Prudential Trust Co. et al. v. Forseth

THE CHIEF JUSTICE:-This is an appeal by Faubert and Watts against the judgment of the Court of Appeal for Ontario' allowing with costs ' an appeal by Temagami Mining Co. Limited from an order of Landreville J., dismissing without costs Faubert and Watts' cross-appeal, setting aside the order appealed from and also an award of a Board of Arbitration, dated April 1, 1958. The costs of the application to Landreville J. were also directed to be paid by Faubert and Watts. The latter will be referred to as the Contractor and Temagami Mining Co. Limited as the Company.

On October 9, 1956, these parties entered into a written agreement (the construction contract) whereby the Contractor agreed to

(a) construct a mining access road (hereinafter called the "road"), as hereinafter provided, from a point on Highway No. approximately four (4) miles south of the Village of Temagami, westerly a distance of approximately twelve miles to Sulphide Point on Lake Temagami along the route indicated on the plan hereto annexed as Schedule "A", subject to slight variation therefrom to secure better grades; and

(b) provide all the materials and complete the road including all bridges and culverts as follows and as in this agreement provided:- (i) the road will be built to the specifications prescribed for mining access roads which include a road bed of gravel twentyeight feet (28') wide and at least one foot thick over base, of a grade of not more than seven percent (7%) and curves of not more than ten degrees

(ii) construction will be of the standard which may be required by the District Engineer of the Department of Highways at North Bay;

(iii) construction to commence immediately and proceed continuously, subject to weather conditions, and to be completed to the satisfaction of the company's engineers, Geophysical Engineering & Surveys Limited.

1(1959), 17 D.L.R. (2d) 246.

The Company agreed to:- (a) pay the Contractor in lawful money of Canada for the materials and services aforesaid at the rate of Ten Thousand Dollars ($10,000.00) per mile plus Two Dollars ($2) per cubic yard of necessary rock cut and One Dollar per lineal foot of necessary corduroy, exclusive of bridges and culverts for which payment will be made at cost of labour and materials plus ten percent (109o) Kerwin C.J. (b) make payments on account thereof upon the certificate of the Engineers as set out.

"The General Conditions of the Contract" which were annexed to the agreement and were to be read into and form part thereof contained Art. XII the relevant parts of which provided:

In the case of any dispute between the Company, or the Engineers on its behalf, and the Contractor during the progress of the work, or afterwards, or after the determination or breach of the contract as to any matter arising thereunder, either party hereto shall be entitled to give to the other notice of such dispute and to demand arbitration thereof. Such notice and demand being given, each party shall at once appoint an arbitrator and these shall jointly select the third. The decision of any two of three arbitrators shall be final and binding upon the parties who covenant that their disputes shall be so decided by arbitration alone and not by recourse to any court by way of action at Law. However, if within a reasonable time the two arbitrators appointed by the parties do not agree upon a third or a party who has been notified of a dispute fails to appoint an arbitrator, then a third arbitrator or an arbitrator to represent the party in default or both such arbitrators may, upon simple petition of the party not in default, be appointed by a Judge of the Supreme Court of the Province of Ontario.

The original construction agreement was amended by another between the same parties, dated June 4, 1957, clause (a) of which reads:

(a) Notwithstanding any other provision in the Construction Contract to the contrary, from and after the 4th day of June, 1957, the Company will pay the Contractor in lawful money of Canada, Three Dollars (83) per cubic yard of necessary rock cut and Fifty-five Cents ($.55) per cubic yard for gravel fill hauled to and used for the construction of said road (exclusive of such material hauled for surfacing the mining access road to a uniform depth of one foot). Payment for said fill shall be based on pit measurements and the Contractor shall advise the Company, from time to time, of its intention to remove gravel fill from a pit which it shall designate and shall enable the employees or nominees of the Company to properly survey said pit both before and after any such gravel is removed therefrom by the Contractor. In the event the Contractor fails to enable the Company to perform any such survey or surveys, the Company shall be under no obligation to pay for gravel removed from the pit since the time a survey of Prior to the agreement of October 9, 1956, the Contractor Cl. had entered into one dated September 13, 1956, with Geophysical Engineering & Surveys, Ltd., for the clearing of all trees, brush and other vegetation and the removal of all merchantable timber, windfalls and other fallen timber, fallen branches and other surface litter, on a location corresponding to that of the mining access road referred to in the agreement of October 9, 1956. As appears from clause (b) (iii) of this last mentioned agreement set out above, Geophysical Engineering & Surveys, Ltd. were the Company's engineers.

Disputes having arisen between the Contractor and the Company the former commenced arbitration proceedings in pursuance of Art. XII of the General Conditions. The procedure before the Board of Arbitration and what it did will be referred to later but it is first necessary to dispose of two points upon which we did not require to hear counsel for the respondent. The award dated April 1, 1958, was, according to the Contractor's factum, published and delivered to the solicitors for each party on April 2, 1958. According to the same factum, on May 15, 1958, the solicitors for the Contractor served a notice of motion asking for leave to enforce the said award, and on May 16, 1958, they were served with a notice of motion on behalf of the Company asking for an order extending the time for bringing a motion to set aside the award and for an order setting it aside on the grounds therein set forth. On May 20, 1958, the Company's motion was adjourned by consent and it was that motion which was heard by Landreville J. on June 16 and 17, 1958. That learned judge extended the time for bringing the motion pursuant to s. 30 of The Arbitration Act, R.S.O. 1950, c. 20:

This was one of the matters as to which the Contractor cross-appealed to the Court of Appeal without success. Mr. Varcoe agreed that Laidlaw J.A., with whom the other members of the Court of Appeal concurred, was correct in stating that he accepted the statement of counsel for the Company that the latter had made a mistake as to CJ. the date of publication of the award and the circumstances under which it became necessary to ask for an extension of time to set aside the award, but that Laidlaw J.A. was mistaken in stating that counsel for the Contractor therefore confined the cross-appeal to the submission "that a person who has accepted a benefit under an award is thereby precluded from applying to have it set aside". He did indeed make this latter submission before this Court but also contended that the Court can exercise its judicial discretion to extend the time for moving to set aside an award only if it can be shown that the applicant held a bona fide intention to move while the right to do so existed, that there were special circumstances which prevented him from so doing and that justice requires that leave be given. So far as that point is concerned we are all of opinion that no matter what the effect of the authorities to which counsel referred may be, the order of the Court of Appeal, affirming in that respect the order of the judge of first instance, was a discretionary order within s. 44 of the Supreme Court Act and that, therefore, no appeal lay unless leave be given by this Court under s. 41 and that under the circumstances leave would not be given.

The second point in the cross-appeal by the Contractor which was decided adversely to it by the Court of Appeal is as to the alleged approbation of the award. As to that we agree with Laidlaw J.A., speaking for the Court of Appeal, that while certain saleable timber left on the site of the work after the termination of the construction contract was found by the Board to be the property of the Company and while the Company transferred its right in the timber to one Roy Pacey in return for his clearing it from the right of way, there was a separate contract between the Contractor and the engineers for the clearing of the right of way. Any question as to the ownership of this timber arose under this separate contract and was in no way connected with or dependent upon the terms of the construction contract, and there was no acceptance by the Company of any benefit under the award or acquiescence in it so as to preclude it from applying for an extension of time, or from applying to set aside the award itself.

cJ.

The members of the Board of Arbitration were duly chosen;

what might be called pleadings were then delivered,-"points of claim" by the Contractor, "points of defence and counter-claim" by the Company and "points of reply and defence to counter-claim" by the Contractor. In view of the award made by the Board it is important to note that after referring to the construction contract of October 9, 1956, para. 7 of the claim alleged that at the request of one Davidson, for and on behalf of the Company, the Contractor agreed to construct a road substantially different from that contemplated by the contract, the benefit of which had been accepted by the Company, and that "It was an implied term of the said agreement that the Defendant Company would pay to the Plaintiffs a reasonable remuneration on a quantum meruit basis for the construction of the said road. The said term is to be implied from the said request and the said acceptance by the Defendant Company. The Plaintiffs say that a reasonable remuneration for the construction of the said road would be the cost of construction incurred by the Plaintiffs plus ten per cent profit". These allegations were denied by para. 8 of the defence including a specific denial that there were implied terms of any agreement between the parties. Denial was also made that the Company had accepted as substantially complete the work done by the Contractor under the original construction contract and the Company maintained that the amending agreement of June 4, 1957, was entered into at the request of the Contractor for its financial benefit. Claims were also advanced by the Contractor as set out in the reasons of Laidlaw J.A. for damages under various heads.

The Board made this finding:-"We further find that the only means to settle the deeply involved dispute is to pay the Contractor the cost of the work, plus a percentage for profit", and then awarded the contractor the cost of the work plus ten per cent. "applied to the total cost of the work after deducting therefrom the amount of equipment rentals". The Board also found that the contract was wrongfully terminated by the Company and therefore in addition to the cost of the work, plus ten per cent., awarded the Contractor $10,100 "as liquidated damages".

I find it unnecessary to refer to any of the other findings of the Board of Arbitration. It appears to me to be quite clear that there is error of law appearing upon the face of the award. The Board did not proceed to arbitrate the matters that were in dispute under the construction contracts but imposed their own view of what should be done and gave what they considered was a proper sum on a quantum meruit basis and furthermore allowed a large sum by way of "liquidated damages". The authorities are all mentioned in the 16th ed. of Russell on Arbitration but reference might be made particularly to the judgment of the House of Lords in Absalom Ltd. v. Great Western

(London) Garden Village Society Ltd.'. Lord Russell with the concurrence of Lord Buckmaster and Lord Tomlin, at p. 607, points out that the authorities make a clear distinction between a case where disputes are referred to an arbitrator in the decision of which a question of law becomes material from the case in which a specific question of law has been referred to him for decision. In the first, the Court can interfere if and when any error of law appears on the face of the award but in the latter case no such interference is possible upon the ground that it so appears that the decision upon the question of law is an erroneous one. Lord

Warrington of Clyffe and Lord Wright came to a like conclusion for similar reasons. I read the relevant parts of the pleadings as indicating that no specific question of law was submitted by the parties to the Board and therefore I do not investigate the problem that would arise if this were not so as did LeBel J.A. with the concurrence of

McGillivray J.A.

The appeal should be dismissed with costs. The formal judgment of the Court of Appeal set aside the order of

Landreville J., but, as the latter extended the time within which the motion to set aside the award might be made, it would appear to be preferable if the affirmance of that part of the order of the judge of first instance were made clear dmn in the judgment of this Court to be issued.

Appeal dismissed with costs. Kerwin CJ.

TRADERS FINANCE

CORPORA- *May 22,25

TION LIMITED (Plaintiff) ......

APPELLANT; Jan. 26

I.

RESPONDENT. ON APPEAL FROM THE COURT OF APPEAL FOR MANITOBA Promissory note-Conditional sale contract-Transaction through agent- Transaction made in Saskatchewan and action brought in Manitoba- Endorsee of note with knowledge of want of consideration-Whether the Limitation of Civil Rights Act, R.S.S. 1953, c. 95, applicable- Whether procedural and not applicable to Manitoba action. The defendant C purchased a tractor-trailer from a dealer in Saskatchewan, but wished to make D appear to be the owner. Consequently, D went through the form of purchasing the equipment and made a downpayment with moneys supplied by C. In the conditional sale agreement, the dealer reserved title and D signed a promissory note for the unpaid balance. The agreement was assigned and the note endorsed to the plaintiff finance company, which knew who was the real owner. Subsequently D transferred the equipment to C, and this transfer agreement was concurred in by the plaintiff and the dealer. C then purported to give a promissory note for the unpaid balance to D. This note was endorsed by D to the dealer and then to the plaintiff, which sued upon it in Manitoba. The transfer agreement provided that this last mentioned note was collateral only to the original sale agreement and the note already held by the plaintiff. The trial judge maintained the action because s. 18 of The Limitation of Civil Rights Act was found to be ultra vires. The Court of Appeal dismissed the action. The plaintiff appealed to this Court and abandoned any argument against the validity of the legislation.

Held: The appeal should be dismissed.

Kerwin CJ. and Taschereau, Locke, Cartwright, Fauteux, Martland and Judson JJ.

Per Kerwin C.J. and Taschereau, Cartwright, Fauteux, Martland and Judson JJ.: The submission that the Act was not applicable because the vendor had no lien for "all or part of the purchase price", failed. D was not the vendor to C but merely a nominee or agent of C CorPN. executing formal documents for the purpose of putting the paper title in the person who was, from the beginning and to the knowledge of the plaintiff and the dealer, the real purchaser and equitable owner. There was, therefore, a reservation of a lien for all or part of the purchase price when the property was sold to D. The note given for that transaction was not enforceable under the Act because no debt existed to the knowledge of the payee and endorsee. The note given in the second transaction by the principal C to the agent D was in no higher position. Since there was a lien reserved there was no right of personal recovery under s. 18(1). The plaintiff held the note and sued upon it, knowing that it was given without consideration and without the existence of any personal obligation to pay.

The sections of the Bills of Exchange Act having to do with the rights of a holder in due course or the rights of a holder for value against an accommodation party, had no application.

The second submission to the effect that s. 18 was a procedural rule of the Courts of Saskatchewan and therefore inapplicable in an action brought in Manitoba, also failed. The section was in no way concerned with procedural rules for the enforcement of a right. It was concerned with substantive law.

Per Locke J.: There was no consideration for the giving of the note, to the knowledge of the plaintiff who sued qua endorsee. The promise to pay, signed by D as the nominee of C, was, to the knowledge of the plaintiff, unenforceable by virtue of s. 18 of the Act, the rights of the promissee, in case of default, being limited to repossession. The note sued upon, being given as collateral security only for a non-existent debt, to the knowledge of all parties to the action, was thus without consideration and unenforceable at the suit of the plaintiff.

In the absence of consideration, the question as to whether s. 18 of The Limitation of Civil Rights Act was in conflict with the sections of the Bills of Exchange Act, dealing with the rights of holders for value or holders in due course, did not arise in this case.

Since the rights of a holder in due course or a holder for value to whom a note had been endorsed after maturity without knowledge of the lack of consideration, did not arise in this case, there was no necessity to pass on the question of the validity of s. 18 of the Act.

APPEAL from a judgment to the Court of Appeal for Manitoba', reversing a judgment of Monnin J. Appeal dismissed.

1 (1959), 16 D.L.R. (2d) 183.

J.:-The appellant, Traders Finance Corporation Limited, sued the respondent, I. G. Casselman, as maker of a promissory note, which had been given in connection with the purchase of a tractor-trailer. The purchase was made in the Province of Saskatchewan, delivery of the property was taken there and all arrangements in connection with the transaction were made in that province. The proper law of these transactions is that of the Province of Saskatchewan but the action was brought in the Province of Manitoba and the main defence pleaded, and the only one that I propose to consider in these reasons, was based upon s. 18 of the Saskatchewan legislation known as the Limitation of Civil Rights Act. This section provides that "When an article, the selling price whereof exceeds $100, is hereafter sold, and the vendor, after delivery, has a lien thereon for all or part of the purchase price, the vendor's right to recover the unpaid purchase money shall be restricted to his lien upon the article sold .......

This defence failed at the trial because of the conclusion of the learned trial judge that the legislation was beyond the provincial power and an infringement of the exclusive jurisdiction of Parliament under s. 91(18) of the British North America Act in so far as it purported to affect the liabilities of parties to bills of exchange and promissory notes. The Court of AppealP reversed this conclusion, Adamson C.J.M. dissenting. On appeal to this Court, counsel for the plaintiff-appellant abandoned any argument against the legislation on constitutional grounds. It is, therefore, unnecessary to deal with the point further and I confine my reasons to a consideration of the only two grounds that were urged against the application of the legislation to the facts of this case. The first was that the legislation did not apply because of the peculiar form which the transaction took in this case, where the vendor according to the documents executed had no lien on the property for "all or part of the purchase price." The second was that this legislation should be characterized as procedural and, in consequence, held to be inapplicable to an action brought on the note in the courts of the Province of Manitoba. I will deal with these submissions in turn. The first submission makes it necessary to examine in some detail the form and substance of the transaction. The respondent Casselman wished to purchase a tractor-trailer from Transport Equipment Company Limited, a dealer carrying on business in the City of Regina. His intention was to incorporate a company which would own this vehicle and to have this company lease it to a transport company, Delarue Bros. Limited, which was engaged in the long distance haulage business between Regina and Toronto. Because the licensing regulations of the Province of Ontario did not permit operators to use leased equipment, to procure this licence it was decided to make Delarue Bros. Limited appear to be the owner. Therefore, Casselman caused Delarue Bros. Limited to go through the form of purchasing this equipment from the dealer with a substantial downpayment supplied by him. The usual conditional sale agreement was signed whereby the dealer reserved title. Attached to the agreement was the usual promissory note for the unpaid balance, which Delarue Bros. Limited signed. The agreement was then assigned and the note endorsed by the dealer to the appellant Finance company. All these transactions took place on September 30, 1952 and there is no doubt on the evidence that the Finance company knew that Delarue Bros. Limited was not the real purchaser and that Casselman Carriers Limited or Casselman personally was supposed to be in the background.

As the ostensible owner, Delarue Bros. Limited obtained a licence from the Province of Ontario and was then ready to transfer the equipment to the real owner and take a lease back. The transfer was made on October 14, 1952 by an agreement between Delarue Bros. Limited and Casselman Carriers Limited, concurred in by the Finance company and the dealer. Casselman Carriers Limited purported to give a new promissory note for the unpaid balance to Delarue Bros. Limited, the apparent original purchaser. This is the note sued upon and it was endorsed by Delarue Bros. Limited to the dealer, and then to the Finance company. The transfer agreement provides that it is not to disturb or affect in any way the security held by the Finance company on the equipment and that the new promissory note signed by Casselman Carriers Limited "shall not constitute payment of the Conditional Sale Contract and/or the promissory note given by the original Purchaser to the Dealer and now held by the Corporation (Traders Finance) and shall be collateral only to the said original Conditional Sale Agreement and the promissory note already held by the Corporation."

The new note was signed in this form: "Casselman Carriers Ltd. I. G. Casselman". The company, however, had not at that time been incorporated and both Courts have held that in the absence of other defences, a note so signed would have involved Casselman in personal liability. In this Court, counsel for Casselman did not question this finding and confined his argument to the other defences.

It is at once apparent that when Delarue Bros. Limited transferred this property to Casselman there was no reservation of title. Delarue Bros. Limited transferred all its right, title and interest, which was, of course, subject to the reservation of the legal title contained in the conditional sale agreement when Delarue became the apparent purchaser. If Delarue Bros. Limited had been an actual vendor of this equipment to Casselman the transaction would not be within s. 18 above mentioned because the vendor, in the words of the legislation, would, after delivery of the property, have no lien thereon for all or part of the purchase price. But Delarue Bros. Limited was not the vendor of this equipment to Casselman but merely a nominee or agent of Casselman executing formal documents for the purpose of putting the paper title in the person who was, from the beginning and to the knowledge of the Finance company and the dealer, the real purchaser and equitable owner. There was, therefore, a reservation of a lien for all or part of the purchase price when the property was sold to the known agent for Casselman. The note given for that transaction was not enforceable under the statute because no debt existed to the knowledge of the payee and endorsee and the note given in the second transaction by the principal

Casselman to the agent Delarue Bros. Limited and ultimately endorsed to the appellant Finance company is in no higher position. In spite of the form, this transaction was one between the dealer and Casselman through the J. intervention of an agent. It was done in two stages instead of one. There was a lien reserved and therefore there is no right of personal recovery. I have reached this conclusion on a consideration solely of s. 18(1). I do not regard the transaction as involving an agreement to make the provisions of the Act inapplicable and consequently null and void under s. 28. There was in fact no such agreement, either express or implied, for the form of the transaction was dictated solely by the determination to evade the licensing regulations of the Province of Ontario.

On this branch of the case, I therefore conclude that there was no debt between Casselman and Delarue Bros. Limited or between Casselman and the dealer because by the terms of the statute there could be no personal obligation to pay the unpaid balance in a transaction of this kind. The

Finance company holds this note and sues upon it, knowing that it was given without consideration and without the existence of any personal obligation to pay. There is no suggestion here that Traders Finance was a holder in due course or a holder for value with Casselman as an accommodation maker. The sections of the Bills of Exchange Act having to do with the rights of a holder in due course or the rights of a holder for value against an accommodation party have no application and the action on the note fails unless it can be successfully argued that the legislation is a procedural rule of the Courts of Saskatchewan and inapplicable in an action brought in Manitoba.

The appellant, in my opinion, has set itself an impossible task in seeking to have this legislation characterized as procedural. The section takes away a personal right of action for the balance of the unpaid purchase price if a lien is reserved. It is in no way concerned with procedural rules for the enforcement of a right. Therefore, the fact that there is no equivalent legislation in the Province of Manitoba does not help the appellant. This was undoubtedly a Saskatchewan cause of action, without a single element which might connect it with the Province of Manitoba. Even in the absence of persuasive authority it is difficult to see how the Manitoba Court could have done other than characterize the matter as one of substantive law. While it is true that the Manitoba Court must characterize this legislation by its own tests of what is procedure and what is substantive law and is not bound by what another jurisdiction may have done, there is no problem of conflicting characterization here because the Manitoba Court took the same view as that of the Saskatchewan Court of Appeal in Canadian Acceptance Corporation Limited v. Matte', where this very section was characterized as a matter of substantive law and not procedure. In that case the conditions were in reverse. The plaintiff sued on a Manitoba contract in the Courts of Saskatchewan. This statute was pleaded as a defence on the ground that it was a procedural rule of the forum. The judgment of the Court of Appeal was that the matter was one of substantive law and not of procedure and that this Saskatchewan legislation had no application to the Manitoba contract under litigation. I agree with this conclusion.

my opinion the ground upon which this appeal should be dismissed is that, as it was found by Mr. Justice Coyne in the Court of Appeal', there was no consideration for the giving of the note, to the knowledge of the appellant who sues qua endorsee.

It was, no doubt, by reason of the fact that this defence was not clearly pleaded in the statement of defence and presumably not argued before Monnin J. that the question was not dealt with by him. While not raised expressly in the notice of appeal to the Court of Appeal, I judge that it was argued there, though the Tritschler J.A. do not mention the matter. The defence appears to me to be sufficiently raised by paras. 11 and 12 of the statement of defence.

I also agree with Coyne J.A. that, in the absence of consideration, the question as to whether subs. (1) and (4) of s. 18 of the Limitation of Civil Rights Act of Saskatchewan, R.S.S. 1953, 95, are in conflict with the sections of the Bills of Exchange Act, dealing with the rights of holders for value or holders in due course, does not arise in the circumstances of the present case. That the Province may validly restrict the rights of the vendor under the conditioned sale agreement in the manner described in the section is not questioned.

The evidence, in my opinion, supports the finding that the manager of the appellant company was aware at the time that, in entering into the agreement to purchase the equipment dated September 30, 1952, and in signing the promissory note bearing that date in which Transport Equipment Co. Ltd. was named as the payee, Delarue Brothers Ltd. acted simply as the nominee of Casselman, for the purposes explained in the evidence.

The conditional sale contract and the promissory note were assigned and endorsed respectively to the appellant and it was upon this security that the moneys were advanced by it to pay the purchase price of the equipment, apparently at or about the above mentioned date.

The undated transfer agreement, found by the learned trial judge to have been executed on October 14, 1952, was made with the consent of the appellant, and it was on that date that the promissory note sued upon was given by Casselman to Delarue Brothers Ltd. and negotiated by endorsement to the appellant.

While the conditional sale contract on the face of it obligated Delarue Brothers Ltd. to pay to the vendor by instalments the balance of the purchase price amounting to $20,391.35, the promise to pay was, to the knowledge of the appellant, unenforceable by virtue of the provisions of s. 18, the rights of the promisee, except in certain respects with which we are not concerned, being limited in case of default to repossessing the machinery.

The transfer agreement referring to the note then given by Casselman, so far as it needs to be considered, reads: The note sued upon, being given as collateral security only for a non-existent debt, to the knowledge of all of the parties to the action, was thus without consideration and unenforceable at the suit of the appellant.

While upon the argument before us counsel for the appellant stated that he did not contend that subs. (1) and (4) of of theLimitation of Civil Rights Act were ultra vires and did not seek to support the judgment in the appellant's favour given at the trial on that ground, we would not, in my opinion, be relieved of our duty to deal with that question if the rights of a holder in due course or a holder for value to whom the note had been endorsed after maturity without knowledge of the lack of consideration were involved. The learned trial judge and the learned Chief Justice of Manitoba have both expressed the opinion that these portions of the section, in so far as they affect the rights of the holder of a negotiable instrument, are ultra vires the Province, while Coyne and Tritschler JJ.A., who constituted the majority in the Court of Appeal, have expressed the contrary opinion.

It is well that it be made clear that no such questions arise in this action. There is nothing in the reasons for judgment delivered in this Court in the case of Attorney-General for Alberta and Winstanley v. Atlas Lumber Co. Ltd.', which as between the original parties to the note affects the rights of the promissor to rely upon either the lack or a failure of consideration by way of defence.

Appeal dismissed with costs.