Coté v. The Stadacona Fire Insurance Co.

OMar. 9. *Nov. 15. THE STADACONA INSURANCE CO..RESPONDENTS. ON APPEAL FROM THE COURT OF QUEEN'S BENCH FOR THE PROVINCE OF QUEBEC (APPEAL SIDE.) The Stadacona Insurance Company incorporated in 1874 employed local agents to obtain subscriptions for stock in the district of Quebec, such' local agents to receive a commission on shares subscribed.

At the solicitation of one of these local agents, F. X. C., intending to subscribe for five paid-up shakes, paid $500 and signed his name to the subscription book, the columns for the amount of the subscription and the numbers of shares being at the time left in blank. These columns were afterwards, in the presence of appellant, filled in with the number of shares (50 shares) by the agent of the company, without F. X. C's consent.

Having discovered his position, one of appellant's brothers,who had also subscribed in the same way, went next day to Quebec and endeavored, but ineffectually, to induce the company to relieve them from the larger liability. At the end of the year 1875, the company declared a dividend of 10 per cen. on the paid-up capital (whontant versd,) and the plaintiff received a. check for $50, for which he gave a receipt. In the following year the company suffered heavy losses, and notwithstanding F. X. 08 repeated endeavors to be relieved from the larger liability, brought an action against him to recover the 3rd, 4th, 5th and 6th calls of five per cent. on fifty shares of $100 each alleged to have been subscribed by F. X. C. in the capital stock of the company.

IHeld, (Sir W. T. Ritchie, C. J., dubitante) reversing the judgment of the court below, that the evidence showed the appellant never entered into a contract to take 50 shares, that the receipt given *Pansr.-Sir W. J. Ritchie, Kinght, C. J., and Strong, Fournier, Henry and Gwynne, J. J.

Bench for the Province of Q~uebec (appeal side), affirming a judgment of the Superior Court for the District of Quebec, by which the appellant was condemned to pay the 3rd, 4th, 5th and 6th calls of five per cent. on fifty shares of one hundred dollars each, alleged to have been subscribed by the appellant in the capital stock of the respondent company.

This action was instituted by the plaintiffs (respondents) against the defendant (appellant) to recover four several calls of 5 per cent. each upon fifty shares, of one hundred dollars each, amounting to five thousand dollars of the capital stock of the company, of which fifty shares it is alleged in the declaration that the defendant is the holder, and that he is indebted to the plaintiff in the sum of one thousand dollars for the said four calls, which sum still remains due and unpaid by the defendant to the plaintiffs. The defendant, in bar of this alleged cause of action, pleaded:

First, that he never was a holder of more than five shares in the capital stock of the said company, which he paid for in full when he subscribed for them, and that with the exception of those five shares he never took, or subtcribed for, or became the holder of, any other share of such capital stock; and

Secondly, that the plaintiffs' agents, when canvassing the defendant for his subscription for the shares aforesaid, represented to him and assured him that his subscription was for five shares only, and that upon the payment of five hundred dollars, then made by the defendant, he should be completely discharged from any VOL. Vt] COURT OF CANADA.

further obligation, and could not be called upon to pay any further sum; and that upon these assurances and representations the defendant consented to sign a paper sV.ca which plaintiffs' said agents then presented to him and Im. which he only signed upon the said assurances that his said signature only pledged the defendant to the amount aforesaid, and the sum aforesaid; that the defendant so gave his signature upon the assurance of the said agents, without examining the contents of the said paper, and in the belief that he only subscribed for the said five shares, which he then paid in full; that after the departure of the said agents the defendant examined divers " circulaires et ivrets," which the said agents left with him, and by these appeared the manner in which ordinary subscriptions were invited by the company, and that only one or two payments were required in ready money, but eight others would become payable at future periods; that suspecting the good faith of the said agents he immediately made complaint and protestation to the chief officers of the plaintiffs, and represented to them as above stated upon different occasions; and that the said chief officers, to this purpose authorized, acknowledged that there was a mistake in the matter, and that the defendant was only bound for the shares as verbally agreed to be subscribed for by him and which he had the intention of taking, and that they sent him away saying that he need not be uneasy; that the matter was arranged, and that he would not have to pay any further sum.

That in all the above the defendant has been cheated -that there has been on the part of the plaintiffs fraud and bad faith, and that the plaintiffs, under the pretence of procuring a subscription for the said five shares, have endeavoured to hold the defendant bound to the payment of fifty, although they will knew that the defendant had no means to meet such amouut, and that if ' such a subscription had been made by him, it could only be the result of error or of false representations of V. the said agents of the plaintiffs. Wherefore the defendant prayed that it should be declared that the signature of the defendant was obtained by error and by the false and fraudulent representations of the plaintiffs' said agents, and that the defendant never intended to subscribe, and never did in fact subscribe for more than five shares, which he paid for in cash, and that the plaintiffs' action be dismissed with costs.

There are two actions precisely similar as the suit of the plaintiffs, against two brothers of the defendant, the pleadings in which, and the circumstances of which are similar, but only that in one of them, namely against Joseph' Cold, the amount claimed is $2,000 as four calls upon $10,000 in the capital stock of the company, alleged to be held by him, whereas his plea alleges that he subscribed only for $1000 or ten shares, which he paid in full at the time of subscription; and in the other, namely, against Amddd Cotme the claim of the plaintiffs is for $1,200, as for four calls upon $6,000 in the capital stock of the company alleged to be held by him, whereas his plea alleges that he subscribed only for $600 which he paid in full at the time of the subscription.

The oral as well as the documentary evidence is reviewed in the judgments hereinafter given.

[The learned counsel reviewed the evidence and contended that it had been clearly proved " when the defendant subscribed for the shares mentioned in the pleadings in this cause, he did not know the nature or extent of the responsibilities he assumed."]

This has been admitted by the judgment of the Superior Court and that of the Court of Appeals, and yet we are condemned to carry out a contract to which it is admitted we never were parties.

1st. Because we were paid and took a dividend. Vo 2nd. Because we allowed two years to elapse with- Ie. out " taking legal measures to have the contract set aside."

We respectfully submit their conclusion is erroneous on both the points on which they rest.

1st. Payment to defendants of a dividend.

It is quite true they received ten per cent. on the money they handed to the local agents, but'it is equally true that to use this as an argument against them, it must first be shown that it was their holding a greater number of shares than they claim, that entitled them to get the money. Now, the three brothers when they subscribed paid cash down $1,000, $600 and $500 respectively, being the full and entire sums they meant to invest in the enterprise. The company declaring a dividend of ten per cent. on the paid-up capital, entitled them to receive ten per cent. on the sums which they had actually paid. When they had received this money they simply carried out the contract as they had from the first understood it to be, and their conduct and their declarations are thoroughly consistent throughout. It is upon the sum paid, not the sum subscribed, that the dividend was declared, and it always is so, and therefore it is impossible to say that the defendants must be held to have subscribed $21,000, because they took that to which they were entitled by the fact of having paid $2,100, as the full price of twenty-one shares.

The defendants having allowed two years to lapse, without taking legal measures to have the contract set aside, are held to have acquiesced in a contract to which they constantly and persistently declare they never became parties. With all possible respect, we submit this results from a confusion of ideas which we will endeavor to clear. Contracts are either null or void- ''w able. When they are tainted with causes of nullity they exist none the less, till such causes of nullity are revealed and made to operate rescission. In such cases, the laches of the parties may estop them from setting up such nullities, nay more, the doctrine that a party to a voidable contract is bound to take active steps to rescind it with reasonable diligence, after he becomes aware of the causes of nullity, is well established. But the very foundation of the doctrine is the existence of a contract.

The main feature which distinguishes the present case is that the contract alleged by the company never existed at all. The doctrine of acquiescence resulting from lapse of time or laches on the part of the defendants can therefore have no application.

But supposing for a moment the contract to have existed, and all the essential elements to be found in it, and that it was merely voidable, has there been .on the part of the defendants such conduct as to justify the assumption that they ratified it ?

It is in evidence that immediately upon discovering that the agents had deceived them, the defendants, through Joseph one of them, came expressly to Quebec, saw the head agent, the secretary of the company; tried to see the president; did what they could to have the matter cleared up, and subsequently called on several different occasions on Mr. Belleau for the same purpose.

Now what is the law on this subject. We find it in abundance of authority, for it is the same in France and England, and of so elementary a character as to leave no room for controversy: see Dalloz' R6pertoire de Jurisprudence (1); Swan v. The North British Australasian Company, limited (1); in re Russian (Vyk. sounsky) Iron Works Company, Kincaid's case ; Taite's case ; Oakes v. Tarquand (4) ; The Bank of Hindusca Ian, v. Alison (5); Carr v. he London and North- IN. Western Railway (6) ; Sharpley v. The Louth and East Coast Company (7); Ashbury Railway, Carriage and Iron Company v. Richd (8) ; ex parte Adamson, in re Collie (9); Atna Insurance Co. in re Shiels (10); The Brolch-y-Plwm Lead litining Company v. Baynes (11). Mr. Bdard for respondents:

[The learned counsel commented at length on the evidefice to show that the contract alleged by plaintiffs was satisfactorily established.]

Besides, it must be remembered that the contract in this cause is in writing, and that by law no parol evidence can be adduced to contradict or vary the terms of a written document.

See Civil Code of L. C. art. 1284; Abbot's Digest, On Corporations (12). The appellant has ratified his contract after having found out his error; and his plea cannot be admitted, because it comes too late, and because the parties are no longer in the same position.

To have a contract annulled on account of ah error, it is not sufficient that a party should allege or prove an error, whatever it may be.

Error, says Larombidre (13) must be certain: In dubio nocet error erranti. If the error is a gross one, no one will believe it. Solere succurri non stultis, sed errantibus.

The error set forth by the appellant, if proved, does (1) 7 &

H. L

(3) L

Ir.

(5) L. 6 C.P. &

Ex.

(6) C. P.

1, not prevent the existence of the contract, which subcoi sists till annulled.

s . c

The last reason of the appellant is to the effect that In. he understood that his contract was but for'five shares, and he says that, for the amount beyond that, the contract is null, has in fact no existence, and was therefore never susceptible of ratification.

The law enacts that the contract will be the one implied by the terms which express the agreement, and not that which either of the parties might- have understood it to be. No matter what they may have had in their minds when contracting, they will have to abide by the terms they employed, because there is no other means to know their respective intentions at the time. In a word, the law of convention is made to rule not the acts of will, but, using the words of Savigny, the manifestations of will (1).

There is no article of the code to declare that consent is necessaiy to the existence of a contract, because contract implies consent, and it would be, to say the least, useless to enact that where there is no consent, there is no contract.

The law declares only that the convention is valid when the consent is legally expressed. It looks not to the consent, but to its manifestation; from the latter it implies the existence of the consent and determines its effect.

Art. 991 enacts that error, violence and fraud are causes of nullity in contracts. Art. 992 declares that error is a cause of nullity only when it occurs in the nature of the contract itself, or in the substance of the contract, or in the substance of the thing which is the object of the contract. And lastly, art. 1000 goes on to say that error, fraud and violence are not causes of absolate nullity in contracts, and only give a right of action or exception to annul or rescind them.

Mr. Languedoc in reply.

SUPEME

RITCHIE, C. J.:- I am not sorry that my learned brethren have been enabled to arrive on this evidence at the conclusion which is so satisfactory to their own minds, Im. because I think a judgment in opposition to the conclusions which they have expressed would operate with extreme hardship on these unfortunate men. I am not prepared to differ from the conclusions at which they have arrived, and I do not intend to dissent from the judgment which they have given; but I must confess that the inclination of my mind has been, in the consideration of this case, that those parties were aware of the number of shares that they signed for. But I also think that they did not fully appreciate the large liability they thereby incurred, and they were influenced in subscribing for this number of shares by the influence and representations of an agent whose interest it was to induce these unfortunate men to take these large amounts of shares, as it has been shown that they went abroad to get subscriptions to this stock, and for every share they were able to get subscribed they were to receive a certain amount of money. Therefore, it was their interest, in dealing with these ignorant people, to induce them to put down their names for as many shares as they could, and they represented, I am in-. clined to think from the evidence, much more strongly than they should have done, that no larger amount than they had paid at the time of subscription would be required by the company; and that the subscribers only realized the extent of the obligation they had entered into and the risk they were running, on a careful examination of the prospectus and charter the company and on consultation with their friends on the evening on which the subscription was made. I think there was very considerable force in the observation made by Mr. Justice Ramsay on this point, in which he says the proof that Cott knew the figures s . c were $10,000 for 100 shares appears clearly from this: that he found out the difficulty and the extent of his Ritchiec.J.iability without reference to the share list, simply in conversation with his friends and from the statute. Also, I was very much impressed with the fact that the appellant and his brothers, after they discovered the extent to which they would be liable, appear to have consulted counsel, and they appear to have called upon the directors, and the directors seem to have repudiated any idea of the correctness of what they then put forward, and they remained quiescent, except the writing of the letters, taking no steps whatever to have the matter set right. I think they were aware of the fact that the company held them for the fifty shares. That was clearly brought home to them. They must have been aware that they were held for the fifty shares, and that the company absolutely refused to permit them to stand as shareholders for five paid up shares; and it would have been at variance with the prospectus and with the act, with which it is evident these parties made themselves acquainted, by their own statement, to have stood as shareholders fully paid up for five shares alone, and knowing they were registered br the company as the holders of 100 shares.

Here, I must say, I cannot agree with my leaTned brother, who says it was necessary that there should be an allotment of shares, or that there was no proof of allotment in this case. I think, under this statute, there was no necessity for an allotment.

When the company sent out their books for subscriptions, and the parties subscribed for fifty shares, they became shareholders of the company, not by any subsequent allotment, but by operation of law under the statute. Therefore, when they subscribed, and when they paid their five per cent. down upon that subscription, they became, by force of a this act, and without any act done by the company or s o by the parties themselves, shareholders and subscribers, 1.s. and liable under this act to all the obligations the Ritec.J. statute imposed upon them.

When a dividend was declared, they must have known, from the knowledge they had of the act, that the dividend was not declared upon paid-up shares, because section three does not recognize that the whole amount is to be called in at once, but can only be called in and accepted by the company in a certain way, 5 per cent. in the first instance, a further call of 5 per cent., and so on. Therefore, when he received the dividend, I find it difficult to believe that the appellant did not know it had been delivered by-the company on the fifty shares he held and subscribed for.

Having received his share of the earnings, I also find it difficult to see that he is not a shareholder, and that he did not accept his position as shareholder, as he stood on the books of the company, and therefore would not be liable; because it must be borne in mind that while he remained and continued a shareholder for these two years the company was doing a prosperous business. It had paid a 10 per cent. dividend; and it must be borne in mind also that conflagrations more extensive almost than ever known before-exceptional conflagrations-took place in the city of St. John and in other portions of Quebec, by which this company, from a very prosperous state of business, was reduced to insolvency.

Had this company had a number of years of prosperity and yearly declared large dividends, I do not see my way very clearly to the conclusion that this man could, from time to time, have been allowed to receive these dividends, and when ultimately the company may have experienced any losses, he could then repudiate and claim not to be a shareholder, and accept the gains and refuse to bear his share of the liabilities. In other s.DOxt words, to use an expression which is to be found in the books with reference to cases of this kind, that he Riti~ cshould not be allowed to play fast and loose, that having received the benefits he should be liable to the loss he sustained.

However, as I said before, as the judgment of my learned brothers on the facts of this case differs from the conclusions on the facts that I have stated now, and as there is a conflict of evidence in the case, I do not intend to set up my judgment on the facts against theirs, and differ from the conclusions they have arrived at on-the case, and which conclusions I am very gratified, on account of these people being poor, they have been enabled to arrive at with satisfaction to themselves. At the same time, having these doubts on my mind, I thought it proper to give expression to them, because if it had not been for the very strong and forcible judgment delivered by my brethren, if I had been left alone I should have come to a different conclusion, but I am happy to say that on the whole I shall not dissent from their judgment. J.:- .

The first question to be determined is one of fact. What was the contract which the appellant intended to make with the agents of the company who came to him to solicit his subscription for shares ? Did he intend to take fifty shares and to pay ten per cent. on the amount of those shares, or did he intend to become a subscriber for five shares only, paid up in full? It appears to me that the evidence of Genest,who is the only witness called by the respondents to prove what took place at the time of the subscription, is sufficiently contradicted by the evidence of the witnesses for the defendant, his brothers, the circumstances attending the transaction, and the probabilities. All depends on the testimony of witnesses,-oral evidence; the writing itself does not assist us in solving this question. When the appellant signed his name to the subscription book, the columns for the amount of the subscription and the number of shares were left in blank.

These columns were afterwards filled in with the number of by Genest himself, in the presence of the appellant, or at least of his brother Toseph. This is a fact of considerable importance in my view of the case, for had the number of shares and the amount of subscription been written by the appellant himself, or filled up before the signature, the legal consequences might have been different. As it is, according to Genest's own evidence, it must be taken to have been done by him acting as the mandatory or agent of the appellant, and it follows therefore that, if the appellant only intended to subscribe for five shares and not for fifty, Genest had no authority to make the entry he did, a'nd his unauthorized act can therefore in no way bind the appellant, who did not assent to it. It is therefore assuming in favor of the company the very question in dispute, to say that the appellant signed his name to a subscription for fifty shares.

Then, I think, Genest's evidence is extremely vague and unsatisfactory; in answer to very important questions in cross-examination, he says he is unable to remember what passed.

19ext, the conduct of the three brothers is altogether inconsistent with the supposition that they understood they were contracting for shares to a greater amount than the sums they actually paid in cash. They appear to have discovered their true position the same evening, and the elder of them went to Quebec the next morning, and endeavored, but ineffectually, to induce the company to relieve them from the larger liability. On the whole, all the surrounding circumstances are confirmatory the evidence of the three brothers, and I agree with Mr. Justice Tessier in the Court S- Queen's Bench, in holding that the appellant never entered into the contract to take the fifty shares in respect of which he is sued on this action.

Had the courts below taken a different view of the facts, it might have been a reason why this court should have hesitated before acting on a different view of the evidence.

It does not appear, however, that the judges of the court below did come to a different conclusion in this respect. The Chief Justice of the Queen's Bench, in his notes of judgment, expresses himself very decidedly to the effect that there was no contract, and from the first "considerant" of the judgment of the court of first instance, I am led to the conclusion that that was also the view taken by the Chief Justice of the Superior Court.

Both the learned Chief Justices, however, attached much importance to the subsequent receipt by the appellant and his brothers of the dividend declared upon the paid-up capital. I was much impressed with this view at the hearing of the appeal, but subsequent consideration has c9nvinced me it ought not to affect our judgment. According to the view I have taken of the evidence, the appellant never entered into any contract to take fifty shares, such a contract never existed, there was therefore never anything susceptible of ratification. Again, even if there had been a contract, but one voidable for error, the receipt of the 10 per cent. dividend on the amounts which the appellant and his brotliers had actually paid in cash to the company would not have been such an unequivocal act of recognition and confirmation as would have been requisite to ratify a contract which might have been set aside in an action brought to cosT establish its nullity. It was quite consistent with what they had always contended, viz: that they were Iss. holders of shares for an amount equivalent to the-cash stro J. they had paid, but for no more, that they should have received the 10 per cent. declared on shares actually paid up in cash. I cannot, therefore, see that their receipt was any admission. of their liability, or a renunciation of the right they had always claimed to have their shares limited to the amount they had paid. On both these grounds I think the company's contention, that there was a ratification, fails.

I think the appeal should be allowed, with costs to the appellant in this court and in both the courts below.

J.:

L'appelant, F. X. Cold, est poursuivi en cette cause pour mille piastres ($1000) montant de quatre versements dus sur cinquante actions qu'il aurait souscrites dans le fonds social de la compagnie d'assurance, intim6e en cette cause. Sa r6ponse d cette demande est qu'il n'a souscrit que cinq parts et qu'il les a pay6es comptant, que si son nom est inscrit au livre de stock pour cinquante actions, il l'a t6 ainsi par les agents de la compagnie frauduleusement et sans son consentenont.

Aprbs son incorporation, en 1874, par acte du Parlement du Canada, la compagnie intim6e nomma comme an de ses agents pour solliciter des souscriptions A son fonds social, M. . N. Belleau, de Quebec. Celui-ci & son tour d6l6gua ses pouvoirs a deux sous-agents, Genest et Delisle, pour recueillir des souscriptions dans 1'Isle d'Orlians qui faisait partie de la circonscription dans laquelle l'agent principal, Belleau, 6tait autoris6 i agir pour la compagnie.

Le 29 octobre de la meme ann6e, Genest et Delisle se coTA pr6sentbrent au moulin de Toseph Cold, A St. Pierre, Isle d' Orldans, pour remplir leur mission. L'entrevue INS. Co. qu'ils eurent avec l'appelant et ses frbres, qui sont comme Fournier, J. lui poursuivis pour quartre versements sur le montant des parts qu'ils auraient ainsi souscrites dans cette circonstance, est racont6e comme suit par Joseph Cold : Dans la nuit du vingt.neuf octobre, mil huit cent soixante. quatorze, les deux agents que je viens do mentionner, sont venus an moulin me troulrer, accompagn6s de deux de mes frres, Amddde et Franpois-Xavier, lea deux autres d6fendeurs.

Ils m'ont demand6 do souscrire au fonds social de Ia compagnie Stadacona, et demandant dix pour cent.

J'ai refhs6, ne voulant pas souscrire les dix pour cent; et j'ai pass6 dans un autre appartement; alors ils sont venus me trouver IA et, m'ont dit......

Object6 A cette preuve.

Objection r6serv6e.

Eh bien I souscrivez mille piastres, votre frdre Amddde six cents piastres, et votre frdre Franpois-Xavier cinq cents piastres, et cola sera tout ce que vous aurez & payer et vous aures dix pour cent de dividende sur cos montants-1.

Amidde Cold, I'un des frbres pr6sents dans cette occasion, donne la version suivante de ce qui s'y est pass6: R.-Ils sont arriv6s A la maison chez moi et m'ont fait des propositions tras-avantageuses A propos de la souscription A la Stadacona; ils m'ont demand6 do prendre des parts, que o'6tait un grand avantage. IA-dessus je n'ai rien voulu faire saus voir mes frbres qui 6taient au moulin A farine.

R. IA ils ont racont6 A mes frares Ia m~me histoire qu'ils m'avaient cont6e A moi-meme; ils Pont cont6e devant moi et mes frares qu'on a trouv6s IA au moulin, disant que c'6tait trbs avantageux do prendre des parts.

Q. Votre frare Joseph a-t-il dit quelque chose ?-R. 11 dit que tant que pour payer dix pour cent il comprenait que 9a no pouvait so faire, qu'il pr6ferait prendre un montant qui no donnerait aucun trouble, sucune responsabilit6 par Ia suite.

Q. Votre fr~re Joseph a-t-il consenti & souscrire dix pour cent?- R. Eh I non, quand ils nous ont parl6 de dix pour cent, il (Joseph) nous a laiss6, disant qu'il no voulait pas de 9a. Les agents ne nous Les trois frbres mirent leur signature sur le livre de stock, sans sp6cifier ni le nombre d'actions qu'ils souscrivaient, ni le total auquel se montait leur souscription, croyant, comme ils le disent, ne souscrire que pour les montants qu'ils avaient pay6s comptant. Les entrees du nombre de parts et de leur total out t6 faites par les agents eux-memes, hors la pr6sence des d'apris la Tersion de ceux-ci, et sans qu'on leur d6clar6 quo les montants ainsi entr6s 6taient diff6rents de ceux pays. Cette version est contredite par Genest, qui d6clare avoir obtenu cette souscription de la manibre ordinaire, comme il avait fait avec tous ceux qui avaient d6jd souscrit. I dit qu'il a donn6 toutes les explications n6cessaires qu'il avait coutume de donner en pareil cas.

ajoute qu'il avait pour s'aider un prospectus de la compagnie, qu'il leur a expliqub,-qu'il leur a dit qu'il n'6tait pas probable que tout le montant serait appel6, que ce n'6tait pas l'intention de la compagnie de demander plus qu'ils ne payaient: mais quo cependant, ils 6taient responsables pour tout le montant de A parts qu'ils souscriraient, et qu'il ne leur a pas dit cela * rien qu'une fois. Il dit aussi avoir mentionn6 le nombre de parts, le montaut souscrit et le montant pay6 pour le premier et le deuxime versements. Ce t6moignage avec la production du livre de stock constitue la preuve sur laquelle la compagnie so fonde pour demander 1'ex6cution du contrat qu'elle pr6tend avoir 4t6 fait par l'appelaut. Ainsi qu'on le voit, il y a deux versions diam6tralement oppos6es.

Si celle de Genest est la v6ritable, it est 6vident que 'appelant doit succomber.

doit au contraire r6ussir, 9i celle donn6e par sea deux frbres, Joseph et Amidde, est accept~e. s'agit done en graude partie d'une appr6ciation de t6moignages.

I faut d'abord remarquer que la d6position de Genest n'est aucunement corroborTe.

II 6tait au pouvoir de la compagnie de le faire puisqu'elle avait un autre agent pr6sent a cette entrqvue, le nomm6 Delisle. Pourquoi n'a-t-il pas Ct6 examin6 ? Est-ce que l'on a redout6 son t6moignage, est-ce que par hasard les quelques mots qu'il a dits auraient 6t6 une confirmation du r6cit des Cotd? Quoi qu'il en soit, on ne peut pas tirer de l'absence de Delisle d'autre conclusion contre la compagnie que celle qu'elle n'a pu corroborer le t6moignage de Genest. Ainsi, on se trouve d'une part, en pr6sence d'un version donn6e par an seul t6moin, et de l'autre, celle donn6e par deux t6moins. Il est vrai que l'on pent dire que ceux-ci sont int~ress6s, puisqu'ils ont un procks semblable, reposant sur les m~mes preuves; mais part cela rien ne fait voir que leur t6moignage ne soit pas digne de foi.

Genest lui-m6me est aussi intbress6, car il avait une assez forte commission sur le nombre de parts qu'il faisait souscrire. II 6tait pay6 tant par part; il 6tait int6ress6 i en rapporter le plus grand nombre possible. Si l'int6rt se contrebalance, 1a version des deux Cold devrait 4tra reque. I y a de plus dans la d6position de Genest, 1'affirmation d'un fait important sur lequel il est contredit par des t6moins 6trangers et d6sinco~i t6resses. Cette circonstance est de nature A affecter "IA''cosA consid6rablement son t6moignage.

II dit: "J'ai donn6 toutes lea explications n~cessaires et que favais Fournier, J. coutume de donner en pareil cas,"-plus loin : " J'ai voulu lea mettre en 6tat de connaitre la chose aussi clairement qu'il y avait moyen, non-seulement avec eux, mais avec toutes les personnes que j'ai fait souscrire" ; " J'ai donn6 les m~mes explications is tout le monde." Cette assertion positive est r6p6the encore sons d'autres formes. Sur ce point cependant il eat formellement contredit par trois t6moins tout-a-fait d6sint6ress6s. Basile 1Marquis raconte ainsi sa rencontre avec lea sous-agents Genest et Delisle :

je je est admis par lea parties que les deux t6moins Phydime Ferland et LEon Aubin prouveraient lea mames faits.

Comment aprbs cela ajouter foi A la declaration de Genest qu'il a donn6 A l'appelant les m~mes explications qu'il a donn6es

A tout le monde?

N'eat-il pas 6vident qu'il n'a pas dit la vidite sur ce sujet, et ne peut-on pas 'raisonnablement en conclure qu'il a employ6 pour obtenir la souscription des Cold le stratag6me qui lui avait r6ussi avec d'autres. En acceptant lea montants pay6s par lea Cold, il a sans doute fait avec eux ce qu'il avait fait avec Marquis-il a r6parti lea sommes paybes par eux pour lea premier et SUPREfE COURT OF CANADA.

[VOL. deuxibme versements sur les parts qu'il leur attribue sans leur en avoir d6clar6 le montant, au lieu d'entrer leurs actions comme pay6es on plein. Cetto conclusion est d'autant mieux fond6e qu'iI est en preuve que les Fournier, j. Cold ont pay6 tout ce qu'ils avaient d'argent; que Pun d'eux a meme 6t6 oblig6 d'emprunter $50.00 pour parfaire son montant. Est-il i pr6sumer que ces trois individus qui paraissent des gens honn~tes et respectables, mais dont la fortune totale s'616ve A peine a $3,000 auraient engag6 leur responsabilit6 pour le montant de $21,000 ? Je crois au contraire que la seule mention de ce chiffre les tellement effray6s qu'ils auraient absolument refus6 de n'avoir rien A faire avec ]a compagnie et qu'ils so seraient ainsi 6pargn6s les prochs qu'ils out a soutenir.

D'apr6s l'expos6 ci-dessus, il parait certain que dans ses d6marches auprbs de Cdti, Genest voulait leur faire prendre un montant plus consid6rable de parts que ceux-ci n'6taient dispos6s A le faire; il pr6tend avoir fait souscrire & 1'appelant 50 parts. Celui-ci au contraire dbclare n'en avoir souscrit que cinq qu'il a pay6es en plein. Il est 6vident d'apr~s le t6moignage, que chacune des deux parties voulait une' chose diffirente que leur consentement n'a pas port6 sur une meme chose, faisant 1'objet du contrat dont il est question.

Le concours de volont6s, condition essentielle de 1'existence du contrat, n'a done pas en lieu,cons6quemment il n'y a pas eu de contrat, faute d'accord entre les parties. O'est le point de vue que j'adopte.

Cette appreciation ne m'61oigne gubre des opinions exprim6es & ce sujet par les deux honorables juges en chef de la cour supbrieure et du Bane de la Reine. L'honorable juge en chef Meredith dit dans son jugement:

Sir A.

Et plus loin il ajoute:

d'aprs Aussi, 1'appelant sans 1'acceptation qu'il a faite d'un -dividende, et le d6lai qu'il a laiss6 6couler sans prendre des mesures judiciaires pour faire rescinder cette sous. cription, aurait-il en gain de cause auprbs des deux honorables juges en chef.

Ces deux circonstances constituent dans 1'opinion des deux honorables juges une ratification ou confirmation du contrat all6gu6, laquelle a l'effet, suivant eux, de le rendre responsable. En effet, il est 6tabli que 1'appelant a requ un dividende de 10 pour cent qui lui a 66 pay6 par un chbque dans la forme suivante:

Mais ce dividende avait-il 6t6 calcul6 sur cinquante actions, dont dix pour cent avaient pay6es, on bien sur cinq actions pay6es en entier ? Rien no le fait voir.

Le ch6que ne fait mention ni du nombre de parts ni de leur total; il y est seulement fait mention que le dividende est r6parti sur le montant vers6.

On no pent donc de ce fait tirer aucune conclusion contre la pr6tention de 1'appelant qu'il n'a souscrit que cinq parts paybes en plein. Il n'a, dans ce cas, touch6 que ce qu'il devait recevoir conform6ment A ce ch6que. Si, au contraire, il avait sonscrit, comme le pr6tend la compagnie, cinquantes parts sur lesquelles dix pour cent seulement aurait 4t6 pay6, il est vrai qu'il n'anrait encore touch6 que le m~me montant. De sorte que si, d'un c6t6 la compagnie pent dire que 1'appelant a accept6 le nombre de parts qu'elle lui a attribu6, Fournier, J.en acceptant 'ce dividende; de l'autre, celui-ci peut r6pondre que la compagnie a an contraire acquiesc6 A sa pr6tention qu'il n'avait souscrit que cinq actions entibrement pay6es en lui payant, comme le comporte le ch6que, un dividende sur le montant par lui vers6. Ce fait pouvant 6tre, avec autant de raison, invoqn6 par chacune des parties a 1'appui de ses pr6tentions, ne pent en cona6quence servir ni 1'ane ni l'autre, ni affecter en aucune manidre leurs positions. Mais si le ch~que, an lieu d'6tre conqu comme il 1'est, avait comport6 que le diridende pay6 et requ 6tait sur cinquante actions dont dix pour cent avait 6t pay6, c'eit 6t indubitablement une confirmation du contrat all6gu6, et la nullit6 dont il 6tait 6tait entach6 aurait 6t0 converte. O'eit 6t6 alors donner valablement, quoique tacitement, le consentement n6cessaire i la formation du contrat; et de ce moment-1l seulement le contrat eit exist6. Puisqu'avant 1'acceptation du dividende il n'y avait pas de contrat, il fant que le fait oppos6 A l'appelant soit sufisant pour en former un, et certes, 1'acceptation de ce dividende auquel il avait droit suivant ses pr6tentions ne constitue pas un consentement d'accepter les 50 parts qu'il avait d6ja r6pudibes.

Si le juge ne doit, comme le dit 1'autorit6 de Dalloz cit6e par 1'hon. juge Tessier, " prononcer qu'avec la plus "grande r6serve et ne d6clarer qu'il y a acquiesement "que lorsque les faits on actes d6montrent l'intention "formelle de la partie de se sonmettre," il est 6vident que l'acceptation du dividende dans les circonstances elle a 6t6 faite n'implique aucunement l'intention de la part de 1'appelaut de se d6partir de sa pr6tention qu'il n'avait que cinq parts. Cette acceptation n'est nulle. ment en contradiction avec sa pr6tention; elle en est plutot une confirmation si elle a quelque signification, CoA et ne peut par cons6quent lui 6tre oppos6e.

SWAson D'ailleurs le pr6tendu contrat invoqu&,par la compams. Co. gnie n'ayant jamais exist6, faute de consentement, FournierJ. n'6tait pas susceptible de confirmation. Il en pourrait - 4tre autrement s'il y avait eu un consentement, quoique vici4 par le dol, 1'erreur on par quelque autre cause. Laurent (1) s'exprime ainsi au sujet de la confirmation des actes:

Confirmer une obligation cest renoncer au droit quo Pon a d'en demander la nullit6 & raison du vice dont elle est atteinte. con firmation a pour but et pour effet d'effacer ce vice, de sorte que Pobligation quoique nulle dans son principe est consid6r~o comme n'ayant jargais t6 vicie.

Le m~me auteur, au No. 531, faisant la distinction entre les obligations annulables et les obligations inexistantes, dit:

II no faut pas confondre le3 obligAtions annulables avec les obligations inexistantes.

Nous avons 6tabli ailleurs la difference qui existe entre les actes nuls, c'est-c-dire annulables, ot les actes que la doctrine appelle inexistants, parce qu'ils n'ont pas d'existence aux yeux de I loi, en ce sens que la loi ne leur reconnait aucun effet.

Les aotes nuls donnent seuls lieu & une action en nullit6. Quant aux actes inexistants, on ne peut logiquement en demander Pannulation, car on ne demande pas la nullit6 du n~ant. Si Pon m'oppose un contrat auquel je n'ai pas consenti, j'ai sans doute le droit de le repousser, mais je ne demande pas au juge do Pannuler, car ce contrat n'existe pas puisqu'il n'y a pas-de contrat sans consentement. Je demanderai que le juge d4clare qu'il n'y a jamas eu de contrat Je puis prendre Finitiative on agissant en justice pour qu'il soit dicid6 que le contrat, quo Pon pouirait un jour m'opposerd moi, ou A mes hiritiers, n's pas d'existence 16gale.

Le jugement ne Pannulera pas, il d6clarera qu'il manque de Fune des conditions requises pour son existence et que par suite il ne peut produire aucun effet."

Le deuxibme mQtif du jugement attaqu6, consistant i dire que 1'appelant no peut plus opposer les vic s (? T. 18, au, No. 559.

dont on admet que son contrat est entack6, parce qu'il a laiss6 6couler un d61ai de pris de deux ans, sans a prendre aucune mesure judiciaire pour faire rescinder IN. Co. sa souscription, no me parait pas fond6 on loi. Pour Fournier, J. lui opposer ce moyen avec succas, il faudrait 6tablir par quelque texte de droit qu'il 6tait oblig6 d'agir dans le dM1ai de deux ans. Je n'en connais pas. Si 1'on adopte 1'opinion qu'il n'y a pas ou contrat, faute de consentement, d ans ce cas 1'appelant avait trente ans pour agir s'il le jugeait a propos. II aurait pu, comme le dit I'autorit6 cit6e ci-dessous, prendre 1'initiative, mais ce n'est qu'une facult6 qu'il 6tait libre d'exercer ou non, A son gr6. Le d6faut de le faire ne pouvait pas le priver de son droit d'invoquer pendant trente ans 1'inexistence du contrat quand il lui serait oppos6.

Dans cas oi- 1'on consid6rerait qu'il y a eu contrat, mais que le consentement A ce contrat a 6t0 vici6 par le dol ou 1'erreur, le contrat 6tant annulable seulement, 1'appelant avait encore en vertu de 1'art. 2253 0.0. de Qudbec, dix aus pour prendre son action en nullit6. Ces deux propositions sont clairement 6tablies par 1'autorit6 suivante (1):

dbi- Voir encore le meme auteur aux Nos. 559 et 560. La doctrine contenue dans les citations ci-dessus est confirm6e par les nombreuses autorit~s cit6es dans le factum do l'appelant.

Si, comme je le pense, il n'y a pas on. contrat, 1'appe. lant avait trente ans pour agir, et dans le cas o-t le cori contrat ne serait qu'annulable A cause du consentement . vici6, I'appelant avait dix ans pour en demander on opposer la nullit6. Ainsi l'on ne peut lui opposer son d6faut d'action judiciaire pendant deux ans comme une preuve qu'il a acquiesc6 au contrat, puisque dans un cas, il avait trente ans et dans l'autre dix ans pour agir. Cependant i'appelant, quoiqu'il ne fut pas oblig6, pour se maintenir dans ses droits, do prendre l'initiative d'aucunes d6marches, s'est empress6, aprbs la d6couverte de 1'erreur dont il se plaint, d'en donner information A la compagnie. En effet, aussit6t que les trois frbres Cotd so sont apergus qu'ils pouvaient Stre inscrits comme actionnaires pour de plus forts montants que ceux qu'ils avaient pay6s, ils ont envoy6 leur frbre Joseple pour informer la compagnie des faits tels qu'ils s'6taient pass6s.

Joseph Cold s'adressa A M. Lindsay, le secrbtaire de la compagnie, et A M. Belleau, 'agent principal pour les souscriptions du stock. M. Lindsay comprit la justice des repr6sentations faites par Joseph Cold, mais M. Belleau refusa d'intervenir pour faire rectifier la souscription.

Cold fit aussi des d6marches pour rencontrer M. . B. Renaud, le pr6sident de la compagnie, mais n'ayant pu r6ussir A le voir, il retourna chez lai d6courag6 et A peu pros convaincu qu'il n'y avait pas moyen d'obtenir justice, mais sans avoir fait aucuu acte, ni prononc6 une parole que l'on puisse considbrer comme un acquiescement A la souscription qu'on voulait lui imposer. L'appelant et ses frbres s'en tinrent la, jusqu'd ]a reption du dividende dont il a t6 parl6 plus haut. Etaient-ils oblig6s de faire plus ? Certainement non, d'aprbs les autoriths ci-haut cit~es.

Mais la compagnie elle-meme, inform6e comme elle ddit l'Atre par son secr6taire et par 1'agent Belleau, n'6tait-elle pas oblig6e d'irtervenir imm6diatement et do r6gler-le differend. On oppose de la n6gligence A l'appelant qui, en loi, n'6tait pas oblig6 d'agir, et 1'on perd de vue que d'aprbs son pr6tendu contrat, I'initiative 6tait obligatoire pour la compagnie.

Quel est en effet le prktendu Fournier, j. contrat dont il s'agit ? En voici la teneur, telle qu'on la trouve dans les papiers qui out 6, A la demande de la cour, trausmis par les parties, depuis 1'audition do la cause:

Le contrat entre les actionnaires et la compagnie est conditionnel, comme on le voit par le fait que celle-ci se r6serve d'accorder le nombre ou seulement une partie du nombre des parts souscrites, tel que son bureau de direction pourra en faire la r6partition. Cette r6partition a-t-elle 6t6 faite? On n'en sait rien, le fait n'est pas prouv6. Avis en a-t-il 6t6 donn6 a I'appelant? On ne le sait pas davantage. Cepehdant il est clair qu'il 6tait du devoir de la compagnie de se conformer A la condition qu'elle a jug6 & propos d'introduire dans son contrat. Elle eut pu se dispenser de l'y insg6rer comme on le verra par la 2me section de son acte d'incorporation, 37 Vic., ch. 94, sec. 2:

D'aprbs cette section laseule souscription au livre de stock eut 6t6 suffisante pour former un contrat parfait. Mais exergant les pouvoirs que leur donne la sec. 24, les directeurs ont sagement pens6 qu'il devait se r6server le droit de contr6ler la souscription, et pour cela ils se sont r6serv6s le droit d'en faire la r6partition S * comme bon leur semblerait. Aprbs avoir t inform6s de la manidre dont la souseription des avait 6t6 J. obtenue, et surtout, connaissant que cette Fouscription 6tait tout-A-fait hors de proportion avec leurs moyens, n'6tait-t-il pas du devoir des directeurs de ne leur accorder qu'un montant de parts en rapport avec leur fortune? En ne le faisant pas, ils ont manqu6 d'accomplir une condition de leur contrat et commis une injustice envers leurs assures, en laissant sur leur livre de stock des actions qui ne valaient rien. Si la r6partition

6t6 faite et qu'avis en edt 6t6 donn6 A l'appelant, la r6ception du dividende apr~s cola, exit pu, sans doute leur 8tre oppos~e. D'aprs ce qui prbcde je crois que c'6tait & l'Intim6 a prendre l'initiative en faisant la r6partition da stock et non pas & 1'appelant, comme je crois l'avoir d~montr6 par les autorit6s cit6es plus haut. Pour ces consid6rations je suis d'avis que l'appel devrait 6tre allou6 avec d6pens.

J.:- The respondent company claims in this action that the appellant is a stockholder in it to the extent of fifty shares, while he alleges himself as such only to the extent of five shares. The right of the respondents to recover depends on their showing him to be a stockholder beyond the number of five shares.

The appellant, whose statement is sustained by other witnesses, alleges that he only agreed with the canvassing agent to take five shares, and that for them he paid the whole amount, and was entitled to have received a certificate for them as fully paid up. The agent who dealt with him alleges he agreed to take, and with full knowlege of what he was doing, signed the stock list for, the fifty shares. His testimony is not corroborated, although it appears another agent of the company ** was present at the transaction, and might have been Iss. called for that puriose, if he would have done so. The 1eyj.

stock book, when produced, corroborates Genes's statement, but the appellant swears that he did not know it had been filled up for more than the five shares, and that his signature was fraudulently obtained. He is a comparatively uneducated farmer, and one shown to have been in no circumstances to have taken so large an amount of stock. The learned judge who tried the cause found iii favor of the appellant's evidence, and, after carefully considering it, I feel bound to say that, so far from differing with his conclusions, were I in his place I would have decided as he did. This view of the result of the evidence seems to have been subsequently adopted in -the two courts below.

How, then, does the case stand? The appellant agreed to take five shares, but was fraudulently got to put his name to a stock list for fifty. Did the respondents case rest here it would be a plain one against them. The fraud would render the contract, not necessarily void, but voidable by the appellant. Under the evidence, however, I consider it was a good confract for five shares. Taking the testimony of the appellant and his witnesses there was a verbal agreement for five shares, and the money for them paid in full. The fraud or mistake in inserting fifty in the stock list could have been corrected, and the agreement for the five enforced. But, although it was not so corrected, it does not therefore follow either that there was no contract, or that there was one for fifty shares. Immediately on the discovery of it he appealed to the manager of the company, with whom he had several interviews, informed him of the circumstances in evidence, and repudiated the contract beyond five shares. Amongst other things, he was told by the manager to keep himself quiet, that the sum paid was all he would have to pay. It appears that this satisfied the appellant and his two brothers, who were similarly ,,,*OY situated, and they became quiet as desired, no doubt, in my mind, thinking the error would be corrected, and eny, j. the contracts they had really made carried out. We should construe the acts and dealings of those illiterate men very differently from those of persons of legal or technical acquirements, and from a totally different standpoint. I make this remark in view of another question affecting the decision of the case I intend hereafter to refer to.

There was, then, no binding contract on the appellant for more than five shares. Has he by his subsequent conduct adopted the contract for the fifty ? It is alleged -that he has done so by the acceptance of a cheque for a 10 per cent. dividend the following year. A counterpart of the cheque (with a blank for the name of the payee and the amount) is in evidence, and it states the payment to have been for a dividend upon paid up capital to the 31st December, 1875.

The amount in the cheque was the dividend on the sum he had actually paid. It might have been intended by the manager or officer of the company who sent it as a dividend on the paid up capital on the fifty shares, for the amount Would be the same in either case, but there is no evidence to show how it was intended. There is no reference in the cheque to the number of shares for which it was sent, nor was there anything to bring to the mind or notice of the appellant that it was for a dividend on the fifty shares, nor does it show whether it was intended as a dividend on the fifty shares or on the five. The amount was calculated on the capital paid up, and in the absence of any proof, why are we to assume that it was intended for the one any more than the other; and still further, how can we be called

SUPREME COU1tT OF CANADA.

[VOL. VI. upon to assume that the appellant so received or understood it. The cheque told him that it was a dividend on paid-up capital.

He had paid in an amount sufficient to entitle him to a dividend, and had Ienry, j. no reason to presume it was intended to have reference at all to fifty shares. Whether he was to be held for fifty or five shares was not a subject then necessarily brought to his mind by the words of the cheque. Besides, neither the rate of the dividend nor the time for which it was made up was stated, so that he was in no position to make any calculations as to the amount sent him, or the purpose for which it was sent. The receipt by him of the cheque is, however, relied on to prove that he acquiesced in his remaining as a subscriber of fifty shares.

I cannot so receive it. To amount to an estoppel, the language or conduct of the acting party sought to be affected must be pointed and unequivocal, and must leave no reasonable doubt. HereL think,no such evidence is furnished by the cheque or otherwise. The doctrine of estoppel is necessarily applicable in cases like the present, and if with. full knowledge a party accepts a position tendered by another, he is estopped from taking one inconsistent with it. If the appellant was shown with his eyes open to have accepted the cheque on fifty shares, he would not be permitted afterwards to repudiate it, but the evidence before us falls far short of establishing that position. If the filling up the fifty shares was a fraud, the appellant, of course, could have repudiated the whole transaction, and obliged the company to repay the money paid them. He, in that case, should not, however, have received any dividend, but ought to receive back his money. His receipt of the dividend for the money he paid in does not, however, estop him from contending that his contract was but for five sharesi

When he applied to the manager shortly after subscribing for the stock, he was lulled into security, and when he subsequently received the cheque, he might very properly conclude that if the company intended to hold him for fifty shares, no Is. dividend would be paid him until the dispute was Henr, J. adjusted, he having so forcibly protested against holding any stock beyond five shares, and informed the manager the signature for more was a fraud.

I think the company with greater propriety, by sending him the cheque on his paid-up capital, might, under the circumstances, be held estopped from claiming him to have been a holder beyond the five shares. I don't agree with the proposition that there was no contract existing, for, if it had been ab initio void for fraud, there must have been a new one entered into between the parties, before an action could have been maintained at all. It was, in my opinion, binding on the company, and. the appellant might have adopted it had he so elected to do, but instead of that he repudiated any thing beyond five shares, and for those five shares I think there was an enforcible contract. It seems to have been admitted throughout, that but for the receipt of the dividend by the appellant, the respondents would have no claim to recover. I am decidedly of the opinion that the receipt of the dividend by the cheque, under the circumstances, is per se no evidence of acquiescence in, or ratification of, the contract sued on. It is objected that the appellant should have within two years, taken action to set aside the agreement, as it appears by the stock list. Article 2,258, C.C.

however, provides, that in cases of fraud, there is a prescription of ten years from the time it is discovered.

This action is by the company to enforce a contract allegred to have been entered into by the defendant, Iss. whereby, as is alleged, he became the holder of fifty shares, amounting to $5,000 in the capital stock of the company; we have no occasion therefore to refer to the numerous cases decided under the Companies' Clauses Act in England, which lay down the broad distinction which exists between the rights of the creditors of a company against a subscriber for shares in the company and the rights of the company against such a person disputing his liability to the company upon the ground of the fraud and misrepresentations of the agents of the company by which his subscription was obtained. In Oakes v. Turquand the Lord Chancellor, Lord Chelmsford, alluding to this distinction, says:

The equitable rights of creditors against shareholders have nothing whatever to do with the present action, which rests upon the allegations of contract contained in the declaration, and must be determined by the ordinary principles of common law as applied to matters of contract.

As was said by Bramnwell, in the Bwlch-y-plwr

Lead Mining Company v. Baynes if the defendant is liable "it is because he has undertaken to fulfil the duties of a shareholder in consideration of the plaintiffs giving him the benefits of one."

The action rests upon the allegation that the defendant is the holder of fifty shares in the capital stock of the company, upon which certain calls have been made which are due and unpaid by the defendant ; the defendant by his plea denies that he ever became the holder of more than five shares in such capital stock, which he alleges he paid up in full at the time of taking them.

To entitle the plaintiffs to maintain this action, they must clearly establish it to be true that the defendant is the holder of the fifty shares, as alleged in the declaration, or at least that the defendant is the holder of more shares in the capital stock of the company than the five which the defendant alleges he paid up in full. That the defendant paid to the plaintiff a sum of money equal to the full amount of five shares, which is equal to 10 per cent. upon fifty shares is not disputed, but the question raised is, as in the Bank of

Hindustan vs. Alison is the defendant in point of fact the holder of the fifty shares as alleged by the plaintiffs, or of any greater number than the five paid up in full as denied by the defendant, or has he estopped himself from saying that he is not?

Now, if the evidence of the defendant's brothers is to be taken as representing truly what passed between the defendant and the company's agent (the brothers each give evidence for the others in the three several actions), there can be no doubt that they were all grossly deceived and entrapped into the appearance of having signed what they never contemplated signing, and what in point of fact they never did sign or agree cT to. They say most distinctly that when applied to by EYcoA Mr. Genest as agent of the company to take shares in the company, and to pay 10 per cent. thereon, they j. absolutely refused to do so, saying that for what they should take, if they should take any shares, they would pay in full once and for all, and that the agent of the company, finding them resolved upon this point, at length said to Joseph (the eldest of the brothers, who spoke for the others), in presence of the others:

That this was eventually agreed upon, and thereupon they each signed their respective names in a bo k presented to them by the agent and paid the above several sums as in fall for all the amounts they respectively desired to take in the capital stock of the company. They say, also, that they never wrote in this book the matter which now appears in it set opposite to their respective names, namely:

That these must have been all written by the agent of the defendant afterwards, and, without their authority, knowledge or consent.

Mr. Genest, agent of the plaintiffs, while admitting that this additional matter is in his handwriting, written after the parties had signed their names, says that it was done by him in their presence; and to carry out what he says he clearly understood to be the intention of the parties to whom, as he says, he fully explained the amounts and numbers of shares so written down, and although he admits that he told them it was not the intention of the company to call in more than '. they had paid, he says he explained to them that they Is. would nevertheless be responsible to the above amounts.

Against the interest which it is urged the brothers have to support the contention of each other, as affecting the weight of their evidence, is to be set the interest which Mr. Genest admits he had in getting subscriptions for as many shares as possible in the books in his hands, for that he was paid 25 cents per share upon all the shares so appearing in such book, and the further interest that he has to free himself from the charge of fraud imputed to him by the brothers Cold. It sufficiently appears by evidence, which is not attempted to be impeached by any contradictory evidence, that the total amounts above set opposite the names of the brothers Cold is six or seven times in excess of the united property of all three combined; and that the now defendant F. X. Cold, when he paid the $500 paid by him, paid more than the whole of what he was worth, and that he hal to borrow $50 from his brother Joseph to make up the amount.

We start therefore with a strong presumption, in support of the assertion of these poor farmers, that they never contemplated taking, and absolutely refused to take, any greater amount in the capital stock of the plaintiff's company than they paid for in full at the time. The learned Chief Justice Meredith, before whom the case was tried in the court of first instance, was satisfied by the evidence, that however much Mr. Genest may have thought he had explained to the defendant the nature of the transaction to which he had set his name, he wholly failed to make the defendant understand it, for in the judgment of the learned Chief Justice when the defendant and his brothers signed their names in the book presented to them by Genest, they did not know the nature or intent of what they had signed, nor the nature, amount, oi extent, of the responsibility which, j. by so doing, they were assuming, that in fact the matter was not fairly put before the defendant nor understood by him.

The Court of Queen's Bench, in appeal, was of-opinion that without any doubt the defendant, the now appellant, had been induced to sign his name for the shares as appearing in the book produced in evidence without understanding the responsibility which, by so doing, he was assuming; and the court concludes that the contract alleged by the company in the declaration is not proved, and that in this point of view (if that in the judgment of the court were sufficient to decide the action) the action should be dismissed.

I must say that with this view so expressed by. two courts, the presiding judge ill one of which himself heard the witnesses, I should not, sitting as a judge in appeal, feel myself justified in differing, even though the evidence should not present itself to my mind precisely in the same light; but the true result of the evidence, as it appears to my mind also, clearly is that the defendant never contemplated taking any greater interest in, or any greater amount of, the capital stock of the company than what was covered by the $500, which he paid at the time as, and intending it to be, in full of all his interest in the company, that is to say, in full of five shares, and that he did not comprehend, if he had at the time heard, what the company's agent set opposite to his name, consequently there never was that concurrence of minds which is essential to the making of a contract inter partes, and that, therefore, the first branch of the question which we have to decide, if the evidence relating thereto be received, must be answered in favor of the defendant, namely: That, in point of fact, he never was the holder of fifty shares in the capital stock of the company, as alleged by the plaintiff, m a nor of any shares, unless the plaintiff should be willing I.. to accept, and should accept, his $500 paid to them as Ga"""e J. payment in full for five shares.

It only, therefore, remains to be considered whether the defendant is estopped from saying that he is not the holder of the fifty shares as alleged by the plaintiffs in their declaration ? In considering this question, it becomes important to enquire, and we are justified (in a case of this nature having regard to the humble condition and want of experience in business of the defendant) in criticising minutely what was the true legal nature, purport and effect of the document which the defendant, without understanding what he was doing, did in fact sign. The attention of the courts below was -not, as it appears to me, drawn to the true nature of that document, the book itself having been withdrawn and only a partial extract, and that of the least important part, taken from it, nor has the character or effect of the defendant's prompt repudiation of that document, as soon as he suspected what it did purport to represent, been sufficiently appreciated.

The page in the book where the defendant's signature appears had not, nor had any page in it, except the first, any heading to indicate what it was the parties signing their names in the book set their names unto. The evidence on the part of the defendant is that he did not see the heading or know that there was one. The evidence of Mr. Genest is, that he read and fully explained to the defendant what appears at. the head of the first page. Now, what is it that is there and that he so explained, if indeed he did so? It is in French and

English, and in English is as follows:

Now, leaving out of consideration for the present the fact that, when the defendant signed his name in the book, there were no shares or amounts set opposite to his name, and that the words and figures now appearing there were added afterwards by Mr. Genest without the knowledge or consent of the defendant (as the defendant's evidence says, although, as Mr. Genest alleges, with his knowledge), and assuming these words and figures to have been added with defendant's knowledge and consent,what is the legal effect and purport of this document, and what is the explanation of it which should have been given by Mr. Genest, if it be true, as he says, that he read it and explained it to the defendant. This document differs from what appeared to me to be expressed in the document of a like nature which was before us in Nasmyth v. Manning lately decided in this court, in which case, although the language of the document there was not so strong as the language of that now before us in support of the conclusion at which a majority of the court arrived, the court .held that no liability arose until some subsequent act in the nature of an allotment of shares by the provisional directors should take place and be communicated to the party subscribing the document. The judgment of this court in that case, until reversed, I must consider as binding upon me, and upon the point now under consideration I must regard it as a conclusive authority. The document, then, now before us involved no obligation upon the part of the provisional board of directors to allot to the defendant any portion of the shares set opposite to his name. Mr. Genest did not and could not a represent the provisional board for that purpose. The . document as appearing now signed in the book Is. produced, the nature of which, as it is found, was not J. fully explained to or understood by the defendant, is simply a proposition upon his part, with an undertaking, as yet unilateral, to take and pay for such portion of the shares set opposite to his name, if any, as the provisional board of directors should allot to him. Until this board should exercise their judgment upon that proposition and signify to the defendant in some manner what they had resolved upon doing and had done in the matter, there was not, and, by the terms of the document signed the defendant, there does not profess to be any, contract perfected between him and the plaintiffs, and the defendant was not and did not become, by his mere signature in the book, the holder of any number of shares in the capital stock of the company. Now, before the provisional board of directors ever assumed to act in the discharge of the function and duty devolved upon them by the defendant's proposition, and which could be discharged by that board only, the defendant became aware that, or had reason to suspect that, the fraud and misrepresentation which he now sets up as his defence to this action had been committed, whereby he was induced to sign a document purporting to represent his intentions and design to be totally different from what he intended and understood it to represent, and thereupon without delay, and before any action is taken by the provisional board of directors upon the document, he wholly repudiates the matter as erroneously represented in the book by the plaintiffs' agent, and informs the company, through their secretary, that all the defendant intended or proposed to do was to take shares to the amount of $500 paid up in full; that it was for this purpose he had given his cheque for $500. There was no legal necessity that such information should be communicated in writing; oral communication was as good as in writing. Now, the effect of this notice and repudiation by the defendant of what the book represented was clearly, as it appears to me, to give to the plaintiffs ample notice to require them, in the discharge of the duty which they owed alike to him as to the company, which latter was to allot shares only to solvent persons, having regard to the amount allotted, that unless they should be willing to accept the defendant as the holder merely of shares to the amount of $500 all paid up, he would have no shares. If they should not be willing so to accept him, their duty was to erase his name from the book in which it was and to refund him his money, which, to say the least, they had so become possessed of by manifest error, of which, after such notice and information given to them, they must be taken to be aware.

The board, it appears now, never did allot to the defendant any shares, but they retained his money of which they had so become possessed, with full notice from the defendant that he had only paid it as, and that under the circumstances communicated to the plaintiff by the defendant, they could only justify their retention of it by accepting it, for the purpose for which it was given by the defendant, as payment in full of so many shares fully paid up in the capital stock of the company as $500 represented. The defendant, then, as it appears to me, effectually withdrew from the provisional board of directors all right to regard him as a subscriber for, or as assenting to become a subscriber for, any greater number than five shares, and those as fully paid up; the Board, however, never did, in fact, communicate to the defendant their acceptance of him as the holder of five fully paid up shares, undet the notice given by him in repudiation of the proposition as appearing in the book. They simply retained coT his money, with the knowledge communicated to them by the defendant that he had paid the $500 as and for payment in full of shares to that amount, viz., five J. shaies; there having been no completed contract at this time, there was no necessity for the defendant to take any proceedings in any court to annul a contract not entered into.

While things still remained in this condition, the plaintiffs having had sufficient notice that what the book signed by the defendant represented was utterly erroneous, and that the defendant was not an applicant for any shares in the capital stock of the company, unless it should be for five shares, for which, as payment in full, he had given his cheque for $500 to the company, the plaintiffs in the year 1876 sent to the defendant a cheque in the following terms:

The money made payable by this cheque was received by the defendant.

Now, can the acceptance of this money operate as estopping the defendant from now alleging that he never was the holder of more than five shares in the capital stock of the company, and these as fully paid up ? Clearly not, as it appears to me. for, firstly, the amount so paid was calculated upon the paid-up capital, that is to say, in so far as the defendant is concerned upon his $500, whether that $500 was payment in full of five shares, or as 10 per cent. upon fifty shares, and, secondly, because, after the notice given by the defendant to the plaintiffs in repudiation of what appeared in the book signed by him, and informing the plaintiffs that he had only paid $500 as and for payment of that amount of fully paid up shares, the board of directors had no right to allot, and in point fact did not allot, to the defendant any shares under the proposition as appearing in such book. They had, in fact, no right to hold him liable for any shares, unless they were willing to accept his version of the erroneous character of what appeared in the book, and of his purpose and intention in paying the $500, and to accept him as the holder of five shares paid up in full. When, then, the directors sent to the defendant the above cheque he would have been rather, as it seems to me, justified in regarding it as evidence of the adoption by the plaintiffs of the defendant's statement, as communicated to them through their secretary in repudiation of the proposition as appearing in the book which the defendant was ignorantly, if not fraudulently, induced to sign, and of his version of the purpose for which he paid his $500.

If there be any estoppel arising out of this cheque it is not against the defendant that it should operate, but against the plaintiffs, who, under the above circumstances, and affected with knowledge of the defendant's contention, and of his intention in paying the $500 being as payment in full of five shares, issued the cheque. As to the defendant, his acceptance of the money made payable by the cheque cannot in reason be regarded as acquiescence in anything further than that he is a holder of five fully paid up shares, which is what he has always contended was the utmost he ever contemplated being the holder of.

The doctrine of estoppel can only operate to prevent the defendant from showing the truth, if, by any act or declaration acquiesced in by him, the plaintiffs were misled to their prejudice to believe the defendant to be the holder of fifty shares in the capital stock of the company. A party is only estopped from showing the truth when he has by some act or declaration acquiesced in an assumed state of things, and by such acquiescence the situation of the other party has been altered to his prejudice. Bank of Hinduslan vs. Alison J. Now the terms of the document bearing the defendant's signature, already commented upon, could not have had that effect, for that document was not only not acquiesced in by the defendant, but was immediately, and before having been acted upon, repudiated by the defendant, to the knowledge of the plaintiffs. The plaintiffs, therefore, could not, by reason of the defendant's signature appearing in that document, have been prejudiced or have believed the defendant to be in truth the holder of the fifty shares for which they now seek to wrake him liable. The act of the defendant in receiving the money made payable by the cheque for dividend cannot, as I have already stated my opinion to be, be construed to be an acquiescence in anything more than that the defendant admitted (as he had contended and as he does now, was the true state of the case,) that he had paid his $500, intending it to be and as payment in full of five paid-up shares.

It appears that Joseph Cold, having learned in 1877 that the plaintiffs still contemplated holding him and his brothers for the amounts wrongly entered by the plaintiffs' agent in the plaintiffs' book, again remonstrated to Mr. Lemoine, one of the directors, who suggested to him to write a letter to the board of directors which he would lay before them. Joseph thereupon, or I should say from the mistakes apparent in the letter, somebody for him, wrote a letter in French, of the 28th February, 1877, to the directors of the company, of which the following is a translation:

The object of this is to make you understand my actual position towards your company.

I am still full of confidence as to the administration of the affairs of the company, and I hope we shall not have reason to regret having placed there all the money we possessed. INS. Co. I address you in the name of four brothers who are in the same Gwynne, J. position as myself. The amount of our subscription has been $2,600, or 260 shares.

Here are the reasons for our having taken so great a number of shares. The agents sent to make known to us the rules of the company, and the conditions of subscription concealed from us almost altogether the risks and responsibilities which we should incur by such subscription. Observe, if you please, Messieurs, that not being able to obtain anything in the Parish of S. Pierre, the agents struggled to show to us the advantages which the company offered without suggesting, save in a vague manner, the dangers that we should run. We yielded to a confidence which we regret to this day. The influence which we have in our locality has been the cause that our mistake has procured many more subscriptions than there would have been without us. If we had had an extract from the act of incor. poration, as that which was left with Mr. Franpois Fortin, we should have understood as he did that we should not with our means risk so much. He qnly paid $125.

Your secretary even expressed his astonishment, and admitted how irrational it was in our position (one of my brothers having borrowed $50 to make his payment), to have paid so large a sum. Upon this subject one of your agents at the office, and in the presence of Mr. Lindsay, said that we had made our payment and that we should not be troubled any more about it. By reason of his reassuring words we surrendered ourselves to your good faith. For these reasons we take occasion to ask to sell our shares without confiscation, so that after this year we may have still the sum of $2,600 in the same manner as if we had paid this sum in three instalments instead of two.

Your humble servant,

JOSEPH COTE. And on the 4th of August, 1877, Joseph and his brother Am~de and the above defendant, all three signed a letter of that date, addressed to the the directors, in French, of which the following is a translation:

4th August, 1877. To THE DIRECTORS, &0.,

GENTLEmUfEN-From the different notices, circulars, &c., which you have sent us we see that you have not paid any attention to our observations and demands. This is very unfortunate, for we ventured to hope different treatment on the part of persons so agreeable and intelligent as you appear to be. We repeat, then, the observations which we addressed to you in writing last winter, in the hope that you will pay attention to it. Three brothers, Joseph, Amddie and Ixa. Co. Franpois Xavier Cotd, deposited in your office $2,100 as shareholders, Gwynne, J>. upon the express condition, and well explained, that they understood that they paid thereby the full amount of their shares. Then your agents wrote that they paid only two instalments of 5 per cent.

which constituted a responsibility of $21,000. Can we, gentlemen, in the name of common sense, believe that you will exact that which your agents have written, our whole properties are not worth the sixth part of that amount. You would thus deprive us of all means of subsistence, and you would still be at a great loss. At present is it true that we have undertaken to pay all the amount of our shares ? Well, we have paid almost every farthing we possess, and Frangois Xavier had to borrow even a part of his to make his payment. Moreover, we have witnesses, if it be necessary, that your agents are mistaken. That our deposit is spent we suspect is true, but as to paying anew we will not, for we are unable to do so. We beg of you, therefore, once for all, to arrange with your agents, that we have taken 1wenty-one shares instead of 210.

We respectfully solicit an answer.

Your three humble servants,

JOSEPH COTE,

AMEDEE COTE,

FRANCOIS X. COTE.

Now that this last letter cannot operate as estopping the defendant from showing the truth is clear, for it is a reassertion of the repudiation of what the plaintiffs' agent had written in the book, involved in the remonstrance and complaint made by the defendant immediately after he first had reason to believe or suspect that it falsely represented him to have taken $5,000 instead of $500 paid up in full.

Then, as to the other letter, its contents show how slow we should be to give the effect of an estoppel to anything over the signature of this poor ignorant man.

The letter speaks of his having four brothers, -whereas there were only two, and of the amount of their subscriptions being $2,600 or 260 shares, when we know that even in the plaintiffs book they were put down for $21,000 and 210 shares. Then the last sentence in the letter is utterly insensible and unintelligible. It Owynne, J. was written at the suggestion of one of the directors to whom Joseph Cold was repeating his original complaint. From what we now know of the nature of that complaint, the letter must be read as having reference to that old complaint, and to the position which, by the alleged wrongful conduct of plaintiffs' agent, Joseph was given to understand that he and his brothers occupied on the books of the company, although it presses other considerations for the board yielding to his demands.

Now, it is to be observed that no obligation is pretended to have been incurred by the company since the writing of that letter, or upon the faith of any admission contained in it; but there is a further and an insuperable reason why that letter should not operate to estop the defendant from showing the truth in this action.

The general doctrine laid down in Ieane vs. Rogers approved and followed in Newton vs. Belcher and Newton vs.Liddiard (2), that a party is at liberty to prove that his admissions were mistaken or untrue, and that he is not estopped or concluded by them, unless the opposite party has been induced by them to alter his condition, is applicable to mistakes in respect of legal liability, as well as in respect of fact. In all cases, therefore, of this nature, a jury, or judges acting as jurors, with the view of estimating the effect due to an admission, are justified in considering the circumstances under which it is made, and if it should appear to have been made under an erroneous notion of legal -liability, they may qualify its effect accordingly

Acting, then, as a juror in this case, and assuming the defendant to be affected by the contents of this letter, and that it is the one referred to in the letter of August, signed by the three brothers as J. having been addressed by them last winter to the directors, of which, however, there was no evidence, and which it would seem not to be from a passage in the letter of August, viz : " We repeat, then, the observations which we addressed to you in writing last winter," I cannot read it as an abandonment by the defendant of the position taken and asserted by him as involved in his original remonstrance and repudiation of what the plaintiffs' agent, contrary to the truth as the defendant alleged, entered in the book opposite to his name, and which contention is repeated in the letter of August, 1877.

But now that we see what the nature of the document which the defendant so signed was, the circumstance under which his signature was procured, the fraud or error committed in setting opposite to his signature the amount and number of shares now appearing there, and when we consider that it was the duty of the plaintiffs, upon the first remonstrance and repudiation of its contents made by the defendant, either to have erased his name altogether and to have refunded him his money or to have adopted his version of the purpose he had in paying them his $500, we see that they never were justified in incurring any obligation based upon the faith of the defendant being the holder of shares to the amount of $5,000; and when we see that the letter under consideration was written under a mistaken idea entertained by the defendant of what he had in fact signed, as well as of his legal liability and rights in

V . respect thereof, the plaintiffs cannot be heard to say that the defendant is estopped from showing the truth. He V. was led by the plaintiffs to believe that he had by a Ixs. perfected contract become the holder of shares to the Gwyne), j. amount of $5000.00 in the capital stock of the company which he was legally bound to pay, whereas it now appears that as matter of fact the paper which he signed did not contain such a contract, and that his signature to what was in the book did not subject him to the legal obligation which was insisted upon. The fact that the defendant, immediately after setting his name to the book produced, communicated to the plaintiffs the true state of the case, before the plaintiffs had taken any.action upon the faith of the defendant's signature having been obtained, and that, in fact, at a time when, as now appears, no completed contract between the defendant and the plaintiffs had been entered into, distinguishes this case from that class of cases which was relied upon by the courts below. For the above reasons, I am of opinion that nothing has taken place which can, in law, estop the defendant from showing the truth in this action in relation to the matter which the plaintiffs make the foundation of their claim, and that the truth being shown establishes that the defendant never was in fact the holder of fifty shares, nor of any number of shares, in the capital stock of the company, unless he be holder of five shares fully paid up