Majority
c. 44, provides, inter alia, that " every consumer of tobacco purchased at a retail sale in the province shall pay to" the province "for the raising of a revenue, at the time of making his purchase, a tax in respect of the consump- SHops tion of such tobacco " (section 4); and the Act also provides that " every person residing or ordinarily resident or carrying on business in " the province " who brings into the province or who receives delivery in the province of tobacco for his own consumption or for the consumption of other persons at his expense or on behalf of or as agent for a principal who desires to acquire such tobacco for consumption by such principal or other persons at his expense * * * shall pay the same tax in respect of the consumption of such tobacco " (section 5).
Section 10 provides that " a consumer shall be and remain liable for the tax imposed by the Act until the same has been collected."
Under section 2 (a) " consumer " means not only any person who within the Province purchases tobacco for his own consumption, but also any other person who purchases tobacco in the Province as agent for his principal who desires to acquire such tobacco for consumption by such principal. It was also enacted (section 3 (2)) that only retail vendors licensed under the Act may sell tobacco at a retail sale in the province. Regulations made under the Act by Orders in Couheil were declared to have the force of statute (section 20 (2)). Regulation 6 provides that " every application for a (retail) vendor's license * * * shall contain an undertaking by the applicant to collect and remit the tax * * * and shall be in Form 2 "; and when signing that Form, the applicant undertakes "to act as the agent of the Minister for the collection of the tax * * * and to account to the province * * * for all moneys so collected."
Held, by a majority of the Court, that the Act is within the constitutional powers of the province, except as to the provisions making the agent, who buys tobacco for his principal personally liable for the tax, which provisions are severable.
The Chief Justice and Mr. Justice Davis were of the opinion that the entire Act was ultra vires the province.
Mr Justice Rinfret and Mr. Justice Crocket were of the opinion that the entire Act was intra vires the province.
Mr. Justice Kerwin was of the opinion that section 5 and also the provisions making the agent personally liable for the tax were ultra vires Mr. Justice Hudson and Mr. Justice Taschereau were of the opinion that the Act was intra vires the province, except as to the personal liability of the agent for the tax.
APPEAL from the judgment of the Supreme Court of New Brunswick, appeal division (1), which held that the Tobacco Tax Act, (N.B.) was intra vires the province. The question in issue in this case is the constitutionality of "An Act to provide for imposing a tax on the consumption of tobacco " (1940, (N.B.)
4 Geo. VI, (1) (1940) 15 M.P.R. 278; [19411 1 D.L.R. 416.
c. 44), hereinafter referred to as The Tobacco Tax Act. The appellant caused a writ to issue in the Chancery Smo'
Division of the Supreme Court of New Brunswick claiming an injunction restraining the respondents Conlon and Co L.
McDonough, and each of them, from entering upon the store premises of the appellant, in the city of Saint John, or from accosting, questioning, or otherwise interfering with customers of the appellant while on those premises, or on the streets adjacent thereto, with reference to any purchase of tobacco, or the payment of any tobacco tax under the authority of the Act above mentioned, or the regulations under it.
The parties agreed upon the following statement of facts:
That the plaintiff, Atlantic Smoke Shops Limited, is a corporation duly incorporated by letters patent issued under the Companies Act of the Dominion of Canada and having its head office at the city of Saint John in the province of New Brunswick.
That on the eleventh day of May, A.D. 1940, the legislature of the province of New Brunswick purported to enact a statute, being chapter 44, 4 George VI, cited as The Tobacco Tax Act. The said Act came into force on the 1st day of October, A.D. 1940, by proclamation of the Lieutenant-Governor in Council.
That under the authority of the said Act the Lieutenant-Governor in Council purported to make regulations styled "Regulations Under Tobacco Tax Act."
That on the fifteenth day of October, A.D. 1940, the said Atlantic Smoke Shops Limited opened a store on the northeast corner of Waterloo and Peters streets in the said city of Saint John, and thereafter carried on and now carries on therein the business of selling tobacco, including cigars and cigarettes.
That the said plaintiff carried on and now carries on its said business without having obtained any license so to do under the Tobacco Tax Act or the said regulations.
That in its said store the said plaintiff has since the fifteenth day of October, A.D. 1940, sold and is now selling at retail sale tobacco, including cigars and cigarettes, manufactured in provinces of Canada other than the province of New Brunswick, to persons defined by section 2 (a) of the said Tobacco Tax Act as "Consumers"
or "Consumers of Tobacco," without collecting the tax imposed by the said Act.
That the defendant, James H. Conlon, was on the coming into force of said Tobacco Tax Act appointed to the office of Tobacco Tax Commissioner, being the office created under the regulations hereinbefore referred to and has since occupied and now occupies said office.
That on the second day of November, A.D. 1940, and from time to time thereafter, the defendant John McDonough, an inspector appointed under the said Act, and others, all acting under the instructions of the other defendants, entered upon the plaintiffs said premises and proceeded to question customers of the plaintiff as to whether they had paid the provincial tax on the tobacco purchased by them from the plaintiff, to ask them to produce their tobacco tax receipts and to demand their names and addresses. The said defendant John McDonough and other persons so entering the said premises as aforesaid refused to leave the same when requested so to do by the plaintiff, and claimed that they ASTNIC were entitled to remain therein and to question the said customers of SHoPs the plaintiff by virtue of certain provisions of the said Tobacco Tax Act and the regulations made thereunder.
That by reason of the said actions of the defendants the said business of the plaintiff has been and is now being injuriously affected.
The question for the opinion of the Court was expressed in these terms:
The question for the opinion of the Court is whether the Tobacco Tax Act, or any of the provisions thereof, and/or the regulations made thereunder or any of them, and in what particular or particulars or to what extent are ultra vires of the legislature of the province of New Brunswick. If the Court shall be of opinion that the said Act and Regulations are wholly intra vires this action shall be dismissed.
If the Court shall be of opinion that the said Act and Regulations are wholly ultra vires, judgment shall be entered in favour of the plaintiff and against the defendants for an injunction order in the terms of the claim endorsed on the writ of summons herein.
If the Court shall be of the opinion that the said Act and Regulations, or any of them are intra vires in part and ultra vires in part, the Court shall make such order, by way of declaration and/or by way of substantive relief to the plaintiff, as it shall deem right and proper. The stated case was submitted to the Supreme Court of New Brunswick, appeal division, which held unanimously (1) that the Act was within the constitutional powers of the province.
From that judgment, the Atlantic Smoke Shops Limited appealed to this Court by special leave granted by the Appeal Division of the Supreme Court of New Brunswick. The legislature of the province of Quebec has adopted in 1940 a statute, 4 Geo. VI, c. 15, entitled the Tobacco Tax Act, which is somewhat similar in its provisions to the New Brunswick statute. The Quebec Act has been held intra vires the province by the Superior Court, Trahan J. (2), which judgment was affirmed by the Court of King's Bench, appeal side (3).
In view of that fact, the Attorney- General for the province of Quebec was allowed to intervene, on this appeal by order of this Court, in order to support the constitutionality of the New Brunswick Act. The material provisions of the Tobacco Tax Act of New Brunswick are the following:
2. (a) " Consumer " or " Consumer of Tobacco " means any person who within the Province, purchases from a vendor tobacco at a retail (1) (1940) 15 M.P.R. 278; [19411 1 DJ.R. 416.
(2) (1940) Q.R. 78 S.C. 377.
(3) (1941) Q.R. 70 K.B. 101. sale in the Province for his own consumption or for the consumption of other persons at his expense or who, within the Province, purchases from a vendor tobacco at a retail sale in the Province on behalf of or SHors as agent for a principal who desires to acquire such tobacco for consumption by such principal or other persons at the expense of such principal.
(d) "Purchaser"
means any person who, within the Province, purchases from a retail vendor tobacco at a retail sale in the Province. (e) "Retail Sale" means a sale to a consumer for purposes of consumption and not for resale.
() "Retail Vendor" means any person who, within the Province, sells tobacco to a consumer.
3. (2) No persons shall sell any tobacco in the Province at a retail sale unless he holds a retail vendor's license issued to him under authority of this Act and such license is in force at the time of sale.
(3) No wholesale vendor shall sell any tobacco in the Province for resale in the Province to a person who is not a vendor duly licensed under this Act.
4. Every consumer of tobacco purchased at a retail sale in the Province shall pay to His Majesty the King in the right of the Province for the raising of a revenue, at the time of making his purchase, a tax in respect of the consumption of such tobacco, and such tax shall be computed at the rate of ten per centum of the retail price of the tobacco purchased.
5. Every person residing or ordinarily resident or carrying on business in New Brunswick, who brings into the Province or who receives delivery in the Province of tobacco for his own consumption or for the consumption of other persons at his expense or on behalf of or as agent for a principal who desires to acquire such tobacco for consumption by such principal or other persons at his expense shall immediately report the matter to the Minister and forward or produce to him the invoice, if any, in respect of such tobacco and any other information required by the Minister with respect to the tobacco and shall pay the same tax in respect of the consumption of such tobacco as would have been payable if the tobacco had been purchased at a retail sale in the Province at the same price.
7. No retail vendor shall advertise or hold out or state to the public or to any consumer, directly or indirectly, that the tax or any part thereof imposed by this Act will be assumed or absorbed by the retail vendor or that it will not be considered as an element in the price to the consumer or, if added, that it or any part thereof will be refunded.
8. The tax shall be collected, accounted for and paid to the Minister by such persons, at such times and in such manner as the regulations may prescribe.
10. A consumer shall be and remain liable for the tax imposed by this Act until the same has been collected.
20. (1) For the purpose of carrying into effect the provisions of this Act according to their true intent or of supplying any deficiency therein the Lieutenant-Governor in Council may make such regulations, not Am inconsistent with the spirit of this Act, as are considered necessary or advisable, and without limiting the generality of the aforegoing the Lieutenant-Governor in Council may make regulations:
(2) Such regulations may from time to time be repealed, amended or varied and, if repealed, may be re-enacted, and such regulations shall have the same force and effect as if enacted by this Act and shall be published in the Royal Gazette.
The material Regulations made under the Act are the following:
6. Every application for a vendor's license, other than a wholesale vendor's license, shall contain an undertaking by the applicant to collect and remit the tax in accordance with the provisions of the Act and these Regulations and shall be in Form 2 of the Schedule to these Regulations, as near as may be. The applicant shall state in his application for a license an estimated amount of his normal monthly Tobacco Sales. Form 2 contains the following:
I/We, upon acceptance of License to Retail Tobacco, agree and undertake to act as the Agent of the Minister for the collection of the Tax imposed by said Act and to account to the Province of New Brunswick for all moneys so collected as provided by the Act and regulations. The other material Regulations are:
9. No person, other than the holder of an itinerant salesman's license issued under the provisions of Regulation shall, either as principal or agent, sell tobacco at retail at any place other than a place of business designated in a valid, subsisting license, issued to such person; Provided that nothing in this or the next preceding Regulation shall be construed to prohibit or restrict the solicitation of orders for or the sale of tobacco by a licensed wholesale vendor to a licensed retail vendor at any place. 12. No person shall sell tobacco at retail elsewhere than a named place of business, either as principal or as agent, without having obtained an itinerant salesman's license.
No person shall sell tobacco at retail elsewhere than a named place of business through an agent or salesman unless such agent or salesman is the holder of a valid subsisting itinerant salesman's license.
19. Every licensed retail vendor is hereby constituted an agent of the Minister for the collection of the tax and shall collect the tax from the consumer at the time of purchase of tobacco by the consumer.
22. The retail vendor or his agent shall deliver to every purchaser, at the time of the sale, a receipt for the tax collected and no sale shall be made unless such receipt is given.
30. No person shall purchase tobacco at retail without paying the tax or accept delivery of same without receiving from the retail vendor a receipt for such tax in accordance with the provisions of the Act and these Regulations.
The grounds of appeal raised by the appellant before this Court were as follows:
1. The Act is not legislation upon the matters assigned to the legislative jurisdiction of the province by sec. 92 of the British North America Act, but is in fact legislation upon matters within the exclusive legislative jurisdiction of the Dominion of Canada by virtue of sec. 91 of the British North America Act.
2. The Act purports to impose a tax for the raising of a revenue for provincial purposes, but such tax is neither,
(a) a direct tax, nor
(b) a tax within the province as authorized by subsection 2 of sec. 92 of the British North America Act. 3. The tax is not confined in its effect to the province of New Brunswick nor to the persons upon whom it is levied.
4. The Act infringes upon the exclusive legislative jurisdiction of the Dominion of Canada to impose customs and excise duties.
5. The Act purports, in violation of the provisions of sec. 121 of the British North America Act, to impose a tax upon articles grown, produced or manufactured in another province of Canada when introduced into New Brunswick for purposes of consumption.
6. The licences provided for in the Act in question are not within the category of shop, saloon, tavern, auctioneer or other licenses in order to the raising of a revenue for provincial, local or municipal purposes under sec. 92 subsection 9 of the British North America Act. 7. The Regulations are invalid because the statute which authorizes them is wholly ultra vires.
W. P. Chipman K.C. and J. F. H. Teed K.C. for the Peter J. Hughes K.C. for the respondents.
Aimi Geoffrion K.C. and R. Genest K.C. for the Attorney-General for Quebec.
THE CHIEF JUSTICE-It is necessary first to ascertain the characteristics of the tax, the validity of which is in question. The charging sections are sections 4 and 5 which must be read in light of the meanings attached to the phrases therein employed by the interpretation section. Sections 4 and 5 are as follows:- 4. Every consumer of tobacco purchased at a retail sale in the Province shall pay to His Majesty the King in the right of the Province for the raising of a revenue, at the time of making his purchase, a tax in respect of the consumption of such tobacco, and such tax shall be computed at the rate of ten per centum of the retail price of the tobacco purchased. 5. Every person residing or ordinarily resident or carrying on business in New Brunswick, who brings into the Province or who receives delivery in the Province of tobacco for his own consumption or for the consumption of other persons at his expense or on behalf of or as agent for a principal who desires to acquire such tobacco for consumption by such Duff CJ. principal or other person at his expense shall immediately report the matter to the Minister and forward or produce to him the invoice, if any, in respect of such tobacco and any other information required by the Minister with respect to the tobacco and shall pay the same tax in respect of the consumption of such tobacco as would have been payable if the tobacco had been purchased at a retail sale in the Province at the same price.
The material provisions of the interpretation section are 2 (a), (d) and (e), which are in the following words:- 2. (a) " Consumer " or " Consumer of Tobacco " means any person who within the Province, purchases from a vendor tobacco at a retail sale in the Province for his own consumption or for the consumption of other persons at his expense or who, within the Province, purchases from a vendor tobacco at a retail sale in the Province on behalf of or as agent for a principal who desires to acquire such tobacco for consumption by such principal or other persons at the expense of such principal. (d) " Purchaser " means any person who, within the Province, purchases from a retail vendor tobacco at a retail sale in the Province. (e) "Retail
Sale"
means a sale to a consumer for purposes of consumption and not for resale.
Section 8 provides that the tax shall be collected, accounted for and paid to the Minister by such persons, at such times and in such manner as the regulations may prescribe. The statute provides for the licensing of vendors and inter alia by section 3, subsection (2) that no person shall sell tobacco at a retail sale unless he holds a retail vendor's license.
The regulations, which have the force of statute (section 20, subsection 2)) provide (Regulations 5 and 6, Form II) that every application for a retail vendor's license shall contain an undertaking by the applicant to collect and remit the tax. The undertaking, in the Form, is that the applicant undertakes to act as agent for the Minister for the collection of the tax and to account to the province for all moneys so collected.
On the license is printed a notice that failure on the part of a vendor to collect and remit the tax renders him liable to a fine and to imprisonment in default of payment. There are two forms of licenses, an itinerant salesman's license and a license to carry on the business of a retail vendor at a named place of business. The effect of Regulations 9 and 12 is that no person shall, either as principal or agent, sell tobacco at retail, other than a person having a license in one or other of these forms.
The regulations contain important provisions touching the payment of the tax. By Regulation 19 the licensed retail vendor is and the Regulation also provides that the retail vendor By Regulation 22 the retail vendor, or his agent, shall deliver to every purchaser at the time of the sale a receipt for the tax collected, and it also provides that no sale shall be made unless such receipt is given. By Regulation 30 it is enacted that and it is further provided that no person shall " accept delivery " of tobacco
The condition of the obligation to pay under section 4 is that the tobacco in respect of which the liability arises has been purchased at a retail sale. It is true the section describes the purchaser as " consumer," but consumer means, as we have seen, a person purchasing tobacco at a retail sale for his own consumption, or for the consumption of other persons at his expense. It is a condition of a legal purchase at a retail sale that the tax be paid and of a lawful delivery of the tobacco to a purchaser that a receipt of the tax be also delivered to him by the seller. There can be no legal purchase without the payment of the tax; there can be no legal sale without the delivery of a receipt for the tax. In the ordinary case, sales win be cash sales. The price demanded will be the " price to the consumer," to use the words of section 7; that is to say, the price to the purchaser, which includes the amount of the tax, a sum which is earmarked as such, of course, by the delivery of the receipt.
In a practical sense, as far as the purchaser is concerned, it is part of the price he pays for his tobacco. As regards the vendor, it is the sum for which he is accountable to the government and, in fact, it comes out of the " price to the consumer "-the price to the purchaser.
In other words, the payment of the tax is not only a C. condition of legal purchase; it is an integral element in the transaction of sale and purchase passing from the purchaser to the vendor as part of the price to the purchaser. Moreover, the real security to the government for the payment of the tax is the vendor's responsibility. True enough, the statute declares that the consumer continues to be liable until the tax is collected, but the real sanction for the obligation of the purchaser lies in the fact that he cannot lawfully, or in practice, get his tobacco without paying the tax. There is no provision for keeping account of consumption. On the other hand, the vendor is obliged, as licensee, to keep account of his purchases, of his sales, of the tobacco he has on hand from time to time. Not only is his default in performing his duty to collect the tax a punishable offence, he must account for his stamps and as agent, under a contractual duty to collect the tax, he is directly responsible if he has made a sale of tobacco without performing that duty. The character of the tax, I think, can best be determined by considering the ordinary case and in the ordinary case, that is to say, in all but exceedingly few cases, the sale of tobacco by a licensed retail vendor will be carried out in the manner contemplated by the Act and the tax will be simply a predetermined fraction of the price to the purchaser which is paid to the vendor and by him remitted to the government. It seems to me to be proper to describe such a tax as a tax on tobacco in respect of the commercial dealing between the retail vendor and the purchaser.
As regards section 5, the tax is imposed upon the importer of tobacco who imports it for his own consumption, or the consumption of others at his expense and that, I think, is a tax on tobacco in respect of the import of it for consumption.
To turn now to the legal questions involved. Section 5 imposes an import duty applying to imports from other parts of Canada, as well as from places outside of Canada. Although not collected in a manner in which customs duties are collected by the Dominion Government in this country, it is of the nature of a duty of customs.
ald Murphy Lumber Co. (1), Lord Macmillan, speaking for the Lords of the Judicial Committee, said:- I shall revert to section 5 after discussing the tax imposed by section 4.
The enactment in section 4 and the ancillary enactments in the statute and regulations are justified on the ground that they constitute legislation in relation to direct taxation within the province within the meaning of section 92 (2).
The question whether the tax is an excise duty of the class falling within the exclusive authority of the Parliament of Canada to impose can be considered more conveniently with section 5.
If I may say so without presumption, the subject of direct and indirect taxation as it affects the application of section 92 (2) has been put in a very clear light in Lord Thankerton on behalf of the Lords of the Judicial Committee in the Attorney-General for British Columbia v. Kingcome Navigation Co. Ltd. (2). At p. 55 it is said, after a review of some of the previous decisions of the Judicial Committee, these decisions, in their Lordships' opinion, make clear that if the tax is demanded from the
His Lordship proceeds to point out that in the case of typical direct taxes, the taxation on property and income, for example, mentioned by Lord Cave in the City of Halifax v. Fairbanks Estate (3), such taxes
Such taxes are contrasted with those as regards which the taxing authorities are indifferent as to who ultimately bears the burden, such as taxes in respect of transactions and taxes in respect of some dealing in commodities, such as their import or sale. The words of the judgment are these: I have said sufficient to show why, in my opinon, the tax imposed by section 4 is a tax in respect of a dealing with tobacco, the sale and purchase of it, and this dealing falls, I think, within the class of dealings with commodities envisaged by such passages in their Lordships' judgment.
On behalf of the respondent it is said that this is a tax in respect of consumption and that it stands in the same category as that in question in the Attorney-General for British Columbia v. Kingcome Navigation Co. Ltd. (1). The tax in question there was payable by every person who consumes fuel oil in the province in respect of the fuel oil consumed and at the rate of one-half cent a gallon. Every person consuming fuel oil was obliged to keep such books and records and furnish such returns as might be prescribed by the regulations, the failure to do so being a punishable offence.
The amount of the tax was recoverable by action and in, every such action the burden of proving the quantity consumed by the defendant was upon him. There are no such provisions in the statute before us. The tax is not payable by the consumer as such. It is payable by the purchaser, or the agent of the purchaser, and the statute itself contemplates that neither of them may be the consumer.
No liability attaches to the consumer as such. To repeat, in the practical administration of the Act there can be no manner of doubt that the payment of the tax and the delivery of the receipt take place as acts in the transaction of sale and purchase. The matter of consumption never comes into question.
On behalf of the respondent it is argued that the purchase from the retail vendor is a purchase for consumption because the tobacco cannot lawfully be sold by the purchaser unless he takes out a vendor's license which insures that he can never sell except at a loss. There is no limit, however, as to the quantity which may be purchased from a retail vendor and any purchaser is entitled to obtain a license as a retail vendor and the license fee is only fifty cents. However, as a rule, tobacco sold at retail, in the ordinary sense, is purchased with the intention that it will be consumed by the purchaser, or his friends or associates, and the vast majority of the purchases of tobacco at retail will be purchased for immediate consumption.
It does not at all follow from this that the tax is a tax in respect of consumption, especially when it is so obviously a tax in respect of the sale and purchase. There is nothing in the statute, truly, which can fairly be said to give to the tax the character of a tax in respect of consumption, except the declaration of the legislature to that effect and some collateral provisions which are relied upon as supporting the contention that such is its character. I do not think too much importance can be attached to the declaration of the legislature that the tax is payable in respect of consumption. The British North America Act " must have contemplated some tangible dividing line referable to and ascertainable by the general tendencies of the tax and the common understanding of men as to those tendencies"
(Bank of Toronto v. Lambe (1), City of Halifax v. Fairbanks' Estate (2).
Nor was it probably contemplated that the " tangible dividing line " between direct and indirect taxation could be shifted at will by the declarations of the legislature as to its expectations, or intentions, in respect of the ultimate incidence of a tax. It is especially important, I think, in the application of Mill's test not to be led away by legislative declarations, or collateral legislative provisions, imparting to the legislation a form calculated to give a colour of legality to the legislative effort.
I return now to section 5. As I have said it imposes a duty in respect of import. Such a duty is one of those mentioned in the passage quoted from Lord Thankerton's judgment (3) as being not imposed as a peculiar contribution upon one of the parties and as being, consequently, an indirect tax. It seems clear, moreover, to be a tax within section 122. There were customs duties levied on manufactured tobacco by the provinces at the time of smo Confederation.
The Dominion has always imposed customs duties in respect of imports of tobacco and it would coL.N seem an extraordinary thing if each one of the provinces Duff CJ. could impose such duties upon persons who import for their own consumption and who should be obliged to pay this duty after paying the duty imposed by the Dominion; and equally extraordinary in the case of raw tobacco imported by an importer in Montreal, who has paid the customs duty upon it and manufactured it there, that it should, on shipment into New Brunswick to a consumer, be subjected to a further import duty in that province. The importation which brings section 5 into operation seems clearly to be a dealing in tobacco within the meaning of the judgment quoted above. So also, I think, the tax imposed by section 4 is an excise duty within the contemplation of that judgment. At pp. 58, 59, Lord Thankerton says:- In their Lordships' opinion the customs or excise duties on commodities ordinarily regarded as indirect taxation, referred to in the judgments in Fairbanks' case (1) and the McDonald Murphy Lumber Co.'s case .(2). are duties which are imposed in respect of commercial dealings in commodities, and they would necessarily fall within Mill's definition of indirect taxes. They do not extend, for instance, to a dog tax, which is clearly direct taxation, though the machinery of the excise law might be applied to its collection, or to a license duty, such as was considered in Lambe's case (3). Customs and excise duties are, in their essence, trading taxes, and- may be said to be more concerned with the commodity in respect of which the taxation is imposed than with the particular person from whom the tax is exacted.
The tax imposed by section 4 fulfils the conditions of this " definition of customs and excise duties," as the judgment describes this passage. The distinction between the New Brunswick statute and the provisions of the British Columbia Fuel-Oil Act, with which the judgment is concerned, is brought out very clearly in the part of the judgment I now quote at p. 59:- Turning then to the provisions of the Fuel-Oil Act here in question, it is clear that the Act purports to exact the tax from a person who has consumed fuel-oil, the amount of the tax being computed broadly according to the amount consumed. The Act does not relate to any commercial transaction in the commodity between the taxpayer and some one else. (1) [19281 A.C. 117.
(2) [19301 A.C. 357.
(3) (1887) 12 A.C. 575.
I should add that section 5, in my opinion, comes within the ban of section 121.
I do not think either the decision in the Gold Seal case (1), or the observations in the judgments, are in any way in conflict with this.
The duty imposed by section 5, as I have already observed, being a duty imposed by a provincial legislature, is, of course, not collected through the machinery of the customs, but levied in New Brunswick prior to Confederation it would have been levied as a customs duty; and considered even from the point of view of its application to goods imported from other provinces, it is of the nature of a customs duty, if the expression is properly applicable in such circumstances. Section 5 is moreover, in my opinion, an enactment in regulation of trade and commerce within the ambit of the exclusive authority in relation to that subject vested in the Dominion by section 91. I should add that the tax under section 4 is payable by the purchaser's agent where the purchase is made by an agent. On the principle of the Manitoba Grain case (2), this provision appears to be invalid.
For these reasons, I think the appeal should be allowed. J.-The question in this case is about the constitutionality of " An Act to provide for imposing a tax on the consumption of tobacco " (c. 44 of the Acts of New Brunswick, 1940), hereinafter referred to as The Tobacco Tax Act.
The appellant caused a writ to issue in the Chancery Division of the Supreme Court of New Brunswick claiming an injunction restraining the defendants, and each of them, from entering upon the store premises of the appellant, in the city of Saint John, or from accosting, questioning, or otherwise interfering with customers of the appellant while on those premises, or on the streets adjacent thereto, with reference to any purchase of tobacco, or the payment of any tobacco tax under the authority of the Act above mentioned, or the regulations under it.
The parties concurred in stating the questions arising for the opinion of the Court as follows:
The appellant is a Dominion company having its head office in the city of Saint John, in the province of New Brunswick.
On May 11, 1940, the legislature of the province of New Brunswick enacted The Tobacco Tax Act, which came into force on October 1st, 1940, by proclamation of the Lieutenant-Governor in Council.
Certain regulations were made under the authority of the Act.
On October 15, 1940, the appellant opened a store, in the city of Saint John, and thereafter carried on, and now carries on, therein the business of selling tobacco, including cigars and cigarettes, without having obtained any license so to do under The Tobacco Tax Act, or the regulations.
In its store, the appellant sells at retail sale tobacco, including cigars and cigarettes, manufactured in provinces of Canada other than the province of New Brunswick, to persons defined, by section 2 (a) of the said Tobacco Tax Act, as consumers " or "consumers of tobacco," without collecting the tax imposed by the said Act.
The respondent James H. Conlon was, on the coming into force of the said Tobacco Tax Act, appointed to the office of Tobacco Tax Commissioner, it being an office created under the regulations.
On November 2, 1940, and from time to time thereafter, the respondent John McDonough, an inspector appointed under the Act, and others, while acting under the instructions of the other respondents, entered upon the appellant's premises and proceeded to question customers of the appellant as to whether they had paid the tax on the tobacco purchased by them, to ask them to produce their tobacco tax receipt and to demand their names and addresses.
They refused to leave the premises when requested so to do by the appellant, and claimed that they were entitled to remain therein and to question customers by virtue of the said Tobacco Act and the regulations made thereunder.
By reason of these actions of the respondents, the business of the appellant has been and is now injuriously affected.
1e- The question for the opinion of the Court is whether the Tobacco Tax Act, or any of the provisions thereof, and the regulations made thereunder, or any of them, are ultra vires of the legislature of New Brunswick; and, if so, in what particular, or particulars.
It was agreed that, if the Court should be of the opinion that the Act and the regulations were wholly intra vires, the appellant's action should be dismissed. If the Court should be of opinion that the Act and the regulations are wholly ultra vires, judgment should be entered in favour of the appellant and against the respondents for an injunction order in the terms of the writ of summons herein. If the Court should be of opinion that the Act or regulations, or any of them, are intra vires in part and ultra vires in part, the Court should make such Order by way of declaration or of substantive relief to the appellant, as shall be deemed right and proper.
The special case was submitted to the Appeal Division of the Supreme Court; and, after argument heard, the Chief Justice of the province of New Brunswick, in which Grimmer and Richards JJ. concurred.
The Court unanimously held that the Act was within the constitutional powers of the Province.
After having quoted the material sections of the Act, the learned Chief Justice stated that the regulations had not been attacked, except upon the ground that, the Act being ultra vires, they fell with it.
He proceeded to enumerate the grounds of objection to the validity of the Act:
(1) That the transaction was not within the Province; (2) That it was an attempt to impose a tax upon interprovincial or international transactions;
(3) That dealers in tobacco could not without their consent be constituted agents for the Crown for the collection of a tax, as it would constitute them public officers; (4) That the tax was indirect as falling upon transactions in conmodities especially;
(5) That it was an indirect tax as being in essence a sales tax;
(6) That the taxation of an agent was vital to the scheme of the Act and that taxation so imposed upon an Co.on agent gave him a right to be indemnified by his principal, thus indirectly imposing the tax upon the principal.
Dealing first with grounds of objection 1 and 2, the judgment failed to see that the legislature had attempted to impose a customs duty upon the importation of tobacco into the Province, contrary to the contention of counsel for the appellant. In the opinion of the Appeal Division, the legislation did not purport to affect any person who was outside of the Province, nor the commodity when it was not within the Province. In fact, it did not affect the commodity at all.
As to objection no. 3, the Court thought that it also failed and that it must be competent for the legislature to provide for collectors of revenue, if that revenue derives from a direct tax.
Objections 4 and 5 were taken together. In the Court's opinion, they raised the only real point in the case, viz.:
Whether the statute imposes direct or indirect taxation.
The attempt made to treat the Act as imposing a stamp tax and thus bringing it within Attorney-General for Quebec v. Queen Insurance Company (1), and Attorney- General for Quebec v. Read (2), was disregarded. It was said by the Court that what was called a "stamp'" in argument is not a stamp at all. It was not regarded as such nor intended to be affixed to anything. It was simply a receipt for payment; and Regulation 20 was referred to. As to the attempt of counsel for the appellant to assimilate the tax to a sales tax, and, therefore, to an indirect tax, the Court thought that transmissibility is the proper test for the present case.
On this ground, reference was made to Attorney-General for Manitoba v. Attorney-General for Canada (3), where the tax was on persons selling grain for future delivery; and to Attorney- General for British Columbia v. Canadian Pacific Railway (4), where the Privy Council stated that fuel-oil, being a marketable commodity, those who purchased it, even for their own use, acquired a right to take it into the market; and that, therefore, a tax levied on the first purchasers of fuel-oil came within the general principle which determines that the tax is an indirect one.
Reference was also made by the learned Chief Justice to cAL.N
Rex. v. Caledonian Collieries Ltd. (1), which dealt with a -i percentage tax imposed on mine owners on the gross revenue of coal mines, and where it was held that the general tendency of the tax upon the sums received from the sale of the commodity which the mine owners produced was that they would seek to recover it in the price charged to the purchaser, and that, although, under the particular circumstances, the recovery of the tax be economically undesirable or practically impossible, nevertheless the general tendency of the tax remained. The effect of the Privy Council decision in Lower Mainland Dairy v. Crystal Dairy (2), and of the decision of this Court in Lawson v. Interior Tree Fruit and Vegetable Committee of Direction (3), was also examined; and the Court found that the cases were not in the same category as the present case. The Court then discussed the judgment of Lord Thankerton in Attorney-General for British Columbia v. Kingcome Navigation Company (4), where the noble Lord reviewed previous judgments of the Board and said that: These decisions made clear that if the tax is demanded from the very persons who it is intended or desired should pay it, the taxation is direct, and that it is none the less direct, even if it might be described as an excise tax, for instance, or is collected as an excise tax.
The ultimate incidence of the tax, in the sense of the political economist, is to be disregarded, but where the tax is imposed in respect of a transaction, the taxing authority is indifferent as to which of the parties in the transaction ultimately bears the burden, and, as Mill expresses it, it is not intended as a peculiar contribution upon the particular party selected to pay the tax. Similarly, where the tax is imposed in respect of some dealing with commodities, such as their import or sale, or production for sale, the tax is not a peculiar contribution upon that one of the parties to the trading in the particular commodity who is selected as the taxpayer.
Of the Fuel Oil Tax Act of British Columbia, Lord Thankerton said that it was clear that the Act purported to exact the tax from a person who had consumed fueloil, the amount of the tax being computed broadly according to the amount consumed, and the Act did not relate (1) [19281 A.C. 358.
(3) E1931] S.C.R. 357, at 364. (2) [1933] A.C. 168, at 176.
(4) [19341 A.C. 45.
to any commercial transaction in the commodity between the taxpayer and someone else. Although it was, of course, possible that individual taxpayers may recoup themselves by the contract or arrangements under which the oil was acquired, this could not, in their Lordships' opinion, affect the nature of the tax.
The Appeal Division, in the present case, then pointed out that the differences between the Act considered by the Privy Council in the Kingcome case (1) and the case at present under review were two:
Firstly, the British Columbia tax was imposed upon the person " who has consumed fuel-oil "; the New Brunswick Act imposed the duty "before consumption of the commodity."
It was shown that by actual consumption, under the British Columbia Act, the purchaser became the ultimate consumer. The Appeal Division thought that the same result was attained by the express provisions of sec. 3 (2) of the New Brunswick Act, which took away the right of resale from the purchaser from a retail dealer. The statute thereby made him the ultimate consumer. As a result of that action, it seemed impossible to conceive that the purchaser attempting to resell could have a market, unless he was prepared to sell the commodity at a definite loss.
Secondly, there was no definition of the word " consumer " in the British Columbia Act, and obviously there could be none, while section 2 (a) of the New Brunswick Act contained a definition and by it the consumer could purchase from a vendor by "means of an agent." principal must be one who desires to acquire the tobacco for consumption by himself, or by other persons at his expense. The appellant contended that the tax necessarily paid by the agent would be "passed on" to the principal, which would bring the transaction within the trading cases to which reference has already been made. To this argument, the Court thought the answer was: " That there is not, and cannot be, a sale by the agent to his principal." True, the agent, if he had not the required money in advance, would be entitled to be indemnified by his principal; but indemnity is not sale.
"Qui facit per alium facit per se" applies. This is only part of the machinery of the Act. Forbes v. Attorney-General of Manitoba (2). Summing up, the learned Chief Justice came to the conclusion that the tax was not imposed upon the vendor, it was not imposed upon the goods; it was imposed upon the consumer, and measured and valued by the extent of CTLON his purchases. The consumer paid the tax at the time of -- r the sale to him. The vendor paid no tax; and the tax could not by any possibility enter as a factor into the price charged by him. That there was a perception of the tax at the moment that the commodity passed from the vendor to the buyer did not make it a sales tax. It seemed to fall within the class of excise taxes which may be levied by a provincial legislature. But it was immaterial how it was described; the incidence of the tax fell upon and was borne by the ultimate consumer and could not be passed on. For these reasons, the Court held that the Act was within the constitutional power of the Province.
From that judgment, Atlantic Smoke Shops now appeals to this Court by special leave granted therefor by the Appeal Division of the Supreme Court of New Brunswick; and the Attorney-General of the province of Quebec intervenes to support the constitutionality of the New Brunswick Act, in view of the fact that the legislature of Quebec has adopted a similar statute.
The Tobacco Tax Act now in question enacts, in sec. 3, that
(2) No person shall sell any tobacco in the Province at a retail sale unless be holds a retail vendor's license issued to him under the authority of this Act and such license is in force at the time of sale; (3) No wholesale vendor shall sell any tobacco in the Province to a person who is not a vendor duly licensed under this Act.
By section 4, it is enacted that
4. Every consumer of tobacco purchased at a retail sale in the Province shall pay to His Majesty the King in the right of the Province for the raising of a revenue, at the time of making his purchase, a tax in respect of the consumption of such tobacco, and such tax shall be computed at the rate of ten per centum of the retail price of the tobacco purchases.
By section 5:
5. Every person residing or ordinarily resident or carrying on business in New Brunswick, who brings into the Province or who receives delivery in the Province of tobacco for his own consumption or for the consumption of other persons at his expense or on behalf of or as agent for a principal who desires to acquire such tobacco for consumption by such principal or other persons at his expense shall immediately report the matter to the Minister and forward or produce to him the invoice, if any, in respect of such tobacco and any other information required by the Minister with respect to the tobacco and shall pay the same tax in respect of the consumption of such tobacco as would have been payable ASTM c if the tobacco had been purchased at a retail sale in the Province at the same price.
In the Act, "Consumer" or "Consumer of tobacco" means any person who, within the Province, purchases from a vendor Rinfret J. tobacco at a retail sale in the Province for his own consumption or for the consumption of other persons at his expense or who, within the Province, purchases from a vendor tobacco at a retail sale in the Province, on behalf of or as agent for a principal who desires to acquire such tobacco for consumption by such principal or other.persons at the expense of such principal.
(Section 2a).
" Purchaser " means any person who, within the Province, purchases from a retail vendor tobacco at a retail sale in the Province (Section 2d).
" Retail sale " means a sale to a consumer for purposes of consumption and not for resale (Section 2e).
" Retail vendor " means any person who, within the Province sells tobacco to a consumer (Section 2f). By section 7:
7. No retail vendor shall advertise or hold out or state to the public or to any consumer, directly or indirectly, that the tax or any part thereof imposed by this Act will be assumed or absorbed by the retail vendor or that it will not be considered as an element in the price to the consumer or, if added, that it or any part thereof will be refunded. By section 9:
9. The Minister may make such allowance as the Lieutenant-Governor in Council may determine to vendors for their services in collecting the tax.
And finally, by section 10:
10. A consumer shall be and remain liable for the tax imposed by this Act until the same has been collected.
For the purpose of carrying into effect the provisions of the Act, the Lieutenant-Governor in Council was authorized to make such regulations, not inconsistent with the spirit of the Act, as were considered necessary, or advisable (section 20); and, amongst other things, for providing for the affixing of stamps on tobacco or on the packages in which it was sold, before or at the time it is sold to the consumer, as evidence of the tax having been paid;
and it is enacted that such regulations shall have the same force and effect as if enacted by the Act and that they shall be published in the Royal Gazette (section 20-2). Of the regulations so made, only the following should be quoted:
SMOKE
.
19. Every licensed retail vendor is hereby constituted an agent of the Minister for the collection of the tax and shall collect the tax from the consumer, etc.
23. The retail vendor shall account for and remit the amount of Rinfret J tax collected to the Tobacco Tax Commissioner within ten days immer diately following the calendar month during which any. sale has taken place and shall with his remittance forward to the Tobacco Tax Commissioner a statement containing the information required by Form 4 in the Schedule of these regulations.
Retail vendors are required to make an application for the license to sell at retail. That application is signed by them and the form so signed contains the following undertaking:
I/we hereby make application for a license as indicated above under the provisions of The Tobacco Tax Act, 1940.
I/we, upon acceptance of license to retail tobacco, agree and undertake to act as the agent of the Minister for the collection of the tax imposed by said Act and to account to the Province of New Brunswick for all moneys so collected, as provided by the Act and Regulations. The form of license itself contains the following prescriptions:
Penalty as prescribed by the Act.
Failure on the part of a vendor to collect the tax renders him liable to a fine of not less than ten or more than five hundred dollars, and costs; and, in default of payment, to imprisonment to a term not exceeding three months.
The form of tobacco tax return provides for the deduction of a commission of 3%, being the allowance to the vendor for his services in collecting the tax; and it contains the following:
Enclosed find the sum of S
*
*
* which is the amount of Tobacco Tax collected by me during the month of after deductions being made as described above.
And attached to the return is a declaration which has to be signed by the vendor to the effect that the remittance is a true return of all taxable sales made during the last preceding months, and that the return herein truly represents all tax imposable by law accruing upon such sales or transactions as are chargeable under the Tobacco Tax The attack made upon that Act by the appellant and the grounds of appeal from the Appeal Division of the Supreme Court of New Brunswick, which upheld the Act, are:
(1) The Act is not legislation upon the matters assigned to the legislative jurisdiction of the provinces by see. 92 of the British North America Act;
(2) The Act purports to impose a tax for the raising nON of a revenue for provincial purposes, but it is neither (a) a direct tax, or
J. (b) a tax within the Province, as authorized by subsection 2 of section 92;
(3) The tax is not confined in its effect to the province of New Brunswick, nor to the persons upon whom it is levied;
(4) The Act infringes upon the exclusive legislative jurisdiction of the Dominion Parliament to impose customs or excise duties;
(5) The Act purports, in violation of the provisions of section 121 of the British North America Act, to impose a tax upon articles grown, produced or manufactured in other provinces of Canada when introduced into New Brunswick for purposes of consumption;
(6) The licenses provided for in the Act in question are not within the category of shop, saloon, tavern, auctioneer or other licenses in order to the raising of a revenue for provincial, local or municipal purposes under section 92, subsection 9, of the British North America Act.
(7) The Regulations are invalid because the statute which authorizes them is wholly ultra vires.
It is to be observed, as already pointed out in the reasons for judgment of the Appeal Division, that the regulations are not brought into question except in so far as they are authorized by the statute and that they will have to be found ultra vires only if the statute itself is held unconstitutional. They may, therefore, be disregarded for the purpose of the present discussion; and that disposes of ground of appeal no. 7.
Ground no. 1 is only a general statement of the objections of the appellant, the details of which are enumerated in grounds 2, 3, 4, 5 and 6.
Those, therefore, are the grounds which have to be examined in order to decide the present appeal.
It is alleged in ground of appeal no. 2 that the tax imposed is not a direct tax, contrary to the powers of a SOKE provincial legislature under head 2 of sec. 92.
Co V.
"Direct taxation" alone may be imposed by a Province, and it must be "taxation within the Province".
Rinfret J.
It was said by this Court, in City of Charlottetown v. - Foundation Maritime Limited (1):
It is no longer open to discussion, on account of the successive decisions of the Privy Council, that the formula of John Stuart Mill (Political Eronomy ed., 1886, vol. II, p. 415) has been judicially adopted as affording a guide to the application of section 92, head 2 (Fairbanks case (2)).
Mill's definition was held to embody "the most obvious indicia of direct and indirect taxation" and was accepted as providing a logical basis for the distinction to be made between the two (Bank of Toronto v. Lambe (3)).
The expression "indirect taxation" connotes the idea of a tax imposed on a person who is not supposed to bear it himself but who will seek to recover it in the price charged to another.
And Mill's canon is founded on the theory of the ultimate incidence of. the tax, not the ultimate incidence depending upon the special circumstances of individual cases, but the incidence of the tax in its ordinary and normal operation.
It may be possible in particular cases to shift the burden of a direct tax, or it may happen, in particular circumstances, that it might be economically undesirable or practically impossible to pass it on (The King v. Caledonian Collieries (4)). It is the normal or general tendency of the tax that will determine, and the expectation or the intention that the person from whom the tax is demanded shall indemnify himself at the expense of another might be inferred from the form in which the tax is imposed or from the results which in the ordinary course of business transactions must be held to have been contemplated.
The definition of John Stuart Mill, above referred to, states:
Taxes are direct or indirect. A direct tax is one which is demanded from the very persons who it is intended or desired should pay it. Indirect taxes are those which are demanded from one person in the expectation and intention that he shall indemnify himself at the expense of another; such as the excise or customs.
Now the appellant contends that the tax we are now examining comes under the definition of an indirect tax because it is imposed upon the taxpayer with respect to, and by reason of, his entering into a commercial transaction or trade in commodities; also because it taxes all agents who purchase tobacco on behalf of their principals or who bring tobacco into the province of New Brunswick on behalf of their principals.
(2) [1928] A.C. 117, at 125.
(3) [1887] A.C. 575, at 582 (4) [1928] A.C. 358.
Of course, the question of the nature of the tax is one of substance. It does not turn only on the language used by the legislature which imposed it; and in testing the validity of the statute, the first requisite is to ascertain the real nature of the tax imposed.
r It may be admitted as a principle, which generally proves to be true, that a tax upon a person with respect to his consumption of some commodity within the Province is direct taxation and intra vires, even although, in some instances and circuivwv he is enabled to pass the burden on to someone e
It may be assumed that, generally speaking, a tax upon a person with respect to a comnmercial transaction, such as a sale or purchase, based upon and with respect to the price of the commodity, is indirect taxation and ultra vires of a province, even although, in some instances, the party taxed may not pass the burden to anyone else.
In the Kingcome case (1), the tax was imposed on the consumer of fuel oil according to the quantity which he consumed within the province. It was held that this was direct taxation and intra vires. The British Columbia Act, in their Lordships' view, did not relate to any transaction in the commodity between the taxpayer and some one else. Here, the appellant argues that the tax is upon the purchaser of commodities, imposed at the time of the purchase, and with respect to the commodity purchased; and that it is accordingly an indirect tax and ultra vires. He relies on a long line of decisions of the Privy Council upholding this principle.
If we turn to the New Brunswick statute, we find that the charging section (sec. 4) imposes the tax only on the consumer of tobacco, in respect of the consumption of such tobacco, and computed at the rate of ten per centum of the retail price of the tobacco purchased.
The statute makes it clear that the only person who it is intended or desired should be taxed is the consumer. It is just as much a consumption tax as was the British Columbia tax in the Kingcome case (1).
For the purpose of deciding whether such a tax is a direct or an indirect tax, it does not matter that the tax is imposed before or after consumption of the commodity. The point is that the tax is imposed in respect of the actual consumption, that the legislature intends that it should be a tax with respect to consumption and that the language of the statute is so guarded that, except in CMLn extremely exceptional and almost inconceivable cases, it makes it impossible for the consumer to pass it on to someone else, or, in the words of Mill, to "indemnify himself at the expense of another."
In fact, the statute is framed in such a way that the legislature has indicated its intention that the person on whom the tax is imposed will bear it himself; and it has taken every precaution to prevent the consumer from indemnifying himself at the expense of another. This must be inferred both from the form in which the tax is imposed and from the results which, in the ordinary course of business transactions must be held to have been contemplated. Indeed, it may not only be inferred from the statute itself, but it is there expressly so stated.
The consumer who is taxed is a person who, within the province, purchases tobacco at a retail sale, in the province, for consumption of himself, or of other persons at his expense. By definition, " purchaser " means a person within the Province purchasing from a retail vendor at a retail sale in the Province.
A "retail vendor" means a person, within the Province, selling tobacco to a consumer, and that is to say: a person who holds a retail vendor's licence, issued to him under the authority of the Act, and whose licence is in force at the time of the sale. And, also by definition, a " retail sale " means a sale to a consumer for purposes of consumption and not for resale. The right of the consumer to resell is taken away by the provisions of the Act, thus meeting the possibility suggested by Viscount Haldane, in Attorney-General for British Columbia v. Canadian Pacific Railway Co. (1). It was stated in that case that
In the present case, this possibility has been provided against; and no legal resale by the consumer may take place within the province.
Not only that; but the fact Sm. that the tax is imposed upon a consumer purchasing at a retail sale, in view of the definition of the words "retail c sale" in the Act, means that the tax is imposed only in Iiret 3. respect of a "sale to a consumer for purposes of consumption and not for resale "; and it follows that if some alleged consumer purchased tobacco with the concealed intention of reselling it, he might, as a consequence, become open to a penalty for violating the Act; but he would not, within the precise terms of the Act, come under the provisions of the charging section (sec. 4), and conceivably he might not render himself liable to the tax.
Here, on account of the prescriptions of the Act, the possibility of a resale cannot be said to be according to the common understanding of men; and the legislature, by its statute, has taken every means to provide against that possibility. The King v. Nat Bells Liquors Ltd. (1). It is the general tendency of the legislation that must be considered, and exceptional cases must be ignored. The suggestion made by the appellant that the purchaser may go outside the province and resell there can hardly be entertained. Section 4, read with sections 2 (a) and 2 (e), imposes the tax on one- who purchases in the Province for consumption there. The purchaser may exceptionally go outside and consume the tobacco sold in the province; but this would be an exceptional case resulting from the free act of the purchaser once he has become the absolute owner of the tobacco; and this isolated case cannot make of the statute one imposing a tax outside the province.
The effect of the tax is intended to be confined to the province of New Brunswick. It is imposed upon the consumers of tobacco in New Brunswick; and it does not pretend to have any effect at all outside the province.
But it is argued that the tax is indirect because the Act taxes the agent with respect to his transaction on behalf of his principal; and the Privy Council's decisions in Cotton v. The King (2), and in Attorney-General for Manitoba v. Attorney-General for Canada (3), and in Provincial Treasurer of Alberta v. Kerr (4), are relied on. The Act taxes the " consumer "; and, by definition, " Consumer " includes a person who
And the Act further says that a consumer, and therefore an agent, in the circumstances within the definition, From a practical point of view, it may be said that this feature of the Act, so far as it is made a point against its constitutionality, is almost negligible.
Under the Act, the
(section 4).
The circumstance no doubt contemplated by the Act, when a person would purchase tobacco "on behalf of or as agent for a principal," would be where the purchaser sends a messenger to a tobacco store, with the object of buying for him the tobacco which he intends to consume.
The purchasers meant to be so covered are purchasers of tobacco " at a retail sale," and " for consumption " by the principal. In ninety-nine cases out of a hundred, the tax, in such cases, would amount to something between ten to fifty cents, the latter being an extreme suggestion. It is to be assumed that, in almost every case, the messenger would have received his principal's money to pay both for the tobacco and for the tax. The amount of the tax, at all events, would be but a trifle; and the instances where it may happen that the messenger would advance the money would be extremely scarce.
I would be very loath to declare a provincial statute unconstitutional on such a slim objection. Moreover, it is very doubtful whether the occurrence in such a case could really be described as " passing on." This, to my mind, is not the kind of "passing on" deemed to be, in the decided cases, the characteristic of an indirect tax. The " agent," in this instance, would not be paying for himself, but for and on behalf of the principal. There would be, as a consequence, no enhancement of the actual cost as between the agent and his principal.
Moreover, should this feature of the Act be found unconstitutional-which, in my view, it should not-it is sever- co.oN able, and it may not be allowed to defeat either the whole Act or its principle. The objection would be met by deleting the provision concerning agents in the definition of " consumer."
As the tax must be paid immediately
" at the time of making the purchase," no valid retail sale may be made without the tax being paid at once, and there is no perceivable object in enacting that the agent will remain responsible for it.
I have now discussed the grounds of appeal nos. 1, 2 and
3. The others do not require elaborate consideration.
As to ground no. 4, I cannot agree that the Act infringes upon the exclusive legislative jurisdiction of the Parliament of Canada to impose customs and excise duties. Section 5 of the Act is relied on for the appellant's argument on this point. It provides that a at at
In regard to this, it should be observed that it affects only persons residing, or ordinarily resident, or carrying on business in New Brunswick.
But it is argued that, since it covers such a person of tobacco from outside, the tax is an attempt to impose customs duties, which are of the exclusive competency of the Dominion Parliament.
I do not think that it is a customs duty within the meaning of those words as they are generally understood. Under section 5, the tax is not. collected at the border of New Brunswick, or before the tobacco is allowed to enter the territory of the Province.
That section covers the case of a resident of New Brunswick, or of a person carrying on business therein, who brings into the Province tobacco
Iinfres j. The consumer of tobacco is not called upon to pay the tax before the tobacco comes into the province, or before he receives possession of the tobacco. He pays after delivery, or after he has come into possession.
Surely there must be a moment when property entering a province becomes property in the province subject to be taxed by the To my mind, section 5 has no other purpose than to equalize between purchasers in the Province and purchasers residing in New Brunswick who happen to have purchased tobacco outside of it. It may be styled legislation incidental to the scheme of The Tobacco Tax Act; it cannot be regarded as imposing a customs duty.
Then, as ground of appeal no. 5, the appellant urges that the Act purports, in violation of the provisions of section 121 of the British North America Act, to impose a tax upon articles grown, produced or manufactured in any one of the provinces, when introduced into the province of New Brunswick for purposes of consumption. Under the provisions of the Act, tobacco enters perfectly free into the Province; but the consumer is taxed in connection with the consumption of a commodity which is in the consumer's possession in the Province. The legislature has assumed that one who acquires for the purpose of consumption will consume.
The exceptional cases where he might change his mind after introducing into the province the tobacco he has purchased for consumption are legitimately ignored by the legislature. It would seem further that section 121 of the British North America Act only aims at the prohibition of customs duties when the articles of the growth, produce or manufacture of any one of the provinces are carried into any other province (Gold Seal Ltd. v. Dominion Express Company & The Attorney-General of the province of Alberta On the occasion of their importation from other provinces, the admission into the province must be free and that is to say that no tax or duty can be imposed as a condition of such admission (The King v. Nat Bell ATuac Liquors Ltd. (1)).
Incidentally, it need hardly be said that the invalidity of co V secton 5 could not affect the rest of the statute (Toronto r. Corporation v. York Corporation (2)).
Rinfres3. The last ground of appeal is that the license required from the vendors is not one authorized by Head 9 of sec. 92 of the British North America Act.
It has been repeatedly held that the licenses specifically enumerated in Head 9 of section 92 are not the only licenses which provincial legislatures may provide for. It has been held also that the words "other licenses" in sub-head 9 are not limited to licenses ejusdem generis (Brewers & Malsters Association v. Attorney-General for Ontario (3); Attorney-General for Manitoba v. Manitoba License Holders Association (4); Shannon v. Lower Mainland Dairy Products Board (5)).
Provincial legislatures can provide for licenses not only for the purpose of revenue, but also for the purpose of regulating matters within their powers.
For example, they have the power of requiring licenses as an incident of any of their other powers, apart from the power to require licenses merely for the purpose of raising a revenue.
A license can, therefore, be required by a Province as a means of collecting a tax which is valid, or as a means of compelling those who are entrusted with the duty of collecting a tax to comply with that duty. Such is the case here. It may be said, as a matter of fact, that the license required under The Tobacco Tax Act is a means of enabling the Province to possess a list of the names of the agents who are entrusted with the collection of the tax.
In the Kingcome Navigation case (6), the statute there considered also provided for a license.
Under all the circumstances, I think that the judgment appealed from was right and The Tobacco Tax Act was competently enacted by the legislature of the province of New Brunswick.
The appeal should, therefore, be dismissed with costs, except that there will be no costs to the Intervenant, the Attorney-General of the province of Quebec.
J.-I agree with my brother Rinfret and the - ~judgment of the Appeal Division of the Supreme Court of New Brunswick that The Tobacco Tax Act, as enacted by the Legislature of that Province, is wholly intra vires. My brother Rinfret has so methodically and exhaustively dealt with the various points involved in the appeal as argued before us that, agreeing with him, as I do, in all his conclusions thereon, I find it difficult to state my own reasons for arriving at the same conclusion without reiterating much of what he has so pointedly said. However, in the circumstances, I feel, even at that risk, I should do so.
Apart from the objection that the vendors' licenses provided for by the statute are not licenses within the meaning of s. 92 (9) of the B.N.A. Act, all the grounds upon which its constitutional validity was challenged here, as in the court below, centre around the question as to whether the tax thereby imposed is a direct tax within the meaning of s. 92 (2) of that Act.
As to the nature or form of the tax imposed, the appellant of course contends that it is an "indirect," rather than a "direct" tax, for the reason that it arises out of a commercial or trading transaction, to which the intended taxpayer is a party, and that it therefore falls within the meaning of the so-called trading cases, which were so strongly relied upon to support the appeal, as well as for the reason that upon the true construction of s. 2 (a) the tax is imposed, not only upon the purchasing prospective consumer, but alternatively upon his agent in making the purchase for him. As to the cases thus relied upon, it will be found on examination that they all proceed upon the ground that, although a tax purports to be imposed upon one party to a commercial or trading transaction, its real nature is determinable by the practicability of its being passed on to other persons by means of a resale and thus absorbed in the purchase price obtained on its resale. The pronouncement of Viscount Haldane in Attorney-General for British Columbia v. Canadian Pacific Railway Company (1) was especially relied upon in this regard, as stated by my brother Rinfret.
In the present case, as Baxter C.J., in the court below ml. distinctly held, and as clearly appears from the very careful analysis my learned brother here has made of the relevant provisions of the New Brunswick Act, this possibility Crokt has been definitely eliminated by the statute itself.
Not only does s. 3(2) expressly enact that but clause (e) of s. 2 declares that "retail sale" means a sale to a consumer for the purposes of consumption and not for resale.
Furthermore, s. 4 in the most explicit terms imposes the tax on the consumer in respect of the consumption of the tobacco purchased, and makes it payable at the time the purchaser makes his purchase. It is true that the word " consumer," as defined in s. 2 (a), includes, not only a person, who purchases tobacco at a retail sale in the Province for his own consumption or for the consumption of other persons at his expense, but one who purchases the tobacco and that s. 10 provides
So far, however, as purchases made in the Province are, concerned, it is plain that the tax must be paid at the time of the purchase, and that if the tax is not then paid no purchase can lawfully be made, so that s. 10 cannot very well be intended to apply to the purchase of any tobacco within the Province. It is obviously intended to apply to the provisions of s. 5 in any case where a person residing or ordinarily resident or carrying on business in the Province may be found to have brought into the Province or have received delivery in the Province of tobacco purchased outside the Province for his consumption, when he is required to report the fact to the Minister and then to pay the same tax in respect of the consumption of such tobacco as would have been payable if the tobacco had been purchased at a retail sale in the Province at the pice
In any event, as I read the relevant provisions, the tax is imposed upon the consumer in respect of his own consumption of it or the consumption of it by other persons at his expense, whether the tobacco be purchased by him personally or by someone whom he has requested to make the purchase for him, either within or without the Province. It cannot reasonably, in my opinion, be held to be a tax imposed upon any other person than upon the consumer himself in respect of tobacco purchased for his own consumption or consumption by other persons at his expense.
It was surely never intended to make a servant or a messenger, who might be sent by his employer to buy a package of tobacco or cigarettes for consumption by his employer or his employer's friends at his employer's expense, liable for the tax so explicitly imposed by the statute in respect of the consumption of the tobacco thus purchased.
The fact that the purchase is made for the master and intending consumer by a servant or messenger does not make the purchase any less the purchase of the master, either at law or according to the common understanding of men, than if the master-the intending consumer-went to the retail store to make it personally. No purchase being possible without payment of the tax, there could in the ordinary course of events be but few instances where a master would send a servant or messenger to a retail vendor's shop to buy tobacco for him without giving him the money to pay both the tax and the price of the tobacco. It would only be in a case where the intending consumer at the moment found himself without the necessary money that there would be any likelihood of the messenger himself paying either the tax or the purchase price with any other than the consumer's own money. In such a contingency the master might borrow the necessary money from someone else, or possibly the servant might himself for the time being lend the money to his master, if he had the change in his own pocket. Constructively at least the money paid to the vendor would none the less be the master's. The tax itself would not amount at the most in such a case to more than five or ten cents, for the statute provides for the computation of the tax to the nearest cent (one-half cent being considered as one cent) at the rate of ten per centum of the retail price of the S . tobacco purchased.
For my part I would, like my brother Rinfret, be very loathe to hold that the mere fact of the purchase being made by a servant or by a special messenger under such exceptional circumstances could have the effect of converting what is otherwise so plainly a direct tax upon a consumer in respect of his own consumption of tobacco, and thus within the constitutional power of a Provincial Legislature, into an indirect tax entirely beyond the legislative power of any of the Provinces.
The statute intends the payment of but one tax in respect of each separate purchase of tobacco in the Province. This, as I have said, it definitely requires to be paid at the time the purchase is made by or in behalf of the prospective consumer. If the servant or messenger in the circumstances I have indicated, either for his own or for his master's convenience, voluntarily makes the payment for his master with his own money or with money borrowed by him for the purpose, it surely cannot well be said that he thereby becomes the " consumer " within the meaning of the charging section of the statute, and that the statute imposes the tax upon him and not upon his master as the prospective consumer. The statute certainly does not compel the servant or agent to pay the tax if the master or employer does not provide him with the money for the purpose. It would in such circumstances be purely a voluntary payment upon his part wholly incompatible with the legal conception of a tax. It seems to me that there would be quite as much reason for saying that if the prospective consumer, not having the money in his pocket at the moment, borrowed it from a servant or from anybody else, went to the vendor's shop himself, made the purchase and paid the tax with the borrowed money, the lender, and not the purchaser, would thereby become the consumer and the taxpayer.
Even if the alternative provision contained in s. 2 (a) concerning the purchase within the province from a retail vendor by an agent for his principal for consumption by the latter or by other persons at his expense must be con- 8.C.R.]
strued as constituting the servant or agent, and not the principal, for whom the purchase is made, the intended taxpayer in such circumstances as above suggested, the servant or agent would not surely find it any less practicable or possible to pass on the tax to his master by means of a resale to him, than the master would to pass on by the same means to anybody else-in the face of the express statutory prohibition against any resale in any manner whatsoever.
Perhaps I should in this connecton mention s. 7 in addition to the other sections I have referred to. This section, so far as all retail vendors are concerned, precludes as effectually as any statutory provisions can the absorption of the tax in the retail price or its recoupment in whole or in part to the purchaser. Reading all the material sections together, it is impossible, I think, to conceive how the Legislature could more effectually have indicated its intention that this tax should be demanded from the very persons, who it intended or desired should pay it. This is the essential characteristic of " direct," as distingushed from " indirect " taxation, and constitutes the true criterion for determining whether a particular tax falls under the former or the latter category, as expounded by John Stuart Mill in his well known treatise on Political Economy, and adopted by the Judicial Committee of the Privy Council in Bank of Toronto v. Lambe (1) and in Cotton v. Rex (2), and other cases, and so distinctly reaffirmed by Lord Thankerton in the recent case of Attorney-General for British Columbia v. Kingcome Navigation Co. (3), as to the meaning of the term "direct taxation " in s. 92 (2) of the British North America Act. In the face of the various provisions of the statute itself, how can it logically be said that the tax imposed by the impugned statute is a tax which the Legislature intended should be borne by any other person than the prospective consumer himself, or that it is a tax, the general tendency of which is to enhance or in any way affect the retail price of tobacco either within or without the Province? The definite provisions of the statute itself in my judgment make the question as to the general tendency of the tax quite irrelevant, unless indeed one is disposed to question the good faith of the Legislature and regard the whole scheme of the statute as a mere pretence or colourable arrangement in order to disguise what is claimed to be "indirect taxation," which is not within its legislative powers, as " direct taxation," which is. For my part I am not disposed to do so.
With all respect, the only ground to my mind upon which any argument could possibly be based in support of the contention that the tax imposed by the Act is not a direct tax within the competency of the Provinces under the provisions of s. 92 (2) of the British North America Act is that of the inclusion of the alternative provision regarding purchases by agents in the definition of " consumer " in s. 2 (2) of the impugned statute. The most that can be said as to this is that the language of the alternative clause may be confusing. Seeing that no retail purchase could lawfully be made within the Province without the tax being immediately paid, this clause would appear to have no perceivable object and to be quite unnecessary to the levying of the intended tax. For this reason the draftsman would have been well advised, in my opinion, to omit it. It could be deleted at any time without affecting the vital object of the Act.
As to s. 5, it is directed only against persons ordinarily resident or carrying on business in New Brunswick, who might otherwise seek to avail themselves of favourable opportunities to buy their tobacco outside the Province and thereby easily evade the tax, which s. 4 so plainly intends to apply to all consumers alike in the Province. Its only and perfectly obvious purpose is to close such an inviting opening to such persons as might be inclined to dodge the intended tax by such convenient means. The section merely places such persons on the same footing in respect of their consumption of tobacco purchased by or for them outside the Province as all " consumers," who buy their tobacco within the Province. It does not purport in any sense to prohibit any one from buying tobacco outside the Province, but makes it clear that when one does so and brings it into the Province or receives delivery of it in the Province for his own consumption he does not thereby free himself of liability to pay the same tax in respect of its consumption as if he had bought it at a retail store within the Province at the same price. Surely if the charging section of the statute is itself within the legislative competency of the Province, such a purely subsidiary section-having no other perceivable object than the prevention or the evasion or defeat of the intended tax-cannot well be held to be beyond it.
As to the contention that the intended tax is in reality a customs or excise duty and consequently an " indirect tax," and that its attempted imposition therefore infringes the exclusive legislative jurisdiction of the Dominion Parliament in relation to the creation or alteration of such duties, 'as expressly conferred by s. 122 of the B.N.A. Act, precisely the same objection was made in the Kingcome case (1) regarding the imposition of the fuel oil tax by the British Columbia Fuel Oil Tax Act, 1930, c. 71, as amended by the statute of 1932, c. 51, upon every con, sumer of fuel oil according to the quantity which he hag consumed. The Judicial Committee overruled the objection as inconsistent with its own decisions, "which,"-to quote the language of Lord Thankerton- That is surely conclusive as to this ground of appeal. It is argued as well that s. 5 of the New Brunswick statute contravenes s. 121 of the B.N.A. Act, as interposing an obstacle to the free admission of tobacco as an article within the meaning of that enactment.
This section came before this Court for interpretation for the first time in 1921, in the case of Gold Seal Ltd. v. Attorney-General for Alberta (2), on the question of the constitutional validity of an enactment of the Parliament of Canada contained in ch. 8, 10 Geo. V, 1919, prohibiting the importation of intoxicating liquor into those Provinces, where its sale for beverage purposes is forbidden by provincial law. The case was heard by Sir Louis Davies, C.J., and Idington, Duff, Anglin and Mignault, JJ. Duff, J., dealing with the construction of s. 181, held that the phraseology adopted, when the context is considered in which the section is found, shows that the real object of the clause is to prohibit the establishment of customs duties affecting interprovincial trade in the A cTic products of any Province of the Union.
Snors br. Anglin, J., expressed the view that the impugned legisco oa lation was not obnoxious to s. 121 of the B.N.A. Act. The purpose,
Crocket J. he said, of that section is to insure that articles of the growth, produce or manufacture of any Province shall not be subjected to any customs duty when carriedinto any other Province. Prohibition of import in aid of temperance legislation is not within the purview of the section.
Mignault, J., thought that the object of s. 121 was not to decree that all articles of the growth, produce or manufacture of any of the Provinces should be admitted into the others, bnt merely to secure that they should be admitted "free," that is to say, without any tax or duty imposed as a condition of their admission.
The essential word here, he continued, is " free," and what is prohibited is the levying of customs duties or other charges of a like nature in matters of interprovincial trade. The clear effect of these three several pronouncements as read together, it seems to me, is that the words "admitted free," as used in s. 121, mean admitted free of customs duties, and for that reason, and that reason only, even an express prohibition of the import of intoxicating liquor from one province to another in aid of provincial temperance legislation is not within the purview of the section. That is precisely how the head-note of the case states the decision of the court on the construction of the section relied on as invalidating the legislation there in question. Whether or not that decision means that the section only applies to Dominion legislation, it plainly implies, I most respectfully think, that the Parliament of Canada may validly go so far as to expressly prohibit the admission from one Province to another of any article of the growth, produce or manufacture of another Province, so long as the prohibition does not involve the imposition of a customs duty. If that be so in respect of the application of the section to Dominion legislation, how can this Court now consistently hold that a provincial enactment, which neither prohibits nor in any sense obstructs nor restrains, as between vendor and purchaser, the passage of any such article from one Province to another, does fall within the purview of the intended ban? No one contends or could well contend that intoxicating liquor is not quite as much J. an article of the growth, produce or manufacture of one or more of the Provinces of Canada as tobacco. Surely s. 121 of our Constitutional Act was never intended to have one meaning in its application to Dominion legislation and quite another meaning in its application to provincial legislation.
And for my part I cannot see how the fact that in the Gold Seal case (1) the court was considering an enactment of the Parliament of Canada in relation to the importation of intoxicating liquor from one Province to another can justify us in completely discarding the construction so explicitly placed on s. 121 of the B.N.A. Act in that case, and now construing the words " admitted. free," as used therein, in such a sweeping sense as that contended for in support of this appeal.
If we were being called upon to interpret the section for the first time, and if I may say so with all respect, I should be disposed to regard it in precisely the same light as Mignault, J., so clearly expounded it in the passage I have quoted, and to hold that it was inserted in the Imperial Act
' and that
This treats the section as applicable to Dominion and provincial legislation alike, and in no way concerns the distributon of legislative powers as between the Dominion and the Provinces.
It recognizes on the one hand the exclusive power of the Dominion to create and impose both customs and excise duties, and on the other the exclusive right of the Provinces to impose direct taxation within the Province for the purpose of raising revenue for provincial purposes, so long as the imposition of such duties or taxes by either authority does not constitute an obstacle to the admission of articles grown, produced or manufactured in any one or more of the Provinces into any other Province in the sense of imposing any condition to such admission. For the reasons already stated, I cannot see r how the New Brunswick Tobacco Tax Act imposes any condition whatever to the importation or admission into that Province of tobacco, whether it be the produce of any other Province of Canada or of any foreign country. The tax or charge contemplated by s. 5 is a tax or charge which, I repeat, is not payable until after the tobacco has been brought into the Province by the prospective consumer or received by him within the Province for consumption by himself or others at his expense. Indeed the tax is neither leviable nor in any manner recoverable until after the intending consumer has reported to the Provincial Secretary-Treasurer the fact that he has brought the tobacco into the Province or received delivery of it within the Province for that purpose, and the price paid for it to the outside vendor..
The objection that the statute's requirements regarding vendors' licenses are ultra vires of the Legislature as not falling within the purview of s. 92 (9) of the B.N.A. Act, is equally untenable for the reasons so convincingly stated by my brother Rinfret.
I agree. with him that the appeal should be dismissed with costs against the appellant, but with no costs to the intervenant, the Attorney-General of the Province of Quebec.
J.-Speaking generally, the tax in question is, in my opinion, a direct tax for the raising of a revenue for provincial purposes within the meaning of head 2 of section 92 of the British North America Act. The mere insertion, by the legislature, of the phrase in section 4 of the Act " a tax in respect of the consumption of such tobacco " is not conclusive but upon consideration it appears to me that the tax is imposed upon the very person it is intended should bear it and who, in the ordinary course, will not be able to pass it on. " consumer" of tobacco purchasing it at a retail sale in the Province is ordered to pay the tax at the time of purchase, and the vendor is made the collecting agency for the Province. In my view the tax is not imposed on ~one of the parties to a sale of tobacco in respect of that transaction, and the fact that it is imposed before consumption (instead of after consumption as in the King- J. come case (1)) is not of importance if my conclusion as to the true nature and tendency of the tax is correct. In two respects the statute is partially ultra vires. The attempt by that part of the definition of " consumer " or " consumer of tobacco" to impose the tax on an agent must, I think, fail as being indirect taxation. However, the principal is liable for the tax and the part relating to the agent is clearly severable.
Section 5, which is also severable, is ultra vires because it infringes the provisions of section 121 of the British North America Act. The statute before this Court in the Gold Seal case (2) was a Dominion enactment and there is nothing in any of the judgments inconsistent with this conclusion.
It is true that the person who brings into New Brunswick tobacco for his own consumption reports the matter to the Minister but the fact that the entry into the Province may, or always will, precede the reporting and payment of the tax, makes it none the less an impost upon the production or manufacture of another province if the tobacco in question falls within that class. If, of course, the tobacco is brought from a foreign country, the tax directed to be paid by section 5 is a customs duty and beyond the powers of a provincial legislature. main purpose of the statute is to impose direct taxation within the Province but it is not ancillary to that purpose to attempt to regulate external trade in a particular commodity or to impose a customs duty thereon. A provincial legislature is not authorized thus to seize a power that was expressly withheld from it.
With the two exceptions mentioned, the statute is intra vires and as the repugnant provisions are severable, the plaintiff appellant, which carries on the business of selling tobacco in New Brunswick, is unable to succeed in its action which by the judgment a quo stands dismissed. The appeal should be dismissed but there should be no costs.
J.-I have had an opportunity of reading the judgment prepared by my brother Rinfret and agree with the conclusions at which he has arrived, except on one point, that is, the personal liability imposed on an agent.
This, I think, oversteps the limits of Provincial legislative jurisdiction but, with this qualification, I would dismiss the appeal.
J.-The Supreme Court of New Brunswick,
Appeal Division, held that the Tobacco Tax Act and regulations thereunder are constitutional. The Atlantic Smoke
Shops Limited now appeals to this Court, and the Attorney- General for the province of Quebec (where a law substantially similar has been enacted) having been allowed to intervene, joins with the Attorney-General for New Brunswick, and submits that the Act is intra vires of the
The Act which was enacted on the 11th of May, 1940, came into force on the first day of October of the same year by Proclamation of the Lieutenant-Governor in
The appellant has a retail store in the city of Saint
John and carries on the business of selling tobacco, including cigars and cigarettes, and has refused to obtain the license required by the Act. It has also neglected to collect the tax imposed upon every purchaser.
The appellant submits that this tax is not a direct tax, nor a tax within the province; that the Act infringes upon the executive legislative jurisdiction of the Dominion to impose customs and excise duties, and that the license provided for is not within the category of licenses for which, under section 92, subsection 9, of the British North
America Act, the provinces have legislative powers.
The principal sections of the Act which have to be considered are the following:- Section 4, which is the taxing section, reads:- The word "consumer"
is defined as follows:- 2. In this Act, unless the context otherwise requires
(a) "Consumer" or "Consumer of Tobacco" means any person who V, within the Province, purchases from a vendor tobacco at a retail sale in the Province for his own consumption or for the consumption of other persons at his expense or who, within the Province, purchases from Tasehereau j.a vendor tobacco at a retail sale in the Province on behalf of or as agent for a principal who desires to acquire such tobacco for consumption by such principal or other persons at the expense of such principal. The Act further provides that the purchaser must purchase from a retail vendor who must obtain a license issued from the proper authorities; and a retail sale is defined as being a "sale to a consumer for purposes of consumption and not for sale."
Every licensed retail vendor is constituted an agent of the Minister for the collection of the tax, and he must collect it from the purchaser upon whom the tax is imposed, at the time the purchase is made within the Province.
The provinces draw their powers to impose direct taxation from section 92, subsection 2 of the Britsh North America Act, and in order to determine whether this particular tax is direct or indirect, the rule many times adopted by this Court and by the Judicial Committee of the Privy Council has once more to be applied.
In City of Charlottetown v. Foundation Maritime Limited (1) Mr. Justice Rinfret, delivering the judgment of the Court, analyzed the various pronouncements on this matter and said:- At the time of the passing of the Act,-and before,-the classification of the then existing species of taxes into these two separate and distinct categories was familiar to statesmen. Certain taxes were then universally recognized as falling within one or the other category. The framers of the Act should not be taken to have intended to disturb "the established classification of the old and well known species of taxation." (City of Halifax v. Fairbanks' Estate (2)).
Customs or excise duties were the classical type of indirect taxes. Taxes on property or income were commonly regarded as direct taxes. These taxes had come to be placed respectively in the category of direct or indirect taxes according to some tangible dividing line referable to and ascertainable by their general tendencies.
(Bank of Toronto v. Lambe (3)).
As to the taxes outside these classifications the meaning of the words "direct taxation" as used in the Act, is to be gathered from the common understanding of these words which pre- (1) [1932] S.C.R. 589, at 593.
(2) [19281 A.C. 117, at 125. (3) (1887) 12 A.C. 575, at 582.
It is now settled that the tax is direct, if it is demanded from the very person who it is intended or desired shall pay it, and it is indirect, if it is demanded from one person Co oL in the expectation and intention that he shall indemnify himself at the expense of another.
It is also the general tendency of the legislation that has to be considered, although in exceptional cases the person made liable by the law to pay the tax may succeed in passing it on, and indemnify himself upon a resale of the commodity.
(Attorney-General for British Columbia v. Canadian Pacific Railway (1); Rex. v. Caledonian Collieries Limited (2)). When the ultimate incidence of the tax, in its ordinary and normal operation, is uncertain, then the tax is indirect, because the question whether the tax is direct or not cannot depend upon those special events which may vary at the time of payment. (Attorney-General for Quebec v. Read (3); Attorney-General for British Columbia v. Kingcome (4)).
In the case submitted to this Court, (I will deal later with the clause making the agent personally liable) the tax is clearly imposed upon the purchaser of tobacco, who is the last purchaser. It is a purchasing tax, not imposed on the transaction of the commodity, but upon every purchaser at the time of making his purchase at a retail sale in the Province. This purchaser is the person intended by the Legislature to pay the tax, and he does pay it at the time of the purchase. Under section 10 of the Act, he is made liable for the tax imposed until it has been collected.
There is no expectation or intention that this purchaser from whom the tax is demanded shall pass it on and indemnify himself, and that someone else than the person primarily taxed will pay it eventually.
The appellant has cited the case of the Attorney-General for British Columbia v. Canadian Pacific Railway (1), where it was decided that a tax imposed upon every person purchasing fuel oil within the Province for the first time after its manufacture, was an indirect tax, and therefore ultra vires. The Judicial Committee came to the conclusion that fuel oil is a marketable commodity, and that those who purchase it for the first time after its manufacture, even for their own use, acquire the right to take it into the market and indemnify themselves at the expense of others.
This, therefore, brought the tax within the principles which made it an indirect tax.
In the present case, it is the last purchaser who is taxed and it is, therefore, quite impossible that the tax can be passed on.
In the case already cited of the Attorney- General for British Columbia v. Kingcome (1), the Judicial Committee upheld the validity of the second fuel oil tax enacted by the province of British Columbia. The Legislature imposed a tax upon every consumer of fuel oil according to the quantity consumed. It was held that the tax was direct taxation, because it was demanded from the very person who it is intended or desired should pay it. As the tax does not relate to any commercial dealing with the commodity, it does not fall within the category of customs and excise duties which are within the legislative powers of the Dominion.
In that case, Lord Thankerton expresses himself as follows:- I have no doubt that this tax is a direct one, and, therefore, within the powers of the Legislature of New Brunswick.
The next point raised is that the tax is not a tax within The argument is that the Legislature is attempting to tax a non-resident of the province of New Brunswick with respect to his consumption of tobacco outside the Province. The Act provides that the tax is levied only when the purchaser purchases in the Province. It is undoubted that it is within the powers of the Legislature to tax any person found in the Province, whether that person is therein domiciled or not; if taxed directly. Bank of Toronto v. Lambe (1); Forbes v. Attorney-General for SOKE Manitoba (2)).
The purchaser pays the tax at the time and place he cor oL purchases the commodity.
Although this tax has been Taschereau J. called a consumption tax, it is more a purchasing tax which is paid by the last purchaser who is deemed to be the consumer.
As section 2 (a) of the Act says, "consumer"
means any person who within the Province purchases
* * * for his own consumption.
As the purchase is made within the Province, it seems clear that the taxation is imposed within the Province, even if by exception the tobacco purchased is consumed in a different Province. It is only in exceptional cases resulting from the act of the purchaser that the tobacco may be consumed outside the
The appellant has also raised the contention that this tax is ultra vires because it violates the disposition of section 121 of the B.N.A. Act, which says:- All articles of the growth, produce, or manufacture of any one of the provinces shall, from and after the Union, be admitted free into each of the other provinces.
The argument of the appellant is that the Act purports to impose a tax upon articles produced or manufactured in another province of Canada when introduced into New
Brunswick. In the submission of the appellant the objectionable clause of the Act is section 5, which reads as follows:- 5. Every person residing or ordinarily resident or carrying on business in New Brunswick, who brings into the Province or who receives delivery in the Province of tobacco for his own consumption or for the consumption of other persons at his expense or on behalf of or as agent for a principal who desires to acquire such tobacco for consumption by such principal or other persons at his expense shall immediately report the matter to the Minister and forward or produce to him the invoice, if any, in respect of such tobacco and any other information required by the
Minister with respect to the tobacco and shall pay the same tax in respect of the consumption of such tobacco as would have been payable if the tobacco had been purchased at a retail sale in the Province at the same price.
This tax, in my opinion, is not a customs duty nor an excise tax. In Attorney-General for British Columbia v.
Kingcome (3), Lord Thankerton said:- (1) (1887) 12 A.C. 575, at 584.
(2) [19371 A.C. 260.
(3) [19341 A.C. 45.
In the case of Bank of Toronto v. Lambe (1), Lord Hobhouse expressed himself in the following manner:- These customs duties impose a condition on the admission of the commodity before reaching the consumer, and as Mr. Justice Mignault says in Gold Seal Limited v. Dominion Express Company (2):- 'The tax contemplated by the Tobacco Act is imposed only once the importation is made, and such importation in the province of New Brunswick does not depend upon the payment of the tax. If we were to adopt the construction suggested by the appellant, no purchaser of a commodity coming from a different province could ever be taxed.
When the commodity has entered into the Province, I see no valid reason why the purchaser could not be compelled to pay a tax to the provincial authorities. It has also been submitted that the retail vendors are subject to the payment of a licence and that the licensing provisions found in the Act are not authorized by the Britsh North America Act. I fail to see how the appellant can succeed on this ground. The licenses provided for in section 92, subsection 9, of the British North America Act are not the only licenses in relation to which the various provinces may enact laws. They may provide for licenses not only for the purpose of raising a revenue, but they have also the right to require licenses as an incident to any one of their other powers.
The appellant has submitted also that the Tobacco Act purports to tax not only the principal but also the agent who, on behalf of his principal, purchases tobacco. appellant's argument is that the agent purchasing for his principal is by the law liable for the payment of the tax and that it is, therefore, possible that he may recoup himself in passing on the tax to his principal.
It will be remembered that under section 2, paragraph (a) of the Act, "consumer"
means not only any person who within the Province, purchases tobacco for his own consumption, but also any other person who purchases tobacco in the Province as agent for his principal who desires to acquire such tobacco for consumption by such principal. This consumer, whether he is the principal or the agent, is personally liable for the payment of the tax, under section 10 which reads as follows:- It is clear, therefore, that the agent who purchases tobacco for his principal is personally liable for the payment of the tax. To my mind, this disposition has the effect, when such a transaction is made, to make the tax an indirect tax.
In Cotton v. The King (1), the Judicial Committee after having construed the provisions of the Quebec Succession Duties Act, as entitling the collector of inland revenue to colleet the duties on the estate from the person making the declaration (the notary) came to the conclusion that this tax was indirect.
Lord Moulton said:- In Burland v. The King (2), the Judicial Committee discussed the Cotton case (1), thought that it could not be distinguished and reaffirmed the principle cited supra. Later, in 1924, in the reference by the Governor General in Council (3), the Supreme Court of Canada came to the conclusion that the Grain Futures Taxation Act of Manitoba purporting to impose a tax upon every person whether broker, agent or principal, entering into a contract for the sale of grain for future delivery, was ultra vires of the legislature.
At page 322, Sir Lyman Duff, the present Chief Justice of Canada, said:- SHops
The statute, therefore, in so far as it levies a tax upon principals in the transactions to which it applies, would, if the legislation were so limited, be in my opinion valid. I am unable, however, to perceive how, consistently with the decisions upon the subject, it is possible to sustain Taschereau J.the tax upon brokers and agents as a legitimate exercise of the authority of the provinces in relation to direct taxation.
This case was submitted to the Privy Council, (Attorney- General for Manitoba and Attorney-General for Canada (1)) and the judgment of the Supreme Court was upheld. The same principles were applied in The Provincial Treasurer of Alberta v. Kerr (2). In that case, Lord Thankerton said:- Under the Alberta Succession Duties Act, the duties in question were imposed on the executors on their application for probate, and letters probate could not be issued without the consent of the Provincial Treasurer, whose duty was to secure payment of the duties or obtain security therefor by a statutory bond before giving such consent. There can be no doubt that normally the application for probate will be by executors, and the issue is whether the legislature intended or desired that an executor should pay the duties without any expectation that such executor should indemnify himself at the expense of some other person. In their Lordships' opinion, the determination of this issue depends on the answer to a simple test, which was applied in the cases of Cotton v. Alleyn (3), already referred to, namely, whether the executor is personally liable for duties.
If the executor is so liable, then the tax is imposed on the executor, with the obvious intention that he should indemnify himself out of the beneficiaries' estate, and the taxation is indirect. If the executor is not personally liable for the duties, then the tax is truly imposed on the beneficiaries and the taxation is direct.
In the present case, the agent is made personally liable for the tax. It is imposed upon him but it was obviously the intention of the Legislature that he should indemnify himself at the expense of his principal. This makes the taxation indirect, and, therefore, ultra vires.
However, the invalidity of the section declaring the agent who buys on behalf of his principal personally liable for the tax, does not affect the rest of the statute which is severable, and which I find within the powers of the Legislature of New Brunswick (Toronto Corporation v. York Corporation (4)).
My conclusion is that the Tobacco Tax Act enacted by the province of New Brunswick is within the legislative (1) [1925] A.C.
(2) [1933] A.C. 710.
(3) [1922] 1 A.C. 215.
(4) [19381 A.C. 415.
powers of that Province, and that it is intra vires, except the sections making the agent who buys tobacco for his principal personally liable for the tax.
The appeal, should, therefore, be dismissed without costs to either party here and in the courts below.
Appeal dismissed, no costs. Solicitors for the appellant: Porter & Ritchie.
Solicitor for the respondents: Peter J. Hughes.
Solicitor for the intervenant: Rosario Genest.
ACCORD AND SATISFACTION
ACTION-Capacity to bring auit.... 388
2-Status to maintain............ 520
3-Instigation to bring...........
ADMINISTRATION
OF ESTATES - Will-Construction-Bequests of shares in company-Direction that shares remain property of testatrix's estate until certain dividends received for benefit of estate- No dividends earned or declared by company within dividend periods mentioned in the will-Vesting of shares in legatees- Time for delivery of shares to legatees.
....................
See WI., 1.
2-See
2; 1.
APPEAL-Motion to quash-Nature of judgment appealed from-In essence and in substance a matter of procedure only- Practice or course of Supreme Court of
Canada in such cases.]-The dismissal an originating motion in the Supreme
Court of Ontario was affirmed by the
Court of Appeal for Ontario on the ground that the relief asked for and the matters raised were not matters which could be conveniently and properly considered in such a proceeding and that to enable these matters to be properly considered and dealt with there should be an action commenced by writ; and leave was given to appellant to bring such an ac- An appeal was brought to this
Court, and respondent moved to quash the appeal for want of jurisdiction. Held:
It is the settled practice, the settled course of this Court, not to interfere with a judgment of that type by the
Court of last resort in a province.
It is in essence and in substance a matter of procedure only. And it is also the settled course of this Court that when on a motion to quash it plainly appears to the
Court that the appeal is one which, if it came on in the regular and ordinary way, must be dismissed, the Court will on that ground quash the appeal. The appeal was accordingly quashed.
(No opinion was expressed as to respondent's contention that the judgment appealed from was not a " final judgment " within s. 36 of the Supreme Court Act, R.S.C., 1927, c. 35). .......................
2- Jurisdiction-Petition for leave to appeal-Question of law of general importance-Whole working of provincial statute throughout a province-Party in a suit being ousted from jurisdiction of His Majesty's courts-Future rights-Title to real estate - Jurisdiction of provincial appellate courts to grant leave to appeal to this Court-Discretiom-Supreme Court Act, s. 41-Watercourse Act, R.S.Q., 1925, c. 46.1-The appellant is the owner of some land on the Etchemin river, in the province of Quebec, and of an island in the same river. Some eighty years ago, a wooden dam was built on this river; it was replaced in 1913 by a concrete dam about eight inches higher and was again raised another fourteen inches or so in 1928. The dam is owned by the respondent. The appellant claimed that, through the raising of the dam, his land was damaged by flood and by erosion; and asked that the respondent be condemned to pay the sum of one hundred and fifty dollars for damages caused during the two preceding years and, moreover, that the respondent be condemned to demolish his dam, on the ground that it had been raised illegally and without complying with the formalities required by the Watercourse Act (R.S.Q., 1925, c. 46). The respondent pleaded that he had acquired by prescription the right to flood the lands of the appellant; that the raising of the dam consisted merely in ordinary repairs and did not require compliance with the enactments of the Watercourse Act; that the raising of the dam did not bring the Etchemin river at a higher level than it had been previously raised when the dam was at its original height; that no damage had been caused to the appellant's land through the raising of the dam; and that, at all events, the whole matter was within the exclusive jurisdiction of the Quebec Public Service Commission, and the Superior Court was not competent to hear and determine the case. The trial judge, Langlais J., dismissed the action on the ground that, in view of the provisions of the Watercourse Act, the Superior Court had no judgment was affirmed by a majority of the appellate Special leave to appeal to this
Court was refused by the appellate court, and the appellant moved before this Court for special leave to appeal. Held that the appellant's petition for special leave to appeal to this Court ought to be granted.
The present case not only raises a "question of law of great importance" (Street v. Ottawa Valley Power Co. [19401 S.C.R.
40); but it concerns the whole working and operation of the Watercourse Act throughout the province of Quebec, and still more the ousting of the jurisdiction of His Majesty's courts on a point likely to arise frequently and of general application.
Therefore it follows that the matter in controversy is of such general importance that leave ought to be granted, provided this Court has the required jurisdiction to grant it. There is jurisdiction in this Court, as the matter in controversy comes within the provisions of section 41 of the Supreme Court Act:
it may come under sub-paragraph (c), as being within the words "other matters by which rights in future of the parties may be affected"; but it clearly comes under paragraph (d) : "the title to real estate or some interest therein." Comments as to the bearing of the decision of this Court in Hand v. Hampstead Land and Construction Co. ([1928] S.C.R. 428), where it was held that leave would not be granted to appeal from a judgment
"solely" because it involved the construction of a provincial statute of a public nature.
Generally speaking, a strictly municipal matter is of a somewhat local character and of restricted interest. In such a case, the matter in controversy, even if it does involve the interpretation of a provincial Act, may not always be found of such general interest and of such importance as to warrant -the granting of special leave to appeal to this Court; but the decision in the
Hand case is far from holding that, whenever the construction of a provincial statute is involved, ipso facto the matter in controversy will not be found of sufficient importance to justify the granting of special leave. Held, also, as already decided by this Court in Canadian National
Railway Co.v. Croteau and Cliche ([1925]
S.C.R. 384) and in Hand v. Hampstead
Land and Construction Co. ([19281 S.C.R.
428), that "the highest court of final resort having jurisdiction in the province in which the judicial proceeding was originally instituted," exercising the authority to grant special leave to appeal to this Court under section 41 of the
Supreme Court Act, is not limited by any rule "supposed to be laid down in this
Court touching the exercise of that jurisdiction."
The granting of special leave to appeal to this Court by a provincial court of appeal, conferred by section
"is untrammelled and free from restriction, save such as is implied in the term 's pecial leave
3--Criminal law-Section 1025 Cr. C.- Appeal to the Supreme Court of Canada -Conflicting decisions--"Judgment of any other court of appeal"-Must be courts within Canada.]-The "court of appeal" contemplated by section
1025 of the Criminal Code which gives right of appeal to the Supreme Court of Canada, upon leave to appeal being granted, "if the judgment appealed from conflicts with the judgment of any court of appeal" does not include any courts other than Canadian courts. Arcadi v. The King ([1932] S.C.R. foll.
THE KINo ....................
4--Jurisdiction-Claims of several employees against same employer cumulated in single action-Each claim amounting to less than 8200-Action taken by Joint Committee on behalf and for the benefit of employees-Powers of Joint-Committee granted by provincial statute-Workmen's Wages Act, Que., 1987, 1 Geo. VI, c. 49, s. 80.1-The respondent, a joint-committee constituted as a corporation under the Quebec Workmen's Wages Act, claimed from the appellant, under the provisions of section 20 (k) of the Act, on behalf and for the benefit of over 200 workers and apprentices, a sum of $4,790.93, amount alleged to be due for wages under a collective agreement; and also claimed under other provisions of the Act further sums, payable to the respondent itself, of $753.97 as liquidated damages and $27.40 as penalty.
Nearly all the individual claims were under $100 and none of them exceeded $200. The respondent's action was maintained by the trial judge, which judgment was affirmed by the appellate court. The respondent moved to quash an appeal to this Court for want of jurisdiction.
Held that no appeal lies to this Court from the judgment appealed from.
Cousins v. Harding, ([19401 S.C.R. 442) followed. LA LE CHAUSsuRtE. ........ 5---Cr. Code, ss. 951(3), 285(6), 103() -Accused charged with manslaughter- Charge arising out of operation of motor vehicle-At trial accused found not guilty of manslaughter but guilty of driving in a manner dangerous to the public-Appeal by Attorney-General of the province dismissed by appellate court (with a dissent on questions of law)-Appeal by Attorney-General to Supreme Court of Canada - Whether there was a "judgment or verdict of acquittal" within a. 1023 ()-Merits-Evidence and findings at trial.........................
6-Patents - Pleadings - Conflicting applications for patent-Proceedings in
Exchequer Court under s. 44 (8) of The
Patent Act, 1985 (Dom., c. 38)-Plaintiff pleading alternatively that alleged invention relied on by defendant was made in course of inventor's employment by plaintiff and that, by virtue of employment contract and circumstances under which invention was made, plaintiff was entitled to benefit of it, and was owner of it- ,Right to raise such issue in the proceedzngs-Patent Act, 1985, s. 44 (8) (iv);
Exchequer Court Act (as amended in
1928, c. 88, s. 3), e. 88 (c)-Plea struck
Supreme Court of Canada to hear appeal
Court Act, s. 88.........................
7-Right of appeal in respect of assessments for income tax in Saskatchewan- Saskatchewan statutes: The Income Tax
Act, 193, c. 9, and amending Acts; The
Income Tax Act, 1936, c. 15, and amending Acts; 1934-35, c. 6 (amending The
Treasury Department Act); The Treasury
Department Act, 1938, c. 8, and amending Acts ......................
See TAx, 2.
8-Nonnterference by Supreme Court of Canada with reduction by Court of
Appeal of amount of general damages awarded by trial judge ............
Code (R.S.C., 1927, c. 86, as amended), e. 285(4) (7)--Conviction under s. 285(4),
(a)-Appeal asserted under s. 8 (7)
County Court Judge from such refusal- Whether right to so appeal-Whether right of appeal from County Court Judge to Supreme Court, P.EI.-Constitutional validity of s. 885 (7), Cr. Code-Constitutional validity of s. 84 (1) (a) (c) of said provincial Act, in view of s. 885 (7),
Cr. Code ..........................
10--Jurisdiction - "Final judgment"
(Supreme Court Act, R.SC., 1987, c. 35,
2 (b), 36)...................
APPEAL-Concluded
11-Habeas corpus-Appeal taken, pursuant to s. 8 of Habeas Corpus Act, R.S.O., 1937, c. 189, from dismissal of application for order discharging applicant from detention in mental hospital-- Powers of Court of Appeal as to procedure-Direction for examination and report by doctors ................. 12---See
ASSESSMENT AND TAXATION-Direct or indirect taxation ..............
2- Tobacco Tax Act (N.B.)-Whether intra vires the province-Direct or indirect taxation within province...... 670 AUDITORS-Companies--Auditors'duties -Statutory audit-Cashier's dishonesty- Cash book-Bank deposit slips-Dominion Companies Act, 1934, 24-85 Geo. V, c. s. 120.]-When a firm of accountants has merely been appointed to act as auditors of an advertising company, without any special terms or conditions as may have been contained in a by-law or a special contract and, thus, where the definition of their duties must be found entirely within the language of section 120 of the Dominion Companies Act, their duties are those, and only those, imposed upon them by the statute. A contract imposing upon them the duty of making the statutory audit therein referred to and of issuing a certificate to the effect that the balance sheet was "properly drawn up so as to exhibit a true and correct view of the state of the company's affairs *
* * as shown by the books of the company" does not call for a more complete and detailed audit, unless some circumstances would give rise to suspicion of dishonesty or irregularities. In the absence of any suspicion as to the honesty of a cashier, who as a fact had been guilty of defalcations for a period of nearly six years before they were discovered, the auditors were not obliged, as in this case, to compare the details of the bank daily deposit slips with the entries in the cash book: they were bound only to exercise a reasonable amount of care and skill in order to ascertain that the books were showing the company's true position: or, adopting the words used by Lopes, LJ. in In re Kingston Cotton Mill Co. [18961 2 Ch. 279), " it is the duty of an auditor to bring to bear on the work he has to perform, that skill, AUDTIORS-Concluded care and caution which a reasonably competent, careful and cautious auditor would use"; and, using a term of the Quebec law system, auditors must act "en bons pares de famille". Upon an action brought by an insurance company, which had issued a fidelity bond on the employees of the advertising company and which had been subrogated in that company's rights, if any, against the auditors, held, applying the principles enunciated in the decisions below-mentioned to the particular facts of this case, that there was no such neglect or default on the part of the auditors as would entitle the advertising company, were it the plaintiff, to succeed in the action. In re London and
General Bank (No. 2) ([18951 2 Ch. 673);
In re Kingston Cotton Mill Company
(No. 2) ([1896] 2 Ch. 279); London Oil
Storage Company Limited v. Seear, Hasluck and Co. (Dicksee on Auditing 11th ed., p. 783) and In re City Equitable Fire
Insurance Company Limited ([19251 Ch.
407) referred to. Comments as to whether, assuming that there was some breach of duty on the part of the auditors, a claim based on such a breach of duty would have been covered by the subrogation document in favour of the appellant; and also, assuming it were covered by the subrogation, what would be the measure of damages for such a breach of duty.
AUTOMOBILES
See Moron
BANKS AND BANKING - Joint bank account-Husband and wife-Deposit by wife in joint names of herself and husband-Signing of a printed agreement form required by the bank-Death of the wife-Whether husband is entitled to ownership of balance of money deposited
-Construction of agreement-Evidence.]
-A wife deposited her own money in the joint names of herself and her husband, and both signed an agreement with the bank authorizing the latter to accept cheques drawn by either, the death of one
"in no way (to) affect the right of" the survivor to withdraw all moneys deposited in the account.
The wife kept the bank book and she alone drew on the account during her lifetime.
A short time before her death when leaving for the hospital the wife handed the bank book to her husband saying "This is yours."
The Registrar of Probate held that the money standing to the credit of the joint account at the time of the death of the wife intestate was vested in the husband (now appellant) as his own property, but this judgment was reversed
AANKS AND BANKING-Concluded by the appellate court on the appeal of the wife's sister (now respondent), where it was held that the husband, who had been duly appointed administrator of the estate, must render account and that the Registrar of Probate must accordingly add the amount to the inventory of the estate. Held, affirming the judgment of the Supreme Court of Nova Scotia in banco M.P.R. 169), Davis and Hudson JJ. dissenting, that, neither the agreement nor the evidence indicated any intention on the part of the wife to create a joint tenancy, in the money deposited, in favour of her husband. Per Crocket, Kerwin and Taschereau JJ.-There is a legal presumption that, when the wife opened the deposit account in the names of her husband and herself and signed the agreement with the bank, there was no intention on her part to divest herself of her exclusive ownership and control of the deposit money and make her husband a joint tenant thereof.
This presumption is a rebuttable presumption, which may always be overborne by the owner's previous or contemporaneous oral statements or any other relevant facts or circumstances from which his or her real purpose in making the investment or opening the account in that form may reasonably be inferred to have been otherwise. In the absence, however, of any such evidence to the contrary the presumption of law must prevail. In the present case, such evidence cannot be found to have been established from the only two sources available, viz.: the signed bank deposit agreement form and the appellant's own deposition before the Registrar of Probate. Per Davis J. dissenting-The document signed by the wife and her husband cannot be treated merely as a direction to the bank to pay, but it evidences an agreement between them and must be construed as evidencing the creation of a joint estate in the moneys in her husband. It is quite impossible to hold on the document that the wife merely created a trust in her husband resulting to her own benefit and did not create, or intend to create, a present joint interest in the moneys in him. Therefore, the husband as survivor was entitled in his own right to what remained in the account on the death of his wife. Per Hudson J. dissenting-If the agreement were taken by itself and without extrinsic evidence, the deposit of moneys in the bank must be treated as a joint one to which the survivor was entitled; and the evidence does not contradict such re ............... BARRISTERS
BILLS OF EXCHANGE
BUILDING CONTRACT
CARRIERS
CERTIORARI
CITIES AND TOWNS ACT - R.S.Q.,
1925, c. 102, s. 123...................
CIVIL CODE-Arts.
1171,
1173,
(Novation) ....................
2-Arts. 1666, 1683, 1688 (Lease and
Hire of Work) ...................
3- Arts. 2485, 2487, 2488, 2489 (Insurance-Representation and Concealment);
2490, 2491 (Insurance-Warranties); 2588
(Life Insurance) ..................
CODE OF CIVIL PROCEDURE-Arts.
1150 et seq.
(Procedure in summary matters) ........................
COMMISSIONER
PROVINCIAL
POLICE-Powers of, under Motor Vehicle
Act, R.S.B.C., c. s. 84 ....
COMPANIES-Criminal law-False statement by director-False by implication- Liability of director-Balance sheet of company-Loan to company treated as cash asset - Particulars - Criminal Code, sections 413 and 414.
...........................
2-Will - Bequests shares in company-Direction that shares remain property of testatrix's estate until certain dividends received for benefit of estate-No dividends earned or declared by company within dividend periods mentioned in the will-Vesting of shares in legatees-Timc for delivery of shares to legatees .......................
3--Income tax-Extra-provincial company selling some of its products within
COMPANIES-Concluded the province-Assessment of company by the province for income tax-Income tax on "the net profit or gain arising" from business in the province-Company not keeping separate profit and loss account in respect of business done in the province-Statute authorizing regulations for determining a company's income within the province where such income cannot be ascertained-Regulation providing that such income shall be taken to be such percentage of company's income "as the sales within the province bear to the total sales"-Constitutionality of statute and regulation - Validity of regulation and assessment, having regard to the statute -Error in assessment in not allowing for deduction in respect of reserve for bad debts-Right of appeal in respect of assessments for income tax in Saskatchewan- Saskatchewan statutes: The Income Tax Act, 1932, c. 9, and amending Acts; The Income Tax Act, 1936, c. 15, and amending Acts; 1934-35, c. 6 (amending The Treasury Department Act); The Treasury Department Act, 1938, c. 8, and amending Acts ......................
4- Contract--Recission-Alleged fraudulent misrepresentations in a selling circular inducing purchase of shares in company-Construction of representations - Right to rescission of contract of purchase-Principles applicable-Status to sue -Shares bought and held by purchaser for benefit of a company which later surrendered its charter after assigning its assets to a successor company-Limitation of actions-Time from which statute of limitation begins to run.......... 520 5--See
CONSTITUTIONAL LAW-Debt Adjustment Act, Alberta, 1937, c. 9, s. 8-Provincial statutory prohibition against commencement of action against resident debtor for recovery of money recoverable as liquidated demand or debt, without permit from provincial Board-Enactment invalid in so far as affecting right of action on promissory note-Bills of Exchange Act, R.S.C., 19,7, c. 16, ss. 74, 134, 185,136-B.N.A. Act, 1867, ss. 91 (18), 92 (13) (14)--Conflict between Dominion and Provincial legislation-Dominion legislation paramount.]-The Debt Adjustment Act, Alberta, 1937, c. 9, by s. 8 enacted that "no action or suit for the recovery of any money which is recoverable as a liquidated demand or debt in respect of any claim enforcible by virtue of any rule of law or equity or by virtue of any statute * * * shall be taken *
* any person whomsoever CONSTITUTIONAL IAW-Continued against a resident debtor in any case"
unless the Board constituted by the Act and appointed by the Provincial Government issues a permit consenting thereto.
In an action brought without a permit in the Supreme Court of Alberta against a resident debtor upon a promissory note, it was held that a defence pleading said
Act could not prevail; that said s. 8 of the Act, in so far as it affects a right of action on a promissory note, is ultra vires the Provincial Legislature. (Judgment of the Appellate Division, Alta., [1940] 2
W.W.R. 437, affirming judgment of Ewing
J., [1940] 1 W.W.R. 35, affirmed in the result). Per the Chief Justice and Kerwin
J.: In so far as said legislation extends to actions upon bills of exchange and promissory notes, it is plainly repugnant to the enactments in as. 74, 134, 135 and
136 of the Bills of Exchange Act, R.S.C.,
1927, c. 16 (which, or substantially the same, enactments have been in the Act since 1890), which, read together, affirm the unqualified right of the holder of a note to sue upon it in his own name and to recover judgment from any party liable on it; and which enactments are necessarily incidental to the exercise of the powers conferred upon the Dominion
Parliament by s. (18)
of the B.N.A.
Act. On the passing of the Bills of Exchange Act the jurisdiction of a province, if it ever possessed any, to enact such legislation as s. 8 of said Debt Adjustment Act (in so far as it extended to actions upon bills and notes) was superseded because it could not be enforced without coming into conflict with the paramount law of Canada. It would not make any difference if said s. 8 were expressed in the form of limiting the jurisdiction of the courts of Alberta. In pith and substance such an enactment, if operative, imposes a condition upon suitors to whom it applies governing them in the exercise of their rights to enforce causes of action vested in them; and, if it contemplates such an action as the present one, it purports to qualify rights in respect of which the Parliament of
Canada has legislative jurisdiction in virtue of s. (18) of the B.N.A. Act, and has exercised that jurisdiction by affirming them unconditionally.
(Attorney-General for Ontario v. Attorney- General for the Dominion, [18961 A.C.
348, at 359, 365, 366, and Attorney-General for Ontario v. Attorney-General for the
Dominion, [18941 A.C. 189, at 200-201, cited).
Per Rinfret J.: The prohibition in said a. 8 of the Provincial Act goes to the right to sue-a siubstantive right;
it is not a matter of mere procedure.
Under said Bills of Exchange Act 74,
134, 135), the holder of a note has the right to sue thereon in his own name and to enforce payment against all parties liable. That right is enforcible by action in the provincial courts (Board v. Board, [19191 A.C. 956, at 962; also said provisions of the Bills of Exchange Act shew that Parliament intended the right to be enforcible by an action in court-the only method open to enforce payment and recover).
With respect to matters coming within the enumerated heads of s. of the B.N.A. Act, the Parliament of Canada may give jurisdiction to provincial courts and regulate proceedings in such courts to the fullest extent (Valin v. Langlois, 3 Can. S.C.R. 1, at 22, 26, 53, 67, 76, 77, 89, and 5 App. Cas. 115, at 117-118; Cushing v. Dupuy, 5 App. Cas. 409, at Said provisions of the Bills of Exchange Act relate directly to the matter of head in s. 91 of the B.N.A. Act; and therefore defendants' contention, that the provincial legislation was not necessarily incidental to legislation with respect to bills and notes and therefore the Dominion legislation could not encroach on provincial powers to make laws in regard to matters under heads and 14 of s. 92 of the B.N.A. Act, could not prevail (Tennant v. Union Bank of Canada, [18941 A.C. 31; Cushing v. Dupuy, 5 App. Cas. 409; Proprietary Articles Trade Assn. v. Attorney-General for Canada, [1931] A.C. 310, at 326-327).
The right to sue or to enforce payment or to recover on a bill or note is of the very essence of bills of exchange; it is one of the essential characteristics of a bill or note; the matter falls within the strict limits of s. (18) of the B.N.A. Act; it flows from the provisions establishing negotiability, which has become the primary quality of a bill or note and in which consist the true character and nature of these instruments; the provisions relating to the right to sue, to enforce payment and to recover before the courts are not incidental; they are the very pith and substance of the statute. The Dominion legislation is valid; the Alberta legislation, in so far as it applies against the institution of an action on a promissory note, is in direct conflict with it, is overridden by it, and is ultra vires on the ground that it attempts to take away from the Alberta courts a jurisdiction conferred on them by the Parliament of Canada with respect to a matter within the exclusive legislative authority of that Parliament; and to that extent it must be held inoperative (John Deere Plow Company v. Wharton, [19151 A.C. 330; Board of Trustees of the Lethbridge Northern Irrigation District v. Independent Order of Foresters, [19401 A.C. 513). Whatever jurisdiction there may have been in the province on the subject has been superseded by the Dominion legislation (Attorney-General for Ontario v. Attorney-General for the Dominion et al., 19411
[18961 A.C. 348, at 369, 370). Crocket J., while not acceding to the contention that the rights conferred by ss. 74, 134 and of the Bills of Exchange Act upon holders of bills and notes to sue, enforce payment and recover thereon in provincial courts, are not subject to provincial legislation relating to the jurisdiction of provincial courts and to procedure in civil matters therein, was not prepared to hold that the prohibitory enactment of said s. 8 (1) of the Alberta statute does not conflict with said Dominion legislation;
and he held that if there is conflict, then the Dominion legislation, strictly relating, as it does, to bills of exchange and promissory notes as one of the classes of subjects specially enumerated in s. of the
B.N.A. Act, in the sense of being necessarily incidental thereto, prevails over the provincial legislation. Per Davis J.: The
Alberta enactment is one of general application, not aimed at, nor legislation in relation to, bills of exchange or promissory notes. Sec. 74 of the Bills of Exchange
Act deals only with the rights acquired by negotiation, and the words "the holder of a bill" "may sue on the bill in his own name" mean only that he is not liable to be defeated in an action on the bill on the ground that the action has been brought by the wrong party (reference to Sutters v. Briggs, [19221 A.C. 1, at
The Dominion statute is not in any way dealing with access to any court. But the
Alberta enactment is ultra vires the province. Where legislative power is divided, as in Canada, between a central Parliament and local legislative bodies and the administration of justice in the provinces, including the constitution, maintenance and organization of provincial courts, is given over to the provinces (with the appointment of the judges in the Dominion), a province cannot validly pass legislation, at least in relation to subjectmatter within the exclusive competency of the Dominion, which puts into the hands of a local administrative agency the right to say whether or not any person can have access to the ordinary courts of the province. The Debt Adjustment Board of Alberta is an administrative body and is not validly constituted to receive what is in fact judicial authority (Toronto v.
York, [19381 A.C. 415, at 427). Per Hudson and Taschereau JJ.: The Alberta enactment does not purport to amend or limit the jurisdiction of the Supreme
Court of Alberta, but to place in the hands of a provincial body the right to say whether or not certain classes of rights, some of which may arise under the laws of Canada, may be established or enforced through the courts. In s. 92 of the B.N.A. Act, which gives to the province the exclusive right to make laws in relation to "the administration of justice in the Province," etc., the expression "administration of justice," read in connection with the whole Act, must be taken to mean the administration justice according to the laws of Canada or the laws of the province, as the case may be. Normally -the administration of justice should be carried on through the established courts, and the Province, though it has been allotted power to legislate in relation to the administration of justice and the right to constitute courts, cannot substitute for the established courts any other tribunal to exercise judicial functions (Toronto v. York, [19381 A.C. 415). There may be administration of law outside of the courts short of empowering provincial officers to perform judicial functions, but in respect of matters falling within the Dominion field a province could not do anything which would destroy or impair rights arising under the laws of Canada. Dominion has power to impose duties upon courts established by the provinces, in furtherance of the laws of Canada, and a province could not interfere with nor take away the jurisdiction thus conferred (Valin v. Langlois, 5 App. Cas. 115; Cushing v. Dupuy, 5 App. Cas. 409). Sec. 74 of the Bills of Exchange Act expressly recognizes a right of action on a promissory note. That right of action is one governed by the laws of Canada and therefore excluded from the provincial legislative field. The Alberta enactment is not properly a law as to procedure in courts; it provides for extra-judicial procedure. A province cannot impose extrajudicial control over rights of action under the laws of Canada. THE v. Co. . .......... 87 2- Dentistry Act-Section 63 enacting prohibitions affecting unregistered dentists -Validity-Whether intra vires as to foreign dentists - Prohibiting advertisement by the latter in the province-Holding out "as being qualified or entitled" to practise-Injunction-Section 63 of the Dentistry Act, R.S.B.C., 1936, c. 72, as enacted in the statute of 1939, c. s. 3.]- Subsection (2) of section 63 of the Dentistry Act, R.S.B.C., 1936, c. 72, added thereto by 1939, c. s. 3, which provides that "no person not registered under this Act shall * * * hold himself out as being qualified or entitled to practise the profession of dentistry either within the province or elsewhere,
* * * or circulate or make public anything designed or tending to induce the public to engage or employ as a dentist any person not registered under this Act," is intra vires the powers of the legislature. Prima faeie this legislation is within the provincial legislative sphere and there is no circumstance in this case which would have the effect of rebutting this prima facie conclusion.
The statute does not profess to prohibit people going beyond the limits of the province for the purpose of getting the benefit of the services of a dentist, or to regulate their conduct in doing so; nor does it prohibit the sending into the province from abroad of newspapers and journals containing the advertising cards of practising dentists; nor does it prohibit any communication with the province from abroad.
Union Colliery Company of
British Columbia v. Bryden, [1889] A.C.
580 dist.
Judgment of the Court of
Appeal (55 B.C.R. 506) affirmed.
Co. LTD. v. THE ex rel.
.............
3-Natural Products Marketing (B.C.)
Act-Order in council---"Scheme" to regulate marketing of milk-Constitution of
Lower Mainland Dairy Products Board- Milk Clearing House Limited incorporated as a company to act as sole "agency"
-Orders of Board-Providing for equalization of return to milk producers-Validity of orders-Obnoxious or exceeding delegated powers-Indirect taxation-Extrinsic evidence to prove intent or effect of orders
-Admissibility-Natural
Products Marketing (B.C.) Act, R.S.B.C., 1986 c. 165.1
-Under the provisions of the Natural
Products Marketing (B.C.) Act, RS.B.C.,
1936, c. 165, the Lieutenant-Governor in
Council passed an order in council creating a "scheme" to regulate the dairy business within a specified territory in British
Columbia and constituted the appellant
Board to administer the scheme, the appellants Williams and Barrow and the defendant Kilby being appointed as its members. The appellant The Milk Clearing House Limited was incorporated and an order of -the Board designated that company as the sole "agency" through which the milk produced in that area was to be marketed.
The appellant Board also passed other orders for the purpose of carrying out the scheme.
Milk producers were prohibited from selling their milk otherwise than to this agency and the latter was given the exclusive right to sell milk to dairies and manufacturers.
The Milk Clearing House was receiving the total receipts from the sale of the milk, and these receipts, less expenses, were divided amongst the producers at a certain period, called the settlement period: the amounts thus paid being based on a system of "quotas."
A certain fixed percentage of the milk purchased by the Milk Clearing House from each producer was treated as having been sold in the "fluid-milk market" and the remainder was treated as having been sold in the lower-priced "manufactured-milk market," quite irrespective of where each producer's milk had actually been sold and without regard to the quantity of milk sold by each individual producer on the "fluid-milk" market: the amount being thus paid to the producers on the basis of an equalized price.
The trial judge held that the orders were ultra vires and his judgment was affirmed by the appellate court. Held, affirming the judgment appealed from (56 B.C.R. 103), that the impugned orders of the appellant Board cannot stand, as they go beyond the limits of the powers granted to the Board by the Act. Per the Chief Justice and Davis and Hudson JJ.: There was sufficient evidence, (and it was so found by the trial judge whose findings were approved by a majority of the Court of Appeal) to support the view that the purpose and effect of the impugned orders was to enable the appellant Board, in co-operation with its agent the Milk Clearing House, to equalize prices as between producers who have a market for their milk in the more advantageous fluid-milk market and producers whose milk is not sold in the fluid-milk market but must be sold in the manufacturers market at a lower price; and to accomplish this by abstracting from the proceeds of the sales of the former class in the fluid-milk market a sufficient part of the returns from the sale of their milk to enable the Board, by handing that part over to the other producers, to bring the several rates of return for the two classes into a state of equality. Such an administrative body as the appellant Board in exercising its statutory powers-powers affecting the rights and interests of private individuals-is under an obligation not only to observe the limits of its powers and to act conformably to the procedure laid down; it is under a strict duty to use its powers in good faith for the purposes for which they are given.
(Marquess of Clanricarde v. Congested Districts Board for Ireland (79 J.P. 481), The Municipal Council of Sydney v. Campbell ([1925] A.C. 338) and Campbell v. Village of Lanark (20 O.A.R. 372)).
The impugned orders are obnoxious to this principle in the purpose disclosed by the orders themselves and the evidence adduced to accomplish indirectly what the King in Council has adjudged they cannot lawfully do directly, namely, by exacting monetary contributions from milk producers by a method constituting indirect taxation. Lower Mainland Dairy Products Sales Adjustment Committee v. Crystal Dairy Limited ([19331 AC. 168, at 176). The orders formulated by the appellant Board go beyond the authority granted the Act, and the appeal could be dismissed on the ground that the Board has exceeded its delegated powers. But these orders could also be declared illegal on the further ground that the Board has attempted to do something upon which the legislature itself could not legislate and this is to impose indirect taxation. There is no substantial difference between the consequences that flow from the impugned orders and the results obtained under the Dairy
Products Sales Adjustment Act of 1929, which had been declared ultra vires the
Lower Mainland Dairy Products Sales Adjustment Committee v.
Crystal Dairy Limited ([19331 A.C. 168).
Held, also, that the extrinsic evidence given at the trial to show the intent and effect of the orders was admissible.
v. .....
4- Tobacco Tax Act (N.B.)-Whether intra vires the province-Direct or indirect taxation within province - Whether tax equivalent to customs duty-Regulation of trade and commerce-Personal liability of agent for the tax-Tobacco Tax
Act, 1940, (N.B.) 4 Geo. VI, c. 44, 2 (a)
(d) (e), 8 (2) (3), 4, 5, 7, 8, 10, 20 (2)- B.N.A. Act, ss. (2), 92 (2), 121, 122.1- The Tobacco Tax Act, 1940 (N.B.), c. 44, provides, inter alia, that "every consumer of tobacco purchased at a retail sale in the province shall pay to" the province
"for the raising of a revenue, at the time of making his purchase, a tax in respect of the consumption of such tobacco"
(section 4); and the Act also provides that "every person residing or ordinarily resident or carrying on business in" the province "who brings into the province or who receives delivery in the province of tobacco for his own consumption or for the consumption of other persons at his expense or on behalf of or as agent for a principal who desires to acquire such tobacco for consumption by such principal or other persons at his expense
*
*
* shall pay the same tax in respect of the consumption of such tobacco" (section 5).
Section 10 provides that "a consumer shall be and remain liable for the tax imposed by the Act until the same has been colleoted."
Under section 2 (a) "consumer"
means not only any person who within the Province purchases tobacco for his own consumption, but also any other person who purchases tobacco in the Province as agent for his principal who desires to acquire such tobacco for consumption by such principal. It was also enacted (section 3 (2)) that only retail vendors licensed under the Act may sell tobacco at a retail sale in the province. Regulations made under the Act by Orders in Council were declared to hive the force of statute
(section 20 (2)).
Regulation 6 provides that "every application for a (retail) vendor's license *
*
* shall contain an undertaking by the applicant to collect and remit the tax *
*
* and shall be in Form 2"; and when signing that Form, the applicant undertakes "to act as the agent of the Minister for the collection of the tax and to account to the for all moneys so collected." Held, by a majority of the Court, that the Act is within the constitutional powers of the province, except as to the provisions making the agent, who buys tobacco for his principal personally liable for the tax, which provisions are severable. The Chief Justice and Mr. Justice Davis were of the opinion that the entire Act was ultra vires the province. Mr. Justice Rinfret and Mr. Justice Crocket were of the opinion that the entiie Act was intra vires the province. Mr. Justice Kerwin was of the opinion that section 5 and also the provisions making the agent personally liable for the tax were ultra vires the province. Mr. Justice Hudson and Mr. Justice Taschereau were of the opinion that the Act was intra vires the province, except as to the personal liability of the agent for the tax. Snors NEW 5- Municipal Bribery and Corruption Act, R.S.Q., 1925, c. 107, s. 8-Constitutionality--S. 161 Cr. Code-B.N.A. Act, s. 92, paras. 8, 15...................... 6-Extra - provincial company selling some of its products within the province -Assessment of company by the province for income tax-Income tax on "the net profit or gain arising" from business in the province-Company not keeping separate profit and loss account in respect of business done in the province-btatute authorizing regulations for detcrnulnmg a company's income within the province where such income cannot be ascertained -Regulation providing that such income shall be taken to be such percentage of company's income "as the sales within the province bear to the total sales"- Constitutionality of statute and regula- 7-Highway Traffic Act, P.E1., 1956, c. 2, ss. 84 (1) (a) (c), 8 (7)-Criminal Code (R.S.C., 1927, c. 86, as amended), s. 285 (4) (7)-Conviction under s. 285 (4), Cr. Code, of driving while intoxicated-Automatic suspension of driving license under s. 84(1) (a) of said provincial Act-Refusal to grant license to convicted person during period fixed by said s. 84 (1) (a)-Appeal asserted under s. 8 (7) to County Court Judge from such refusal-Whether right to so appeal-Whether right of appeal from County Court Judge to Supreme Court, PEI.-Constitutional validtiy of 8. 285(7), CONSTITUTIONAL LAW-Concluded
Cr. Code-Constitutional validity of s.
84 (1) (a) (c) of said provincial Act, in view of 8. 285 (7), Cr. Code........
CONTRACT - Action to recover for alleged failure to return plant and equipment in accordance with agreement under seal-Long lapse of time since said alleged breach-Subsequent occurrences and course of conduct-Alleged oral settlement as discharging cause of action by accord and satisfaction-Corroboration under a. of
The Evidence Act, R.S.O., 1937, c. 119.1- In an action for the value of plant and equipment alleged by plaintiff to have been loaned to defendant and not returned in accordance with an agreement under seal, and for damages for the alleged failure to return the same, this
Court restored the judgment of the trial judge (which had been reversed by the
Court of Appeal for Ontario) dismissing the action, in view of the many years which had elapsed since the alleged breach of contract, the subsequent occurrences and course of conduct, and the defendant's evidence, accepted by the trial judge, as to an oral agreement of settlement, fulfilled by him, of which evidence there were circumstances in support. Per Crocket and
Kerwin JJ.: A cause of action arising from the breach of a contract may be discharged by accord and satisfaction, which need not be in writing or under seal even where the original contract was under seal
(Blake's case (1605)
6 Co. Rep. 43B;
Steeds v. Steeds, 22 Q.B.D. 537).
Corroboration within the meaning of s. of
The Evidence Act, R.S.O., 1937, c. 119, must be evidence of a material character supporting the case to be proved but it may be afforded by circumstances (McDonald v. McDonald, 33 Can. S.C.R. 145; Thompson v. Coulter, 34 Can. S.C.R. 261). Cox v. HouRIGAN ...................
2-Money had and received-Demand
(in good faith) of further payment than what is owing-Circumstances of practical compulsion- Payment under protest- Right of payer to recover back.]-Defendant held certain lands subject to an option and an agreement of sale thereof to plaintiffs.
Under the written terms, upon payment of the consideration therein set out, plaintiffs were to get title to the lands freed from a certain interest therein held by another person, which interest defendant had later acquired. Defendant, claiming that there had been an understanding that plaintiffs would assume the discharging of said interest, insisted, when plaintiffs were making payments, upon additional payments being made to him to cover it. Plaintiffs, who had entered into an agreement requiring for its fulfilment a transfer of the lands to a company, and were concerned to protect their position and secure title, made the additional payments, but, so they alleged, under protest; and sued to recover them back. Held, that defendant had no right to said additional payments; that they were made under protest and under circumstances of practical compulsion; and (even though defendant's demand was made in the belief that he had a right to them) the plaintiffs were entitled to judgment for repayment of them with interest. Shaw v. Woodcock, 7 B. & C. 73; Smith v. Sleap, 12 M. & W. 585; Parker v. Great Western Ry. Co., 7 M. & G. 253; Wakefield v. Newbon, 6 Q.3. 276; Close v. Phipps, 7 M. & G. 586; Fraser v. Pendlebury, LJ., N.S., C.P. 1; Great Western Ry. Co. v. Sutton, L.R. 4 H.L. 226, and Maskell v. Horner, [19151 3 K.3. 106, cited. KNTrsoN V. BouRKs
3-Building-Contractor-Price to be on basis of costs plus-Work by estimate and contract-Lease and hire of work-Price fixed in advance-Whether specifications necessarily required-Subsidence-Defect of soil - Responsibility of contractor - Presumption of fault-Conditions upon which contractor can be relieved from liability-Articles 1666, 1683, 1688 C.C.1- Where the construction of a warehouse has been entrusted to a contractor to be carried out in accordance with plans prepared by himself based upon information obtained from the proprietor as to its requirements for a price to be determined on a basis of costs plus ten per cent, and such work was carried out by the contractor under his own superintendence throughout, the evidence showing that the latter had the right to choose the men to be employed, to fix their salaries, to manage them and to dismiss them, such enterprise constitutes work by estimate and contract as contemplated by article 1683 C.C. and not a lease and hire of work as mentioned in article 1666 C.C. Also, it is not necessary, in virtue of the provisions of article 1683 C.C., that the contract price should be fixed in advance, and the absence of a fixed price is not a reason why a contract may not constitute a contract by enterprise. Moreover, specifications attached to the plans are not necessarily required in order to constitute a contract by enterprise: such a contract may be complete and valid without them. In an action for damages brought by the proprietor against the contractor, under the provisions of article 1688 C.C., on the ground that the building, some time after its construction, had subsided to a considerable extent, Held, that, by the terms of articles 1683 and 1688 C.C., the builder or contractor is responsible for the consequences of a defect in construction or a defect of the soil; and a presumption of fault is created against him. The proprietor of the building is not obliged to prove the fault of the builder or contractor in the case of a contract by enterprise, and the latter can only be relieved from his liability by proving that the damage was attributable either to an act of God, to a fortuitous event, to a fault of the proprietor or to an act of a third person. Judgment of the Court of King's Bench (Q.R.
69 K.B. 281) affirmed and varied. HIL- ..............
4-Rescission fraudulent misrepresentations in a selling circular inducing purchase of shares in company-Construction of representations rescission of contract of purchase-Principles applicable - Status to sue
Shares bought and held by purchaser for benefit of a company which later surrendered its charter after assigning its assets to a successor company-Limitation of actions- Time from which statute of limitation begins to run.]-This Court dismissed the defendant's appeal from the judgment of the Court of Appeal for Ontario [19391
O.R. 66, dismissing its appeal from the judgment of Greene J., [1937] O.R. 888, rescinding a contract for purchase from the defendant of shares of stock in a company on the ground that the purchase was induced by false and fraudulent representations in a prospectus or selling circular issued by the defendant. Per Rinfret, Crocket and Taschereau JJ.: The mere fact that statements in a prospectus issued by a defendant are false does not necessarily render him liable in damages;
the false representation has to be made knowingly, or without belief in its truth, or with reckness disregard of whether it is true or false. If the defendant was indifferent as to whether the statements were false or true, this frame of mind is sufficient, when the facts are proven to be false, to create civil liability (Derry v.
Peek, App. Cas. 337). The shares in question had been purchased by P. who purchased and held them as trustee for
P.-H. Co., the beneficial owner. That company later surrendered its charter, after having assigned its assets to its successor,
P. Co., which therefore became the beneficial owner of the shares, P. holding them as trustee for it. The plaintiffs in the action were P. and P. Co. Held: The action was maintainable. Per Rinfret, Crocket and Taschereau JJ. (agreeing with Masten and Fisher JJ.A. in the Court of Appeal):
(1) P. had by himself a status to maintain the action; P. Co., though not a necessary party, was yet a proper party plaintiff.
(2) The rule that a right incidental and subsidiary to the ownership of property is assignable and does not savour of champerty or maintenance, applies to the facts of this case.
Per Kerwin J.: The contract was made between defendant and P., and the right of action for rescission vested in P. as trustee and there it remains.
A contention that the action was barred by The Limitations Act, Ont., over six years having elapsed between the purchase of the shares and the commencement of the action, was rejected. judgment of Masten and Fisher JJ.A. in the Court of Appeal, refusing to interfere with the trial judge's findings that plaintiffs had not been guilty of laches and did not suspect any fraud until a time much less than six years before commencement of the action, and holding that the statute began to run only at that time, was (per Rinfret, Crocket and Taschereau JJ.) approved.
THOM- 5--Suit to have conveyance and agreesent set aside-Alleged improvident transaction- Relationship of parties Condition of health of grantor-Circumstances prior to and at time of execution of documents-Evidence-Findings by trial judge -Onus of proof as to full comprehension by grantor of what he was doing and as to pressure or undue influence-Whether grantor's execution was spontaneous act with free and independent exercise will.]-Complainant sued to have a deed of conveyance and an agreement, executed by him, set aside. The deed conveyed his farm to his daughter and her husband, reserving a life estate, without impeachment of waste, to complainant and his wife. By the agreement (of the same date as the deed), made by complainant and his wife of the first part and their daughter and her husband of the second part, complainant assigned to his daughter and her husband a one-half share of complainant's farm stock, implements, crops, furniture and other movables on the farm; the parties were to live together on the farm, as they had done theretofore, were to carry on farming operations joint, ly, to share equally expenses and profits; said daughter and her husband were to care for complainant and his wife during their lives, their support and maintenance to be from their share of profits and to be in a manner in keeping with the farm's earnings; and on the death of complainant and his wife or the survivor of them, all their interest in said farm stock, etc., were to belong to the daughter and her husband. Complainant alleged that the documents were executed by him in advanced age. at a time when he was infirm and of weak understanding and unable to resist the threats and importunities of defendants (complainant's wife. his daughter and her husband) or some or one of them; that they were executed without independent legal or other disinterested advice at a time when complainant was under defendants' influence; that they were executed improvidently, and without any power of revocation; that the consideration was grossly in adequate; and that the contents thereof did not express complainant's wishes.
The trial judge made findings against complainant's contentions and dismissed the suit. His judgment was affirmed on appeal (on equal division of the court) and complainant appealed to this Court. Held (Davis and Hudson JJ.
dissenting): The appeal should be allowed, and the deed and agreement cancelled.
Having regard to -the evidence as to complainant's condition of health, the relationship of the parties, their feelings towards each other as shown by their conduct, and all the facts and circumstances leading up to and in connection with the execution of the documents, the documents, in their contents and effect, were such as to create doubt and suspicion as to their genuineness, so as to make it the duty of those who practically took the whole benefit thereunder to satisfy a court of equity that complainant not only fully comprehended what he was doing when he executed them but that he was not subjected to any pressure or undue influence in connection therewith;
and the documents, read in the light of the evidence concerning the relations and feelings between the parties and the complainant's condition of health, did not show a fair and just and reasonable transaction on an equal footing, nor that complainant's execution of them was (as found by the trial judge) his "spontaneous act with a free and independent exercise of his will,"
but pointed quite to the contrary conclusion. The established rule of equity is that, whenever it appears that any party to a transaction, from which he or she derives some large or immoderate benefit, occupies such a position in relation to his or her supposed benefactor as to give the recipient a dominating influence over him, that benefit is presumed to have been obtained by the exercise of some undue influence on the part of the recipient.
In all such cases, whatever be the nature of the transaction, whether a gift inter vivos or a contract alleged to have been made for a good and sufficient consideration, the onus of proof lies on the party who seeks to support it, to show that the transaction by which the benefit is granted was the free, independent and unfettered expression of the grantor's mind.
Davis and Hudson JJ. (dissenting)
: It is unnecessary to decide whether the deed, in view of the collateral a.-reement, can strictly be said to be a voluntary convpyance to which the rule that the onus rests on the grantees to justify the transaction applies, because in both courts below the deed has been treated as a voluntary conveyance and complainant has had whatever advantage there was in that interpretation. The case was essentially one
CONTRACT-Concluded of fact for the trial judge, who had the advantage, so important in a case of this sort, of seeing and hearing all the parties to the impeached transaction. To reverse his findings in such a case this Court should have to be convinced that he was wrong; and the evidence as a whole was far from convincing that there was any solid ground upon which this Court should interfere.
McKAY 6---Contract between mayor and municipality prior to his election-Contract still in force during tenure of office-Disqualification .............................. 7--Joint bank account-Husband and wife-Deposit by wife in joint names of herself and husband-Signing of a printed agreement form required by the bank- Death of the wife-Whether husband is entitled to oumership of balance of money deposited - Construction of agreement Evidence ......................... 8---Goods damaged by derailment and fire while being carried on defendant's railway-Suit for damages for defendant's fence-Defendant claiming benefit of condefence ........................... 9-See
CONVEYANCE-Suit to have conveyance and agreement set aside ........... COURTS - Patent - Action for infringement-Plea alleging invalidity of patent- Jurisdiction of provincial courts-Whether concurrent with the Exchequer Court of Canada-Patent Act, (D) 1935, c. 52, ss. 64, 59, 60, 65-Patent Act, (D) 13-14 Geo. V, c. 23, ss. 87.1-In an action brought by a plaintiff in a provincial court for a declaration that his patent had been infringed by the defendant, the latter denied such infringement and further pleaded that the patent was invalid. The plaintiff having raised on appeal the point that the provincial courts had no jurisdiction to entertain such a defence on the ground that the Exchequer Court of Canada alone has the authority and the power to declare a patent or any claim therein invalid or void, affirming the judgment of the Court of Appeal for British Columbia. that the provincial courts have jurisdiction, concurrently with the Exchequer Court of IS.C.R. COURTS-Concluded
Canada, to entertain a defence of invalidity of a patent.
In doing so, the provincial courts will not assume to give any judgment setting aside the patent, but will merely deny the plaintiff the relief sought on the ground that the plaintiff's patent was invalid.
Durable
Electric Appliance Co. Ltd. v. Renfrew
Electric Products Ltd. (59 O.L.R. 527;
[1928] S.C.R. 8) ref.
See 1, 4;
5, 7;
ACr,
2, 3;
3;
3, 4;
CRIMINAL LAW - Trial - Murder - Plea of insanity-Charge to fury-Evidence-" Beyond all reaqonable doubt"
or "to the reasonable satisfaction of the jury."[-On a trial for murder, where a plea of insanity is advanced, the law does not require the accused, in order to succeed upon that issue, to satisfy the jury that insanity has been proved beyond all reasonable doubt; it is sufficient in point of law if insanity is proved to the reasonable satisfaction of the jury.
Clark v. The King Can. S.C.R. 608)
approved.
v. THE KING....
2- Appeal--Cr. Code, ss. 951 (8), 285 (6),
1023 (2) - Accused charged with manslaughter-Charge arising out of operation of motor vehicle-At trial accused found not guilty of manslaughter but guilty of driving n a manner dangerous to the public-Appeal by Attorney-General of the province dismissed by appellate court
(with a dissent on questions of law)- Appeal by Attorney-General to Supreme
Court of Canada-Jurisdiction-Whether there was a " judgment or verdict of acquittal" within s. 1023 (2)-Merits- Evidence and findings at trial.]-Accused was charged with manslaughter.
charge arose out of the operation of a motor vehicle.
The trial judge (sitting without a jury, as permitted by statute applicable to the province) found accused not guilty of manslaughter but, as provided for by s. (3) of the Cr. Code
Cr. Code (as amended ibid, s. 16).
Attorney-General for Alberta appealed, asking that the "judgment or verdict of acquittal" at trial on the charge of manslaughter "be set aside and a conviction made in lieu thereof" or that. in the alternative, there be a new trial of accused upon said charge. The appeal was dismissed by the Appellate Division, Alta.,
(Harvey, CJ.. dissenting on questions of law), [1940] 2 W.W.R. 401. The Attorney- General appealed to this Court.
The appeal should be dismissed.
Rinfret. Crocket, Kerwin and Taschereau
JJ.: The appeal should be quashed for want of jurisdiction.
Per Rinfret J.: Neither of the conditions of a right of appeal to this Court under s. 1023 (2) of the Cr. Code (as amended in 1935, c. 56, s. 16) exists; the Appellate Division did not "set aside a conviction" nor "dismiss an appeal against a judgment or verdict of acquittal." The judgment at trial was not an acquittal; it was a conviction upon the charge as laid, in accordance with s. 951 (3) which indicates that a conviction under s. 285 (6) may be the result of a charge of manslaughter arising out of the operation of a motor vehicle. Further, the right of appeal of an Attorney- General of a province under s. 1023 (2), as it was only recently given and as criminal statutes should always be construed favourably to the accused, should not be extended beyond the strict terms of the Code. Per Crocket J.: The judgment of the Appellate Division did not fall within the terms of s. 1023 (2). clear intendment of s. 951 (3) is that a charge of manslaughter which arises out of the operation of a motor vehicle must be taken to include the offence described in s. 285 (6) and that the trial tribunal shall have the right, instead of convicting of manslaughter, to find accused guilty, on the manslaughter charge, of the lesser offence. This having been done, it cannot be said that there was "a judgment or verdict of acquittal" in respect of the charge on which accused was tried. Per Kerwin J.: Though accused was acquitted of the charge of manslaughter, yet it cannot be said that the judgment at trial was "a judgment or verdict of acquittal in respect of an indictable offence" within the meaning of s. 1023 (2) so as to give this Court jurisdiction, particularly in view of the results which otherwise might follow (as set out infra, per Taschereau J.).
Per Taschereau J.: A charge of manslaughter arising out of the operation of a motor vehicle includes, by operation of s. 951 (3), a charge under s. 285 (6), though the offence under 285 (6)
is not mentioned in the count. When there is an acquittal on said major offence followed with a conviction on said minor offence, it cannot be said that accused has been acquitted on the charge as laid; the degree of his guilt is smaller, but he has nevertheless been found guilty. For the purpose of the right of appeal given by s. 1023 (2), the word "acquittal" therein means a complete acquittal in respect of all the offences charged directly or otherwise in the same count. To hold otherwise would have the very extraordinary result that this Court, entertaining the appeal, would undoubtedly have the power to direct a new trial, as a result of which the accused, without having appealed, might be acquitted even of the charge on which he has already been found guilty at the first trial. The Chief Justice, but for the above weighty concurrence of opinion by four Judges of this
Court against this Court's jurisdiction, would have thought that the Appellate
Division, Alta., was right in considering the appeal on the merits. He expressed emphatically his opinion that, on a charge such as that in the present case, a jury, having satisfied themselves that the accused, in the language of a. 951 (3),
"is not guilty of manslaughter" (which is a condition of their jurisdiction to find the accused guilty of an offence under s. 285 (6), must pronounce a verdict to that effect and that the accused is entitled to demand such pronouncement;
and that such a pronouncement is an acquittal of the accused upon the charge of manslaughter under the indictment.
Whether an appeal lies or not may, of course, be another question. Per Davis J.:
The appeal should be dismissed on the merits. On the evidence and the findings at trial, it cannot be said that accused killed the man with whose death he was charged by the indictment. Per Hudson
J.: The appeal should be dismissed on the ground that the trial judge, on proper interpretation of his statements, found that there was not sufficient evidence to satisfy him beyond reasonable doubt that accused caused the death of the deceased and, as a consequence, found accused not guilty of manslaughter.
THE KING v.
W ............................
3- War Measures-Regulation made by
Governor in Council-No sanction provided-Application of section 164 of the
Criminal Code-Regulation to "have the force of law"-Whether deemed to be an
Act of Parliament-War Measures Act,
R.S.C., 1927, c. 206, 8 (2) and 4- Criminal Code, ss. 2 (1) and 164.1-An order or regulation made by the Governor in Council under the War Measures Act, although it is thereby enacted that such order or regulation "shall have the force of law," is not an enactment passed by
Parliament, i.e., an Act of Parliament, but is merely an enactment passed by the Government. When an accused is charged of having disobeyed such an order or regulation, for the violation of which no penalty or other mode of punishment has been expressly provided, the disobedience so complained of is not punishable under section 164 of the Criminal Code, which relates only to violations of Acts of Parliament or of provincial legislatures.
Davis and Hudson JJ. (dissenting)
. THE v. .....
4-Companies - False statement by director-False by implication-Liability of director-Balance sheet of company- Loan to company treated as cash asset- Particulars-Criminal Code. sections VS and 414.1 THE KING v. McLEOD.... 228
5-Charge of conspiracy to steal- Option by accused for trial before a judge without a jury-Speedy trial-Bill of indictment later signed by the Attorney-General for trial before a jury Whether this procedure was a sufficient compliance with section 825(5) Cr. C.- Question of jurisdiction of trial court ought to have been raised as special plea before arraignment.1-The appellants, charged with conspiracy to commit the crime of stealing, made the option to be tried by a judge, without the intervention of a jury, under the provisions of section 827 of the Criminal Code. But, as such offence was punishable with imprisonment for a period exceeding five years, the Attorney-General could "require" that the charge be tried by a jury, under the provisions of subsection 5 of section 825 of the Criminal Code. After the election made by the appellants for a speedy trial, the Attorney-General preferred a bill of indictment over his own signature for a trial before a jury. Such trial took place and the appellants were found guilty. The ground of appeal was that, under section 825 (5) Cr. C., there must be a definite statement in writing by the Attorney-General that he "required" that the charge be tried by a jury and that the mere signature of the Attorney-General on a bill of indictment did not constitute sufficient compliance with that section. Held that the preferment of a bill of indictment by the Attorney-General over his own signature for a trial before a jury was a sufficient compliance with section 825 (5) of the Criminal Code. There are no form or words specified to indicate that the Attorney-General "requires" the charge to be tried by a jury. In the present case, it must be assumed that the Attorney-General had knowledge of the facts in respect to the election made by the appellants, which were of public record, and that, when he intervened by preferring an indictment over his own signature for trial before a jury, he did so for the purpose of complyine with section 825 (5) Cr. C. and of exercisint the right conferred upon him by that section. Moreover, it is no longer open to the appellants to question before this Court the jurisdiction of the trial court; that was a matter for special plea before arrainment and before pleading the general issue. appellants, by not havine raised then the question of jurisdiction. have waived any right to nut forward such a contention, even if the nreferment under the sienature of the Attorney-General had not been otherwise sufficient and effective unrder section 825 (5) Cr. C. Minguy v. The King Can. S.C.R. 261); Collins v. The King (62 Can. S.C.R. 154), and Giroux v. The King (56 Can. S.C.R. 63) discussed.
6-Evidence - Accused charged with arson-Contention that accused arranged that other persons carry out the crime- Evidence of conversations between such other persons-Admissibility-Questioning of accused, in cross-examination, as to alleged fire at other premises than those in question.]-The accused appealed from the judgment of the Supreme Court of
Nova Scotia en bane, M.P.R. 459, affirming his conviction of having unlawfully and wilfully set fire to a store.
The appeal was based on certain objections of law, which were grounds of dissent in the said Court en banc.
G. testified that accused hired him to commit the crime and G. arranged with
P. to do it. P. itestified that he secured the assistance of T. P. and T. gave evidence that they set the premises on fire.
It was objected that evidence of P. and
T., particularly with reference to their conversations with each other and with
G., was improperly admitted. Held, that this ground of appeal failed.
Per the
Chief Justice and Kerwini J.: The evidence of P. and T. did not implicate accused in any way, but was admissible to prove the actual setting of the fire.
Accused was not charged with having conspired to commit arson and, as the trial judge explained to the jury, the actions of P. and T. and the conversations between them were relevant to the charge upon which accused was being tried only if the jury were satisfied as to the truth of the evidence given by G.
relating to his conversation with accused.
Any acts done or words spoken in furtherance of the common design may be given in evidence against all (Paradis v.
The King [19341 S.C.R. 165). This rule applies to all indictments for crime, and not only when the indictment is for conspiracy, and it also applies even if the conspirator whose words or acts are tendered as evidence has not been indicted
(Cloutier v. The King, [19401 S.C.R.
at 137).
These principles were properly applied to the present case.
(2) It was objected that the prosecuting officer, in cross-examining accused, had improperly questioned him as to an alleged fire at other premises than those in question, which questioning had greatly prejudiced accused with the jury.
Held: Effect should be given to this objection; the appeal should be allowed and a new trial ordered. Per the Chief Justice and Kerwin J.: The likely, if not the only, effect upon the jurymen of said questioning would be that accused was a person who was very apt to commit the crime with which he was charged. A person charged with having committed a crime is not only entitled to have placed before the jury only evidence that is relevant to the issues before the court, but, when testifying on his own behalf, he may not be
CRIMINAL LAW-Concluded asked questions that have no possible bearing upon such issues and might only tend to prejudice a fair trial. The questioning complained of could not be justified on the ground that it went to accused's credibility: credibility cannot arise in connection with questions relating to an extraneous matter that has not been opened by the examination in chief of accused or otherwise on his behalf.
Per Rinfret, Crocket and Taschereau JJ.: An accused has to answer the specific charge mentioned in the indictment for which he is standing on trial, and the evidence must be limited to matters relating to the transaction which forms the subject of the indictment (Maxwell v. Director of Public Prosecutions, [19351 A.C. 309); otherwise the real issue may be distracted from the jury's minds, and an atmosphere of guilt created, prejudicial to the accused. The accused cannot be cross-examined on other criminal acts supposed to have been committed by him, unless he has been convicted, or unless these acts are connected with the offence charged and tend to prove it (Paradis v, The King, [19341 S.C.R. 165, at 169), or unless they show a system or a particular intention, as decided in Brunet v. The King, 57 Can. S.C.R. 83.
The 'questioning of accused complained of may have influenced the verdict of the jury and caused accused a substantial wrong. Kouns v. THE KiNa. ......... 7-Section 1025 Cr. C.-Appeal to the Supreme Court of Canada-Conflicting decisions-"Judgment.of any other court of appeal "-Must be courts within Canada.1-The "court of appeal" contemplated by section 1025 of the Criminal Code which gives right of appeal to the Supreme Court of Canada, upon leave to appeal being granted, "if the judgment appealed from conflicts with the judgment of any court of appeal" does not include any courts other than Canadian courts.
Arcadi v. The King ([19321 v. THE KING............................ 8-Motor vehicles - Highway Trafic Act, P.E1., 1936, c. 2, ss. 84 (1) (a) (c), 8 (7)-Criminal Code (R.S.C., 1927, c. 86, as amended), s. 285 (4) (7)-Conviction under s. 285 (4), Cr. Code, of driving while intoxicated-Automatic suspension of driving license under s. 84 (1) (a) of said provincial Act-Refusal to grant license to convicted person during period fixed by said s. 84 (1) (a)-Appeal asserted under s. 8 (7) to County Court Judge from such refusal-Whether right to so appeal- Whether right of appeal from County Court Judge to Supreme Court, P.E1.- Constitutional validity of s. 285 (7), Cr. Code-Constitutional validity of S. 84 (1) (a) (c) of said provincial Act, in view of s. 285 (7), Cr. Code................. CROWN-Patents-Alleged use by Crown of patented invention-Right of patentee to compensation-Patent Act, 1935 (Dom., c. 82), s. 19-Right of patentee to a reference by the Crown to Commissioner of
Patents to fix compensation-Procedure by Petition of Right to enforce rights- Exchequer Court Act (R.S.C., 1927, c. 34), ss. 18, 87; Petition of Right Act (R.S.C.,
1927, c. 158), ss. 2 (c) (10)-Nature of relief granted-Form of judgment... 270
DAMAGES-Negligence - Motor vehicles
-Plaintiff struck by motor car-Action for damages-Directions to jury-Jury's findings-Question as to negligence of plaintiff-Onus of proof on defendants as to negligence-Form of question to jury- Amount of damages awarded-New trial.
...................................
2- Maintenance-Suit for damages for alleged intermeddling and stirring up litigation-Requisites for recovery-Absence of proof of special damage.........
DEBT ADJUSTMENT ACT, ALBERTA
-1937, c. 9, s. 8-Provincial statutory prohibition against commencement action against resident debtor for recovery of money recoverable as liquidated demand or debt, without permit from provincial Board-Enactment invalid in so far as affecting right of action on promissory note-Bills of Exchange Act,
-Conflict between Dominion and Provincial legislation-Dominion legislation param ount..............................
DEBTOR AND CREDITOR
1; CON- 2;
1, 3;
DENTISTRY ACT (B.C.)-S. 63 (2) (enacted in 1989, c. s. 8) of the Dentistry
Act, R.S.B.C., 1936, c. 72-Constitutional validity ...........................
DRAINAGE - Highways
Public utilities - Drainage - Company supplying gas in city-Removals, replacements and repairs of portions of its mains and pipes made necessary by works done by city on its streets- Recovery of cost by the gas company from the city-Application of The Public
Service Works on Highways Act (now
R.S.O., 1937, c. 67)--"Constructing, reconstructing, changing, altering or improving
DRAINAGE-Concluded any highway"'-Nature of works done by city--Construction of (inter alia) sewers. ...................................
EVIDENCE - Criminal law-Trial-Murder-Plea of insanity-Charge to jury- Sufficiency of proof as to insanity.]--On a trial for murder, where a plea of insanity is advanced, the law does not require the accused, in order to succeed upon that issue, to satisfy the jury that insanity has been proved beyond all reasonable doubt; it is sufficient in point of law if insanity is proved to the reasonable satisfaction of the jury.
Clark v. The King Can. S.C.R. 608) approved.
SMYTHa v. THE KING ....................... 2-Criminal law-Accused charged with arson-Contention that accused arranged that other persons carry out the crime- Evidence of conversations between such other persons-Admissibility-Questioning of accused, in cross-examination, as to alleged fire at other premises than those in question.]-The accused appealed from the judgment of the Supreme Court of Nova Scotia en banc, M.P.R. 459, affirming his conviction of having unlawfully and wilfully set fire to a store. The appeal was based on certain objections of law, which were grounds of dissent in the said Court en banc. (1) One G. testified that accused hired him to commit crime
G. arranged with P. to do it. P. testified that he secured the assistance of T. P. and T. gave evidence that they set the premises on fire. It was objected that evidence of P. and T., particularly with reference to their conversations with each other and with G., was improperly admitted. Held, that this ground of appeal failed. Per the Chief Justice and Kerwin J.: The evidence of P. and T. did not implicate accused in any way, but was admissible to prove the actual setting of the fire. Accused was not charged with having conspired to commit arson and, as the trial judge explained to the jury, the actions of P. and T. and the conversations between them were relevant to the charge upon which accused was being tried only if the jury were satisfied as to the truth of the evidence given by G. relating to his conversation with accused. Any acts done or words spoken in furtherance of the common design may be given in evidence against all (Paradis v. The King, [1934] S.C.R. 165).
This rule applies to all indictments for crime, and not only when the indictment is for conspiracy, and it also applies even if the conspirator whose words or acts are tendered as evidence has not been indicated (Cloutier v. The King, [1940] S.C.R. at These principles were properly applied to the present case.
(2) It was EVIDENCE-Continued objected that the prosecuting officer, in cross-examining accused, had improperly questioned him as to an alleged fire at other premises than those in question, which questioning had greatly prejudiced accused with the jury. Held: Effect should be given to this objection; the appeal should be allowed and a new trial ordered.
Per the Chief Justice and Kerwin J.: The likely, if not the only, effect upon the jurymen of said questioning would be that accused was a person who was very apt to commit the crime with which he was charged.
A person charged with having committed a crime is not only entitled to have placed before the jury only evidence that is relevant to the issues before the court, but, when testifying on his own behalf, he may not be asked questions that have no possible bearing upon such issues and might only tend to prejudice a fair trial. The questioning complained of could not be justified on the ground that it went to accused's credibility; credibility cannot arise in connection with questions relating to an extraneous matter that has not been opened by the examination in chief of accused or otherwise on his behalf.
An accused has to answer the specific charge mentioned in the indictment for which he is standing on trial, and the evidence must be limited to matters relating to the transaction which forms the subject of the indictment (Maxwell v.
Director of Public Prosecutions, [19351
A.C. 309); otherwise the real issue may be distracted from the jury's minds, and an atmosphere of guilt created, prejudicial to the accused.
The accused cannot be cross-examined on other criminal acts supposed to have been committed by him, unless he has been convicted, or unless these acts are connected with the offence charged and tend to prove it (Paradis v.
The King, 119341 S.C.R. 165, at 169). or unless they show a system or a particular intention, as decided in Brunet v. The
King, 57 Can. S.C.R. 83.
The questioning of accused complained of may have influenced the verdict of the jury and caused accused a substantial wrong.
v. THE KIN..............
3-Level crossing accident crossing sign properly maintained as required under Railway Act-Admissibility in evidence of finding by Board of Railway Commissioners................
4- Loss of goods by fire-Onus of proof as to negligence....................
&-Corroboration under s. of The
Evidence Act, R.S.O., 1987, c. 119..
6-Joint bank account-Husband and wife-Deposit by wife in joint names of
EVIDENCE-Concluded herself and husband-Signing of a printed agreement form required by the bank -Death of the wife-Whether husband is entitled to ownership of balance of money deposited-Construction of agreement-Evidence-Presumption...... 368 7-Negligence-Motor vehicles - Plaintiff struck by motor car-Action for damages-Directions to jury-Jury's findings -Question as to negligence of plaintiff- Onus of proof on defendants as to negligence-Form of question to jury-Amount of damages awarded-New trial.... 473 8-Admissibility of extrinsic evidence to show intent and effect of orders made by Board ........................
9--Goods damaged by derailment and gence ........................
10----Suit to have conveyance and agreement set aside-Alleged improvident transaction-Relationship of parties-Condition of health of grantor-Circumstances prior to and at time of execution of documents -Findings by trial judge-Onus of proof as to full comprehension by grantor of what he was doing and as to pressure or undue influence-Whether grantor's execution was spontaneous act with free and independent exercise of will........ See 5.
EXCHEQUER
(JURISDIC- CREDITORS
ARRANGE- MENT ACT, 1934 (DOM.) -Sale land-Action by vendor against purchaser under agreement of sale
Order nisi Effect of terms thereof-Subsequent formulation and confirmation of proposal by Board of Review under said Act-Validity or invalidity of proposal-Existence or non-existence of a "debt."]-Plaintiff, of land on which defendant, purchaser, had made default in payment. Plaintiff claimed: specific performance; payment of arrears and interest due, and, under an acceleration clause, payment of the balance of purchase price; in default of payment, cancellation of the agreement and forfeiture of moneys paid thereunder; immediate possession of the land. Defendant did not defend and plaintiff obtained an order nisi which fixed the amount due at $8,804.64, of which $4,104.64 was in arrear; ordered that defendant pay into court by a certain date $4,104.64 and interest and costs to be taxed; that in default of payment the agreement be cancelled and determined and all moneys paid thereunder be forfeited and retained by plaintiff; provided that upon payment of $4,104.64 (the sum in arrear) and interest, defendant be relieved from immediate payment of what had not become payable by lapse of time; and ordered that plaintiff have immediate possession of the land. Subsequently to said order nisi and before expiry of the time for payment thereunder, the Board of Review, under the Farmers' Creditors Arrangement
Act, 1934 (Dom., c. 53), formulated a proposal reducing the amount owing to plaintiff and extending the time for payment, which proposal was rejected by plaintiff but confirmed by the Board.
Thereafter plaintiff issued a writ of possession, which was executed by the sheriff who placed plaintiff in possession.
Defendant moved to set aside the writ of possession.
The Local Master dismissed the motion. His order was reversed by
Bigelow J. ([19401 1 W.W.R. 204) but was restored by the Court of Appeal for
Saskatchewan
([19401
1 W.W.R. 657).
Defendant appealed. Held: Defendant's appeal should be dismissed.
At the time when the Board formulated and confirmed its proposal, there was no "debt"
owing by defendant to plaintiff within the meaning of the Act, and therefore defendant was not entitled to the benefits of the Act. When plaintiff elected to take out a judgment in the form in which he did in the order nisi, he ceased to have any personal right against defendant.
Sec. (1) of the Act did not aid defendant. After the order nisi the plaintiff's position was negative, that of defendant, if he wished to retain the land, was positive.
Plaintiff had the title to the land and an order for possession.
Defendant had no title and no rights unless he actively did what the order nisi called for.
2--Jurisdiction of Board of Review to entertain proposal-Party making proposal under the Act-Whether a "debtor"
-Whether respondent is a "secured creditor" - Absence of privity - Grounds against proposal raised by way of certiorari-Jurisdiction of the Court of
Appeal-Illegal transfer of property in order to bring it within reach of machinery of the Act-Abuse of statutory procedure-Certiorari-Applicability to Board of Review-Board's confirmation of proposal quashed-Devisee of mortgaged land obtaining title after May, 1985-Effect of section 19 of the Act-When a debt is
"incurred" in the sense of that section- Whether creditor should not have raiscd grounds against proposal before County Farmers' Creditors Arrangement Act (Dom.) 1984-Section 2 (2); section 2 (d) as amended by c. 47 of 1988; sections 5, 7, 18 (5) (6) and section 19 as enacted by amending statute of 1938.1- In September, 1919, one John McEwen borrowed $4,000 from the respondent and executed a mortgage upon his land in favour of the latter. He died on August 26th, 1934.
His will appointed his wife, Jane, executrix and devised all his real and personal estate to her. The will was admitted to probate on August 13th, 1935. At the time of John McE.'s death, the whole of the mortgage debt was owing to the respondent, as well as a large sum for accumulated interest.
The respondent, acting under the powers contained in its mortgage, leased the land to Robert J. McE. for terms from November, 1934, to November, 1936, and the widow continued to live on the farm until her death in 1940. In July, 1936, a proposal under the Farmers' Creditors Arrangement Act, 1934, was filed by the latter, in her personal capacity and not as executrix, with the Official Receiver, the only debts disclosed being the amount due to the respondent under its mortgage and a sum of for taxes. Actually, Jane McE. had never assumed payment of the mortgage debt or interest, nor had she in any way obligated herself to the respondent.
At the time of filing her proposal, the certificate of title to the land was held by the widow, not as owner but only as executrix. In October, 1936, she, as personal representative, purported to transfer the land to herself personally for an expressed consideration of $1, and a certificate of title was issued to her; but the estate had not yet been fully administered. Immediately upon receipt of notice of the proposal and again in November, 1936, the respondent advised the Official Receiver that it had no claim against Jane McE. and that she was not entitled to the benefit of the Act; and later, in March, 1937, the respondent's solicitors wrote to the Registrar of the Board of Review asserting lack of jurisdiction on the part of the Board. The Board of Review, in October. 1937, formulated its proposal, reducing the amount of the respondent's mortgage, and confirmed it in October, The respondent, in October, 1939, on its behalf as well as on behalf of all the creditors of the deceased, brought an action against the widow, both as executrix and in her own right, to have her required to administer the estate, to have the transfer of the land to herself as owner set aside and to have the land sold to discharge the respondent's debt. The Board's proposal was pleaded as a bar to the action, such proposal having allegedly operated to extinguish the liability of the estate. Jane McE. died in
March, 1940, and probate of her will was granted to the appellants, Robert J. McE.
and Edith McE. who obtained registration of the land in their names as personal representatives. On June 19th. 1940, they transferred the land to themselves in their personal capacities, and, on the same day, they both joined in a transfer to Robert J. McE. who became the registered owner.
The respondent, in September, 1940, launched before the Court of Appeal for Manitoba an application for certiorari in order to bring the proposal before that Court and have it quashed. The Court of Appeal ordered the issue of the writ and later on made an order declaring the proposal to be beyond the powers of the Board of Review and directing that it be quashed.
Held, Davis J. (dissenting)
, that the judgment of the Court of Appeal ([1941]
1 W.W.R. 129) should be affirmed. Per the Chief Justice: Upon the admitted facts of this case, the land in question, before the transfer of it to herself in
October, 1936, was not the property of
Jane McE. in the sense of the Farmers'
Creditors Arrangement Act. Being beneficially entitled to the residue of her husband's estate, she was entitled to have the land, subject to the rights of the mortgagee, applied in payment of the debts of the estate; and as legal personal representative, it was her duty to see that this was done. As the estate was admittedly insolvent, she had no interest in the land which could lawfully be made available to satisfy her personal debts if she had any. Under such circumstances she could not properly transfer the land to herself. The purpose of such transfer was evidently prompted by the supposition that it might enable her to bring the land and the mortgage debt within reach of the machinery of the Act. With such facts before them, the Board of
Review ought to have declined to act on the proposal made by John McE. on the ground that they were confronted by a manifest abuse of the statutory procedure; and, if the question had been raised by an application to the Court, it must inevitably have been held that by such devices the creditors of the estate could not be deprived of their rights.- Moreover, even assming that, the title to the farm being vested in Jane McE.
in virtue of the certificate of title or of the transfer to her in October, 1936, it was her property in the sense of the
Farmers' Creditors Arrangement Act, 1984, and that the mortgage debt could be deemed to be her debt for the purposes of the Act, the amendments of 1938 to that Act which, it was contended, brought her into privity of contract with the mortgagee, had no application, for the reason that section 19 of that Act, added
FARMERS' CREDITORS ARRANGEthereto by statute of 1935, c. 20, provides that the "Act shall not, without the concurrence of the creditor, apply in the case of any debt incurred after May 1, 1935": the essential condition being that the property affected by the security shall have been the property of the debtor in the sense of the amending statute, consequently, the mortgage debt in this case never became (constructively) the debt of Jane McE. until long after that date.- A "debt" (if it be a mortgage debt) cannot be "incurred" in the sense of section before the property or interest on which it is charged has become the "property" of the debtor within the contemplation of section 2 (d) of the statute. Per Rinfret, Crocket and Hudson JJ.- Under the circumstances of the case, Jane McE. was not entitled to file a proposal under The Farmers' Creditors Arrangement Act, for the reasons that she was not the owner of the land and that there was no privity of contract between her and the respondent company.
She was in no way the "debtor" of the respondent within the requirements of the Act, even after the introduction of the amendment of 1938 to section 2 (d).
The only debt appearing in the proposal formulated by the Board of Review was the respondent's mortgage account; that was not her debt, so much so that the respondent could not have sued her for it; it was not a "debt provable in bankruptcy" against her, or against her estate in bankruptcy: the sole object of the procedure being to obtain a reduction on the debt owing to the respondent by the estate. Therefore, under the circumstances of this case, the Board of Review had no jurisdiction to deal with the respondent's mortgage debt and more particularly to reduce the rate of interest on that mortgage; and the Board could not, consistently with the provisions of the Act, deal with Jane McE.'s request, or formulate a proposal, in complete disregard of the position and interest of the respondent.-Also, the provisions of section 2 (d) of the Act, as amended by c. 47 of 1938, defining the word "creditor" did not confer any greater jurisdiction upon the Board in the present case; the object of the amended definition has apparently enlarged the class of "creditors", but did not alter the status of the "debtor".-Moreover, section 19 of the Act, above referred to, finds application in this case: "the debt incurred," referred to in that section, is necessarily a debt personally incurred by an applicant and does not concern a debt which, though at present owing by the applicant farmer towards the creditor, had been incurred by a previous debtor (who may not have been a farmer) and at a date prior to the first day of May, 1935. as it is in the present case.-Therefore the proposals formulated by the Board of Review were made without authority and jurisdiction and were invalid. It should also be held that the Court of Appeal had power to deal with the matter in controversy in, this case on an application for certiorari by the respondent; that the preliminary questions raised by the respondent were of such a nature that, in an ordinary case, they would properly give rise to an inquiry on certiorari by a superior court and that, for the purposes of that inquiry, the facts bearing on the question of jurisdiction could be put before that Court by means of affidavits. Per Davis J. dissenting-In view of all the facts and circumstances of this case, on one hand, the conduct of the respondent throughout has been such as to disentitle it to relief in certiorari proceedings and, on the other hand, allowance of the appeal would put the appellants the Board of Review, the
Registrar, the executors of Mrs. Jane McE.
and her son R.J. McE. to the burden of excessive and unnecessary costs of litigation.-The effect of the lodging by Mrs.
Jane McE. with the Official Receiver of a composition, extension or scheme of arrangement, on July 31st, 1936, was to put the subject-matter of the proposal into the exclusive jurisdiction, subject to appeal, of the County Court of Dauphin, which was the judicial district where Mrs.
McE. resided and the farm was located;
such district being designated by section
5 (1) of The Farmers' Creditors Arrangement Act. And the Act moreover gave to the Board of Review a right to work out a proposal which might involve secured creditors, even in the absence of their concurrence. Although the respondent had the right at its own risk to deliberately ignore the proceedings under the Act, on the alleged grounds that Mrs. Jane McE.
was not its debtor and that it was not a secured creditor, a very convenient and speedy remedy was available to the respondent when it got notice of Mrs. Jane
McE.'s application with the Official Receiver, by moving at once in the County
Court to have the proposal set aside upon any of the grounds alleged by the respondent in its present proceeding by way of certiorari. The county judge would have certainly entertained any such application and would have dealt with the matter at the time in a speedy and inexpensive manner; and, moreover, a statutory right to appeal from any decision so rendered would have been available to the respondent. In re McEWEN;
THE OF
REVIEW
.......................
3----Structure and operation of the Act respondent Community is a
"farmer"-Board of Review-Jurisdiction
-Whether county or district courts have exclusive jurisdiction under the Act
Jurisdiction of Supreme Courts of the provinces in the matter-Action by creditor against debtor before Supreme Court and appointment by the latter of a Receiver, prior to proceedings by the debtor under the Act-Farmers' Creditors Arrangement Act, 1984 (Dom.), s. 2 (2), s. 6 (1), a. 6 (1) (2) (7), s. (1) (2), a. 12 (4) (5) (6).]-On May 18th, 1938, the appellant instituted in the Supreme Court of British Columbia a debenture holder's action against the respondent Community, praying foreclosure, or sale, of certain properties and assets mortgaged to the appellant by the respondent Community to secure the payment of certain debentures of the Community. In May and July, 1938, by orders of the Supreme Court of British Columbia, a Receiver (an authorized trustee in bankruptcy) was appointed and immediately entered upon his duties. This action is still pending and the Receiver is still executing his duties. In June, 1939, the Community purported to file a proposal under the Farmers' Creditors Arrangement Act. In the same month, by County Court orders, "upon the application of" the Official Receiver, under said Act, "for directions," "and upon reading the statement of affairs herein and the proposal and the resolution of the Directors" of the Community, the latter was "hereby permitted to make application under and (was) entitled to take advantage of the provisions of" said Act, and the Official Receiver was "hereby permitted to accept the said proposal" of the Community under said Act. September 14, 1939, the respondent Board of Review gave notice to the Receiver that a written request by a creditor of the Community had been made to the Board of Review to formulate an acceptable proposal for a composition, extension of time or scheme of arrangements of the affairs of the Community and gave notice of hearing. The appellant immediately on the 16th of September, 1939, brought the present action, claiming, inter alia, a declaration that the respondent Community was not a farmer within the meaning of the Farmers' Creditors Arrangement Act and was not entitled to the benefit of that Act, that the respondent Board of Review was without jurisdiction and that it had no jurisdiction over the appellant and the other creditors of the Community. The trial judge held that he was invested with jurisdiction to render a decision in the action, and his decision was that the respondent Community was not a farmer within the meaning of the above Act.
The appellate court, reversing that judgment, held that the Supreme Court of British Columbia had no jurisdiction in the matter and that, by force of the provisions of the Act, such jurisdiction resided exclusively in the County Court, and it further held that the respondent Community was a farmer. Held, that the respondent Community was not a farmer within the meaning of the Farmers' Creditors Arrangement Act, and, as such, entitled to a proposal for a composition of its liabilities under the provisions of that Act;
and, also, that, under the circumstances of this case, the Supreme Court of British Columbia had jurisdiction to determine the questions raised by the appellant's action. Barickman Hutterian Mutual Corporation v. Nault ([19391 S.C.R.
223) disc. and dist. Held, also, per the Chief
Justice and Davis and Hudson JJ., that, under the circumstances of this case, the
Supreme Court of British Columbia had jurisdiction to entertain the appellant's action-It is not necessary, for the purpose of this appeal, to determine generally the jurisdiction of the County Court and of the Supreme Court, respectively, in relation to the statutory validity of a proposal filed by a debtor who is invoking the provisions of the statute.-In the present case, property of the respondent
Community affected by the debentures was in the hands of a Receiver appointed by the Supreme Court. Whatever may be the effect of the general language of the enactment which purports to give to the County Court exclusive jurisdiction in bankruptcy, such general language cannot be read as giving to the County
Court any control over the assets of the respondent Community, in the hands of the Receiver, which could be exercised without the consent of the Supreme
Court; and it seems necessarily to follow that it would be within the jurisdiction of the Supreme Court to ascertain by an examination of the facts (if such a claim were made) whether or not the purported proceedings under the statute were competent proceedings,-whether or not, in other words, the County Court had acquired exclusive jurisdiction in relation to the debtors' assets by force of the statute. The Board of Review was about to consider a proposal to be formulated under s. (4) (5) of the Act, and, in the case of a proposal being formulated and confirmed by the Board, questions might very well arise as to the position of the Receiver.
S. read literally and giving effect to it according to the full scope of its terms, without any qualification, would appear directly to affect the
.Receiver in any proceedings by him to realize property within the receivership
(e.g., in an action to collect a book debt charged by the debentures in suit). Only the very clearest language would justify the conclusion that Parliament intended in these circumstances to deprive the
Supreme Court of the authority to decide for itself whether the filing of the Community's proposal had any statutory warrant. The words employed in the first paragraph of section 5 of the Act ought not to be read as excluding the jurisdiction of the Supreme Court to decide whether, in such circumstances as those in this case, its jurisdiction in respect of property in its possession, and in respect of proceedings in relation to that property pending before it, has been ousted. The trial judge had all the circumstances before him and, having regard to those circumstances, felt it his duty to pronounce upon the issue.
The trial judge was right in exercising the jurisdiction he did exercise.
He was not deciding upon any abstract question. It was important that the issue should be decided speedily, to avoid conflict of jurisdiction with resulting confusion and expense. As to the County Court orders (The recital shows that they were made on application for directions before the Community's proposal was filed-and quaere whether, until such filing, the Official Receiver has any status, or the Court any jurisdiction, on such an application) : The farmer's right to file a proposal arises from provisions of the Act, not from any leave of the Court; the Act does not contemplate an application for such leave. The purpose of the procedure under Rule 42 is to enable the Official Receiver to obtain directions as to his own acts in the course of administration where the application of the Act, which is the foundation of the authority both of the judge and the Official Receiver, is assumed-it is not its purpose to empower the Court to make binding orders affecting the rights of third persons who are not parties to the proceeding. It does not follow that on an application for directions questions of right and jurisdiction may never be determined. The County Court has jurisdiction, speaking generally, to determine such questions in a summary way, and the hearing of an application for directions in a particular case may be a convenient and unobjectionable occasion for dealing with such questions, when proper care is taken to see that everybody concerned is fully represented and has full opportunity of bringing out the facts and presenting his case. County Court orders in question should be treated as directions to receive and file proposals, and the statement therein that the Community is permitted to make application under, and is entitled to take advantage of, the provisions of the Act, must be regarded simply as introductory, expressing the judge's opinion quantum valeat with regard to matters upon which he had no authority to make a binding pronouncement. Per Rinfret J.-The principal powers of the Board of Review are enumerated in section 12 of the Farmers' Creditors Arrangement Act and its subsections; but, nowhere is there to be found vested in the Board of Review the power to determine as a question of law the applicability of that Act to a person whose quality and status as a
"farmer" is disputed, or where it is objected, by some party having an interest in the matter, that the applicant for a proposal does not come within the definition of the Act: the courts of justice are the proper forum where the matter must be debated and determined.-As to the question whether, in a province other than the province of Quebec, an interested party, who decides of his own initiative to contest the status of an applicant as farmer, must necessarily have to institute his proceedings in the county or district court or whether he is deprived of the right of invoking the general jurisdiction of the Supreme Court of the province, it should be held, as far as the interpretation of the statute is concerned, that, as the Farmers' Creditors Arrangement
Act may be regarded as a chapter of the
Bankruptcy Act, the status of a farmer and the question whether he is entitled to invoke the benefit of the Farmers'
Creditors Arrangement Act are included within the words "jurisdiction in bankruptcy" mentioned in the first paragraph of section 5 of the Act and that, therefore, these matters, under the Act, are within the exclusive jurisdiction of the county and district courts of all the provinces except in the province of Quebec.-It does not necessarily follow that the Supreme Courts of these provinces are divested by the Act of their supervisory authority over an official such as the Official Receiver or a board such as the respondent Board of Review, which jurisdiction is exercised through the writs of prohibition, mandamus or certiorari, or possibly by declaration and injunction as contended by the appellant; but this latter question may be left for wider examination in a case where the point may come up squarely for decision-In the present case, however, there is a special situation.
The appellant's Debentures Holders' action was instituted prior to the respondent
Community's application to the Official
Receiver under the Farmers' Creditors
Arrangement Act and before the county court orders were issued. That action is still pending and the Receiver appointed in that action of the Supreme Court of
British Columbia is still carrying on his duties.
The effect of the Receiver's appointment by the Supreme Court was to put all the property and assets of the
Community under the authority of that
Court. In such circumstances, its jurisdiction in respect of the assets of the respondent Community and with regard to the proceedings then pending before it could not be interfered with by th- MENT ACT, 1934 (DOM.)-Conc. mere application of the Official Receiver to the county courts under the Farmers' Creditors Arrangement Act. Per Crocket J.-Upon a consideration of the record and of the relevant provisions of the Farmers' Creditors Arrangement Act and its regulations the trial judge had full to make declaration which he did and his judgment was fully warranted by the evidence.
If the respondent Community was not a farmer, neither the Official Receiver nor the Board of Review nor any County Court judge had any authority whatsoever to bring the respondent Community within the operation of that Act, and any orders or reports purporting to recognize such respondent as a farmer must be held under the explicit provisions of the Act to have been wholly void and of no effect. If the respondent Community was not a farmer within the meaning of the Act, the fact that a County Court judge had without authority and erroneously found that the respondent Community was a farmer cannot possibly have the effect of ousting the jurisdiction of the Supreme Court to pronounce upon the validity of these proceedings and of removing from the custody and control of a special receiver appointed by the Supreme Court for the administration of the British Columbia assets and business of the respondent Community for the realization of the moneys secured by the respondent's deed of trust and mortgage, and placing them in the exclusive control of the county court. Moreover, the whole tenor of the statute negatives the suggestion that the Parliament of Canada intended to interfere with the inherent jurisdiction of the Supreme Court of the various provinces to declare the nullity of wholly unauthorized proceedings and orders of all inferior statutory functionaries or tribunals at the suit of those whose property and civil rights such proceedings and orders purport to affect. Judgment of the Court of Appeal (55 B.C. Rep. 516) reversed.
UNI- FIRE - Loss of plaintiffs' goods, while awaiting shipment, on defendant's pier when pier destroyed by fire-Cause of fire unknown-Duty and liability of defendant-Question as to negligence, in origin of fire, and in failing to stop its spread ............................ FIRE INSURANCE
HABEAS CORPUS-Appeal taken, pursuant to s. 8 of Habeas Corpus Act,
R.S.O., 1937, c. 129, from dismissal of application for order discharging applicant from detention in mental hospital- Powers of Court of Appeal as to procedure-Direction for examination and report by doctors-Sufficiency of certificates for admission of a patient to hospital, under s. 20 of Mental Hospitals Act,
R.S.O., 1937, c. 392, as to examination and investigation made.1-On an appeal, taken pursuant to s. 8 of The Habeas Corpus
Act, R.S.O., 1937, c. 129, from the dismissal of appellant's application (made following the issue of a writ of habeas corpus) for an order discharging him from custody in an Ontario hospital where he was detained as being mentally ill, the
Court of Appeal for Ontario, after reservjudgment, directed that appellant be examined separately by two doctors appointed by the Court, not connected with any Ontario hospital for persons mentally ill, and then adjourned the appeal sine die. The two doctors made their reports, finding appellant to be mentally ill;
whereupon the Court of Appeal dismissed the appeal.
Appellant appealed to this
Court. Held: Under s. 8 (2) of said Act, the Court of Appeal had the power to proceed as it did; and the present appeal from its order should, upon consideration of said doctors' reports, be dismissed. A point -raised in the Court of Appeal and in this Court (and which, it was held, could, in a proceeding of this nature, be so raised, though not raised before the
Judge of first instance) was that appellant was improperly detained because he was not a properly certificated patient under s. 20 of The Mental Hospitals Act,
R.S.O., 1937, c. 392, in that the certificates upon which he was originally admitted to the hospital did not "show clearly"
that the medical practitioner "after due inquiry into all the necessary facts relating to the case of the patient, found him to be mentally ill."
No opinion was expressed in the Court of Appeal or in this Court as to the sufficiency of the certificates in question; but this Court pointed out that "it might be difficult successfully to contend that a certificate did 'show clearly' that due inquiry was made into all the necessary facts relating to -the case of the patient, if a medical practitioner signing a certificate considered that the patient had delusions without any investigation on the doctor's part as -to whether they were in fact delusions."
Re ......
HIGHWAYS - Public utilities-Drainage-Company supplying gas in city
Removals, replacements and repairs of portions of its mains
HIGHWAYS-Concluded and pipes made necessary by works done by city on its streets-Recovery of cost by the gas company from the city- Application of The Public Service Works on Highways Act (now R.S.O., 1937, c. 57) -"Constructing reconstructing, changing, altering or improving any highway"- Nature of works done by city-Construction of (inter alia) sewers-Claim by gas company against city for cost of alterations made necessary by construction of subways ordered by Board of Railway Commissioners for Canada.. ...... 2--See Moroa
3; HUSBAND
WIFE
Joint bank account-Deposit by wife in joint names of herself and husband-Signing of a printed agreement form required by the bank-Death of the wife-Whether husband is entitled to ownership of balance of money deposited - Construction of agreement-Evidence.............. 368 INCOME TAX-Computation of taxable income-Claim for deduction for legal expenses incurred in defending franchise to supply natural gas-Income War Tax Act, R.S.C., 1927, c. 97, s. 6 (a) (b)-"Expenses not wholly, exclusively and necessarily laid out or expended for the purpose of earning the encome"-"Payment on account of capital."]-Respondent company supplied natural gas to inhabitants in. parts of the city of Hamilton. Its right to do so was attacked in an action in which there were claimed against it a declaration that it was wrongfully maintaining its mains in the streets, etc., in said city and wrongfully supplying gas to the inhabitants, an injunction against its continuing to do so, a mandatory order for removal of its mains, and damages. Respondent defended the action and was successful, at trial and on appeals. Its legal expenses of the litigation were $48,560.94 (after crediting all sums recovered against the other party as taxed costs). The question now in dispute was whether that sum, which respondent paid in 1934, should be allowed as a deduction in computing respondent's taxable income for that year under the Income War Tax Act, RS.C., 1927, c. 97. Held: The sum was not deductible in computing respondent's taxable income. (Judgment of Maclean J., [19401 Ex. C.R. 9, reversed). Per the Chief Justice and Davis J.: In order to fall within the category "disbursements or expenses wholly, exclusively and necessarily laid out or expended for the purpose of earning the income" (s. 6 (a) of said Act), expenses must be working expenses; that is to say, expenses incurred in the process of earning INCOME TAX-Continued
"the income"; and the expenditure in question did not meet that requirement.
Lothian Chemical Co. Ltd. v. Rogers,
Tax Cases 508, at 521; Robert Addie
& Sons' Collieries Ltd. v. Inland Revenue Commissioners, 1924 S.C. 231, at
235; Tata Hydro-Electric Agencies v. Income Tax Commissioner, [19371 A.C. 685, at 695-6; Ward & Co. Ltd. v. Commismissioner of Taxes, [19231 A.C. 145, at
Further, the expenditure in question was a capital expenditure.
It was incurred "once and for all" and was incurred for the purpose and with the effect of procuring for respondent "the advantage of an enduring benefit" within the sense of Lord Cave's language in the criterion laid down in British Insulated v.
Atherton, [19261 A.C. 205, at 213. (Van den Berghs Ld. v. Clark, [19351 A.C. 431, at 440; Moore v. Hare, 1914-1915 S.C.
also cited).
Though in the ordinary course legal expenses are simply current expenditure and deductible as such, yet that is not necessarily so (as example, reference to Thomson v. Batty,
S.C. 289).
Per Crocket J.: The expenditure in question cannot be said to have been wholly and exclusively made by respondent "as part of the process of profit earning" according to the test formulated
(on statutory provisions not distinguishable in effect, as regards the present case, from those now in question) in the
Addie case (supra), 1924 S.C. 231, at
235, which test was expressly adopted and applied by the Judicial Committee of the Privy Council in the Tata case
(supra), [19371 A.C. 685, at 696, and therefore is binding on this Court. Per
Kerwin and Hudson JJ.: The test stated in the Addie case (supra), 1924 S.C. 231, at 235, and approved in the Tata case
(supra), is applicable to the case at bar, and the expenditure in question was not one "laid out as part of the process of profit earning" within the requirement of that test. It was a "payment on account of capital," as it was made "with a view of preserving an asset or advantage for the enduring benefit of a trade" (British
Insulated v. Atherton, [1926] A.C. 205, at 213).
..................
2-Extra - provincial company selling some of its products within the province
-Assessment of company by the province for income tax-Income tax on "the net profit or gain arising" from business in the province-Company not keeping separate profit and loss account in respect of business done in the provine--Statute authorizing regulations for determining a company's income within the province where such income cannot be ascertained
-Regulation providing that such income shall be taken to be such percentage of company's income "as the sales within the
INCOME TAX-Continued province bear to the total sales"-Constitutionality of statute and regulation-Validity of regulation and assessment, having regard to the statute-Error in assessment in not allowing for deduction in respect of reserve for bad debts-Right of appeal in respect of assessments for income tax in Saskatchewan - Saskatchewan statutes: The Income Tax Act, 1932, c. 9, and amending Acts; The Income Tax Act, 1936, c. 15, and amending Acts; 1934-35, c. 6 (amending The Treasury Department Act); The Treasury Department Act, 1938, c. 8, and amending Acts.]- Appellant company had its head office and central management and control at Hamilton in the province of Ontario. It had branch offices in the province of Saskatchewan. It manufactured agricultural implements, the manufacture being wholly outside of Saskatchewan. It sold its products in Saskatchewan and elsewhere.
All moneys received in Saskatchewan, for sales or in payment of debts, were deposited in separate bank accounts and remitted in full to the head office in Hamilton.
It kept no separate profit and loss account in respect of the business done in Saskatchewan; it kept at its head office in Hamilton a profit and loss account of its entire business. By statute of Saskatchewan, every corporation and joint stock company "residing or ordinarily resident or carrying on business within the province" must pay a tax upon its income during the preceding year. "Income" was defined (in part) as "the annual net profit or gain * * * as being profits
*
*
* received by a person *
*
* from any trade, manufacture or business
* *
* whether derived from sources within Saskatchewan or elsewhere." Profits earned by a corporation or joint stock company (other than a personal corporation) "in that part of its business carried on at a branch or agency outside of Saskatchewan" were not liable to taxation. income liable to taxation of every person (including any body corporate and politic) residing outside of Saskatchewan, who was carrying on business in Saskatchewan, "shall be the net profit or gain arising from the business of such person in Saskatchewan"
(Income Tax Act, 1932, s. 21a; Income Tax Act, s. 23). Where the Minister was unable to determine or to obtain the information required to ascertain the income within the province of any corporation or joint stock company or of any class of corporations or joint stock companies, Lieutenant - Governor in might make regulations for determining such income within the province or might fix or determine the tax to be paid by a corporation or joint stock company liable to taxation. Regulations were issued "covering such cases where INCOME TAX-Continued the Minister is unable to determine or obtain information required to ascertain the income within the Province of a corporation or joint stock company carrying on a trade or business within and without
A regulation
(applied in the present case) provided that the income liable to taxation "shall be taken to be such percentage of * * * the income as the sales within the Province bear to the total sales"; the sales being measured by the gross amount received from sales and other sources (certain kinds of receipts being excluded).
Provision was made for a taxpayer objecting as to the application of such method to his business and for redetermining the taxable income by some other method of allocation and apportionment as the Commissioner might decide. On August 23, 1938, the Commissioner of Income Tax made assessments upon appellant in respect of its income for each of the years 1934, 1935, and
1936, applying the regulation above quoted.
Appellant appealed unsuccessfully from the assessments, first to the Board of Revenue Commissioners and then to
Anderson J. ([19391 3 W.W.R. 129). It then appealed to the Court of Appeal for Saskatchewan, which held ([1940] 2
W.W.R. 49) that, on consideration of the relevant statutes, there was no right of appeal to it in respect of the assessment for 1934, and the appeal as to that assessment should be dismissed for want of jurisdiction; but that there was a right of appeal in respect of the assessments for 1935 and 1936; and that the assessments for 1935 and 1936 were defective in that they did not provide for allowance for deduction in respect of a reserve for bad debts, and should be set aside, and in making new assessments the question of such reserve should be reconsidered in the light of the reasons for judgment of the Court of Appeal; but that all other objections to the assessments failed.
On appeal and crossappeal to this Court: Held (per Rinfret, Crocket, Kerwin and Hudson JJ.):
(1) There was a right of appeal to the
Court of Appeal with respect to the assessments for 1935 and 1936, as held by the Court of Appeal; but there was also a right of appeal to the Court of
Appeal with respect to the assessment for
(Provisions of the following Saskatchewan Acts considered: The Income
Tax Act, 1932, c. 9, and amending Act,
1934-35, c. 16; An Act to amend The
Treasury Department Act, 1884-85, c. 6;
The Income Tax Act, 1986, c. 15; and amending Acts, 1937, c. 8; 1938, c. 91
(s. 2); 1939, c. 9; The Treasury Department Act, 1938, c. 8; and amending Acts,
1940, c. 5, c. 6).
(2) The application of the above quoted regulation was validly adopted in the method of assessment.
INCOME TAX-Continued
The regulation, and the authorizing statutory enactment, were intra vires. Their purpose was to reach by taxation only the income arising from the business in Saskatchewan, of non-resident companies which carry on business in Saskatchewan, and the purpose of their application in the present case was to reach by taxation only the income arising from appellant's business in Saskatchewan. the adoption of such method was proper under the circumstances, as being the best available means to ascertain that income.
(Bank of Toronto v. Lambe, 12 App. Cas. 575; Attorney-General v. Till, [19101 A.C. 50, at 72, cited).
(3) The holding of the Court of Appeal that the assessments for 1935 and 1936 were defective as aforesaid and should be set aside, and the direction for reconsideration of the question of a reserve for bad debts, should be affirmed; but the same holding and direction should be applied in respect of the assessment for 1934. Per the Chief Justice and Davis and Taschereau JJ. (dissenting): The assessments were invalid because the regulation pursuant to which they purported to be made either did not apply to appellant or was beyond the powers of the Lieutenant-Governor in Council. The essence of appellant's profit making business is a series of operations as a whole (including manufacturing, etc.). Though that part of the proceeds of appellant's sales in Saskatchewan which is profit is received in Saskatchewan, yet it cannot be said that the whole of such profit "arises from" that nart of its business which is carried on there within the contemplation of s. 21a (above quoted, of the Act of 1932-the same as s. 23 of the Act of 1936). The effect of the words "net profit or gain arising from the business of such person in Saskatchewan" in s. 21a is, for the purpose of s. 21a, to delete from the definition of "income" above quoted the words "or elsewhere."
The policy of the Act, as shown by s. 21a, along with other provisions, is that the profits taxable under s. 21a as "arising from the business" of a non-resident "in Saskatchewan" are that part of the profits which is earned therein, and to remove from the incidence of income tax profits earned elsewhere, without regard to the place where those profits may have been received. (Commissioners of Taxation v. Kirk, [19001 A.C. 588, referred to as helpful in the elucidation of the Act now m question). In the present case the method of determination adopted, as put in the regulation, was to ascertain the ratio of the sales in Saskatchewan to the total sales and then apply that ratio to the income (profits). As determined by this method, the subject of taxation is a percentage of the sales in Saskatchewan, a percentage which is identical with the INCOME TAX-Concluded ratio between total profits and total sales.
Under the regulation applied, the subject of income tax is that part of the sales in Saskatchewan which is profit; that is to say, the whole of the profit received in Saskatchewan.
This is a procedure wholly inadmissible under the Act. Nowhere does the Act authorize the Province to tax a manufacturing company, situated as appellant is, in respect of the whole of the profits received by the company in Saskatchewan.
It is not the profits received in Saskatchewan that are taxable; it is the profits arising from its business in Saskatchewan; not the profits arising from its manufacturing business in
Ontario and from its operations in Saskatchewan taken together, but the profits arising from its operations in Saskatchewan.
The enactment authorizing the making of regulations limits the authority to making regulations "for determining such income within the province";
"such income" being the income contemplated by the taxing provisions of the
Act as the subject of income tax; i.e., in the case of non-resident companies, the profits arising out of that part of their business that is carried on in Saskatchewan. Consequently, the regulation in question, if it applied to non-resident companies such as appellant, was not competently made, because its aim was not within the purpose for which the statutory authority was given. The aim of the regulation was to determine the profits received by such companies in Saskatchewan; the authority was to make regulations for determining net profits as limited and defined by s. 21a.
v. THE TAX
INSURANCE-Life insurance-Nullity of policy - Written application - Medical
"questionnaire"--Answers to questions by assured-Alleged failure to disclose facts as to his true medical history-Whether answers are representations or warranties according to terms of policy such misrepresentation or concealment of facts by assured is "of a nature to diminish the appreciation of risk."-Arts.
2485, 2487, 2488, 2489, 2490, 2491, 2588
C.C.]-The appellant's husband, holder of an insurance policy issued by the respondent company, died, and, by the terms of his will, the appellant was made universal legatee and as such became entitled to the benefit of the insurance policy.
On an action by the appellant claiming the payment thereof, the respondent pleaded that the policy was issued upon the written application of the insured, including a "questionnaire" and a medical examination attached to and forming part of the policy in question;
that the statements and answers of the insured in the application and the medical "questionnaire" constituted warranties on the truth and accuracy of which the validity of the contract depended; that the insured failed to disclose to the medical examiner his true medical history, notwithstanding the fact that the questions put to him called for such disclosure; that his answers were untrue, inaccurate and misleading And as such were a cause of nullity of the contract of insurance; that, in any event, the insured, in giving his answers, was guilty of misrepresentation and concealment of a nature to affect the appreciation of the risk by the respondent, and consequently, whether made by him in error or by design, they were a cause of nullity of the contract, and there never was any contract of insurance binding on the respondent. The respondent prayed for a declaration that the policy was null and void and that it had no binding effect. The General Clauses which were at the back of the policy contained the following clause (translated): "This policy, with the application of which copy is attached, contains and constitutes the integral contract intervened between the parties to the said contract, and all the declarations made by the assured shall, in the absence of fraud, be considered as 'd6clarations' and not as 'affirmations' and no declaration shall annul the policy nor shall serve as a basis of contestation of a claim based on this contract, unless this declaration be contained in the application of the policy and unless a copy of this application be endorsed on the policy or be attached to it at the time of its issue." The trial judge maintained the appellant's action, but that judgment was reversed by the appellate court. Davis and Hudson JJ. dissenting, that the appeal to this Court should be allowed and the judgment of the trial judge restored.
The answers, or statements, made by the assured in his proposal, must, in the absence of fraud (and the trial judge found no fraud), be considered only as representations, and not as warranties.
As a copy of the proposal has been attached to the policy and the proposal formed part thereof, these answers and statements may be used by the respondent for the purpose of contesting the claim of the appellant, and they may result in avoiding the policy; but they always remain representations, and they do not become warranties, notwithstanding the fact that a copy thereof has been attached to the policy and that they formed part of the contract. [In other words, by force of clause above quoted, the parties have agreed to submit their contract purely and simply to the provisions of the Civil Code with regard respectively to warranties and representations.] Upon the evidence, and applying these provisions of the law of Quebec, the alleged misrepresentations by the assured, invoked by the respondent company, and specially the alleged failure assured to disclose the facts that he had consulted doctors and had gone to a sanatorium, are not shown to have had any influence upon the respondent company in its appreciation of the risk; and it is also impossible on a fair consideration of the evidence to come to the conclusion that disclosure of the matters concealed or misrepresented would have influenced a reasonable insurer to decline the risk or to have stipulated for a higher premium. Mutual Life Insurance
Company v. Ontario Products Company
([1925] A.C. 344) foll. As to the clause of the policy quoted in the head-note, the word "d~clarations," used therein four times, must of necessity, except on the first occasion, be understood to mean
"repr6sentations"; while the word "affirmations," in that same clause, must be given the meaning of warranties.
Davis and Hudson JJ. (dissenting)
-Even assuming, without deciding the point, that the answers to the questions were, by virtue of certain language in the policy, representations and not warranties, there is sufficient evidence to conclude that, if these facts as they existed had been disclosed by the insured, special mention of the facts would have been made to the respondent company by any medical examiner and a more careful and serious examination would have been ordered by the company. Such concealment of the facts was "of a nature to diminish the appreciation of the risk," and therefore
"is a cause of nullity," according to the provisions of article 2487 C.C.
AMERICA.............
2- Insured motor yacht lost by fire- Suit to recover under policy-Warranty by insured as to use of the yacht- Alleged breach of warranty-Construction of warranty-"Private pleasure purposes"
-Nature of policy-Whether a policy of
"fire insurance" and whether subject to
Part IV (and statutory conditions therein) of The -Insurance Act, R.S.O., 1987, c. 56-Policy of marine insurance.]insured appellant's motor yacht in respect of perils "of the seas and waters,
*
*
* fires, collisions, jettisons, salvage
* * * and all other similar marine perils, losses and misfortunes
*
*
*." Appellant warranted that the yacht would be confined to a named Ontario inland lake and tributary waters; and by a marginal endorsement warranted that it "shall be used solely for private pleasure purposes and not to be hired or chartered unless approved and permission endorsed hereon."
yacht was destroyed by fire on said lake during the currency of the insurance policy.
At the time of the fire it was being used by appellant's friend, R. (who, as found by the trial judge, had taken it without appellant's knowledge but in pursuance of a vague general consent to use it), to take (without remuneration) R.'s uncle to a part of the lake where the uncle was to inspect a mine for his own benefit (the yacht was not hired or chartered either by R. or his uncle). About a month before the fire, one C. on two occasions had used the yacht to convey C.'s workman across the lake for the purpose of filling C.'s boom with logs, had tied up the yacht there, worked for about four hours logging, and then brought the workman back in the yacht. (As found by the trial judge, this was done without appellant's knowledge, but C. had appellant's general permission to use the yacht; its said use by C. had nothing to do with its loss.)
sued to recover under the policy. His action was dismissed by the trial judge, who found breach of appellant's warranty in R.'s use of the yacht at the time of its destruction, and in C.'s use of it as above stated. An appeal to the Court of Appeal for Ontario was dismissed, and appellant appealed to this Court. Held: There was no breach of warranty, and appellant was entitled to recover. Per the Chief Justice and Crocket and Davis JJ.: A "strict though reasonable construction" (Provincial Ins. Co. v. Morgan, [1933] A.C. 240, at 253-4) of the marginal endorsement is to treat the words "not to be hired or chartered" as set in apposition to, and declaring the meaning of, the words "solely for private pleasure purposes." The evidence showed that appellant's intention was that the yacht would be used solely for private pleasure purposes and that that became in fact its normal use; there was no intention to hire or charter it, and it was never hired or chartered during the currency of the policy. Per Rinfret, Crocket and Kerwin JJ.: In construing the policy, the marginal statement should not be read as a condition that the policy would be avoided upon the yacht being used for other than private pleasure purposes even though at the time a loss was suffered it was not being so used (Provincial Ins. Co. v. Morgan, [19331 A.C. 240, affirming [1932] 2 K.B. 70. Judgment of Scrutton L.J. in [19321 2 K.B. at 79, 80, particularly referred to). As to the use of the yacht at the time of the fire: The word "private" in the marginal statement must be read in conjunction with the words "and not to be hired or chartered unless approved and permission endorsed hereon"; and so read, the "pleasure purposes" may be private even when the yacht was used by R. with appellant's implied permission; and the use by R. in question was such as was within the words
"private pleasure purposes." Per Rinfret,
Crocket and Kerwin JJ.: The contract was not a policy of fire insurance within the meaning of the Ontario Insurance
Act, R.S.O., 1937, c. 256, and it was not subject to Part IV (and the statutory conditions therein) of that Act; the contract was one of insurance against losses incident to marine adventure, and the policy was one of marine insurance. Secs.
23 (1), 1 (39), 1 (30), 102 of said Act considered.
3- Accident insurance-Death of insured
-Suit to recover under policy-Proximate cause of death-Insured taking insulin for diabetic condition-Death alleged to have been caused by insulin reaction from taking dose of insulin-Application and effect of 8. 6 (in force at time of death) of Accident Insurance Act, R.S.
NB., 1927, c. 85.]-Plaintiff sued to recover upon an accident insurance policy upon the life of her deceased husband.
The deceased suffered from diabetes and took insulin therefor.
One morning he took (as found by inference from the evidence) the usual dose, later in the day became very ill, from, according to evidence given, an "insulin reaction," and died three days later. The policy by its terms insured against (inter alia) death resulting from "bodily injuries, effected directly and independently of all other causes, through external, violent and accidental means."
Sec. 5 (in force at the time of deceased's death) of the New
Brunswick Accident Insurance Act provided that "in every contract of accident insurance, the event insured against shall include any bodily injury occasioned by external force or agency, and happening without the direct intent of the person injured, or as the indirect result of his intentional act * * *" Held: Plaintiff was entitled to recover.
Though deceased's diabetic condition co-acted with the insulin, yet, on the true construction of the policy and said s. 5 of the Act, there was only one cause of death (Fidelity and Casualty Company of New York v. Mitchell, [19171 A.C. 592, at 597), viz., the bodily injury, sustained as a result of the taking of the insulin. The bodily injury (the event insured against) was occasioned by external agency and happened without deceased's direct intent, within the meaning of said s. 5.
Judgment of the Supreme Court of New
Brunswick, Appeal Division, M.P.R.
418, reversed.
(Crocket J. dissenting).
Per Crocket J. (dissenting)
: The effect of the judgment of this Court on the former appeal in this action ([19381 S.C.R. 234, which ordered a new trial) was that, up- INSURANCE-Concluded on the proper construction of a. 5 of the Act, the external force or agency (in this case the injection of the insulin by the insured) which occasions the bodily injury, must be the proximate cause of the insured's death.
Under the policy and the Act alike, the "means" or "external force or agency" must be at least accidental as well as external.
The suggestion that s. 5 of the Act was intended to include as accidents, circumstances where the means is not accidental but intentional and an unintentional result follows, is contrary to the clear effect of said former judgment of this Court; and s. 5 cannot now be regarded as doing away with the fundamental and universally recognized principle of accident insurance, viz., that the accident must be found in the "means" or (as expressed in said s. 5) in the "external force or agency" from which the bodily injury insured against has naturally and directly resulted. INS. Co. .....................
4---Goods damaged by derailment and such conditions, if available, afforded defence ................................ JOINT BANK ACCOUNT-Deposit wife in joint names of herself and husband-Signing of a printed agreement form required by the bank-Death of the wife-Whether husband is entitled to ownership of balance of money deposited of agreement-Evidence. .......... See BANKING. JUDGMENTS-Servant's negligence causing injury to third person-Question whether servant at time of such negligence was acting in the course of his employment-Judgment at trial for plaintiff against servant but not against master- Question whether entry of judgment and certain proceedings precluded plaintiff from recovering against master on appeal. ........ 2-"
Final judgment" within meaning of ss. 2 (b) and 86, Supreme Court Act, R.S.C., 1927, c. 85................. See 3, 4;
7;
AR- Acr, 2, 3;
3;
3,
4;
LAW SOCIETY OF ALBERTA-Hearing of charge of misconduct against a member-Chairman of discipline committee-Power to name investigation committee.1-Under rule 55 of the rules and regulations of the Law Society of Alberta, the chairman of the discipline committee is authorized to appoint an investigating committee to hear a charge of conduct unbecoming a barrister or solicitor against a member of the Society. Harris v. Law
Society of Alberta ([19361 S.C.R. 88) dist.
LIFE INSURANCE
LIMITATION OF ACTIONS - Action for alleged breach of trust-Application of s. 46 (2) of The Limitations Act
R.S.O., 1937, c. 118-Proviso in s. 46 (21
(b)
that statute shall not begin to run against beneficiary unless and until interest of beneficiary becomes an interest in possession-Beneficiary having an interest in possession as to revenue of fund and a contingent interest in corpus.]-This
Court dismissed an appeal from the judgment of the Court of Appeal for Ontario,
[1940] O.R. 201, dismissing the appellant's appeal from the judgment of Hogg
J. (ibid) dismissing her action, which was brought for relief for alleged breach of trust. Under the will of her father, who died on October 1929, appellant was entitled, during a certain period after her father's decease, to part, and after expiration of said period, to the whole, of the revenue from a trust fund to be set apart by the trustees and executors of the will;
should appellant become a widow, she was to receive the corpus of the fund, but if she died without having become a widow, the fund was to go to her brothers.
The trust fund was partially set up in December, 1929, and was completed in 1936.
In the action, commenced in March,
1937, against the executors and trustees of the will, appellant alleged that a certain mortgage, included in the partial set up of the fund in December, 1929, was not a proper security to have been included therein.
There was no allegation of fraud or fraudulent breach of trust.
Held (per
Rinfret, Kerwin, Hudson and Taschereau
JJ.): As the action was commenced more than six years after the alleged breach of trust occurred, it was barred by s. 46 (2)
of The Limitations Act (R.S.O., 1937,
LIMITATION OF ACTIONS-Conc. Appellant did not come within the proviso in s. 46 (2) (b) that the statute of limitations "shall not begin to run against any beneficiary unless and until the interest of such beneficiary becomes an interest in possession." So far as the revenue from the trust fund was concerned, appellant's interest was one in possession; and, that being so, it could not be said that, because she had only a contingent interest in the corpus of the fund, she came within said proviso. The proviso is not intended to protect an interest in rem but a beneficiary. Appellant's cause of action, if it existed, arose when her interest as the person entitled to the income or part of it was an interest in possession, and the lapse of time had barred her claim for the alleged breach of trust, even though she might be entitled to a further interest in the property in the future.
(Hudson J. held also that, on the evidence, appellant must fail on the ground that her action was barred by a certain agreement of August 7, 1931, made for the purpose of settling matters in dispute between her and the defendants).
U. 2-Time from which statute of limitation begins to run ................ MAINTENANCE-Suit for damages for alleged intermeddling and stirring up litigation-Requisites for recovery-Absence of proof of special damage.]-Respondent sued recover damages against appellant for maliciously instigating and stirring up respondent's wife to commence and prosecute an action for alimony. Appellant had had nothing to do with the alimony action itself, but had merely put into the wife's head the idea of bringing it. During the course of the trial of the alimony action, respondent entered into a settlement by which he agreed to pay his wife per annum for life and to deposit securities as security for payment and to pay her costs; and judgment was given declaring the settlement binding. (reversing the judgment of the Court of Appeal for Ontario, [1940] O.R. 448, and restoring the judgment of Roach J., [1940] O.R. 292): Respondent's claim against appellant should be dismissed. Per the Chief Justice: In the circumstances of the case, the action could only succeed on proof of the absence of reasonable and probable cause for the alimony action.
Also special damage was not proved.
On both these grounds respondent's claim should be dismissed. Rinfret, Davis and Hudson JJ.: In the case of civil proceedings, while there cannot be "maintenance" in the strict sense MAINTENANCE-Concluded of the term until the action is commenced, a person who, without reasonable and probable cause, instigates another to bring an action incurs a civil liability to the defendant similar to that incurred by a maintainer. But the action against the instigator is only maintainable in respect of legal damage actually sustained. In the present action it cannot be said that the settlement in the alimony action was not the recognition by respondent of a legal obligation on him towards his wife or that appellant who stirred up the litigation, was the cause of respondent having to make the payments under the judgment. At least it can scarcely be said that the wife had no right to bring that action. Per Taschereau J.: Appellant intermeddled and stirred up litigation; but no special damage to respondent had been proved; and without proof of special damage a civil action for damages by reason of said facts cannot succeed. Such an action at common law is not one for the invasion of a right; it is one in respect of an offence which causes damage to the plaintiff.
The annual payments ordered in the alimony action were clearly the discharge of a legal obligation; and they do not, nor do the costs adjudged against respondent (or incurred by him) in that action, constitute special damages for which the present action can be maintained.
FRIND..........
MANDAMUS
MINERALS;
MARINE INSURANCE
MASTER AND
SERVANT-Negligence
-Servant's negligence causing injury to third person-Liability of master-Question whether servant at time of such negligence was acting in the course of his employment - Judgments- Judgment at trial for plaintiff against servant but not against master-Question whether entry of judgment and certain proceedings precluded plaintiff from recovering against master on appeal-Pleadings-Jury awarding damages exceeding amount claimed- Amendment of pleadings after verdict.]- S., a general repair man in respondent's employ, and whose duties took him to various premises of respondent, had made a key in respondent's shops in West
Toronto and was instructed by his foreman to take it to respondent's premises in North Toronto to try it in the lock for which it was intended.
S. was entitled to be paid for the time occupied in such an errand.
Means of transport were available for his use-vehicles which could be run on respondent's railway,
MASTER AND SERVANT-Conc. and street-cars for which respondent would provide tickets. On the occasion in question no instruction was given by the foreman to S. as to mode of transportation. Notices had been given by the respondent to its employees (and brought to S.'s attention) forbidding use of privately owned automobiles in connection with respondent's business unless the owner carried insurance against public liability and property damage risks.
In taking the key as aforesaid, S. drove his own automobile, in respect of which he did not have insurance, and on his way he negligently (as found by the jury at trial) struck and injured appellant. The chief question on the present appeal (treated by the trial judge as a question of law, and as to which no questions were referred to the jury) was as to respondent's liability to appellant. Held: Respondent was liable.
The question whether a master is liable for injuries caused to third persons by his servant's negligence depends upon whether under all the circumstances the servant at the time of the negligence was acting in the course of his employment, and, if he was so acting, liability attaches to the master even though the servant was doing something forbidden by the master. Upon the circumstances and facts in evidence, it must be held that S. at the time of the negligence was acting in the course of his employment within the meaning and application of the above rule. Cases reviewed.
Judgment of the Court of Appeal for Ontario,
O.R. (affirming judgment of Rose, C.J.H.C., [19391 O.R. 517) reversed. Held, further, that the facts that judgment had been entered against S. on appellant's behalf, and on behalf of his father, by whom as next friend appellant, an infant, had sued, and that his father had, in his personal capacity, taken proceedings to secure by way of attachment part of his own damages awarded against S., did not operate to end appellant's cause of action against respondent so as to nullify appellant's right of appeal.
Held, further, that though the amount of damages claimed on appellant's behalf in the statement of claim was $5,000, and no amendment was applied for until after the jury's verdict, when the trial judge allowed an amendment to cover the sum awarded, namely, $10,000, the judgment for the sum awarded should not be disturbed. LOCKHART V.
RY. ...... MENTAL
HOSPITALS
ACT-R.S.O., 1937, c. 392-Sufficiency of certificates for admission of a patient to hospital, under s. 20 of Act, as to examination and investigation made................. MINERALS-Lapse reinstatement of claims-Conditions of- Mineral claims staked and subsequently forfeited-Order of reinstatement by the
Minister-Right of intervening applicant, who had restaked same claims, to mandamus to compel recording of his application by Mining Recorder-The Mineral Resources Act, 1981, c. 16, s. 10, 2 and Regulations 39, 54, 55, 66, 132.]- Some mineral claims were, in 1937, staked and recorded and subsequently transferred into the name of Mun Syndicate, one of the appellants.
By reason of the failure of the latter to comply with the conditions prescribed by the regulations under
The Mineral Resources Act of Saskatchewan, these claims had become forfeited in the summer of 1938 and were thus open for restaking. Later, in the month of September, 1938, the prosecutor Studer, associated with two others, all of whom held miners' licenses, restaked the claims;
and applications by them to have the claims recorded in their names, together with assignments thereof by his associates to him, were filed on October 12th, 1938, at the sub-recording office at Prince Albert and the necessary fee was paid.
These applications reached the mining recorder at 'Regina on October 13th, 1938.
The pertinent regulation provides that the date upon which the documents are
"received in the office of the mining recorder shall govern, and shall be considered the date of the application."
Meanwhile, the Mun Syndicate had become active and had secured from the
Minister on October 11th, 1938, an order under section 22 of the Act and section
66 of the regulations, reviving their claims to the property. The order of reinstatement expressly stated that it was subject to section 22, which provides that the revesting of rights which have been forfeited or lost shall be subject to the rights intervening between the default and the order of the Minister. This order was then recorded, so that, when Studer's application arrived at the Mining Recorder's Office, the situation was that the
Mun Syndicate again stood in the record as the holders of the claim in good standing, subject only to the conditions specified.
The Mining Recorder, now the appellant Swain, rejected the applications of the prosecutor Studer on the ground already stated that the prior holders had been reinstated on October 11th, 1938.
The prosecutor Studer then applied for a prerogative writ of mandamus to compel the appellant Swain, Mining Recorder, to record and enter the name of
Studer as holder of the mineral claims in question, his expressed object being to obtain a record of his claims so that he would have the necessary status to maintain an action, against the reinstated claimants, to establish his rights.
trial judge granted the order applied for,
MINES AND MINERALS-Continued which judgment was affirmed by a majority of the Court of Appeal. Davis and Kerwin JJ. dissenting, that the appeal should be allowed, the judgments of the courts below be set aside, and the writ of mandamus discharged, but, under the circumstances of the case, without costs to any party. Per Rinfret, Crocket and Hudson JJ.-The remedy sought on behalf of Studer was to compel the Recorder in his official quality to record his name as holder of the mineral claims, that is, to do a ministerial act, not to decide a dispute, much less to rule on the legality or propriety of an act of his Minister.
The motion for mandamus was based on the assumption that Studer would not have an adequate remedy in an action commenced by writ, until he had been first duly recorded as a holder, which assumption has found acceptance in the courts below.
But there is no reason in principle why a lack of entry of Studer's name should be a bar to an ordinary action to enforce any such rights as he is entitled to in the matter. Such rights were the very kind of rights which were intended to be preserved by section 22 of the Mineral Resources Act, and were preserved by the order of the Minister. Per Davis J. (dissenting)-The only remedy sought by the respondent Studer in this case was to have recorded in his name in the books of the Mining Recorder the restaking by him, or by those under whom he claimed, of the mining lands in question in this case, and Studer was entitled to such a remedy. These claims had become forfeited due to the absence of any record of the necessary assessment work required to keep the claims alive, subject to the provisions of section 22 of the statute. But the restaking or relocation was done by Studer after the default and before the order had been made under that section by the Minister. At least fifteen days were made available by the regulations for recording that staking and the fifteen days had not elapsed before the date of the Minister's order. Therefore, notwithstanding the Minister's order relieving against the forfeiture, the restaking of the claims in the interval entitle the licensee Studer to have a record of the staking made in the Recorder's Office. The order of the Minister was not only on its face but by the force of section 22 of the statute subject to that intervening right, while the refusal to record the staking was definitely put by the Mining Recorder upon the ground that "the former claims covering the same area had been reinstated." Per Kerwin J. (dissenting)-The
Studer, having staked claims that were at the time open, could not, under the circumstances, litigate his rights as against the members of the Mun Syndicate without first acquiring a record.
Studer could not do MINES AND MINERALS-Concluded this unless it is held that the Mining
Recorder had no discretion to decline to receive the application and record it. In view of the fact that the claims were open and the staking done by the respondent Studer before the order was made by the Minister, section 22 of the statute applies, and the interest or rights forfeited or lost are to be revested in the person so relieved, "but subject, however, to any intervening right of any person arising subsequent to the default sought to be remedied and prior to the order of the Minister." The order of the
Court of Appeal, granting respondent
Studer's application for mandamus and thus affording him the opportunity to litigate the rights he claimed, should be upheld.
Osborne v. Morgan
App.
Cas. 227); Hartley v. Maston (32 Can.
S.C.R. 644); Mutchmore v. Davis (14
Grant 346); Farmer v. Livingstone (8
Can. S.C.R. 140); McPhee v. Box ([1937]
S.C.R. 385); Re Massey Mfg. Co. (13
Ont. A.R. 446), and Minister of Finance of B.C. v. Andler ([19351 S.C.R. 278) discussed. SWAIN v. ex rel.
........................
MORTGAGE
AcT, 2, 3.
MOTOR VEHICLES-Negligence - Collision-Minor son of owner driving car- Solely responsible for accident-Statutory liability of owner-"Living with and as a member of the family of the owner"
in section 74A (1) of the Motor Vehicles
Act-Meaning of "living with"-Owner temporarily absent from home in another province-Son forbidden to drive by the father-Liability as owner under section
74A different from responsibility of parent or guardian under section 45-Motor
Vehicle Act, R.S.B.C., 1936, c. 195, section 45, and section 74A as enacted by
B.C. statutes, c. 54, s. 11.1-In an automobile collision, the son of the owner of one of the cars was driving it, and the trial judge held that he was solely responsible for the accident, which finding of facts was concurred in by the appellate court. The son, about seventeen years of age, was living with his parents on their farm, and he had no driver's license. About one month prior to the accident the father went to Alberta on business and did not return until after the accident; and, before leaving, he gave instructions to his son not to use his automobile outside of the farm.
In an action for damages the occupants of the other car recovered judgment against the father, the respondent; but the Court of Appeal dismissed the action on the ground that, during the father's absence, his son, the driver, was not "living with and as a member of the family of" the respondent within the meaning of section 74A of the Motor Vehicle Act of British Columbia. Held, reversing the judgment of the Court of Appeal (55 B.C.R. 350; [1940] 3 W.W.R. 81), that the father, respondent, was liable: during the latter's temporary absence from his home, his son had not ceased to live "with and as a member of" his family within the meaning of the above section.
In such case, the driver is deemed to be the agent of the owner and the consent of the latter is immaterial. As to the respondent's contention that section 45 of the Act (enacted before section 74A) makes the parent or guardian liable only when the automobile has been entrusted to the minor by the parent or guardian, Held that the liability of the respondent as owner under section 74A does not disappear because all the conditions of section 45 do not exist. If the automobile had been entrusted to the son by his father, the respondent would then be liable as father under section 45 and as owner under section 74A. In the present case, the respondent is liable not because he is a father who has entrusted an automobile to a minor child, but because his automobile was driven by a "person * * * living with and as a member of" his family. Sec. tion 74A deals with the liability of an owner, an entirely different thing from the responsibility of a parent or guardian, irrespective of ownership, which is dealt with in section 45.
2--Judgment for costs only against person holding automobile licenses - Power of Commissioner of Provincial Police to suspend licenses on failure to satisfy judgment- Whether such judgment within meaning of section 84 (1) of Motor Vehicle Act-Capacity in which Commissioner acts under said section- Motor-Vehicle Act, R.S.B.C., 1936, c. 195, s. 84.]-The respondent Dumont brought action against one Bollons for damages resulting from an automobile accident, and Bollons counterclaimed for damages in the sum of S59.35.
Both claim and counter-claim were dismissed with costs. No damages therefore were recovered by either party.
After taxation, the respondent Dumont's costs of the counterclaim being set off against Bollon's costs of the action, the result was that the respondent Dumont became liable under the judgment to pay to Bollons the balance of the costs, i.e., $466.25. This sum not having been paid within 30 days and no appeal having been taken, the Commissioner of Provincial Police suspended the respondent Dumont's driver's and owner's licenses under section 84 of the Motor-Vehicle
[6.C.R. Dumont then launched mandamus proceedings directed against the Commissioner to compel him to return the said licenses.
The trial judge dismissed the application; but, on appeal to the Court of Appeal, that judgment was reversed and mandamus was granted. After the judgment of the appellate court, the
Commissioner of Police complied with the order and delivered up the licenses and number plates to the respondent
Dumont. Held, affirming the judgment of the Court of Appeal (55 B.C.R. 298), that the facts of this case do not bring the appellant's action, suspending the respondent's licenses, within the authority of the Commissioners under the statute.
The judgment against the respondent
Dumont for costs in an action brought by himself in which no amount was recovered for damages, either in respect of personal injury or in respect of damage to property and in which no claim was made against Dumont for damages in excess of does not bring the power of the Commissioner under section 84 (1) into operation. Held, also, that, the appeal on the question of the construction of the statute being entirely without merit and owing to the acquiescence of the Commissioner in the judgment of the appellate court, this appeal had no practical object; but it may be stated that there is no doubt that the
Commissioner's authority is vested in him as the agent of the statute and that mandamus would lie to compel him to perform his statutory duty; but it is unnecessary for the court to decide whether in the circumstances of this case mandamus was the proper procedure. Comv. THE
KINo ex. rel. ............
Cr. Code, of driving while intoxicated- Automatic suspension of driving license under s. 84 (1) (a) of said provincial
to County Court Judge from such refusal-Whether right to so appeal right of appeal from County
Court Judge to Supreme Court, P.E1.- Constitutional validity of s. 285 (7), Cr.
Code-Constitutional validity of s. 84 (1)
The Highway Traffic Act, 1986, (c. 2), of Prince Edward Island, the license (to operate a motor vehicle) of a person who is convicted of driving a motor vehicle while under the influence of intoxicating liquor or drugs, "shall forthwith upon, and automatically with such conviction, be suspended" for (a) 12 months for the first offence; and (s. 84 (1)
(c))
"the Provincial
Secretary shall not issue a license to any person during the period for which his license has been cancelled or suspended under this section." By s. 285 (7) of the Criminal Code of Canada (as amended by 3 Geo. VI, c. 30, s. (6), where a person is convicted, under s. 285 (4), of driving a motor vehicle while intoxicated, the court of justice may, in addition to any other punishment provided, prohibit him from driving a motor vehicle anywhere in Canada during any period not exceeding three years.
The respondent, who had a license to operate a motor vehicle, good until February 28, 1940, was, on November 20, 1939, convicted under said s. 285 (4) of the Cr. Code. On May 28, 1940, he applied for an operator's license. His application was refused pursuant to said s. 84 (1) (c) of the Highway Traffic Act, as the period of automatic cancellation, under s. 84 (1) (a) upon said conviction, had not expired. From such refusal, respondent, asserting a right of appeal under s. 8 (7) of said Highway Traffic Act, appealed to a County Court Judge, who allowed the appeal and ordered issuance of a license. The Provincial Secretary appealed to the Supreme Court of Prince Edward Island en banc, which
M.P.R. 271) dismissed the appeal, holding that the County Court Judge had jurisdiction to make the order and that there was no appeal therefrom, and holding further that, by reason of the enactment of said s. 285 (7) of the Cr. Code, s. 84 (1) of said provincial Act had become ultra vires. The Provincial Secretary appealed (leave to do so being granted by said Supreme Court en banc) to this Court. Held: The appeal should be allowed and the order of the County Court Judge set aside. There was no right of appeal to the County Court Judge from the refusal of the Provincial Secretary to grant a license to respondent. Said s. 8 (7) of the Highway Traffic Act did not apply.
The right of appeal given by s. 8 (7) is to a person aggrieved by refusal to grant a license or by revocation of a license under s. 8. The refusal in question was not a refusal under s. 8; nor was there revocation of license under s. 8. The law itself, s. 84 (1) of the Act, said that respondent, in the premises, was not entitled to a license. The Provincial Secretary was merely carrying out the law, and had no discretion. There was no provision authorizing an appeal to the County Court Judge under such circumstances; and his order was made without jurisdiction. The Supreme Court en banc should have so held, and set aside the order.
It was not legally seized of the question whether s. 84 (1)
of the Highway Traic Act was ultra vires. Upon said constitutional question, this Court expressed opinion as follows:
The field of s. 285 (7) Cr. Code, and that of s. 84 (1) of said provincial Act are not co-extensive. The Dominion, in enacting s. 285 (4) (7), has not invaded the whole field in such a way as to exclude all provincial jurisdiction. It cannot have superseded the provincial enactment, which was obviously made from the provincial aspect of defining the right to use the highways in the province and intended to operate in a purely provincial field.
The provincial enactment does not impose an additional penalty for a violation of, or interfere with, the criminal law; it provides, in the way of civil regulation of the use of highways and vehicles, for a civil disability arising out of a conviction for a criminal offence;
and that does not make it legislation in relation to criminal law. The undisputed authority of the province to issue licenses or permits for the right to drive motor vehicles on its highways, carries with it the authority to suspend or cancel them upon the happening of certain conditions. Said s. 84 (1) deals purely with certain civil rights in the province, and is not ultra vires. (Bgdard v. Dawson,
[1923] S.C.R. 681; Lymburn v. Mayland,
[1932] A.C. 318, referred to).
Per the
Chief Justice: Primarily, responsibility for the regulation of highway traffic, including authority to prescribe the conditions and the manner of the use of motor vehicles on highways and the operation of a system of licenses for the purpose of securing the observance of regulations respecting these matters in the interest of the public generally, is committed to the local legislatures.
S. 84 (1) (a) (c)
said provincial Act is concerned with the subject of licensing over which it is essential that the Province should primarily have control; and so long as the purpose of the provincial legislation and its immediate effect are exclusively to prescribe the conditions under which licenses are granted, forfeited or suspended, it is not, speaking generally, necessarily impeachable as repugnant to s. 285 (7), Cr. Code, in the sense that it is so related to the substance of the Dominion enactment as to be brought within the scope of criminal law in the sense of s. of the
B.N.A. Act by force of the last paragraph of s. 91.
There is no adequate ground for the conclusion that the provincial enactments in question are in their true character attempts to prescribe penalties for the offences dealt with by the Cr. Code, rather than enactments in regulation of licenses.
S. 285 (7) Cr.
Code, is intra vires. S. 1 of c. 5, Acts of
1940, P.E.I., gives prima fade an appeal to the Supreme Court, P.E.I., from any
MOTOR VEHICLES-Concluded a Judge of a County Court who is acting in a judicial capacity, though persona designata and not as the County Court, under the authority of a Provincial Act. fact that the
Judge has acted without jurisdiction does not affect this right of appeal.
Questions of jurisdiction are within the scope of the appeal. 4-Criminal law-Appeal--Cr. Code, 951 (3), 285 (6), 1028 (2)-Accused charged with manslaughter-Charge arising out of operation of motor vehicle
At trial accused found not guilty of manslaughter but guilty of driving in a manner dangerous to the public-Appeal by Attorney-General of the province dismissed by appellate court (with a dissent on questions of law)-Appeal by Attorney- General to Supreme Court of Canada- Whether there was a "judgment or verdict of acquittal" within s. 1023 (2)-Merits-Evidence and findings at trial........................ 5-Negligence - Plaintiff struck motor car-Action for damages-Directions to jury-Jury's findings-Question as to negligence of plaintiff-Onus of proof on defendants as to negligence- Form of question to jury-Amount of damages awarded-New trial...... 473 6-See
MUNICIPAL
BRIBERY
COR- RUPTION ACT-R.S.Q., 1925, c. 107.. Contract passed between mayor and municipality prior to his election-Contract still in force during term of office-Bribery or corruption-Benefit or interest in the contract-Penal action-Judicial pronouncement as to nullity of contract-All interested parties not joined in the action similar offence provided by section 161 of the Criminal Code or by section 128 of the Cities and Towns' Act - Constitutionality of the Municipal Bribery and Corruption Act-Effect of section 227 of the Municipal Code as to contract of sale between member of council and municipality - "mayor" is "member of a municipal Construction of the words "shall include" in statute law-Conditions necessary to enable courts to pronounce nullity of contract - Municipal Bribery and Corruption Act, R.S.Q., 1925, c. 107, as. 3 and 19-Cities and Towns' Act, R.S.Q., 1925, c. 102, s. 123-B.N.A. Act, section 92, paras. 8 and 15.]-The appellant was elected mayor of the town of Grand'Mre, in the province of Quebec, on July 2, 1935.
At the time of his election and up to the commencement of this action, the appellant and the municipal corporation were bound by a contract entered between them on May
1928, whereby, following a conveyance
(effected on the same date by the appellant to the municipal corporation)
certain lots of land to be used as public streets, the adjoining lots, so long as they had not been sold by the appellant to third parties, were not to be
"assessed on the valuation roll of the corporation at more than thirty-five dollars each". It was further agreed that the same conditions would apply to the unimproved lots which the appellant, within two years following the contract, would repossess for non-payment by the buyers of those lots. The respondent, in his capacity of elector, ratepayer and property-owner, instituted proceedings, under section 3 of the Municipal Bribery and Corruption Act, R.S.Q.,
1925, c. 107, where conclusions were to the effect that the appellant "be declared disqualified for five years from the date of the judgment from holding any office in or under the council of the town of
Grand'Mre." This action was dismissed by the Superior Court, which held that the appellant's relations with the municipality under the above contract were rather those of a creditor of the municipality for prestations for which the latter had made itself responsible and that they did not come within the provisions of the above-mentioned Act, the effect of which was to forbid any member of the municipal council to make a contract during his tenure of office, but not to prohibit his election to the council after such a contract had been in force for some time and the obligations resulting therefrom towards the council had been fully performed; in other words, it was held that the appellant had fully performed his obligations to the municipality prior to his election and that, therefore, the prohibition provided by section
3 of the Act did not disqualify him.
This judgment dismissing the respondent's action was reversed by the appellate court, which set aside the construction given to the Act by the trial judge as well as all the other grounds invoked by the appellant. Held, affirming the judgment of the appellate court (Q.R.
66 K.B.
133), that the appellant has violated the provisions of section 3 of the above-mentioned Act.
According to the evidence, he clearly had an interest in a contract with the municipal council to which he had been elected and of which he continued to be a member until the action was commenced; that contract existed throughout his tenure of office and during that time he derived appreciable benefits therefrom, and he cannot reasonably claim that he did not do so knowingly. As to the ground raised by the appellant, that the offence raised against him, having already been provided for by the provisions of section of the Criminal Code, the latter overrides the provincial Act and makes it inoperative: Held that a mere comparison of the above-mentioned sections of both Acts shows that the two provisions do not relate to the same thing: the provincial Act prohibits the existence of any contract or employment relationship between a municipal council and a member thereof, while the Criminal Code prohibits any offers, proposals, etc., intended inter alia to influence the vote of such a member. The two sections are far from identical and, therefore, the provincial field is not in the present instance occupied by the Dominion field. Moreover, the provincial Act comes within the provisions of paragraphs 8 and of section 92 of the B.N.A. Act and therefore its constitutionality cannot be successfully attacked.
As to the other ground raised by the appellant that the municipal council, at the time of the occurrences forming the basis of the action, was governed by the Cities and Towns' Act (R.S.Q.,
1925, c. 102), that section 123 of that Act covered the same offence as the one mentioned in section 3 of the Municipal Bribery and Corruption Act and that therefore the provision of section 123 of the first Act has the effect of setting aside the application, of section 3 of the last Act.
Held that the two Acts do not cover the same case and the provision of one Act does not exclude the provision of the other Act; section 123 of the first Act simply prohibits the nominating or electing to the office of mayor or alderman or the appointing to or holding of any other municipal office, while section 3 of the second Act makes of either one of these Acts an offence entailing not only disqualification from immediately holding the office to which the municipal elector was elected, but in addition disqualification "from holding any public office in the council or under the council thereof, for five years". The two provisions, far from conflicting, are complementary to each other.
As to the other ground raised by the appellant, that, the contract he entered into with the municipality being a contract of sale and in view of the fact that section 227 of the Municipal Code, which also contains a provision prohibiting holding municipal office by a member of the council who has a contract with the corporation, provides that the word "contract" does not include "the sale * * * of land," it would be consistent with the economy of the municipal law of Quebec to rule that such a contract is not covered by the prohibition and offence provided in section 3 of the Municipal Bribery and Corruption Act. Held that such ground is not well founded.
First, the parties in the case are not governed by the Municipal Code, but by the Cities and Towns' Act which contains no restriction of the kind mentioned in the
Municipal
Code;
secondly, above-mentioned section 3, which applies in this case, makes no distinction, and, therefore, there is no reason why the courts should make such a distinction, at least in the present instance.
Moreover, the contract in this case is not a contract of sale, but a contract sui generis. Section of the Municipal Bribery and Corruption Act provides that
"the term 'member of a municipal council' shall include municipal councillors, aldermen and delegates to the county council," and, therefore, the appellant urged the ground that the Act does not apply to the mayor of a municipality.
Held that the mayor is included in the expression "member of a municipal council" as found in section 3. By its very terms, section 19 is not a definition, but it simply specifies some persons which should be included in the term "member of a municipal council" (Guibord v.
Dallaire, Q.R. 50 K.B. 440 followed);
and, moreover, the words "shall include"
are not ordinarily construed as implying a complete and exhaustive enumeration.
The Queen v. Herman (L.R. 4 Q.B.D.
284); Robinson v. The Local Board of
Barton-Eccles (8
App. Cas. 798) and
Dyke v. Elliott (L.R. 4 P.C. 184) followed.
Held, also, that the legal position of the appellant would not be improved by the alleged fact, assuming it to be right, that the benefits and privileges which he has derived from the contract throughout his tenure of office would be illegal: it is the effect of the contract that must be considered and the appellant must suffer the consequences thereof. Moreover, the courts can not in this case pronounce nullity of the contract or even recognize the existence of that nullity, first, because neither party to the suit have so requested and, above all, for the reason that one of the contracting parties, the corporation of the town of Grand'Mere, has not been made a party to the action. Held further that, in such a case, it is not necessary that a "conviction" should first be pronounced against the delinquent in a criminal proceeding; and the so-called "conviction"
may be prayed for, at the same time as the disqualification, in the conclusions of one and the same penal action instituted unt::r articles seq. C.C.P.
RICARD v. LoRD.......................
2- Public utilities-Supply of water by City of Ottawa to certain adjoining municipalities-Power of Ontario Municipal Board to fix rates under s. 59 (ii) of Ontario Municipal Board Act, R.S.O., 1937, c. 60 (as amended)-Effect of provisions of special Acts relating to said city's water works-Construction of statutes-"Generalia specialibus non derogant"--Appeal-Jurisdiction-"Final judgment" (Supreme Court Act, R.S.C., 1927, c. 35, ss. 2 (b), 86).1-Clause (ii) (enacted in 1940, c. 20, s. 1) of s. 59 of The Ontario Municipal Board Act (R.S.O., 1937, c. 60) empowers the Ontario Municipal Board to "hear and determine the application of any municipality to confirm, vary or fix the rates charged or to be charged in connection with water supplied thereto by any other municipality." Appellant, the City of Ottawa, has for some years supplied water to respondents, adjoining municipalities, which take the water at or near appellant's boundary line and carry it through their own mains to their consumers, appellant dealing only with municipalities. There had been a written agreement between appellant and each of respondents as to rates, but the agreements had expired prior to the enactment in 1940 of said clause (ii), and since said expiry the parties have not agreed upon the rates to be paid by respondents for the water, which appellant has continued to supply. Respondents each applied to the Board, pursuant to said clause (ii), to vary or fix the rates for water supplied. Appellant applied to the Board for an order dismissing respondents' applications, on the ground that the Board has no authority or jurisdiction to hear and determine them, by reason of the provisions of the special Acts relating to appellant City and the powers vested in its council under such Acts. The Board dismissed appellant's application, and the dismissal was affirmed by the Court of Appeal for Ontario ([1940] O.W.N. 524; [1941] 1 D.L.R. 483). Appellant, by special leave from said Court of Appeal, appealed to this Court.
Respondents moved to quash the appeal for want of jurisdiction, on the ground that the judgment appealed from was not a "final judgment" within the meaning of ss. 2 (b) and 36 of the Supreme Court Act (R.S.C., 1927, c. 35). The appeal and the motion to quash were heard together. Held: This Court had jurisdiction to hear the appeal. The judgment of the Court of Appeal was an adjudication determining a substantive right of the parties in controversy in that Court, and was therefore a "final judgment" within the definition in s. 2 (b) of said Supreme Court Act. Held also: The appeal should be dismissed. Per Rinfret, Crocket and Taschereau JJ.: (1) Appellant, under the special Acts regulating its water works system (Ont.: 35 Vic., c. 80; 42 Vic., c. 78; 3-4 Geo. V, c. 109; 6 Geo. V, c. 85), has power to supply water to respondents; and each of respondents, under The Public Utilities Act (R.S.O.,
1937, c. 286), ss. 2 has power to purchase water from appellant and to regulate its supply in its municipal area. (2) The Board has jurisdiction to fix the price of water supplied by appellant to each respondent from the time when an actual agreement in respect of rates ceased to exist; and for as long as the supply of water continues without the price or rate thereof being agreed upon by the parties themselves.
Although, under its said special Acts, appellant has power to fix rates for water supplied to another municipality, yet the authority conferred upon the Board by said clause (ii) is not inconsistent with such powers of appellant; it may be read into the special Acts without repugnancy;
and therefore the principle expressed in maxim, generalia specialibus non derogant (discussed and cases thereon referred to), does not operate in the present case to exclude from the
Board's jurisdiction in the particular matter in question.
(It was remarked that it was not contended that there was any power in the Board to compel appellant to supply or continue supplying water to respondents; that whether there is any governmental authority that can compel a municipality to supply water to another municipality was a question not before the Court).
Per Davis J.:
On the particular facts of the case, said clause (ii) applies, and the Board was right in deciding that it - could proceed to hear respondents' applications.
Board was competent to make such decision, which was plainly something incidental to its administrative functions.
Per Hudson J.: Appellant has power to supply respondents with water, and the
Board has power to fix the rates; but the Board cannot compel appellant to sell or deliver water to respondents and, in so far as the Board is concerned at least, appellant has the right to refuse to deliver water if the rates imposed are not satisfactory to it.
CIY V.
3-Highways-Public utilities-Drainage
-Company supplying gas in city-Removals, replacements and repairs of portions of its mains and pipes made necessary by works done by city on its streets
-Recovery of cost by the gas company from the city-Application of The Public
Service Works on Highways Act (now
R.S.O., 1987, c. 57)-"Constructing, reconstructing, changing, altering or improving any highway"-Nature of works done by city-Construction of (inter alia) sewers -Claim by gas company against city for cost of alterations made necessary by construction of subways ordered by Board of Railway Commissioners for Canada.] -Plaintiff was a company distributing artificial gas through its mains and pipes in the streets of defendant, the City of Toronto. From time to time, to enable defendant to do, or by reason of its doing, certain workssewers, pavements, sidewalks, street gradings, street diversions, street widenings, drainage systems, retaining walls, etc.plaintiff made removals, replacements and repairs of portions of its mains and pipes; and for the cost thereof it claimed payment from defendant.
Sec. 2 of The Public Service Works on Highways Act (now R.S.O., 1937, c. 57) provides: "Subject to the provisions of section 3, where in the course of constructing, reconstructing, changing, altering or improving any highway it becomes necessary to take up, remove or change the location of appliances or works [which, by the Act, include pipes and pipe lines] placed on or under the highway by an operating corporation [which, by the Act, includes a company distributing gas], the road authority [which, by the Act, includes a municipal corporation] and the operating corporation may agree upon the apportionment of the cost of labour employed in such work and in default of agreement the cost of such work shall be apportioned equally between the road authority and the operating corporation, but such costs shall not include the replacement or renewal of the appliances or works nor the cost of any materials or supplies, nor any other expense or loss occasioned to the operating corporation." (Plaintiff contended, inter alia, that said provisions did not affect its rights, in view of provisions of its incorporating Act Vict., (Canada), c. 14) and of Acts relating to it). Plaintiff also claimed payment from defendant of plaintiffs cost of making alterations in its mains and pipes ordered by the Board of Railway Commissioners for Canada and made necessary by reason ordered by said Board, of subways at certain places on streets of the city where railway tracks crossed them. Held (affirming judgment of the Court of Appeal for Ontario, [19411 O.R. 175): (1) The term "highway" in said Act includes the public streets of a city. (2) Said Act governed plaintiff's right to compensation when defendant's operations, in exercise of its powers, were of the character described in said s. 2; and in such cases plaintiff was entitled to recover no more than 509' of the labour cost only of its removals, replacements and repairs.
(3) The construction of certain sewers in question, whether for sanitary purposes or for sur- MUNICIPAL CORPORATIONS-Conc.
and for relocations of gas mains reason of such construction the plaintiff was entitled to payment in full. (Kerwin
J. dissented as to the storm water sewers, holding that, generally speaking, storm water sewers are constructed by municipalities in the course of improving a highway and that, on the evidence, highways were improved by the storm water sewers in question; a drain may improve a highway under which a gas company has its mains and also other highways from which surface water is drained, but, so long as the first condition exists, said s. 2 applies).
NATURAL PRODUCTS MARKETING
(BRITISH COLUMBIA)
NEGLIGENCE-Fire-Loss of plaintiffs' goods, while awaiting shipment, on defendant's pier when pier destroyed by fire-Cause of fire unknown-Duty and liability of defendant-Question as to negligence, in origin of fire, and in failing to stop its spread.]-Plaintiffs sued defendant companies, one hereinafter called the "Steamship
Co." and the other the
"Marine Co.", for damages for loss of plaintiffs' goods by a fire which destroyed the Steamship Co.'s pier at Vancouver on which the goods were.
Plaintiffs had arranged with the Marine Co. (which was agent for a number of individual ships, each owned by a separate company) for carriage of the goods to Montreal by a certain steamer, then inbound, and were directed by the Marine Co. to send the goods to said pier, where said steamer would on its arrival load
Vancouver cargo. A wharfage charge in respect to said goods was payable to the Steamship
Co. The pier was in process of being enlarged, but at the time of the fire, which was on a Sunday afternoon, no construction work was going on; nor were there at the pier any ships or movement of freight or transaction of any passenger or other business; and on the day before, a weekly clean-up of the pier had been made; there were two
NEGLICENCE-Continucd watchmen on duty, stationed at the shore end of the pier, to prevent visiting by the public.
The fire started at the other end of the pier from an unknown cause. The trial judge, Manson J., dismissed the action, holding that plaintiffs' ldss did not arise out of any act or omission of either of the defendants (53 B.C.R. 207). His decision was affirmed by the Court of Appeal for British Columbia ([19401 2 W.W.R. 97; [1940] 4 D.L.R. Plaintiffs appealed to this Court. Held: Plaintiffs' appeal should be dismissed. The trial judge's findings against negligence by defendants, as to origin of the fire, or its spreading so as to destroy plaintiffs' goods, were, on the evidence, agreed with or accepted in the reasons for judgment in this Court. (The question of onus of proof with respect to negligence was discussed to some extent, but, on the evidence and findings, decision thereon was unnecessary.) Crocket and Davis JJ.: Outbreak of fire in a structure where fire is not employed in its operation or use is a remote, not a probable, risk, and the trial judge found upon the evidence that the risk of fire was in fact remote. In view of the varying risks of fire in different classes of buildings, no rule can be laid down. "The degree of want of care which constitutes negligence must vary with the circumstances.
What that degree is, is a question for the jury or the Court in lieu of a jury. * * * " (Caswell v. Powell, [1940] A.C. 152, at 176). Whether there was negligence by the Steamship Co. in failing to stop the fire before it spread to plaintiffs' goods was a question of fact, and on the evidence the destruction of the goods was not caused by its negligence; and the same must apply to the carrier, the Marine Co., which at the time of the destruction had not taken delivery of the goods from the pier. Per Kerwin J.: The Marine Co. could not be liable on any basis; even if it be treated as the owner of said steamer, the highest at its arrangement with plaintiffs might be put was that the goods should be carried on the steamer to Montreal; and the goods were destroyed without ever having come into the Marine Co.'s possession in any capacity. The Steamship Co. was not the carrier but received and held the goods merely as warehouseman.
(Discussion of onus of proof as to negligence in the fire's origin). On the evidence, the Steamship Co. fulfilled its full duty to exercise the same degree of care towards the preservation of plaintiffs' goods as "might reasonably be expected from a skilled storekeeper, acquainted with the risks to be apprehended either from the character of the storehouse itself or of its locality" (Brabant v. King, [18951 A.C. 632, at 640). As to precautions against spread of fire-The NEGLIGENCE-Continued pier was in process of construction; it was impossible to do everything at once;
and though certain standards may be set before prospective builders by insurance men as something desirable to be attained, a warehouseman cannot be held liable merely because he did not choose to spend as much money as the adoption of those standards would involve.
LTD.
2- Injury to customer in store by the exhibiting and discharging therein by another person of an air-pistol-Liability of person using the pistol, of person in charge of store, and of owner of store business - Non-interference by Supreme
Court of Canada with reduction by Court of Appeal of amount of general damages awarded by trial judge.]-The action was for damages for injury to the infant plaintiff, a boy 12 years old, caused by his being hit by a bullet discharged from an air-pistol in the hands of the defendant C. H., a boy 16 years old, in the store occupied by the defendant W. H.
for his business. W. H. was not in the store at the time, it being in charge of his brother and employee, the defendant
F. H. The said C. H. (a nephew of the other defendants but not employed in the store) had been exhibiting the pistol to a customer in the store, charging it with air and discharging it, and, after the infant plaintiff had entered to make a purchase, C. H. exhibited the pistol to him, pointing it towards him and discharging it, when the accident occurred.
The trial judge, Urquhart J. ([19401 O.R.
461), held all defendants liable, and awarded 810,000 general damages to the infant plaintiff.
His judgment was affirmed by the Court of Appeal for
Ontario (ibid), except that said damages were reduced to $5,000. Defendants appealed; and plaintiffs cross-appealed, asking for restoration of the amount of damages awarded at trial.
Held: The appeal and cross-appeal should be dismissed.
The trial judge's finding that
C. H. was negligent should not be disturbed, there being ample evidence to warrant it.
F. H. (who, on the trial judge's finding, knew that the pistol was a very dangerous weapon), as the person in charge of the store, who negligently allowed C. H. to remain on the premises in possession of the dangerous article and to use it, must also be held liable. W. H.
was the occupier of the store, as he was the proprietor of the business being carried on therein.
A customer is entitled to the exercise of reasonable care by the occupier to prevent damage from unusual danger of which the occupier knows or ought to know (Indermaur v.Dames,
L.R. 1 C.P. 274).
W. H. failed in his duty to the infant plaintiff (who had
NEGLIGENCE-Continued entered the store as a customer) to exercise that care when his employee, F. H., was guilty of negligence; and must also be held liable.
Where general damages fixed by a trial judge sitting without a jury have been reduced by the Court of Appeal under circumstances such as those in the present case, this Court, as a general rule, will not interfere.
(Ross v. Dunstall, 62 Can. S.C.R. 393; Pratt v. Beamen, [1930] S.C.R. 284). No error in principle was made by the Court of Appeal.
(McHugh v. Union Bank of Canada, [1913] A.C. 299, discussed and distinguished; Warren v. Gray Goose Stage Ltd., [19381 S.C.R. 52, at 57, referred to).
3-Motor vehicles-Plaintiff struck by motor car-Action for damages-Directions to jury-Jury's findings-Question as to negligence of plaintiff-Onus of proof on defendants as to negligence- Form of question to jury-Amount of damages awarded-New trial.]-The action was for damages for injury to plaintiff caused by his being struck by a motor car while he was making a purchase at a bakery sleigh on a business street in the city of Ottawa. The jury, to the question: "Have the defendants satisfied you that the damages sustained by the plaintiff were not caused or contributed to by the negligence of [the driver of the car]?" answered "No"; and to the question: "Was the plaintiff guilty of any negligence which caused or contributed to the accident?" answered "No"; and assessed plaintiff's damages at $25,000, for which amount judgment was given. An appeal to the Court of Appeal for Ontario was dismissed, and defendants appealed to this Court. This Court ordered a new trial. The Chief Justice (dissenting in part) would dismiss the appeal except as to damages, as regards which he would direct a new trial. Per Rinfret and Crocket JJ.: Defendants' defence was not fairly put to the jury by the trial judge, particularly, in view of the circumstances and plaintiff's actions, with regard to the question as to plaintiff's negligence and with regard to the doctrine of contributory negligence. On these matters and also as to the degree of onus of proof on defendants under The Highway Traffic Act (R.S.O., 1937, c. 288, s. 48), there were statements or inadequate explanations amounting to misdirection in the trial judge's charge. The form of the first above quoted question to the jury, as the questions were put in this case, was calculated to mislead a jury. The fact that the Legislature has placed the onus of negativing negligence upon the defendant does not require the use of such a form of question. The amount of damages awarded was unreasonable, and unjustifiable in any 7(11 NEGLIGENCE-Concluded conceivable view of the evidence.
Davis and Hudson JJ.: Some features of the trial were so highly unsatisfactory that there should be a new trial.
Taschereau J.: The verdict of the jury on the questions of contributory negligence and assessment of damages was not supported by the evidence, and no jury properly instructed and acting judicially could reasonably have reached it.
BRoWN ......
4- Master and servant-Servant's negligence causing injury to third person- Liability of master-Question whether servant at time of such negligence was acting in the course of his employment- Judgments-Judgment at trial for plaintiff against servant but not against master
-Question whether entry of judgment and certain proceedings precluded plaintiff from recovering against master on appeal-Pleadings-Jury awarding damages exceeding amount claimed-Amendment of pleadings after verdict.... 278
5-Goods damaged by derailment and railway-Suit for damages for defendant's failure to deliver-Allowance by trial judge of amendment to plead negligence against defendant - Judgment grounded on negligence-Onus of proof as to negligence- Defendant claiming benefit of conditions in standard bill of lading: as to notice and benefit of insurance-Whether such conditions, if available, afforded defence .............
G-See 1.
NOVATION-Collateral security given to a bank for debt-Sale of assets and business of company as going concern- Consideration being payment by purchaser of all debts and liabilities of vendor- Purchaser also to create and issue bonds to be delivered to vendor and then to be delivered by the latter to the creditors of the company-Agreement between the parties-Whether intentions of parties were to operate novation-Whether full and complete discharge or only qualified discharge-Rights of the bank upon collateral securities- Articles 1171, 1178, 1174 C.C.1-One J. R.
Walker, in order to accommodate Walker
Press Limited, provided, as collateral security for certain indebtedness of the latter to the respondent bank, a certificate in his name for 150 shares of the
South Shore
Lumber
Company
S10,C00 of bonds of the Back River
Power Company. On October 31st, 1932, an agreement was entered into between
Walker Press Limited, as vendors, E. S.
Alger as purchaser, and Walker Paper
NOVATION-Continued
Company, Kruger Paper Company, The Royal Bank of Canada and Barclays Bank (Canada), as intervenants, by the terms of which Walker Press Limited sold its assets and business as a going concern to E. S. Alger, in consideration of the payment and satisfaction of all the obligations of the vendor in respect of the lease of the premises occupied by it and in respect of the debts and liabilities of the vendor mentioned in a certain list attached thereto.
Alger further undertook to cause a new company to be incorporated and Jo transfer to that company all the assets conveyed to him, subject to the above mentioned liabilities, and to invest $2,000 in cash in the new company; he was also to cause the new company to create and issue bonds of the par value of $19,000, secured on all the assets acquired from Walker Press Limited as well as upon all future assets of the new company, these bonds to be delivered to Walker Press Limited within 30 days from the date of the agreement.
Walker Press Limited undertook to surrender its charter within a reasonable time after the receipt of the bonds and deliver them to the intervenants pro rata and in proportion to their respective claims, Alger acknowledging that he was already in possession of all the assets of Walker Press Limited. Then the agreement contained the following clause: The intervenants
(above mentioned) agreed with the Walker Press Limited, vendors and Alger, purchaser, "that when the said bonds of the new company, hereinabove mentioned, shall have been issued and delivered to the Walker Press Company or its representative or representatives that they individually will accept a pro rata amount of the said bonds proportionate to their respective claims against the Walker Press in full settlement and satisfaction of any and all claims they may have against the Walker Press and the purchaser directly or indirectly, save that inasmuch as the Royal Bank of Canada and Barclays Bank
(Canada) and the Kruger Paper Co. Limited hold certain securities as collateral security against the amounts due them by the Walker Press, it is understood that the said banks and the Kruger Paper Co. Ltd., shall be entitled to continue to hold and/or realize upon such security until and unless their said claims are paid in full through the payment of the said bonds or otherwise, it being understood that the present agreement shall not in any way interfere with the rights of the said banks and Kruger Paper Co. Ltd. in respect of said collateral security." Pursuant to the agreement, Alger causd the new company to be incorporated, and the bonds were created and delivered to Walker Press Ltd.; but, before they were issued, S. R. Alger, a NOVATION-Continued brother of the purchaser, submitted to the respondent bank an option to purchase the bond to which they were entitled as a result of the agreement, for the sum of 82,811.24. The option was accepted and carried out. The bank received the sum of $2,81124 and surrendered to S. R. Alger its rights to the bond of $14,056.20, which it would otherwise have received.
Subsequently, by their action, the executors of James R.
Walker claimed that the debt for which the collateral security had been given was extinguished and that they were entitled to recover from the respondent bank the 150 shares of the South Shore
Lumber & Builders Supplies Ltd. and the $10,000 bonds of the Back River
Power Company. At the same time, Barclays (Canada) Limited, an assignee of the bank, brought an action to compel the completion of the transfer of the
South Shore Company's share certificate in its name. The Superior Court, applying articles 1171, 1173 and 1174 C.C., held "that the agreement of 1932 (did)
not create novation; that the Walker
Press was discharged only with the reserve that the Bank would hold or realize upon the collateral security until the claim of the Bank was paid in full * * * it being understood that the agreement would in no way interfere with the rights of the bank in respect of the said collateral security a stipulation which amounts to say that the bank renounces to any personal recourse against the
Walker Press Limited, but the debt is not extinguished, since the bank has the right to sell the collateral in payment of the debt." The judgment of the Superior
Court was affirmed by the appellate court, which decided that the respondent bank was entitled to hold the collateral securities: the action of the appellants was therefore dismissed and, consequently, the action of Barclays (Canada), respondent in the second appeal, to have the transfer completed in its favour, was maintained. Held that the judgment appealed from should be affirmed. The intention of the parties to the agreement above mentioned was not to effect novation: as stated in article 1171 C.C., novation is never presumed and the intention to effect it must be evident. By force of article 1173 C.C., even if the agreement should be interpreted as one by which
Walker Press Limited gave to the respondent bank a new debtor who obligated himself towards the bank, such delegation did not effect novation "unless it is evident that the creditor intends to discharge the debtor who makes the delegation." The alleged full and complete discharge to the Walker Press Limited was, in reality, only a qualified discharge.
Undoubtedly the intervenants were giving up any right to claim against Walker
NOVATION-Concluded
Press Limited personally and any right to be paid out of the general assets of Walker Press Limited, except in so far as the bonds which they were getting from Alger Printing Company (the new company) were to be secured upon those assets through the trust deed executed in connection with the issue of the bonds. But their rights upon the collateral securities remained untrammelled and, to the extent that the existence of the debt of Walker Press Limited was necessary for the purpose of preserving to the collateral security the character of a legal pledge, that debt was to remain in existence. It could no longer be claimed as a personal debt against the Walker Press Limited, it could not have been realized against the latter's general assets, but it subsisted as a debt which could be realized against the collateral securities. It became a claim propter rem. LTD.........
.............
ONTARIO MUNICIPAL BOARD PARTIES-Trade unions and other similar associations
Not incorporated and not possessing otherwise collective civil personality - Capacity to be sued as such-Whether capacity to bring suit also as plaintiffs--"An Act to facilitate the exercise of certain rights" Quebec statute, 1938, 2 Geo. VI, c. 96.]-The Quebec statute of 1938 (2 Geo. VI, c. 96), enacted to facilitate the exercise of certain rights, allows the summoning, before the courts of the province, of any group of persons associated for the carrying out in common of purposes or advantages of an industrial, commercial or professional nature in that province, such group not possessing a collective civil personality recognized by law and not being partnerships within the meaning of the Civil Code; but that statute does not confer on these groups
(in this case trade unions) the right to bring suit, i.e., the right to ester en justice as plaintiffs. Society Brand Clothes Limitd v. Amalgamated Clothing Workers of America ([1931]
S.C.R. 321)
disc.
Judgment of the appellate court (Q.R. K.B. 2- PATENTS-Action for infringement Plea alleging invalidity of patent-Jurisdiction of provincial courts-Whether concurrent with the Exchequer Court of Canada-Patent Act, (D) 1935, c. 3, ss. 54, 59, 60, 63-Patent Act, (D) 13-14 Geo. V, c. 28, ss. 33, 87.1-In an action brought PATENTS-Continued by a plaintiff in a provincial court for a declaration that his patent had been infringed by the defendant, the latter denied such infringement and further pleaded that the patent was invalid. The plaintiff having raised on appeal the point that the provincial courts had no jurisdiction to entertain such a defence on the ground that the Exchequer Court of
Canada alone has the authority and the power to declare a patent or any claim therein invalid or void, Held, affirming the judgment of the Court of Appeal for
British
Columbia, that the provincial courts have jurisdiction, concurrently with the Exchequer Court of Canada, to entertain a defence of invalidity of a patent.
In doing so, the provincial courts will not assume to give any judgment setting aside the patent, but will merely deny the plaintiff the relief sought on the ground that the plaintiff's patent was invalid. Durable Electric Appliance Co.
Ltd. v. Renfrew Electric Products Ltd.
(59 O.L.R. 527; 119281
S.C.R. 8) ref.
v. DALY.................
2-Validity-Subject-matter- Infringement.1-An appeal by the plaintiffs from the judgment of Maclean J., [19401 Ex.
C.R. 36, in so far as that judgment dismissed their action in respect of alleged infringement by defendant of Canadian patent 333,478 (granted on petition of one Miller for an alleged new and useful improvement in Sound Reproducing Systems), and an appeal by the defendant from said judgment in so far as it granted relief to the plaintiffs in respect of alleged infringement by defendant
Canadian patent
218.931
(granted petition of one Wilson for an alleged new and useful improvement in Electron
Discharge Devices), were both dismissed.
3-Pleadings - Conflicting applications for patent - Proceedings in Exchequer
Court under S. 44 (8) of The Patent
Act, 1985 (Dom., c. 32)-Plaintiff pleading alternatively that alleged invention relied on by defendant was made in course of inventors employment by plaintiff and that, by virtue of employment contract and circumstances under which invention was made, plaintiff was entitled to benefit of it, and was owner of it- Right to raise such issue in the proceedings-Patent Act, 1935, s. 44 (8)
(iv);
Exchequer Court Act (as amended in
Supreme Court of Canada-Jurisdiction to hear appeal-Exchequer Court Act, s. 82.1-There were two conflicting apnlications for patent pending in the patent
PATENTS-Continued office, one made by appellant's assignors and the other by the administratrix of the estate of K., under whom, by mesne assignments, respondent claimed. Commissioner of Patents decided that, upon the material before him, K. was the prior inventor.
Appellant then, as provided for in s. 44 (8) of The Patent Act, (Dom., commenced proceedings in the Exchequer Court for the determination of the respective rights of the parties.
Appellant in its statement of claim alleged that its assignors were in fact the first inventors and that appellant was entitled as against respondent to the issue of patent, and asked that it be so adjudged; and alternatively, by par. 8, in the event that the Court should find that K. was the first inventor, it alleged that K. had been employed in appellant's experimental department and if K. made any invention he made it in the course of such employment and when he was carying out work which he was instructed to do on appellant's behalf; that by virtue of the contract of employment and the circumstances under which the invention was made, K. became and was a trustee of the invention for appellant which was entitled to the benefit of it; that K. was by reason of his being such a trustee unable to transfer any right, title or interest in the invention to any other party and appellant was now the owner of it; and asked that it be so adjudged and that respondent be ordered to execute an assignment to appellant of the entire right, title and interest in and to the invention and the application relating to it. On motion by respondent in the Exchequer Court, said par. 8 and the prayers based thereon were struck out, it being held that appellant was not entitled to raise the issue pleaded by par. 8 in proceedings originating under s. 44 of said Act. Appellant appealed to this Court. Respondent objected that this Court had no jurisdiction to hear the appeal.
Argument was heard both on that point and on the merits of the appeal. Held: This Court had jurisdiction to hear the appeal. That point stands to be decided, not under the provisions of the Supreme Court Act, but under the provisions of the Exchequer Court Act and of the Patent Act (British American Brewing Co. Ltd. v. The King, [19351 S.C.R. 568, at 570).
The requirements of s. 82 of the Exchequer Court Act (R.S.C., 1927. c. 34) existed. judgment appealed from was a "judgment upon a demurrer or point of law raised by the pleadings" and, that being so, the conditions of jurisdiction are complied with if the right immediately involved in the action or cause in which the demurrer or point of law was raised exceeds in value S500-it is not required that there PATENTS-Continued should be at stake a pecuniary sum exceeding 8500.
(Massie & Renwick Ltd.
v. Underwriters' Survey Bureau Ltd.,
[1937] S.C.R. 265, at 266; Sun Life Assce.
Co. of Canada v. Superintendent of Insurance, [19301 S.C.R. 612; Burt Business
Forms Ltd. v. Johnson, [19331 S.C.R. 128, cited). Held, also: The appeal should be allowed and the parts of appellant's statement of claim in question restored.
Although the occasion for appellant's action was the Commissioner's decision that the applications were in conflict and that he would allow the claims to respondent, yet under the express enactment in s.
(iv) of the Patent Act, 1935, the
Exchequer Court could decide "that one of the applicants was entitled as against the other to the issue of a patent including the claims in conflict as applied for by him"; and, for the determination of that point, there is nothing in the
Act or in the law which could prevent appellant from urging any fact or contention necessary or useful for the purpose of enabling the Court to decide between the parties. The allegations in said par. 8, if true. and the conclusions based thereon, if legally correct, would be a reason for a declaration in appellant's favour in the terms of s. 44 (8) (iv), and the point so raised would Properly lead to the remedies Prayed for by annellant;
and these remedies would be within the jurisdiction of the Exchequer Court as being covered by said s. 44 (8) (iv).
It is true that the Exchequer Court has no jurisdiction to determine an issue purely and simply concernine a contract between subject and subject (The King and Hume and Consolidated Distilleries Ltd. and
Consolidated Exporters Corpn. Ltd., [19301
S.C.R. 531); but here the subject-matter of appellant's allegation only incidentally refers to the contract of employment; the allegation primarily concerns the invention, of which appellant claims to be the owner as a result of the contract and other alleged facts. A further reason why the Exchequer Court should exercise jurisdiction upon the point is the enactment in s. 22 (c) (as enacted in 1928, c. 23, s. 3) of the Exchequer Court Act, which gives that court jurisdiction between subject and subject in all cases where a
"remedy is sought under the authority of any Act of the Parliament of Canada or at Common Law or in Equity, respecting any patent of invention
*
* remedy sought by appellant, as a result of said par. 8, is a remedy in equity respecting a patent of invention.
Court pointed out that its judgment was limited to the interpretation of the statutory enactments, no quesion having been raised as to their constitutionality).
v. KELLOGG..........
PATENTS-Concluded
4- Crown-Alleged use by Crown of patented invention-Right of patenteee to compensation-Patent Act, 1985 (Dom., c. 32), s. 19-Right of patentee to a reference by the Crown to Commissioner of Patents to fix compensation-Procedure by Petition of Right to enforce rights- Exchequer Court Act (R.S.C., 1927, c. 84), ss. 18, 37; Petition of Right Act (R.S.C., 1927, c. 158), ss. 2 (c), 10-Nature of relief granted-Form of judgment.]-If a patentee has a valid patent and his invention has been used by the Crown within the meaning of s. of the Patent Act, 1935 (Dom., c. 32), then he has a legal right under s. 19 to be paid by the Crown reasonable compensation, as ascertained and reported by the Commissioner of Patents, subject to the appeal provided for; also, by necessary implication under s. 19, the patentee has the right to'have the question of the compensation referred by the Crown to the Commissioner. A petition of right lies in the Exchequer Court to enforce these rights (Exchequer Court Act, R.S.C., 1927, c. 34, ss. 37, and Petition of Right Act, R.S.C., 1927, c. 158, ss. 2 (c), 10, considered). A claim for a declaration of the patentee's rights as above (supported by sufficient allegations of facts), is a claim for "relief" within the meaning of s. 2 (c) of the Petition of Right Act (defining "relief") and of s. 18 of the Exchequer Court Act. The relief granted (on establishment of the necessary facts) would be a declaration of said rights (Attorney-General of Victoria v. Ettershank, L.R. 6 P.C. 354; Dominion Bldg. Corp. v. The King [1933] A.C. 533, at 548; Attorney-General v. De Keyser's Royal Hotel, [19201 A.C. 508, cited). Judgment granting such relief is not a mere declaratory judgment in any pertinent sense; it is a judgment establishing the right to appropriate relief in the only form in which that can be done in a judgment against the Crown. Rights of the Crown, if any, under s. 46 of the Patent Act, 1985, should be taken into account in passing on the patentee's claim to relief. Judgment of Maclean J., [19411 Ex. C.R. 1, affirmed (with a variation of the order in the Exchequer Court, so as to make clearer the suppliant's rights). THE v. BRADLEY.............. PAYMENT-Demand (in good faith) of further payment than what is owing- Circumstances of practical compulsion- Payment under protest-Right of payer to recover back .................. PENAL ACTIONS
PETITION OF RIGHT
PLEADINGS-Patents--Conflicting applications for patent-Proceedings in Exchequer Court under s. 44 (8) of The
Patent Act, 1935 (Dom., c. 82)-Plaintiff pleading alternatively that alleged invention relied on by defendant was made in course of inventor's employment by plaintiff and that, by virtue of employment contract and circumstances under which invention was made, plaintiff was entitled to benefit of it, and was owner of it-Right to raise such issue in the proceedings-Patent Act, 1985, s. 44 (8)
(iv); Exchequer Court Act (as amended in 1928, c. 28, s. 8), 8. 22 (c)-Plea struck
Supreme Court of Canada-Jurisdiction to hear appeal-Exchequer Court Act, s. 82.
.....................
2-Jury awarding damages exceeding amount claimed-Amendment of pleadings after verdict...............
3-Goods damaged by derailment and against defendant grounded on negligence-Onus of proof as to neglidefence .......................
PRACTICE AND PROCEDURE
See 4; 5;
3;
PROMISSORY NOTE - Constitutional law-Debt Adjustment Act, Alberta, 1937, c. 9, s. 8-Provincial statutory prohibition against commencement of action against resident debtor for recovery of money recoverable as liquidated demand or debt, without permit from provincial Board- Enactment invalid in so far as affecting right of action on promissory note-Bills of Exchange Act, R.S.C., 1927, c. 16, es. 74, 184, 185, 136-B.N.A. Act, 1867,
91 (18), 92 (18) (14)-Conflict between
Dominion and Provincial legislation - Dominion legislation paramount..... 87
PROSPECTUS
PUBLIC SERVCE WORKS ON HIGH- WAYS ACT (ONTARIO)
PUBLIC UTILITIES - Municipal corporations-Supply of water by City of Ottawa to certain adjoining municipalities-Power of Ontario Municipal Board to fix rates under a. 59 (ii) of Ontario Municipal Board Act, R.S.O., 1987, c. 60 (as amended)
of provisions of special Acts relating to said city's water works-Construction of statutes-"Generalia specialibus non derogant"-Appeal- Jurisdiction-"Final judgment" (Supreme Court, Act, R.S.C., 1927, c. 85, as. 2(b), 86)................................ 2-Municipal corporations-Highway- Drainage-Company supplying gas in city -Removals, replacements and repairs of portions of its mains and pipes made necessary by works done by city on its streets-Recovery of cost by the gas company from the city-Application of The Public Service Works on Highways Act (now R.S.O., 1987, c. 57)-"Constructing, reconstructing, changing, altering or improving any highway"-Nature of works done by city-Construction of (inter alia) sewers-Claim by gas company against city for cost of alterations made necessary by construction of subways ordered by Board of Railway Commissioners for Canada ........................... RAILWAYS
Level crossing accident Evidence-Whether crossing sign properly maintained as required by Railway Whether kept "painted white" Effect of subsequent finding by Board of Transport Commissioners under section 809 that the crossing was sufficiently protected. Railway Act, R.S.C., 1927, o.
sections 267 and 309.1-In action tried without a jury, resulting from a level-crossing accident, the main issue was as to whether there was sufficient evidence to connect such accident with an alleged default of the appellant railway company in respect of its obligation to properly maintain a crossing sign required by the Railway Act and the regulations thereunder. At the trial, the appellant company produced as evidence a finding by the (then) Board of Railway Commissioners, made under section 309 after the accident, affirming a report of its inspector made when the crossing was in the same condition as it was at the time of the accident,-that the crossing that condition was sufficiently protected. The trial judge, although rejecting such evidence, nevertheless dismissed the respondent's action. On appeal, the judgment was reversed and the action maintained; but the appellate court also held that the finding of the Board of Railway Commissioners was not binding upon the parties to the action or upon the courts, and that it was not admissible evidence 7(C(6
RAILWAYS-Continued upon the issue whether the regulation requiring the placing of the sign at the crossing had been observed. Held, reversing the judgment appealed from, ([19401
1 W.W.R. 643) that the evidence did not justify the finding of the appellate court that the default in the condition of the crossing sign materially contributed to the accident, and, such being the case, the respondent's action ought to be dismissed. Held, also, affirming the judgment appealed from as to that ground, that the finding of the Board of Railway
Commissioners was not admissible evidence.
Such finding was not evidence which did go to the crucial issue on the appeal, i.e., whether the default of the appellant company materially contributed to the accident.
RY. V.
2-Ooods damaged by derailment and defence.]-Plaintiff sued defendant railway company for damages for defendant's failure to deliver goods which, plaintiff alleged, defendant had undertaken to transport. The goods had been purchased by plaintiff from manufacturers in England and shipped from there, and at Saint John, N.B., the shipping line, pursuant to instruction in the bill of lading, delivered them to defendant for carriage to Schumacher, Ontario.
goods were damaged by derailment and railway. The trial judge found that there was no contract between plaintiff and defendant but, when delivering judgment, gave leave to plaintiff to amend its statement of claim by adding an allegation that the goods were damaged by the negligence of defendant, and gave judgment for plaintiff.
Said allowance of amendment and judgment was affirmed by the Court of Appeal for Ontario
([19401
O.W.N. 452;
[19401
4 D.L.R.
629) subject to giving to defendant an opportunity (not exercised) of denying negligence (it was held that the onus was on defendant to disprove negligence) ind having a new trial on the questions raised by the amendment. Defendant appealed to this Court. Defendant claimed that its carriage of the goods was subject to conditions in a standard form of bill of lading approved by the Board of Railway Commissioners for Canada, one of which conditions provided that, unless a certain notice of loss was given, the carrier should not be liable, and another
RAILWAYS-Concluded gave to the carrier (on reimbursing to the insured the premiums paid) the full benefit of any insurance that might have been effected upon the goods, "so far as this shall not avoid the policies or contracts of insurance."
There was insurance, and after the loss the insurers advanced a sum to plaintiff under terms set up in a loan receipt, by which the sum was received "as a loan, not a payment of any claim," and plaintiff agreed "to repay this loan to the extent of any net recovery made from" any carrier responsible for the loss, and authorized the insurers to sue the carrier in plaintiffs name.
The policy was subject to the provisions of the (Imperial) Marine Insurance Act, 1906 (c. 41, s. 79), providing specifically for subrogation. Held: Defendant's appeal should be dismissed. The affirmance (in terms as aforesaid) by the Court of Appeal of allowance of said amendment and of judgment for plaintiff on the ground of negligence was right. Even if the conditions in said standard form of bill of lading were available to defendant (as to which, quaere), the conditions relied on did not afford a defence.
As to the condition as to notice (non-observance of which was not pleaded but was claimed at trial): Per the Chief Justice: Defendant was bound to plead non-observance, and no amendment should in the circumstances be allowed.
Per Rinfret, Kerwin, Hudson and Taschereau JJ.: In view of the evidence as to actual notice of the damage and of intention to make claim, and subsequent conduct of the parties, a defence based on this condition was not maintainable. As to the condition as to insurance: Per curiam: Any contract made by plaintiff would impair insurers' right subrogation would relieve the latter from liability. Under the terms of the loan receipt the insurers would be entitled to return of the money advanced if it were found that they had been deprived of the fruit of subrogation because of some action by the insured. There was no suggestion, and it was entirely improbable that the insurers knew anything about the condition now set up. Under the circumstances, the condition was not operative.
3-Claim by gas company against city for cost of alterations made necessary by construction of subways ordered by Board of Railway Commissioners for Canada. ..... SALE OF LAND
Farmers' Creditors Arrangement Act, 1984 (Dom., c. 53)- Action by vendor against purchaser under agreement of sale-Order nisi--Effect of SALE OF LAND-Concluded terms thereof - Subsequent formulation and confirmation of proposal by Board of Review under said Act-Validity or invalidity of proposal-Existence or nonexistence of a "debt." ..............
SCHOOLS-School board providing transportation of county pupils to and from continuation school-Liability of county in respect of cost of such transportation
- "Cost of education" - Continuation
Schools Act, Public Schools Act, High
Schools Act, R.S.O., 1937, c. 359, c. 357, c. 360.1-The respondent Board of Public
School
Trustees had established maintained a
Grade B
Continuation
School in its Union School Sections, which were in the County of Northumberland,
Ontario. Respondent had provided in the year 1937 transportation by motor buses to and from said continuation school for pupils residing outside said school sections though in the County of Northumberland (called "county pupils"), and sought to hold liable the appellant, the
Corporation of the United Counties of
Northumberland and Durham, in respect of the cost of such transportation, as being part of the cost of educating such county pupils. Held (Davis J. dissenting): Respondent Board was entitled to recover from appellant corporation payment in respect of said costs of transportation. (Judgment of the Court of Appeal for Ontario, [1940]
2 D.L.R. 28, affirmed). The Continuation Schools Act,
R.S.O., 1937, c. 359, particularly ss. 3 (2),
5, 8 (1),
15; The Public Schools Act,
R.S.O., 1937, e. 357, narticularly ss. 94,
95. 86, 87, 89 (p); The High Schools
Act, R.S.O., 1937, c. 360 (particularly, per
(per the Chief Justice and Kerwin and
Taschereau JJ.) as to the right of the parties to have determined by action the above question of liability, in view of s. 36 (4) of The High Schools Act (as to determination the Judge
County Court), and as to the discretion under s. (b) of the Ontario Judicature
Act to make a mere declaratory judgment in this action; but in view of certain proceedings before action and the course of proceedings in the action, the appeal to this Court was (but without in any way creating a precedent) dealt with on the merits. (In the view of the merits taken by Davis J., dissenting. it became unnecessary to consider whether said s. 36 (4) of The High Schools Act precluded the Supreme Court of Ontario from entertaining an action for the declaration made by that Court.)
" SCHOOLS-Concluded
TOwNSHIPs ........... SHIPPING- Collision in St. Lawrence River during fog-Whether proper fog signals given-Whether either one or both ships at fault-Moderate speed in fog- Article 16 of International Rules of the Road-Apportionment of blame on each vessel by trial judge-Alteration of it by appellate courts.]-The appellant, Port Colborne & St. Lawrence
Navigation Company, Limited, were owners of the SS. Benmaple, which sank as a result of a collision between her and the ship Lafayette, owned by the respondent, La Compagnie G6n6rale Transatlantique. The collision occurred at about five o'clock in the morning of August 31st, 1936, in the St. Lawrence river, about 25 miles above Father Point, where the Lafayette had taken a pilot. There was a dense fog and neither ship saw the other until almost the moment of the collision, apparently too late to avoid it. Lafayette, about ten minutes before the collision, heard an ordinary fog whistle ahead, slightly on her port bow. Up to that time, she had been running through the fog for some 35 minutes at a "standby full speed" which, for her, was about 16 knots "over the ground." The tide was ebb about 2 to 3 knots against her. When the Lafayette heard the fog signal, the only one she alleged she did hear, she stopped her engines for three minutes, but the ship still continued running along at about 5 or 6 knots over the ground. Then she went ahead at slow speed for two minutes and then increased to half speed for about five minutes when the collision occurred. The trial judge found that the logs on the Lafayette plainly appeared to have been erased and falsified at critical points. Subsequent to the action in damages by the owners of the Benmaple against the ship Lafayette, the master and other officers and members of the crew of the Benmaple and four passengers on board the steamer were added as plaintiffs for loss of clothing and personal effects.
La Compagnie G~n6rale Transatlantique also filed a counterclaim against the owners of the Benmaple for for damage caused to the ship Lafayette by the collision.
Another action was taken against the Lafayette by Maple Leaf Milling Company, Limited, and other owners of cargo or goods laden the Benmaple.
trial judge, Demers J., Judge in Admiralty, hearing the case with two assessors, held that there was no doubt as to the fault on the part of the Benmaple; that the Lafayette also contributed to the accident, she having been wrong in going half speed before ascertaining that there SHIPPING-Concluded was no danger from the other ship; and the trial judge apportioned fault threequarters against the Benmaple and onequarter against the Lafayette. On appeal to the Exchequer Court of Canada,
Angers J., assisted by one assessor, held that the fault was wholly that of the
Benmaple and that, even assuming that the Lafayette's speed was too great, that was not the proximate cause of the accident, and the actions were dismissed.
Held, Crocket J. (dissenting)
, that there was no doubt as to the fault on the part of the Lafayette as well as on the part of the Benmaple, as found by the trial judge and that such finding should not have been disturbed on appeal to the
Exchequer Court of Canada. Per the
Chief Justice and Davis J.-Under the circumstances of this case, it is plain that the Lafayette should have stopped when she heard the first fog signal until she had ascertained "with certainty" what was the position of the ship from which the signal had come.-Comments as to what constitutes a moderate speed in fog;
as to the duty of a ship to stop and then navigate with caution until the danger of a collision is over; and as to the question of altering the apportionment of blame on each vessel as fixed by the trial judge. Per Crocket J. (dissenting) :-The vital issue in the case is a question of fact as to whether the fog signals of the
Benmaple were sounded at regular intervals after the first signal heard by the
Lafayette; and the trial judge misdirected himself in holding that he was obliged to accept the affirmative testimony of the Benmaple's witnesses that they were sounded rather than the negative testimony of the Lafayette's witnesses that they were not, following the rule of evidence that the positive or affirmative testimony as to whether a thing did or did not happen should be accepted rather than the negative testimony. Therefore, the judge in appeal was justified in disregarding the trial finding upon that vital issue and himself concluding upon the evidence that the
Lafayette was not at fault; her act of increasing her speed from slow to half was attributable, not to any negligence on her own part, but solely to the negligent failure of the Benmaple to regularly sound her fog signals for a period of at least five minutes. Judgment of the
Exchequer Court ([19391 Ex. C.R. 355)
reversed, Crocket J. (dissenting)
. SS. Benmaple v. SHip Lafayette;
MILuNG Co. Er v. Lafayette ................................
SOLICITORS
See SocerY
STATUTES-Construction of the words "shall include" ...................... 2--Construction -"
Generalia specialibus non derogant " ............... 3-Exercise by Board of statutory powers .......................
4-Statutes of Limitation.
See AcTIoNs. 5-As to particular statutes dealt with, see under appropriate subject headings, throughout .the index. TOBACCO TAX ACT (N.B.)-Constitutionality ........................ TRADE UNIONS
Capacity to bring suit ............................... TRUSTS AND TRUSTEES-Action for alleged breach of trust-Application of s. 46 (2) of The Limitations Act, R.S.O., 1937, c. 118-Proviso in s. 46 (2) (b) that statute shall not begin to run against beneficiary unless and until interest of beneficiary becomes an interest in possession-Beneficiary having an interest in possession as to revenue of fund and a contingent interest in corpus....... 503 2-See 4.
UNDUE INFLUENCE
WAR MEASURES-Regulation made by Governor in Council under War Measures Punishment for disobedience - Applicability of s. 164, Criminal Code. .
............. WAREHOUSEMAN - Loss of goods, while awaiting shipment, on pier when pier destroyed by fire.............. 230 WILL-Construction-Bequests of shares in company-Direction that shares remain property of testatriz's estate until certain dividends received for benefit of estate- No dividends earned or declared by company within dividend periods mentioned in the will-Vesting of shares in legatees -Time for delivery of shares to legatees.] testatrix, in her will and a codicil thereto, made bequests of preferred and 76g WILL-Continued common shares of stock in a company, and by the codicil provided that all succession duties payable upon any of her bequests be paid out of her personal estate and then directed that any and all of the shares in said company bequeathed by her "shall be and remain the property of my estate and be held by my executors and trustees as part of my estate until all dividends on the preferred shares accrued to the date of my death have been paid in full and also until the two half-yearly dividends which shall accrue immediately subsequent to the date of my death shall have been paid in full to my estate for the benefit thereof, it being my intention * * * that all dividends on said preferred shares accrued due to the date of my death, whether earned or declared or not, together with a full year's dividends accruing due after my death, whether earned or declared or not, shall be paid to my executors and trustees for the benefit of my estate before making any transfers of the stock or shares" of said company, common or preferred, bequeathed by her. The codicil was made in October, 1934. The testatrix died on
November 30, 1934. No dividends were earned or declared by the company in
1934 or 1935. The dividends on the preferred shares were at a fixed rate and cumulative, but payable only out of profits, and there were "o profits sufficient to justify any dividend in those years.
Baxter CJ. held M.P.R. 306) that the shares vested in the legatees at the death of the testatrix; that the dividends, until the payment of which the shares were to remain in the estate, had never aecrued, and the time fixed by the will for the shares to remain in the estate had elapsed, and the legatees were entitled to receive them. The Appeal Division of the Supreme Court of New Brunswick held (15 M.P.R. 130) that the legatees had a vested interest in the shares subject to a charge thereon in favour of the executors and trustees to the amount of two years' dividends on the preferred shares bequeathed, and that the legatees were entitled to delivery of the shares when the amount of the charge had been paid to the estate or the charge released. The specific legatees of shares appealed to this Court. In this appeal it was not disputed that the shares vested in the legatees on the death of the testatrix; but the respondents
(residuary legatees) contended that the judgment of the Appeal Division was right.
Held: The judgment of Baxter
C.J. should be restored. No dividends could be said to have "accrued due" or to be "accruing due" within the intendment of the reservation in the codicil.
The shareholders acquired no right to payment of any dividends until there were profits and until the directors de- WILL-Continued termined they should be paid (Bond v. Barrow Haematite Steel Co., [19021 1 Ch. 353, at 362; In re Wakley, [19201 2 Ch. 205, at 217).
The reservation in the codicil was directed wholly to the payment of dividends on the bequeathed preferred shares during the anticipated period of the administration of the estate and could only apply to the payment of dividends as such to the executors and trustees of the estate, as the registered holders of the shares, by the company itself as a going concern, and clearly excluded any payment in lieu thereof by the beneficiaries, in whom the shares themselves were vested. The executors and trustees, as the registered holders of the shares, had never acquired the right to demand payment from the company of any dividends to cover either the year 1934 or the year 1935. It could not be said that the testatrix intended that the transfer of the shares to the legatees should be withheld indefinitely until the actual payment of the deferred dividends, which might possibly never happen. If such were the interpretation, the reservation (whether or not the words "whether earned or declared or not" be eliminated as repugnant) would have to be held void for uncertainty. The uncertainty would go, not to the validity of the bequests, but to the validity of the reservation (Egerton v. Earl Brownlow, 4 H.L.C. 1, at 181; Hancock v. Watson, [19021 A.C. at 22; Fyfe v. Irwin, [19391 2 All E.R. 271). The intention of the testatrix must be taken to be that the executors should not withhold transfer to the legatees beyond a year after her death and to withhold from them their right to receive the unearned and undeclared dividends only in the event of their being paid by the company to the executors, as the registered holders of the shares for the purpose of administering the estate, within a period of one year following the death of the testatrix. In re ...................................
2-Construction - Gift to grandson "when he shall attain the age of 25 years," with provision for advances from income for maintenance, etc., and provision for gift over - Vesting - Right of grandson to intermediate income on attaining said age.1-A testator by his will gave to his grandson the sum of $7,000 "when he shall attain the age of 25 years"; and continued: "Provided that my executor * * * may advance to my said grandson such of the income from the said bequest as may be necessary for his maintenance and education prior to his attaining the age of 25 years"; and later in the will provided that in the event of the death of the grandson "before the period of distribution," then "the share WILL-Concluded of" the grandson should, if he left no wife or child him surviving, fall into the residue of the estate, and if he left a wife or a wife and child or children him surviving, be divided equally amongst them. Held: The gift vested in the grandson at the testator's death (subject to be divested if he died before attaining the age of 25 years), so that on his attaining the age of 25 years he would be entitled to receive, in addition to said sum, the intermediate income therefrom (less sums, if any, paid out for his maintenance and education). In re v. BARTON............
WORDS AND PHRASES - "Constructing, reconstructing, changing, altering or improving any highway" (The Public Service Works on Highways Act, Ont.). 584
2--"Creditors" ................
3- Debt
...................
WORDS AND PHRASES-Concluded 4-"Debt incurred" ............ Acr, 2.
5-"Debtor" ..................
AcT, 2.
&-"Farmer"
........ 7- "Final judgment" within meaning of ss. 2 (b)
and 86, Supreme Court Act, R.S.C., 1927, c. 85................. &-"Highway" (in The Public Service Works on Highways Act, Ont.)..... 9-"Private pleasure purposes" (use of motor yacht)...................... 10-"Shall include" in statute...... WORKMEN'S WAGES ACT-Que., 1987, 1 Geo. VI, c. 49, s. 80..............
Cases cited
- 12 A.C. 575 12 A.C. 575 582, 584
- A.C. 168 A.C. 168 176
- City of Charlottetown v. Foundation Maritime Ltd. scr-1932-589 594, 593
- A.C. 117 A.C. 117 125
- A.C. 575 A.C. 575 582
- A.C. 358 A.C. 358
- A.C. 710 A.C. 710
- 1 A.C. 215 1 A.C. 215
- Hand v. Hampstead Land & Construction Co. scr-1928-428
- 1 W.W.R. 35 1 W.W.R. 35
- Proprietary Articles Trade Assn. v. Attorney-General for Canada A.C. 310 326-327
- A.C. 338 A.C. 338
- O.R. 888 O.R. 888
- Durable Electric Appliance Co., Ltd. v. Renfrew Electric Products, Ltd. scr-1928-8
- 2 W.W.R. 401 2 W.W.R. 401
- Paradis v. The King scr-1934-165
- Insulated v. Atherton A.C. 205 213
- A.C. 344 A.C. 344
- Provincial Ins. Co. v. Morgan A.C. 240 253-4
- O.R. 201 O.R. 201
- O.R. 448 O.R. 448
- O.R. 292 O.R. 292
- 3 W.W.R. 81 3 W.W.R. 81
- Bédard v. Dawson scr-1923-681
- A.C. 318 A.C. 318
- 1 D.L.R. 483 1 D.L.R. 483
- Caswell v. Powell A.C. 152 176
- Pratt v. Beaman scr-1930-284
- McHugh v. Union Bank of Canada A.C. 299
- Massie & Renwick Ltd. v. Underwriters' Survey Bureau Ltd. scr-1937-265 266
- A.C. 533 A.C. 533 548
Statutes and regulations cited
-
- s. 36 of the Supreme Court Act
- s. 41
- section 41 of the Supreme Court Act
- section 41
- Section 1025
- ss. 84
- s. 285(4)
- s. 84
- s. 8
- s. 885
- s. 120
- s. 123
- 7
- s. 6
- s. 46
- section 22
- section 123
- s. 1
- s. 2
- s. 48
- ss. 54
- ss. 33
- s. 22
- ss. 2
- sections 267
- 309.1
- s. 36
- s. 80
-
- section 20
- ss. 951(3)
- 285(6)
- 103
- s. 44
- sections 413
- 414
- ss. 84
- s. 285
- s. 84(1)
- s. 84
- ss. 64
- 59
- 60
- 65
- ss. 87.1
- ss. 951
- s. 1023
- s. 45
- s. 16
- s. 951
- section 164
- ss. 2
- section 825(5)
- section 827
- section 825
- section 1025
- s. 19
- section 19
- Section 2
- section 2
- s. 2
- 2
- section 45
- s. 11.1
- section 84
- section 161
- s. 59
- 87.1
- s. 82.1
- section 809
- section 309
- s. 164
-
- s. 3
- s. 88
- section 3
- ss. 18
- 87
- 184
- 135
- 18
- s. 82 of the Exchequer Court Act
- 37
- ss. 37
- s. 18 of the Exchequer Court Act
- s. 82
- ss. 3
-
Unresolved citations
- section 4
- section 5
- Section 10
- section 2
- section 3
- section 20
- sections 4
- 5
- Sections 4
- Section 8
- subsection (2)
- section 7
- Section 5
- section 92
- section 122
- section 121
- section 91
- section 9
- section 10
- section 121 of the British North America Act
- Section 4
- sections 2
- s. 92
- s. 2
- s. 3(2)
- s. 4
- s. 10
- s. 5
- s. 7
- s. 122
- s. 121
- s. 181
- section 92 of the British North America Act
- paragraph (a)
- paragraph (c)
- paragraph (d)
- s. 8 of Habeas Corpus Act
- section 120 of the Dominion Companies Act
- s. (18)
- s s. 8 of said Debt Adjustment Act
- Section 63 of the Dentistry Act
- Subsection (2)
- section 63 of the Dentistry Act
- ss. (2)
- s. (3)
- ss. (18)
- s. (1)
- s. (4)
- section 12 of the Farmers' Creditors Arrangement Act
- s. 20 of Mental Hospitals Act
- s. 20 of The Mental Hospitals Act
- s. 20 of Act
- section 22 of the Mineral Resources Act
- section 128 of the Cities and Towns' Act
- section 227 of the Municipal Code
- section 3 of the Municipal Bribery and Corruption Act
- s. 59 of The Ontario Municipal Board Act
- s. 44 of said Act
- s. 46 of the Patent Act, 1985