Ouimet
Arts. 1047, 1049, 1140 0. C.
About the time a dissolution of partnership was imminent one of the partners was accused of embezzlement of funds and, supposing that he was liable for an alleged shortage and under threat of criminal prosecution, he signed a consent that the amount should be deducted from his share as a member of the firm. He was denied access to the books and vouchers and, some weeks afterwards, upon settlement of the affairs of the partnership, the amount so charged to him was paid over to the other partners. It was subsequently shewn that this partner had made his returns correctly and had not appropriated any part of the missing funds. Held, that he was entitled to recover back the amount so paid in an action condictio indebiti as both the consent and the payment had been made under duress and in error and, further, that there bad been no ratification of the consent to the deduction of the amount by the subsequent payment, because the denial of access to the books and vouchers caused him to continue in the same error which vitiated *his consent in the first place, and, further, that, even if the consent given could be regarded as amounting to transaction, it would be voidable on account of error as to fact.
APPEAL from the judgment of the Court of Queen's Bench, appeal side, reversing the judgment of the Superior Court, District of Quebec, and maintaining the plaintiff's action with costs.
The plaintiff, the defendant and another person carried on business together in partnership as manu- :-Taschereau, Gwynne, Sedgewick, King and Girouard JJ.
facturers in the City of Quebec and, shortly before dissolution of the firm, the other partners became suspicious in respect to the plaintiffs method of paying the factory hands and accused him of having appropriated about $9,000 of the partnership funds to his own use; criminal proceedings were threatened and the plaintiff was prevented by the other partners from making an examination of the books or vouchers. Under fear of this prosecution and its consequences to himself and family and erroneously supposing that shortages were chargeable to him, the plaintiff consented that $6,000 should be deducted from his share in the firm's property and, upon the division of the assets, a short time afterwards, the money was deducted from his account and $3,000 credited and paid to each of his partners.
Upon subsequent examination of the books and vouchers the plaintiff discovered that he was not indebted, and, upon being convinced of the mistake which had been made, one of the partners returned the $3,000 he so received from the plaintiff, but defendant insisted upon retaining the $3,000 which had been I aid to him. In an action, condictio indebiti, to recover the latter amount as having been paid in error and under duress the trial court judge dismissed the plaintiff's demande on the grounds that there had been no daress, and that there was consideration for the payment as a shortage had not been accounted for.
On appeal this judgment was reversed and judgment ordered to be entered for the plaintiff, the Court of Queen's Bench considering that he had proved that his consent to the payment had been given under duress and through threats and artifice.
The defendant now appeals.
Fitzpatrick Q.C. (Solicitor-General), and L. Cannon for the appellant. The payment was upon transaction and to avoid a lawsuit which was good and mI sufficient consideration.
Admitting (what appellant denies) that the agreement constituted " compounding of felony," money paid under such an illegal contract cannot be recovered back. There was no duress, or error and, even admitting that the contract was entered into through threats and compulsion, it was ratified by the respondent consenting, some months afterwards, that the amount charged against him should be paid to the appellant on the settlement of the partnership affairs.
Arts. 1012, 1918 0. C. ; Fisher 4* Co. v. Apollinaris Co. ; Ward v. Lloyd
But even if the transaction was really stifling a prosecution, neither of the parties has any locus standi and the action must be dismissed.
He who has paid the price of an illegal convention has no right to " condictio indebiti." Mc- Kibbin v. McCone (3); Wilson v. Strugnell (4); Herman v. Jeuchner (5); Munt v. Stokes (6); Collins v. Blantern per Wilmot L. C. J. at page 360; Scott v. Brown (8); Taylor v. Bowers (9); Goodall v. Lowndes (10). Plaintiff could not have had any reasonable fear, under the circumstances; arts. 994-1000
.C0.; Hilborn v. Bucknam ; Schultz v. Culbertson (12); 4 Aubry & Rau pp. 299-300; Pothier, Obligations, no. 26; 10 Iuranton, nos. 144-145; 15 Laurent, no. 517; Miguet v. Guyon (13); Rep. Gen. J. du P. vo. " Obligation," no. 144; Gassiot v. Courrige (14); Pissardv. Maury Boddy v. Finley
Goulet assisted in keeping the books and was in the best position to know exactly how the matter stood. His assent to the correctness of the charge of wrongfully dealing with the moneys of the partnership must be implied from his voluntary offer to compromise : G . Clarke v. Dutcher
Error of law is not a cause for annulling transaction; art. 1921 C.
As to ratification and acquiescence see Addison Contracts ed.) p. 118; Ormes v. Beadel (2); Petit v. Martin In August he voluntarily executed the undertaking made in May; Ewing v. Hogue (4); Piper v. Harris Mfg. As to the onus probandi, see Dal. Rep. Supp. v. Obligation no. 2325; Leclerc v. Leclerc ; McC/atchie v. Haslam ; Jones v. Merionethshire P.
Money stolen is a good consideration. Thorn v. Pinkham
See also North British and Mercantile Insurance Co. v. Tourville ; Colonial Securities Trust Co. v. Massey as to the weight to be given to the decision at the trial.
L. P. Pelletier Q. C. for the respondent.
The appellant extorted this money by threats and the onus probandi is upon him to show reasons for retaining it. Against the suspicions which at first existed the fuller investigation has cleared the respondent from fault of any kind; he has been honourably acquitted. He is in the position of a surety entitled to a full and final discharge; Paquette v. Bruneau (12); Peoples Bank of Halifax v. Johnson
The obligation supposed to exist when he bound himself has been shewn to have been null and void and non-existent. The duress was of continuing character for he was kept in jeopardy all the time and forcibly prevented from making an examination of the books and vouchers.
We cite as authorities in support of the judgment appealed from, Arts. 982, 98S, 991, 994, 995, 996, 1047, 1048, 1140, 1921-1925 C.; Dugrenier v. Dugrenier (1); City of Quebec v. Caron (2); 10 Duranton, p. 140; Banque de St. Hyacinthe v Sarrazin (3); Kerr v. Davis (4); Ewzng' v. Hogue (5); 16 Laurent, Nos. 112, 116. Larombiere, Art. 1876
C. N. par. 13.
Couture v. Marois (6); Macfarlane v. Dewey and authorities cited. Marbeau, " Transactions," un. 162, 168; Fuzier- Herman, Codes ann, Art 2053, nn. 1, 4; Art. 2055, un. 1, 3. Dal. Sup. Vo. Transaction, un. 93, 97, 99-102, 106, 109 et seq.; Dal. Rep. Vo. Transaction, nn. 148, 162 et seq.; Yo. Obligation, nn. et seq., 528 et seq.; Dal. Dict. Dr. 1897.
Tables Vo. Transaction, col. 576, No. 3. Dal. 95-2-423; Baudry-Lacantinerie " Transactions." No. 1262.
Judgment of the Court
J.-Si les faits de cette cause sont nombreux, comme le d6montre la revue approfondie qu'en a faite Monsieur le Juge Ouimet en Cour d'Appel, les questions de droit qu'ils soulvent ne me paraissent ni compliquies ni difficiles A r&soudre D'abord, comme fait principal et sur lequel suivant moi d6pend toute la cause, 1'intim6, Goulet, a-t-il prouv6 qu'il ne devait pas les trois mille piastres en question, lorsqu'il a sign6 le document par lequel il promit les payer?
Toute ardue que soit toujours la tAche de celui sur qui, par exception, la loi met en certains cas le fardeau d'une preuve n6gative, il est rare de rencontrer un litige elle puisse l'8tre plus qu'elle I'a t pour I'intim6 dans l'esphce.
Et cependant, il a r6ussi.
Je vois au dossier la preuve convaincante qu'il ne devait rien & 1'appelant lors de la dissolution de leur soci6t, pas mime d'apris son t6moignage auquel je donne croyance, les quelques piastres que le comptable Blouin aurait ora 6tre primd facie dues d'apr~s un examen, ex parte, des livres et des documents produits. Il n'y avait done pas, la date du document en question, de dette pr6-existante, que l'intim6 6tait oblig6 de payer, Arts. 1047, 1140 C C., et 1'appelant a par consequent reeu ce qui ne lui 6tait pas dd. Ceci 6tant r~solu comme question de fait, 1'obligation de prouver qu'il a fait ce paiement par erreur devenait pour 1'intim6 aussi facile que la preuve n6gative, sur laquelle repose la base de son action, lui avait t6 difficile.
Car ici, tout 6tait A presumer en sa faveur. T6pugnerait au bon sens de supposer, sous les circonstances de la cause, qu'il ait voulu, dans l'occasion en question, faire de plein gr6 un cadeau de trois mille piastres , l'appelant.
Il n'a consenti A payer que parce qu'il croyait devoir; et il ne devait pas.
Il a done droit de r6p6ter ce quil a pay&.
Que 1'appelant ait t6 de bonne foi on non, qu'il ait cru lui-mAme on non, que 1'intim6 6tait r6ellement son d6biteur, ne peut affecter en rien l'obligation que la loi lui impose de restituer intagralement & l'intim6 ce qu'il en a indftment requ.
Art. 1049 C. C.
La pretension de l'appelant que l'intim6 aurait ratifi6 sa promesse de payer, en payant fait quelques semaines plus tard ne peut prvaloir.
Ce paiement est entach6 du m~me vi'e que la promesse de payer elle-m~me, 1'erreur o-i 6tait l'intim6 qu'il 6tait le d6bi teur de l'appelant, et l'impossibilit6 1'appelant lui-mime Pavait mis de pouvoir s'assurer du contraire en lui refusant arbitrairement tout accs aux livres de leur Ce n'est que quand il a pu voir ces livres, et constater la fausset6 des pretensions de 1'appelant, Tcb qu'il a 6t en 6tat de faire sa r6clamation.
Et si cet 6crit pouvait envisag6 comme comportant une transaction tel que 1'a soutenu l'appelant, alors cette transaction serait nulle pour la mgme cause, parce que 1'intim6 n'y a consenti que par erreur de fait.
Ce point de vue du litige diff re un pen de celui de la Cour d'Appel, mais pour les motifs ci-dessus, nous sommes d'avis que la conclusion A laquelle elle en est venue, de maintenir l'action de 1'intim6, est inattaquable, et nous renvoyons 1'appel avec d~pens.
Appeal dismissed with costs.