Pacaud v. The Queen

A company formed for the construction of a subsidised railway having failed, another company undertook to complete it, and the Government of Quebec agreed to pay all the actual debts against the road out of the unearned subsidies.

A., the contractor of the former company, presented a claim which was approved of and paid to the extent of $175,000, whereupon be paid over $100,000 of the amount to P. for services performed in organizing the new company and obtaining payment of the claim.

The Government afterwards brought an action against P. to recover back the $100,000 on the ground that A.'s claim was fictitious and was paid on fraudulent misrepresentations.

Held, that the action must fail if it could not have been maintained against A. ; that the onus was on the Crown of proving A.'s claim to be fictitious; that the Crown not only failed to satisfy such onus but the evidence clearly established the claim to be a just and reasonable one; and that the action could not be maintained as it did not ask for cancellation of the Order-in.Council and the letter of credit issued and that the payment made by the Crown thereunder should be set aside.

Held, further, that the payment to A., with the consent of the new company, was a discharge to the Government pro tanto of the subsidy due to the company, and if wrongfully paid the latter only could recover it back.

:-Sir Henry Strong C.J., and Taschereau, Sedgewick, King and Girouard JJ.

for Lower Canada, sitting in review, at Quebec, affirming the judgment of the Superior Court, District Quebec, maintaining the action with cost.

It was- alleged that neither Armstrong nor defendant had any claim which could entitle either of them to any part of said subsidy, nor had the defendant any legal claim against Armstrong and, consequently, that the money had been misapplied and paid out in error. The information prayed judgment against defendant for $100,- 000 and that the other parties should be summoned to hear such condemnation.

The defendant alone appeared and pleaded a demurrer and perpetual exception setting up that the money paid to him belonged to Armstrong, and that the province had no claim thereto.

The Superior Court, Andrews J., dismissed the demurrer and plea and entered judgment for the $100,- 000 and costs on the following grounds, viz.:

Considering the said demurrer is unfounded in law;

" Considering it is proved that the said C. N. Armstrong had in fact no legitimate right to any portion of the said subsidy, and the said Ernest Pacaud, on his part, no right, even as against the said C. N. Armstrong, to be paid any amount whatever, his only claim thereto being based on an unlawful agreement with the said C. N. Armstrong, contrary to public order, whereby he was to use his influence with certain members of the then executive of this province to bring about the passing of the said order in council, and the recognition of rights in Armstrong having no legal existence;

" Considering it has been made apparent that the payment of the said sum of one hundred thousand dollars out of the Provincial treasury was the contemplated result of a scheme continued by the said Ernest Pacaud and C. N. Armstrong to obtain from the said treasury to their mutual gain, a sum of one hundred and seventy-five thousand dollars, whereof it was from the first designed and understood between them thit the said Ernest Pacaud should get one hundred thousand dollars as his share;

" Considering that as to the said sum of one hundred thousand dollars, Armstrong was a mere instrument and confederate aiding the said Pacaud to possess himself of it;

" Considering it is also proved that the Baie des Chaleurs Railway Company did not complete the works which they undertook as a consideration for said subsidy, and only on the completion of which they would become entitled thereto;

"Considering it is also proved that the said Baie des Chaleurs Railway remains encumbered by a privileged claim carrying with it a lien, in favour one Henry Macfarlane for work by him done on the said railway as a sub-contractor of the said C. N. Armstrong, for a sum much exceeding one hundred thousand dollars;

" Considering that the said plaintiff, as the custodian of the said subsidy, has a legal interest and right to recover the said sum of one hundred thousand dollars, forming part thereof, and so misapplied and unlawfully taken therefrom, in order to apply it to its legitimate purpose of freeing pro tanto, the said railway from the said lieu of the said Henry Macfarlane; "Considering not only that the said Ernest Pacaud has no right whatever to the said sum of one hun- ,dred thousand dollars, but that it is also against public order that he should be allowed to retain it." The present appeal is from the judgment of the Court of Review affirming the decision of the Supreme -Court.

The money paid to the defendant appears, even by the notes of the trial judge, to have belonged to Armstrong.

It had been certified to by the directors of the railway coihpany and the engineer in charge, in settlement of a genuine claim and payable to him on handing over the road free from debt to the new company. Armstrong had fulfilled this condition and was entitled to full control of the $175,000.

There has been no duress ,or unlawful action shown against either him or the defendant.

The Crown had no control or right of action in respect of it after it had been paid, and cannot inquire as to what disposition was made of the funds. We refer to the following cases as bearing the questions at issue, viz.; Mogul Steamship Co. v. Gregor, Gow 4- (1); Allen v. Flood (2); Badische Anilin und Soda Fabrik v. Schott, Segner Co. ; The Queen v. Dunn at page 402; Canada Central Railway Co. v. The Queen (5); Clarke v. Eckroyd Hereford Railway Co. v. The Queen

Even if the contract between Armstrong and the defendant had been illegal, the money paid cannot be recovered back; Kearley v. Thomson

Matthew Hutchinson for the Crown. The money was paid under misapprehension, in error of law and in error of fact.

It was a payment sine causd without the existence of any lawful debt, and through the misrepresentation made by the defendant and mises en cause. See Dalloz '55, 1, 108.

The pretended services, or more accurately artifices, for which defendant himself admits he did not expect to receive more than four or five thousand dollars, are essentially immoral and contrary to public order, and the payment made of them bears, in itself, this character of immorality and illegality which removes all possibility of claiming payment

There was thus between Armstrong and the defendant illegality and immorality of consideration, condictio turpem causam, and there was nullity contrary to public order, and to these there was added the nullity of the execution itself by which they knowingly appropriated Government money to themselves. Both of them must then be declared to have been in bad faith and if the defendant was in bad faith there is a direct action against him.

3 Arntz, no. 473, p. 255 ; 13 Locr6, p. 39, no. 7; 5 Pothier, no. 170, p. ; St. Michel v. Guilleminot (9); Mourlon, p. 885: 4 Aubry et Rau, p. 739, par. 40, no. 3; Dalloz, Rap. Vo. Obl. no. 5489.

See also arts. 989, 990 and 1047 0. C. The defendant argues that the Government has no Qun.

right of action, as it has lost nothing; that this money was to be handed over to the railway company. That is true, but only upon certain conditions which were not executed, that is to say, after the completion of works which were not done, and especially upon the conditions that the privileged debts should be paid with the moneys which have been diverted from their express destination.

Again a Government subsidy to a railway is not so much for the railway company as for the section of country to be developed, a political, social obligation, a need to satisfy. If the grant is diverted the need still subsists, and with it the obligation to satisfy it, a matter of public interest which the Government is bound to see properly discharged.

concur with Mr. Justice Taschereau and Mr. Justice Girouard.

J.-The facts that bear upon this case are not complicated.

Of the formidable volume of over 1,000 pages containing the inquiry of the Royal Commission, more than two thirds of the eighty-nine depositions and two hundred exhibits thereof filed by consent as part of this record (assuming them to have been legally filed) are altogether irrelevant and have no application whatever to the issue between the parties, besides being in a large measure inadmissible as evidence in a court of .justice. As to the law, a correct appreciation of the facts-leaves no room for controversy.

In 1891, the undertaking known as the Baie des Chaleurs Railway was on the verge of a total failure. The company, the contractors, the sub-contractors, were all insolvent; the whole of the earned subsidies granted by both the federal and the provincial governments had been exhausted; all work on the ground had been suspended for over a year; whatever had been done was in a dilapidated state and deteriorating more and more every day; the distressing condition and sufferings of the contractors' unpaid workmen were engaging the attention of the whole country; a statute had been passed enabling the Government to cancel the company's charter and wind up its business, 54 Vict., ch. 37, and all previous attempts to reorganize the company and enable it to continue and complete its undertaking had proved abortive.

It was under these circumstances that, in March, 1891, one Thom, who was a creditor of the company, as a member of the firm of Cooper, Fairman & Co., taking advantage of an additional subsidy granted by the provincial legislature on the 30th December preceding (54 Vict., ch. 88), at the suggestion of one Armstrong, the contractor of the company and interested therein, succeeded in forming a syndicate accepted as being of sufficient financial strength to complete this railway, which, it was admitted on all hands, was a work greatly needed in the public interest and of vast importance not only to the large extent of the country which it was intended by the legislature thereby more directly to benefit, but also to the whole Dominion as a feeder to the federal road known as the Intercolonial Railway.

Having come to an understanding with the owners of the charter, Thom, acting for the syndicate so formed, entered with the Government into negotiations, which resulted in the acceptance by the Government of his propositions by the order-in-council no. 237, approved of by the Lieutenant-Governor the 23rd April, 1891.

This order-in-council appears to have been carefully drawn and bears intrinsic evidence of the Government's desire to protect the company's creditors by the right thereby reserved to the Government to itself pay under certain conditions the actual debts of the company, through an officer appointed for that purpose, out of the land subsidy converted into cash (conceded to be equivalent to $280,- 000), granted by the Act of the then last session the Legislature, 54 Vict., ch. 88, already referred to, which said subsidy, converted into cash to the amount necessary therefor, the Government bound itself by the said order-in-council to pay to the creditors of the company whose claims would be approved of by Thom or determined by arbitration.

On the same day, by another order-in-council, one J. C. Langelier was appointed the commissioner to pay these claims as provided for by aforesaid order-in-council no. 237. Afterwards, on the same day again, Armstrong handed to the said Commissioner Langelier a claim of $298,943.62, which he had against the company. Immediately, or on the next day, Langelier sent this claim to Thom for the approval required from him by the order-in-council no. 237.

Thom, who had seen or heard of it before, answered that he approved it, but only to the amount of $175,000.

Langelier then wrote to the Commissioner of Public Works that Thom had deposited in his hands $500,000 worth of debentures as required by his contract with the Government contained in the order-in-council no. 237, and had otherwise fulfilled all the obligations imposed upon him by the said order-in council, asking at the same time, as prompt action was required, that the funds necessary to enable him to immediately commence the payment of the debts of the company be placed at his disposal.

The commissioner, or his deputy, being subsequently shown Armstrong's claim, the consent by Thom that $175,000 of that claim should be paid by the Government, the certificates of the engineers, and the admission by the managing director and by the secretary of the old company that the claim as filed was correct statement of the work done by him remaining unpaid, after, moreover, getting the opinions of the law officers of the Crown, and acting altogether as cautiously as possible in the matter, ordered the payment of the claim to the amount of $175,000 and informed Langelier of it. Langelier accordingly paid $100,000 thereof to Armstrong by his cheques on the Union Bank to Armstrong's order, five in number, for $20,000 each, which cheques Armstrong immediately indorsed and handed over to the appellant, who later on got them cashed. The balance of $75,000 was also paid to Armstrong or to his order, but these $75,000 are not in question here. It is simply the $100,00 paid as aforesaid to Armstrong, and repaid by Armstrong to appellant, of which the Crown now demands the reimbursement from the appellant. This demand is based exclusively on the ground that Armstrong's claim was a fictitious and a fraudulent one, and that the company did not owe him anything, to the knowledge of the appellant; that it was the appellant who, at Armstrong's request, had succeeded by undue influence and corrupt means in obtaining from the Government these $100,000, which immediately upon receiving them, under a previous agreement between them, Armstrong had paid over to him, the appellant, without consideration, or for an illegal and immoral consideration.

It is admitted by the appellant, whilst denying all fraud on his part or on the part of Armstrong in the matter, and all the allegations of the information as to bribery, undue influence or fraudulent acts whatsoever on their part, that under a previous agreement with Armstrong, he, Armstrong, immediately upon receiving those $100,000 from Langelier, indorsed the cheques and handed them over to him, the appellant, as remuneration and payment for his services in acting as agent for the said Armstrong in the negotiations with the Government relating to the formation of the new syndicate and the settlement of said Armstrong's claim.

It results from this synopsis of the case that the fact to be first investigated is the one declared upon on the part of the Crown, that Armstrong had no claim whatever against the railway company. For it was conceded at the argument that the Crown cannot recover these $100,000 from the appellant if they could not recover them from Armstrong.

And it is a rather singular fact, which remains unexplained, that no condemnation is asked by the Crown against Armstrong in this case.

If consideration was given to Thom or to the company by Armstrong for the payment of these $175,000 to him by the Crown for the company, the case is at an end.

What Armstrong did with the money, whether he spent it illegally repaid it to appellant for an immoral consideration, assuming that to be so, cannot give to the company, and still less to the Crown, the right to recover it back from him, Armstrong, and aforliori not from the appellant if it was due or if consideration was given by Armstrong for it.

Now the onus probandi was on the Crown. It had to prove that these $100,000 were not due to Armstrong, and that it had paid them through error, upon false representations.

And on the present issue with appellant more especially. the proof of these facts had to be clear, positive and convincing.

The Crown's demand is based negative allegation, the allegation that nothing was due to Armstrong; the establishment of that negative is an essential element of their case. Appellant could not be expected to have to prove that Armstrong's claim was a legitimate one. Then the Crown had to prove not only that it was a fictitious one, but also that appellant knew that it was a fictitious one. Now the Crown has failed on both these points. As to Armstrong's claim there is abundant evidence, and what should in this issue between the Crown and the appellant be taken as conclusive evidence, that it was a just one. He repeatedly himself swears to its accuracy, and his evidence is unimpeached.

It seems to have been given fairly and frankly. It is, moreover, certified for a large portion thereof by Leduc, his engineer, and by Light, the company's engineer and inspector for the local Government, who by Armstrong's contract with the company was stipulated to be the sole judge the quality and the quantity of the work done. It is moreover admitted as correct by the managing director and the secretary of the old company whose contractor he was. What more could the Government require, as Mr. Garneau, the Commissioner of Public Works, says in his evidence, than these certificates and the admission of the company itself, coupled with the admission of Thom himself, for the new syndicate as to $175,000 thereof that the claim filed was a correct and legitimate one, at least to that amount ? It is true that it was not cash, but bonds only, that Armstrong had then a right to demand according to his contract, and that the whole was not then exigible; but it was a compromise, a new contract virtually that intervened between him and Thont with the consent of the old syndicate or company.

In consideration of these $175,000 he signed the following document:

I, Charles N. Armstrong, contractor for the construction of the Baie des Chaleurs Railway, do hereby grant a full and complete discharge and quittance to the Baie des Chaleurs Railway Company of THE all and every claim, of whatsoever nature and kind, that I have may have against the said company ; and I further agree to cancel and TaschereauJ. annul, and I do hereby cancel and annul the contract and agreement entered into with the said company on the 9th day of June, for the construction of the said railway.

I hereby authorize the said company to take possession of the works on the said railway and all materials provided for the construction of the line, together with all the rolling stock placed on the line in furtherance the provisions of said contract of the 9th June,

And I further transfer, assign and make over to the said company, all and every claim which I have or may have against Henry MacFarlane & Son, and the said company hereby authorized to use my name in enforcing or collecting such claim.

Signed at Quebec, this 28th day of April,

N. ARMSTRONG. If he had not agreed to accept these $175,000 for his claim, the whole of these negotiations would have failed, afid the company would most probably have been put into liquidation.

He gave up all claim against the company under his contract; he gave up not only his contract itself, but also the possession of the railway, of the rolling stock and of the construction materials and plant on the ground; he further assigned to the company a claim he had against the Macfarlanes.

It cannot therefore be contended that this sum of $175,000 was paid to him without consideration, even if it was paid to buy him out, to use his own expression.

And even if paid before it was due, it cannot be recovered under the express terms of Art. 1090 of the Civil Code. But, in fact, by mutually putting an end to the contract, what was due thereunder became unconditionally immediately exigible. It was, moreover, one of the express conditions of his so giving up his contract that he be paid these $175,000 immediately.

He was master of the situation; he had, or his sub-contractors had, de facta possession of the road; he had the contract. It was only upon payment of these $175,000 as a compromise that the new company could succeed in going on with the enterprise, as it appears by the evidence they satisfactorily did soon thereafter. And the company never complained that they had paid too much for that compromise.

How can the Crown be admitted to complain of it ? It is true that Armstrong would have taken $75,000 for his claim in 1890, but that is satisfactorily explained in his evidence and in Thom's evidence.

Rather than lose everything, as he then had to fear, he would have taken that amount, perhaps less. But as the company had since been granted an additional subsidy of $280,000, he positively refused thereafter to be satisfied with $75,000. The fact that his claim was not filed in the Department of Public Works before it was filed with Langelier has been insisted upon on the part of the Crown as a suspicious one.

But that is also satisfactorily explained. Armstrong had no claim whatever against the Government.

It was with the company and the company alone that he had contracted, and he had duly filed his claim in the office of the secretary of the company. He could not reasonably be expected to file his claim with the Government when the Government owed him nothing. It had all along the previous negotiations in 1890 been known that he bad a claim against the company which had to be settled some way or another before any attempt to reorganize the company and put it in a sound financial position could be expected to succeed.

It has been urged, though but faintly, on the part of the Crown, that Armstrong's claim was not a privileged claim under the terms of the statute granting the $280,000 subsidy, 54 Vict., ch. 88. But Thom or the company, the interested parties. do not attack this payment, and such a ground more specially cannot be invoked by the Crown against TH.

this appellant in an action of this nature. Then Armstrong had possession of the road and the right retention.

That constituted a privilege; and it was so treated as a privileged claim by Thom himself, by the Government special commissioner, Langelier, and by the Commissioner of Public Works.

How could the appellant have been expected to know that this was not a privileged claim, assuming that to be so? How could he be expected to make an investigation of the matter ? Then by the order-in-council no. 237, the Government was bound to pay out of the subsidy the actual debts, not only the privileged debts of the company, as Thom had proposed. The contention by the respondent that the acts of the Lieutenant-Governorin-Council are to be assimilated to the acts of a subordinate officer who cannot exceed his mandate are totally unfounded.

The acts of the Lieutenant- Governor-in-Council are the acts of the Crown. However, in this case, this point does not necessarily come up for adjudication.

The expression, " actual debts," clearly included the privileged debts, and the orderin-council is supported by the statute. Then, by the statute, these payments had to be made to the satisfaction of the Lieutenant-Governor-in-Council, and the Lieutenant-Governor-in-Council, through Langelier, its commissioner specially authorized to determine which were and which were not privileged, treated Armstrong's claim as a privileged one.

Then it is not as a condition precedent nor necessarily out of the subsidy that, by the statute, the privileged debts of the company were to be paid. The subsidy could legally have been paid to the company upon condition, the performance of which guaranteed to the satisfaction of the Lieutenant-Governor-in-Council, that these debts were to be thereafter paid. We have been asked on the part of the Crown to read subsection (J) of the statute (1) as if the words " out of the said subsidy " were in it after the word " paid " but there is nothing in the statute that would justify this being done.

Moreover there is no allegation whatever in the information that there were at that time other outstanding claims against the company privileged or not privileged.

It has further been urged on the part of the Crown that the conversion into cash of the land subsidy granted by 54 Vict. ch. 88, was not authorized by the statute. But there is nothing in that contention, could the Crown lawfully avail itself of the objection in this case against the present appellant. That statute, section authorizes the conversion and, it is obvious, necessarily authorized it as regards the creditors of the company, without requiring any previous formality whatever.

If the Lieutenant-Governor-in-Council ordered that the creditors privileged and not privileged were to be paid by the Government out of this subsidy, as it could be done and has been done in this case, before any part of it was paid to the company then the conversion of the land grant into cash was in that case necessarily implied by the statute to have been provided for, at least to the amount of their claims, as it was cash, not land, with which the Legislature must have intended them to be paid.

The resolution the directors required by the said statute could not be required in such a case.

Then this might be an objection on the part of the company, but it is not one open to the Crown, after having paid the money knowingly without asking for such a resolution. And the company, a party to this case, never took this or any objection whatever against this payment to Arm- *E strong, and never could have taken it, as it was made with their consent and by their order.

There is another obstacle to the respondent's demand, which Armstrong could have successfully invoked had it been instituted against him, and which, therefore, is available to the appellant. The payment was a direct one to Armstrong, as conceded by paragraph 37 of the information.

It was a payment for and in the name of the company in satisfaction of the company's debt, with the company's assent. In fact, the warrant is " to pay or cause to be paid unto the Baie des Chaleurs Railway," to be taken from 40 Vict. ch. "An Act Respecting the Consolidated Railway Fund." This payment made with the company's assent is a discharge to the Government pro tanto towards the company of the subsidy granted to the company in 1890.

It is so much less that the company can expect to receive from the Government. If since the company has not fulfilled its obligations, that is a matter which does not concern Armstrong, still less the appellant. If the Government had given that money to Thom for the company, and Thom had repaid it over to Armstrong, it is the company alone who could recover it back, if any one could, not the Crown. Who would benefit by it if the Crown succeeded in this case? Evidently the company and the company alone. Whose monies did the Crown pay to Armstrong? The company's money, the money voted to the company.

Thom's approval of Armstrong's claim for $175,000 was equivalent to an order on the Government to pay so much to Armstrong out of the grant by the Legislature, in satisfaction of the company's indebtedness to him (Armstrong), with the company's assent. The Crown, therefore, has no right to this action, even if the facts established any liability whatever by Armstrong or the appellant.

For these reasons, I am of opinion that the Crown could not have recovered these

$100,000 from Armstrong, and that, consequently, they cannot be recovered from the appellant.

But even if the Crown was in a position to recover from Armstrong, it does not follow that it can recover against the appellant.

One of the essential conditions required to enable the Crown to maintain its demand against the appellant is that he, the appellant, knew, assuming it to be so, that Armstrong had no right to these $100,000, or to any part thereof.

Now, there is not the least ground for that contention in the whole record. And how could he have any but the sincere conviction that the company was indebted to Armstrong, when not only did Armstrong himself always assert it, and it was conceded by every one to appellant's knowledge in all the previous negotiations that had taken place to re-form the company, but also when he had before him not only the engineers' certificates and the confession of judgment, as it were, by the officers of the old company, for a much larger amount than the one compromised for, but also Thom's acknowledgment of the legitimacy of the claim up to $175,000, an acknowledgment acquiesced in and never complained of by the new company he represented. The fact that his agreement to get $100,000 was kept secret cannot be taken by itself as evidence of fraud. When fraud is charged, it has to be proved, and proved clearly. Suspicions will not do.

It is true that Mr. G-arneau, the commissioner of public works, swears that if he had known that the appellant was to get anything out of these $175,000, Armstrong would not have had a cent.

But that is ,obviously a voluntary statement made by the witness before the Royal Commission with a political object, or to emphasize his repudiation of any dishonourable conduct whatever on his part in the whole transaction. In law, if the money was due to Armstrong, it had to be paid to him, whether the commissioner knew or not that he was to spend it illegally or immorally, or to give it or throw it away. And what Mr. Garneau says only tends to prove that the interests of the railway required the secrecy of this agreement between Armstrong and the appellant.

The allegations of the information, as to deception, circumvention, bribery, immorality and undue influence in the negotiations with the Government, of either the company or Thom or Armstrong and the appellant as his agent, are not made out in the case. There is nothing in this record to cast any doubt upon the statement of the Commissioner of Public Works. when he swears that everything was done honestly, openly and regularly.

As to this agreement for $100,000 between the appellant and Armstrong, it is certainly an extraordinary one.

No doubt the appellant performed some services for Armstrong and was entitled to some remuneration therefor. And there is nothing to find fault with in the fact that Armstrong, who lived in Montreal, employed an agent in Quebec to transact his business with the Government in Quebec and paid for his services.

Neither was he guilty of any improper conduct because he chose as such a friend of the Ministers and a supporter of the Government, and gave him an interest as one of the promoters of the enterprise. If any one in his position wishes to employ an agent, he is not obliged, as evidence of the honesty of his claim, to resort to an adversary of the Government or to a personal enemy of the officials to be dealt with. Influence should not be required, it is true, to procure the payment by the Government of an honest claim; but, if one requires more than usual promptness in the matter, the use of legitimate influence with the officials to procure it does not justify accusations of a nature to throw discredit on the whole country- Evidently Armstrong thought that if he did not succeed in getting up a new syndicate and obtain then a settlement of his claim, he was in immediate danger of irretrievably losing everything.

No time, he had reason to think, was to be lost. The act then recently passed empowering the Government to revoke at will the charter of the company was hanging as a heavy cloud over the whole business. There might at any time intervene a political crisis and a change in the Government with an entire change of policy as to subsidies to these companies.

Then other parties unfriendly to him might at any moment offer to organize a syndicate and take up the charter. Thom himself, unable as he was to take up the charter unless Armstrong's claim was settled, threatened that if the Government did not settle it without delay he would give up the transaction.

The forty days delay fixed by his agreement with the old shareholders for the necessary assignment of their rights and of the charter were very soon to expire when the order-in-council was passed. There were only five days left. Evidently, he and the appellant as his agent were justified in pressing the matter and employing all the legitimate influence they could obtain to hasten a final settlement.

The amount the appellant received is, however, altogether out of proportion to his services.

But that is a matter entirely between himself and Armstrong. It does not in the least concern the Crown. It is a dealing that leads to suspicion, no doubt, but all suspicion is dispelled as against the Crown's demand in this case by the evidence adduced; 1st, that Armstrong's claim was a legitimate one; 2nd, that were there now, or had there been at any time since, any room for doubt *E that first point, the appellant had no reason whatever then to doubt that it was a legitimate one.

I would allow the appeal with costs and dismiss the action with costs.

Such is the unanimous judgment of the court.

and JJ. Concurred.

J.-Sans vouloir faire l'appr~ciation de la preave faite devant la Commission Royale, pour les raisons que j'indique plus loin, je ne puis m'emp~cher d'observer que cette action ne me paralt pas avoir t&6 intent6e dans le but d'obtenir le remboursement des milliers de piastres que la Couronne allgue avoir 6t6 soustraits du tr6sor public.

Comment en effet expliquer le d~faut de conclusions contre Armstrong et le -d~faut d'assignation contre d'autres personnes qui out aussi b6ndfici6 des proc6d6s de Pacaud et Armstrong. D'ailleurs, dans les pays regis par le droit constitutionnel anglais, les crimes politiques, comme celui que l'ou reproche , 1'appelant, sout poursuivis et punis devant les tribunaux de juridiction criminelle on la haute cour -du parlement on 1'61ectorat.

On n'a pu nous signaler un seul pr~c~dent analogue A la poursuite civile que nous sommes appelks A decider.

M. le juge Andrews cite bien quelques exemples les tribunaux frangais, .A la demande de 1'une des parties, ont anuul6 des contrats comme celui que sign~rent Pacaud et Armstrong, ce qui ne peut 6tre contest6 srieusement; mais quant la r6p6tition de 1'indu dans les circonstances de la pr~sente cause, il n'en indique aucun. Avant de confirmer le jugement dont est appel, il faut donc examiner si l'action est bien fond6e et prouv6e.

Je suis oblig6 .de donner h la Couronne ses justes droits, maisje ne me sens pas dispos6 d'6tre g6n6reux A propos d'amendements on de consentements sur la proc6dure suivie. Je suis entibrement oppos6 A tout ce qui tend A faire des tribunaux une arkne politique.

Les particuliers n'ont 1'action en r6p6tition de l'indu, Giroad J. qu'en all~guant et prouvant lo, que ce qui a t6 pay6 n'6tait pas et 2o, que le paiement a 6t fait par erreur. C.C., Art. 1047, 1048, 1140. Lorsque le d6biteur paie en pleine connaissance de cause et sans erreur, il ne peut r6p6ter; il est cens6 faire une lib&ralitO. est vrai que Particle 1140 dit tout simplement que "ce qii a pay6 sans qu'il existe de dette est sujet A rip6tition," mais 1'article 1047 y suppl6e en ajoutant que la r6p6tition de 1'indu n'a lieu que s'il y a erreur. O'6tait 1'opinion de Pothier, Cond. Ind. n. 160, et des anciens auteurs.

Laurent ajoute, et son opinion est g~ndrale. ment enseign6e par la majoritO des commentateurs modernes :

Stre j'aie y a dans ce sens un arr~t de la Cour de Cassation du mars, 1885, V. 86, 49.

C'est aussi ce que cette cour d~cida en 1882 en Bain v. Citi de 1Vlontrial Le Recueil des Arrts de Sirey pour l'ann6e 1884, note part. IV, p. contient un rTsum6 complet de la jurisprudence et de la doctrine sur le sujet.

Voir aussi Huc, n. 388; Baudry-Lacantinerie, (5e. 6d.) n. 1342. Si les particuliers ne penvent r6p~ter sans invoquer 1'erreur; il doit en ktre autrement des gouvernements qui ne peuvent faire des lib&ralit6s sans l'autorit6 de la 16gislature; mais si le paiement a t fait en vertu d'actes on de documents obtenus par fraude on dol, ]a resolution de ces actes doit 6tre demand6e.

La fraude n'est pas une cause de nullite absolue.

L'article 1000 de notre code dit qu'elle donne seulement un droit d'action on une exception pour faire rescinder les actes E et contrats qui en sont entach6s.

A mon avis, la Couronne. qui alligue dol et fraude, aurait demander la J. rescision du paiement et de la lettre de credit, au moins de 1'ordre en conseil qui les aulorisait, et dont la nullit6 n'6tait pas apparente A la face mime de ces documents. En effet, c'est 1'ordre en conseil qui autorisait le paiement des dettes de la compagnie, sur le certificat de Thom, un des actionnaires de la nouvelle compagnie, et apparemment son repr~sentatt dans le cours de toutes les n~gociations.

Laurent enseigne, avec raison que justice, Voir 5 Larombibre, p. 614.

L'intimce a demand6 la nullit6 du trait6 secret entre Pacaud et Armstrong.

Mais cela n'6tait pas n6cessaire, car les contrats n'ont aucun effet A 1'6gard des tiers. Si le montant pay6 eit th di A Armstrong, ce dernier pouvait en faire pr6sent A Pacaud on A d'autres, et il est en preuve qu'il lui permit de toucher la somme de $100,000, ce qui parait extraordinaire et fut la cause de toute 1'agitation politique de 1'poque, ofi nous n'avons rien A voir ; mais je ne puis voir 'int6r~t que l'intim6e peut avoir de demander la nullit6 du trait6, ind6pendamment de 1'ordre en conseil, de la lettre de cr6dit et du paiement; elle n'alligue pas la d6confiture d'Armstrong afin de lui permettre d'exercer 1'action qu'il pouvait avoir contre Pacaud. D'ailleurs, ce ne fut pas ce trait6 secret qui fut la cause du paiement et du tort fait A la Couronne, mais bien 1'6mission de la lettre de credit et la passation de l'ordre en conseil; et ce sont ces documents, particulibrement le dernier, dont on aurait dfi demander la r6solution.

Est-il bien vrai qu'il n'6tait rien A Armstrong? est prouv6 par le t6moin Macfarlane, entendu dans la cause, qu'Armstrongavaitfait des travaux consid&rables sur la ligne du chemin de fer, dont il ne peut estimer le montant.

est difficile d'en fixer la valeur sans exa- -miner toute ]a preuve qui a t6 faite devant la Commission Royale, et qui forme un volume d'au delA de 1000 pages.

Armstrong demandait $298,943.62 certifibes comme dues, suivant les stipulations du contrat, par l'ing6nieur de la compagnie, agissant en mime temps comme le surintendant du gouvernement, et aussi par l'ing6nieur des contracteurs, le secrtaire-trsorier et le directeur-g6rant de la compagnie.

L'ing6nieur de la compagnie jure devant la Commission que le compte d'Armstrong 6tait exag6rb de 50 par 100, et qu'il ne 1'avait approuv6 que sur les repr6sentations du pr6sident. Mais alors il lui 6tait r6ellement di pris de $150,000, A tout 6v6nement plus que les $100,000 demand6es.

Le gouvernement paya plus que cette somme & Armstrong, on A d'autres pour son compte, dont il ne demande pas la v~p6tition, bien que payee en vertu du m~me ordre en conseil et par suite des mimes manaouvres. Thom avait vu la r6clamation d'Armstrong au bureau des Travaux Publics A Qubbec le on vers le 23 avril 1891.

croyait qu'elle 6tait bien fond6e, au moins en partie, et apr~s l'avoir v6rifibe par 1'examen des certificats de l'ing~nieur et avoir consult6 M. Cooper, le plus fort actionnaire de la nouvelle compagnie qui succ6dait A l'ancienne, il l'approuvajusqu'6 concurrence de la somme de $175,000.

L'intimbe pr6tend que ce qui 6tait alors di A Armstrong n'6tait pas exigible et d~pendait d'une condition suspensive, savoir, le parachivement du chemin de fer. Mais le contrat d~clare en termes formels que si les -subsides en terres 6taient convertis en argent, Armstrong " shall be paid and receive the said cash." C'est pr~cis6ment ce qui eut lieu en vertu d'actes de la l1gislature.

TE

Enfin la demande est sans preuve, si l'on carte le dossier de la Commission Royale, produit dans cette J. cause du consentement des parties et d6clarant qu'il L'autorisation du tribunal ne fut pas m~me demand&e contrairement A 1'article 319 du Code de Proc6dure. Le Code de Proc6dure donne bien aux parties le pouvoir d'examiner leurs t6moins, de consentement, devant le protonotaire, ou un commissaire; mais il fallu l'intervention de la 16gislature.

Pinsonnault v. Valade. (1) C. P.C. Art. 255, 285; 33 Vict., c. 18. Egalement, il a fallu un texte de loi pour leur permettre de proc6der de consentement A la preuve au long. C. P.

L'Article 25' indique comment on peut transmettre un dossier d'une cour h une.autre et ajoute que cette transmission peut se faire de toute autre manibre du consentement des parties. Dans des circonstances sp6ciales, un juge peut bien accepter la preuve faite dans une autre cause, avec on sans le consentement des parties; mais je ne sache pas qu'il puisse admettre une preuve prise en dehors des tribunaux. Toutes ces exceptions 6tablissent que la r~gle g6ndrale promulgu6e par le Code de Proc6dure, art. 263-que ]a preuve doit tre faite en justice-est d'ordre public et qu'il n'est pas permis d'y d6roger par des consentements. Carr6, Lois de la Procidure civile, 6d.,) t. ler, p. XVI, n. dit que les lois qui 6tablissent les formalit~s substantielles ou intrinsiques de la procdure civile font une partie essentielle du droit public; puis il cite l'auteur de l'article Droit public, au nouveau r6pertoire qui ajoute que

Voir aussi Carr6, n. 118.

Il y a d'autant plus de J. raison de refuser cette preuve que l'on sait qu'une commission royale, comme le comit6 des Privilges Elections, ne sont pas assujettis A ces r~gles.

M. le juge Baby, 1'un des commissaires, en r6ponse A l'un des avocats, remarquait au commencement de 1'enquite : La preuve fut cependant admise, sur les prc dents politiques cit6s.

Todd, Parl. Gov., 2e 6d., t. 2e, p 445, observe :

S'il y a lieu d'appliquer 'article 1204 du C. C. c'est bien dans le cas present : la preuve offerte doit 6tre la meilleure dont le cas, par sa nature, soit susceptible. Je suis done d'avis d'accorder 1'appel, de maintenir la d6fense en droit et de renvoyer 1'action de l'intimbe avec d6pens, pour les raisons suivantes : lo. L'intim6e ne demande pas la resolution du paiement, de la lettre de cr6dit on m~me de l'ordre en conseil pour cause de fraude et dol; 2o. En dehors de la preuve devant ]a Commission Royale, que je ne puis accepter nonobstant le consentement des parties, il n'y a aucune preuve 16gale de la part de l'intimbe qu'au moins la somme de $100,000 n'tait pas 16gitimement due A Armstrong. Appeal allowed with costs.