Racine v. Barry

testatrix left all her property to her daughter M.J.B., "to be used for herself and daughter (M.G.D.) . . and at the death of my daughter, what may remain is to go to her daughter (M.G.D.)".

She appointed M.J.B., the defendant (her cousin) and the defendant's husband to be trustees under the will. Included in the succession were shares in two companies, and these shares were registered in the names the three trustees and delivered to M.J.B.

Subsequently M.J.B. lent the certificates to the defendant for the express purpose of being pledged with the defendant's broker, but with the understanding that M.J.B. would receive the revenue from the shares, and that the certificates would be returned to her at any time she wanted them. Some years later M.J.B. learned that the shares had been sold and, with M.G.D., brought an action against the defendant for an accounting. The action was dismissed by the trial judge on the ground that the only appropriate remedy was a direct action for possession of the shares and their fruit,, if any, or for their value. This judgment reversed by the Court of Appeal.

The defendant was not a trustee, but a mere borrower. Even if she was liable to account for the dividends (which was doubtful), they had all been paid to M.J.B. It was not necessary to decide whether the loan was a prit h usage, where the lender retained both the ownership and the legal possession of the thing lent, or a pr~t de consommation, where the property in the thing passed to the borrower, whose obligation was to return an equivalent. In either case the sanction if the borrower did not perform his obligation to return was a condemnation in money, and this was not what claimed in this action.

Taschereau, Rand, Kellock, Fauteux and Abbott JJ. Per Rand J., dissenting: The transaction between the parties was that of a prit h usage, where the lender retains the ownership and the R legal possession of the property and where the borrower assumes vis-a-vis the lender duties of a mandatary.

As borrower, the defendant was under a duty to conserve and restore the shares, together with all their fruits and accessories, and this obligation could be enforced only after its extent was ascertained by an accounting.

The shares were to be held for the double purpose of benefiting both the plaintiff and the defendant, the borrower as mandatary assuming a relation to the plaintiff's interest which carried with it an accounting responsibility.

The same result followed on another view of the facts: the persons named by the will as trustees did actually take the legal title to the shares and 'by their dealings with each other set up at least a de facto trust in which each assumed toward M.J.B. and M.G.D. the obligation that the law would have imputed to them, that of fiduciaries.

As to M.G.D., her contingent interest in the substitution was sufficient to entitle her to take this conservatory measure. The dealing in the shares took place in -the face of the fiduciary duty toward her, and it was beyond controversy that such a duty called for an accounting. The rule observed in this Court that on a matter of procedure the opinion, here unanimous, of the highest Court of the Province should be accorded the greatest respect, helped to fortify the conclusion reached on the case as a whole.

Per Kellock J., dissenting: It was well settled that this Court would not interfere with the decisions of provincial Courts in a matter of procedure where no injustice had been suffered; and it could not be said that there could be any injustice to the defendant in upholding a right of action requiring her to account for her dealings with the shares, rather than an action for damages in respect of those same dealings.

The loan of the shares constituted a prit h, usage, which is not inconsistent with the right given here to pledge them. Any intention that the property in the shares would pass to the defendant was excluded in the contract. The only significant difference, for the purposes of this case, between a prit h usage and a contract of d6pot, is that the borrower can use the thing loaned whereas the depositary cannot do so without specific permission. But both the borrower and the depositary are bound to restore the identical thing received and, in the case of a chose frugif~re, as here, to render to the owner all fruits and accessories, whether obtained as a result of their illicit act or not. They are, therefore, both accountable.

Since the shares ceased by reason of the wrongful sale on the part of the defendant to be in her possession and could not therefore be returned, the plaintiff became entitled to get the equivalent from the defendant 'and the purpose of the accounting demanded in this action was to establish that equivalent.

Apart from the dividends, which might be taken to have been received, the defendant was liable to account for the original shares, for all the shares into which they were converted or for which other shares were substituted, and for the proceeds. It is well settled in the jurisprudence of the Province that where a defendant not only refuses to give an accounting but refrains from Bench, Appeal Side, Province of Quebec (1), reversing the judgment at trial and ordering an accounting.

Appeal allowed.

J.:-Dame Mina J. Barry, veuve de Ernest E. Delany, tant personnellement -qu'en sa qualit6 de fiduciaire de la succession de Christina Ross Barry, et Mina Gene Delany, ont institu6 des proc6dures 16gales contre Dame Minette Racine, de la Cit6 de Westmount, tant en sa qualit6 personnelle qu'en sa qualit6 de fiduciaire de la meme succession

Les conclusions de l'action sont A l'effet que Minette Racine soit destitu6e de ses fonctions de fiduciaire, qu'elle soit condamn6e h rendre compte de tout 1'actif de la succession de Christina Ross Barry dont elle aurait eu la possession, ou qu'elle aurait administr6, et qu'elle soit 6galement condamn6 ' payer tout reliquat de compte, A moins qu'elle ne pr6fbre payer h la demanderesse Mina J. Barry, la somme de $40,500, et que dans le cas de d6faut de rendre compte, elle soit condamn6e A payer ladite somme de $40,500.

La Cour Sup6rieure, pr6sid6e par M. le Juge J. Archambault a rejet6 cette action avec dipens, mais la Cour d'Appel (1) 1'a maintenue en partie. Elle a infirm6 le jugement et a statu6 que 1'intim6e devait rendre compte aux demandeurs de tous les biens de la succession de feu Dame Christina Ross Barry dont elle a eu la gestion ou la possession, et en particulier du produit de la vente des actions de Steel Company of Canada Limited et de Montreal Light, Heat & Power Consolidated, et de tous les dividendes, boni ou actions suppl6mentaires qu'elle aurait pu recevoir, le tout sous un d6lai de trente jours de la date du jugement, k moins que la d6fendresse ne pr6fire payer, sous le mime d6lai, la somme de $21,812.80 avec intirit. A d6faut par la d6fenderesse de rendre compte sous le d6lai fix6, la Cour a condamni la d6fenderesse h payer aux appelants, sous un d6lai de quinze jours apris l'expiration du d6lai fix6 pour la reddition de compte, la somme de $21,812.80 avec intir&t ?i compter de la date du 7 novembre 1947. La d6fenderesse a 6t6 condamnbe h payer les d6pens et en Cour Sup6rieure et en Cour d'Appel. Les faits qui ont donni naissance A ce litige sont assez simples. Christina Ross Barry, cousine de la d6fenderesseappelante, a fait un testament olographe le 29 octobre 1927, et elle a ainsi dispos6 de ses biens:

(Les italiques sont de moi.)

La testatrice est d6cid6e le 6 janvier 1928, et ce testament a 6t6 v6rifi6 conformiment 'a la loi.

On voit done que deux des "trustees", Minette Racine Dupr6, la d6fenderesse, et Mina Jane Delany sont en cause. Le troisibme "trustee" Yvon Dupr6, mari de Minette Racine Duprd, est maintenant d6cid6.

Quelque temps apris le d6chs de la testatrice, le Notaire Joron, qui apparemment s'occupait du r~glement des affaires de la succession, a, le 16 mai 1928, remis h 'un des "trustees", M. Yvon Dupr6, certaines valeurs mobilibres, dont un certificat pour 119 actions de la Montreal Light, Heat & Power Consolidated, et un autre certificat pour 71 actions ordinaires de Steel Company of Canada Limited. Ces deux certificats 6taient enregistr6s au nom des "trustees de la succession C. Ross Barry" et M. Dupr6 en a accus6 Taschereau J. r6ception sous sa signature. Peu apris, M. Dupr6 a remis ces certificats h l'intime qui les a gard6s dans son coffret de sfiret6. C'6tait bien une reconnaissance des droits de 1'intim6e h sa possession personnelle de ces valeurs suivant les termes mimes du testament, oii les mots significatifs "to be used by her" sont employs.

Ce sont les seules valeurs dont il soit question dans la pr6sente cause.

Subsiquemment, Mina Jane Barry (Delany), la b6n6ficiaire, remit ces deux certificats h 1'appelante qui s'en servit comme garantie collat6rale de son compte au bureau de courtage de Shearson Hammill & Co. h Montr6al. Il est bon de noter que les actions de Steel Company of Canada Limited furent subsiquemment subdivis6es en quatre, ce qui faisait que les h6ritiers d6tenaient en tout 284 actions de cette compagnie.

Aucun document bilat6ral constate la nature de la transaction intervenue entre Mina Jane Delany et l'appelante Minette Racine Dupr6. Deux exhibits importants ont 6t6 produits au dossier. Le premier, en date de juillet 1928, se lit ainsi:

Westmount, 210 Edgehill Road,

July 28 This is a note to my estate in case of death.

There is in Shearson, Hammill & Co. at their Montreal office (184 St. James Street) deposited as collateral, a certificate of seventy one shares of Steel Company of Canada, and one, of one hundred and nineteen shares of Montreal, Light Heat & Power Consolidated against account Yvon Dupre # 592 # 2. These certificates belong to the Estate of the late Mrs. C. R. Barry & should be returned to her heir Mrs. Mina J. Delany who lent them to me and to whom they belong.

(sgd) M. R. Dupre

"

Yvon Dupre

Le second, en date du 24 janvier 1929, est r6dig6 dans les termes suivants:

Westmount, 210 Edgehill Road

January 24th, 1929. This is to certify that I have in my possession certificates of one hundred & nineteen shares of Montreal Light Heat & Power Consolidated. two hundred and eighty-four (284) shares of Steel Company of Canada Dans le cours de 1'ann6e 1932, ces actions furent vendues sans doute pour combler le d6ficit du compte de l'appelante chez le courtier, et celle-ci fut en cons6quence dans 1'impossibilit6 de retourner ces valeurs h leur propri6taire, et de remplir 1'obligation h laquelle elle s'6tait engag6e. C'est en 1946 seulement que suivit Faction en reddition de compte. Cependant, avant que cette action ne fut intent6e, l'appelante versa, comme elle s'y 6tait d'ailleurs oblig6e h 1'origine de la transaction, tous les dividendes d6clar6s par les deux compagnies, et un certain acompte sur le capital. Le plaidoyer de la d6fenderesse-appelante est h 1'effet qu'elle n'est pas comptable envers la demanderesse, et elle a en outre soutenu qu'il s'agit en 1'occurrence d'un pr~t h usage, et que si les certificats de valeurs mobilibres qui font 1'objet de ce pr~t ne peuvent 6tre remis, parce qu'ils ont t6 vendus, le seul recours de la cr6ancibre n'est pas une action en reddition de compte, mais bien une r6clamation personnelle en argent pour la valeur des choses pr&t6es.

Il est certain que s'il s'agit d'un pr&, la transaction intervenue peut avoir le caractbre d'un prt h usage ou d'un pr~t de consommation.

Le prit h usage est en effet un contrat par lequel 1'une des parties livre une chose h une autre personne, qui peut s'en servir gratuitement pendant un temps, mais qui doit ensuite la rendre au pr8teur: Code Civil, art. 1763. Dans ce cas, le pr~teur entend conserver la propri6t6 de la chose et a droit d'en exiger la restitution.

Si la restitution devient une impossibilit6, parce que 1'emprunteur a dispos6 de la chose prit6e, le recours du cr6ancier-priteur est de r6clamer la valeur de la chose qui a fait l'objet du contrat.

Au contraire, lorsqu'il s'agit d'un pr~t de consommation, le pr~teur livre h 1'emprunteur une certaine chose qui se consomme par l'usage, h la charge par ce dernier de lui rendre une autre chose de mime espice et de mime qualit6: Code Civil, art. 1777.

Des opinions diverses ont 6 6mises concernant la nature J. du pr~t de valeurs mobilibres. Ainsi, certains auteurs soutiennent que le prit de valeurs mobilibres constitue un prit de consommation, vu qu'elles sont susceptibles d'&tre vendues, et particulibrement,. comme dans le cas qui nous occupe.

Dans le premier cas, la propri6t6 demeure au priteur; dans le second, vu qu'il y a consommation, la propri6t6 est transf6r6e. h l'emprunteur: Dalloz, Petit Dictionnaire de Droit, p. 997; Dalloz, Nouveau R6pertoire, vol. 3, p. 529; Dalloz, Encyclopidie, Droit Civil, vol. 4, p. 90, No 225; Ripert, Trait6 de Droit Civil, vol. 2, 3e ed. 1949, p. 881.

Je ne crois pas, pour la d6termination de cette cause, qu'il soit n6cessaire d'4tablir cette distinction, car, qu'il s'agisse d'un prit h usage ou d'un prit de consommation, la sanction h d6faut par l'emprunteur de remplir son obligation, doit n6cessairement 6tre une.condamnation p~cuniaire.

Mais, ce n'est pas ce qui est r6clam6 dans la pr6sente action. La demanderesse-intimbe r6clame une reddition de compte.

Le compte, au sens de la reddition du compte, est 1'expos6 d'une gestion faite dans l'int6r~t d'autrui. C'est la pr6sentation h celui pour qui on a gir6 d'un 6tat d6taill6 de ce qu'on a regu et de ce qu'on a d6pens6 pour lui, h l'effet d'arriver h la fixation du reliquat, si la recette excide la d6pense, ou de 1'avance, si la d6pense excide la recette. La reddition de compte est due par ceux qui ont administr6 le bien d'autrui, h quelque titre que ce soit. Ainsi doivent des comptes, tout mandataire ou g6rant, le tuteur, 1'h6ritier b6n6ficiaire, le curateur h une succession vacante, I'ex6cuteur testamentaire, le siquestre, les associ6s, le fiduciaire, etc.

Il est essentiel, pour donner naissance au droit de l'oyant de r6clamer un compte, que le rendant compte ait eu la d6tention de certains biens, et en ait eu l'administration: Dalloz, Petit Dictionnaire de Droit, p. 292.

L'action en reddition de compte est une action particulibre que peut intenter celui dont les biens ont t6 g6r6s par un autre. Les rigles qui en d6terminent la nature sont prescrites par les arts. 566 et suivants du Code de proc6dure civile. La premibre question qu'il faut d6terminer est de savoir si le d~fendeur doit un compte; s'il n'en doit pas parce qu'il n'est pas comptable, 1'action doit 6tre rejet6e. S'il en doit un, il doit 6tre rendu h la personne qui y a droit, et doit contenir dans des chapitres distincts la recette la d6pense, et 6tablir la balance qui peut exister. L'oyant compte est tenu de prendre connaissance du compte et des pi~ces justificatives au greffe et de produire ses d6bats de compte, s'il le conteste, dans un dilai de quinze jours qui peut 6tre prolong6 par le juge sur requite. A d6faut par le d6fendeur de rendre compte, le demandeur peut lui-mime proc6der A 1'6tablir tel que pr6vu A 'art. 568 du Code de procidure civile, c'est-A-dire qu'il doit 4tablir la recette et la d6pense et d6terminer la balance qui lui est due. Cependant, la jurisprudence a accord6 certains temp6raments h la rigueur des articles du Code, lorsque les parties ont transform6 faction en reddition de compte en un v6ritable d6bat de compte et qu'elles ont mis devant le tribunal toutes les pi~ces justificatives. Les cours ont prononc6 que les rigles du Code de procedure civile n'6taient pas imp6ratives, et que 1'obligation ultrieure de rendre compte apris l'institution de Faction, devenait inutile lorsque par le d6bat engag6 par le consentement des parties, on en 6tait arriv6 A une solution imm6diate et d6finitive: Cousineau v. Cousineau (1).

C'est d'ailleurs I'opinion exprimbe par la Cour d'Appel dans cette mime cause de Cousineau v. Cousineau (non rapport6e).

Dans cette cause, M. le Juge Bissonnette exprimait son opinion de la fagon suivante:

(Les italiques sont de moi.)

Mais encore faut-il que les parties aient transform6 l'action en un d6bat de compte.

La demanderesse-intim6e a bien tent6 de le faire, mais non pas la d6fenderesse-appelante qui n'a pas offert de preuve, n'a produit aucun compte, et qui a nib h la demanderesse le droit d'en r6clamer un. La d6fenderesse a clairement limit6 le d6bat h la question de savoir si oui ou non elle tait comptable.

J.

A mon sens, la preuve rivile qu'il s'agit purement et simplement d'un prit consenti par l'intim~e h l'appelante, et non pas d'un mandat de girer ni pour la succession ni pour l'intimbe les valeurs mobilibres qui ont 6t6 transport6es. Il s'ensuit que l'appelante n'est pas comptable au sens de la loi vis-h-vis la succession, ni vis-h-vis 1'intim6e. Elle n'a rien eu h administrer pour personne. Elle n'a pas eu la possession de ces valeurs comme fiduciaire, mais bien comme emprunteuse, et c'est en cette qualit6 seule que sa responsabilit6 est engag6e si la dette n'est pas encore pay6e.

On a soutenu h l'audience que si l'appelante n'est pas comptable du capital emprunt6, elle 1'est du moins en qui concerne les dividendes qu'elle aurait regus. Je ne puis accueillir cette pr6tention, car mime si l'appelante 6tait comptable des dividendes, ce qui est fort douteux, ils ont tous 6t6 pay6s de l'avis mime de l'intim6e, ainsi qu'une substantielle partie du capital.

Je me vois donc A regret dans l'obligation de maintenir cet appel et de rejeter 1'action.

Le recours de la demanderesse n'6tait pas par action en reddition de compte, mais bien en remboursement du prit consenti. C'est une application de la loi dans toute sa rigueur, et I'6quit4 n'y peut apporter aucun temperament.

Dans une cause de Bouchard v. Perron (1) oii il s'agissait d'un d6p6t, M. le Juge Pr6vost dit ce qui suit:

Vide 6galement Savard v. Charette (2); Boivin v. Rock Shoe Manufacturing Co. (3); Dallaire v. Doyon (4). Dans la cause de Donoghue v. Lefebvre (5), M. le Juge en chef Lamothe s'exprimait de la fagon suivante:

Dans un cas de prit non rembours6, comme dans le cas qui nous occupe, 1action en reddition de compte n'est pas le remade appropri6 et ne peut 6tre sanctionn6e par les tribunaux. Cette obligation de rendre compte presuppose une administration.

Sans doute, il est certain qu'il peut se pr6senter des cas, oii 1'emprunteur ou mgme le d6positaire, peut 6tre tenu de restituer les fruits produits par la chose emprunt6e ou d~pos6e, et mime en rendre compte; mais dans le cas actuel, toute id6e d'administration est exclue par la nature mime de la convention intervenue. L'obligation contract6e a 6t6 uniquement de remettre les actions et les dividendes, et ces derniers ont t6 intigralement transmis h l'intim6e.

L'appel doit done 6tre maintenu, I'action rejet6e, et le jugement du juge de premibre instance r6tabli. L'appelante aura droit h ses frais devant la Cour du Banc de la Reine et devant cette Cour.

:-The ground taken on this appeal is essentially one of procedure. The facts are not seriously disputed and the documents which establish the primary allegations are given in the reasons of my brother Taschereau.

The litigation, before the courts since 1946, has been befogged by irrelevant topics and the observation made by Bissonnette J. in the opening sentence of his reasons (1):

& is highly appropriate. I should add that the affirmative defence to the effect that the proceeds of the shares were applied to speculation debts of the respondent Mina Barry is, on the evidence, without.the slightest foundation. issue, then, is whether the appellant, admitting that in 1929 she received the shares of stock from the respondent Mina Barry for the purpose of tiding over her own account with brokers during the market debacle of that period, is bound to furnish an account of the securities and their fruits or that these proceedings disclosing all the facts are to be dismissed as abortive.

Bissonnette J., disregarding the question of a trust e a between the parties arising under the will, treated the controversy as concerned with a pr~t A usage for which the conclusion of the declaration for an account to be rendered, was, in the circumstances, proper; and on this footing I will first consider it.

As between the respondent Mina Barry and the appellant the oral evidence and the letters of acknowledgment by the latter prove all the elements of a pr~t h usage. The shares of stock were lent gratuitously for a special purpose; and the borrower agreed to return "these certificates", the individual things in specie, to the respondent when the latter should call for them.

That a share of stock can be the subject of such a transaction is evident both under the old law and the article of the Code. Pothier, vol. 5 at p. 7, art. 2, para. 14 says: and the Civil Code:

In his description of the uses to which the property may be put, Pothier gives a number of examples to distinguish the prit A usage from that of mutuum, from which it is clear that the same property may be the subject of the one or other, depending on the character of the use authorized. Here, where the actual certificates were to be returned, the terms contemplated their preservation; there was no right to use them otherwise than as a continuing security for so long only as the lender would not call for their return; but physically and as representing a share interest in a company, they were to remain intact.

The lender, in such a situation, retains both the ownership and the legal possession of the property: Pothier, supra, art. 3, para. 9, p. 6:

and vis-h-vis the lender the borrower assumes duties at least of a mandataire.

The significance of continuing to retain property "h titre d'emprunt" is that, in the absence of a statute, prescription does not run while the property remains in the hands of the borrower.

Rand J. As borrower the appellant was under a duty to conserve and to restore to the lender the shares, together with all their fruits and accessories. Pothier, supra, at p. 31, art. 3, para. 73, deals with fruits:

Un troisibme objet accessoire de cette action, est la restitution des fruits qui sont n6s chez l'emprunteur, lorsque la chose pr6t6e 6tait une chose frugifbre.

and in para. 74 with accessories:

Enfin, on doit mettre au rang des objets de 1'action commodati, la restitution de toutes les autres choses accessoires de la chose prt6e;

Dalloz, Encyclopidie, vol. 4, p. 83, item 55, uses the following language:

Ainsi, lorsque des pieces de monnaie ont 6t6 prities h un changeur pour les exposer dans sa vitrine. encore, lorsque les objets qui font I'objet du prit n'ont 6t6 remis que pour que 1'emprunteur puisse les donner en gage un tiers, A charge de les rendre nature. (Baudry-Lacantinerie et Wahl, n*

Applying these conceptions to a share of stock, it is obvious that dividends, in cash or stock, share warrants, new shares representing the subdivision of prior issues, the sum received for an unauthorized sale, intervening profits made outtof moneys received, would, apart from damages, all come into consideration.

These fruits and accessories must, in Pothier's language, be "rendered" to the lender and being, as here, by their nature expressed in terms of money or money's worth, they are "rendered" only as they may be ascertained by an account and paid over.

The authorities support this view. Garsonnet, ed. 1888, vol. 3, pp. 140-1-2, summarizes the persons liable to be charged with administration of another's property as Quiconque est charg6 ou se charge volontairement d'administrer tout ou partie du bien d'autrui doit rendre un compte d6taill6 de sa recette de sa d6pense.

Tels sont, moins qu'ils n'aient prescrit, transig6 ou obtenu dispense de rendre compte, les mandataires, tuteurs, associ6s, copartageants, h6ritiers bindficiaires, ex6cuteurs testamentaires, d6positaires, s6questres, cr6anciers-gagistes et antichrisistes, envoyds en possession provisoire de biens d'absent, curateurs aux successions vacantes and in J.-Cl. Proc., art. 529, p. 3, para. 12, as a general indication of the class, most of these items are reproduced with a reference to Garsonnet et C6zar-Bru, Proc. civ. 3e ed. 1913, t. III, no 815, p. 607 et suiv. My brother Kellock, whose reasons I have had the advantage of reading, has traced the treatment of a dbpositaire by the courts of Quebec to a demonstration of their agreement with the view of Garsonnet. approved in the volume cited of Juris- Classeur.

In Whitney v. Kerr (1), one who had agreed to buy shares of stock in a company was upheld by the Court of Queen's Bench in an action brought to compel the seller, in order to determine the price agreed upon, to render an account of what the shares had cost him. The latter did not hold any property of the purchaser; but he had agreed to sell his own property which in equity and good faith he was bound to keep for the purposes of performing his obligation; and that interest furnished the foundation for the proceeding.

A similar view was taken by Archibald J. in Brunet v. Banque Nationale (2), in which the plaintiff, alleging that he was employed to assist in the collection of certain moneys to a percentage of which he was entitled for commission, claimed an accounting by the principal to determine the amount received.

Several decisions in actions brought by commercial travellers for commission for an account by the principal of goods sold have been dismissed; but it is plainly evident that in that relation no semblance of interest in property of the agent is to be found in the possession of the principal, and the cases have no bearing on the situation before us. To the same effect is La Corporation du Village d'Yamaska v. Sigefroy Lauzibre (3), in which the person called upon for an account was "un simple surveillant" of works carried out by the corporation.

This category of pr~t is seen to be characterized by the circumstance that a person is charged with the conservation of a principal thing and the administration of its fruits and accessories, coupled with the right to use the thing for a benefit which does not impair its individuality. The Rand J. shares were to be held for the double purpose of benefits to both the respondents and the appellant, examples of which in Roman law are mentioned in Buckland's Text- Book of Roman Law (1921), p. 471.

Toward the interests of the respondents the borrower as mandataire sustained a relation which carried with it an accounting responsibility. That was the view of Bissonnette J. and I am in entire agreement with it.

But in another view of the facts here the same result Whatever may be the proper interpretation of the will as to the vesting of the property in the beneficiaries or the trustees, the persons named as "trustees" did actually take upon themselves the legal title to the shares. It appears that the deceased husband of the appellant as one of the trustees obtained the certificates for these shares as well as others from a notary and they were registered on the books of the companies in the three names as "Trustees of the estate of the late Mrs. C. R. Barry". This was done undoubtedly in the belief that it was in accordance with the provisions of the will and from a reference in a receipt given to the notary to a legal opinion on the will, dated February 7, 1928, about a month after the testatrix's death, under legal advice.

The dividends for 1930 and the first two quarters in 1931 were paid by cheques made out to all three, sent to the deceased husband, endorsed by him and the appellant, and handed over to the respondent, Mina Barry, who cashed them as her own funds. Although the shares were sold in 1931 without the knowledge or consent of the respondent Mina, an account introduced on behalf of the respondents purports to indicate that the appellant remitted personal cheques in favour of the respondent on the shares of the Steel Company of Canada, in 1932 for the amount of $496.80, which represents a rate of $1.75 on 280 shares, and in 1933 and each year following until 1946 for the amount of $337.80 representing a rate of $1.20 on the 284 shares less

Since the institution of the action, these shares have been split on the basis of five for one. A rate of appears to have been declared by the Steel Company for 1931 and 1932, $1.20 in 1933, $1.75 in 1934, J. $3.171 in 1935, $3.75 from to 1940 inclusive, and $3 from 1940 to 1946. A list of similar remittances is shown to represent the dividends from the Montreal Light, Heat & Power Company in the sum of $360 in each year from 1931 to 1946 inclusive; there were 238 shares and the rate $1.50, an annual dividend of $357.

From 1937 to 1946 additional sums in even dollar amounts ranging from $200 to $2,550 are shown to have been received in each year, but their appropriation to the principal of either stock or to a contra-loan account is not indicated. The statements were not to show with precise accuracy the accounting result but a prima facie proof of the substance of the dealings between the parties and the justification for claiming an account to be rendered by the appellant. respondent was a novice in business matters and although for some time she had entertained suspicions that the shares had been sold, it was not until 1947 that she learned definitely of that fact.

By and between the parties, therefore, there was set up at least a de facto trust in which each assumed towards the beneficiaries, the respondents, the obligation that the law would have imputed to them, .that of fiduciaries. The mention of trustees by the testatrix was in all likelihood for the purpose of placing her daughter and granddaughter under a protection in particular against interference with the property by the daughter's husband. Whatever may be said of the ability of the respondent Mina to act for herself, what the testatrix had in mind and what the other two trustees voluntarily undertook was that they should use the wider business understanding especially of the appellant's husband to safeguard the interests of both beneficiaries.

But the respondent Gene, the granddaughter, is in a different and stronger position.

She had a contingent interest in the substitution sufficient, in the words of Bissonnette J. "pour prendre cette sorte de mesure conservatoire, afin de pr6server les biens qu'elle 6tait cens~e recueillir".

At the death of her grandmother she was an infant of six or seven years and the dealing in this stock took place in the face of the fiduciary duty toward her; and that that relationship is within the class enumerated by Garsonnet is, in my opinion, beyond controversy. In this conclusion on the case as a whole I am fortified by the rule observed in this Court that on a matter of procedure the opinion, here unanimous, of the highest Court of the Province should be accorded the greatest respect.

I would, therefore, dismiss the appeal with costs. J. (dissenting) :-This action was dismissed by the learned trial judge on the ground that the respondent Mina J. Barry was not entitled to bring an action for reddition de compte against the appellant but that her sole right of action was "a direct action to be given possession of the thing loaned and the fruits of thing if any". He also held that the respondent Mina Gene Delany had no right of action at all. The Court of Appeal (1) set aside this judgment, holding that the respondents were entitled to bring such an action.

The evidence established that the shares here in question were the subject of a loan to the appellant and her husband to be returned to the respondent Mina J. Barry at any time she might ask for them, and that instead of being returned, they were sold by the appellant. The sole issue in the appeal is as to whether the said respondent was entitled to bring an action for reddition de compte or whether her only right was some other form of action. It is well settled that this Court, although having jurisdiction, will not interfere with the decision of the provincial Courts in a matter of procedure where no injustice has been suffered: Roessel v. Perlo, Feb. 10, 1921, cited in Cameron, 3rd ed. 1924, p. 86; Finnie v. City of Montreal In the latter case this Court refused to interfere although the matter brought before the Court was "a demande almost different from the matter actually in controversy".

cannot be said that there could be any injustice to the appellant involved in upholding a right of action requiring her to account for her dealings with the shares here in que.,tion as against an action for damages in respect those same dealings. It is therefore clear, in my opinion, that the appeal ought to be dismissed on this ground alone. I am, however, also of opinion that the appeal ought to be dismissed on other grounds.

Leaving aside for the moment the question of trust, it is, in my opinion, clear that the loan of shares by the respondent, Mina J. Barry, to the appellant and her husband constituted a prit h usage, the property loaned to be returned to the said respondent "at any time she wants them back".

There is no question that demands for its return were made but never complied with. obligation of the borrowers was not to return merely "a like quantity of things of the same kind and quality", which would have been the case had the loan been one for consumption within art. 1777 of the Civil Code. That it was the specific certificates loaned which were to be returned was expressly acknowledged in writing by the appellant and her husband. Accordingly, arts. 1763 et seq. are the relevant articles on the facts of this case. distinction between the two kinds of contract is clearly stated in Dalloz, Petit Dictionnaire de Droit, p. 998, para. 9, as follows:

A As the contract here in question did not permit of a sale, any intention that the property in the shares should ever pass to the borrowers was excluded.

Dalloz, Encyclop6die de Droit Civil, vol. IV, p. 90, para. 216. Again, Dalloz, Nouveau Repertoire, vol. III, p. 529, para. 5: prtie Unquestionably the certificates in the case at bar were numbered certificates.

' It has been held by La Cour de Cassation, 11 May 1901, D.P. 1902.2.415, that the fact that the borrower of specific shares has the right under the contract to pledge them with a creditor of the latter is entirely consistent with a contract of pr~t h usage.

Similarly, Huc, Commentaire du Code Civil, vol. XI, p. 207; S. 1895, 1.160; S. 1906, 1.430.

There is therefore, in my opinion, no question but that the case at bar is one of prt h usage, as the learned judge of first instance found.

There is no evidence, as the learned trial judge seems to have thought, that the shares were sold by the pledgees, although it may be assumed the latter would not have accepted the certificates from their clients, the appellant and her husband, without the endorsement of the registered shareholders.

The only evidence as to why the certificates were not returned to the respondent is that of the latter, who testified that the appellant had told her, some years after the certificates had been loaned, that she had sold them, but no information was then or at any time given as to when the sale had taken place nor as to the amount of the proceeds.

In the course of his judgment dismissing the action, the learned judge of first instance said:

The learned judge does not state his view as to the time as of which the "market price" is to be determined, whether at the date when the shares ought to have been returned or the date of their sale by the appellant or the date of the judgment; vide Pothier 5, p. 29, paras. 68, 72; S. 1850, 1.455; 1933, 1.87. As already mentioned, the only person with knowledge of the date of sale is the appellant, who has not only refused the information but, by her pleading, denied any sale.

Moreover, should it be held that the market price on any date other than the date of sale is the relevant date for the purpose of assessing the value by way of damages, the appellant would be enabled, if the price on that date should turn out to be less than the price actually realized by the sale, to put herself, by her own wrongful act, in a position of making a profit, while depriving the owner of the proceeds of her own property. If such were considered to be a permissible result under the civil law of the Province, it would seem that an owner of property would be in a considerably less favourable position under the regime of that law than would be the case in similar circumstances in other jurisdictions where he may, at his option, sue for damages for the wrongful conversion of his property or for an accounting and recovery of the actual proceeds of sale: United Australia, Limited v. Barclay's Bank, Limited (1); Trusts & Guarantee Co. v. Brenner (2). Viscount Simon in the case first above mentioned refers, at p. 12, to the case of Lamine v. Dorrell (3), decided in the year 1705, where certain Irish debentures had been wrongfully sold, and where Powell J. said: Any suggestion that another result would be permissible under the civil law would seem to be negatived by the principle of unjust enrichment firmly embedded in that law to a much greater extent than in the common law. An interesting example of its application in circumstances not too remote in principle from the case at bar is the decision of the Cour de Cassation; Gaz. Pal. 1927.1.426.

It is of interest also, in this connection to observe that Bioche, in the second volume of his Dictionnaire de Proc6dure, under the head of "Compte de Fruits", in treating of fruits required to be rendered in specie, says, at p. 551, para. 45:

Coming to the ground upon which the learned judge of first instance proceeded, it may be that where the subjectmatter of loan is a shovel or a machine or similar object, the result reached by the learned judge might be proper but where, as here, the property loaned consists of "une chose frugif&re", other considerations apply.

For reasons which will appear, it is useful to compare the pr~t A usage with the contract of dipot. In the one the borrower is entitled to the use of the thing loaned for the purpose "intended by its nature or by agreement" (art. 1766), while in the other, the depositary "has no right to use the thing deposited without the permission of the depositor" (art. 1803).

For present purposes there is no other significant difference between the two.

Both the borrower and the depositary are bound to restore the identical thing received and to render to the owner all fruits and "accessories".

Title remains, in both cases, vested in the owner. Pothier, in speaking of the pr8t h usage, refers, in vol. 4, p. 3, para. 5; p. 5, para. 9; and p. 9, para. 20, note (1), to the fact that even the legal possession resides in the lender, the borrower having nothing more than physical possession. See also Mignault, vol. 2, p. 482. With respect to the remedy by way of an action for reddition de compte, Dalloz, in his R6pertoire Pratique, vol. 3, p. 406, defines "La reddition de compte" as: At p. 407, under the heading "Cas oil il est da un compte", Dalloz says, in para. 9:

A Again, Glasson-Tissier, Proc6dure Civile; 3rd ed. 1936, vol. p. 207, para. 1734, under the. heading "Des Redditions de Comptes":

etc., peuvent avoir h rendre compte de leur gestion. S'ils ne remplissent pas h cet 6gard leur obligation, ils peuvent 6tre poursuivis en reddition de compte; . . .

Similarly, Garsonnet, 3rd ed. 1913, vol. 3, s. IV, n. 815, Kellock J. p. 607:

Quiconque est charg4 ou se charge volontairement d'administrer tout ou 'partie du bien d'autrui doit rendre un compte d~taill6 de sa recette et de sa d6pense.

Tels sont . . . dipositaires . . . possesseurs de bonne ou de mauvaise foi . . .

Further, Fuzier-Herman, Vo Compte, p. 972, para. 14: Sont done comptables: toute personne qui accepte un mandat contractuel (C. civ., art. 1793); toute personne qui prend spontan6ment une gestion d'affaires (C. civ., art. 1372); les envoy6s en possession provisoire des biens de 1'absent (C. civ., art. 125); le phre, administrateur ligal des biens de ses enfants mineurs (C. civ., art. 389; V. supra, Administration 14gale, n. 137 et s.); le tuteur (V. infra, vo Compte de tutelle); le curateur d'un mineur 6mancip6 (C. civ., art. 482); le curateur d'une succession vacante (C. civ., art. 813 et s.); 1'administrateur provisoire donn6 A celui qu'on veut faire interdire (C. civ., art. 497); l'ex6cuteur testamentaire (C. civ., art. 1031); le dipositaire (C. civ., art. 1936); le s6questre (C. civ., art. 1956, 1963); le cr6ancier gagiste (C. civ., art. 2079, 2081); le crbancier antichrisiste (C. civ., art. 2085-2086);

le curateur au d6laissement par hypothque d'un immeuble (C. civ., art. 2174 et s.). Les envoyds en possession d6finitive des biens d'un absent n'ont pas h rendre compte, puisqu'ils restituent les biens dans l'tat oi, ils se trouvent (C. civ., art. 132). V. supra, Absence.

To the same effect Rolland de Villargues "R6pertoire de la Jurisprudence du Notariat", vol. III, p. 17, div. 1, paras. 1 and 2:

En g6ndral, ceux qui ont administr6 les biens d'autrui, A quelque titre que ce soit, avec ou sans mandat, sont oblig6s de rendre compte de leur administration.

Ainsi, . . . le simple possesseur et

Again, Pigeau, "Proc6dure Civile", 2nd ed. 1811, vol. II, p. 365, under the heading "Compte en G6n6ral":

On doit compte toutes les fois qu'on a administr6 le bien d'autrui, lors m6me qu'on est propriftaire d'une portion de ce bien . . .

Lorsqu'on a comme mandataire, on mgme sans mandat. As already pointed out, the position of a borrower cannot be distinguished from that of a depositary and in so far as a possessor has no rights to fruits, he is in a similar position.

In Quebec the law is stated in the same sense by Sir F.-X. Lemieux C.J., in Boivin v. Rock Shoe Manufacturing Co. (1)

Sont done comptables, toute personne qui accepte un mandat contractuel, toute personne qui prend spontandment une gestion d'affaires, le Kellock J. tuteur, le curateur, le dipositaire, le siquestre, le curateur au d6laissement, & I'hypothique de l'immeuble, etc. C'est l1 langage des auteurs. The learned Chief Justice founds himself on a number of authors, including Fuzier-Herman, vo Compte, Nos. 11, 13 and 14. The last mentioned paragraph I have reproduced above.

In Bouchard v. Perron (2), Pr6vost J., without any discussion of doctrine or jurisprudence, purported to found a contrary opinion upon, inter alia, the Boivin case, overlooking that that case was decided by Chief Justice Lemieux on a view of the law to the direct contrary.

Savard v. Charette (3), also referred to by Pr6vost J., contains no discussion of the law and does not advance matters. The other two cases referred to by Pr6vost J., namely Donoghue v. Lefebvre (4) and Dallaire v. Doyon (5), are, neither of them, authority for his view.

The point under discussion is expressly covered in the case of a dip6t by Pothier, vol. 5, p. 141, para. 47, as Les fruits de la chose donn6e en dip6t, que d6positaire a pergus, sont aussi un des objets de la restitution du dip~t. Soit qu'il ait encore par devers lui la chose qui lui a t6 donn6e en d6pit, soit qu'il ne lait plus, il doit tenir compte des fruits qu'il en a perous, b celui qui la lui a donn6e en d6p~t; car un d6positaire ne doit profiter en rien du dip~t. Par exemple, lorsqu'on a donn6 quelqu'un des vaches en d6pit, d6positaire doit tenir compte A celui qui les lui a donnues en dip~t, du lait et des veaux, sous la d~duction des frais qu'il a faits pour la nourriture la garde

Le dpositaire, tant qu'il n'a pas 6t6 en demeure de rendre la chose qui lui a 6t6 donn6e en d6p~t, n'est tenu de rendre que les fruits qu'il a pergus: il n'est pas tenu de ceux qu'on efit pu percevoir, et qu'il n'a pas peigus: mais depuis qu'il a 6t6 mis en demeure, il est tenu de tehir compte de tous ceux qu'on a pu percevoir, quoiqu'il ne les ait pas pergus; c'est un effet de la demeure, suivant les principes 6tablis en notre Traitg des Obligations,

Que. at

R.L. N.S. Que. at

Que. K.B. 1. Que. K.B.

Glasson in his "Procidure Civile", vol. 1, p. 542, para. 503, points out that:

y a un certain nombre de cas dans lesquels la loi ordonne une restitution de fruits, et cette restitution peut 6tre accessoire h une demande principale ou faire, elle-mime, 1'objet exclusif du procks; dans les deux cas, Kellock J. le systhme de la loi est le mime.

And further:

Tout jugement qui condamne A une restitution de fruits n~cessite trois op6rations: il faut d'abord fixer la quantit6 de fruits recueillis et qui doivent Stre restitubs.

Le jugement qui ordonne la restitution n'en opere pas en principe la liquidation; il ordonne de s'engager pour cette liquidation dans la proc6dure de reddition de compte (art. 526 IC. pr.); mais cette proc6dure n'est pas prescrite h peine de nullit6, et les juges pourraient, sans recourir ) la proc6dure de reddition de compte, op~rer cette liquidation par le jugement, s'ils en trouvaient les 616ments dans les pihces du procks (Req., 23 f6vrier 1859, D.P. 59. 1. 386; req., d6cembre 1882, D.P. 83. 1. 188); une fois connue la quantit6 des fruits A rendre. il faut d~terminer la valeur de ces fruits; 3' ensuite on en d6duit la d6pense; c'est ce qui fait l'objet de la seconde et de la troisibme op6ration (art. 129 C. pr.).

Such being the position with regard to fruits and accessories coming into the hands of a borrower or depositary, is the situation any different where the fruits or accessories come into existence as the result of an illicit act on the part of the borrower or depositary? As one might expect, the law is that the obligation is to render all fruits howsoever obtained.

Pothier, in vol. 5, p. 31, para. 73, in discussing the obligation of the borrower, says:

Pareillement, si celui h qui j'avais prWt6 une chose afin qu'il s'en servit pour son usage, I'a lou6e A un autre et en a retir6 un loyer, ce loyer qu'il en a retir6 est un fruit civil de ma chose, qui doit m'appartenir et qu'il doit me rendre . . .

To the same effect Trudel in his "Trait6 de Droit Civil du Qu6bec" by Herv6 Roch, vol. 13, p. 171:

Dans le cas, toutefois, l'emprunteur tire un profit de 1'usage illicite de la chose, ce profit appartient au priteur.

As put by Story on Bailments, 9th ed. 1878, p. 240, para. 269:

If, 'by any improper use of the thing loaned, the borrower has made a profit, that profit also belongs to the lender.

The position is the same in the case of a wrongful sale. Pothier, in treating of d6p6t, vol. 5, p. 140, para. 43, says: N6anmoins, si c'6tait par son dol qu'il ne 1'ett plus, ou par quelque faute, de l'espbce de celles dont il est tenu; en ce cas, il ne serait pas dicharg6 de son obligation de rendre la chose. Faute d'y pouvoir satisfaire, il serait tenu d'en rendre le prix; et mime, selon les circonstances, il pourrait 8tre, en outre, tenu des dommages et int6rits de celui qui la lui a donn6e en d6p6t.

Le d6positaire qui a vendu de mauvaise foi la chose qui lui a 6t6 donn6e en d6pit, n'est pas d6charg6 de i'obligation de la rendre, quoiqu'il Kellock J. ait rachet6 la chose pour la garder comme auparavant, et qu'elle soit depuis p~rie chez lui sans sa faute.

Pothier distinguishes the case of the person who has innocently sold the thing deposited.

At the foot of the same page he says:

Un autre exemple, c'est lorsque I'h6ritier du d6positaire, ignorant dip6t, a vendu la chose donn6e en d6p~t, qu'il croyait 6tre de la succession du difunt: cet h6ritier qui Pa vendue de bonne foi, n'est pas oblig6, v6rit6, de rendre la chose celui qui donn6e en dip~t au difunt; mais il est oblig6 de lui rendre la somme qu'il a reque pour le prix de cette chose; i6 moins que celui qui avait donn6 la chose en depit, n'aimAt mieux la revendiquer sur 1'acheteur par devers qui elle est; auquel cas serait cet acheteur que I'argent devrait ftre rendu.

It could not be suggested that the right of action of the depositor is on any lower footing as against the depositary who fraudulently sells the subject-matter of the deposit. The liability of the innocent vendor for the price of the thing sold received by him is embodied in art. 1806 of the Civil Code. With respect to all of the articles dealing with the obligations of the depositary, namely, arts. 1802 to 1811, the Codifiers, in their sixth report, say, at p. 20: The contract which forms the subject of this title, like that of the preceding one, (loan) is founded upon principles derived from the Roman law. The ancient law of France as expressed by Pothier in his treatise upon dip6t and siquestre, following that of Rome with little or no deviation, affords a clear and complete system of ruless these have been, for the most part, adopted in the modern code,

As the property loaned in the case at bar was company shares, the use of which was granted to the appellant for the limited purpose of pledging with the appellant's broker but with the duty of preventing any sale, the appellant was charged with the receipt and rendering to the lender of all "fruits" and "accessories", including dividends and shares to which the shareholder might become entitled by way of bonus or conversion of the existing shares, in a word, any profit whatever which might accrue to the shareholder as such during the currency of the loan.

In support of their action in the case at bar, the respondents have pro- 19ss duced evidence under the hand of the appellant that there was a substitution or conversion of the Steel Company shares.

In view of the clear obligation to account described by Kellock J. Pothier, as above set out, it is not necessary to say more but it may be asked how a depositor or lender may ascertain what have been the fruits and accessories while the subject-matter of the loan or deposit was in the custody of the borrower or depositary unless he can call for an account. Without such a remedy he could never put himself in a position to claim or even to give evidence that there had been fruits or accessories, whether properly or illicitly acquired, where the only knowledge of their having come into existence resides with the defendant.

As stated by Rinfret J., as he then was, in Johnston v. Channell (1): The purpose of the accounting is to ascertain whether the monies and securities are still in the appellants' possession, in which case the respondent would be authorized to take possession of them, as her property, in the hands of the appellants. And the alternative purpose of the accounting, if the monies and securities have ceased to be in the possession of the appellants, is to establish what is the equivalent that they should pay to the respondent in lieu of her property.

It is, moreover, provided by art. 406 of the Civil Code that

Ownership is the right of enjoying and of disposing of things in the most absolute manner. . . .

and by art. 408 of the Civil Code:

Ownership in a thing whether moveable or immoveable gives the right to all it produces, and to all that is joined to it as an accessory whether naturally or artificially. This right is called the right of accession. It cannot be said that the obligation to return the thing loaned rested, for example, upon a borrower by art. 1763 of the Code, places the lender in any inferior position to that of an owner whose property is in the possession of a mere possessor similarly obliged by art. 411 to return to the owner the thing and, subject to the terms of that article and art. 412, its fruits.

In Johnston v. Channell, supra, the action was brought by the respondent, a married woman, against a firm of brokers, who had received certain moneys and securities (1) [19371 S.C.R. 275 at 281, [19371 3 D.L.R. 214.

from her as security for a brokerage account she was operating with them without her husband's consent. respondent had asked for an account of all moneys and securities delivered to the appellants and, in default, that they be condemned to pay the respondent the sum of $162,000.

It was held that the appellants were under obligation to render an accounting, the double purpose of which was as already stated in the passage above quoted. Rinfret J., as he then was, had said earlier in his judgment (1):

In the case at bar, the securities which were the subjectmatter of the loan were the property of the respondent. They ceased by reason of the wrongful sale on the part of the appellant to be in her possession and thus it became impossible for her to return them. The respondent, therefore, became "entitled to get the equivalent from the appellant" and the purpose of the accounting demanded in this action is to establish that equivalent.

Leaving out of consideration the matter of dividends, which the respondent may be taken to have received in full, the appellant is accordingly liable to account for original shares, for all shares into which they were converted or for which other shares were substituted and for the proceeds. She has not only refused to give an accounting but has refrained from furnishing any information to the respondent either before action or in these proceedings as to the amount which she received on the sale. It is well settled in the jurisprudence of the Province that in such case the Court may condemn the defendant to pay a liquidated sum.

The authorities are reviewed and followed in Whitney v. Kerr (2); Bird v. Canadian Car & Foundry Co. Ltd. (3).

With respect to the question of trust, the learned trial judge considered that there was no conveyance by the will of any property to the "so-called trustees" as required by art. 981(a) of the Civil Code, and that accordingly the J. appellant was never a trustee of the shares in question. Assuming, but without deciding, such to be the proper construction of the will, that does not end the matter. If, as the learned trial judge determined, the shares and other assets disposed of by the will became "the absolute property" of the respondent Mina J. Barry under the will, those shares were in fact conveyed by her to the three trustees. The simple fact is that the shares which, at the date of death stood in the name of the deceased Christina Ross and which devolved upon the respondent Mina J. Barry as her property, with substitution in favour of the latter's daughter, were transferred to the three trustees by the respondent Barry, and the trust thus established, which the beneficiaries were the respondents or one of them, was accepted by the trustees. There is no question therefore, in my opinion, that from this point of view also, the appellant must account.

I would therefore dismiss the appeal with costs.

Appeal allowed with costs, Rand and Kellock JJ. dissenting.