Majority
June 1. THE ROYAL BANK OF CANADAI
AND ISLAND AMUSEMENT
COM- RESPONDENTS. PANY LIMITED .................
ON APPEAL FROM THE COURT OF APPEAL FOR BRITISH COLUMBIA the judgment of Mr. Justice Robertson (2) which dismissed the plaintiff's motion for judgment upon admissions made in -the pleadings. In the action the plaintiff claimed a certain sum of money on deposit with the Royal Bank of Canada standing in the name of Island Amusement Company, Limited, as bona vacantia. The courts below, with Mr. Justice Martin dissenting in the Court of Appeal, have disallowed this claim, and in my view they were correct in so doing.
Island Amusement Company, Limited, was incorporated in 1912 under the British Columbia Companies Act then in force. In 1917 the company went into voluntary liquidation and one A. S. Innis was appointed liquidator. October 25th, 1928, the Registrar of Companies struck the company off the Register of Companies in pursuance of section 167 of the Companies Act, R.S.B.C., 1924, chapter 38, for failure on the part of the liquidator to make the returns required by the Act. This action of the Registrar followed the publication in the British Columbia Gazette of the required notice, and in accordance with subsection 4 of section 167 of the Act, the Registrar published notice of the striking of the company off the register, and according to the same subsection, upon the latter publication, the company was " dissolved."
It will be necessary to revert to the provisions of the 1924 Act in order to determine the meaning and effect of this dissolution.
On July 2nd, 1933, Mr. Innis, the liquidator, died. Some time before the making of an order, April 5th, 1935, by the Supreme Court of British Columbia, the Crown made a claim to the moneys on deposit with the Royal Bank of Canada standing in the name of the company. No explanation is forthcoming as to how this deposit had been overlooked by the liquidator 'and those interested in the company. The order referred to was made. on the application of three shareholders of the company pursuant to the terms of the Companies Act then in force, being chapter 11 of the British Columbia Statutes of 1929. That order
BRIrIO is as follows:
Upon the application of Bernard Sigismund Heisterman, Joseph Eilbeck Wilson, and Joseph Charles Bridgman, members of the above-named company, by petition dated the 28th day of March, 1935, and upon hearing the solicitor for the applicants, and upon reading the affidavits hearingISLAND of the said Bernard Sigismund Heisterman and of William Henry Langley, respectively, both filed herein, and it appearing that the Registrar of
Companies does not oppose such application:
It is ordered that the name of the above-named Island Amusement Kerwin J. Company, Limited, be restored to the Register of Companies for a period of one year from the date of its restoration to said Register for the purpose of enabling the company to be wound up voluntarily, and that pursuant to the Companies Act the company shall be deemed to have continued in existence as if its name had never been struck off, without prejudice, however, to the rights of any parties which may have beea acquired prior to the date on which the company is restored to the register.
And it is ordered that the time within which an office copy of this order shall be filed with the Registrar of Companies and his lawful requirements (if any) in respect to the company fulfilled shall be thirty days from the date of this order.
While this order does not so state, we were informed that counsel for the Attorney-General of British Columbia appeared on the motion although we were also informed that the order was issued without having been approved by him.
On June 10th, the Attorney-General, suing on behalf of
His Majesty the King in the right of His Province of
British Columbia, brought action against the Royal Bank of Canada for a declaration that the money on deposit in the bank to the credit of Island Amusement Company,
Limited, was bona vacantia and had been ever since
October 25th, 1928, the date on which the company was struck off the register, and for an order directing the bank to pay to the plaintiff the said money. On June 19th, 1935, on the application of the defendant bank, it was ordered that the company be joined as a party defendant in the
As the company was without a liquidator, no appearance was entered for the added defendant.
November 15th, 1935, the plaintiff's motion for judgment was dismissed and the plaintiff appealed to the Court of
Appeal for British Columbia. The appeal first came before that court on January 24th, 1936, and then again on January 29th, May 14th, June 26th and October 13th.
At some date prior to November 4th, 1936, when judgment was delivered by the Court of Appeal, a new order was made under the Companies Act, 1929, and while this order does not appear in the case, we were informed that it was made in terms similar to the order of April 5th, 1935. The Court of Appeal had found it impossible to determine the real matter in dispute by reason of the fact that Island Amusement Company, Limited, was not represented but by agreement, after a new liquidator had been appointed, the company was represented by counsel before the Court of Appeal, which counsel adopted the argument that had already been advanced on behalf of the defendant bank. The members of the court were unanimous that the appeal should be allowed as against the Royal Bank, and an order Swas made for payment of the money into court by the tbank. As against the Island Amusement Company, Limited, the appeal was dismissed, and it was ordered that the money was the property of that company. Mr. Justice Martin dissented as to the latter provision, being of opinion that the plaintiff was entitled to succeed in its claim. What is the nature of a claim to bona vacantia? This matter was discussed at length by the Court of Appeal in England in In re Sir Thomas Spencer Wells (1), where it was held that the doctrine of bona vacantia extended to leaseholds, and that the equity of redemption in the mortgaged premises there in question passed to the Crown as bona vacantia on the dissolution of the company. It was pointed out in the judgment of Lord Hanworth, the Master of the Rolls, at page 43 (1):
The Master of the Rolls further pointed out that that view was accepted by Lord Thurlow in his judgment in that case and also by the Privy Council in Dyke v. Walford (3). At page 49 (1), Lawrence L.J. quotes Blackstone's definition of " bona vacantia " as " goods in which no one else can claim a property," and refers to the fact that
Romer L.J., at page 55 (1), states:
In my opinion it is established law that the Crown is entitled to all personal property that has no other owner, and on page 56 emphasizes the point
BRuS that the rule at common law is that property must belong to somebody !!and where there is no other owner, not where the owner is unknown, ithat is the distinction, it is the property of the Crown.
The exact point for determination in that case was as to the applicability of the doctrine of bona vacantia to an equity of redemption in mortgaged leasehold premises. The Co.LrD. company had been dissolved and there were no enactments Kerwin J. in question, such as we have in the instant case.
The actual decision in Russian and English Bank and Florence Montefiore Guedalla v. Baring Brothers and Company (2), does not assist on the point that arises for determination here. The head-note of the report correctly sets forth the decision:- A foreign company which after carrying on business in this country has been dissolved in the country of its incorporation may, notwithstanding its dissolution in that country, be wound up as an unregistered company under s. 338, ss. 1 and 2, of the Companies Act, 1929, although the dissolution took place before the passing of that Act; and, with the leave of the Registrar in Companies Winding-up, on the instruction of the liquidator with the approval of the committee of inspection, an action may be brought in the name of the foreign company to recover sums which at the date of its dissolution were due to the company and unpaid.
So held, by Lord Blanesburgh, Lord Atkin and Lord Macmillan, Lord Russell of Killowen and Lord Maugham dissenting.
At the conclusion of the report appears this note:- Order appealed from reversed: Ordered that the stay of proceedings be recalled and that the action be allowed to proceed, and that the respondents do pay to the appellants their costs in the Court of Appeal and in this House.
From this it appears that the only point decided was that the action might be brought in the name of the company. At page 422, Lord Blanesburgh states:- I would only add, by way of a general observation, that any difficulties in this liquidation will, I doubt not, be met as they arise. It will be open to the Court completely to control the liquidator at every step. In the present action the Court will doubtless be vigilant to see that no order possibly affecting either the Attorney-General on behalf the Crown or the Soviet Government is made without due notice to each. Lord Atkin in his speech, at page 426, states that:- On the assumption adopted by the judgments under appeal * * * there is the further difficulty that all that which had been the moveable property of the company has become vested in the Crown as bona vacantia.
(1) [1933] Ch.
[1936] A.C.
And later, on the same page, in discussing the effect of the ATTORNEY- judgments under review, he points out:- What has been the property of the company now belongs to a third person, the Crown, and there is no power to vest the property of a third person in the liquidator;
but, on the assumption Lord Atkin preferred to adopt, BANK the Crown acquired a defeasible title defeated upon the making of a winding-up order.
ISAm
Lord Macmillan, the third member of the House, who Co. ID. concurred in allowing the appeal, refers at page 439 to Kerwin j. sections 294 to 296 of the Act there in question and pointed out that the provisions of section 296 as to the property of a dissolved company becoming bona vacantia were in his view, inapplicable to the Russian and English Bank case (1).
But (he continues), if the assets of the bank on its dissolution become bona vacantia, either at common law or by statute, the Attorney-General on behalf of the Crown was present when the winding-up order was pronounced and in acquiescing in that order he must be taken to have had in view all its consequences, including the consequence that it would involve the effective collection and distribution of the assets which belonged to the company.
I must confess that, with respect, I find it difficult to follow this last statement since the report of the decision on the petition for a winding-up order, In re Russian and English Bank (2), shows, at page 666, that the Crown took the position that "the Court has no power to accede to the present petition," and further, in the present case the Crown has a claim to the goods as bona vacantia if it is able to obtain possession of them.
However, I have referred to these extracts from the speeches of their Lordships who, comprising the majority, allowed the appeal, merely to show that each one took a different view as to the possible claim of the Crown to bona vacantia.
Of the dissenting Judges, Lord Russell of Killowen, at page 434, states:
The property which it owned in this country thereupon became the property of the Crown, and Lord Maugham at page 444:
It would seem that unless the Crown waives its claim to the assets in question (as in the case of In re Hendersons' Nigel Co. (3) there will be no assets available for distribution. In the absence of the Crown I do not wish to be taken as expressing a final opinion on this question, but it seems to me to suggest a further difficulty in the way of the nominal plaintiff.
(1) [1936] A.C. 405.
(2) [1932] 1 Ch. D. 663. (3) (1911) 105 L.T. 370.
Except, therefore, for such assistance as may be gleaned from the expressions of opinion of their Lordships in the Russian and English Bank case (1), it would appear that one must find the solution to the problem in this appeal from a consideration of the extent of the doctrine of bona vacantia and of the sections of the Act itself. The case of The King v. Attorney-General of British Columbia (2), affords no guide since, as remarked by Lord Sumner at page 215:- And accordingly, on the basis of that admission, it was determined that bona vacantia are " royalties " within section 109 of the British North America Act, 1867, and belong to the Province and not to the Dominion. In view of the admission in that case, it is not important to consider how the company referred to in the proceedings had been dissolved.
The applicants for incorporation of Island Amusement
Company, Limited, had filed a memorandum of association with the Registrar of Companies, and under the provisions of the Companies Act in force at that time, the company became incorporated upon the Registrar retaining and registering the memorandum. It has already been mentioned that the company went into voluntary liquidation in 1917 and thereupon it became the duty of the liquidator, from time to time, to make returns to the
Registrar, and it was for failure in this respect that on
October 25th, 1928, the Registrar struck the company off the register.
Section 167 (R.S.B.C., 1924, chapter 38) which is the section under which the Registrar acted, appears in Part
IX of the Act which deals with "Dissolution."
The first division of this Part is headed " Cancellation of Incorporation " and section 166, which is the only section in that division, empowers the Lieutenant-Governor in Council to revoke and cancel the incorporation of a company and declare the company to be dissolved. The second division, headed " Removal from Register of Companies in Default or Defunct," comprises sections 167 to 171 dealing with GBERAL failures to file certain returns. The third division is headed " Winding up," and it is interesting to note that by section 233 provision is made for the dissolution of a company at the expiration of three months from the receipt by the Registrar of Companies of a return showing how the property of the company had been disposed of. We are not concerned with the dissolution provided for by sections 166 Kerwin J. or 233 but with the dissolution under section 167. That section (the underlining is mine) is as follows:
167. (1) Where a company or an extra-provincial company has failed to file any return, notice, or document required to be filed with the Registrar pursuant to this Act or any former Companies Act for two consecutive years after the return, notice, or document should have been so filed, or the Registrar has reasonable cause to believe that a company or extra-provincial company is not carrying on business or in operation, he shall send to the company by post a registered letter notifying it of its default or inquiring whether the company is carrying on business or in operation.
(2) If within one month of sending the letter no reply thereto is received by the Registrar, or the company fails to fulfil the lawful requirements of the Registrar, or notifies the Registrar that it is not carrying on business or in operation, he may, at the expiration of a further fourteen days, publish in the Gazette a notice that at the expiration of two months from the date of that notice the company mentioned therein will, unless cause is shown to the contrary, be struck off the register, and the company will be dissolved, or, in the case of an extra-provincial company, will be deemed to have ceased to carry on business in the province.
(3) In any case where a company or extra-provincial company i9 being wound up, if the Registrar has reasonable cause to believe tha no liquidator is acting or that the affairs of the company are fully wound up, or if the returns required to be made by the liquidator have not been made for a period of three consecutive months, after notice by the Registrar demanding the returns has been sent by post to the registered office of the company, or, in the case of an extra-provincial company, to the attorney of the company under Part VIII, and to the liquidator at his last-known place of business, the Registrar may publish in the Gazette a like notice as is provided in subsection (2).
(4) At the expiration of the time mentioned in the notice, and also in any case where a company has by resolution requested the Registrar to strike it off the register, and has filed with him a statutory declaration of two or more directors proving that the company has no debts or liabilities, the Registrar may, unless cause to the contrary is previously shown, strike the company off the register, and shall publish notice thereof in the Gazette, and on the publication in the Gazette of this notice the company shall be dissolved, or in the case of an extra-provincial company, shall be deemed to have ceased to carry on business in the province; Provided that the liability (if any) of every director, manager, officer, and member of the company shari continue and may be enforced as if the company had not been struck off the register.
At the time the restoring order of April 5th, 1935, was OF secured, the Companies Act in force was chapter 11 of the BarrISH statutes of 1929, sections 199 and 200 of which are as follows (the underlining again being mine):- 199. (1) Where a company or an extra-provincial company or any member or creditor thereof is aggrieved by the company having been struck off the register, the Court, on the application of the company or EMNT member or creditor, may subject to section 200 and if satisfied that the company was at the time of the striking off carrying on business or in operation, or otherwise that it is just that the company be restored to e the register, order the company to be restored to the register, and thereupon the company shall be deemed to have continued in existence, or in the case of an extra-provincial company, to be a company registered under Part VII, as if it had not been struck
Provided that the Court shall not make an order:
(a) In the case of a company formed for the purposes of a club, without the written consent of the Attorney-General; or
(b) In the case of a company struck off the register at its own request without the written consent of the Registrar; or
(c) In the case of a public company incorporated before the first day of July, 1910, without the written consent of the Registrar.
(2) Where the period fixed for the duration of a company expired before the first day of September, 1921, without a grant of perpetual existence having been obtained by the company under any Act in that behalf, an application to restore the company to the register may nevertheless be made under this section, and if the Court makes an order restoring the company, the company shall be deemed to have been granted perpetual existence as from the date when its time of existence expired, but no member of the company shall be liable for anything done between the time when the company ceased to exist and the date of the order, unless he has consented in writing to the application under this section to restore the company.
(3) A company may for .the purposes of its restoration to the register hold such meetings and take such proceedings as may be necessary as if the company had not been dissolved, or in the case of an extra-provincial company as if the company were registered under Part VII, R.S. 1924, c. 38, s. 168.
200. (1) The Court may make an order restoring a company to the register for a limited period or for the purpose of carrying out a particular purpose, and after the expiration of that period or the execution of that purpose the company shall forthwith be struck off the register by the Registrar.
(2) The Court may by an order restoring a company to the register give such directions and make such provisions as seem just for placing the ccmpany and all other persons in the same position as nearly as may be as if the company had not been struck off, but, unless the Court otherwise orders, the order shall be made without prejudice to the rights of parties acquired prior to the date on which the company is restored by the Registrar.
(3) The Court shall not make an order restoring a company to the register, unless notice of the application, together with a copy of the petition and any document filed in support thereof with the Court, has 1-' been sent to the Registrar, and, except where the application is for an order under subsection notice of the application has also been adver- BarriS tised in two issues of the Gazette.
(4) The Court shall by the order restoring a company to the register VE fix a time within which an office copy of the order shall be filed with the BANK Registrar and his lawful requirements (if any) in respect of the company fulfilled, and may extend such time, but no order shall take effect until an office copy is so filed and such lawful requirements are so fulfilled; and when the office copy is so filed and such lawful requirements are fulfilled, Co. ITD.
the Registrar shall issue under his seal of office a certificate that the com- pany is restored to the register.
(5) Where the application is not made within one year from the date on which the company was struck off, and another company or extraprovincial company has been incorporated or registered, as the case may be, under the same or a similar name, and the Registrar objects to the restoration of the company to the register under its own name, the Court shall by the order provide that the company be restored under another name approved by the Registrar in writing and the order shall, subject to subsection (4), take effect in the same manner as if the company had changed its name and the Registrar had issued a certificate thereof in accordance with this Act, but in the case of an extra-provincial company the Court shall not make an order unless the company has changed or undertakes to change its name in accordance with its charter and regulations, but this provision shall not apply to a Dominion company. (6) The expression "lawful requirements " in subsection (4) shall, in addition to any requirement of this Act, be deemed to authorize the Registrar to require a public company incorporated before the first day of July, 1910, to comply with sections 40 or 41 before it carries on business, and to require a company any of whose shares are of a nominal or par value of less than fifty cents for each share to consolidate and divide such shares into shares of a nominal or par value of not !ess than fifty cents for each share. RS. 1924, c. 38, s. 168.
While the order restored the company to the register for a limited period and for a particular purpose, it seems plain that in determining the effect of the order regard must be had to the provisions of section 199 as well as the provisions of section 200.
Firstly, it is only section 199 which refers to those who may apply for an order.
Secondly, by subsection 3 of section 200 the court is not to make an order restoring a company to the register unless notice of the application has been sent to the Registrar and except where the application is for an order under subsection 1 notice of the application has also been advertised in two issues of the Gazette. The part underlined contains the provision for notice of the application appearing in the Gazette but excepts therefrom the case where an application is for an order under subsection 1 of section 200. Thirdly, the provisions of subsections 4 and 5 must refer as well to a general order made under section 199 as to an order under subsection 1 of section 200 when it is borne in mind that the powers of the court to restore companies to the register were given in the Act of 1924 (chapter 38)
in one section, 168.
Reading these sections together, therefore, the effect of the order was, as stated in subsection 1 of section 199, that The enactment in subsection 2 of section 200 that when read in the light of the terms of section 199 that
" the company shall be deemed to have continued in existence" causes no difficulty as I have concluded that the making of the order in 1928, striking the company from the register, never gave the Crown a right to the money as bona vacantia. (It should be added that the insertion in the order restoring the company to the register, of the
" without prejudice " clause adds nothing to the effect of subsection 2 of section 200.)
Such a right arises only when there is no other owner, and how can it be said that the money on deposit was without an owner when the company was not really dead for all purposes? By subsection 1 of section 199, the company itself may apply for the order, and by subsection 3 the company
Added to which is the explicit statement as to the effect of the order.
This view is strengthened by a perusal of the earlier legislation. In 1910 the Companies Act appeared as chapter 7, and section 265 thereof provides that where a company has failed for any period of two years to send or file any return, notice or document required to be made or filed or sent to the Registrar pursuant to this Act, or the Registrar has reasonable cause to believe that such company is not carrying on business or in operation, he shall send an inquiry as to whether such company is carrying on business or in operation and notifying it of its default (if any).
By subsection 2, if within one month no reply to such letter is received, etc., the Registrar may at the expiration of another fourteen days publish in the Gazette and send Barrisia to such company a notice that at the expiration of two months the name of such company will, unless cause is shown to the contrary, be struck off the register and the company will be dissolved. By subsection 3, at the expiration of the time mentioned in such last-mentioned notice, Co. LTD.
the Registrar shall, unless cause to the contrary is pre- Kerwin J. viously shown by such company, strike the name of such company off the register and shall publish notice thereof in the Gazette for one month, and on such last-mentioned publication the company shall be dissolved.
By subsection 4 if any such company or a member or creditor thereof feels aggrieved by the name of such company having been struck off the register in pursuance of this section, the company or member or creditor may before the completion of the last-mentioned publication apply to the Court; and the court may order the name of the company to be restored to the register and thereupon the company shall be deemed to have continued in existence as if the name thereof had never been struck off.
By subsection 6:- (6) Where a company is being wound up, and the Registrar has reasonable cause to believe either that no liquidator is acting or that the affairs of the company are fully wound up and the returns required to be made by the liquidator have not been made for a period of three consecutive months, after notice by the Registrar demanding the returns has been sent by post to the registered address of the company and to the liquidator at his last known place of business, the provisions of this section shall apply in like manner as if the Registrar had not within one month after sending the letter first mentioned received any answer thereto. It seems therefore that subsection 2 and the other subsections would then apply so that in the case of a winding up, as well as other cases where default occurred, the company or member or creditor were obliged to apply to the court, before the completion of the month's notice in the Gazette, giving notice that the name of the company had been struck off the register. That is, under the Act of 1910 the court was empowered to act on an application to restore the company to the register only if such application were made within the time limited.
Then came the revision in the Revised Statutes of 1911, chapter 39, in which section 268 replaced section 265 of the 1910 Act except for an unimportant amendment made in 1911.
In 1913, by chapter 10, section 21, an important change was made. Subsection 4 of section 268 of the 1910 Act was repealed and a new subsection inserted. By it the application to the court could be made at any time but the new subsection provided that if the application was not made within one year any other company might change its name to the same or a similar name, etc. Subsection 3 was left as it was and it is that subsection which provides that the Registrar shall at a certain period strike the name of the company off the register and publish notice thereof in the J. Gazette for one month
Then in 1921, by chapter 10, these provisions were removed from Part IX of the 1911 Act, headed "Winding up," of which Part section 268 was the last, and incorporated in Part IX of the Companies Act, which Part is headed "Dissolution."
Division I is headed "Cancellation of Incorporation "; Division II is headed "Removal from Register of Companies in Default or Defunct," and
Division III is headed "Winding up."
The important provisions are separated and appear in two sections, 167 and 168.
The amendments to the 1921 Act, by 1921 (Second Session), chapter 8, section 4, and by 1922, chapter 11 section
22, are not important. Then came R.S.B.C., 1924, chapter
38. sections 167 and 168, under the first of which the company was on October 25th, 1928, struck from the register.
It will, therefore, be seen that the legislature removed the time limit within which an application might be made to the court to restore the name of the company to the register, but the effect of any order so made was as it always was that
The effect of the removal order of October 25th, 1928, was by the terms of section 167 of the Act then in force (R.S.
B.C., 1924, chapter 38) that the company was struck from the register and " dissolved."
In view of the provisions of section 168, which would apply to any order of the court restoring the company to the register, made while that Act was in operation, and of sections 199 and 200 of the relevant Act of 1929. can it be said that the " dissolution " was an end of the company for all purposes, and particularly for the purpose of the applicant's contention that the money on deposit in the bank ceased to have an owner, so as to permit the operation of the doctrine of bona vacantia? I conclude that the answer must be in the negative and that is sufficient to dispose of the present appeal.
Counsel for the appellant, however, referred to the Escheats Act, R.S.B.C., 1924, chapter 81, as amended. The J. amendment of 1924, chapter 18, section 2, added section 3 (a) to the Act. Subsection 1 of section 3 (a) provides that where a corporation is dissolved, the lands, tenements y and hereditaments, etc., shall for all purposes be deemed to escheat to the Crown in right of the province. By subsection 2 of section 3 (a) the Lieutenant-Governor in Council shall not within one year from the date of the dissolution of the corporation make any grant or other disposition of escheated lands. By subsection 3 of section 3 (a) where a corporation is within one year from its dissolution revived pursuant to any Act, by order of any court, the order shall have effect as if the lands, etc., had not escheated, and subject to the terms of the order such lands, etc., shall ipso facto vest in the corporation. Section 7 of the Escheats Act as amended by section 3 of 1924, chapter 18, reads as follows, the words underlined being those which were inserted by the amendment:- While section 3 (a) deals with escheats, counsel adduced from its provisions the argument that the legislature having therein made definite provision for the case of a company being revived within one year of its dissolution and no similar provision having been made in section 7 referring to personal property to which the Crown is entitled, "by reason of the same having become vested in the Crown as bona vacantia," the Lieutenant-Governor in Council, under the last section, is the only authority to determine the dis- VE position of the money. However, for the reasons already given, I am of opinion that this money never was, under the circumstances, bona vacantia. On the proper constructions of sections 199 and 200 of the 1929 Act the doctrine of bona vacantia does not apply so as to include money of a J. company which, while " dissolved," cannot be taken to be dead for all purposes when, by the very Part of the Act that refers to dissolution, provision is also made for an order of revivor, with the consequence that the company is deemed to have continued in existence as if it had not been struck off.
The appeal should be dismissed.
When the matter first came on for argument before us no one appeared for the
Island Amusement Company, Limited, and the hearing was adjourned to give an opportunity to the appellant to arrange that the company should be represented by counsel so that we might have the benefit of his argument. In view of this, we deem it unnecessary to make any order as to the costs of this appeal.
DAvIs J.-There can be no doubt of the right of the
Crown to the personal property of an incorporated company which has become extinct by complete and effective dissolution and in this case we may well ask ourselves at the outset the question whether upon the proper construction of the statute under which the company was incorporated and under whose provisions its name was stricken from, and subsequently restored to, the register, there was at the time the company was stricken from the register an absolute and complete, or merely a qualified, dissolution because while section 167, which provides the machinery for the Registrar to strike a defaulting company from the register, says "and the company will be dissolved," section 199 enables the company subsequently to apply to the court for an order restoring it to the register and for the purposes of its restoration, to hold such meetings and take I such proceedings as may be necessary as if the company had not been dissolved, and expressly enacts that upon the order being made
Cunnack v. Edwards (1) was the case of an unincorporated society, under the protection of the Friendly Societies Acts, which had lasted for nearly ninety years but had then become extinct. All the members were dead but a remnant of the common fund amounting to some- D'-z thing over £1,200 remained. Chitty J. held that there was a resulting trust in favour of the personal representatives of those who had contributed to the fund but the Court of Appeal (Lord Halsbury L.C., A. L. Smith and Rigby L. JJ.) were all of the opinion that that view could not be maintained because the entire beneficial interest had been exhausted in respect of each contributor and the funds were bona vacantia and belonged to the Crown in that character. That case is easy to understand because all the members of the unincorporated society had been natural persons and they were all dead.
In re Higginson and Dean ex parte The Attorney-General (2) was the case of a corporation created by statute that had proved in the bankruptcy of a trading firm, along with other creditors.
The corporation subsequently was dissolved by an order of the court under the Companies Act. Afterwards it was discovered that the bankrupts had been entitled to certain railways shares and the official receiver recovered the value of the shares and held the proceeds as trustee in the bankruptcy.
Another creditor moved to expunge the proof of the dissolved corporation, claiming that the money to which the corporation had been entitled as a creditor, and which was then in the hands of the official receiver as trustee, was divisible among the still existing creditors. The county court judge made an order expunging the proof. On appeal by the Attorney- General on behalf of the Treasury, it was held by the court (Wright and Darling JJ.) reversing the order, that on the dissolution of the corporation the proceeds of the shares in the hands of the official receiver as trustee in the bankruptcy had passed to the Crown as bona vacantia, and the Crown was entitled to the amount. But the corporation there was treated as one "who has become extinct without successor or representative."
R. S. Wright J. at p. 331 said that in the 17th and 18th centuries corporations aggregate, constituted by charters or letters patent, were numerous and questions frequently occurred as to the effect Tm upon their rights and obligations of dissolution, revival and reincorporation, with or without change of name or constitution.
I cannot find that in any case the rights or obligations of a corporation were held to be affected by a technical dissolution. Nor, on the other Davis J. hand, can I find a case in which such a question has been decided, where the corporation had not been revived, or some provision made by statute or charter with reference to its obligations. In Mayor, &c., of Colchester v. Seaber the revived corporation sued in its own name on a bond given to the dissolved corporation, and succeeded.
Sir Fletcher Norton, for the plaintiff corporation, argued that the goods and chattels of the old corporation, including its choses in action such as the bond, had on its dissolution passed to the Crown, and that the Crown in granting a charter of revival had regranted them to the revived corporation.
Mr. Dunning, on the other side, neither admitted nor denied this, and the Court is not reported to have expressed any opinion on this point, it being held that there was only a qualified dissolution, and no absolute break of continuity.
In The King v. Pasmore (2) Lord Kenyon speaks of a corporation being dissolved " to certain purposes " and in considering very old cases goes on to say that by the new charter the King did not consider the old corporation as dissolved "to all purposes."
Lord Maugham (Maugham J. as he then was) in In re Home and Colonial Insurance Company Limited (3), says that it was settled by the decision in In re Higginson and Dean (4) that "on a company being dissolved in the strict sense " the whole of its assets undistributed at the date of dissolution passed to the Crown as bona vacantia. Lord Macmillan in The Russian and English Bank case (5), said:
Now the purpose of pronouncing a winding-up order is to secure the collection and distribution of the assets of the company to which it relates. The logical inquirer may ask how a company which has ceased to exist can have any assets. But when the Legislature authorized the making of a winding-up order in the case of a dissolved company it must be presumed to have intended such order to be effective and to result in the collection and distribution of assets.
To hold that the Legislature has authorized the collection of the assets of a dissolved company, but (1) (1766) 3 Burr. 1866.
(2) (1789) 3 Term Rep. 199.
(5) [1936]
(3) (1928) 44 Times L.R. 718. (4) (1899) 1 Q.B. 325.
A.C. 405, at 437.
a
1 And again at p. 438:
Section 167 of the British Columbia statute permits the Registrar of Companies to strike off the register any company which has failed to
The language is sufficiently comprehensive to include defaults of the slightest nature-for instance, mere omission to make some annual or other return called for by the Act. Having regard to the provisions of the entire statute, the dissolution referred to in section 167 necessarily excludes in my opinion " a general dissolution," to adopt the term used by Lindley on Companies, 6th ed., p. 821. The company does not " become extinct without successor or representative," to use the words of Wright J. in the Higginson case (1).
The statute plainly negatives a complete dissolution whereby the company becomes extinct because the statute clearly recognizes that subsequent to the dissolution referred to in section 167 the company itself may apply to the court to be restored and for that purpose may hold meetings and take proceedings as if it had not been dissolved.
In that view of the statute there was no such dissolution of the company in this case as to entitle the Crown to acquire ownership of the money on deposit at the bank as against the company and its creditors. But assuming that we are not entitled to regard the dissolution under section 167 as anything but a real and effective dissolution that in itself entitled the Crown to the personal property of the corporation, as property having no other owner, the subsequent order of the court restoring the company to the register enjoins us to treat the company, "in the words of the statute," as if it had "continued in existence" and "had not been struck off." In that view it might be held that the Crown acquired at the time the company was stricken off the register title to the personal property of the company as bona vacantia subject to being defeated upon the subsequent making of a restoration order.
But personally I find it exceedingly difficult, dealing with the matter as one of practical administration, to think of GBoALoF the Crown's right to ownership of goods in the character of bona vacantia in terms of a qualified or defeasible title.
It appears to me to be a contradiction in terms to regard the property of a company as being without an owner and at the same time to recognize the possibility that at some undefined period of time in the future the corporation may be revived and the title of the Crown defeated.
It is argued on behalf of the Crown, however, that on the assumption that the dissolution can be set aside and the Crown's claims defeated, the order of the court in this particular case preserved the Crown's right by the provision in the order that the company should be restored and continued in existence as if its name had never been struck off,
But when one considers the scheme of the statute as a whole and the various methods provided for the final winding up of a company (a) by voluntary winding up, or
(b) by a court order in winding-up proceedings, and the provisions of the statute for the effectual collection of the assets and the distribution of them among the creditors and the final certificate to the Registrar of winding up whereby the company becomes ultimately dissolved (in the strict sense I take it of the word) in contradistinction to the dissolution referred to in section 167 (which precedes the special machinery set up for reviving the company and the carrying out of its liquidation in the ordinary course), it becomes apparent that the without prejudice clause in the statute, and which is found in the order restoring the.
respondent company, is intended to preserve legitimate claims of third parties which have arisen subsequent to the date that the company was stricken off the register because officers and agents of the company may not have heard of the striking of the name of the company from the register and may have gone ahead for some time carrying on the operations of the company in absolute good faith without notice or knowledge that the Registrar had stricken the name of the company off the register. That I believe is a fair interpretation to be put upon the without prejudice ATIORNEY- clause. I cannot bring myself to the view urged upon us G,,
~OF that those words, properly construed, apply to such a claim counI as the claim of the Crown under the rule of bona vacantia. T^E
Lord Blanesburgh in Morris v. Harris (1) in the House of Lords observed the apparent reason for the difference in phraseology and effect between section 223 and subsec- AMusMENT tion 6 of section 242 in the Companies (Consolidation) Co.LrD.
Act, 1908:
Davis J.
A dissolution under see. 242, as I have said, is preceded by no windingup, and the section had to envisage a dissolution which might have taken place without the knowledge of any one concerned in the company. Hence the wide powers given to the Court by subsection 6. Section 223, on the other hand, is confined to cases where the dissolution succeeds the complete winding up of the company's affairs and cannot take effect at all except at the instance or with the knowledge of the liquidator, the company's only executive officer. The Legislature has not seen fit to make provision for validating any intermediate acts done on behalf of such a company so dissolved.
Adapting the language of Lord Blanesburgh to this case, the Legislature has seen fit in section 200 to make provision for validating any intermediate acts done on behalf of a company so dissolved. I cannot read the provision as intended to validate a vesting of all the personal property of the company in the Crown as a vesting which automatically took effect at the moment of the dissolution of the company under the provisions of section 167.
The appeal must be dismissed.
Appeal dismissed. Solicitor for the appellant: H. Alan Maclean.
Solicitors for the respondent The Royal Bank of Canada: Crease & Crease.
Solicitor for the respondent Island Amusement Co. Ltd.: W. H. Langley.
(1) A.C. at
ADMINISTRATION OF ESTATES
APPEAL-Negligence - Motor vehicles
-Collision-Verdict of jury-Appeal- Discussion of principle acted upon in setting aside, on appeal, the verdict of a jury as against the weight of evidence.] This Court dismissed the defendant's appeal from the judgment the Court of Appeal for Ontario affirming (by a majority) the judgment at trial on verdict of a jury in favour of the plaintiff in an action for damages resulting from a collision of motor vehicles. Discussion of the principle on which this Court acts in setting aside the verdict of a jury as against the weight of evidence.
Authorities cited.
The verdict of a jury will not be set aside as against the weight of evidence unless it is so plainly unreasonable and unjust as to satisfy the Court that no jury reviewing.the evidence as a whole and acting judicially could have reached it. v. MLEAN ......
2- Jurisdiction-Status to appeal.] On an appeal to the Appellate Division of the Supreme Court of Alberta from a
District Court judgment dismissing an appeal from an order of a police magistrate under s. 26 of The Domestic Relations Act, 1927 (c. 5) (Alta.), finding that B.K., being able wholly or in part to maintain his wife, M.K., did wilfully neglect to do so and did desert her, and ordering him to pay her the sum of $4 a week, the Appellate Division (by a majority) held ([1936] 3 W.W.R. 699)
that the province was without legislative authority to confer upon the magistrate the powers purported to be granted to him by said s. 26, and set aside the magistrate's order. Before the Appellate Division the Attorney-General for
Alberta intervened to support the constitutionality of the Act. Special leave to the Attorney-General and to M.K.
to appeal to this Court was granted by the Appellate Division; but M.K. failed to perfect her appeal. Held: On an appeal to this Court by M.K., the Attorney-General would, in the ordinary course, have the right to appear in order
APPEAL-Concluded to support the validity of the legislation; but he had no status to appeal to this Court; and, as M.K. had not perfected her appeal (a delay for opportunity to do so having been given by this Court but her application under s. 66 of the Supreme Court Act for leave dismissed by the Appellate Diivision), this Court had not jurisdiction to hear the appeal.
3- Effect of petition in revocation of judgment-Application for return of record to trial court .............. 4-As to disturbing finding of trial judge ............................ 5- Jurisdiction-Exhequer Court Act, s. 82-Judgment on demurrer. See MASSIE & RENwICK V. 265, at ..... 6-Evidence - Damages - Jury's verdict ............................. 7- Jurisdiction ...............
8-Application for re-hearing of appeal or varying of judgment given on appeal by directing reference back to trial court .......................
See 6.
9--Reference to Supreme Court of Canada from Board of Railway Commissioners-Apportionment of cost on application to construct crossing of highway and railway ................. ASSESSMENT
TAXATION Income tax-Direction in will for payment of sum monthly to testator's son, an executor - Construction of will Whether monthly sum a legacy or remuneration as executor and, as such, taxable income-Payment in one year of lump sum covering arrears for previous years-Imposition of tax in respect of the lump sum-Income War Tax Act, R.S.C. 1927, c. 97, ss. 8, 9, 11.] testator by his will named three executors including his son J. Subsequently one of the named executors died.
Later, by codicil, the testator appointed two additional executors. By a subsequent codicil he directed that his son J. be paid $500 a month "in addition to any sum which the courts or other proper authorities may allow him in common with the other executors."
The testator died on December
5, 1923. Nothing was paid to J. in connection with said direction for payment of $500 a month, until March 5, 1927, when a lump sum of $19,500 was paid him to cover the period from the testator's death to that date.
From that date until his death in 1932, J. received the $500 a month.
The Minister of
National Revenue claimed, under the
Income War Tax Act, R.S.C. 1927, c. 97, for income tax in respect of the payments so received by J. Held: (1) On interpretation of the will, the $500 a month directed to be paid to J. was not a legacy, but additional remuneration to him as executor, and as such, was taxable income.
(2) Tte said lump sum of $19,500 was assessable for income tax in respect of 1927, the taxation year in which it was actually received, notwithstanding that $18,000 of that sum represented arrears that had fallen due during preceding years (the result being that, under the Act, a higher percentage of taxation was imposed than if
86,000 had been allocated to each of the preceding three years).
S. 3 (defining "income ") and s. 9 (imposition of tax) of the Act, referred to. S. had no application to the facts. of the case.
Judgment of the Exchequer Court of
Canada (Angers J.), [1936] Ex. C.R.
163, affirmed.
TRuST v. THE MINIsTER
2- Sale of land for taxes-Action to set it aside - Assessment Act, R.S.O.
1927, c. 288-Failure of treasurer of municipality to give proper notice under s. 174, as amended in c. 2,
8. 14-Applicability of 8. 181 to bar right of action.] Land of the plaintiff in a township municipality in Ontario was, on February 28, 1934, sold for taxes which at the time of sale had been in arrear for more than three years. The sale was (as found) openly and fairly conducted. The treasurer of the municipality did not send the notice
(as to fact and date of sale and right to redeem) required by s. 174 of the
Assessment Act, R.S.O. 1927, c. 238, as amended by 23 Geo. V (1933), c. 2, s. 14, but gave notice as required before said amendment.
The land was not redeemed within one year after
ASSESSMENT AND TAXATIONthe sale, and the official deed of the land was delivered to the purchaser. Plaintiff sued to have the tax sale set aside.
See. 181 of said Act provides: " If any part of the taxes for which any land has been sold
* * * had at the time of the sale been in arrear for three years * * * and the land is not redeemed in one year after the sale, such sale, and the official deed to the purchaser (provided the sale was openly and fairly conducted) shall notwithstanding any neglect, omission or error of the municipality or of any agent or officer thereof in respect of imposing or levying the said taxes or in any proceedings subsequent thereto be final and binding * * it being intended by this Act that the owner of land shall be required to pay the taxes thereon within three years after the same are in arrear or redeem the land within one year after the sale thereof; and in default of the taxes being paid or the land being redeemed as aforesaid, the right to bring an action to set aside the said deed or to recover the said land shall be barred." Held: The treasurer's neglect, omission or error in not giving the proper notice was that of an officer of the municipality within the contemplation of the words "agent or officer" in a. 181; and s. 181 applied to bar plaintiff's right to bring an action to set aside the deed or to recover the land.
The sending of the notice required by s. 174 is not a condition precedent to the right of the proper officials to execute the deed. Judgment of the Court of Appeal for Ontario, [19361 OR. 409, reversed. Cummings v. Township of York, 59 Ont. L.R. 350, and Cruise v. Town of Riverside, [19351 O.R. 151, discussed. This Court did not read those decisions as deciding that the treasurer when he gives or omits to give the notice after sale provided by s. 174 is not an officer of the municipality within s. 181, but if they intended to lay down that proposition, this Court could not accept them. There is no element of forfeiture or confiscation in legislation enabling a municipality to realize upon its statutory lien given to secure payment of its taxes. City of Toronto v. Russell, [1908] A.C. 493, at 501; Cartwright v. City of Toronto, 50 Can. S.C.R. 215, at 219, -Sales tax-Excise tax-Special War Revenue Act (R.S.C. 1927, c. 179, and amendments), ss. 86 (1) (a) (" goods produced or manufactured"); 80 (1) (b) and Schedule II, item 3 ("tires manufactured or produced ")
Old tires bought, treated and retreaded, and retreaded tires sold-Liability to said taxes.]
Appellant purchased in bulk lots, by the pound, old and worn-out motor vehicle tires and put them through a process of repair, treatment and retreading, and sold the retreaded tires. Throughout the process the sidewall of the tire was not dismantled or destroyed, the numerical identification of the original tire was not destroyed, the name of the manufacturer of the original tire was still clearly marked upon its sidewalls, upon which appellant also marked a serial number.
Held:
What appellant sold after said process were "goods produced or manufactured"
by appellant within the meaning of s. 86(1)(a) of the Special War Revenue
Act (R.S.C. 1927, c. 179, and amendments) and were "tires manufactured or produced"
by appellant within the meaning of s. 80 and Schedule II (item
3) of said Act; and appellant was liable to pay in respect thereof the sales tax and excise tax imposed by said sections respectively.
TIRE Co. v. THE
KIN .......................
4-Lease-Church assessment-Lessee to pay "all taxes, assessments and rates general and special "-Whether lessee bound to pay church assessment-Parish and Fabrique Act, R.S.Q., 1925, c. 195
-Articles 471, 1021, 2011 C.C.-Articles
609 & seq. C.C.P.................
5--See
ASSOCIATION
ATTORNEY-GENERAL
-Status to appeal ............
AUTOMOBILES
BANKRUPTCY- Distribution - Priorities-Claims by Provincial Treasurer
(for tax under Corporations Tax Act,
RB.O. 1927 c. 29); City of Toronto
(for tusiness tax); Toronto Electric
Commissioners (for supply of electrical energy); Landlord; Custodian and Trustee (costs, fees and expenses); Workmen's Compensation Board; Minister of National Revenue (for sales tax)- Bankruptcy Act, R.S.C., 1927, c.
121, 125, 126, 188; Assessment Act,
R.S.O., 1927,'c. 288, a. 11£; Public Utilities Act, R.S.O. 1927, c. 249, a. 26 (2);
Landlord and enant Act, R.S.O., 1927, c. 190, a. 87; Special War Revenue Act,
BANKRUPTCY-Continued
R.S.C., 1927 c 179-Costs.] In the distribution of the assets of a bankrupt company (consisting of personal property, insufficient to pay in full all claims now in question), which company had carried on business in Toronto, Ontario, the following claimants were, for reasons stated below, held entitled to payment according to the following order priority:
(1) The
Treasurer of the Province of Ontario (for tax under the Corporations Tax Act, RS.O., 1927, c. 29); (2) The City of Toronto (for business tax imposed under the Assessment Act, R.S.O., 1927, c. 238); and The Toronto Electric Commissioners (for supply of electrical energy under the Public Utilities Act R.S.O., 1927, c. 249); (3) The landlord; (4) The custodian and the trustee (for costs, fees and expenses).
The Workmen's Compensation board (for indebtedness Workmen's Compensation Act, R.S.O. 1927 c. 179); (6) The Minister of National Revenue (for sales tax imposed under the Special War Revenue Act, R.S.C. 1927, c. 179). The head priority of the Ontario Provincial Treasurer's claim was held not to be open to attack on this appeal, as it was virtually conceded in the courts below; otherwise, as expressed by this Court, it might have presented difficulty.
(2) The claim of the City of Toronto for business tax took its aforesaid priority by virtue of s. 125 of the Bankruptcy Act and s. 112 of the Ontario Assessment Act. The effect of s. 125 of the Bankruptcy Act is to leave undisturbed the provincial law in respect of the "collection of any taxes, rates or assessments" payable by the debtor; and thus leaves available to the City s. 112 of the Ontario Assessment Act which provides effect-without the amendment in 1922 hereinafter mentioned-that where personal property liable to seizure for taxes has passed into possession of a third person through seizure, attachment, execution, assignment for the benefit of creditors, or liquidation, it shall be sufficient for the tax collector to. give notice of the amount due for taxes and requires payment thereof to him ' in preference and priority to any other and all other fees, charges, liens or claims whatsoever."
Even if the amendment in 1922 (12-13 Geo. V, c. 78, s. 24), extending the wording to include . any authorized trustee in bankruptcy, be deemed ultra vires, the City's reliance on s. 112 is not defeated. its original form without the amendment it is not bankruptcy legislation and is competent provincial legislation, BANKRUPTCY-Continued and (by force of s. 125 of the Bankruptcy Act) covers the present ease.
The amendment in 1922 may be disregarded or severed. Per Duff C.J.: At the date of the adjudication in bankruptcy the bankrupt's goods and chattels were liable to seizure and sale by the City under s. 112 (2) of the Ontario
Assessment Act. S. 112 of that Act
(and disregarding said amendment in
1922) provided procedure by notice in the circumstances therein mentioned and required the amount due for taxes to be paid " in preference and priority,"
etc., (see supra). The City's right under the law of Ontario to seize and sell and to pay the taxes out of the proceeds, and, in proceedings under provincial statutes for the distribution of the debtor's goods for the benefit of creditors, to be paid the amount due for taxes in preference and priority as aforesaid, is a right in the nature of a
"lien or charge"
within the contemplation of the second branch of s. 125 of the Bankruptcy Act, a right. which, by force of s. 125, it is the trustee's duty to recognize.
In this view, the validity of said amendment in 1922 is immaterial.
(3) The Toronto Electrip
Commissioners are merely the statutory agent and manager of one of the City's public utilities, and their charges for supply of electrical energy come within the words " taxes, rates or assessments"
in s. 125 of the Bankruptcy Act, and by the Public Utilities Act, R.S.O., 1927, c. 249. s. 26 (2), may be entered on the tax collector's roll; therefore they stand in the same position as the City.
The rights and priorities of the landlord, upon the bankruptcy of a lessee, are left by s. 126 of the Bankruptcy
Act to be determined by the laws of the province regulating the rights and priorities of the landlord consequent upon an abandonment or voluntary assignment by a lessee for the benefit creditors.
The "preferential lien of the landlord for rent" mentioned and restricted by s. 37 (1) of the Landlord and Tenant Act, R.S.O., 1927, c. 190, is, as created or given effect to therein, a statutory lien as a substitute for distress (Re Fashion Shop Co., 33 Ont:
L.R. 253, Lazier v, Henderson, 29 Ont.
R. 673, and other cases in the Ontario courts, referred to).
This preferential lien is preserved by force of s. 126 of the Bankruptcy Act, and, as s. 121 of that Act is expressly made subject to the provisions of s. 126, the landlord's claim takes precedence over the claims of those creditors given certain priorities by virtue of s. 121, including the custodian and the trustee and the Work- BANKRUPTCY-Concluded men's Compensation Board. But the landlord's claim is subject in priority to that of the City of Toronto (and to that of the Toronto Electric Commissioners), consequence that "would have ensued under the laws of -the province"
(s. 126 of the Bankruptcy Act), on a voluntary assignhave been that the City took priority over the landlord by virtue of s. 112 of the Ontario Assessment Act. (5) The custodian's costs and expenses and the trustee's fees and expenses (all, for the purpose of priority, treated as one claim) and the claim of the Workmen's Compensation Board rank next (in the order given), in accordance with the priorities specifically given by s. of the Bankruptcy Act.
(6) As to the claim of the Minister of National Revenue for sales tax: The Crown in right of the Dominion is, by s. 188 of the Bankruptcy Act, bound by the priorities set up by that Act; and, having no lien or charge to secure the payment of its sales taxes, cannot rank ahead of those creditors or of the trustee who are by that Act secured or given a special priority.
It takes first among ordinary creditors by virtue of the prerogative. Judgment of the Court of Appeal for Ontario, [19361 O.R. 510, varied.
orders granting special leave to appeal to this Court expressly provided that the appellants should not be required to give any security for the costs of their appeals. No security was in fact given, and s. 174 (4) of the Bankruptcy Act provides that in such circumstances an appellant "shall not be awarded costs in the event of his success upon such appeal." S. 174 (4) does not prevent costs being given against such an appellant when unsuccessful.
BOARD
RAILWAY
COMMIS- SIONERS FOR CANADA
BONA VACANTIA-Company-Dissolution-Company funds in bank-Striking off register-Subsequent order for restoration to register-Motion for declaration that moneys property of Crown -Companies Act, R.SJB.C., 1924, c. 88, ss. 167, 168; B.C. statute of 1929, c. ss. 199, 200....................... BROKER-Broker and client-Evidence -Marginal trading transactions counts by mother and two daughters- Verbal agreement by mother with BROKER-Concluded broker to treat all three accounts as one and as her own-Oral evidence- Whether commencement of proof in writing - Whether " commercial matters
Necessary elements to constitute "commencement de preuve par jcrit "-Trial judge's decision on the matter-Article 1233 C.C.-Article
2- Husband and wife
Contract of married woman-Stock exchange transactions-Marital authorization-Nullity by married woman for accounting-Plea alleging enrichissement sans cause and direct loss-Articles 177,
183, 406, 983, 1011 and 1057, C.C..
BUILDING CONTRACT
Action for damages for alleged faulty performance by contractor-Terms of contract
-Interpretation-Nature of work-Nature of alleged defects
Basis and measure of damages recoverable, if any
-Surety company guaranteeing performance by contractor-Alleged alteration of contract without surety's consent-Alleged failure to notify surety of certain matters-Release of surety.)
The defendant B. contracted with plaintiffs to erect for them a church building. It was of a design unique on this continent and of difficult work.
defendant surety company gave its bond to plaintiffs, guaranteeing performance by B. The time for completion under the contract was May 15, 1931.
building was completed by August 13,
1931, on which date the architect's final certificate was issued. There had been, and continued to be, leakages of rain into the building, which plaintiffs alleged were due to faulty workmanship and B.
alleged were due to faulty design.
September 2S, 1931, plaintiffs paid the balance of the contract price (which, by arrangement, was paid direct to unpaid sub-contractors), after obtaining on that date from B. a written undertaking as follows: "I hereby acknowledge having received notice from you and your architect
*
*
* that certain defects have been discovered by your architect, and that there is water leaking into the church
* * * .
cause of which has not been exactly determined.
*
*
*
I hereby acknowledge that the said notice has been given to me in pursuance of the specifications which form part of the contract * * *. I further agree and covenant to repair same according to the directions given by your architect." The undertaking as drawn by plaintiffs had
BUILDING CONTRACT-Continued contained, after said words, "to repair same," the words according to the terms of the contract," but as B. (who denied faulty performance by him) would not sign it in that form latter words were deleted.
Article 16 of the general conditions in the specifications read as follows: "Neither final certificate or payment * * * shall relieve the contractor from responsibility for faulty materials or workmanship, which shall appear within a period of one year from the date of completior of the work, and he shall remedy any defect due thereto and pay for any damage to other work resulting therefrom which shall appear within such period of one year, but beyond that the contractor shall not be liable.
* * * " Plaintiffs sued B. and the surety, claiming for damages resulting from the leakages. At trial they obtained judgment against both defendants.
B.'s appeal from this judgment was dismissed by the Court of Appeal for Ontario, which, however, allowed the surety's appeal and dismissed the action as against it. B. and the plantiiffs appealed to this Court. Held (per the majority of the Court: Duff CJ., Crocket and Davis JJ.): (1) In view of the issue of the architect's final certificate and payment of the full amount of the contract moneys. and there being no suggestion of fraud or mistake, the question of B.'s liability must be confined to his said undertaking of September 28, and said article 16 (being the only relevant reservation in the contract available to plaintiffs, once the work was completed and accepted, the final certificate issued and the contract moneys paid). (2) B.'s obligation under his undertaking of September 28 was limited to obeying directions of the architect; and in the absence of proof that directions were given and not obeyed, B. was not liable under the undertaking.
(3) B.'s responsibility under article 16 was limited to faulty materials or workmanship which did not "(appear " until after the completion and acceptance of the work. Assuming (what plaintiffs contended) that B. had not properly bonded the bricks and tiles with the mortar yet article must be read in the ligit of the necessity for the architect's constant supervision of this particular work (the bricklaying being a job of more than ordinary difficulty) and of the fact that there was no suggestion of bad faith or fraud or concealment on B.'s part; (discussion of an architect's duties in such cases, and of the extent of a contractor's liability in damages if the architect fails to supervise properly and check defects BUILDING CONTRACT-Continued and have them remedied as they occur); and if the defects complained of were such as the architect would observe if he gave the requisite supervision to the work, then it could not fairly be said that the defects were not apparent within the contemplation of article 16 before the completion and acceptance of the work.
The date of the "appearance"
of faulty workmanship or materials (if any)
was important; and the case against B. had not really been dealt with, at trial, from that point of view. Further, if there was liability upon B. under article
16, it rested upon plaintiffs to establish upon a proper measure of damages what were in fact the actual damages;
and the evidence was not such as could establish that. The principle of measururing damages on the basis of the cost of repairing the building as it stood at the date of the trial (February, 1934)
was clearly wrong, quite apart from the very unsatisfactory nature of the evidence adduced even on that basis.
was impossible to say from the evidence whether any liability had been incurred under article
(4) For reasons afore.
said, the judgment against B. should be set aside; with liberty to plaintiffs to proceed to a new trial on the issue arising out of article 16. (5) The action as against the surety should be dismissed.
Acts of the plaintiffs in connection with the contract (anticipatory payments, the arrangement aforesaid for payment direct to sub-contractors owing to B.'s financial difficulties in completing the work, the settlement covered by said undertaking of September 28, etc.) which, under all the special circumstances of the case should have been, but were not, done with the knowledge and consent of the surety, operated to discharge the surety.
(The law as to the effect of alterations in a contract as affecting a surety's liability, discussed, and Holme v. Brunskill, 3 Q.B.D. 495; Calvert v.
London Dock Co., 2 Keen's Rep. 638,
General Steam Navigation Co. v. Rolt,
6 C.B. (N.S.)
550, and other cases, referred to.
Any agreement or transaction between the principals in variation of the contract without the surety's consent, unless it is self-evident that the variation is unsubstantial or necessarily beneficial to the surety, operates to discharge the surety.
The application of this principle with regard to the circumstances of the present case discussed).
(6) After B.'s bid had been accepted, he notified plaintiffs that he had made two substantial omissions in estimating costs for the purpose of it, and requested release or an increased
BUILDING CONTRACT-Continued contract price, which plaintiffs refused. B., faced with threatened forfeiture of deposit and loss of materials on the site of the work, decided to proceed with the work. It was subsequent to this that the surety delivered its bond in the blanket form in which plaintiffs required it. When these facts had come out at the trial (which had then proceeded for a week) counsel for the surety asked leave to plead non-disclosure thereof by plaintiffs to the surety and consequent release of the surety, which request was refused except on terms of adjournment and payment by the surety in any event of all costs of the trial up to that time, which latter term' was declined. The majority of this Court expressed the opinion that under all the circumstances the surety should have been allowed to amend its pleadings unfettered by such an onerous term as to costs; and that, had judgment not been given for dismissal, on other grounds, of the action against it, a new trial would have been necessary to determine the issue sought to be raised. The questions involved in such an issue were to some extent discussed. Rinfret J. (dissenting in part): The trial judge's finding that leakages were attributable to faulty workmanship of B. which did not "appear" until within one year after the completion of the work, within the contemplation of article 16, was fully warranted on the evidence. But in any case the undertaking of September 28, 1931, created a new and independent obligation on B., which was not qualified by restrictions in article 16, to repair the defects; and directions within the meaning of said undertaking were given by the architect. The judgment against B. should be affirmed. But said undertaking of September 28 was a material alteration in the contract, and the surety was thereby released of its liability under its bond, and the judgment of the Court of Appeal dismissing the action as against it should be affirmed.
Per Kerwin J. (dissenting)
: Upon the evidence, the trial judge's findings against B. should not be interfered with. The leaks arose through B.'s failure to comply with the specifications.
The conditions in the building shortly before the trial of the action, shewn in evidence, were, upon the evidence, substantially unchanged from those existing within a year after completion of the building; and the defects had arisen within that year. There was ample justification for the amount fixed as damages by the trial judge. Directions were given to B. to repair, within the meaning of the undertaking BUILDING CONTRACT-Concluded of September 28. The judgment against
B. should be affirmed.
As to the surety's liability:-Having regard to article
16 (aforesaid), and to other terms in the contract which (inter alia) required the work to be done in accordance with the plans, drawings, etc., and such "instructions as may from time to time be given" by the architect, the undertaking of September 28 did not subject B.
to anything more onerous than had been required by the contract; it did not effect any change in the contract; nor, consequently, any release of the surety.
As to B.'s alleged mistake in omitting to estimate certain costs for the purpose of his bid (even assuming the point was now open to the surety): there was no obligation on plaintiffs to notify the surety thereof; there was no charge of fraud or misrepresentation nor any suggestion that it occurred to plaintiffs or the architect to withhold the information as something of which the surety should be apprised; the error was not such a circumstance the mere non-disclosure of which would release the surety. As to certain matters which occurred during the work-including B.'s financial difficulties and the arrangement for making payment to sub-contractors-they did not give rise to any obligation on plaintiffs to notify the surety thereof.
There was no alteration in the terms of the contract; nor was the surety prejudiced.
The judgment at trial against the surety should be restored.
v. DOE
CARRIERS - Shipping - Damage to goods-Peril of the sea-Negligence- Fault of carrier or of his agent or servant-Burden of proof-Barbados Carriage of Goods by Sea Act, 1926-Clause q rule 2, article 8, of the schedule of the Act .........................
2- Negligence-Street railways-Passenger injured by a passing automobile after alighting from street-car which, to allow her to alight, had been stopped suddenly at a place other than a usual stopping place-Liability of street railway company-Evidence-Findings of
CHARITABLE ASSOCIATIONS
See SocIETIES 1.
CHARITIES
See WILL 1.
CHURCH ASSESSMENT
CIVIL CODE-Arts. 177, 183 (Respective rights and duties of husband and wife) ........................... 2- Art. 406 (Ownership) ....... 3-Art.
471 (Obligations of usufructuary) ........................
4-Arts. 818, 819, 820 (Gifts by contract of marriage) ............... 5- Art. 983 (Obligations) ...... 6- Art. 1011 (Lesion) .......... 7-Arts. 1018, 1018 (Interpretation of contracts) ....................... 8-Art.
1021 (Interpretation of contracts) .......................
9-Art.
1029 (Contract with regard to third persons) ................... 10-Art. 1057 (Obligations which result from the operation of law solely). .... 11-Arts. 1106, 1107 (Joint and several obligations) .................. 12-Art. (1) (7) (Testimony). 86 13-Arts. 1292 et seq. (Of the administration of the community and of the effect of the acts of either consort, in relation to the conjugal association). ..... ................... 14- Art. 2011 (Privileges upon immoveables)....................... 15-Arts. 2468, 2472, 2474, 2476, 2480 (Nature and form of insurance contract) .......................
CODE OF CIVIL PROCEDURE-Art. 816 (Examination of witnesses) .... 2-Art.
488 (Verdict)............ 3- Art. 501 (Verdict as against weight of evidence)...................... 4- Art. 502 (New trial) .........
5- Art. 505 (New trial) ........
Arts. et
(Decision of questions of law upon facts admitted).
..................
7-Art.
(Habeas corpus) ....
8-Art.
1168 (Opposition to judgm ent) ............................
9-Arts. 1178, 1182 (Petition in revocation of judgment) .............
COMBINING
COMPANY-Winding-up-Resolution of directors making a call on shareholders and declaring frofeiture of shares for non-payment-Whether illegal, irregular
-Fiduciary obligations of directors- Breach of trust-Good faith-Collusive transaction between directors and shareholders-Forfeiture to be in the interest of the company and not for the benefit of the shareholders-Quebec Companies Act R.S.Q.
1925, c. 228, ss. 58,
59, 60.]
tJpon a petition by the appellant, as liquidator of the Cr~dit Canadien Incorpor6, alleging the illegality and irregularity of certain resolutions of its directors making a call on the shareholders and later declaring the forfeiture of these shares when the call was not paid, and further asking for a declaration that the directors had thus acted ultra vires and against the interests of the company, Held that, upon the evidence, no adequate ground was disclosed for holding the call was not a valid call of which payment could have been enforced, that the charge has not been established by evidence that, in exercising the power of forfeiture, the directors had been availing themselves of that power for some purpose for which it could not be legitimately employed, and that, under the circumstances of this case, it was impossible to conclude that the forfeiture was not in the interest of the company.
Duff C.J. and Davis and Hudson JJ.- The directors of a company, in putting into effect the discretionary authority to declare the forfeiture of shares, are the obligations which govern persons acting in a fiduciary capacity.- COMPANY-Continued
An act which is ultra vires of the company when done by its directors is void ipso facto. As regards acts within the scope of the company's objects and, therefore, intra vires of the company and belonging to a class of acts within the powers of the directors, the latter, by reason of their fiduciary obligations in the exercise of such powers, are bound.to act with the utmost good faith for the benefit of the company.-Acts of the directors within the scope of the powers of the company, although impeachable by the company as a breach of trust, are binding on the company if done with strangers acting in good faith and without knowledge or notice of the breach of trust.-Where the transaction is one between a company represented by the directors and a shareholder, then somewhat different considerations may apply.
Where the validity of a forfeiture of shares is called in question in a winding-up on the ground that the act of the directors in professing to forfeit the shares is not binding upon the company, there is an important distinction which ought not to be overlooked.
If the proceeding against the shareholder, i.e., a proceeding which in form is one of the kind contemplated by the authority to declare a forfeiture, is in reality in that respect fictitious, aliud simulatum aliud actum, if there has been no call the payment of which could have been enforced, and if in truth the real transaction was a collusive transaction between the directors and a shareholder or group of shareholders to enable a shareholder to surrender his shares and withdraw from the company, then, as between the company and the shareholder who is implicated in the breach of trust, the transaction cannot stand and the shareholder in a winding-up proceeding will properly be treated as a contributory.-The present case is not in any way analogous to such cases and there in it nothing fictitious about the forfeiture of the shares by the resolution of the directors. Held, also, that the rule, laid down in Spackman v. Evans (L.R. 3 H.L. 171) and approved by this Court in McArthur v. Common (29 Can. S.C.R. 239), that a forfeiture can be declared only when it is in the interests of the company and not when it is for the benefit of the shareholders whose shares are declared to be forfeited, is binding and, where the circumstances warrant it, should be followed; but the circumstances of this case take it out of the operation of that rule.
Bioi
.......................
COMPANY-Concluded
2- Bona vacantia - Dissolution - Company funds in bank-Striking off register-Subsequent order for restoration to register-Motion for declaration that moneys property of Crown-Companies Act, R.S.B.C 1924, c. 88, ss. 167,
168; B.C. statute of 1929, c. 11, ss. 199,
200.]
On the proper constructions of sections 199 and 200 of the British
Columbia Companies Act of 1929 (c.
11), the doctrine of bona vacantia does not apply so as to include moneys of an incorporated company which had its name stricken from the register under the provisions of the Companies Act of
1924 (ss. 167, 168 of c. 38) and restored under the provisions of the 1929 Act- Such company, while "dissolved," cannot be considered to be dead for all purposes when, inter alia, by the very part of the Act that refers to dissolution (s. 199 (1) of the Act of 1929), provision is also made enabling the company to apply to the court for an order of revivor, with the express enactment that, upon the order being made,
"the company shall be deemed to have continued in existence
* *
* as if had not been struck off."
AMUsE- 3--Capacity of Companies, Act reapecting, Manitoba statute, 1917, c. 12.
..................................
See SociETIEs 1.
CONSPIRACY
Sep 1; 3.
CONSTITUTIONAL LAW-Land taken by Dominion for harbour purposes- Public domain--"Public harbour"-Interpretation - Petition right-Trespass-Land not property of
Dominion-Damages-Determination of amount - Expropriation proceedings - B.N.A. Act, 1867, section 108, and third schedule-Exchequer Court Act, R.S.C.,
1927, c. 84, 19, 19 (b), 81-Railway
Act, R.S.C., 1927, c. 170, as. 164, 166,
215, 219, 220, 221, 222, 282-Chicoutimi
Harbour Commissioners' Act, 1926, 16- 17 Geo. V, c. 6.]
The suppliant in his petition of right alleging to be the owner by letters patent from the province of Quebec of a certain water lot in the township of Chicoutimi and that the entered into possession thereof, save for a small strip, for public purposes, claimed compensation for the land taken and for the damages suffered by such taking, to wit: $43,125.
CONSTITUTIONAL LAW--Continued The respondent admitted the erection of a wharf on the property in question; but alleged that the suppliant was not the owner thereof and that by virtue of section 108 of the British North America Act and its third schedule it formed part of the public domain of Canada in right of the Dominion, being, having been and forming part of a public harbour of -the port of Chicoutimi in and before 1867. The province of Quebec intervened to support the letters patent issued by it to the suppliant, claiming that at such time it formed part of the public domain of the province. The Exchequer Court of Canada held that, from the evidence, the port of Chicoutimi was a public harbour in 1867 and previous thereto and it dismissed the suppliant's action and the intervention. Held, reversing the judgment of the Exchequer Court of Canada ([1936]
Ex. C. 127), that, upon the evidence, there was no ground for judicially finding that the beach lot owned by the suppliant appellant was at the time of Confederation part of "a public harbour" within the contemplation of that term in the British North America
Act.- Without considering whether there was any "public" harbour within the meaning to be attributed to that term in the above Act, it is held that the beach lot in question became vested at Confederation in the province of Quebec, that the province had the right to convey it to the suppliant appellant as it did in 1897 and that therefore the latter is entitled to compensation in respect of the taking of the beach lot by the Dominion for the purpose of its public works.-Without attempting to define strictly what sort of locality by its natural formation or constructed works may properly be regarded as susceptible for use as a potential shelter for ships, it is obvious that thern must be some physical characteristic distinguishing the location of a harbour from a place used merely for purposes of navigation; the mere fact that there along an open river cannot in itself constitute great stretches of the river a harbour. The provisions of the British North America Act dealing with harbours cannot have intended to include within the expression "harbour" every little indentation or bay along the shores of all inland lakes and rivers as well as along the sea coast and the shores of the Great Lakes, where private owners had erected a wharf to which ships came to load or unload goods for commercial purposes.
Held, also, on the question of damages or compensa- CONSTITUTIONAL LAW-Concluded tion to be awarded to the suppliant appellant that although in view of this
Court's decision on the first branch of the case the suppliant's action in the
Exchequer Court of Canada on the petition of right should be treated, if a technical rule is applied, as an action in trespass and the damages assessed as in any other action in trespass, nevertheless the lands were virtually expropriated; and the Court is of the opinion that the proper course is to proceed to determine the amount of compensation to which the suppliant would have been entitled as if expropriation proceedings had been taken.
The suppliant is entitled to recover besides the value of the lands, substantial damages for the severance of his property and the subsequent interference with his right of access to the river; but in order to arrive at a fair amount oi damages, the
Court should have some evidence of what was the fair value to the suppliant of his estate at the time of the commencement of the construction of the public work complained of and of what is the fair value of the estate he has now after such construction.
If the
Chicoutimi Harbour Commission commence within one month expropriation proceedings, the compensation to the suppliant should be fixed in accordance with the provisions of the Railway Act,
1919, made applicable mutatis mutandis by the provisions of the Chicoutimi
Harbour Commissioners' Act; otherwise, a new trial should be held in the
Exchequer Court of Canada limited to the ascertainment of the damages or
THE KINo.
2- Application of fines payable to the Province or to the
Dominion--Cr. Code, s. 1036-Proceeding instituted at the instance of a
Department of the Government of
Canada in which that Government
"bears the cost of prosecution" (exception (b) in s. 1086 (1), Cr. Code).
..
R.
............
3-See
CONTRACT-Contract under seal--Action at law thereon against a person not a party to the contract.] No person can sue or be sued in an action at law upon a contract under seal unless he is a party to the contract. Authorities reviewed. Plaintiff sued K. and D.
for damages for alleged breach of a contract to purchase goods, which contract was made under seal between plaintiff and K.
Plaintiff alleged that subse- CONTRACT-Concluded quent to the contract K. introduced D. as the principal on whose behalf K. had entered into it, and that D. confirmed that representation.
The trial judge dismissed the action (on ground of illegality of the contract) and an appeal from his judgment was dismissed by the Court of Appeal for Ontario.
K. had not been represented at trial or on the hearing of the appeal, and plaintiff's notice of appeal to this Court was directed only to the defendant D. and asked for judgment against him. At the hearing of the appeal before it this Court pointed out that the contract was under seal and D. was not a party to it, and referred to the principle first above stated. Held: The action, being solely one at law to recover damages for alleged breach of contract seal, was not maintainable against D. on the principle first above stated. The Court could not disregard the said point of law, though D. had not raised it at any time in the proceedings. It appeared upon the very document sued upon and put in at the trial. Nor could the Court entertain the argument that K. was merely an agent for D. and exceeded his authority in attaching a seal to the contract and in making the contract to purchase himself for his own benefit-that was not the basis of the action.
Nor could plaintiff succeed upon an alternative contention that D. subsequently ratified the contract and might accordingly be sued upon it. Nor was there any foundation for the application of the doctrine of novation. Nor was this a case where D. had himself received the benefit under the contract and was bound in equity to pay for the same. MARv. .............. 2; COPYRIGHT-Fire insurance plans- Conversion - Injunction - Defence - Conspiracy - Combine - Relevancy - Right of action barred-Sections 21 and 24 of the Copyright Act, R.S.C., 1927, c. 82-Section 82 of the Exchequer Court Act.] action is one for infringement and conversion of copyright which the plaintiffs claim in fire insurance plans, and also for an injunction, damages and delivery up of infringing reproductions. The defendant pleaded inter alia that the plaintiffs combined and conspired together to prevent defendant from obtaining copies of the plans in question. Plaintiffs applied to have struck out those paragraphs of the statement of COPYRIGHT-Continued defence relating to the alleged combine and conspiracy; and the
Exchequer
Court of Canada granted such application. The defendant also alleged that the plaintiffs right of action, as to most of the works upon which the action was brought had been barred by section 24 of the dopyright Act and the Exchequer
Court of Canada held that such section was applicable to claims made under section 21 of the Act for the recovery of possession or in respect of conversion. Held, reversing the first part of the judgment of the Exchequer Court of Canada ([1937]
Ex. C.R. 15), that this Court should not be called upon, on the pleadings as they stand, to say whether or not the allegations in the above-mentioned paragraphs would be sufficient to justify the court in withholding an injunction and that the matter in dispute should be referred back to trial.
The question whether a court will grant an injunction or not is a question of discretion, but limited;
every threatened violation of a proprietary right which, if it were committed, would entitle the party injured to an action at law, entitles him, prima facie, to an injunction, and the onus is upon the defendant of rebutting such presumption by showing that damages will be adequate compensation to the plaintiff for the wrong done him or that on some other ground he is not entitled to equitable relief. In considering whether such grounds exist for refusing such relief in this case, the trial court ought to have regard to the conduct of the plaintiffs and especially to the fact, if such fact were established, that the application for the injunction was merely one step in the prosecution of a scheme in which the plaintiffs had combined to further some illegal object injurious to the defendant.
Held, also, affirming the second part of the judgment of the Exchequer Court of Canada, that, without expressing any opinion on the question whether section 24 of the Copyright Act would in all cases affect a claim under section inasmuch as the language of section 24 cannot be said to be capable of only one necessarily exclusive meaning precluding its application to claims under section 21 of the character hereinafter mentioned, there is reasonable ground for deciding that such application was within the probable intention of Parliament. The words "in respect of infringement of copyright" in section 24 are capable of a construction by which the phrase would extend to a claim under section 21, as in the present case, where the infringing copy with which
COPYRIGHT-Concluded the claim is concerned is a copy the making and importing of which constituted infringement in the pertinent sense.
& SuRvEY
......
COSTS
Costs upon appeal Bankruptcy Act s. 174 (4)............. Aee
2--" Cost of prosecution"--Application of fines-Whether payable to the Province or to the Dominion-Cr. Code, s. 1086-Proceeding instituted at the instance of a Department of the Government of Canada in which that Government " bears the cost of prosecution" (exception (b) in s. 1086 (1), Cr. Code) ........... CRIMINAL LAW-Carnal knowledge of girl under age of 14 years (s. 801 (1), Cr. Code)-Corroboration. 2-Application of fines-Whether payable to the Province or to the Dominion-Cr. Code, 8. 1036-Proceeding instituted at the instance of a Department of the Government of Canada in which that Government "bears the cost of prosecution" (exception (b) in s. 1036 (1), Cr. Code).] The question was whether certain fines in question should be paid to the Treasurer of the Province of Nova Scotia or to the Minister of Finance for Canada. An information was laid at Halifax, Nova Scotia, at the instance of the Department of National Revenue of the Government of Canada, against certain persons as having conspired to commit specified indictable offences against the Excise Act and the Customs Act, and contrary to s. 573 of the Criminal Code. The accused were, on a preliminary inquiry at Halifax, committed for trial, were subsequently admitted to bail, later they surrendered to the gaol keeper, they were granted writs of habeas corpus and recipias corpus to bring them before the stipendiary magistrate in and for the City of Halifax, before whom they were brought and charged, they consented to be tried by him under Part XVI of the Criminal Code, pleaded guilty, were convicted and adjudged to be imprisoned and to pay the fines now in question, aggregating $16,000, which were paid to the treasurer of the City of Halifax.
Counsel for the informant, an instructions of the Department of National Revenue, appeared at the preliminary inquiry, on the applications for bail and for writs of habeas CRIMINAL LAW-Continued corpus, etc., and at the trial.
prosecuting officer for the County of
Halifax, or his assistant, appeared on behalf of the Attorney-General of Nova
Scotia on the same proceedings except the preliminary inquiry. The Province or the Municipality of the County of
Halifax made no disbursements.
Department of National Revenue paid direct to the parties concerned the fees of informant's counsel, costs of stenographer's notes, and other costs, and fees of witnesses for the prosecution and fees and allowances of the justice of the peace on the preliminary inquiry.
Witnesses' fees or the justice's fees and allowances were never ceitified to be correct nor produced or presented to the treasurer of the municipality in manner prescribed under The Costs and
Fees Act, R.S.N.S., 1923, c. 252 (which provides for payment thereof) and no claim for fees by witnesses or the justice was made to the treasurer of the municipality.
The Dominion Government did not pay for the services of the said prosecuting officer (or his assistant) or of the stipendiary magistrate
(who each receive remuneration nually from the Government of Nova
Scotia or the municipality).
Held: The fines in question were imposed in a proceeding instituted at the instance of the Government of Canada or of a department thereof, in which that Government bore the cost of prosecution, within the meaning of exception (b) in s. 1036 (1) of the Criminal Code, and were payable to the Minister of Finance for Canada. Judgment of the Supreme
Court of Nova Scotia in banco, 11
M.P.R. 335. affirmed on above ground.
Per Duff C.J., Rinfret, Kerwin
Hudson JJ.: The words "in which that
Government bears the cost of prosecution" in said exception
(b)
in s.
1036 (1) do not relate to what may take place in a particular prosecution;
they connote something broader than the mere casual occurrence of the payment of the costs in an individual case;
they imply a consistent course of action sanctioned by law or by custom
The existence of The Costs and Fees
Act of Nova Scotia cannot affect the construction nor preclude the true effect of s. 1036 of the Criminal Code, which is essentially federal legislation.
custom or practice, the Government of
Canada had full right to institute the proceedings and to conduct the prosecution in question; and the costs thereof were such as would usually and properly be borne by the Dominion of
Canada; and, moreover, they in fact were so borne. The provinces establish
CRIMINAL LAW-Continued and maintain the ordinary criminal courts and, for this reason in itself, the "cost of prosecution" referred tc in said exception
(b)
must be of a character apart from the ordinary costs of maintenance of those courts. said words "cost of prosecution" which the "Government bears" are necessarily referable to cost specially incurred in connection with the proceeding it has instituted. The fact that the trial was presided over by a stipendiary magistrade who is not paid by the Government of Canada, or the participation by the prosecuting officer, or his assistant, who are not paid by that Government, does not affect the situation. When acting in the premises, said magistrate and prosecuting officer (who receive their remuneration annually as aforesaid) are doing so merely as part of their regular duties; they were not paid specifically in connection with the prosecution in question.
Per Davis J.: Without attempting to define .the full scope and extent of the statutory condition that the Government of Canada "bears the cost of prosecution," it is plain that in this case that Government did bear such cost within the meaning of that condition; and this is sufficient for the purpose of deciding the present question. Quaere, as to the jurisdiction of this Court to entertain the appeal (on noting the language of the relevant provisions-ss. 1 and 6 of c. 226, R.S.N.S., 1923, under which the Reference was made to the Supreme Court of Nova Scotia, and s. 43 of the Supreme Court Act, R.S.C., 1927, c. 35). S.
1036, CeIMiNAL CANADA.............. 3-Evidence-Charge of conspiracy to distribute drug-Evidence of accomplice-Corroboration.] The appeal was from the affirmance by the Court of Appeal of British Columbia of appellant's conviction for conspiracy to distribute morphine contrary to the Opium and Narcotic Drug Act, 1929, (Dom.) There was a dissent in the Court of Appeal on the ground of lack of corroborative and misdirection with regard thereto.
against appellant was almost wholly that of one F., named as a co-conspirator of appellant but who had previously been tried and convicted.
F.'s story set out conversations and dealings with appellant as to the sale of morphine and in particular an occasion when he had met him at a certain house and went with him out of a room there CRIMINAL LAW-Continued where others were gathered, and had a private conversation with im as to delivery of morphine.
A police agent gave evidence that he was present on said occasion, that the place was one where dealings in morphine were being carried on by some of those involved in the conspiracy, and that he had seen
F. and appellant leave the room together.
Appellant in evidence admitted being present at the place at the time, but denied that he had any private conversation with F. In the course of charging the jury the trial judge stated that, while it is open to a jury to convict upon the uncorroborated testimony of an accomplice, it is dangerous to do so; that "corroboration is such evidence as confirms not only the circumstances of the crime as related by the accomplice, but also the identity of the prisoner; by that I do not mean that it will not be corroboration unless every circumstance is confirmed; it will be corroboration if there is confirmation as to a material circumstance of the crime and of the identity of the prisoner; evidence to amount to corroboration need not be direct evidence that the accused committed the crime, it may amount to corroboration if it is confirmation a material circumstance and it connects the accused with the crime."
Referring to the police agent's evidence, he said it "amounts to only this: it is a confirmation, if you accept it, of F.'s evidence as to the conspiracy on the part of the others outside of [accused]; he does appear to corroborate him on substantial points";
and that "all that amounts to is this:
it is proof of a fact, if you accept what
F. tells you, that it did occur; if you accept that, then you have [the police agent's] corroboration of nothing more or less than that the conference which
F. says occurred, did occur; that is all it corroborates, and the inference there is for you, * * *." He further stated:
" If you think that corroboration is necessary then it is for you to say whether you have corroboration which falls within 'the definition I have given you." Held (Kerwin J. dissenting): On consideration of the summing up as a whole and in view of all the circumstances, there was no material misdireetion or non-direction on the point of corroboration.
The appeal should be dismissed. Per Kerwin (dissenting): As the police agent's testimony indicated merely an opportunity on accused's part to discuss with F. the delivery of morphine, the trial judge was wrong in telling the jury that the police agent's evidence, if believed, was corroboration.
CRIMINAL LAW-Concluded
There were no circumstances surrounding the particular episode that would tend to implicate accused in the commission of the crime charged (the house in question being a boot-legging establishment where those desiring beer, etc., might be served).
Opportunity by itself is not sufficient (Burbury v. Jackson, [19171 1 K.B. 16).
criticized as improper the fact that, while F. had pleaded guilty to a charge of conspiracy under the same Act, he had not been sentenced at the time he gave evidence at appellant's trial. KING................ CROWN-Land taken by Dominion for harbour purposes - Public domain - " Public harbour "-Interpret ation-Evidence
Petition of right
Trespass Land not property of Dominion-Damages-Determination of amount-Expropriation proceedings
B.N.A. Act, 1867 section 108, and third schedule- Exchequer Court Act, R.S.C 84, ss. 19, (b), - Railway Act, R.S.C., 1927, c. 170, ss. 164, 166, 215, 219, 220, 221, 222, 282-Chicoutimi Harbour Commissioners' Act, 1926, 16-17 Geo. V, c. 6........................ DAMAGES-Patent-Damages for infringement-Matters and items of damages-Sale of product of infringing machine-Invention for manufacturing stringers to be used in fasteners-Loss caused from sales of completed articles (fasteners) made from stringers made on infringing machines - Damages for loss of profit on sales lost-Damages by way of royalty-Damages for loss from reduction in sale price-Pleadings- Raising question of right under s. 47 (6) of Patent Act (R.S.C. 1927, c. 150) on assessment of damages after judgment, when facts relied on not pleaded and proved in the action for infringement. ........ 2- Land taken by Crown (Dom.) for public work-Erection of wharf-Crown claiming right to the land as being part of a "public harbour" under B.N.A. Act, s. 108 and Srd schedule--Claim against Crown for compensation and damages- Basis and amount of damages..... 51 3- Seduction-Action by the woman alleged to have been seduced-The Seduction Act, R.S.A.,
102, s. 5-Construction-Cause of action- Nature of damage-Basis of damages- DAMAGES-Concluded
Sufficiency of evidence of damage to support action-Verdict of jury.. 318
4--See
1;
(FiRE)
DEPOSIT RECEIPT
See SuccEssIoN DUTY 1.
DRUG-Conspiracy to distribute
See 3.
EVIDENCE-Broker and client-Marginal trading transactions-Accounts by mother and two daughters - Verbal agreement by mother with broker to treat all three accounts as one and as her own - Oral evidence commencement of proof in writing - Whether "commercial matters"-Necessary elements to constitute "commencement de preuve par 6crit" - Trial judge's decision on the matter- Article C.C.-Article 316 C.C.P.]
The appellants were stock brokers in
Montreal and had a branch in the city of Sherbrooke, where the respondent resided.
the month of August,
1926, the latter entered upon the operation of a marginal trading account at that branch.
About a year later, two daughters of the respondent opened similar accounts of their own at the same branch office.
These became very large and most active accounts until came the break in the stock market in October, 1929.
The accounts went under the margin and even under the market, and the respondent and 'her daughters were continually called upon to supply funds or securities to support their accounts.
The respondent, after her daughters had given all they had for that purpose, was able to support them for a certain period.
Finally, having tried and failed to raise funds to provide for further margins required by the branch manager, the respondent expressed to the latter the desire to have an interview with one of the appellants, Mr. Johnston, in Montreal.
The interview took place; and, after a long discussion about the exact position of all the accounts, the respondent, according to Mr. Johnston's version, authorized latter verbally to treat all three accounts as one, and to close them, agreeing to hold herself responsible for them and that any balance due on the other accounts should be charged against her account.
brought against the appellants asking, inter alia, that the latter be condemned to pay her the sum of $58,793.98, being the total of two debit balances in the accounts of one of her daughters charged
EVIDENCE-Continued to the respondent in the final statement of account sent to her by the appellants; the respondent specifically denying the fact of her alleged authorization to treat all accounts as one and arguing further that this alleged agreement was not susceptible of being proven by oral testimony. The trial judge held that the agreement on which the appellants relied was susceptible of being proven by oral testimony as he found sufficient commencement of proof in writing and that the evidence had established the existence of such agreement.
The appellate court held that such evidence was not legal and maintained the respondent's action in part. Held that verbal proof of the agreement alleged by the appellants was admissible, as upon the facts and circumstances of this case, sufficient commencement of proof in writing under article 1233 (7) C.C. could be found in order to let in oral evidence of the particulars of such agreement. Held also that, whatever may be the correct legal description of the agreement alleged to have been made by the respondent, it does not come within the transactions made by stock brokers in the ordinary course of their business; and, therefore, verbal evidence was not admissible constituting proof "facts concerning commercial matters" within the meaning of those terms in paragraph 1 of article 1233 C.C.-The decision of Forget v. Baxter ([19001 A.C. 467) is not applicable to the present case.
The expression "commencement of proof in writing," although no definition of it is contained in the Civil Code, connotes a writing emanating from the party against whom it is to be used which tend to render probable (in French "vraisemblable") the existence of the fact which is desired to be proved-It is not necessarily required that the writing should be in the hand of the party against whom it is sougnt to be used or that it should be signed by that party; it is sufficient if it "emanates" from him.-The writing required for the commencement of proof may be replaced by the evidence of the party (article 316 C.C.P.)-The question whether there is a writing and the further question whether that writing emanates from the party against whom it is sought to be used are questions of law; but the question whether the writing, or the evidence of the party against whom it is used, tends to render probable the existence of the fact which it is desired to be proved, is a question of fact. The trial judge's finding, in this case, was in favour of the appel- EVIDENCE-Concluded lants; and it is a well established practice that an appellate court should not disturb such findings, on questions of facts, unless there could be found evident error by the trial judge in appreciating the evidence- but the rule must even be more strictly adhered to when it is applied to the question of whethber a commencement of proof in writing is sufficient to let in oral evidence.
trial judge's finding, that "on important points,
(respondent's)
testimony was often evasive, confused and contradictory" was peculiarly within the province of the trial judge, who was in the best position to pass upon it; and such a situation has always been recognized as a valid basis of commencement of proof in writing.
2- Will - Construction - Person or persons intended to benefit-Extrinsic evidence of testator's intention.] HAmm v. HOOPER........................
3- Shipping-Damage to goods-Peril of the sea-Negligence-Fault of carrier or of his agent or servant-Burden of proof-Barbados Carriage of Goods by Sea Act, 1926-Clause q, rule 2, article 3 of the schedule of the Act.
4--Landlord and tenant-Negligence
-Evidence-Fire occurring in building occupied by lessee-Claim by lessor against lessee for amount of loss-Fire starting during cleaning operations in which gasolene used-Cause of fire uncertain-Res ipsa loquitur........
5-Jury's verdict-Sufficiency of evidence to support-Evidence of damages. .............................
6--Facts established by newly discovered evidence as ground for setting aside judgment. .................
7--Corroboration .............
8-Criminal law-Charge of conspiracy to distribute drug
Evidence of accomplice-Corroboration........ 421
See 3.
9-See
EXCISE TAX-Special War Revenue
Act (R.S.C., 1927, c. 179 and amendments), s. 80 (1) (b) and Schedule II, item 8 ("tires manufactured or produced")-Old tires bought, treated and retreaded, and retreaded tires sold-Liability to excise tax. ..............
See AssEssMENT
EXECUTORS
ADMINISTRA- TORS-Administration of estate of deceased person - Possible deficiency of assets-Notice by executors to secured creditor to place specified value on securities - Creditor not doing so - Creditor selling securities and suing estate for deficiency - Right to cover-Trustee Act, Ont. (R.S.O., 1927, c. 150, as amended in 1931, c. 23, s. 7), s. (2), 57 (1).]
At the time of his death (November 10 H. was indebted to the plaintifr bank, which held as collateral security hypothecations by H. of share certificates and bonds. The terms of the hypothecations gave the right to the bank upon default in payment to realize on the securities, without prejudice to its claims for any deficiency. Defendants were executors and trustees under H.'s will and obtained probate thereof.
The bank demanded payment and threatened to sell the securities and look to defendants for payment of any deficiency.
The defendants, on December 23, 1933, notified the bank that they were of opinion that there might be a deficiency of assets to meet creditors' claims and required it, within 30 days, to prove its claims and give particulars of, and place a specified value on, each of its securities. This notice was given pursuant to s. 56 (2) of the Trustee Act, R.S.O., 1927, c. 150, as amended in 1931 c. 23 s. 7 (but which fixes no period of time for running of the notice).
The bank January 4, 1934, wrote to defendants stating the amount due, a list of securities and its intention, failing some satisfactory arrangement, to proceed to realize thereon.
On January 23, 1934, it filed its claim with particulars of securities. It did not place a value on the securities. The defendants did not apply under s. 57 (1) of said Act (as amended as aforesaid) for an order requiring the bank to value its securities or be barred from sharing in the estate. The bank sold the securities, commenoing on January 15, 1934, and, after notice by defendants of contestation, and pursuant to a court order obtained, sued defendants for the amount of the deficiency.
Held: The bank was entitled to recover. The notice of December 23, 1933, the bank's failure to value, and its sale of the securities, did not bar its right to judgment.
(Judgment of the Court of Appeal for Ontario, [1936] O.R. 402, reversed).
Per Duff C.J.: The effect of the amendment in 1931 enacting ss. 56 and 57 of the Trustee Act was not to abrogate the right theretofore existing of a creditor to rank upon the estate of a deceased person and substitute a new right-but to modify the right,--attaching certain TORS-Concluded incidents to it and giving certain rights to the legal personal representative.
to the right to call upon the creditor to value his security, the statute provides a sanction and nominates the procedure for enforcement, and, by well known principles, the legal personal representative must resort to this procedure in the enforcement of the right. The defendants could have proceeded under a. 57;
they could have taken steps to prevent the sale of the securities; it might be that they had an action for damages;
but the effect of the statute was not to put the bank, after the notice of December 23, to its election to value its securities or rely exclusively upon them without remedy for any deficiency, nor, merely by reason of said notice and the course taken by the bank, to cause the bank to lose its contractual right to claim for a deficiency.
The statutory provisions in question postulating, as they do, a possible de ciency of assets, are intended for the protection of the creditors and, where creditors' rights are not in any way in jeopardy, those provisions cannot be resorted to for the sole benefit of the beneficiaries of the estate. Per Rinfret, Crocket and Kerwin JJ.: Where it says in s. 56 (2) that the personal representative "may require" a creditor to place a specified value on his security, the word "require"
has not an imperative force, but is merely descriptive of one step in the proceedings that may be taken to secure a valuation by the creditor. As defendants had not followed the notice by securing an order under s. 57 (1), the bank was never called upon to choose between relying only upon the securities and placing a value upon them, and had never lost its right under the terms of the hypothecations to sell the securities and claim for any deficiency.
Per Davis J.: The defendants, not having obtained the relief provided by s. 57 (1) for breach by the bank of its duty under s. 56 (2) (which relief, being that expressly provided by the same statute which created the new duty is the only one available), had no defence upon the ground of said breach to the bank's action to recover the amount of the contractual debt.
On an application under s. 57 (1) the judge is not bound to make the order provided for therein; he may exercise his discretion, having regard to all the facts and circumstances brought to his attention.
......
2-See DUTY.
FINES-Application of-Whether payable to the Province or to the Dominwn-Cr. Code, s. 1036-Proceeding instituted at the instance of a Department of the Government of Canada in which that Government " bears the cost of prosecution" (exception (b) in s. 1086 (1), Cr. Code). ..........
FIRE
FIRE INSURANCE
See (Fin). FRATERNAL BENEFIT SOCIETY FREIGHT RATES
GUARANTEE
HARBOUR
HIGHWAYS - Railways - Level crossing-Quebec Orders in Council-Crown grants - Provincial Acts - Reservation for highways-Costs of construction and maintenance-Practice of the Board of Railway Commissioners for Canada- Seniority - Re-hearing - Railway Act, sections 48, 51, 189, 256, 269. ..... HUSBAND
AND WIFE-Contract of married woman-Stock exchange transactions-Marital authorization-Nullity by married woman for accounting
Plea alleging enrichissement sans cause and direct loss-Articles 177, 183, 406, 988, 1011 and 1057, C.C.] an action brought against a broker by a married woman for the annulment of stock transactions on the ground that the plaintiff had entered into such transactions without the authoTization of her husband, and also for an order for accounting and further for the payment of the balance shown to be due as a result of such accounting, the defendant cannot set up in his plea allegations that the moneys and securities received did not enrich him in any way and that if he is ordered to pay them over to the plaintiff, such moneys or securities will represent a direct loss to him. The case of a person suffering from a fundamental incapacity to do a juridical act and attempting to create obligations beyond its powers must be distinguished bona fide creating obligations which become inoperative by reason of causes recognized by the law.
In the latter case, the law merely seeks the most AND WIFE-Continued equitable solution to the situation, while in the first case, so that the incapable person may receive the full protection which the law seeks to give it it is inevitable and imperative that tfie law should order full restitution when decreeing nullity. Accordingly, when once it has been found -that a married woman acted without the participation or the consent of her husband, as required by law (arts. 177
183, C.C.), the consequence is that her deed or her act is the equivalent of non-existent. And, applying this principle to -the present case, the supposed contract or agreement with the appellants being absolutely null on account of the legal incapacity of the respondent to act as she alleged she did, it is not susceptible of any effect; the appellants derived thereby no legal right to deal as they have done with the moneys and securities.
They acquired no title to these moneys and securities;
they never had any legal right to hold them; and, therefore, the moneys and securities still belong to the respondent.
And if, on account of the fact that the moneys and securities are no longer in the appellants' possession, it has become impossible to return them to the respondent, then she is entitled to get the equivalent from the appellants.
Moreover, without deciding whether the doctrine of unjustified enrichment
(enrichissement sans cause) forms part of the law of the province of Quebec, even if the attempt to 'place the demurrer on such a ground could have been entertained in the present case, it could not have supported the allegations of the appellants' plea, as that doctrine could not be invoked to defeat either the principle or the effect of the precept of public order embodied in article 183
C.C. Judgment of the Court of King's
Bench (Q.R. K.B. 42) aff.
CHANNELL...................
2-Marriage contract-Universal community as to property - Matrimonial agreements- Nullity of one clause
Whether whole contract null-Whether obligation imposed by such clause is null-Arts. 818, 819, 820, 1013,
1018,
1292 et seq. C.C.]
The terms "tous les biens qu'il posshdera alors" con- 'tained in a clause of a marriage contract reading as follows: "Advenant la
" mort du futur 6poux avant la future
"6pouse sans laisser d'enfants du dit
"futur mariage, tous les biens qu'il
" posshdera alors appartiendront A ses
" enfants du premier lit, mais ils seront
"oblig6s de payer A la dite future
"6pouse une somme de deux mille piastres qu'elle gardera en pleine pro- HUSBAND
AND WIFE-Continued " pri6t6 & toujours, A moins qu'elle ne " convole en secondes noces; car dans ce cas, elle ne garderait en pleine proprifth que cinq cents piastres et le " reste retournerait aux dits enfants du "premier lit "-means tous les biens dont il sera propriitaire alors"; and in that sentence the word "alors"i relates to the date of " la mort du futur 6poux." In the language customarily used in the province of Quebec, the terms " tous les biens qu'il possedera alors " are not intended to apply to possession in the legal sense of the word, but they refer to ownership. Consequently, when a marriage contract stipulates a universal community property between the husband-to-be and the wife-to-be, those terms (" tous les biens qu'il possidera alors ") will not lump together all the goods which formed the universal community provided in the marriage covenant: they include only the share of the husband in the community.
Moreover, in the present case, that stipulation which constitutes a donation made in contemplation of death is not authorized by law although included in a marriage contract, because it was not made in favour of the children to be born of the future marriage as required by the law, but was a stipulation in favour of children born from a first marriage and therefore illegal.
On the ;other hand, the nullity of such a stipulation does not involve the nullity of the whole contract. The material agreement of the marriage contract was -the stipulation that a universal community of property would exist between the parties.
The stipulation as to the property of which the husband would be the owner at his death relates solely to the succession of the deceased husband.
Therefore there is not, between the whole of the marriage contract and the special clause above quoted, such dependency that the nullity of that last clause should involve the nullity of the marriage contract itself. The intentions of the contracting parties would be violated if, because the stipulation as to the succession of the husband is illegal, the agreement as to a universal community of porperty would consequently cease to exist. These are two distinct covenants, and the existence of one is not dependent upon the existence of the other. The marriage contract remains valid as to the remainder.
But the same cannot be said as to the obligation imposed upon the children born from the first marriage to pay to the surviving wife "une somme de deux mille piastres qu'elle gardera en pleine propri6t6 A toujours HUSBAND AND WIFE-Concluded
*
* *." This obligation is included in a clause of which the main object is to give over to the children born from the first marriage the property of which the husband would be the owner at his death.
constitutes, properly speaking, a charge in connection with the disposition made in favour of the children born from the first marriage;
and it follows that the illegality of the stipulation in favour of these children involves as a consequence the nullity of the obligation imposed upon them by reason of such stipulation.
INCOME TAX
INJUNCTION-Right to-Prima facie right-Onus--Consideration as to existence of grounds for refusing relief- Conduct of parties. ..............
INSURANCE (ACCIDENT) -Policy- Disability clauses-Total and permanent disability-Admitted by insurance company-Income payments made for a period of time -Discontinuance payments on ground of cessation of disability-Payment of premiums under protest-Action for arrears of income payments and return of premiums paid under protest
Jury trial - Verdict
Findings in favour of insured as to disability - Prescription - Applicability of sub-sections 2 and 8 of section 9216 of
Quebec Insurance Act, R.S.Q.,
9248.1 The appellant company, on March
3, 1927, issued a policy insuring the life of the respondent's husband, in her favour, for $15,000 or for $30,000 in the event of his death by accident, such policy also providing for an indemnity of $150 a month in the event of the insured suffering total and permanent disability.
The stipulated premium was
$375.90 payable half-yearly of which
$34.35 was stated to be for the disability benefits. On the 31st of March,
1927, the insured assigned the policy to his wife, the respondent in this case.
On the 17th of February, 1930, the insured met with an accident which so crippled his right hand that he was incapable of doing any manual work.
The appellant company then admitted total disability within the meaning of the policy and paid the total disability benefit of $150 a month for a period of nineteen months, namely, until the 17th of October, 1931; it also waived the payment of all premiums falling due during that period under the terms of the policy. On November 12, 1931, the appellant company wrote the insured
INSURANCE (ACCIDENT)that as he was no longer continuously totally disabled, it would discontinue making further disability payments. In 1932, the company appellant demanded payment of the two half-yearly premiums of $375.90 falling due respectively on March 3 and September 3, 1932, which were paid under protest with an additional sum of $75.18 as exchange for United States money. On April 3, 1933, the respondent brought the present action to recover from the appellant company seventeen monthly disability benefit payments of $150 each from November 1931, to March 1933, plus $382.40 for excess value in United States over Canadian currency and for the return of the two half-yearly premiums paid under protest, with exchange, in 1932, Le. $826.98. An incidental demand was made for seven additional monthly disability payments from March 17, 1933. to October 1933, i.e., $1,050, plus $95 for excess value in United States over Canadian currency and also for the recovery of 5834.3W being the amount of two additional premiums and exchange paid under protest in March and September. 1933; the total sum claimed being $5,738.76.
The appellant company pleaded generally and, in particular, denied that from and after October 17, 1931, the respondent's husband was continuously and totally disabled within the conditions and terms of the policy. At the trial, the jury found that the insured had been totally disabled from February 17, 1930, up to the date of the verdict. The appellant's counsel, in support of a motion for the dismissal of the action, raised for the first time a point taken in the factum that, under subsections 2 and 3 of section 216 of the Quebec Insurance Act, R.S.Q., 1925 c. 243, the respondent's right of action was prescribed, because more than one year had elapsed since "the happening of the event insured against." The trial judge held that the action was so prescribed as far as the disability payments were concerned, but maintained it as to the claim for the return of premiums paid under protest in 1932 1933, i.e., the sum of $1,661.36. The appellate court added to the above judgment the sum of 82,066.38, arrears of disability payments which became due within the year of the institution of the action and, under the incidental demand, the sum of 81.145 arrears of disability payments which became due after the institution of the action, April 17 to October 1933, the court holding that the five payments due from November to March 17, 1932, were barred above-mentioned provision of the Quebec Insurance Act, thus increasing the amount awarded to from
$1,661.36 to $4,872.74.
Held, that the prescriptions of subsections 2 and 3 of section 216 of the Quebec Insurance Act are not applicable to the 6tate of facts as found in this case and cannot be held to bar any part of the respondent's action; and that the respondent is entitled to recover a further indemnity for the five months from November,
1931, to March, 1932, as well as for the nineteen months from April, 1932, to
October, 1933, allowed by the Appellate Court.
Therefore the respondent's action should be maintained for the full amount claimed therein, i e
$5,738.76-The appellant company could only invoke the prescription contained in the Quebec Insurance Act by disproving the claim which was the subject of the respondent's action; this it has completely failed to do.
On th'.
contrary, the respondent has obtained from the trial court a verdict which has not been challenged in this Court, that the insured was totally disabled, within the meaning of the insurance policy sued on, at the time of the trial and had been continuously so totally disabled from February 1930.
This verdict was the outcome of the trial of the whole merits of the action. It must be taken as conclusively negativing the appellant's contention that the total disability, which the appellant company, the insurer, had recognized as continuing uninterruptedly for which it had paid up to October 17,
1931, had ceased at any time thereafter, and, therefore, as negativing also its submission that action was barred by the provisions of s. 216 (2)
of the Quebec Insurance Act on the assumption that the prescription there enacted might be treated as beginning to run against the plaintiff from the cessation of the total disability insured against. Upon the true construction of this insurance policy, in so far as it relates -to the total disability benefits sued for, the risk insured against was the continuance of a condition of total and presumably permanent disability on the part of the insured, resulting from bodily injury or disease, and the statutory prescription relied on could have no application to the respondent's claim so long as the insured, once found to have been 'totally disabled within the meaning of the policy, in that condition without interruption; the happening of the accident was not 'the event insured against, either within the meaning of this insurance contract or within the in- INSURANCE (ACCIDENT)tendment of s.
216 (2) (3) of the Quebec Insurance Act. Per Rinfret J.- The effect of the prescription resulting from subsections 2 and 3 of section 216 of the Quebec Insurance Act in respect to similar insurance policies has been dealt with by the appellate court in Quebec in three other cases besides the present one: North American Life Insurance Co. v. Hudson (Q.R. 55 K.B 273), Gagnd v. New York Life Insurance Co. (Q.R. 57 K.B. 60), and Canada Life Insurance Co. v. Poulin (Q.R. 57 K.B. 78).
In the Hudon and the Poulin cases, the facts were different, as there the insurance company had not acknowledged the existence of the conditions of invalidity which entitled the insured to the benefits accruing under the policy and had not made a single payment of the monthly income to the insured;
(the decision on the points raised in those cases should be reserved for future consideration)-In the Gagn6 case, the insurance company had admitted, as in this case, the "happening of the event insured against" and had acted upon the proof thereof submitted by -the plaintiff and had made several monthly income payments, and the prescriptions of section 216 (2 and 3) of the Insurance Act are not, in that case as in the present one, applicable to such a state of facts. Moreover, the circumstances in 'the present case are more favourable to the claimant than in the Gagnd case.
Lin Co. v. ...... INSURANCE
(AUTOMOBILE)-Public liability-Undertaking by insurance company to indemnify other persons than the insured-Automobile driven by third person with consent of owner- Accident
Action in warranty against insurance company by driver sued for damages by person injured-Liability of company-Stipulation in favour of third person valid under civil law of Quebec -Insurable interest-Articles 1029, 2468, 2472, 2474, 2476, 2480 C.C.]
The respondent company issued an automobile insurance policy in favour of the mis-en-cause whereby it undertook to indemnify the latter for all losses and damages resulting from his legal responsibility towards third persons as a consequence of bodily injuries or of the death sustained by the latter and caused to them through the maintenance or the use of a certain automobile described in the policy; and, under another clause of the same policy, the respondent company also undertook "A indemniser, en la mime manibre et aux mgmes conditions auxquelles l'assur6 y a droit, d'aprbs les prbsentes, toute personne transport6e dans lbutomobile ou la conduisant 16gitimement ainsi qua toute personne l6galement responsable de la conduite du dit automobile, condition que permission en soit donnie par l'assur&."
On August 27, 1934, the mis-en-cause lent his automobile to his brother, the appellant, and while the latter was driving the automobile on that day, having with him two passengers, he met with an accident in the course of which his two companions were seriously injured.
One of them brought an action against the appellant to recover the damages sustained by him as a result of the accident which he attributed to the fault and negligence of the appellant. The appellant, alleging that he was protected against the liability thus incurred under the policy above mentioned, brought, in his own name, an in warranty against the respondent insurance company. Held that, under the terms and conditions of the insurance policy, the respondent company was liable to indemnify the appellant for all losses or damages resulting from the accident.
The appellant was legitimately in possession of the automobile, was driving it with the permission of the insured and was legally responsible for the manner in which the automobile was being driven.
He was, therefore, one of the persons whom, under the terms of the policy and in consideration of the premium paid to it by the mis-en-cause, the respondent insurance company undertook to indemnify.
He was not therein mentioned by name; but, according ot the law of Quebec, as expressed in the French doctrine and jurisprudence, it is not necessary for its validity that the stipulation for the benefit of third parties should be made in words definitely ascertaining these persons; it is sufficient if they are ascertainable on the day when the stipulation takes effect in their favour.
Therefore the respondent company cannot escape the obligation of indemnifying the appellant unless it is shown that its stipulation is prohibited by law.
But the clause in favour of third persons invoked by the appellant against the respondent company is valid and enforceable, because stipulations in favour of third parties are va.lid and enforceable in civil law.
They are expressly authorized by article 1029 C.C.;
and no special rule exists, in the chapter of the code dealing with insurance, of a nature to exclude insurance contracts
INSURANCE (AUTOMOBILE)from the application of the general principle enacted in article 1029 C.C. this view is strengthened by the enactments of article 2480 of the above chapter, where the civil code expressly singles out a class of policies which are declared prohibited.-The definition of "insurance" as contained in article 2468 C.C. adapts itself to the policy issued by the respondent company: it applies both to the main obligation undertaken for the benefit of the mis-en-cause and to the undertaking towards the other persons ascertainable under the above-cited clause.-The fact that up to the moment of the accident the appellant had not yet signified his assent to the stipulation made in his favour by the mis-en-cause is not a bar to the action: his assent was not necessary to bind the insurance company and it was sufficient if he manifested his intention to avail himself of the stipulation as soon as the event happened which made the stipulation effective in his favour. In civil law, a valid stipulation in favour of a third person creates a contract (viniculum juris) between the third person and the person who has agreed to be bound by the contract. Vandepitte v. Preferred Accident Insurance Corporation ([19331 A.C. 70) not applicable to this case.
........ 368 INSURANCE (FIRE)-Cause of loss- Statutory condition-Explosions-Nature of explosions-Whether fire preceded explosion or explosion preceded fire- Amount of damage recoverable under & Co. LTD.......
......... 2- Fire insurance plans........ 265 INVENTION
JUDGMENT-Action to set aside judgment-Charge of fraud not established against party obtaining judgment attacked-Judgment attacked on allegation of facts different from facts alleged in defence in first action--Facts established by newly discovered evidence as ground for setting aside judgment.] The action was brought to set aside judgment. The trial Judge, Rose C.J.H.C. ([1935] O.R. 410), held that, though the judgment attacked could not successfully be impeached on the ground of fraud, yet plaintiff should succeed on the ground that newly discovered evidence, of which it could be said that it could not by the exercise of due dili- JUDGMENT-Concluded gence have been discovered before the judgment attacked was pronounced, established that the judgment attacked was one to which the party obtaining it was not entitled. The judgment of Rose
C.J.H.C. was reversed by the Court of
Appeal for Ontario
([1936J O.R. 75)
which dismissed the action. The grounds taken by Middleton JA. in that Court were: that fraud in obtaining the judgment attacked, charged as the basis of the present action, was not proved; also that a defendant who allows an action to go to trial upon a certain defence of facts set up which fails, cannot by bringing an.action to set aside the judgment set up another and inconsistent defence of facts. The plaintiff appealed to this Court.
Held that the appeal should be dismissed, on said grounds taken by Middleton J.A. and also on the following ground: A judgment cannot be set aside on the ground of facts established by newly discovered evidence, unless it is proved that the evidence relied upon could not have been discovered by the party complaining by the exercise of due diligence. This is a rule which must be applied with the utmost strictness, otherwise the finality of judgments generally would be gravely imperilled.
In the present case the plaintiff was bound to establish in the most entirely convincing way that the rule had been met, and this had not been done in the case presented at trial
GLT v. GLATT...............
JURISDICTION
1;
LANDLORD
AND TENANT-Lease- Church assessment-Lessee to pay "all taxes, assessments and rates general and special"-Whether lessee bound to pay church assessment-Parish and Fabrique
Act, R.S.Q., 1925, c. 195-Articles 471,
C.C.-Articles 609 & seq.
The respondent leased to the appellant a property situated in the city of Montreal; and the lease contained, inter alia, the following stipulation under the heading "Conditions": "*
*
* the lessee binds itself
*
*
* to pay all taxes, assessments and rates general and special which may be imposed on or in respect of the said property
* * *". The parties submitted a stated case, under article 509 & seq. C.C.P., as to whether "the appellant (was) liable for the payment of
*
*
* church assessment under the provisions of the lease." Held, Davis J. dissenting, affirming the judgment of the Appellate Court
(Q.R. 60 K.B. 289), that the church assessment provided for in the Parish
LANDLORD AND TENANTand Fabrique Act, R.S.Q., 1925, c. 195, of which the material provisions are outlined in the judgment of the court is one of the "taxes, assessments or rates" in respect to which the parties have stipulated in the above clause of the lease; and, further, that such assessment is a tax in respect of the property leased to the appellant by the respondent.
Per Davis J. (dissenting)
: The church assessment, although a -tax, assessment or rate imposed on or in respect of the property, is a statutory charge of a special and peculiar sort and is not something which may be fairly presumed to have been understood by the parties to the lease as covered and intended to be covered by the indemnity clause.
As a matter of interpretation, the true sense and effect of the language of the clause, read as a whole does not impose upon the lessee a burden of this sort.
McKEssoN & 2-Negligence-Evidence -Fire occurring in building occupied by lessee- Claim by lessor against lessee for amount of loss-Fire starting during cleaning operations in which gasolene used-Cause of fire uncertain-Res ipsa loquitur.] Defendant was in possession of a building under a lease from the plaintiffs H. (hereinafter called the plaintiffs), who had erected it for defendant's use as an automobile service garage and in sale of automobile parts. While defendant's employees (on a hot day, when the windows and doors were open) were cleaning a cement floor on the ground floor of the building, using gasolene, and scraping and scrubbing, and washing with oakite, heated in a tank on the ground floor by means of two gas jets under the tank, and washing off with water from a hose, a " whoof " (so described)
occurred and flames appeared over said cement floor and a fire occurred which damaged the building.
Plaintiffs sued 'to recover from defendant for the loss. In the lease plaintiffs covenanted to pay taxes and insurance premiums;
defendant covenanted to "repair, according to notice in writing, reasonable wear and tear and damage by fire, lightning and tempest
*
*
* only excepted" (but was not required to make repairs to the roof, nor exterior or structural repairs) and that it would "leave the premises in good repair, reasonable wear and tear and damage by fire, lighting and tempest only excepted."
The lease provided that if the building should be "so damaged by fire or other casualty or happening as to be substantially destroyed," then the lease should cease and any unearned rent paid in advance should be apportioned and refunded to defendant; but in case the building was not substantially destroyed, the premises should be restored by plaintiffs and a just proportion of the rent should abate until such restoration. The exact cause of the ignition was not shown.
Expert witnesses for plaintiffs testified that gasolene when vaporized was dangerous and that, given the proper proportions of air and gasolene vapour, ignition might be caused by a naked flame or an electric spark or a hot body such as a red-hot iron. Witnesses for defendant testified that, in such cleaning it was customary to use gasolene and scrapers and brushes followed by an application of some cleansing substance, the whole washed off with water; but, as found in this Court, the evidence fell short of proving that it was the usual practice to clean such an area as that in question in the elapsed time under the conditions that existed that day. Held (affirming judgment of the Court of Appeal for Ontario, [19361
O.R. 225) that defendant should be held liable. Per Duff C.J. and Davis J.: The circumstances established in evidence afforded reasonable evidence of negligence in the sense that, in the absence of explanation, the proper inference was that the damage caused was the result of defendant's negligence; and the explanations advanced were not of sufficient weight either to overturn or to neutralize the force of the inference arising from the facts proved. The application and effect, in certain classes of cases, of the principle called res ipsa loquitur discussed and explained.
Rinfret, Crocket and Kerwin JJ.: A tenant is liable in damages to his landlord for waste, voluntary or permissive
(Yellowly v. Gower, Ex. 274; The
Conveyancing and Law of Property Act,
R.S.O., 1927, c. 137, as. 28, 31).
By virtue of The Accidental Fires Act
R.S.O., 1927, c. 146. in the absence of any relevant stipulation between a landlord and tenant, the latter would not be liable for any damage occasioned by a fire which should "accidentally begin"
on the premises. The words "accidentally begin," as used in the Act, do not include a fire caused by negligence
(Filliter v. Phippard, Q.B. 347; Canada Southern Ry. Co. v. Phelps, 14
Can. S.C.R. 132; Port Coquitlam v.
Wilson, [1923] S.C.R. 235).
The effect of the above-mentioned clauses of the lease (discussed) was to leave defendant liable for damage by a fire caused
LANDLORD AND TENANTthrough its negligence.
The evidence established negligence on its part: the operations being under its control and the accident being such "as in the ordinary course of things does not happen if those who have the management use proper care," the maxim res ipsa loquitur served to make the circumstances
"reasonable evidence, in the absence of explanation by the defendant that the accident arose from want of care" (Scott v. London & St. Katherine Docks Co., 3 H. & C. 596); defendant did not show that at the time of the explosion the gas jets were not lighted, and it failed to suggest any explanation or warrantable inference as to the cause of the fire, and plaintiffs were entitled to rely on said maxim LIMITATION OF ACTIONS
See 1; (Acci- MARITIME FREIGHT RATES ACT- R.S.C., 1927, c. 79, s. 8............ MARRIAGE CONTRACT
MINES
MINERALS - Mineral claims-Lapse of, through failure of recorded owner to do work required Same person subsequently staking them on behalf, and having them recorded in names, of others (defendants)-Others (plaintiffs) subsequently stakng them, refused a record, and bringing action attacking validity of said former staking and recording as not done according to regulations-Right or status of latter (plaintiffs) to do so-Regulations for the Disposal of Quartz Mining Claims, approved by order in council (Dom.) dated January 19, 1929, and made applicable by order in council (Bask.) dated November 97, 1931.]
The defendant T.B. had become the recorded owner of six mineral claims near Beaver Lodge, Saskatchewan. In 1933 the claims lapsed through T.B. failing to perform the work required under the mining regulations (Regulations for the Disposal of Quarts Mining Claims, approved by order in council
(Dom.)
dated 19th January, 1929, and made applicable by order in council (Sask.) dated 27th November, In August, 1934, T.B. staked three of the claims on behalf of the defendant J.B. and the other three on behalf of the defendant E.B., and had MINES AND MINERALS-Continued them recorded in the names of J.B. and
E.B. respectively.
Subsequently plaintiff M., personally and on behalf of the plaintiff P., purported to stake the same claims, believing that said staking as done by T.B. was not in accordance with the regulations.
He applied for a record of the claims, but this was refused because the claims were already recorded as aforesaid. The affidavit in form "A," required on an application to record a claim, contains the statement "that to the best of my knowledge and belief the ground * * * is unoccupied and unrecorded by any other person as a mineral claim."
varied this by "excepting" J.B. or E.B.
respectively and inserting:
"That claim that the staking and recording by [J.B. or E.B. respectively] of said ground was illegal and that the said ground was open for staking at the time that I staked the same."
Plaintiffs brought action for a declaration that the alleged claims of J.B. and E.B.
to the claims were null and void and that plaintiffs were the holders or owners of the claims and were entitled to have records in their names, and other relief. MacDonald J. dismissed the action on the ground that plaintiffs had no status to maintain it (Q1935] 3
W.W.R. 226). An appeal was dismissed by the Court of Appeal for Saskatchewan ([1936] 2 W.W.R. 129).
Plaintiffs appealed to this Court.
Held: Plaintiffs' appeal should be dismissed. The case was not one contemplated by ss. 7 and 8 of the regulations (requiring certain procedure and permission as to relocating).
Ss. 7 and 8 contemplate a case where, a claim having been abandoned or forfeited (and assuming, but not deciding, that this embraces a case in which the claim has lapsed by reason of failure to perform the representation work), the owner wishes to relocate the claim for himself.
The question whether or not in point of fact T.B. was not acting on behalf of J.B. and E.B.
but under some understanding, express or tacit, was making an unlawful use of their licences for the purpose of acquiring the ground for himself, was not a question upon which it was competent to the mining recorder to enter. The claims having been staked out and the mining recorder having accepted the staking as bona fide and sufficient, there were records of them in the names of
J.B. and E.B. ex fade valid which the mining recorder could not treat as nullities.
Plaintiffs could not, when they staked their claims, make the affidavit in form "A," and, such being the case, they could not lawfully either stake out
MINES AND MINERALS-Concluded the ground as a mineral claim or obtain a record of it as such.
Osborne v. Morgan, App. Cas. 227, Hartley v. Matson 32 Can. S.C.R. 644, and other cases discussed.
To what extent the principle of those decisions is applicable for the protection of a holder of a record of a mineral claim under the regulations now in question, it was not necessary to determine for the purposes of the present appeal. This Court did not endorse, or decide on, the view that the existence of a record in itself precludes a licensee from all remedy against the holder of the record where the facts of the particular case bring it within a class of cases in which the regulations expressly or by necessary implication enact that the ground within the limits of the claim described in the record is open to location generally by the holders of miners' licences.
Box ......................
MOTOR VEHICLES - Negligence - Automobile collision-Finding of jury- Form of finding - Construction - Evidence.
2--Negligence-Collision- Verdict of Appeal - Discussion of principle acted upon in setting aside, on appeal, the verdict of a jury as against the weight of evidence ............... 3--See
MUNICIPAL CORPORATIONS - Sale of land for taxes.............. 334 NEGLIGENCE-Automobile collision- Finding of jury-Form of finding-Construction-Evidence. Co. ..... 2- Passenger injured by a passing automobile after alighting from streetcar which, to allow her to alight, had been stopped suddenly at a place other than a usual stopping place-Leability of street railway company - Findings of jury.] Plaintiff was a passenger in defendant's street-car and, desiring to alight, signalled to stop, and went to the exit door at the side of the car.
As the motorman did not slow down to stop at the usual car stop, she rang again.
The motorman, noticing her at the exit door, quickly stopped the car at a point which was not a usual stopping place, and then caused the door to open.
She alighted and was almost immediately struck and injured by an automobile driven by 8 NEGLIGENCE-Continued from the rear. She sued for damages. At the trial the jury found that defendant's motorman was negligent "in stopping the tram too suddenly at other than a customary car stop without taking proper precaution for the safety of passengers"; they negatived negligence in S. and the plaintiff.
Judgment was given to plaintiff for damages, which was reversed by the Court of Appeal for Ontario ([1937] O.R. 256).
Plaintiff appealed to this Court. Held: The judgment for plaintiff at .trial should be restored. There is no absolute rule that the duty of a street railway company towards its passengers ends when they alight and that it is not responsible for any mishap that may overtake the passenger making his way to the sidewalk.
Each case must depend on its own circumstances.
There is a duty on the company not to place its passenger in danger at the moment of alighting or immediately thereafter.
There were precautions that might have been taken by the motorman, which the jury, no doubt, took into account.
Per Duff
C.J.: Defendant's duty was to exercise reasonable care for the safety of its passengers. What constitutes reasonable care
(where no special rule of law comes into play) is a question of fact, to be determined according to the circumstances.
Sec. 37 (1) of the Ontario
Highway Traffic Act (as to vehicles not passing a street-car which is stationary for taking on or discharging passengers)
was intended to provide a specific safeguard for (inter alia) passengers leaving street-cars. It imposes a duty upon drivers of motor cars directly, but has significance in relation to a street railway company's execution of its duty to exercise reasonable care in the carriage of passengers. The conduct of a company, which stops its car for the discharge of passengers at such a place and in such a manner as to render nugatory said statutory safeguard, is a circumstance not irrelevant in determining whether it has acquitted itself of its obligations to them. Ex facie, it is not a wholly unreasonable conclusion that the company is not sufficiently attending to the safety of passengers if it acts in disregard of the contingency
(when the emergence of that contingency ought to be foreseen as a practicable possibility) that a motor car may at the moment be in the act of passing and may, if the street-car is too suddenly stopped and the doors too suddenly thrown open, be carried through the place where passengers are alighting.
In the absence of circumstances implying assumption of the risk
NEGLIGENCE-Concluded by the passenger (which in itself in most cases would probably be issue of fact for the jury; and which assumption of risk could not be affirmed in the present case) it is a question of fact for the jury whether, in managing its street-car in such a manner as to deprive descending passengers of the safeguard contemplated by the statute, the company is fulfilling its duty to take reasonable care for its passengers' safety. Further, in the present case, it was, upon the evidence, open to the jury to take the view that the sudden stopping of the street-car might set up motions in the car itself, which, when the doors were opened almost simultaneously with the application of the brakes, might cause the plaintiff, in descending, to lose her balance and distract her attention from street traffic; and that such things did occur and had that effect upon the plaintiff; and in such view it would be a natural and proper conclusion that defendant was not resaonably entitled to assume that no precautions on its part were necessary. There was evidence from which the jury might not improperly find that the situation of danger from the passing automobile was one created by the unreasonable and imprudent stopping of the street-car in the manner in which and at the place where it was stopped; and that this situation of danger ought to have been anticipated as a reasonably possible contingency; and that defendant could not reasonably assume that, in the circumstances, plaintiff. without negligence on her part, would not be unaware of the risk involved in defendant's acts or of the actual danger from the approaching motor car. 3- Jury trial-Answers to questions- Whether "special, explicit and articulated"--Findings of the jury-Arts. 488, 601, 502 C.CP. ................... 4-Landlord and tenant-Evidence- Fire occurring in building occupied lessee-Claim by lessor against lessee for amount of loss-Fire starting during cleaning operations in which gasolene used--Cause of fire uncertain--Res ipsa loquitur .................... 5- Motor vehicles-Collision-Verdict of jury-Appeal--Discussion of principle acted upon in setting aside, on appeal, the verdict of a jury as against the weight of evidence ........... 6--See 1.
PATENT-Damages for infringement- Matters and items of damages-Sale of product of infringing machme-Invention for manufacturing stringers to be used in fasteners-Loss caused from sales of completed articles (fasteners)
made from stringers made on infringing machines-Damages for loss of profit on sales lost-Damages by way of royalty
-Damages for loss from reduction in sale price-Pleadings-Raising question of right under s. 47 (6) of Patent Act
(R.S.C., 1927, c. 150) on assessment of damages after judgment, when facts relied on not pleaded and proved in the action for infringement.] The sale of the product of an infringing machine is not too remote upon to found a claim in damages, under s. 32 of the
Patent Act (R.S.C., 1927, c. 150), by the owner of the patent of the machine infringed.
The object of the patented invention was to manufacture stringers to be used in fasteners. Held: Plaintiff (owner of the patent) could not be properly compensated for infringement by reference only to the manufacturer's cost and sale price of the stringers and without regard to the cost and sale price of the completed articles (fasteners); the stringers were of importance only in their use in fasteners and what plaintiff lost was sales of fasteners; the principle set forth in
Meters Ld. v. Metropolitan Gas Meters
Ld., 28 R.P.C. 157, should be applied;
plaintiff was entitled to damages for loss sustained by reason of defendant's sales of fasteners from stringers made on infringing machines.
Held, further:
On the evidence (and applying the
"broad axe" referred to by Lord Shaw in Watson v. Pott, 31 RJP.C. 104), had defendant not sold such fasteners, plaintiff would have sold 60 per cent. of the number actually sold by defendant; and plaintiff was entitled by way of damages to the profit it would have made on what it would have sold as aforesaid.
It was so entitled, even were it shown that in the period of infringement it did not manufacture stringers on its patented machine; it was deprived of the opportunity of using its patented machine to produce stringers for the said 60 per cent.
the 40 per cent. of defendant's sales which plaintiff would not have made, plaintiff was entitled to damages by way of royalty (Watson v. Pott, R.P.C.
104, at 120; United Horse Shoe & Nail
Co. v. Stewart, 5 R.P.C. 260, at 267).
Damages were awarded also for loss to plaintiff by reason of reduction by defendant in the sale price of such fasteners (forcing reduction by plaintiff)
(American Braided Wire Co. v. Thomson, 7 R.P.C. 152); but not where plaintiff was the first to act, even were plaintiff induced to act by its representatives having been told, falsely, by prospective or actual customers that they could purchase more cheaply from defendant-a claim for damages in such a case was too remote. In the interval between lapse of plaintiff's patent for non-payment of fees and publication of notice of application to restore it, defendant shipped into Canada fasteners (not taken into account in plaintiff's statement of damages) made in the United States on machines identical with machines held to constitute infringement of the patent. On an assessment of damages, after judgment had been given for plaintiff in an action for infringement, defendant claimed that by virtue of the operation of s. 47 (6) of the Patent Act, it obtained the right to use the invention in Canada. Held, that the facts should have been pleaded and proved in the patent action as a defence, and it was now too late to raise the question on the assessment of damages.
v. Co. 36 2-Validity-Anticipation-Prior art- Specification-Definite claims-May be so broad as to be invalid-Their construction by the courts-The Patent Act, 13-14 Geo. V, c. 23, s. 14 ss. 1; 25-26 Geo. V, c. 82, s. 85, s. 2. Ithe appellant company is manufacturing a collar of the same material as used in a soft shirt, made semi-stiff and yet comfortable fo: personal wear and sufficiently porous to absorb perspiration and to be easily washed and ironed.
The appellant's process for making that collar is as follows: Two plies of the particular shirt material, forming outside and inside layers of the collar, are taken and there is placed between them a ply of other woven material in which all the. weft threads and two out of three of the warp threads are cotton, the remaining one in three of the warp threads being of cellulose acetate. These cellulose threads are partly dissolved by a volatile
(acetone-alcohol)
solvent applied through one of the outer fabrics after the collar is partly finished. result of the rapid driving off of the volatile solvent is that the dissolved cellulose acetate does not spread; the knuckles only of the cellulose actate yarn melt and form an adhesive which united all three plies at a series of spaced spots, staggered on opposite sides of the lining material, -the result being a semi-stiff composite fabric. This process was put into use in Canada by the appellant about June, 1935. respondent then alleged that the process infringed the Dreyfus Canadian patent no. 265,960, granted November 16, 1926, on an application filed December
1925, and owned by the respondent, and the present action was brought before the Exchequer Court of Canada, the patent not appearing to have been put into commercial use prior to the adoption by the appellant of its process.
The patent is recited to be an invention of "certain new and useful improvements relating to fabrics sheet materials and the manufacture thereof."
The invention is stated to concern the manufacture of new fabrics or sheet materials having waterproof to gas-proof properties or capable of other applications.
According to the invention, a fabric or sheet material is made by uniting under appropriate conditions of temperature and pressure, woven.
knitted or other fabrics, composed of or containing filaments or fibres of thermoplastic cellulose derivative or derivatives with woven, knitted or other fabric composed of or containing filaments or fibres of non-thermoplastic or relatively non-thermoplastic material. In this way the fabrics are united and a composite sheet material is obtained in which the pores or interstices are reduced to extremely minute dimensions, or closed completely by the melting or softening effect proAuced by the heat and pressure upon the filaments and fibres of the thermoplastic cellulose derivative or derivatives and by the uniting of the fabrics under the heat and pressure. Further specifications are fully described in the judgment reported. The invention of Dreyfus was, in effect, to make an ordinary fabric or sheet material waterproof or gas-proof without detracting from the appearance of the orignial material.
Although there were some twenty-five claims set up the appellant's arguments were confined to claims 1 and 4 which were as follows:
"1. A process for the manufacture of composite sheet material which comprises subjecting a plurality of associated fabrics, at least one of which contains a thermoplastic derivative of cellulose, to heat and pressure, thereby softening said derivative and uniting said fabrics. *
*
*. A process for the manufacture of composite sheet material which comprises treating a fabric containing a thermoplastic derivative of cellulose with a softening agent, associating it with another fabric, and uniting the fabrics by subjecting them to heat and pressure." The inventor, Dreyfus, in defining his claims in his British application, expressly mentioned "woven, knitted or other fabric composed of or containing filaments or fibres of a thermoplastic cellulose derivative or derivatives," and in defining his claims in the United States application also expressly mentioned "a fabric containing yarns comprising a thermoplastic derivative of cellulose"; but he entirely omitted such words in his subsequent application in Canada. Amongst many British and United States patents referred to by the parties, the Van Heusen, which was granted in the United States January 1, 1924, was the most relevant one to this case. It disclosed the manufacture of a three-ply collar consisting of a lining and two outer plies which caused to combine into a single composite sheet by the application to the lining of a cellulose derivative in solution to act as a "cementing agent," whereupon the outer piles and the lining were treated "*
* * by heat and pressure to cause the cementing material to be converted into its final form and thereby secure the separate layers of fabric together."
One of the grounds upon which the validity of the Dreyfus patent was challenged by the appellant company was that the claims were not confined and limited to the use of the cellulose in yarns, filaments or fibres, woven knitted or worked into the Intermediate material, but extended to the use of a cellulose deriva. tive in any form. The Exchequer Court of Canada upheld the validity of the patent.
Held, reversing the judgment of the Exchequer Court of Canada ([1936] Ex. C.R. 139) that the patent was invalid. Unless tie claims in the Canadian Dreyfus patent can properly be narrowed by the introduction of a limitation to the use of the cellulose derivative in the form of yarns, filaments or fibres, they have been clearly anticipated by the United States patent of Van Heusen and two other British patents referred to in the judgment. Van Heusen clearly disclosed the process of taking the separate pieces of fabric and securing them together "into what is in effect an integral composite fabric" by the use of an intermediate binding layer containing solutions of cellulose derivatives.
It constitutes a complete anticipation of the claims of the respondent unless those claims can be modified by incorporating the limitation that the thermoplastic derivative of cellulose be in the form of yarns, filaments or fibres woven into the intermediate fabric.
As a general rule, the ambit of the invention must be circumscribed by definite claims. It is a question of law, then, whether or not the claims in this case read in the light of the specification may be limited.
If they cannot, the claims remain so broad as to be invalid because of the prior art.
If limited, they have not been anticipated.
Throughout the specification of the Dreyfus patent, there is a continuous reference to the use of the thermoplastic derivative of cellulose in the form of yarns, filaments or fibres and it is plainly the very essence of the disclosure in the specification; but the inventor did not state in his claims the essential characteristic of his actual invention.
The Court is invited to read through the specification and import into the wide and general language of the claims that which is said to be the real inventive step disclosed. The claims are unequivocal and complete upon their face; it is not necessary to resort to the context and as a matter of construction the claims do not import the context.
In no proper sense can it be said that though the essential feature of the invention is not mentioned in the claims the process defined in the claims necessarily possesses that essential feature.
The Court cannot limit the claims by simply saying that the inventor must have meant that which he has described.
The claims in fact go far beyond the invention and upon that ground the patent is invalid.
The Patent Act specifically requires that the specification shall end with a claim or claims stating distinctly the things or combinations which the applicant regards as new and in which he claims an exclusive property and privilege. The Patent Act,
The Patent Act, 1935 (25-26 Geo. V, c. 32, s. 35, as. 2). B. V. D.
IrD.
3-Validity-Prior public knowledge and prior use-Subject-matter-Breadth of claims.] It was held that the letters patent in question, for alleged new and useful improvements incubators, were invalid and void, and they were declared cancelled and set aside (reversing judgment of Angers J. in the Exchequer Court of Canada, [19361 Ex.
C.R. 105), on grounds as follows: The subject-matter of the alleged invention and the validity in that respect of the patent must be envisaged within the ambit of the claims accompanying the specification.
As to the
"method"
claims (those relating to the "method of hatching"): Bearing in mind that, in order to have the character of an invention in the patentable sense, it would not be sufficient for the patentee's conception to consist in the adoption of the principle of air circulation in a room for the purpose of maintaining in it uniformity of temperature (which principle was not new), that a further step was required, viz., a novel method of utilizing air circulation (involving " a degree of ingenuity
*
*
* which must have been the result of thought and experiment "-Thomson v. American Braided Wire Co., 6 R.P.C. 518), it was to be noticed that nowhere in the claims was there claimed precisely as material any particular method of utilizing the air circulation, except, perhaps. the statement that the current of heated air is "created by means other than variations of temperature"; also that there was nothing in the claims to restrict the patent to any particular order of arrangement of the eggs or any particular direction or means of control of the current of air, other than its velocity, and nothing to estop the patentee from asserting that the claims were not restricted by such features; and it followed that, in view of the operations of one Hastings and prior public use (as established in evidence) at Muskogee, Oklahoma, in 1912 (the date of the alleged invention now in question carried back to 1915), the patentee's claims in question were too wide; also the greater part of them, if not all, were already anticipated and precluded by Hastings' public use. The Supreme Court of the United States in Smith v. Snow (294 U.S. R. 1), dealing with the first of the method claims, held it to be valid, but the record before that Court lacked evidence of Hastings and evidence of what his prior use had been, and the record before this Court in the present case was so widely different that a different conclusion must be reached.
As to the claims relating to the apparatus: Upon the evidence, it was impossible to regard the advance, if any, over the prior knowledge and prior user as good and sufficient subject-matter of a patent. Any difference that might exist between the structure now in question and that of Hastings consisted only in mechanical details. The apparatus claims were defeated by Hastings' prior public use; they must be regarded as invalid and void, as embracing more than the patentee could claim as new: and, indeed, as claiming something which, having regard to Hastings' prior public use, did not amount to an invention in the pertinent sense. THE v. Co. AL................. 4- Validity-Claims-Construction of claims - Determining scope of patent monopoly - Matter embraced in the claims - Specification - The action was for damages, etc., for alleged infringement of the same patent that was considered in the judgment of this Court in The King v. Smith Incubator Co. et al., ante, p. and, so far as it applied, the evidence in that case was made part of the evidence in the present case. Held: The issue as to the validity of the plaint-iffs patent must follow the decision, against the validity of the patent, in The King v.
Smith Incubator Co. et al., supra, and on this ground the plaintiffs appeal
(from the judgment of Angers J. in thi,
Exchequer Court of Canada, dismissing the action on the ground of no infringement) must be dismissed.
The claims at the end of the specification in a patent must be regarded as definitely determining the scope of the patent monopoly, having regard to the due and proper construction of the expressions they contain. They must be construed in the light of the rest of the specification; that is to say, the specification must be considered in order to assist in comprehending and construing the meaning-and possibly the special meaning-in which the words or the expressions contained in the claims are used; but on the issue eithcr of validity or of infringement, the criterion must be determined according to the scope of the monopoly as expressed in the claims (though it is not necessary, to justify a holding of infringement, that the infringing article be found identically, or in every respect, the same as the patented article; it is sufficient if the infringer has borrowed the substance or spirit of the invention as it can be ascertained from the claims, except in details which could be varied without detriment to the successful working of it). Discussion by Duff CJ.
with regard to pertinent principles as to the requisites of a specification, the construction of claims, what constitutes the essence of infringement, and grounds on which a plaintiff in an action for alleged infringement may fail, having regard to the claims or to the specification as a whole. References to authorities. It was pointed out that, in construing and applying judgments on such subjects, it is important that the judgment be read as a whole and, still more, that it be read in light of the issues of fact and questions of law to which the judge is addressing himself.
Co. v. SEiLNG... 251
5-Validity - Subject-matter - Prior art.] Plaintiffs sued because of alleged infringement of two patents, relating to means for conveniently removing wrappers (particularly of cellophane) from small packages of such articles as cigarettes and chewing gum, the alleged invention consisting in the combination of the wrapping material and a tearing strip or ribbon of the same material, though in a different colour, affixed to the wrapper, and a tab or tongue composed of a little piece of the wrapper and ribbon, the effect of the arrangement being that when the tab is grasped the wrapper proper is readily torn and may conveniently be removed from the package.
Held: The patents were invalid for lack of subject-matter-the general idea of the alleged invention was old and, as to the means employed, it was reasonably clear that a person competently skilled in the art of devising wrappers for packages to be placed on the market for sale and faced with the problem presented could hardly fail, on reverting to the devices and methods employed in the prior art and publications, to hit upon the use of the ribbon and the tab; any difference that might exist between the patents sued upon and the disclosure in a certain prior (British) patent (Boyd) particularly referred to, was so trifling as to be of no substance in a patent case. Judgment of Maclean, J., President of the Exchequer Court of Canada, [19361 Ex. C.R. 229, dismissing the action, affirmed in the result.
To- CITY Co. LTD ...... 6--Judgment of trial judge declaring patent valid and infringed-Reversed by Supreme Court of Canada-Patent declared void as claims too broad and embracing more than alleged invention described in specifications .- Disclaimer subsequently filed in the Patent Office- Motion by losing party, before formal entry of judgment, for a rehearing of the appeal to give effect to the disclaimer or for a reference back to trial court-Sections 68, Patent Act, 86-86 Geo. V, c. In an action brought by the appellant under section 60 of the Patent Act praying for a declaration that the respondent's patent was void or that, in the alternative, it was not infringed by the manufacture of certain shirt collars by the appellant. the Exchequer Court of Canada held that the respondent's patent was "valid and infringed by the" appellant and dismissed the action.
On appeal, this Court reversed this judgment and declared the respondent's patent void, the judgment proceeding upon the sole grounds that -the claims were too broad and embraced within their scope more than the alleged invention disclosed in the specifications; and, further, that the claims, properly construed, had been anticipated by certain United States and British patents, this Court not finding it necessary to consider the issue of or any other
.grounds upon which the appellant attacked the validity of the respondent's patent.
Before the judgment of this
Court had been formally drawn up or entered, the respondent filed a disclaimer in the Patent Office, stating that through mistake, accident or inadvertence and without any wilful intent to defraud or mislead the public, the specification had been made tao broad, asserting a claim to more than that to which the inventor was entitled.
respondent, arguing that the disclaimer had the effect of correcting the fault in the claims as found by this Court and that it should have an opportunity under sections 50 and 53 of the Patent
Act to establish the validity of the patent as amended by the disclaimer, then moved for an order directing a rehearing of the appeal "in order to meet the new conditions that have arisen since the delivery of the judgment and to provide in the formal judgment of the Court for the filin already made of the disclaimer * * *
On the hearing of the application, leave was given to the respondent to move that, in lieu of a rehearing of the ap.
peal, the judgment of this Court should be varied by directing a reference to the Exchequer 'Court of Canada to determine whether effect ought to be given to the disclaimer, and whether relief ought to be given to the respondent under subsection 2 of section
53 of the Patent Act.
Held, that the respondent's application should be dismissed; under the circumstances of this case, neither a rehearing of the appeal nor a reference back to the Exchequer
Court of Canada ought to be directed.
The direction the respondent is asking for could not be given (without disregarding the appellant's legal rights) unless this Court is prepared to rehear the appeal and enter upon a full examination of all the grounds of appeal advanced by the appellant.
At the time of the hearing of the appeal this
Court then had power to amend the pleadings and, if necessary, to hear fresh evidence in order to dispose of all the issues raised by the appeal as well as those which the respondent is submitting by its motion; but the respondent then insisted on maintaining the judgment of the trial judge, declaring its claims, as framed, to be valid claims.
Having lost on that issue of validity, the respondent is now seeking a rehearing in order to take up a new position never before suggested by it, with all
PATENT-Concluded the attendant delay and inconvenience. By its conduct, the respondent -has definitely elected against taking the position which it is now endeavouring to take and, on grounds both of justice and convenience, the application should fail.
B. V.
PETITION
REVOCATION JUDGMENT-Effect .............. PLEADINGS
PRACTICE AND PROCEDURE-Petition in revocation of judgment (requdte civile)-Effect of its filing-Suspension of proceedings or hearing before appellate courts-Return of record by appellate court to trial court-Granted at the discretion of the court--Preponderance of inconvenience-Jury trial Answers to questions-Whether "special, explicit and articulated"-Findings of the jury -Arts.
1106, 1107 C.C.-Arts. 488, 502, 505, 1118, 1168, 1178, 118
A petition in revocation of judgment (requ6te civile) has not the effect, ipso facto, the the case wherein the petition is presented, and more particularly the hearing before an appellate jurisdiction-Stay of execution is the only consequence to result from the mere filing of the petition in revocation; and, moreover, such consequence does not follow as a matter of course, but only upon an order to that effect granted by a judge. A fortiori the filing of a petition in revocation of judgment does not operate as a stay of proceedings in appellate jurisdictions as a matter of course. appellant company's application that, in view of the fact that a petition in revocation has been duly filed in the Superior Court in Montreal, the record ought to be returned to that Court for hearing on the petition, held that, such matter being entirely within the discretion of this Court, such application should be refused as, under the circumstances of this case, the respondent having been awarded damages by the judgment appealed from, the balance of inconvenience would be entirely on the respondent's side if the application was granted. Kowal v. New York Central Railroad Co. ([19341 S.C.R. 214) dist. On the merits of the case, the judgment appealed from, affirming the judgment of the trial judge with a jury and awarding the respondent damages resulting from an accident due to collision, should be affirmed.-The jury's answer to the question whether the accident has been the result of the sole fault of the appel- Jant company and if so in what consisted that fault, was "Yes, excessive speed and negligence of the watchman."
Although the last italicized part of the answer should be disregarded, being clearly insufficient and irregular as not being "special, explicit and articulated"
(art. 483, C.C.P.), the other part of the answer "excessive speed," taken separately-as it must be under the circumetances-is sufficient to meet the requirements of that article of the Code and render the verdict valid; and it is not the function of this Court under the circumstances of this case to review such finding (art. 501 C.C P.).
MoNT- Co. v. GuAtARD.... 76
PRESCRIPTION-Insurance Act, R.S.Q.
1925, c. 243, s. 9216 (2) (3) ......... 127
PRINCIPAL AND SURETY
PUBLIC HARBOUR
RAILWAYS-Maritime
Freight Rates
Act, R.S.C., 1927, c. 79, section 8- Freight rates-Select territory-Reduced rates outside-Competitive or reduced tariffs-Board of Railway Commissioners-Powers and duties-Admmistrative and judicial--Prejudice or non-prejudice
-Question of fact.]
The appellants made an application to the Board of
Railway Commissioners for Canada for an order requiring the respondent railway company to reduce the freight rates on potatoes in carloads from shipping points within "select territory" in the
Maritime Provinces to points within certain areas of Ontario and Quebec in which the respondents had published reduced rates for the express purpose of meeting motor-truck competition.
Board found that the appellants had failed to establish that the competitive tariffs complained of had resulted in the destruction of, or to the prejudice of, the advantages given by the Maritime
Freight Rates Act to shippers in the
"select territory" in favour of persons or industries located elsewhere and dismissed the application. Held that the judgment of the Board should be affirmed. Competitive tariffs established outside of the "select territory" are within the contemplation of section 8 of the Act, and when such tariffs prejudicially affect "the statutory advantages," then "the Board shall not ap- RAILWAYS-Continued prove nor allow" such tariffs; and these words necessarily imply authority to cancel any rates having such effect; but whether any particular competitive rate has that effect must in each case be a question of fact to be determined by the Board itself. The onus of establishing prejudice does not rest always upon the shipper or the complainants. The Board itself is a body invested with administrative as well as judicial powers and duties; and when a complaint is presented to the Board that any par-ticular tariff constitutes an infraction of section 8, it is the duty of the Board to determine the question of prejudice or non-prejudice, keeping in mind that it is the intention of the Act to maintain the statutory advantages in rates given thereby to persons and industries. located in the "select territory." authority. of the Board under section 8, is limited to that which is given by or implied in the words "shall not approve nor allow any tariffs which may destroy or prejudicially affect such advantages"; and the Board, having decided the issue of fact adversely to the appellants, as regards the particular tariffs in question in this appeal, was right in concluding that those tariffs ought not to be disallowed.
THE PRovINca NovA ScoTIA 2- Highway-Level crossing-Quebec Orders in Council-Crown grants-Provincial Acts-Reservation for highways -Costs of construction and maintenance-Practice of the Board of Railway Commissioners for Canada-Seniority- Re-hearing-Railway Act, sections 43, 51, 189, 256, 259.1
On the application of the municipality of St. Eughne de Guigues, province of Quebec, for a level crossing over the Canadian Pacific Railway Company's tracks at Angliers, the Board of Railway Commissioners for Canada by a first judgment (43 Can. Ry. Cas. 84) held that, under the Quebec Order in Council of October 30, 1794, the Municipal Code and certain provincial Acts, the municipality was senior at the point of crossing and placed the cost of construction and maintenance on the railway company. The latter then applied under section of the Railway Act for a re-hearing of the application and on the re-hearing, which was first refused and subsequently granted, both parties submitted additional evidence, and the case was reargued. On April 8, 1936, the Board of Railway Commissioners for Canada rendered its decision, (45 Can. Ry. Cas. 208); but the Chief Commissioner, the RAILWAYS-Concluded
Assistant Chief Commissioner and the
Deputy Chief Commissioner (the latter differing from the Chief Commissioner in his view of the facts and of the law) were all of the opinion that a case should be stated in writing for the opinion of the Supreme Court of Canada on the following questions:
1. Whether the
Chief Commissioner was right in holding that the Orders in Council of 1794 do not constitute a valid reservation for highways as against subsequent grantees of the Crown.
2. Whether the Chief
Commissioner was right in holding that the grant from the Crown to the railway company in 1933 is sufficient in itself to rebut any presumption in favour of such a reservation which might otherwise arise either from the terms of the
Orders in Council or by reason of the practice which has been followed for many years in the survey of Crown lands in the province of Quebec.
Whether the Chief Commissioner was right in holding that the railway company occupies a position of seniority in respect of the railway crossing, the subject of this application.
4. Had the
Board jurisdiction under section 51 of the Railway Act to grant a re-hearing of the application? Held that, as to the first and second questions the title of the railway company to the lands in question was not subject to any reservation in respect of highways; and as to the fourth question, that the Board of Railway Commissioners for Canada bad jurisdiction under section of the
Railway Act to give a direction for, and to proceed with, the re-hearing of the municipality's application.
As to the third question, no answer was given to it, as, in the opinion of the Court, it was no part of its functions to define the practice of the Board in respect of the apportionment of cost of works upon an application to construct a railway crossing on a highway or a highway crossing on a railway.
3- Negligence-Street railways-Passenger injured by a passing automobile after alighting from street-car which, to allow her to alight, had been stopped suddenly at a place other than a usual stopping place-Liability of street railway company -Evidence - Findings of
RES IPSA LOQUITUR
SALE OF GOODS
SALE OF LAND-for taxes ...... SALES TAX-Special War Revenue Act (R.S.C., 1927, c. 179, and amendments), s. 86 (1) (a) ("goods produced or manufactured")-Old tires bought, treated and retreaded, and retreaded tires sold- Liability to sales tax.............. SEDUCTION-Action by the woman alleged to have been seduced-The Seduction Act, R.S.A., 1922, c. 102, 8. 5- Construction-Cause of action-Nature of damage
Basis of damages Sufflciency of evidence of damage to support action-Verdict of jury.] Sec. 5 of The Seduction Act, R.S.A., 1922, c. 102, enacts that "notwithstanding anything in this Act an action for seduction may be maintained by any unmarried female who has been seduced, in her own name, in the same manner as an action for any other tort and in any such action she shall be entitled to such damages as may be awarded." At the trial the jury found that the present appellant, an unmarried female, and a plaintiff in the action, was seduced by defendant, and that she suffered damage in an amount of $10,000.
The trial judge (Ives J.) dismissed her action, on the ground that damage is the gist of the action, that the damage necessary to found a right of action in the woman must be of the same character as gave the master his right of action, i.e., loss of service, or at least an interference with the woman's ability to serve, and that there was no evidence of such damage ([19341
2 W.W.R. 511). dismissal of the action was (by a majority) affirmed by the Appellate Division, Alta. ([19351 1 W.W.R. 199). appeal to this Court: Held (Davis J. dissenting), that the appeal be allowed, and appellant have judgment for the amount of the jury's verdict. Per Duff C.J., Rinfret and Kerwin JJ.: In view of the decisions of the Appellate Division, Alta., in Gibson v. Rabey, (1916) 9 Alta. L.R. 409, and Tetz v. Tetz, (1922) 18 Alta. L.R. 364, concerning the construction of said s. 5 as it stood prior to its reproduction without material alteration in R.S.A. 1922, c. 102, that reproduction must be taken to have given legislative sanction to the construction put upon the section by those decisions
(Barras v. Aberdeen Steam Trawling & Fishing Co. [19331 A.C. 402), and, having regard to the effect of those decisions (discussed), any construction is precluded by force of which the determining factors in the trial of an action of seduction under s. 5 are to be deemed essentially or substan- SEDUCTION-Continued tially the same as those in the trial of an action of seduction under the other
(preceding) sections of the Act or at common law. Starting from this point it follows that s. 5 should be construed according to the ordinary meaning of the words and that damage of the special character which is the gist of the action under the other sections of the Act-damage actually or presumptively entailing some loss of service or some disability for service-is not of the gist of the action under s. 5.
Kerwin J.: A consideration of the language of s. 5 leads to the same conclusion.
The language analysed and discussed.)
There was sufficient evidence of damage to support the action. Further, the jury's verdict must stand unless, examining the evidence as a whole, the Court was clearly of opinion that it was one which no jury, acting judicially, could give; and this had not been established by argument. So also as regards damages.
It was for the jury to determine whether appellant's evidence, or how much thereof, should be accepted as correct; and on her evidence it could not be said that, if it was accepted, the sum awarded was such as no tribunal of fact acting reasonably could have awarded.
Per Davis J. (dissenting)
:
If the cause of action in s. 5 (excluding necessarily the relation of master and servant) is the same as in the other sections of the Act, the birth of a child or pregnancy or at least some physical disability as a direct result of the conduct complained of is an essential element of that cause of action, and the illness that was proved in this case was too remote and insufficient to sustain the action.
If, on the other hand, the cause of action in s. 5 is to be regarded as a new and independent tort, separate and distinct from the action for seduction referred to in the other sections, then, whatever be the essential elements of this new cause of action, there must be at least something in the nature of negation of choice. Taking either interpretation of s. 5, the action failed upon the evidence. In interpreting s. 5, the statute should be read as a whole and s. 5 interpreted, not as an isolated piece of legislation to be given a new meaning and significance, but as part of an entire statute dealing with the same subject-matter. The other (preceding) sections (discussed) necessarily import as an essential ingredient of the cause of
SEDUCTION-Concluded action an illegitimate child born or conceived as a result of the relations complained of; and that has always been the common understanding in Canada of the cause of action for seduction. The language of s. 5 analysed and discussed, and with reference to the language in the other sections. Sec. 5 should not be interpreted so as to import into the words used therein a different quality or meaning from that which the same words have in the other sections. In the cause of action under s. 5 there is necessarily excluded the relation of master and servant as an essential, and with it the necessity for proof of loss of service; but the substance of the cause of action, the birth of a child or at least the condition of pregnancy, remains. The re-enactment of the statute in the revision of 1922 does not touch the point as to the substance of the cause of action, because the fact of birth of a child or pregnancy in the Alberta cases prior to the revision was admitted or accepted by counsel and those cases did not turn upon that question. The evidence in the present case disclosed no cause of action. MACMIL- SHIPPING-Damage to goods-Peril of the sea-Negligence-Fault of carrier or of his agent or servant-Burden of proof -Barbados Carriage of Goods by Sea Act, 1926-Clause q, rule 2, article 8, of the schedule of the Act.]
Upon an action against a carrier for damages to goods shipped under bills of lading which specifically stated that the vessel should not be liable for damage caused by perils of the sea, the grounds of defence were, first that, the carrier having established at the trial a prima facie case of loss by a peril of the sea, the burden of proving negligence consequently rested on the respondent, and secondly, that the carrier had discharged the burden of proof resting on him under clause q, rule 2, article 3, of the schedule of the Barbados Carriage of Goods by Sea Act, 1920, which was made applicable to the contract. Held that, the issue raised by the first ground being an issue of fact, it was incumbent upon the carrier to acquit himself of the onus of showing that the weather encountered during the voyage was the cause of the damage and that it was of such a nature that the danger of damage to the cargo arising from it could not have been foreseen or guarded against as one of the probable incidents of the voyage-In this case, the concurrent findings of fact, on that issue, by the trial and appellate courts in favour of the respondent must stand. Held, also, that under clause q, SHIPPING-Concluded rule 2, article 3, the burden rests upon the carrier to show that neither the actual fault nor the privity of the carrier, nor the fault or neglect of the agents or servants of the carrier, contributed to the loss or the damage; and the carrier does not acquit himself of this onus by showing that he has employed competent stevedores to stow the damaged cargo, or that proper directions as to the stowage of the cargo have been given.
v. ...................
SOCIETIES-Fraternal benefit society
-Society incorporated under Charitable
Associations Act, R.S.M., 1913, c. 27- Action brought by member attacking acts done in contemplation of or in connection with incorporation of a
Dominion society, the establishment of lodges outside the province, and transfer of moneys to Dominion society-Powers of the provincial society-Manitoba statute, 1917, c. 12 (An Act respecting the
Capacity of Companies), s. 1-Status of plaintiff to bring the action.] The plaintiff sued as a member of the defendant provincial society, incorporated in 1915 under the Manitoba Charitable
Associations Act (R.S.M., 1913, c. 27), claiming declarations that certain bylaws of the society, passed (as alleged)
in contemplation of extending its objects and powers throughout Canada and obtaining a Dominion charter, were invalid, as were also the establishment of lodges or branches outside of Manitoba, the method of electing trustees or directors, the use of moneys of the society to obtain a Dominion charter, and the application of its funds to the objects and purposes of the defendant Dominion society (incorporated by Dominion Act,
1930, c. revived or continued by amending Act, 1933, c. 64), and asking for injunctions, accountings and restitution. The powers of the provincial society included (inter alia) powers " to pass by-laws to regulate the powers and duties of the officers of the association, the amount and manner of the payment of contributions * * * the manner of choosing 'officers * * * and * * * of admission of new members, and generally such other by-laws as may be necessary for the purpose of effectually carrying out the objects of the association " and "to amalgamate or affiliate with any other society existing at the date hereof or which may be incorporated or formed in the future, and whose aims and purposes are similar" to those of said provincial society.
Held: (1)
Ch. (s. 1) of the Statutes of Manitoba, 1937 (An Act respecting the Capacity of Companies) applied to the pro- SOCIETIES-Concluded vincial society. Though that statute was repealed by the Consolidated Amendments, 1924, it was then re-enacted, by s. 24 of c. 35 thereof, in exact terms. Said s. 24 of c. 35, though included in a chapter entitled An Act to amend "The Companies Act," cannot be said to have been repealed by the Companies Act, 1932. In any event, most of the things of which plaintiff complained were done prior to the coming into force of the Companies Act, 1932, and the proceedings leading up to amalgamation of the provincial society with the Dominion society were under way, and defendants invoked s. 31 of the Manitoba Interpretation Act, R.S.M. 1913, c. 105. (2) Under its charter and the above provisions of the statutes of Manitoba, the provincial society had power to pass the by-laws attacked by plaintiff, and also to establish branches outside the provinee and to amalgamate with or transfer its assets to another body having similar powers. The only provision in the Dominion incorporating Act claimed to be dissimilar from the powers held by the provincial society-a certain restriction in qualification for future membershipwas not a sufficient departure from the purposes of the provincial society as to prevent it from amalgamating with or transferring its assets to the Dominion society.
(3) As it was not suggested that plaintiff's case rested upon fraud or oppression attempted against the minority of the society's members, plaintiff's right to sue as a member of the provincial society in respect of its acts was limited to the purpose of preventing it from commencing or continuing the doing of something which was beyond its powers.
(4) In view of the above and for reasons aforesaid the plaintiff had no status to bring the action.
(5) Further, in view of the fact that all of the assets of the provincial society were actually transferred to the Dominion society, which had been in full operation for over three years with the approval of governmental authorities, both federal and provincial, the judgment appealed from dismissing the action should not be interfered with under the circumstances. Judgment of the Court of Appeal for Manitoba, 44 Man. L.R. 280, dismissing the plaintiff's action, affirmed in the result.
SAss v.
STATUTES-Statute creating new duty and providing remedy for breach-Confinement to remedy prescribed.... 169 2---Construction-Reproduction of enactment without material alteration as STATUTES-Concluded giving legislative sanction to construction put upon enactment by decisions prior to the reproduction.......... 318
See SEDucioN 1.
3--Church assessment-Parish and Fabrique Act, RS.Q., 1925, c. 195.... 113
4-Maritime Freight Rates Act, R.S.C.,
1927, c. 79, s. 8...................
5- Trustee Act-R.S.O., 1927, c. 150
(as amended in 1981, c.
s. 7), e8.
56(2) 57(1)....................
6--See also under appropriate subject headings, throughout the index.
STATUTES OF LIMITATION
See CoPmIonr 1; (Acci- STREET RAILWAYS - Negligence - Passenger injured by a passing automobile after alighting from street-car which, to allow her to alight, had been stopped suddenly at a place other than a usual stopping place - Liability of street railway company - Findings of jury..................
SUCCESSION DUTY-Deposit receipt issued by bank in Province of Manitoba and held by a person who died domiciled in State of Minnesota and then held by his executors in Minnesota--Claim by
Government of Manitoba (under Succession Duty Act, Man., 1984, c. 42) for succession duty in respect of the sum represented by the deposit receipt
Situs of debt-Terms and nature of the deposit receipt - Collateral attack on validity of instrument as regards authority of officials signing it.] B. died domiciled and resident in the State of Minnesota and having in his possession there a deposit receipt issued by a bank in the Province of Manitoba, reading as follows: "Received from [B.] the sum of $50,000 which this bank will repay to [B.1 or order with interest at the rate of 21% per annum until further notice.
Fifteen days' notice of withdrawal to be given and this receipt to be surrendered before repayment of either principal or interest is made.
No interest will be allowed unless the money remains in the bank one month. This receipt is negotiable." Probate of B.'s will issued to his executors in Minnesota, where the deposit receipt was reduced into possession and held by them.
None of the executors or beneficiaries under the will resided in Manitoba.
The Provincial
Treasurer of Manitoba claimed from B.'s estate succession duty under the Succes- SUCCESSION DUTY-Continued sion Duty Act, Man., 1934, c. 42, in respect of the sum deposited and represented by the deposit receipt. The evidence was that the bank treated that form of deposit receipt as negotiable; that in general practice, if it was endorsed in accordance with the way it was made payable, it would be negotiated and paid; if the payee endorsed it, the bank considered it was properly transferred; it was the bank's practice to honour indorsement by the payee; and it could come through another bank with another party; the bank admitted its liability to pay the deposit receipt in question. Held: The deposit was not subject to succession duty under said Act. (Judgment of the Court of Appeal for Manitoba, 44 Man. R. 63, affirmed.) The situs of the deposit receipt for the pertinent purposes was not the Province of Manitoba. It came within the well recognized exception to the rule that the situs of a simple contract debt is the jurisdiction where "the debt is properly recoverable and can be enforced." came within the exception notwithstanding that it might not properly be called a "negotiable instrument" within the strict definition of that term as found in Bills of Exchange Acts or as that term has come to be regarded in English mercantile custom and usage. The exception is not restricted, in its application, to "negotiable instruments" strictly as so defined. The deposit receipt in question was, after endorsation, capable of being transferred by delivery and of being sold in Minnesota, passing a valid title to the debt, by acts done entirely in Minnesota. It was in effect a saleable chattel, therefore situate where it was found, and it followed the nature of chattels as to the jurisdiction to grant probate. It was capable of being reduced into possession by the executors in Minnesota, by virtue of the probate and letters testamentary there issued, and, when that was done, the executors held a marketable security, saleable and, after endorsation, transferable by delivery, with no act outside of Minnesota being necessary to render the transfer valid. The executors or their transferee could maintain an action, if necessary, against the bank in the Manitoba courts without taking out ancillary letters of administration in Manitoba. The document, and the debt of which it was the title, was locally situated in Minnesota. and was not subject to the succession duty claimed.
Attorney - General v. Bouwens, 4 M. & W. 171; Crosby v. Prescott, [19231 S.C.R. 446; The King v. National Trust Co., [19331 S.C.R. 670; Richer v. Voyer, L.R. 5 Priv. Cou. App. 461, and other cases and authorities cited. SUCCESSION DUTY-Concluded
The King v. Lovitt, [1912] A.C. 212, distinguished.
Held, also: It was not open to the Provincial Treasurer to attack collaterally the validity of the deposit receipt as regards the authority of the bank officials who signed it.
BENNETT
SURETY-Building contract-Action for damages for alleged faulty performance by contractor-Terms of contract-Interpretation-Nature of work-Nature of alleged defects-Basis and measure of damages recoverable, if any-Surety company guaranteeing performance by contractor-Alleged alteration of contract without surety's consent-Alleged failure to notify surety of certain matters-Release of surety..............
TARIFFS (FREIGHT)
TAXATION
TRUSTEE ACT-R.S.O., 1927, c. 150
(as amended in 1931, c. 23, 8. 7),
66 (2), 67 (1).....................
TRUSTEES
WILL-Construction-Direction to trustees to pay the "net annual interest and income" of fund to charitable institution-Latter claiming right, as sole beneficiary of income, to corpus of the fund.]
A testator by his will appointed trustees, providing also for appointment of new trustees in place of those dying, etc., and gave them his residuary estate in trust to convert into money and stand possessed of all moneys in trust for certain uses and purposes, including as to
$20,000, to invest it and pay tie net annual interest and income therefrom to his sister for life if remaining unmarried, and from and after her death or marriage to keep invested said sum and "pay and apply the net annual interest and income thereof," one-half to appellant, a charitable institution (incorporated by statute), "to be used for the general purposes of that institution," and, as to another $20,000, to invest it and pay and apply the net annual interest and income thereof for the benefit of a certain church, and should (inter alia) said church cease to exist or change its adherence, "then and thereafter" to "annually pay over the whole of the net annual interest and income" of said sum
WIL-Continued to appellant "to be used for the general purposes of that institution." In events which occurred since the testator's death, appellant became entitled to said gifts in its favour. It claimed the right, as sole beneficiary of the income, to receive from the trustees the corpus (onehalf and the whole respectively) of said sums. Held: Appellant was not entitled to receive the corpus. Judgment of the Supreme Court of Nova Scotia in banco, M.P.R. 65, affirming, on equal division, judgment of Mellish J., ibid, affirmed.
Per Duff CJ. and Davis J.: The testator's intention was plainly that the corpus should not be handed over to the beneficiary.
Wharton v. Masterman, [1895] A.C. 186 (applying to charities the rule in Saunders v. Vautier, 4 Beav. 115, that where a legacy is directed to accumulate for a certain period or where the payment is postponed, the legatee, if he has an absolute indefeasible interest in the legacy, is not bound to wait until the expiration of that period, but may require payment the moment he is competent to give a valid discharge) discussed; that case does not cover the present one. Where, as here, a testator has clearly settled a fund for the benefit of a particular charitable institution, from which fund the annual income is to be paid over by the trustees, whose perpetual succession is expressly provided for, that fund is a capital endowment, or in the nature of a capital endowment, created and settled for the benefit of the particular charity so long as it lasts, but no longer. It cannot be treated as an absolute and presently vested gift of the corpus of the fund which the beneficiary at any time may lawfully demand to be paid over to it and the trust in respect thereof arrested and extinguished without reference to the contrary intention of the testator. In the present case it is income that is given and not capital, and to make the order sought would be to vary the trust (In re Blake's Estate; Berry v. Geen, 53 T.L.R. 411, cited and discussed). Per Rinfret and Crocket JJ.: The rule that where there is an unlimited and unrestricted gift of income, the gift carries with it the corpus from which the income is derived, has no application where the will clearly shews, expressly or impliedly, that the testator intends that the gift should not absolutely vest the corpus in the beneficiary. It is not sufficient to carry the corpus that the annual payments of the income therefrom to the beneficiary are intended to continue in perpetuity (which they may be in the case of charitable gifts), if it clearly appears on a perusal of the entire will that, notwithstanding this fact, WILL-Continued the testator intended that the beneficiary should not itself take possession of the corpus. (Coward v. Larkman 56 L.T.R.
278; 57 L.T.R. 285; 60 L.T.R. 1, cited and discussed.
In re Morgan, [1893]
3 Ch. 222 discussed.)
The rule laid down in Aaunders v. Vautier, 4 Beav.
115, and the basis of its application in
Harbin v. Masterman, [18941 2 Ch. 184, and (on appeal therefrom) Wharton v.
Masterman, [18951 A.C. 186, discussed.
Construing, as a whole, the will now in question, it was the testator's intention to create a perpetual trust in the hands of his trustees, and not to have the trust extinguished and the capital funds taken out of their hands. Per Kerwin
J.: If this were a case where the testator had made a gift of income indefinitely to an individual, the latter would be entitled absolutely to the corpus. Wharton v. Masterman, [18951 A.C. 186 (discussed) cannot be relied on as indicating that the same rule applies where the legatee is a charity; that case, on the questions there arising, does not cover the point now in question. The law is correctly stated in Tudor on Charities,
5th ed., at p. 76 as follows: "A charitable trust may be made to endure for any period which the author of the trust may desire. It may therefore be created for the application of the income in perpetuity to the charitable purpose * * *"
(Reference also to the same work at p.
78 as to the true application of the rule in Saunders v. Vautier in the case of charities. Reference also to other authorities).
The gift of the income in perpetuity to the charity in the present case was entirely valid and proper.
2- Constructio-Person or persons intended to benefit-Extrinsic evidence of testator's intention. v.
3- Interpretation-Persons entitled- Vested interest.] The testator died in
1883, leaving his widow and three daughters, G., H. and L. By his will he devised and bequeathed all his property to his executors and trustees upon trusts.
The will set aside three specific funds, one for each of the daughters for life, and, subject thereto, gave to the widow a life interest in the estate. She was also given a power of appointment, which she exercised, as to one-half of the residue of the estate, and this was not now in question. The daughter G.
died in 1885, ten days after the birth of her only child, who died within two months later, leaving his father as next of kin. The daughter H. died without issue in 1907. The widow died in 1909.
WILL-Continued
The daughter L. died, unmarried, in 1934. Questions then arose, under provisions in the will, and in the above circumstances, as to who were now entitled to (1) that half of the residue of the estate over which the widow was not given a power of appointment, (2) the fund set aside for the daughter L. during her life, and (3) the fund set aside for the daughter H. during her life. As to said half (in question) of the residue, the will directed the trustees to pay the income thereof to the testator's wife during her life and, on her death, then to pay the income to G. during her life, and upon her death to pay the principal "to the lawful issue of my said daughters L. and G. or should only one of them have children, then to the lawful issue of such daughter, share and share alike." Held: G.'s child took at birth a vested interest in the- principal of said half of the residue. Though vesting in possession was postponed until the expiration of the life interest of the widow and of the subsequent life interest of G. had she survived her mother, the vesting of an interest in G.'s child was not dependent or expectant upon the prior life interest or interests; it did not depend on his being alive at the time of distribution.
(Brown v. Moody, [19361 A.C. 635; Hickling v. Fair, [18991 A.C. 15. at 35; and Duield v. Duffield, 3 Bligh's New Reports, 260, at 330-331, cited.)
As to the fund set aside for L. during her life, the will directed the trustees, upon the death of L. having issue, to pay it to such issue, and in default of issue then to pay it "to my daughter G. should she survive my daughter L., or should my said daughter G. not be living at the death of my said daughter L., then to pay [the fund] to the lawful issue then living of my said daughter G., share and share alike." Held: The words "then living" clearly related to the last antecedent, the date of L.'s death, and, there being no issue of G. living at that date, the fund fell into the residue of the estate, half of which passed under the widow's appointment and the other half to those entitled through G.'s child's vested interest. As to the fund set aside for H. during her life, the will directed the trustees upon her death to pay it to her issue and in default of issue to pay it to G. if living "and should she not be then living to pay the same to the lawful issue of my daughters L. and G. share and share alike or should there be but one child of either of my said daughters then to such child absolutely." Held: The fund became (for the same reasons as those for the above conclusion as to the residuary clause) vest- WILL-Concluded ed in G.'s child at birth, and there was no intestacy. The court could not insert such words as "then living" after the words "to pay the same to the lawful issue."
(Re Litchfield; Horton v.
Jones, 104 L.T. 631).
Judgment of the
Court of Appeal in Equity of Prince
Edward Island, [1936]
4 DL.R. 443, reversed. In re
4--Income tax-Direction in will for payment of sum monthly to testator's son, an executor-Construction of will monthly sum a legacy or remuneration as executor and, as such, taxable income-Payment in one year of lump sum covering arrears for previous years-Imposition of tax in respect of the lump sum-Income War
Tax Act, R.S.C., 1927, c. 97, as. 8, 9,
.........................
WORDS AND PHRASES-" Accidentally begin"
(Accidental Fires Act,
R.S.O., 1927, c. 146) .............
2-" Bears the cost of prosecution"
(within exception (b)
in s. 1086 (1),
Crim. Code......................
3-"
Commencement of proof in writing" (Art. 1233(7), C.C.).........
4-"
Commercial matters"
(within art. C.C., par. 1).............
WORDS AND PHRASES-Concluded 5-" Cost of prosecution" (within exception (b) in s. 1086 (1) Crim. Code. .................................. &-"Facts concerning commercial matters" (within art. 128, C.C., par. 1). 86 7- " Harbour"................... 8-"In which that Government [Government of Canada] bears the cost of prosecution" (within exception (b) in a. 1036 (1), Crim. Code........... 9---" Negotiable instruments" (deposit receipt) .........................
10--" Public harbour" .......... 11-"
Res ipsa loquitur" ...... 12-"
Tous les biens qu'il possadera alors" (in clause in marriage contract). .............. See WIFE 2. WORKMEN'S
Workmen's Compensation Act, N.B., 1932, c. 36-Claim under the Act for death of workman-Nature of the industry in which the workman was engaged and whether it was one within the scope of Part I of the Act-Jurisdiction of the Workmen's Compensation Board.
Cases cited
- A.C. 405 A.C. 405
- 3 W.W.R. 699 3 W.W.R. 699
- City of Toronto v. Russell A.C. 493 501
- O.R. 402 O.R. 402
- O.R. 410 O.R. 410
- City of Port Coquitlam v. Wilson scr-1923-235
- 2 W.W.R. 129 2 W.W.R. 129
- O.R. 256 O.R. 256
- Smith Incubator Co. et al. Smith Incubator Co. et al., supra
- King v. Lovitt A.C. 212
- Wharton v. Masterman A.C. 186
Statutes and regulations cited
-
- section 2
- section 3
- Section 7 of the Escheats Act
- section 7
- sections 199
- 200
- section 167
- section 199
- Section 167
- section 223
- Section 223
- section 200
- s. 26
- ss. 167
- ss. 199
- s. 199
- s. 7
- sections 2
- ss. 7
- s. 2
-
Supreme Court Act
-
Copyright Act
-
- Section 82 of the Exchequer Court Act
- ss. 19
- ss. 164
- 166
- 215
- 219
- 220
- 221
- 222
- s. 47
-
- s. 5
- 57
- s. 56
- s. 57
- sections 48
- 51
- 189
- 256
- section 9216
- s. 216
- section 216
- s. 32
- 25
- s. 85
- s. 35
- Sections 68
- section 60 of the Patent Act
- sections 50
- 53
- s. 9216
- 259.1
-
Unresolved citations
- section 167 of the Companies Act
- section 167
- s. 338
- ss. 1
- 2
- sections 294
- 296
- section 296
- section 109 of the British North America Act, 1867
- Section 167
- section 166
- sections 167
- 171
- section 233
- sections 166
- subsection (2)
- sections 199
- 200
- section 200
- s. 168
- subsection (4)
- sections 40
- 41
- section 199
- section 265
- section 268
- section 21
- section 4
- 168
- section 168
- s. 26 of The Domestic Relations Act, 1927
- s. 125 of the Bankruptcy Act
- s. 112 of the Ontario Assessment Act
- s. 126 of the Bankruptcy Act
- s s. 121 of that Act
- s. 188 of the Bankruptcy Act
- section 108 of the British North America Act
- s. (2)
- ss. 56
- 57 of the Trustee Act
- section 216 of the Quebec Insurance Act
- section 51 of the Railway Act
- s. 31 of the Manitoba Interpretation Act