facie of domestic concern only and not of international concern, such, for example, as the matters dealt with by the conventions to which effect is given by the statutes now before the Court: the regulation of wages and of hours of labour.
The view that the exclusive authority of Parliament extends to international treaties and agreements relating to such subjects rests on the grounds now outlined.
(1) As touching the view advanced that the subjectmatters of the stipulations in the international agreements in question are of exclusively domestic and not at all of international concern: the language of section 132 B.N.A. Act is unqualified and that section would appear prima facie to extend to any treaty with a foreign country in relation to any subject-matter which in contemplation of the rules of constitutional law respecting the royal prerogative concerning treaties would be a legitimate subject-matter for a treaty; and there would appear to be no authority for the proposition that EX
[8.C.R. treaties in relation to subjects, such as the subject-matter of the status in question are not within the scope of that prerogative.
Legislative authority to give effect to treaties within section 132 remained, of course, after the B N.A.
Act, down to the enactment of the
Statute of Westminster in the Imperial
Parliament, although by section 132, it also became and is vested in the Parliament of Canada; but, since the Statute of Westminster, no Act of the Imperial
Parliament can have effect in Canada without the consent of Canada.
practice of modem times and, in particular, the provisions of the Covenant of the League of Nations embodied in the Treaty of Versailles would appear to demonstrate that by common consent of the nations of the world, such matters are regarded as of high international as well as of domestic concern and proper subjects for treaty stipulation.
(2) As touching the view that the legislative authority committed to the Parliament and Government of Canada by section
132 (and by the introductory clause of section 91 in relation to international matters) does not extend to matters which would fall exclusively within the legislative jurisdiction. of the provinces, in the absence of any international obligation respecting them, it is to be observed: First, section 132 relates inter alia to obligations imposed upon any province of Canada by any treaty between the British Empire and a foreign country. Section 132 obviously contemplates the possibility of such an obligation arising as a diplomatic obligation under such a treaty, even although legislation might be necessary in order to attach to it the force of law. In such case the Parliament and Government of danada appear to be endowed with the necessary legislative and executive powers.
This provision with regard to the obligations of the provinces taken together with the generality of the language employed in section 132 would seem to point rather definitely to the conclusion that the view under consideration is not tenable.
Secondly, the established practice of the Parliament of
Canada and the decisions of the Courts in relation to that practice do not accord with this view.
Statutes giving effect to the International Waterways Treaty
(1911) with the United States, and the
Treaty with Japan (1913) are instances in which treaties dealing with matters of civil right within the provinces and the management of the public property of the provinces were given the force of law by Dominion statutes. The legislation concerning the Japanese Treaty was held to be valid and to nullify a statute of the province inconsistent with it by the Judicial Committee of the Privy Council in Attorney-General for British Columbia v. Attorney-General for Canada, ([19241
A.C. 203). jurisdiction of Parliament to enforce international obligations under agreements which are not strictly " treaties" within section 132 is co-ordinate with the jurisdiction under this last named section.
It is contended by the provinces that the Dominoin cannot, by reason merely of the existence of an international agreement (within section or within the residuary clause) possess legislative authority enabling the Parliament of Canada to legislate in derogation of certain fundamental terms which, it is said, were the basis of the Union of 1867, and are expressly or impliedly embodied in the B.N.A. Act. For the purposes of the present reference, it is unnecessary to make any observation upon this contention further than what has already been said, viz., that the exclusive authority of the Dominion to give the force of law to an international agreement is not affected by the circumstances alone that, in the absence of such an agreement the exclusive legislative authority of the provinces would extend to the subject-matter of it. The second of the cardinal questions requiring determination concerns the construction and effect of article 405 of the Treaty of Versailles. The draft conventions now in question were brought before the House of Commons and the Senate, received the assent of both Houses in the form of resolutions, which resolutions approved the ratification of them, and the statutes in question were passed for the purpose of giving legislative effect to their stipulations, the operative clauses of the statute being in each case preceded by a preamble in which it is recited that the draft conventions have been ratified by Canada.
The procedure followed, if we put aside the provisions of article 405, was the usual and proper procedure for engaging in and giving effect to agreements with foreign governments. The propriety of this procedure is questioned on the ground that under the special provisions of article 405, and especially those of paragraphs 5 and 7 of the article, it was an essential condition of the jurisdiction of Parliament to legislate for the enforcement of the conventions that the conventions should have been submitted to, and should have received the assent of, the provincial legislatures before the enactment of such legislation by Parliament. Paragraphs 5 and 7 must be read together and, reading them together, it would appear that the "competence" postulated is the " competence" to enact legislation or to take other " action "
contemplated by the article. The obligations upon consent of the competent authority or authorities to ratify and, upon like consent after ratification, "to make effective the provisions of the convention " are both treaty obligations;
and the authority or authorities competent to take legislative action where legislative action may be necessary to make the provisions of the convention effective would appear plainly to be included within the authority or authorities before whom it is provided that the draft conventions shall be brought. It follows from what has been said that this treaty obligation is an obligation within section 132 and, consequently, that the authority to make the convention effective exclusively rests in the
Parliament and Government of Canada and, therefore, that the Parliament of
Canada is, at least, one of the authorities before which the convention must be brought under the terms of article
The provincial legislatures may also be competent authorities within the contemplation of paragraph 5 of that article, but it is unnecessary to decide that question for the purposes of this reference.
The Governor General in
Council is designated by the Treaties of
Peace Act, 1919, enacted under the authority of section 132, to take all such measures as may seem to him to be necessary for the purpose of carrying out the Treaties of Peace and for giving effect to the terms of such treaties. He it was, therefore, upon whom devolved the duty of performing the obligation of Canada under art. 405 to bring the draft convention before the authority or authorities possessing " competence " under the Constitution of Canada. He it was also on whom devolved, the duty to communicate to the League of Nations the ratification by Canada upon the assent of the competent authority or authorities.
Moreover, the Parliament of Canada, possessing exclusive jurisdiction in relation to international agreements, the creation as well as the enforcement of them, declared', by the statutes now under examination, that the conventions in question were ratified by Canada.
The executive authority, therefore, charged with the duty of acting for Canada in performing the treaty obligations, of submitting the conventions to the proper constitutional authorities and of communicating ratification to the League of Nations upon the assent of those authorities, and His
Majesty the King in Parliament have, in effect, combined in declaring that the ratification was assented to by the proper constitutional authorities of Canada in conformity with the stipulations of art. 405. That would appear to be sufficient to constitute a diplomatic obligation binding upon Canada to observe the provisions of the conventions. Per Rinfret J.-Apart from any consideration resulting from their aspect as laws intended to carry out the obligations of Canada under Draft Conventions agreed upon at general conferences of the International Labour Conference of the League of Nations, the subject-matter of these Acts is undoubtedly one in relation to which, under the Constitution of our country, the legislature in each province may exclusively make laws. It follows that, in order to support the validity of the Acts, the Attorney-General of Canada has the burden of demonstrating that, in the premises, the subject-matter of the disputed legislation has, for some special reason, been transferred to the jurisdiction of the Parliament of Canada.
The Acts cannot be supported as an exercise of the legislative powers of the Dominion either to make laws for the peace, order and good government of Canada, or for the regulation of trade and commerce, or in relation to the criminal law. These conventions are not treaties within the meaning of section 132 of the B.N.A. Act, such as was the case in the Aeronautics Reference to the Privy Council ([19321 A.C. 54); nor are they conventions belonging to that class of conventions submitted to the Privy Council in the Radio Reference ([1932] A C. 304). So that the judgments of the Privy Council in those two References do not constitute authorities in support of the Dominion Government's or the Dominion Parliament's power to act alone in the performance of the obligations deriving from conventions of the present character.
Besides that, both in the Aeronautics and in the Radio references, the Privy Council, at the same time as it declared that the validity of the legislation in respect thereto could be supported as an exercise of the power derived from section 132, B.N.A. Act, or from the residuary power to make laws for the peace, order and good government of the country, also came to the conclusion that the subject of aeronautics and the subject of radio came under one or more of the enumerated heads of section of the B.N.A. Act, which is not the case here. But the critical point in the present reference is whether the Draft Conventions were competently ratified-a point which was not raised nor decided in the Aeronautics or Radio references.
A very great distinction must be made between the power to create an international obligation and the power to perform it when once it has been created.
Under the distribution of legislative powers, the subject-matters of the three Acts now submitted are assigned to the exclusive jurisdiction of the legislature in each province under the head "Property and
Civil Rights in the Province," of section
92, B.N.A. Act.
A civil right does not change its nature just because it becomes the subject-matter of a convention with a foreign state. It is always the same civil right.
It is not within the spirit of the Constitution that the
Dominion Parliament might acquire exclusive jurisdiction over such matters merely as a consequence of the fact that the Dominion Government, in regard to them, decides to enter into a convention with a foreign power.
would be directly against the intendment of the B.N.A. Act that the King or the Governor General of Canada should enter into an international agreement dealing with matters exclusively assigned to the jurisdiction of the provinces solely upon the advice of the
Federal Ministers who, either by themselves or through the instrumentality of the Dominion Parliament, are prohibited by the Constitution from assuming jurisdiction over these matters.
Moreover, article 405 of the Treaty of Versailles must be interpreted as requiring, in
Canada, the consent and approval of the provinces before Draft Conventions of the nature of those now submitted can be properly and competently ratified by Canada as a member of the League of Nations. In this Court, the question as to where lies the power to create an international obligation dealing matters within the exclusive jurisdiction of the provinces is concluded by our decision on the reference Re: Legislative Jurisdiction over Hours of Labour
([19251 S.C.R. 505).
It follows that the
Draft Conventions not having received the consent and the approval of the legislatures of the provinces, nor even of the provincial governments, were not properly and competently ratified; and the Acts adopted in relation to these
Draft Conventions and allegedly for the purpose of performing the obligations arising under them are ultra vires of the
Parliament of Canada. Per Cannon J.- When an Act of Parliament is challenged before this Court as unconstitutional, the article of the Constitution which is invoked should be laid beside the statute which is challenged in order to decide whether the latter squares with the former.
The only power of this
Court is to announce its judgment upon
This Court neither approves nor condemns any legislative policy. Its office is to ascertain and declare whether the legislation is in accordance with or in contravention of the provisions of the Constitution. question is not what power the Federal Government ought to have, but what powers, in fact, have been given to it by the B.N.A. Act. There is in this country a dual form of government, and in every province there are two governments.
Our country differs from nations where all legislative power, without restriction, is vested in a parliament, or other legislative body, subject to no restriction. If any changes are required to face new situations or to cope with the increased importance of Canada as a nation, they may be secured by an amendment to the B.N.A. Act; but neither this Court nor the Privy Council should be called upon to legislate outside of its provisions. labour draft conventions in this case, binding Canada independently from the rest of the Empire, do not fall under section 132, B.N.A. Act; they were not even contemplated as feasible in 1867 when that Act was passed.
Radio and aeronautics are also new matters not existing at that time and had to be dealt with by the Privy Council as outside the enumerated subjects of 91 and 92 B.N.A. Act; and these two decisions must be considered as arr~ts d'esp&ce and confined to the subject-matters which both had necessarily interprovincial and international aspects. But the payment of wages for labour, the weekly rest and the rate of wages and length of hours of work were well known subjects in 1867 and they were, by common agreement, reserved by the Imperial Parliament to the provinces as purely local and private matters of property and civil rights. Therefore, in the words of section 405 of the Treaty of Versailles, Canada as a federal state has only a "power to enter into convention on labour matters subject to limitation" and the draft conventions should have been treated as "recommendation only." Such recommendation is to be submitted to the members for "consideration with a view to effect being given to it by national legislation or otherwise."
The Versailles Treaty recognizes that in certain cases, effect can be given to a labour agreement "otherwise" than by national legislation. In these cases, it does not appear that either the recommendations or the draft conventions were submitted to the provinces, i.e., the "authorities within whose competence the matter lies for the enactment of legislation or other action"; and this is fatal to the validity of the ratification 69g of these labour conventions by the Federal authorities. As an intemal matter, such changes in the respective constitutional powers of the provinces and of the Central Government cannot be justified by invoking some clauses of the
Treaty of Versailles.
Respect of their property and civil rights was guaranteed by the British Crown to the inhabitants of the original provinces as far back as the Treaty of Paris in 1763; this was confirmed by the constitution of 1867 which cannot be changed in this essential part except by an Imperial statute, as plainly set forth in the Act of Westminster of 1931, section 7.
Therefore the Parliament and the Government of Canada cannot appropriate those powers, exclusively reserved to the provinces, by the simple process of ratifying a labour convention passed at Geneva with representatives of foreign countries. Neither the Governor General in
Council, nor Parliament, can in any way, and specifically by an agreement with a foreign power, change the constitution of Canada or take away from the provinces their competency to deal exclusively with the enumerated subjects of section 92, B.N.A. Act. Before accepting as binding any agreement under section 405 of the Treaty of Versailles, foreign powers must take notice that this country's constitution is a federal, not a legislative union.
Crocket J.-The Acts passed by the
Dominion Parliament embody legislation which is directly aimed at the regulation and control of contracts of employment, private as well as public, in every province of the Dominion, and thus deal in a very real and radical sense with civil rights in all the provinces of Canada alike; and the fundamental question before this Court is whether is any authority within the
B.N.A. Act for the exercise of such legislative power by the Parliament
Canada. None of the draft conventions of the International Labour Conference of the League of Nations, upon the ratification of which by the Government of Canada it has been sought to justify the enactment of this legislation, fall within the terms of section 132 of the B.N.A. Act. Even if the Treaty of
Versailles were a treaty between the
British Empire, as an undivided unit, and those foreign states, whose plenipotentiaries signed it, and not a treaty purporting to have been entered into by the self-governing Dominions of the
Empire as separate governments, it could not be said that there was any obligation for the performance of which the Parliament of Canada was empowered within the terms of section to enact legislation as pertaining to an obligation imposed by that treaty upon Canada or any province thereof, as part of the British Empire. As regards the residuary clause of section 91, this provision can only be invoked where the real subject-matter of the legislation does not fall within the classes of subjects which are exclusively assigned to the provinces by section 92; once it appears that the real purpose and effect of a Dominion enactment is to interfere with private and civil rights in the provinces and that in that aspect it consequently falls within the sphere of legislation which has been exclusively reserved for the provinces, not only by the provisions of section 92, but by the saving clause in the introduction of section 91, such an enactment cannot be justified under the general authority conferred on the Parliament of Canada. If such legislation could be maintained on the ground that it was for the peace, order and good government of Canada, it could only be by ignoring the explicit limitation which is placed on the socalled general authority by the residuary clause itself with the obvious intention of preventing its application in the very sense now contended for, and thus protesting the provinces in the full enjoyment of their exclusive legislative rights as permanently guaranteed to them by section 91.
Although the Government of Canada must now be held to be the proper medium for the formal conclusion of international conventions, whether they affect the Dominion as a whole or any of the provinces separately, this fact cannot be relied on as altering in any way the provisions of the B.N.A. Act as regards the distribution of legislative power as between the Dominion Parliament and the provincial legislatures or as necessarily giving to any matter, which may be made the subject of legislation in Canada, any other meaning or aspect than that which it bears in our original constitution. Whether such a matter is one which falls under the terms of either section or of section 92 or of section 132, must depend upon the real intendment of the B.N.A. Act itself, as gathered from the terms of those sections and the Act as a whole. The legislation embodied in these three statutes is legislation which the Parliament of Canada has enacted to give effect to the draft conventions of the International Labour Conference of the League of Nations. These conventions are admittedly conventions, to which the Government of Canada were in no manner bound to assent or to formally ratify. They were submitted to the Government of this INDl
CONSTITUTIONAL LAW-Concluded country as mere draft conventions, and stood as such until 1935, when the
Government of Canada chose to approve them, several years after the expiration of the period fixed by article
405 of the Treaty of Versailles for their submission " to the authority or authorities within whose competence the matter lies for the enactment of legislation or other action."
The provision of article
405 of the Peace Treaty of Versailles is clearly mandatory and not merely directory and the ratification of the conventions, upon which these three statutes purport to be founded, is null and void under the terms of that article.
However, the provisions of the B.N.A.
Act, not the terms of the Treaty of
Versailles, should be looked at for the answers to the questions submitted on this reference concerning the constitutionality of these three statutes; and, accordingly, they are ultra vires the
Parliament of Canada.
REFERENCE
THE WiKLY
BEING 14
1935; THE
AcT, 44
1935; THE
63 1935. 461
8- Direct taxation for provincial purposes-Whether Dominion and provincial statutes conflict .............
CONTRACT-Agreement between company and city for construction and operation of elevator by company- Bonds deposited by company as security for due construction and completion- City to convey to company lands for elevator site-Failure to complete elevator-Lands not conveyed to company owing to obstacle of title-Interpretation and effect of agreement-Conveyance of lands a condition precedent- Company's right to return of bonds- Waiver-Estoppel.]
The question on the appeal was the plaintiff company's right to compel defendant city to return certain bonds.
A company (plaintiff's assignor) and the city made an agreement dated
October
13,
1930, whereby (inter alia), the company was to construct by October 1, 1932, and operate for at least ten years, a grain elevator on certain lands; the city was to transfer to the company (for the elevator's site and operation) part of certain water lots, which the city had applied for to (but not as yet obtained from) the Crown, and certain "lands
CONTRACT-Continued shown in black " on a plan, which lands included certain golf club land, on which the city had secured an option, and a small piece of land thought to belong to the golf club (and to be covered by said option) but in fact still in the Crown; and the company was to deposit certain bonds (those in question) as security for the due construction and completion of the elevator "in the event of" the city conveying to the company the said lands shown in black, " and in the event of the failure " of the city to convey said lands," "then, as security for the purchase" by the company from the golf club of certain lands in accordance with an agreement between the company and the golf club whereby, in the event of the city failing to exercise its said option (which, however, it did exercise), the company was to purchase certain lands from the club.
By a " deposit agreement " of October 13, 1930, the company deposited the bonds as security to the city for the due completion of the elevator "provided the [city) conveys " to the company the said lands shown in black, and it was provided that "should the [city] convey" said lands to the company and should the company fail to complete the elevator within the time and in the manner provided for, the bonds should be forfeited as liquidated damages, and that "should the [city] convey " the said lands to the company, then upon due completion of the elevator the bonds were to be delivered back to the company.
(By said deposit agreement, the bonds were deposited with the city "and the golf club," and if the city failed to convey said lands to the company, the deposit was to be as security to the club for the company's performance of its said purchase from the club, and the bonds were to be forfeited to the club if the company did not, and were to be delivered to the company if it did, carry out that purchase. Owing to the city's exercise of its said option from the club, the club ceased to have any interest in the bonds).
Until default by the company, it was to receive the bond interest coupons.
(It did receive those maturing before October 1, 1932).
Before or upon execution of the agreements, some work was done on construction, but the company later found itself without sufficient funds to complete the work. The city did not convey the lands-the Crown delayed granting the water lots, and an obstacle came to light against the Crown's granting its said piece of land included in said " lands shown in black," which obstacle also prevented its grant of the water lots. In answer CONTRACT--Continued to enquiry by the city in September,
1931, as to completion, the company replied that reorganization was being effected, and, shortly after, a new company, the plaintiff, took over the company's assets, but did nothing to complete the elevator. On enquiry by the city in February, 1932, plaintiff replied to the effect that it was making efforts to interest new capital.
In September,
1932, plaintiff wrote asking for an extension of two years, and in this letter mentioned that the city had not conveyed the lands.
Later plaintiff sued, claiming (inter alia) return of the bonds.
Held: Plaintiff was entitled to return of the bonds.
Under the terms of the
"deposit agreement," even in the light of the other documents and all the circumstances, the city's right to retain them was dependent upon it conveying said " lands shown in black." There was in evidence no conduct of the company which could be considered as a waiver of its right to return of the bonds, or as an estoppel against it. The mere fact that the company itself was in default did not prevent its insisting upon such return (Mayson v. Clouet, [1924] A.C.
Per Duff C.J., Rinfret and Davis
JJ.: The proviso that the city should convey the lands to the company was a condition precedent to the city's right to retain the bonds; the intention of the parties in this respect being clearly shown by the nature of the subjectmatter; it was the very basis or essence of the contract whereby the company undertook to deposit the bonds with the city, that the city should convey to it the lands, which were essential in the elevator scheme.
v. THE
..........
2-Sale of land-Objection to title- Purchaser terminating contract-Vendor claiming specific performance-Extent of title agreed to be conveyed-Vendor claiming rectification of formal contract
-Alternative claim for specific performance of formal contract, with reference as to title.] Plaintiff sued for specific performance of an agreement of sale of land and land covered with water from him to defendant.
Shortly after the agreement, the Crown in the right of the Dominion of Canada had asserted a claim to a part of the land as having passed to it at Confederation, under s.
108 of the B.N.A. Act, as part of a public harbour, and, on plaintiffs refusal to remove this objection to title, defendant had purported to terminate the agreement.
The trial judge found
(sustaining plaintiffs claim) that, under the agreement, plaintiff was selling only
CONTRACT-Continued such title as he had in the lands, and granted specific performance. This judgment was reversed by the Court of Appeal for Ontario, which found that plaintiff had agreed to convey a good and sufficient title to the lands, and dismissed his action. Plaintiff appealed to this Court. Held: Appeal dismissed. A certain executed formal document, under which plaintiff was bound to convey a good and sufficient title to the lands, constituted the only binding agreement, and plaintiff had established no adequate case for reformation in the sense The trial judge apparently failed to appreciate the evidentiary weight which must be ascribed to the fact of execution of that document and the legal consequences of that fact. to defendant's objection to title because of said claim of the Crown-the evidence tended to show that part at least of the westerly portion of the lands was used as a public harbour before Confederation, and warranted the court in refusing to force such a doubtful title on defendant.
The court refused to plaintiff a decree of specific performance of the agreement as it stood, with a reference as to title, because, (1) when plaintiff took the stand that defendant was bound to accept such title as he had, he was virtually repudiating his obligations under the formal agreement, and defendant, in view of the situation created by the Crown's claim, had just and solid grounds for his action in terminating the agreement, which thereupon ceased to have any virtue as a foundation for any claim by plaintiff; (2) no such claim or offer to accept such a decree (alternatively to rectification of the formal agreement) had been made by plaintiff until argument at trial after completion of the evidence, and, in view of plaintiffs persistent attitude up to that time, such claim should not be allowed in the appellate courts.
3--Sale of goods-Contract for sale of scrap steel, accumulated on a certain wharf, to be loaded there on ship- Clause providing that weight of goods be ascertained by checking ship's draft -Subsequent arrangement for transferring goods and loading at different place -Change in circumstances-Conduct of parties-Dispute as to weight of goods loaded-Method of ascertainment-Evidence to prove weight.] Defendants contracted to purchase from plaintiffs certain scrap steel, part which was on a wharf at Dartmouth and part at Halifax, and which was to be loaded a steamer chartered by defendants. The contract provided: "Railway weights to govern settlement on all material loaded CONTRACT-Concluded in Halifax. For material loaded in Dartmouth, weight to be obtained in accordance with ship's draft. [Plaintiffs] have the Tight to appoint Lloyd's Agents to act on [plaintiffs'] behalf as regards to checking the draft for weight purposes, and [defendants] are appointing ship's chief officer for the same purpose." The intention that the steamer should take on the Dartmouth cargo from said Dartmouth wharf was frustrated by the ship captain's fears that there was not sufficient depth of water for that to be done safely. The parties then made an agreement whereby the Dartmouth scrap was loaded into lighters and transported to the ship's side at a pier in Halifax. It was loaded and stowed in the steamer from these lighters while the Halifax scrap was being put on from the pier.
Plaintiffs did nothing as to checking the ship's draft, nor did defendants or the ship's officer notify them that the draft was to be checked for the purpose of ascertaining the weight of the Dartmouth scrap. The main dispute was as to the weight of the scrap brought from
Dartmouth, to prove which weight the plaintiffs at the trial adduced evidence of the lightermen and others.
jury's finding of the weight was in plaintiffs' favour, and judgment was given accordingly, which was affirmed on appeal. Defendants appealed to this
Court. Held: In the circumstances the above quoted weight clause respecting the Dartmouth scrap in the original contract could not fairly be held to have been incorporated as an implied term of the new arrangement made for its loading: checking its weight by the displacement method within the true meaning of said weight clause became impossible owing to the simultaneous loading (which the clause could not be taken as contemplating) of Halifax and
Dartmouth scrap at Halifax; further.
clause contemplated concurrent checking and raised a duty in each party to co-operate with the other in the checking of the draft. It was therefore competent to plaintiffs to prove by the best available testimony the weight of the Dartmouth scrap actually delivered;
and the evidence adduced warranted the jury's finding.
Judgment of the
Supreme Court of Nova Scotia en bane,
[1936] 1 DL.R. 780, affirmed. DErrcHER v. ...................
COSTS
See 1.
CRIMINAL
CODE - Section 498A - CRIMINAL LAW-Conflict of judgments-Circumstantial evidence Rule as to inference of guilt-Section 1025 Cr. C.-Appeal-Leave to appeal to Supreme Court of Canada.] When the conviction of an accused is grounded exclusively on circumstantial evidence, the rule acted upon by the decisions of several courts of appeal throughout Canada has been that "in order to "justify the inference of guilt, the in- "culpatory facts must be incompatible " with the innocence of the accused and " incapable of any other reasonable " hypothesis than that of his guilt "; and when that principle is compared with the principle expounded in this case by the reasons of judgment of the appellate court, it must be held that there exists, between the above decisions and the judgment appealed from, the conflict required by section 1025 of the Criminal Code; and, therefore, leave to appeal to this Court should be granted, as such rule of law of sufficiently general importance to justify such leave. 2-Indictment - Formal charge writing setting forth offence-Description of offence-Insuffciency-Defects in matters of substance and essential averments omitted-Conspiracy-Overt act-Substantial wrong-Sections 869, 873, ss. 5, Criminal Code.] Held insufficient a count in a formal charge in writing (replacing in Quebec, a bill of indictment before a grand jury no longer required in that province) that the accused were parties "to a seditious " conspiracy in conspiring together and (other persons named and un- " known), thereby committing the crime " of seditious conspiracy," such a charge containing defects in matters of substance and essential averments having been wholly omitted.
Although conspiracy to commit a crime, being in itself an indictable offence, may be charged alone in an indictment and independently of the crime conspired to be committed, it is nevertheless necessary that a count charging conspiracy alone, without the setting out of any overt act, should describe it in such a way as to contain in substance the fundamental ingredients of the particular agreement which is charged, or, in other words, in such a way as to specify in substance, the specific transaction intended to be brought against the accused. Under the terms of section Cr. which enacts an imperative requirement (" shall contain"), there must be in the charge CRIMINAL LAW-Continued a statement that the accused has committed an indictable offence; and such offence must be " specified."
It will be sufficient if the substance of the offence is stated; but every count must contain such statement " in substance." It will not be sufficient to merely classify or characterize the offence; it is necessary to specify time, place and matter and to state the facts alleged to constitute the indictable offence.
The statement
"may be made in popular language, without any technical averments " or allegations; or it "may be in the words of the enactment describing the offence declaring the matter charged to be an indictable offence "; but the statement must contain the allegations of matter "essential to be proved" and must be in " words sufficient to give the accused notice of the offence with which he is charged " (ss. 2 and 3 of section 852 Cr. C.): the main object of such legislation being that an accused may have a fair trial and consequently that the indictment shall, in itself, indentify with reasonable precision the act or acts with which he is charged in order that he may be advised of the particular offence alleged against him and prepare his defence accordingly.
v. THE KINa ............
a---Trial - Circumstantial evidence - Rule as to evidence consistent with innocence or guilt of accused-Verdict of guilty by the jury-Proper direction as to rule-Conviction affirmed by appellate court-Appeal to the Supreme
Court of Canada-Whether this Court should interfere with the verdict of the jury.] Where the evidence in a criminal case is purely circumstantial and the jury has been properly instructed within the rule as to the value of circumstantial evidence, the verdict of the jury finding the accused guilty is equivalent to a finding that, in the minds of the jury, the inferences to be drawn from the evidence were consistent with the guilt of the accused and inconsistent with any other reasona)ble conclusion, i.e., with the absence of guilt. Likewise, an appellate court could also decide, on the evidence, whether the facts were such as to be equally consistent with the innocence as with the guilt of the accused, and accordingly quash the verdict. But, before this Court, when the accused does not urge any ground of complaint against the direction of the trial judge and the evidence is such that the jury might, and could, legally and properly draw an inference of guilt, as held by the appellate court, it is not for the Court to decide whether the jury ought or not to have inferred that
CRIMINAL LAW-Concluded the accused was guilty. v. THE KING ........................
See LAw 2, 3. CROWN-Canadian National Railways -Railway embankment-Washed out by overflow of water and ice during spring-Construction of dam upstream- Interference of natural course of river- Derailment of train-Damages-Servitude - Riparian owner - Liability of owner of dam-Ruling as to various species of damages caused to the railway company - Water Course Act, R.S.Q., 1926, c. 46, 8. 18-Arts. 499, 500, 501, 603, 508 C.C.]
The Crown as owner of the Canadian National Railways Company, brought an action against the appellant company for the recovery of a sum of 881,53320 for damages caused through the derailment of a train in consequence of a sudden washout of the railway embankment between the viaduct over the highway and the railway bridge crossing the St. Francis river, near Drummondville, P.Q. The Crown alleged that the loss and damage were the consequence of the construction, in 1928, of a large power house and dam, across the river about two and a half miles upstream from the embankment, which were owned, maintained and operated by the appellant company. Exchequer Court of Canada maintained the respondent's action for the full amount claimed, less a sum of 8600. Held that the appellant company was liable, as the existence of the appellant's dam led directly to the washing out of the railway embankment, but that the amount of the damages awarded by the trial judge should be reduced to $31,418.03. Held, per Cannon and Crocket JJ. and Dysart J. ad hoc, that, under the laws of Quebec, the appellant company could be held liable only for the damages caused by the injury to the enjoyment of the rights of the railway company as riparian owner; and thus it would not include the locomotive and rolling stock which happened to reach the site of the embankment after the- washout.
The statutory liability cannot be extended beyond what the law has fixed as the price of the servitude on riparian owners, i.e., the damage caused to the riparian owner, as such, of any property by the damming of the waters. Under the circumstances the failure of the railway employees to safeguard the train was a failure in an obvious duty and relieves the appellant from responsibility for all damages resulting directly or indirectly from the destruction of the dam. Consequently, the respondent was entitled to recover only the costs of repairs to tracks, CROWN-Concluded
$5,254.57, the costs of repairs to structure, $13,004.47, and the costs of diversion of train service and of special train service, $13,158.99, making a total sum of $31,418.03.
Per Lamont and Davis
JJ.-In addition to the above-mentioned damages, a further sum of $30,235.78 should be awarded to the respondent for costs of repairs to the locomotive and the cars. The liability for damages resulting from the construction maintenance of the works of the appellant was not confined to such damages as might reasonably have been anticipated by the appellant; when it is found that a man ought to have foreseen in a general way consequences of a certain kind it will not affect him to say that he could not foresee the precise course or the full extent of the consequence which in fact happened.
If liability is once established by proof of the relation of cause and effect, then those damages that flow directly are recoverable.
appellant had lawful governmental authority to construct and maintain its works in and across the St. Francis river, but it took that authority subject to the obligation created by section 12 of the Water-Course Act, R.S.Q., 1925, c. 46, of becoming "liable for all damages resulting therefrom to any person, whether by excessive elevation of the flood-gates or otherwise."
While the appellant was put by the statute into the position of being able lawfully to construct, maintain operate its works, it was under the condition subsequent that it should, notwithstanding that there was no injuria, pay, under a liability imposed by the statute, for the damnum which should from time to time prove to have been occasioned to any person therefrom; and the language of the statute embraces damages, whether they occur above or below the obstruction in the river, that result from any of such works. Held that the respondent was not entitled to recover the sum of $19,592.35 for medical and hospital services to employees and passengers who were victims of the accident, for funeral and ambulance expenses, for indemnities to passengers and employees and for wages paid to disabled employees. Judgment of the
Exchequer Court of Canada ([19341 Ex.
C.R. 142)
varied.
PowER Co. c. ............
DOMINION
TRADE
INDUS- TRY ACT-Constitutional validity.
EMPLOYMENT
SOCIAL
SURANCE ACT--Constitutional valid- See LAw.
EVIDENCE-Shipping--Crown claiming forfeiture of ship, under s. 67 (2) of Merchant Shipping Act, 1894 (Imp.), because of alleged false statement of citizenship in declaration of ownership- Authenticated photostatic copy of certificate of naturalization in foreign country to person of same name as person making declaration of ownership-Inadmissibility of comparison of handwriting of citizen's signature on said copy of certificate of naturalization with that of signature on declaration of ownership, to prove identity-Failure to object to admissibility at trial.] The Crown claimed forfeiture of a ship, under s. 67 (2) of the Merchant Shipping Act 1894, (Imp.), alleging that its registered owner, one Manuel Purdy, wilfully made a false declaration touching his qualification to be registered as owner, by falsely declaring that he was a British subject.
The declaration in question was contained in his declaration of ownership upon his application for registration of the ship in his name as owner, in March, 1933.
His signature to this was duly proved. was also put in evidence an authenticated photostatic copy of a naturalization certificate issued on November 27, 1926, by which " Manuel Purdy," "who previous to his naturalization was a subject of England," became a citizen of the United States.
The signature " Manuel Purdy " appeared on this certificate, and evidence was given of the practice to have the signature of the person to whom the certificate relates put upon it. The Crown relied on a comparison of the handwriting of this signature with that of the signature to the said declaration of ownership, along with the identity of names, to prove identity. Held: Such a comparison of handwriting was inadmissible. The authenticated copy of the naturalization certificate was good evidence of the contents of the original document; and the proper inference was that the signature " Manuel Purdy" appearing on the certificate was that of the person to whom the certificate was granted. But the rules by which, at common law or by statute, a record may be proved by exemplification or by the certificate of the person having the custody of the record where in the nature of things the original cannot be produced, do not contemplate the use of such document for the purpose of establishing the character of the handwriting on the original document.
The court cannot receive for the purpose of comparison of handwriting a copy, photographic or other, of alleged specimens of handwriting upon proof by official certificate alone. The court could not examine the photostatic copy of the certificate of natur- 19361
EVIDENCE-Concluded alization in question for any other purpose than that of ascertaining the contents of the original. It was not shewn, therefore, that the Manuel Purdy who in 1926 was admitted a citizen of the
United States was the same person who in 1933 made the said declaration of ownership and became registered owner of the ship. Identity of names alone was not satisfactory evidence upon which to decree a forfeiture (which postulates an offence) under said s.
67 (2). The contention that, as the above particular objection to the comparison of handwriting to shew identity was not taken when the evidence was offered and received, effect should not be given to it now, was rejected (Jacker v. International Cable Co., 5 T.L.R. 13).
Nothing occurred at the trial (such as did occur, e.g., in Bradshaw v. Widdrington;
see 86 L.T. 726, at 732) which precluded insistence on the objection now. Also, the document being admissible to establish a necessary part of the Crown's case, and having been admitted, it was not so much a question of the admissibility of a piece of evidence as of the manner in which evidence admissible and admitted could properly be applied.
The denial of -admissibility of such comparison was a proposition of law to which the court could not refuse to give effect on this appeal; because the Crown by this appeal was asking the court to declare a forfeiture, and the court must consider whether there was a proper foundation in the evidence for such a declaration. Judgment of Martin, D.J.Adm., [19361 Ev.
CR. 92, in favour of an unregistered transferee of a registered mortgage of the ship, as against the Crown, affirmed in the result. THE KING v. THE Sun'
K.....................
2-Mining shares-Stock market value
-Prima facie evidence-Not conclusive.
......
See WILL 1.
3- Dispute as to weight of goods loaded - Method of ascertainment - Evidence to prove weight ........
4---Shipping-Negligence-Vessel sunk when moored at wharf-Damage-Onus
-Findings of trial judge-Assessors- Care and nautical skill ..........
APPEAL 1.
FARMERS' CREDITORS ARRANGE- MENT ACT-Constitutional validity.
FIDELTY INSURANCE
FIRE INSURANCE
GUARANTEE-Mortgage bond-Construction of conditions-Extension or renewal of loan-Rate of interest increased without the knowledge of sureties- Whether sureties released - Written acknowledgments by sureties after completion and delivery of the extension and renewal agreements-Whether binding.] On December 1909, the Calgary Y.M.C.A. mortgaged its leasehold of certain lands to the Standard Trusts Company to secure the payment of a loan of $25,000, the terms of payment and interest being set out in the mortgage indenture.
As an added security, the respondent Hutchings, the deceased Hugh Neilson and other individuals executed a bond, on the same date, in favour of the mortgagee, for due payment and performance by the Y.M.C.A. It was stipulated in the bond that if the Y.M.C.A. " shall pay
* * * the said The Standard Trusts Company *
*
* the sum
* * * with interest thereon the days and times and in the manner called for in the mortgage or any renewal or extension thereof provided and shall further fully perform all covenants and contions contained in the said mortgage or any renewal or extension thereof, no matter what dealings the said company may have had with the mortgagors or any one interested in the said lands (the intention being that the above obligation shall remain in full force and virtue as long as any money remains unpaid under the said mortgage or any renewal or extension thereof) then the above bond or obligation to be void, otherwise to remain in full force and virtue." The mortgage moneys were repayable with interest at 7 per cent per annum and, the final payment of principal and interest was due and payable on January 2, 1915. mortgage moneys secured thereby were assigned and transferred to the appellant company. The Y.M. C.A. defaulted a number of its payments and negotiated with the appellant for an extension of time and eventually an agreement was reached and reduced to writing on June 29, 1915, whereby time for final payment under the mortgage was extended to April 1, 1918, and the rate of interest was increased from 7 per cent. to 8 per cent.; and a renewal agreement with similar clauses was also negotiated. The sureties were not consulted in the negotiations for the extension and renewal agreements and were not parties to GUARANTEE--Continued them; but the appellant company prepared a document which was signed by of the bondsmen, among whom were the respondents Hutchings and
Neilson, but not until late November or December, 1915. This document purported to acknowledge notice of the assignment of the mortgage and the bond and also notice of the extension agreement.
No proceedings upon the mortgage, upon the agreements or upon the bond were taken by the appellant company until March 27, 1934, when an action was brought against the respondent Hutchings and later, on April 9,
1934, a similar action was taken against the legal representatives of the deceased
Neilson.
Held, affirming the judgment of the Appellate Division,
([19351
W.W.R. 338), that the respondents
Hutchings and Neilson were not liable.
The change in the rate of interest was a material variation in the original contract, the performance of which the sureties had guaranteed by their bond, and operated in law in extinguishment of their liability.
A renewal or extension with an increased rate of interest was not a renewal or extension within the contemplation of the parties to the bond. As to the appellant's contention that the words in the bond "no matter what dealings the said company may have had with the mortgagors *
*"
permitted the change of the rate of interest and that the respondents cannot complain of the alteration, reading the instrument as a whole, those words must be confined in their meaning -and effect to dealings with matter collateral to the contract and cannot be extended to matters inconsistent with or repugnant to the very contract, the performance of which the sureties have guaranteed: an increase in the rate of interest is not something collateral to but a definite alteration of a material part of the original contract.
The parties expressed in that clause their intention that the obligation of the bond shall remain as long as any money remains unpaid under the said mortgage or any renewal or extension thereof. The words of that clause cannot be construed to entitle the creditor to make a new contract with the principal debtor and still hold the sureties on the bond given in respect of the original contract.
to the written acknowledgments signed by the respondents Hutchings and Neilson, it is settled law that a surety is not discharged by a variation to which he assents afterwards, even though there may be no fresh consideration for the assent, where it is not the creation of a new debt but the revival of an old debt; but, whether the assent is given
GUARANTEE-Concluded previous to or subsequent to a variation, the creditor must put the surety in possession of all the facts likely to affect the degree of his responsibility, and if he neglects to do so, it is at his peril; and the evidence in this case does not establish that the sureties ever knew the real facts and circumstances surrounding the making of what are described as the extension and renewal agreements, or that they knew that two of their co-sureties had not assented to the variation in the contract; the original bond was the joint and several obligation of the sureties and each surety had a contractual right of contribution against the others apart altogether from his equitable right as a surety; that discharge of these co-sureties was something that those who were asked to remain in the bond were entitled to know.
v. THE CO.......... HIGHWAYS - Negligence - Railways. HIRE OF WORK OR PERSONAL SERVICES-Tacit renewal-Notice. ....... HUSBAND
WIFE - (sickness)-Wife of insured designated as beneficiary .................... INCOME TAX
INSURANCE (FIRE)-Cause of loss- Burning match-Explosion-Clauses in the policy-Liability of insurer.] A fireman on an oil-burning tug, desirous ascertaining for the information of the captain whether there was enough fuel oil in the boat to enable her to proceed with her journey without reloading, opened a manhole on the boat, lit a match, and held the burning match over the man-hole with a view to seeing the quantity of fuel oil in the tank. Instantly the vapour in the tank caught fire, an explosion occurred and the boat was in the midst of flames. Very substantial loss was sustained by the appellants, the owners the tug, and they sued the respondents upon a policy fire insurance for the amount of their entire loss. The respondents contended that they were not liable for the loss attributable to explosion, but only for that part of the loss actually caused by fire. The policy contained the following printed clause: "Unless otherwise " provided by agreement writing 7()7 "added hereto this company shall not
"be liable for loss or damage occurring
* * by explosion or lightning,
"unless fire ensue, and, in that event,
" for loss or damage by fire only." Held that by the terms of the policy recovery by the appellants must be limited to the proportion for fire damage as distinguished from explosion damage. Hobbs v. Guardian Fire & Assurance Co. (12
Can. S.C.R. 631); Curtis's & Harvey,
Ltd. v. North British & Mercantile Ins.
Co. ([19211
1 A.C. 303); Stanley v.
Western Ins. Co. (L.R. 3 Ex. 71), and
Re Hooley Hill Rubber & Chemical Co.
v. Royal Ins. Co. ([1920] 1 K.B. 257)
disc. Per Duff CJ. and Davis and Kerwin JJ.-The language of the printed clause in the policy is not limited to cases where the fire was originated by the explosion but includes cases where the explosion occurs in the course of a fire. By the policy, the respondents insured the appellants against "all direct loss or damage by fire."
The printed clause in the policy, however, defined or limited the risk and excluded damage caused immediately by explosion.
Rinfret and Cannon JJ.-In this case, the insurers agreed to pay fire damage if the fire was caused by an explosion. In order to carry out the intention of the parties as expressed in the policy and in view of the opinion of both courts below on the evidence and its application to the terms of the policy, the recovery by the appellants must be limited to the loss caused by fire which followed or was concurrent with the explosion.
Robbs case (supra) dist.
FIE INS. Co. .......
(LIFE) - Bankruptcy - Joint life insurance policy-Both lives not insured
Death of one insured
Other insured becoming bankrupt - Right of the trustee to the proceeds of the policy-Transfer of policy to a third person-Insured party to transfer-Validity of the transfer-Bankruptcy Act,
R.S.C. c. section 92, ss. ff- Husbands' and Parents' Life Insurance
Act, R.S.Q., c. 9244.1 On February
4, 1927, one Aboosamra Kouri and his son, Khalil Kouri, one of the respondents, insured their lives jointly with the
New York Life Insurance Company, the policy being what is known as a " joint life insurance policy."
Under this policy, issued on two applications made individually by the father and the son, both were called the insured; and the insurance company agreed to pay to the survivor of them the sum of $24,947, upon receipt of due proof of the death first occurring of either of the insured, whereupon the contract would cease and
INSURANCE (LIFE)--Continued determine. The premiums were payable during the joint lifetime of the insured. Shortly after the issue of the policy, on February 18, 1927, the respondent Khalil Kouri signed a letter addressed to his father, declaring he had no interest in the policy and stating that, in the event of his father's death before his, he renounced in favour of his mother, the other respondent, the full amount of the policy; and the latter concurrently accepted in writing the benefit of her son's interest in the policy. In each of the applications attached to the policy and so forming part of the contract, each insured had reserved unto himself the right and power "to change the beneficiary from time to time"; and accordingly, on March 8, 1934, the father and the son joined in signing a document by which the wife of one and the mother of the other respondent was designated as beneficiary under the policy; such appropriation was duly noted and endorsed on the policy by the insurance company. The father also, by his will dated December 24, 1931, bequeathed all his life insurance policies to his wife. On March 19, 1930, the respondent Khalil Kouri, went into bankruptcy and the appellant was appointed trustee. On June 10, 1934, the father died; and the proceeds of the policy were deposited into court by the insurance company, after satisfying a -lien of the Bank of Montreal to which both the insured had assigned the policy as security for a loan. The appellant trustee in bankruptcy then brought the present action to effect a cancellation of the transfer of the policy by the son to his mother and to claim the proceeds of the policy. Held, affirming the judgment appealed from (Q.R. 60 KB. 114) but for different reasons, that the appellant was not entitled to claim any right to the proceeds of the insurance policy. Rinfret, Cannon and Kerwin JJ.-The bankrupt debtor had not really a right under the policy, he held a mere chance of benefit, a mere possibility; and neither that chance of benefit nor that possibility came oithin the definition of property as contained in subsection ff of section 2 of the Bankruptcy Act; consequently, it did not pass to the appe!lant trustee.
The trustee might have claimed the proceeds of the policy, if the insolvent son were still the beneficiary at the death of his father; but the latter exercised his right to change the beneficiary and the mother then become the sole beneficiary in the event of the death of her husband. The fact that the son joined his father in signing the appropriation document whereby latter revoked him as his beneficiary [SIC.R. INSURANCE (LIFE)-Concluded could not and did not affect the validity of the, document. At the time the new appropriation was made, the father enjoyed full liberty to make it, and it does not matter that his son was then bankrupt and undischarged or even that the father would have been moved to act as he did precisely because his son was then bankrupt; the creditors were not thereby deprived of anything to which they could make a valid claim.
Per Davis J.-The appellant cannot succeed on the ground raised by him, that the proceeds of the policy belong to the insolvent son's estate because the policy was not within the Husbands' and Parents' Insurance Act, it being a "joint insurance policy" of father and son. Under such a policy, the two lives of. the father and the son were not insured;
but one of them; that of the one who died first. The policy by its terms came to an end with the death of that one.
That one in this case was the father who predeceas3d his son. The son's life was only conditionally insured in the event of his predeceasing his father and the father's life was insured conditionally in the event that he predecease the son; and that event happened. Accordingly this case should be decided, as would be decided the simple case of a father insuring his life in favour of his son and subsequently designating his wife as preferred beneficiary;
would be no doubt of the right of the widow to the proceeds of the insurance policy.-A "joint insurance," as the one in this case should be construed as an insurance "by each of the other's life and not as an insurance by each of his *
*
* own life." Vaughan Williams L.J. in Griffiths v. Fleming, ([1909]
1 K.B. 805, at 815).
KouRi .......................
INSURANCE (SICKNESS)-Policy issued in 1920 against disability from accident or sickness-Wife of insured designated as beneficiary - Sickness of insured in 1934-Question whether payments by insurance company during insured's disability belonged to committee of estate of insured or to insured's wife
-Provisions of policy
Ontario Insurance Act, R.S.O. 1914, c. 183, s. 178 (in force when policy issued)-Subsequent statutory changes-Question as to retrospective effect-1922, c. 61; 1924, c. 50;
R.S.O. 1927, c. 222; 1928, c. 35; 1931, c
49-" Continuous" policy-Right of wife to recover insurance moneys direct without intervention of committee.]
1920, G., then 44 years of age, residing in Toronto, Ontario, obtained an insurance policy against disability from accident or sickness. His application there- INSURANCE (SICKNESS)-Continued for, attached to the policy, was for a "non-cancellable income policy," and designated. his wife as beneficiary. By provisions of the policy, it expired one year from date except as it might be continued by renewal for terms of one year each (or by a certain period of grace), and until the insured became 60 years of age he should have the right to renew the policy from year to year by payment of premium.
The policy was kept alive by payment of annual premiums.
In 1934, G. was declared, under R.S.O.
1927, c. 98, to be incapable of managing his affairs, and a committee of his estate was appointed. The main question in dispute was whether the monthly payments made by the insurance company under the policy during G.'s disability belonged to the committee or to G.'s wife. Sec. 178 of the Ontario Insurance Act, RS.O. 1914, c. 183, in force when the policy was issued, provided that where the contract of insurance or declaration provided that the insurance money should be for the benefit of a " preferred beneficiary " (that term including a wife), such contract or declaration should (subject as therein provided) create a trust in favour of such beneficiary and that "so long as any object of the trust remains the money payable under the contract shall not be subject to the control of the assured, or of his creditors, or form part of his estate." The committee contended that any trust thereby created in respect of the policy in question had been destroyed by subsequent statutory enactments. Held: G.'s wife was entitled to the proceeds of the policy. By said designation of her as beneficiary and the operation of said s. 178, a trust was created in her favour; and it was impossible, on the general language of the subsequent amendments, to conclude that the legislature thereby destroyed or intended to destroy said trust or the operation and effect of the above quoted provision in said s. 178. subsequent enactments dealt with in the judgment included, inter alia, 1924, c. 50, ss. 114, 134, 135. 136, 139, 177 (3), 180; 1928, c. 35, ss. 4, 6 (2), and new statutory condition 19 substituted for that introduced in 1922 (c. 61); 1931, c. 49, s. (2) ). The policy in question was not an annual renewal policy, but a continuous policy, and the distinction (discussed) becomes of importance in considering changes in a general statute governing policies of insurance. Where, as in this case, the contract is of continuous insurance, kept alive, merely by payment of the stipulated annual premium, it requires very clear and precise language in general amendments to de- INSURANCE (SICKNESS)-Concluded stroy a statutory trust created in favour of a named beneficiary at the time the policy was taken out. The subsequent amendments in question may have been intended to have, to a certain extent, retrospective effect, but when the language is not plain the new law ought to be construed so as to interfere as little as possible with the vested rights and should not be given a larger retrospective power than one can plainly see the legislature intended (Reid v. Reid, 31
Ch.
The wife was entitled, as between her and the committee, to recover the insurance moneys direct from the insurance company without the intervention of the committee. (National Life Assur.
Co. of Canada v. McCoubrey, [19261
Can. S.C.R. 277).
Judgment of the
Court of Appeal for Ontario, [19351 2
D.L.R. 329, affirmed in the result, with a variation declaring the wife's rights lastly above mentioned.
INSURANCE (SURETY)-Surety company-Warranty-Bond-Pecuniary losses to employer through acts of employee
-- "Larceny or embezzlement"-Whether to be construed in their technical or oopular sense - Whether contract a suretyship or insurance-Arts. 1919, 1935
O.C.]
Upon a bond, commonly called a surety bond, subscribed by the appellant in favour of the respondent for pecuniary losses through acts of larceny or embezzlement on the part of respondent's employee, although it was not proven that the latter had been guilty of these offences construed in the strict sense of these words, held, Davis
J. dissenting, that, as a result of the circumstances of this case and in view of its context, the terms of the bond were sufficient to cover the cases of fraud and dishonesty committed by the appellant's employee. When the insurer bound himself to pay the insured (employer) such "pecuniary losses * * * as (the insured) shall have sustained of money or other personal property * * * by any. act or acts of larceny or embezzlement on the part of"
(an employee), it is sufficient to find these acts to have been fraudulent or dishonest and such indeed as to amount to embezzlement, if not in the technical sense, at least in the non-technical or popular sense, of the word.
The word "embezzlement" should not be construed in the same way and with the same specific meaning as it would be construed when used in an indictment under the criminal law. Davis J. dissenting.
Such class of bond is not in
INSURANCE (SURETY)-Concluded effect, as commonly known, a surety bond: it partakes more of the nature of an insurance policy than of the nature of a suretyship (art. 1929 C.C.). Therefore, art. 1935 C.C. which enacts that "suretyship
*
*
* cannot be extended beyond the limits within which it is contracted " has no application to such a bond, which, by its real charater, is a commercial contract to which should be given a liberal interpretation. Davis J. dissenting. Per Davis J. (dissenting)-Upon a proper interpretation of the language of the policy, the words
" larceny embezzlement " should be given their technical and strict meaning.
The meaning of technical terms in a contract of suretyship ought not to be extended beyond what is the strict meaning of the words. Judgment appealed from (Q.R. 59 K.B. 295) affirmed,
Davis J. (dissenting)
. LAW SOCIETY
................ LEASE-Lease and hire of work or personal services-Tacit renewal-General provisions as to lease or hire of things applicable to lease and hire of work or personal services-Right of master to dismiss servant and right of servant to quit service-Notice to be given by both within delay prescribed by law- Arts. 1608, 1609, 1648, 1667, 1667, 1670 CC.]
Tacit renewal of a contract of lease or hire of work or personal services prolongs that contract for another year, or for the term for which such lease was made, if less than a year. The Civil Code treats the lease or hire of work or personal services as coming under the subject. and general provisions of lease and hire, and both contracts, that having things for its object and that having work for its object, are dealt with by the Code under the same general title. (Arts. 1600 and seq. C.C.). Therefore the intention of the legislature and of the Civil Code in using the words " tacit renewal " in connection with the lease and hire of work or personal services in article 1667 C.C., was that it should convey the same meaning, carry the same effect and be governed by the same rules, mutatis mutandis, as tacit renewal operating in the case of a contract for lease or hire of things. Accordingly, under article 1667 C.C., as under article 1609 C.C., tacit renewal will operate in the case of lease or hire of work or personal services if LEASE-Concluded the lessee continues to give his services beyond the expiration of the term originally fixed, without any opposition or notice on the part of the lessor; and applying the terms of article 1609 CiC., in such a case, the lessor, or servant, will not have the right thereafter to leave the service of the master, or the master will not have the right to dismiss the servant unless notice has been given within the delay required by law. As to the length of such notice, the provisions of articles 1657 and 1642 C.C. relating to lease or hire of things, may be made applicable to the lease or hire of work or personal services. Asbestos Corporation Ltd. v. Cook, ([19331 S.C.R. 86)
has no application to the present litigation. That case was not dealing with the question of tacit renewal, but with a contract of lease for personal services for an undetermined period of time.
Even that contract could not be terminated without giving a notice of a reasonable delay. Also: although it had been held in the Asbestos case that article 1642 C..
was not applicable to a lease of personal services for the purpose of determining the length of the contract, it has not been decided in that case that article 1642 C.C. could not be applied to leases of personal services, in so far as it is referred to in article 1657 C.C. for the purpose of computing the delay of the notice required to terminate a contract prolonged by tacit renewal.
............ 177
LEAVE TO APPEAL
LIFE INSURANCE
LIMITATION OF HOURS OF WORK
ACT-Constitutional validity.
MASTER AND SERVANT-Negligence
-Plaintiff, operating defendants' bulk station plant for handling gasoline and oil, injured by explosion-Construction of plant-Volents non fit injuria--Contributory negligence-Liability of both defendants, having regard to acts, position, and occupancy, of each ...... 309
MINES
MINERALS - Mining shares - Stock market value - Prima facie evidence - Not conclusive... 37
MINIMUM WAGES ACT - Constitutional validity.
MORTGAGE-Bond.
MUNICIPAL CORPORATION Resolution adopted by council-Action attacking its legality- Judgment judicata as to all other ratepayers-Art. 1241 C.C.-Arts. 4, 5, 430 M.C.] A judgment rendered upon an action brought by a ratepayer of a municipality in which it was alleged that a resolution adopted by a municipal council was illegal, constitutes res judicata as to all other ratepayers of -that municipality; and such judgment can be invoked as such in a subsequent action -where the legality of the same resolution is challenged.
Municipal corporations represent before the courts all the ratepayers, and a judgment rendered in favour of the corporation or against it in an action brought by a ratepayer can be opposed to any other ratepayer. Stevenson v. La citd de Montrial (Q.R. 6 Q.B. 107; 27 Can. S.C.R. 593) app. D'ESCHANES v. ....................... NATURAL
PRODUCTS
MARKET- ING ACT - NEGLIGENCE-Horses-Child running towards, and kicked by, colt led on highway on grassy strip between gravelled and cinder sidewalk-Liability in damages for injury to child.] The junior defendant, a boy 17 years old, was riding a pony northerly on a street in Calgary, Alberta, and leading by a rope a haltered colt on the east side of him. He went on to a grassy strip on the highway, east of its gravelled portion. He met two young boys running southerly on a cinder sidewalk east of the grassy strip.
One of them, the infant plaintiff, 6 years and 7 months old, ran towards the colt after it had passed him and was kicked by it. Said defendant and his father (who owned the colt and was following in a wagon some distance away) were sued for damages. Held (Kerwin J. dissenting): Defendants were liable. Judgment of the Appellate Division, Alta., [1935)
3 W.W.R. 554, affirmed. Per Duff CJ., Crocket, Davis and Hudson JJ : The junior defendant the moment he saw the boys running along the cinder path towards him, should have foreseen the danger and taken the horses off the grassy strip on to the gravelled roadway. His failure to discharge this duty to the children must, in the circumstances disclosed by the evidence, be held to be both the primary and proximate cause of the accident. No intervening act by a child too young to be capable of appreciating an obvious danger, which primarily NEGLIGENCE-Continued arises from another's negligence, can avail to relieve that other from the consequences of his own negligence, unless the child's act be such as could not reasonably have been foreseen. The child's act in going upon the grassy strip and following the horses, so likely to attract him, should have been anticipated as a likely consequence of keeping them on the grassy strip after seeing the children running towards them.
Per Kerwin J. (dissenting)
: As the pony was lame, the junior defendant acted prudently and properly in travelling on the grassy strip, but having seen the children he was bound to proceed in a reasonable manner and so as not to endanger them. There was no scienter;
the colt was under proper control and defendant had no reason to expect that the boy would run after the colt or that the colt would kick.
It could not be said, on the facts appearing from the evidence, that defendants were responsible in law for the injury. RicKARD v.
........................
2-Master and servant operating defendants' bulk station plant for handling gasoline and oil, injured by explosion-Construction of plant- Volenti non fit injuria
Contributary negligence - Liability of both defendants, having regard to acts, position, and occupancy, of each.] Defendant
R.O. Co. refined and manufactured petroleum products, and engaged plaintiff, in February, 1929, to operate a bulk station plant, to be constructed at
Beiseker, Alberta.
R.O. Co. obtained a lease of land on April 29, 1929, on which it immediately had the plant constructed, and plaintiff, in April or early in May, 1929, began operating it. It contained platform scales and pumps for the handling of gasoline and oil, and, in a small room adjoining the main room and entered by a door from the platform and with no window, a gasoline engine to provide power to operate the -pumps, and connected with them by a shaft running through a hole in the wall between the engine room and the warehouse proper, the hole having an unobstructed space of about
60 square inches through which fumes from the warehouse could pass into the engine room. The exhaust pipe of the engine was not extended out of the engine room. There were two storage tanks. On June 1, 1929, the defendant
R.D. Co. took over the marketing facilities of R.O. Co. and later wrote to plaintiff that the refining and marketing were operated under different company names, that operations with which plaintiff was connected were to be under the
NEGLIGENCE-Continued name of R.D. Co., and that he should in future communications use that name. The said lease to R.O. Co. was never assigned to R.D. Co. prior to the accident in question.
On Aug. 22, 1932, while tractor fuel was being pumped from a truck into a storage tank, plaintiff, as the pump seemed not working satisfactorily, placed a drum on the scales and made adjustments so that the rest of the fuel in the truck should go into drums.
When a number of drums had been filled, and the fuel was coming irregularly and slowly, plaintiff left his position beside the drum to go to a point where he could exchange signals with a man on the truck and, receiving what appeared to be a signal that the truck was empty, he returned to close off the valves, but before that was done fuel overflowed from the drum. Plaintiff then went to the engine room to shut off the engine and while attending to this he saw a flame come from the exhaust, an explosion occurred, and he was injured. He sued. for damages. The trial judge charged the jury that the determining factors were three issues of fact: (1) the charge against defendants of negligence in construction;
(2) defendants' reply that in any case plaintiff accepted any hazards that were incident to the operation of the plant; and (3) defendants' contention that the accident was chargeable to plaintiff's own negligence in regard to the operation of filling the last drum immediately prior to -the accident. The jury found a verdict for plaintiff for damages and judgment was given accordingly, which was affirmed on appeal.
appealed Court.
Held: The appeal should be dismissed. Per Duff C.J. and Davis and Kerwin JJ.: The doctrine of Rylands v. Fletcher, L.R. 3 HL. 330, could have no application to this case (Toronto Power Co. v. Raynor, 51 Can. S.C.R. 490, at 503, 505).
An' employer, though he does not warrant the safety of the plant and property used in the business in which the servant is employed, is under an obligation, arising out of the relation of master and servant, to take reasonable care to see that such plant and property is safe.
whether or not, by the common law, he can fulfil his obligation by delegating the performance of it to employees whose competence he has taken reasonable care to ensure, discussed, Toronto Power Co. v. Paskwan, [19151 A.C. 734, Ainslie Mining & Rly. Co. v. McDougall, 42 Can. S.C.R. 420, Brooks, etc., Co. v. Fakkema, 44 Can. S.C.R. 412. Bergklint v. Western Canada Power Co., 50 Can. S.G.R. 39, 54 Can. S.C.R. NEGLIGENCE-Continued
285, and Fanton v. Denville, [19321 2
K.B. 309, referred to. Where defendant relies upon delegation, the onus is upon him to establisa it: Canadian Northern
Ry. Co. v. Anderson, 45 Can. S.C.R.
There is no longer an independent rule that, for an employee to recover for injuries sustained from defects in the plant, there must be ignorance in himself and knowledge in the master of those defects (Jury v. Commissioner for Railways, 53 Comm. L.R.
273, at 282).
As to the defence of volenti fit injuria, the question is, did the employee agree that if injury befell him the risk would be his and not his master's? (Smith v. Baker [18911 A.C.
325; McPhee v. Esquimalt & Nanaimo
Ry. Co. 49 Can. S.C.R. 43).
The issue of volens in this case was one for the jury.
As to contributory negligenceplaintiff was obviously much concerned about the manner in which the apparatus emptying the truck was working;
the overflowing of the drum was not the consequence of any want of zeal on his part; and the jury might, without acting arbitrarily and unreasonably, have thought any slip, any miscalculation or error of judgment excusable, and not incompatible with the absence of negligence.
In the view taken as aforesaid, the responsibility of R.D. Co.
was not disputed; there would also appear to be a prima facie case against
R.O. Co.
P.er Rinfret, Cannon and
Kerwin JJ.: On the evidence the jury could reasonably find in plaintiff's favour on the said three issues of fact submitted to them. For a defence on the ground of volenti non fit injuria, it must be found as a fact that plaintiff freely and voluntarily, with full knowledge of the nature and extent of the risk he ran, expressly or impliedly agreed to incur it (Letang v. Ottawa
Electric Ry. Co., [1926] A.C. 725); it was not sufficient in this case that plaintiff knew it was a common thing for the engine to backfire, that any fault in construction of the building existed from the time he took over the plant, that he knew that the tractor fuel was a highly inflammable product and the vipour from it highly inflammable and dangerous, that he apprehended danger of a spark exploding such vapour.
that he would not light a match there, and that he never complained; the jury had to be satisfied that not only did plaintiff know, but he accepted voluntarily to run. the risk (Baade v. Hill,
[1934] 4 DIR. 385. referred to). Bo!h defendants were liable-R.O. Co., which made agreement brought into the plant the dangerous substances for storage; it was, under its
NEGLIGENCE-Concluded lease, the occupant of the land; R.D. Co.. which in fact was only a continuing incorporated department of R.O. Co., also occupied the land either as tenant or employee of R.O. Co.; it was in charge of the premises at the time of the accident and had control over plaintiff; (Rainham Chemical Works Ltd. v. Belvedere Fish Guano Co. Ltd., [1921] 2 A.C. 465).
& 3-Passenger injured through slipping on roadway when alighting from defendants' bus-Condition of place where bus stopped-Bus not drawn up to sidewalk -Findings by jury of negligence of defendant and against contributory negligence of passenger-Evidence-Defendant's duty and liability in law.] 4.-Railways-Highways.
PATENT-Alleged infringement-Validity of patent-Means and methods of underpinning buildings-Lack of patentable improvement-Sufficiency of disclosure-Appeal-Presentation of matter after argument.] Plaintiff appealed from the judgment of the Court of Appeal for Manitoba, 43 Man. R. 245, affirming judgment of Adamson J. (ibid) dismissing his action for alleged infringement of patent of invention relating to means and methods of underpinning buildings. Held: Appeal dismissed. Having regard to the state of the art at date of the patent, the methods and devices in respect of which protection was claimed involved no patentable improvement. Remarks, but no decision, on respondent's contention that, since, admittedly, the patentee's procedure would only be operable in soil of suitable consistency and condition, and since there was nothing in the pateat defining, either by reference to soil composition or to locality, the places in which it would be operable, the patent was void for want of sufficient disclosure.
A communication advancing suggestions on a point, and effect requesting reargument thereon, addressed to the Court after conclusion of the argument, without special leave given at the argument or subsequent to it, cannot properly be considered by the Court.
2-Validity - Subject - matter vention.] In order validly to support a patent, not only must the art or the improvement therein be new, useful, and not anticipated by prior knowledge or prior use, by others within the meaning of the Patent Act, but also there must be invention; one does not hold a PATENT-Continued valid subject-matter of a patent unless he shews the exercise of inventive ingenuity. Generally speaking, the question whether or not in any particular case there has been invention is one of fact and degree, depending upon practical considerations to a larger extent than upon legal interpretation.
(Riekmann v. Thierry, R.P.C. 105, Burt
Business Forms Ltd. v. Autographic
Register Systems Ltd.,
[19331
Can.
S.C.R. 230, at 237, 238, and other cases, cited). In the present case, the judgment of Maclean J. President of the
Exchequer Court of banada, [19351 Ex.
C.R. 190, holding that the patent in question (for a domestic refrigerator insulated door, recessed on its inner face so as to provide a hollow food space therein with suitable shelving arrangements, and withcut materially adding to the exterior dimensions of the refrigerator) was invalid for lack of subjectmatter, was affirmed.
.........................
3- Re-issue patent-Conditions necessary for grant of-Patent Act, R.S.C.
1906, c. 69, s.
4-Interpretation-Conditions that original patent be deemed
"defective"
by reason of "insufficient description or specification" arising from
"inadvertence, accident or mistake,"
within the statute-Action for infringement of re-issue patent-Validity of amendments in re-issue patent-Proper limits of expert testimony.] The issue of a new patent (a re-issue patent) in accordance with an amended description and specification, under s. 24 of the
Patent Act, R.S.C. 1906, c. 69, is not justified if the invention described in the amended description or specification and protected by the new patent is not the same invention as that to which the original patent related.
The relief authorized by said s. 24 in respect of "insufficient description or specification" is limited to corrccting insufficiency (arising " from inadvertence, accident or mistake") in describing or specifying in the original patent the invention in respect of which the applicant therefor intended to ask protection.
The statute did not contemplate a case in which an inventor has failed to claim protection in respect of something he has invented but failed to describe or specify adequately because he did not know or believe that what he had done constituted invention in the sense of the patent law and, consequently, had no intention of describing or specifying or claiming it in his original patent. The original patent cannot be "deemed defective" within s.
24 in a case where it obviously com- PATENT-Continued pletely fulfilled the applicant's intention-where the invention in respect which he intended to obtain protection is quite certainly and sufficiently described and specified.
On appeal from the judgment of Maclean J., President of the Exchequer Court of Canada, ([19361 Ex. C.R. 75), dismissing the plaintiffs' action for alleged infringement of a re-issue patent (for an alleged new and useful improvement in radio communications):
Held: The appeal should be dismissed. The grant of the re-issue patent was unauthorized, as the conditions necessary for its grant under s. 24 (as above interpreted) were absent. The proper conclusion from the documents was that there was no defect in the statutory sense in the original patent (there was no suggestion that it could be deemed "inoperative")-no reasonable ground for apprehending that it was defective in failing sufficiently to describe the inventions in respect of which the applicant for it was intending to claim invention; no "inadvertence, accident or mistake" of the applicant in respect of the description or specification of the invention that the applicant had in mand. The pertinent documents conclusively negatived any intention on the part of the applicant for the original patent to describe or t. specify any of the inventions, so-called, embraced within the amendments in the re-issue patent in so far as they were material to the present appeal. Also, in view of the evidence as to the state of the art at the time of the application for the original patent, and at the time when the applicant therefor was alleged to have conceived and perfected -the inventions embraced within the amendments in respect of which relief was now claimed, it was highly improbable that he believed he was entitled to obtain protection in respect thereof; and the balance of probability supported the conclusion that he was not so entitled.
A large part of the expert evidence given in the case (on both sides) was the subject of adverse comment by this Court, which held that much of it was not legal evidence and could not properly be taken into consideration.
With reference to specified examples there-i, it was held, that any inference 'o be drawn from the applicant's specification in the original patent. as to whether or not the devices and arrangements in question in these proceedings were inventions of said applicant (to establish the affirmative of which was a substantive part of plaintiff's case), was matter of fact for the court and not a matter upon which it was competent to any expert witness to PATENT-Concluded pronounce; also (with reference to a witness being shown said original patent and being asked broadly to explain what said applicant was trying to do), that the issue touching the identity of the invention to which said original patent related, was a substantive issue in the action, and upon that issue no expert witness should have been permitted to express an opinion.
Comments upon the proper limits of expert testimony in British Celanese Ld. v. Courtaulds
Ld., 52 R.P.C. 171, at 196-8, quoted.
.............
PRACTICE
.
PRINCIPAL AND AGENT
PRINCIPAL AND SURETY
See (SuiETY).
RAILWAYS-Negligence - Highways - Railway track on public street-Children playing in vicinity-Track used for assembling of freight train-Child climbing on car of assembled train just before train hauled away, falling through jerk of starting train and injured-Liability of railway company.] Defendant railway company had a track on the north side of H. street in the city of Winnipeg, on which it would assemble a freight train by moving easterly successive "cuts" of cars to be added to those already assembled. When the assembling was completed an engine was attached and the train was hauled westerly to connecting tracks within defendant's yards. Children played in the vicinity.
One evening, after a long train had been assembled, and the hauling crew had taken charge, and were about to start the train, the plaintiff, a boy aged 4 years, ran across the street, unnoticed by the trainmen, climbed the end side ladder of a car, crossed to the rear ladder, and fell at the jerk of the starting train and was injured by the moving train. Defendant was sued for damages. Held (Crocket J. dissenting):
Defendant was not liable.
(Judgment of the Court of Appeal for Manitoba,
43 Man. R. 345, reversed).
Per Duff
C.J. and Rinfret J.: Plaintiff was a trespasser on the train and on that ground alone was precluded from maintaining a right of action for negligence.
case is governed by Grand Trunk Ry.
Co. v. Barnett, [19111 A.C. 361.
(Lygo v. Newbold, 9 Ex. 302, Hughes v. Macjie, 2 H. & C. 744, and Addie v, Dumbreck, [1929] A.C. 358, also cited). Further, no breash of duty by defendant had been established.
Towards people
RAILWAYS-Continued using the public street defendant was bound to exercise reasonable care. Engaged in the execution of statutory powers, it was bound to take reasonable care not to cause unnecessary harm to those who might be injured by a careless or unreasonable exercise of its rights. But it was under no obligation to intending trespassers, children or adults, to prevent them effectuating a trespass upon its cars. Its duty towards such a trespasser was limited to refraining from intentionally injuring him or "not to do a wilful act in disregard of ordinary humanity towards him"; "not to act with reckless disregard of the presence of the trespasser."
On the evidence it was clear that defendant did not permit children to climb on the cars and tried to prevent them; it was not in the position of a tacit licensor. There was here no nuisance; the action rested upon negligence; (the distinction, and its importance, discussed, and Lynch v. Nurdin, 1 Q.B. 29, Liddle v. Yorkshire, [19341 2 K.B. Cooke v. Midland, [19081 2 Ir. R. 242, [19091 A.C. 229, Latham v. Johnson [19131 1 K.B. 398, discussed).
The present case has no analogy to Lynch v. Nurdin, 1 Q.B. 29, Glascow Corporation v. Taylor, [19221 1 A.C. 44, Excelsior Wire Rope Co. v. Callan, [19301 A.C. 404, or Cooke v. Midland, [19091
A.C. 229.
A person who is using his vehicle in the usual way, having committed no wrong, and though the vehicle may be attractive to children, is guilty of neither negligence nor nuisance, and is not responsible for injury to children caused by their trespassing thereon. Per Davis J.: The case cannot be treated in law as one of nuisance, and falls to be determined upon the question of negligence. That distinction is fundamental. presence and movement of cars on the street was the inevitable result of the ordinary exercise of defendant's public authority. It was not shewn that plaintiff was on the car with leave or licence of defendant.
He was a trespasser on the car. It was clear upon the evidence that no employee of defendant saw him approaching the car or upon it. could not be fairly said upon the evidence that defendant's conduct toward him was such wilful or reckless disregard of his presence as to amount to malicious conduct toward him. To hold defendant liable would make it virtually an insurer of a trespasser. (Grand Trunk Ry. Co. v. Barnett, [19111 A.C. 361, Addie v. Dumbreck, [19291 A.C. 358, and Liddle v. Yorkshire, [19341 2 K.B. cited. Lynch v. Nurdin, 1 Q.B. 29, Cooke v. Midland, 11909[ A.C. 229. Excelsior Wire Rope Co. v. Callan, [19301 RAILWAYS-Concluded
A.C. 404, and other cases, discussed).
Per Kerwin J.: Defendant's railway track was legally on the street, and its employees were lawfully engaged in moving the cars.
Defendant owed no duty to plaintiff which it failed to ful- Plaintiff's act in running out and getting on the car when none of defendant's employees happened to be looking, was something against which defendant could not guard, and which, in law, it was not incumbent upon it to foresee.
(Donovan v. Union Cartage
Co,. [19331 2 K.B. 71, Liddle v. Yorkshire, [19341 2 K.B. and other cases, referred to).
Per Crocket J. (dissenting)
: Defendant, in the exercise of its right to assemble cars and move trains on its track along the street, was bound to take such precautions for avoidance of injury to the public as were fairly commensurate with the danger created by said operations.
Its degree of care and vigilance owed to the public depended on existing conditions and risks, as they were known or ought to have been known to defendant or its servants in charge.
At the particular point where the accident happened there was a special danger from the presence of children in play in close proximity, and upon the evidence defendant through its servants and agents must be charged with knowledge thereof. The standing cars were an attraction to younger children, and this should have been known to defendant's servants; and defendant did not take reasonably adequate precautions to guard against the obvious danger of such a thing as happened. It should have kept one or two watchmen to patrol the dangerous sections, specially charged with looking out for children, from the time the hauling crew took over the train antil it was moved off the street. In the circumstances defendant could not avail itself of the fact that plaintiff was a trespasser on the car; he was no more so than were the infant plaintiffs in Lynch v. Nurdin, 1 Q.B. 29, and Excelsior Wire Rope Co. v. Callan,
[19301 A.C. 404.
RY.
................
2-Crown - Canadian National Railways - Railway embankment - Washed out by overflow of water and ice during spring-Construrtion of dam upstream
-Interference of natural course of river
-Derailment of train-Damages-Servitude-Riparian owner-Liability of owner of dam-Ruling as to various species of damages caused to the railway company-Water-Course Act, R.S.Q., 1925, c. 46, s. 12-Arts. 499, 500, 501, 508, 508
C .C .]...............................
RES JUDICATA
RIPARIAN OWNER Servitude-Liability of owner of dam.............. SALE OF GOODS-Contract-Contract for sale of scrap steel, accumulated on a certain wharf, to be loaded there on ship-Clause providing that weight of goods be ascertained by checking ship's draft - Subsequent arrangement for transferring goods and loading at different place-Change in circumstances- Conduct of parties - Dispute as to weight of goods loaded-Method of ascertainment - Evidence prove weight.] Defendants contracted to purchase from plaintiffs certain scrap steel, part of which was on a wharf at Dartmouth and part at Halifax, and which was to be loaded on a steamer chartered by defendants. The contract provided: "Railway weights to govern settlement on all material loaded in Halifax. For material loaded in Dartmouth, weight to be obtained in accordance with ship's draft.
[Plaintiffs]
have the right to appoint Lloyd's Agents to act on [plaintiffs'] behalf as regards to checking the draft for weight purposes, and [defendants] are appointing ship's chief officer for the same purpose."
The intention that the steamer should take on the Dartmouth cargo from said Dartmouth wharf was frustrated by the ship captain's fears that there was not sufficient depth of water for that to be done safely.
The parties then made an agreement whereby the Dartmouth scrap was loaded into lighters and transported to the ship's side at a pier in Halifax. It was loaded and stowed in the steamer from these lighters while the Halifax scrap was being put on from the pier. Plaintiffs did nothing as to checking the ship's draft, nor did defendants or the ship's officer notify them that the draft was to be checked for the purpose of ascertaining the weight of the Dartmouth scrap. The main dispute was as to the weight of the scrap brought from Dartmouth, to prove which weight the plaintiffs at the trial adduced evidence of the lightermen and others. The jury's finding of the weight was in plaintiffs' favour, and judgment was given accordingly, which was affirmed on appeal. appealed this Court. Held: In the circumstances the above quoted weight clause respecting the Dartmouth scrap in the original contract could not fairly be held to have been incorporated as an implied term of the new arrangement made for its loading: checking its weight by the displacement method within ihe true meaning of said weight clause became impossible owing SALE OF GOODS-Concluded to the simultaneous loading (which the clause could not be taken as contemplating)
of Halifax and
Dartmouth scrap at Halifax; further, the clause contemplated concurrent checking and raised a duty in each party to cooperate with the other in the checking of the draft.
It was therefore competent to plaintiffs to prove by the best available testimony the weight of the
Dartmouth scrap actually delivered; and the evidence
&dduced warranted the jury's finding. Judgment of the Supreme
Court of Nova Scotia en banc, [19361
1 D.L.R. 780, affirmed.
SALE OF LAND-Contract-Objection to title-Purchaser terminating contract
-Vendor claiming specific performance
-Extent of title agreed to be conveyed
-Vendor claiming rectification of formal contract-Alternative claim for specific performance of formal contract, with reference as to title.] Plaintiff sued for specific performance of an agreement of sale of land and land covered with water from him to defendant.
Shortly after the agreement, the Crown in the right of the Dominion of Canada had asserted a claim to a part of the land as having passed to it a; Confederation, under s.
108 of the B.N.A. Act as part of a public harbour, and, on pfaintiff's refusal to remove this objection to title, defendant had purported to terminate the agreement. The trial judge found (sustaiaing plaintiff's claim) that, under the agreement, plaintiff was selling only such title as he had in the lands, and granted specific performance.
This judgment was reversed by the Court of Appeal for Ontario, which found that plaintiff had agreed to convey a good and sufficient title to the lands, and dismissed his action.
Plaintiff appealed to this
Court. Held: Appeal dismissed. A certain executed formal document, under which plaintiff was bound to convey a good and sufficient title to the lands, constituted the only binding agreement, and plaintiff had established no adequate case for reformation in the sense
The trial judge apparently failed to appreciate the evidentiary weight which must be ascribed to the fact of executior of that document and the legal consequences of that fact. As to defendant's objection to title because of said claim of the Crown-the evidence tended to show that part at least of the westerly portion of the lands was used as a public harbour before Confederation, and warranted the court in refusing to force such a doubtful title on defendant.
The court refused to plaintiff a decree of specific performance
SALE OF LAND-Concluded of the agreement as it stood, with a reference as to title, because, (1) when plaintiff took the stand that defendant was bound to accept such title as he had, he was virtually repudiating his obligations under the formal agreement, and defendant, in view of the situation created by the Crown's claim, had just and solid grounds for his action in terminating the agreement, which thereupon ceased to have any virtue as a foundation for any claim by plaintiff; (2) no such claim or offer to accept such a decree (alternatively to rectification of the formal agreement) had been made by plaintiff until argument at trial after completion of the evidence, and, in view of plaintiff's persistent attitude up to that time, such claim should not be allowed in the appellate courts. SCHOLARSHIP - Competition for - Special jury-Verdict.
SERVITUDE-iparian owner-Liability of owner of dam .............. SHIPPING-Evidence-Crown claiming forfeiture of ship, under s. 67 (2) of Merchant Shipping Act, 1894 (Imp.), because of alleged false statement of citizenship in declaration of ownership- Authenticated photostatic copy of certifi.cate of naturalization in foreign coun-try to person of same name as personA making declaration of ownership-Inadmissibility of comparison of handwriting, of citizen's signature on said copy of certificate of naturalization with that of signature on declaration of ownership, to prove identity-Failure to object to .admissibility at trial.] The Crown claimed forfeiture of a ship, under s. 67 (2) of the Merchant Shipping Act, 1894, (Imp.), alleging that its registered owner, one Manuel Purdy, wilfully made a false declaration touching his qualification to be registered as owner, by falsely declaring that he was a British subject.
The declaration in question was contained in his declaration ownership upon his application for registration of the ship in his name as owner, in March, 1933. His signature to this was duly proved.
There was also put in evidence an authenticated photostatic copy of a naturalization certificateissued on November 27, 1926, by whicty "Manuel Purdy," "who previous to hisnaturalization was a subject of England," became a citizen of the United States. The signature "Manuel Purdy" appeared on this certificate, and evidence was given of the practice to have the signature of the person to whom the certificate relates put upon it. The
Crown relied or a comparison of the handwriting of this signature with that of the signature to the said declaration of ownership, along with the identity of names, to prove identity.
Held:
Such a comparison of handwriting was inadmissible.
The authenticated copy of the naturalization certificate was good evidence of the contents of the original document; and the proper inference was that the signature "Manuel Purdy" appearing on the certificate was that of the person to whom -the certificate was granted.
But the rules by which, at common law *or by statute, a record may be proved by exemplification or by the certificate of the person having the custody of the record, where in the nature of things the original cannot be produced, do not contemplate the use of such document for the purpose of establishing the character of the handwriting on the original document.
The court cannot receive for the purpose of comparison of handwriting a copy, photographic or other, of alleged specimens of handwriting upon proof by official certificate alone. The court could not examine the photostatic copy of the certificate of naturalization in question for any other purpose than that of ascertaining the contents of the original. It was not shewn, therefore, that the Manuel Purdy who in 1926 was admitted a citizen of the United States was the same person who in 1933 made the said declaration of ownership and became registered as owner of the ship.
Identity of names alone was not satisfactory evidence upon which to decree a forfeiture
(which postulates an offence)
under s. 67 (2). The contention that, as the above particular objection to the comparison of handwriting to shew identity was not taken when the evidence was offered and received, effect should not be given to it now, was rejected
(Jacker v. International Cable Co., 5
T.LR. 13).
Nothing occurred at the trial (such as did occur, e.g., in Bradshaw v. Widdrington; see 86 L.T. 726, at 732) which precluded insistence on the objection now. Also, the document being admissible to establish a necessary part of the Crown's case, and having been admitted, it was not so much a question of the admissibility of a piece of evidence a3 of the manner in which evidence admissible and admitted could properly be applied. The denial of admissibility of such comparison was a proposition of law to which the court could not refuse to give effect on this appeal; because the Crown by this appeal was asking the court to declare a forfeiture, and the court must consider whether there was a proper foundation in the evidence for such a declaration. Judgment of Martin, D.J.Adm., [19361 Ex. C.R. 92, in favour of an unregistered -transferee of a registered mortgage of the ship, as against the Crown, affirmed in the result. THE SHIP K.............
2-Maritime law-Insurance - Wheat cargo-" Loss or damage from any external cause "-Grain deteriorated by moisture and reconditioned-Agreement as to its sale-Liability of insurer-Extent of loss-Method to be followed to determine it-Sue and labour clause- Act, 2585 C.C.-Marine Insurance Act, 1906, (Imp.) 6 Edw. VII, c. 41, s. The appellant company is a grain dealer and, in the course of its business, shipped grain cargoes from certain ports on the Great Lakes and on the St. Lawrence river to Montreal. spondent insurance company, by a "lake cargo policy," insured on account of the appellant all shipments of grain on vessels sailing between named dates against the risk of "loss or damage from any external cause" occurring during the transportation of these cargoes. Under the terms of this floating policy, a valued marine certificate was issued on a cargo of no. 3 northern wheat valued at 65 cents per bushel. The grain was shipped at Fort William on board the Anna C. Minch. and, after being transhipped at Kingston to a barge, was tendered to the Harbour Commissioners elevator at Montreal.
After a small quantity had been taken out, the wheat was refused by the elevator authorities, as it was found that it had become "tough" due to excessive moisture and had therefore lost its classification as no. 3 northern wheat.
The appellant company directed the Montreal Harbour Commission to turn and dry the grain, a process of reconditioning; and, as a result of the process, nearly all the wheat came back to a moisture content which permitted it to be again classified as no. 3 northern. As provided in the policy, the consignees or holders of the certificates of insurance gave immediate notice of the loss or damage to G.W.P. Ltd. who then reported to the underwriters, the respondent, for adjustments or settlement; and Hays S. & Co. were subscquently called in as cargo surveyors to act on behalf of the respondent. Later, the general manager of the appellant's insurance-brokerage firm, one Oldfin, suggested that bids be obtained for the wheat, and, as found by the trial judge and the majority of this Court, this was agreed to by the president of Hayes S. & Cc.
As a result of this arrangement, a grain broker, authorized by Oldfin, secured offers for the grain, amongst which was one from the appellant.
At a meeting of all parties interested, it was agreed that the appellant's offer of the sum of $44,352.81 should be accepted.
Later on, the reconditioned wheat was resold by the appellant company on a favourable market, the actual loss to the latter being
$4,448.58, as contended by the respondent. The insured value of the cargo was
$63,852.84.
The appellant's action for
"loss or damage" to the wheat cargo under the insurance policy was maintained in full by the trial judge, the amount of $18,500 claimed and awarded being the difference between the insured value of the cargo and the amount of the sale of the reconditioned wheat to the appellant. The appellate court found the loss under the policy to be $4,448.58, representing the cost of turning and drying the wheat, warehouse storage charges and loss of bushels of grain that were not retained and dried. Held, Davis J.
dissenting in part, that the amount of the damage suffered by the appellant and for which the respondent is liable under the terms of the policy is $8,544.79;
Cannon J. (concurring)
with the judgment of the trial judge and Davis J.
with that of the appellate court.
Rinfret, CrockeL and Kerwin JJ.-The amount of the damage suffered by the appellant is the sum of $18,500 as found by the trial judge; but this is not the amount for which the respondent is liable under the terms of the policy and certificate.
The loss to the appellant is a partial loss; and the agreement between the parties as to the sale of the reconditioned wheat did not purport to alter the rule of law in such a case as contained in art. 2535 C.C., the provisions of which are similar to those contained in sec. of the Marine Insurance Act, 1906,
(Imp.) c. 41.
accordance with these provisions, the amount for which the respondent 's liable is ascerta-ued as follows: the insured value of the cargo was $63,852.84;
the gross produce of the damaged sales was S44,352.84; the sound value of the grain on the first day of unloading at
Montreal was 52k cents per bushel; the total sound value of the cargo is therefore 851205.08; the difference between sound damaged values is
$6.852.24, which is 13-382 per cent of the sound value; and the percentage of the insured value of the total quantity of wheat delivered at Montreal, i.e.,
863.852.84, amounts to 88.544.79, which is the loss for which the respondent is liable. Cannon J. contra. Per Rinfret.
Crocket and Kerwin JJ.-The "sue and labour" clause contained in the policy, which would have applied otherwise, cannot be invoked by the respondent in view of the agreement arrived at between the representatives of the parties in this case. Per Cannon J.-Under the terms and ambit of the policy and according to the written documents of record, the findings of the trial judge should not be disturbed; and the latter held that the damage was ascertained by agreement of all interested parties for the purpose of any future litigation and that the amount so determined should be considered as the damage recoverable under the policy. The loss in this case was not, strictly speaking, a partial nor a total loss of the cargo, but rather a deterioration of the whole cargo causing damage for only part of the sum insured; and the course adopted by the parties, the conduct of the case and the proven circumstances make inapplicable the percentage rule of art. 2535 C.C. in order to reduce the sound value of the wheat: the necessary elements are lacking to establish the proportioii contemplated by the Code. The "sue and labour" clause would apply only in case of disaster during the voyage or adventure and not after the arrival of the ship at destination. Davis J. (dissenting in part)-The "sue and labour" clause should be applied in this case in order to determine the amount of the "loss or damage" suffered by the appellant company; and, consequently the amount which the appellant is entitled to recover is the actual loss suffered by it amounting to $4,448,58, as held by the unanimous judgment of the appellate court.
SoNs
3-Maritime law-Collision-Evidence of negligence - Damage - Liability - Vessel sunk when moored at wharf - Damage - Onus - Findings of trial judge - Assessors - Care and nautical skill.]
British cruiser H.M.S. Dragon, in command of the appellant. shortly before 9 o'clock in the morning and in fair weather, when about to enter Victoria Basin in the harbour of the city of Montreal to take up her allotted berth at the cross-wall at the inner end of the basin, collided with and sank the respondents' oil bunkering steamer Maplebranch which was lying at the time securely moored alongside steamer
New Northland which was docked at the wharf in a section just outside the entrance to the basin, on the north side of the harbour. The oil tanker Maplebranch had received orders to deliver a quantity of oil to the New
Northland on the morning of the collision and she proceeded, without previously notifying the Harbour Master's office in conformity with certain regulations of the Montreal Harbour, to dock the section where the New Northland was moored and tied up alongside it about fifteen minutes before the collision occurred.
According to the evidence, anpellant observed
Maplebranch cross over from the entrance to the basin and go alongside the New Northland when he was at a distance estimated by him at about a mile away though at that time he was not able to identify the vessel or to judge the distaace of it from the entrance to the basin. It is also common ground that a strong cross current runs diagonally across the entrance of the basin toward th north shore at a speed of from five to six knots. The evidence shows further that a motor vessel, the
Saguenay Trader, had arrived in the
Dasin the previous afternoon and docked on the south side, bow towards the west; and, just as the Dragon was approaching the entrance to the basin, the Saguenay Trader was being turned about at her berth by her crew, her stern lines being fast to the pier and she merely drifting round with the wind;
and the appellant alleged that, when he observed this motor vessel apparently swinging out across his course, he believed that she was going to get into his way and that he had to stop and reverse the Dragon's engines and that the cross-current then carried the Dragon over against the Maplebranch with no fault on his part.
The action was brought by the respondents, Steamer
Colin W. Limited, as registered owner of the steamer Maplebranch, and St.
Lawrence Tankers Limited, as beneficial and managing owner or operator of the steamer Maplebranch, and as owner also of the cargo on board her, jointly claiming
$100,000 against the appellant as officer commanding H.M.S.
Dragon for damages by collision alleged to have been caused solely by the improper and negligent navigation and mismanagement of the Dragon by the appellant. Held, Rinfret and Crocket
JJ. (dissenting)
, that the appellant should be held liable.
The appellant, having collided with the Maplebranch at her mocrings in broad daylight, the onus rested upon him to satisfy the Court that there was no fault upon him which directly caused the collision, and the trial judge has affirmatively found that there was such fault; and where the trial judge, as here, is not only an experienced local judge in Admiralty, but had the assistance of two assessors to advise him upon matters requiring nautical or other professional knowledge and arrived at a conclusion of fact upon conflicting testimony, it would need a very clear case of error for this Court, without the assistance of any assessors, to reverse such a finding.-The position of the Maplebranch has no bearing on of the appellant's liability, for, even if there were some technical breach of one of the Harbour regulations in bunkering
New Northland without first notifying the Harbour Master, that would have no legal consequence because of the fact that the appellant had a full view of the Maplebranch in ample time to avoid a collision with her. There is no place in this case for the application of the doctrine of contributory negligence to the Maplebranch: if there was any negligence, it was remote and antecedent and was not a proximate cause of the collision.-Also, assuming that there was some fault on the part of the vessel Saguenay Trader, if there was fault as well on the part of the appellant, the respondents not being guilty of any contributory negligence would be entitled as a matter of law to recover the whole of their loss from either of the ships that was in fault; and therefore the vital question before the Court was whether there was absence of negligence on the part of the appellant. Per Rinfret and Crocket JJ. dissenting.-In the case of a collision in broad daylight between a ship under way and one securely moored and an action brought against the moving ship for the recovery of damages resulting therefrom the defendant is not obliged, in order to absolve himself from liability or blame, to prove that the collision could not have been avoided in any possible way, but only to prove that it could not have been avoided by the exercise of ordinary skill and care on his part or on the part of the officers and men, for whose conduct he was responsible, in the particular circumstances in which they were placed. If he clearly proves that the collision was the necessary consequence of the intervention of a third ship in his course and that he and his officers and men were not at fault in the creation of that emergency he fully discharges the onus the law imposes upon him for running into a ship at anchor or securely moored and the defenc- of inevitable accident is thereby established.
The finding of the trial judge that the defendant had not satisfied him that the collision was an inevitable accident was apparently based upon the assumption that the defendant should have foreseen that a EX
SHIPPING-Concluded vessel at or near the basin the defendant ship was entering might move and that it was his duty to have "his ship in hand to meet any eventuality."
this he prescribed a higher standard of of duty for the defendant than the law warrants.
The defendant's duty was, not to foresee and have his ship in hand to meet and guard against any and every eventuality which might possibly happen, but merely to exercise that degree of care and nautical skill, which is generally looked for in a competent seaman, to avoid such risks as might in the proved circumstances reasonably have been anticipated by him. There is no finding or suggestion, in the trial judgment, of any evidence pointing to any possible negligence on the part of the
Dragon other than in following the course it did in approaching the basin of any failure to keep a sufficient lookout before the Saguenay Trader was first observed across her course within the basin and of any lack of nautical skill respecting the orders to stop her engines and reverse. When these orders were given the evidence clearly shews that the Dragon was face to face with an imminent peril.
Unless, therefore, she herself bad been guilty of some negligence which contributed to bring that peril about, her commanding and navigating officers, being then in the agony of an imminent collision, could not properly be held to be accountable for any failure to exercise even ordinary care or nautical skill.
There was no evidence upon which it could properly be found that there was any prior negligence upon their part which contributed to bring about the emergency. In these circumstances the Dragon should have been held blameless. The City of Peking
Case (6 Asp. 396) disc. W. F.
W.
SICKNESS INSURANCE
SOLICITORS ..................
SPECIFIC PERFORMANCE
STATUTES-(Imp.) 1867-B.N.A. Act,
91, 92, 132
40, 363, 384, 461, 560.
2, 4, 7, 8.
2-(Imp.) Merchant Shipping Act,
1894, 67-58 Vict., c. 60, s. 67 (2)....
3-(Imp.) Marine Insurance Act, 6
Edw. VII, c. s. 71.............
STATUTES-Continued
4-R.S.C. [1906], c. 69, e. 24 (Patent 5--R.S.C. [19271, c. 11, 8. 2, as. ff (Bankruptcy Act) ............... 6--R.S.C. [19271, c. 12, 8. 88 (Bank 7-R.S.C. [19271, c. 85, es. 85, 41, 64, 67, 70 (Supreme Court Act)... 124,544 See 2, 3.
8-R.S.C. [19-71, as. 498A, 852, 859, 878 (5), 1025 (Criminal Code). 1....... I, 188, 363 9-(D.) 24-25 Geo. V, c. 53 (Farmers' Creditors Arrangement Act) ...... 384 10-(D.) 24-25 Geo. V, c. 67 (Natural Products Marketing Act) ........ 11-(D.) 25-26 Geo. V, c. 14 (Weekly Rest in Industrial Undertakings Act). ........ See 7.
12-(D.) 25-26 Geo. V, c. 20 (Farmers' Creditors Arrangement Act). ..... 13-(D.)
Geo. V, c. 88 (Employment and Social Insurance Act). ................................. See 6.
14-(D.) 25-26 Geo. V, c. 44 (Minimum Wages Act)................ See 7. 15-(D.) 25-26 Geo. V, c. 59 (Dominion Trade and Industry Act)...... 16-(D.) 25-21 Geo. V, c. 63 (Limitation of Hours of Work Act)...... See 7. 17-(D.) 25-26 Geo. V, c. 64 (Natural Products Marketing Act)......... 18-RS.O. [19141, c. 188, a. 178 (Insurance Act) ..................... 19-R.S.O. [1927], c. 222 (Insurance 20-RS.O. [1927], c. 288, ss. 9, 9 (1), 10 (Assessment Act) ........ 141, 249 See ASSESSMENT 2, 21-(Ont.) 12-18 Geo. V, c. 61 (Insurance Act) ....................
STATUTES-Concluded
22-(Ont.) 14 Geo. V, c. 50 (Insurance
23-(Ont.) 18 Geo. V, c. 85 (Insurance
2-(Ont.) 91 Geo. V, c. 49 (Insurance
25--(Ont.) 98 Geo. V, c. 9, s. 2 (Assessment Act) ..................... .249
26-R.S.Q. £1925], c. 46, s. 19 (Water- Course Act) ........................
27-R.S.Q. (1995], c. 189 (An Act for the Encouragement of Music).... 323
28-R.S.Q. [1261, c. 244 (Husbands' and Parents' Life Insurance Act).. 261
29-R.S.A. [19291, c. 206 (Legal Protession Act) ....................
30-R.S.B.C. (19941, c. 5, s. 114 (Administration Act) ..................
See WILL 1.
(Administration Act Amendment Ac!).
..........
Se 1.
32-(Man.) 14 Geo. V, c. 91 (Income
Tax Act) ........................
33-(Man.) 90 Geo. V, 99 (Income
Tax Act) ........................
(Man.) 98 Geo. V, c. 44 (Special
Income Tax Act) .................
35-R.S.N.S. [19981, c. 199 (Workmcn's Compensation Act) ........
STOCK BROKER
SURETY - Surety company - Warranty - Bond - Pecuniary losses to employer through acts of employee-" Larceny or embezzlement
Whether to be construed in their technical or popular sense-Whether contract a suretyship or insurance-Arts.
1919, 1985 C.C.1
Upon a bond, commonly called a surety bond, subscribed by the appellant in favour of the respondent for pecuniary losses through acts of larceny or embezzlement on the part of respondent's employee, although it was not proven that the latter had
SURETY-Concluded been guilty of these offences construed in the strict sanse of these words, held, Davis J. dissenting, that, as a result of the circumstances of this case and in view of its context, the terms of the bond were sufficient to cover the cases of fraud and dishonesty committed by the appellant's employee. When the insurer bound himself to pay the insured (employer) such "pecuniary losses * * * as (the insured) shall have sustained of money or other personal property * * * by any act or acts of larceny or embezzlement on the part of" (an employee), it is sufficient to find these acts to have been fraudulent or dishonest and such indeed as to amount to embezzlement, if not in the technical sense, at least in the non-technical or popular sense, of the word.
The word " embezzlement"
should not be construed in the same way and with the same specific meaning as it would be construed when used in an indictment under the criminal law.
Davis J. (dissenting)
.
Such class of bond is not in effect, as commonly known, a surety bond: it partakes more of the nature of an insurance policy than of the nature of a suretyship (art. 1929 C.C.). fore, art. 1935 C.C. which enacts that "suretyship * * * cannot be extended beyond the limits within which it is contracted"
has no application to such a bond, which, by its real character, is a commercial contract to which should be given a liberal interpretation. Davis J. dissenting. Per Davis J. (dissenting)-Upon a proper interpretation of the language of the policy, the words "larceny and embezzlement" should be given their technical and strict meaning. The meaning of technical terms in a contract of suretyship ought not to be extended beyond what is the strict meaning of the words. Judgment appealed from (Q.R. 59 K.B. 295) affirmed, Davis J. dissenting.
TAXATION-Direct taxation for provincial purposes - Whether Dominion and provincial statutes conflict.... 560 2-See
TRADE-MARK
WAGES, TAX ON
WATERS AND WATERCOURSES ACT-Constitutional validity.
See 7.
WILL - Administration - Intestacy - Deceased survived by widow without issue-Valuation of estate-Date of- Mining shares-Stock market value- Prima facie evidence-Not conclusive- Concurrent finding-Administration Act
114, as amended by statute of 1925, c. 2, s. 4.] One G. H. Collins died intestate leaving a widow without issue.
chief asset of the estate was 256,017 shares in B.C. Nickel Mines, Limited.
The appellants, nephew and niece of the daceased, claimed that they were entitled to share .n the estate, which they alleged would exceed $20,000, on the ground that at the date of the death the market value of these shares was
29 cents per share. It was* held by the trial judge and affirmed by the appellate court that the net value of the estate should be ascertained as of the date of the deceased's death and that 5J cents per share was the outside price at whicn the shares could have been realized upon at that time and that the widow, now respondent, was entitled to the whole estate. Held, affirming the judgment of the Court of Appeal (50 B.C.
Rep. 122) that the finding of the trial judge as to the value of the shares
(this being an issue of fact), in which the appellate court concurred, ought not to be set aside.
The price at which shares are selling on the stock market might be regarded as prima facie evidence of the vdlue of those shares but such evidence ought not to be accepted as conclusive by the courts.
Unter- WILL--Concluded meyer Estate v. Attorney-General for British Columbia ([1929] S.C.R. 84) disv. COLLINS..... 2- Testamentnry capacity-Insane delusions.] In deciding whether or not a testator at the time of making his will was influenced by insane delusions to which it is shown he had been subject, all the circumstances of the case must be considered.
In the present case it was held (reversing the judgment of the Court of Appeal for Ontario and restoring the judgmcnt of the Surrogate Court Judge at trial), on the evidence, that, at the time of the making of the will, the delusions, which were as to the character and conduct of the testator's wife, were present and affected the testator's mind so that he could not rationally take into consideration the interest of his wife; and therefore he lacked the capacity to make a will and the will should not be admitted to probate.
The law on the subject discussed; Banks v. Goodfellow, L.R. 5 Q.B. 549, Boughton v. Knight, 3 P. & D. 64, and other cases, referred to. WORDS AND PHRASES-"Final judgment" .......................... 2-"
Larceny and embezzlement" ........... 3-"
Loss or damage from any external cause "
.................
4-"
Volenti non fit injuria " ....
Cases cited
- Ohene Moore v. Akesseh Tayee A.C. 72
- Attorney-General for Manitoba v. Attorney- General for Canada A.C. 561
- Solloway v. Johnson Solloway v. Johnson, supra, at 207-8 207-8
- Solloway v. Johnson Solloway v. Johnson, supra, at 207 207
- Compensation Board v. Canadian Pacific Railway A.C. 184
- A.C. 725 A.C. 725
- Rainham Chemical Works Ltd. v. Belvedere Fish Guano Co. Ltd. 2 A.C. 465
- A.C. 358 A.C. 358
- Untermeyer Estate v. Attorney General for British Columbia scr-1929-84
Statutes and regulations cited
-
- section 1025
- Section 14
- section 18
- Section 20
- Sections 21
- 22
- 14
- sections 15
- 38
- sections 39
- section 132
- s. 182
- Section 132
- section 405
- Section 1025
- ss. 5
- 3
- s. 178
- ss. 114
- 134
- 135
- s. 19
- s. 114
-
Unresolved citations
- s. 24
- s. 84 of said Act
- s. 84 of said Assessment Act
- section 2 of the Bankruptcy Act
- section 57 of the Workmen's Compensation Act
- the Constitution
- section 132 of the British North America Act
- section 12 of the Water-Course Act
- s. (2)