SUPREtKE COURT OF CANADA.
DAME
ELLEN TREACEY et vir.
APPELLANTS; (DEFENDANTS)...........................
*Nov. 'Jan. THOM AS LIGGETT et al, (PLAINTIFFS)...RESPONDENTS. ON APPEAL FROK THE COURT OF QUEEN'S BENCH FOR THE PROVINCE OF QUEBEC (APPEAL SIDE). On 28th June, L. et al sold to M. T. a property for of which price $3,780 were paid in cash. On 16th June, 1879, E. T., daughter of M. T., married J. K., and in their contract of marriage M. T. made a donation to his daughter, E. T., of certain property of considerable value, and remained with no other property than that sold to him by L. et al. In July, 1881, L. et al brought an action to set aside the gift in question, claiming that, the property sold having become so depreciated in value as to be insufficient to cover their claim for the balance remaining due to them and secured only by the property so sold, the gift in this marriage contract had reduced X. T. to a state of insolvency, and had been made in fraud of L. et al, and that at the time the gift was made M. T. was notoriously insolvent. M. T. pleaded, inter alia, denying averments of insolvency, fraud, or wrong-doing.
The only evidence of the value of the property still held by M. T. at the date of the donation, 16th June, 1879, was the evidence of an auctioneer, who merely spoke of the value of the property in November, 1881, and that of a real estate agent, who did not know in what condition the property was two years before, but stated that it was not worth more than $6,000 in November, 1881, adding that he considered property a little better now than it was two years before, although very little changed in price.
Held (reversing the judgment of the court below), That in order to obtain the revocation of the gift in question, it was incumbent on the plaintiffs to prove the insolvency or d6confiture of the *PRESENT.-Sir W. Ritchie, C.J., and Strong, Fournier, Henry, and Gwynne, JJ.
that that the the it
APPEAL from a judgment of the Court of Queen's Bench for Lower Canada (appeal side) (1), affirming the judgment of the Superior Court.
This was an action brought to set aside a gift made by Martin Treacey to his daughter Ellen Treacey and to her husband John Killoran, contained in their marriage contract executed 16th June, 1879, to which Martin Treacey was a party for the purpose among other things of conveying to them, in consideration of their marriage, property of considerable value.
The wrong which Liggett et al complained of was, that having sold Martin Treacey a property on the 28th June, 1876, which had only been partly paid for, a balance remained due to them thereon secured only by the property so sold, which having become depreciated in value was insufficient to cover their claim, that the gift in this marriage contract had reduced Martin Treacey to a state of insolvency and had been made in fraud of Liggett et at whose claim remained unsatisfied; they further alleged that at the time the gift in question was made, Martin Treacey was notoriously insolvent, that he had remained in possession of the property so given, the same as before the date of the gift, and that a year had not elapsed since they, Liggett et at, had become aware of the existence of the donation ; they therefore claimed that the donation in question should be set aside and annulled.
The defendants each pleaded separately, but to the same effect, by a special categorical denial of each of the aveiments in the declaration, especially the averments of insolvency, fraud, or wrong-doing.
(1) 3 Dorion's 6 B. B.
The facts shown in evidence were that by deed dated the 28th June, 1876, Liggett et al. had sold Martin Treacey a property for $12,250, whereof $3,787 were paid in cash, and the balance was made payable to the acquittal of Liggett et al., viz: $403 to A. M. Foster, 1st November, 1876, and the balance to the Liverpool, London 4 Globe Insurance Co. as follows, viz: $4,030 on the 1st July, 1878, and $4,030 on the 1st July, 1883. That the contract of marriage complained of was made 10th June, 1876, and contained a large amount of valuable property which Martin Treacey thereby transferred to his daughter and son-in-law, and was duly registered.
That besides the property he gave to his daughter and her husband, Mr. Treacey held no other than that sold to him by Liggett et al.; also that they had taken judgment against him for the first instalment due under his deed of purchase, and seized and sold his moveables; further that since his daughter's marriage, she and her husband had lived on the property he had given her. There was no proof of fraud or collusion on the part of the daughter or of her husband.
As to proof of the value of the property still held by Marlin Treacey at the date of the donation 16th June, 1879, two witnesses were examined on the 12th November, 1881.
William J. Shaw, auctioneer, stated that on that day, 12th November, 1881, sub-divison No. 40, No. 1206 St. Ann's Ward, he considered Worth about $6,000. Oliver W. Stanton, real estate agent, being examined, stated that he considered about $6,000 a very fair value of No. 1206 sub-division 40, St. Ann's ward. The houses, he said, were in bad order and the building also. He was asked: " Is it worth to-day as much as it .443 was two years ago? A. I did not see it two years ago." 'Q. Supposing the property to be in the same state, L .
was it more valuable two years ago than to-day ?
The Superior Court rescinded the donation made by contract of marriage to the female appellant by her father Martin Treacey, and that judgment was affirmed by the Court of Queen's Bench for Lower Canada (appeal side.)
From thcse judgments the appellants, Dame Ellen Treacey et vir, as well for themselves personally as beneficiary heirs to the estate of the late Martin Tracey, appealed to the Supreme Court of Canada.
The question which arose on this appeal was,whether the respondents had proved their averment in their declaration, that Martin Treacey was at the date of the said donation, and before, notoriously insolvent, en diconfiture and unable to pay his debts, and were entitled under art. 803 C. C. to obtain the revocation of the gift. Other points were argued by counsel but the court did not think it necessary to express any opinion on them. Mr. Doutre, Q.C., and Mr. Joseph for appellants, and Mr. Branchaud for respondents.
C.J.
The whole question turns on whether Martin Treacey was solvent at the time he made this conveyance, or whether making the conveyance which he did rendered him insolvent.
For the reasons given by Mr. Justice Cross, and with which I entirely agree, and to which I have nothing to add, I think this appeal should be allowed.
That is to say, I am of opinion that the insolvency of the party was not established.
J.
For reasons substantially the same as those given by Mr. Justice Cross, I am of opinion that we ought to allow this appeal.
Without entering upon a consideration of the important point of law which is dealt with in the opinion of the. learned Chief Justice of the Court of Queen's Bench, but assuming, for the present purpose, that the law is as he states it, that a donation of immovable property by a father to his daughter, on the occasion of her marriage, is to be considered a gratuitous alienation, I am still of opinion that the proof in the present case is inadequate to invalidate the gift made by Martin Treacey to his daughter.
Article 803 of the Civil Code provides that:
their Fraud must be proved, and is not to be presumed. Therefore, it was incumbent on the respondents to show that the property remaining to Martin Treacey, after he had made this donation to his daughter, was inadequate in value to pay the hypothecary claims of the respondents with which it was charged.
This property had been sold by the respondents to Martin Treacey, on the 28th June, 1876, for $12,250, of which price $3,787 had been paid in cash.
There is a presumption, therefore, that on the day of donation by Martin Treacey to his daughter, the 10th of June, 1879, the property still remained of more than sufficient value for the residue of the unpaid purchase money. The question we have to decide is, therefore, reduced to this: is it sufficiently proved that the property on the 10th June, 1879, was so redaced in value as to be worth less than the portion of the sum remaining unpaid, in other words, is the primd facie presumption destroyed by the counter testimony of witnesses? Only two witnesses were examined on the point of value.
William J. Shaw's evidence is not material, since he merely speaks of the value at the date of his examinan Jtion, which was the 12th November, 1881.
Stanton, a real estate agent, says that $6000 was the fair value at the date at which he speaks-in November, He says, he did not know the property two years ago.
He then adds, he considers property a little better (when he speaks) than it was two years ago. It appears to me, that this evidence of a'single witness is much too vague and general to repel the fair inference arising from the circumstance of the sale in 1876, especially considering the well known fluctuations in the value of land in cities and towns in this country. It is true, that the only way of fixing a valuation in questions of this kind is by the estimation of persons having dealings in real estate, or otherwise experienced in its value, like the witness; but, certainly, it would be most unsafe to act on evidence like this, when it must have been easily within the power of the respondents, upon whom the burden of proof lay, to establish the value at the date of the marriage settlement by the evidence of witnesses who knew the property at that time. I doubt, indeed, if such evidence as this ought to be acted on, even in a case where there was no such criterion of the value afforded as there is here by the price agreed to be paid under the previous sale, to which the creditors were parties, but under the circumstances of the present case it seems clear to me, that there is not such distinct and clear proof of insolvency as is required to warrant the revocation of the donation.
I think the appeal should be allowed, and the action dismissed with costs in this court and the court below, Le 28 juin 1876, les Intimbs vendirent A Martin Treacey, un des Appelants, un lot de terre avec bAtisses, pour la somme de $12,250, A compte de laquelle ils regurent au moment de la passation de 1'acte de vente $3,787.
La balance 6tait payable avec intfr~t A 7 p. c. comme suit: $403.00 h A. M. Foster avec int6rt au ler novembre 1876, $4,030.00, le ler juillet 1878, et $4,030, le lerjuillet 1883.
Le 19 juin 1879, Martin Treacey intervint au contrat de mariage de sa fille, Ellen Treacey, avec John Killoran, et lui fit donation de toutes ses propri6t6s A 1'exception de celle qu'il avait achet6e des Intim6s. Ceux-ci ont, par leur action en cette cause, demand6 la r6vocation de cette donation, comme faite en fraude de leur droit, et parce qu'A 1'6poque de cette donation, le donateur Martin Treacey 6tait notamment insolvable et en d6confiture.
Cette dernibre all6gation 6tant la base principale de 1'action, il est important de la donner textuellement, afin de faire voir clairement la position prise par les Intimbs:
Martin Martin intent the
11s out de plus all6gu6 que l'existence de cette donation n'6tait parvenue A leur connaissance que depuis moins d'un an.
Les Intimbs out par des d6fenses s6par6es ni6 sp6cialement toutes les all6gations de la d6claration et plus particulibrement celles concernant la fraude et l'insol. vabilit6.
11s out aussi invoqu6 la prescription intro- Tmoury duite par l'art. 1040 C. C.
Le jugement de la Cour Superieure, confirm6 par celui de la Cour du Banc de la Reine, a maintenu l'action et annul6 la donation tout en ordonnant la discussion des autres biens de 1VMartin Treacey.
La question tras controvers~e de savoir si la donation contenue dens un contrat de mariagp doit tre consid6r6e faite A titre gratuit on on~reux, a 6t6 discut6e par plusieurs des honorables juges appelks A dicider cette cause.
Cette question qui pourrait 6tre de la plus haute importance en certains cas, A cause de la difffrence de la preuve que la loi exige suivant le caract~re de 1'acte, n'en a aucune dans la pr6sente cause ; car la preuve est tout A fait insuffisante pour 6tablir les all6gations de fraude, d'insolvabilit6 notoire et d6confiture qui sont les 616ments essentiels de 1'action r6vocatoire. Si la preuve en e-it t faite, il est indubitable que le jugement rendu en cette cause aurait bien jug6, mais il est 6vident que cette preuve fait d6faut.
D'abord quant A la preuve de fraude et de collusion de la part d'Ellen Treacey et de son mari, il n'y a pas eu la moindre tentative de la faire. Qaant A la preuve de l'insolvabilit6, A la date de la donation, il n'y en a aucune preuve non plus, si ce n'est celle que les Intim6s pr6tendent tirer de l'admission de faits des Appelants, que Martin Treacey n'avait pas A cette 6poque d'autre propri6t6 que celle achet6e des Intim6s (" no other pro- (perty but the one purchased from plaintiffs in this cause.") Cette admission qui ne fait pas mention des propri6t6s mobilibres, ne fait pas preuve d'insolvabilit6 et encore moins de d6confiture.
Pour suppl6er A cette insuffisance et dans le but d'arriver, faute de preuve directe, A prouver l'insolvabilit6, les Intim6s ont fait entendre deux t6moins au sujet de la valeur de la propri6t6 en question.
M. T. Shaw, 1'un d'eux qui a 6t6 entendu, le 12 octobre 1881, estime la propri6t en question $6,000.
L'autre, Olivier W. Stanton, l'estime aussi A $6,000. I dit que les bhtisses 6taient en mauvais ordre.
A la question qu'on lui a faite pour savoir J. cette proprit6 valait autant il y a deux ans, il r6pond qu'il ne 1'a pas vue A cette 6poque.
Elle pouvait alors valoir beaucoup plus, si elle 6tait en bon ordre, mais le t6moin n'en sait rien.
Ainsi ces deux t~moins ne font mention de la valeur de la propri6t6 en question qu'd 1'6poque de leur examen, le 12 novembre 1881. Ce qu'elle pouvait valoir plus de deux ans auparavant, 6 1'6poque de la donation du 16 janvier 1879, ils n'en savent rien.
IJevons-nous presumer que cette propri6t6 vendue $12,253 le 28.janvier 1876, n'en valait plus que $6,000 le 16 janvier 1879, 3 ans aprbs? Non, car lorsqu'il s'agit de prouver 1'insolvabilit6, c'est par des preuves directes qu'il faut le faire. Aucune tentative n'a t6 faite do la part des Intim6s pour prouver la valeur de cette propri6t6 A 1'6poque de la donation D'apr~s la manibre qu'ils out fait leur preuve ils semblent avoir complktement perdu de vue que le fait essentiel A prouver 6tait la valeur A l'6poque de la donation, afin do d6montrer que d6duction faite des propriet~s donn6es il ne restait plus assez de biens A Martin Treacey pour payer ses dettes. Ils semblent aussi avoir 6t6 sous 1'impression que dans un cas comme celui-ci, de simples pr~somptions seraient suffisantes poui faire la preuve requise, mais ils ont oubli6 qu'il s'agit dans cette cause de faire annuler un acte solennel entre non commergants, et qu'ici les pr6somptions ordinaires, suffisantes lorsqu'il s'agit de 1'annulation d'actes de commergants en fraude de leurs cr6anciers, ne peuvent recevoir aucune application.
fant encore remarquer que quant A la preave de insolvabilit6, il n'en est pas de meme que pour celle de la fraude; si celle-ci, fante de preuve directe, pent tre prouv6e par des preuves indirectes, il faut an contraire, LIGETT. pour 6tablir l'insoivabilit6 ou la d~confiture, des preu- ves directes et positives.
ournier,
Pardessus dit (1) :
La d6confiture est la position du non-commergant qui se trouve par 'accumulation de condamnations ou de poursuites dirig~es contre lui, hors d'6tat de payer ce qu'il doit.
......... Qu'un simple particulier laisseprononcer contre lui des condamnations, ne paie personne, quoiqu'il ait des meubles ou des immeubles, il ne sera pas en d~confiture, car ses cr~anciers peuvent le saisir, I'exproprier. Il n'y a de d6confiture que seulement oil la discussion de tous les biens ne produit pas facquittement de toutes les dettes.
Si telle erit 6t6 la position de Martin Treacey le 16 juin 1879, il eit 6t6 facile d'en faire la preuve par la production de condamnations et de poursuites dirigbes contre lui, et en constatant d'une manibre pr6cise la valeur, A cette 6poque, de la proprit6 qui lui restait, aprbs la donation, -- la valeur de ses biens meubles et le montant exact de ses dettes; on pouvait ais6ment par ce procd6 arriver A faire la preuve n6cessaire d'insolvabilit6. Cette preuve les Intim6s s'6taient engag6s i la faire par les all6gations de leur d6claration.
En basant, comme ils 1'ont fait, leur action sur 'art. 1034, ils devaient prouver l'insolvabilit6 de Martin Treacey A la date de l'acte de donation dont ils se plaignent. Un autre article non moins positif sur ce point, rendait encore cette preuve obligatoire. L'article 1034 C. C. dit : Si, au temps de la donation et distraction faite des choses donnies, le donateur n'6tait pas solvable, les cr~anciers antbrieurs, bypoth6caires ou non, peuvent la faire r~voquer quand m~me l'insolvabilit6 n'aurait pas 6t0 connue du donataire.
La preuve faite ne justifie nullement le principal consid6rant du jugement d6clarant " qu'il a 6th prouv6 "que le d6fendeur Martin Treacey s'est rendu insol- (1) Vol. 4, No. 1,321, pp. 579, 580.
" vable par la donation dont il est question en cette " cause, et qu'il 6tait insolvable lors de l'institution de la I - "pr6sente action, et que les immeubles qui lui restaient L . n'6taient pas suffisants pour assurer le paiement de ses dettes et nomm6ment de la cr6ance des demandeurs." Quant A la dernibre partie de ce consid6rant d&clarant Martin Treacey insolvable lors de l'institution de 1'action qui a t signifibe plus de deux ans aprbs la date de la donation, il est 6vident qu'elle doit tre sans effet sur le sort de cette cause, car elle est en contradiction manifeste avec les articles 1034 et 808, exigeant la preuve de l'insolvabilit6 A la date de l'acte attaqu6.
Mais elle fait voir que les honorables juges qui ont rendu ce jugement n'ont pas trouv6 de- preuve au dossier les autorisant A d6clarer que l'insolvabilit6 existait au temps de la donation.
Dans la premiere partie du consid6rant, quoiqu'il soit d~clar6 que Martin Treacey s'est rendu insolvable par la donation en question-il n'est pas dit quand cet effet s'est produit. Est-ce au moment de la donation ? - si c'est l'interpr6tation qu'il faut donner au jugement, il est clair qu'il n'y a aucune preuve pour justifier cette conclusion. Pour en arriver L, il faudrait, comme il a 6t6 dit plus haut, avoir un 6tat exact de la position de Martin Treacey au temps de la donation. Il faudrait tre en 6tat. de dire si, aprbs d6duction faite des propri6t6s donnues il ne lui restait pas assez de biens pour payer ses dettes.
n'y a dans le dossier aucune preuve quelconque sur laquelle on puisse baser cette op~ration.
Pourtant, d'apres l'article 803, c'est la manibre de constater l'insolvabilit6.
Cette premibre paitie du consid~rant n'est pas plus justifi6e par la preuve que la seconde.
De 1'existence, reconnue par la Cour, de l'insolvabilit6 de Martin Treacey, lors de la signification de l'action a-t-on voulu en induire qu'il en r6sultait une presomption de fraude comme celle dont Ricard fait mention dans son Trait6 des Donations (1)?
V' y a peu d'analogie entre les deux cas.
Dans celui dont parle Ricard il s'agissait de savoir si la donation Fournier,J.6tait sujette A l'insinuation.
Il est vrai qu'il dit que " le sort de la contestation fut sur ce qu'il y avait une pr6somption violente que le pbre avait fait A son fils, par son contrat de mariage, la donation dont il s'agissait, en fraude de ses cr6anciers, en cons6quence de ce qu'elle contenait tous les immeubles qu'il poss6dait et qu'il avait fait banqueroute un an aprbs."
y a cette diff6rence importante dans le cas present, que la donation n'est pas de tous les immeubles-et que 1'insolvabilit6 n'est survenue que plus de deux aus aprbs la donation dont il s'agit,-tandis que dans le cas cit6 par Ricai d la banqueroute avait lieu un an aprbs, et que la donation 6tait de tous les immeubles. L'insolvabilit6 survenue A une 6poque rapproch6e des actes all6gu6s pourrait bien former une pr6somption de fraude,prouver 1'intention de fraude, consiliumfraudis,-mais cela seul ne suffirait pas pour faire prononcer la nullit6, il faudrait encore pour se conformer A une autre condi- ,tion essentielle de l'action r~vocatoire, prouver que cette insolvabilit6 est la cons6quence de ces actes afin d'6tablir le pr6judice caus6, eventus damni, sans lequel l'action ne peut exister.
Aubry et Rau (2) disent A ce sujet et p6judice . 1'exception cependant de ceux dont la discussion pr6senterait trop de difficult6s.
faut, en second lieu, que le pr6judice soit r6sult6 pour le cr&ancier de l'acte contre lequel son action est dirig6e, en d'autres termes, quo le d6biteur ait t6 audessoui de ses affaires d6s avant la Fournier, J. passation de l'acte attaqu6, ou que du moins son insolvabilit6 en ait t6 la cause reconnue.
Chardon dit (1)
De m~me que le dessein de tromper, sans un pr6judice effectif ri'autorise pas l'action r6vocatoire, le pr6judice 6prouv6 ne permet de l'accueillir qu'autant qu'il a t6 la cons6quence d'une intention hostile; Consiliumfraudis, et eventus damni. L'article 1167 du Code civil offre le m6me sons, puisqu'il n'autorise les or6anciers A critiquer que les actes faits par leurs d6biteurs en fraude de leurs droits. ......... Les cr~anciers doivent done prouver, et le dommage qui leur est fait, et I'intention qu'a eue leur d6biteur de le leur faire. Il est essentiel de faire cette preuve.
Bedarride dit (2) :
seconde condition impos6e au cr~ancier suivant l'action rbvocatoire, est de prouver l'insolvabilit6 du d~biteur. Cette action est essentiellement subsidiaire. Elle ne pout itre exerc6e quo pour amener le paiement que les biens restants sont, par leur insuffisance, dans l'impossibilit6 d'effectuer.
II faut done pr6alablement 6tablir cette insuffisance.
Cette condition se justifie avec autorit6 par cot autre principe que, pour intenter une action, il ne sut pas d'avoir qualit6, qu'il faut surtout y avoir int6r6t.
Chardon dit encore (3)
Pour 6tablir la fraude du donateur, il suffit de prouver son infortune au moment de la donation, parce qu'en effet si alors ses detes surpassaient son avoir, it ne pouvait en rien donner qu'au pr6judice de ses cr6anciers. O'est done ce pr~judice que doit prouver celui qui se plaint........
Demolombe dit (4)
Le pr6judice 6prouv6 par les cr6anciers, c'est-4-dire l'insolvabilito du d~biteur resultant de 1'acte qu'ils attaquent, telle est done la premiate condition, sous laquelle l'action Paulienne est recevable.
(3) De la Fraude, 2 Vol., No. 203, p. 369.
237, p. 432.
(2) Trait6 du Dol et de la Frau- (4) 25 Vol.
Code Napoleon, p. de, 3 Vol., p. 205, No. 1425.
172, No. 179.
prjudice et A tat. fiillite dit, subsidiaire peut 6tre Comme on le voit par ces autorit6s qu'il, serait facile de multiplier, la condition premiere, comme le dit Demolombe, sous laquelle Faction des Intim6s 6tait recevable 6tait le pr6judice lui r6sultant de l'acte de donation attaqu6. Ils ne pouvaient exercer leur action qu'en cas d'insuffisance des autres biens de Martin Treacey, constat6e par une discussion pr6alable de ses biens
Cette condition est exig6e par les autorit6s cidessus cit6es,-A moins que le d6biteur ne soit d6jd en faillite ou en d6confiture ouverte. Non seulement les biens de Martin Treacey n'ont pas t discut6s avant l'6manation de l'action r~vocatoire, mais la preuve de son insolvabilit6 au temps de la donation, condition essentielle du succbs de leur action, n'a pas t6 faite. Quant i la question de savoir si les Intim6s devraient discuter les biens de Martin Treacey avant de porter leur action, je ne crois pas que les circonstances de cette cause m'obligent A la d6cider
Cependant, je ne puis m'emp~cher de reconnaitre que les autorit6s citbes plus haut qui comptent parni les plus consid6r6es, sont en faveur de la discussion et la consid6rent obligatoire, A moins que le d6biteur ne soit en faillite on en d~confiture ouverte.
Mais comme d'aprbs la preuve en cette cause, on pouvait consid6rer Martin Treacey comme insolvable ; l'6poque de 1'6manation de l'action, cette circonstance rendait, suivant l'opinion de Demolombe, laction recevable.
Mais pour r6ussir A faire annuler la donation attaqu6e, il aurait fallu 6tablir par des preuves directes et positives, que cette insolvabilit6 remontait & la date de la donation attaqu6e, ou que la donation ellem~me 6tait la cause de l'insolvabilit6.
En outre des observations quej'ai faites sur la nature de la preuve de 1'insolvabilit6, je dois d6clarer que je concours dans celles qui ont 6t6 faites sur m6me sujet par l'honorable juge Cross.
Pour tous ces motifs je suis d'opinion que l'appel doit tre requ.
J.:- I am entirely of the same opinion. I think the party was bound to prove that at the time of the transfer from Treacey to his daughter and her husband he was insolvent. I may say that no such evidence has been given. We are asked to presume that because one man put a valuation of $6,000 on the property two years and a-half afterwards, therefore it was not worth $8,000 at the time of the conveyance.
It is a principle that not only must fraud be alleged, but it must be also proved. He undertakes to assert that that was a fraudulent and illegal transaction, and that the party became insolvent by the mere fact of making that transfer. Now, have we any reason to assume fraud ? On the contrary, I think we are bound to assume the reverse on this occasion.
At the time of the transfer he paid nearly onethird of the whole amount, leaving $8,000 due.
At the time of the donation we could hardly assume that the property had fallen so much in value as to be worth no more than $6,000, that is, depreciated in value to the extent of one-half. I think if property went down by degrees and had two years to go down after the transfer of this property, we may assume that at the time this donation was made it had not got down to the depth of $6,000. I see no reason for imputing fraud in SUPREME COUlT' OF CANADA.
[VOL. IX this case. He, the father of Mrs Killoran, was growing old, he had no wife and but one daughter.
He was aking provision for his daughter and probably for his own support in his old days. I cannot, under the circumstances, imagine, without express proof of fraud, that we are justified in assuming it. I think the appeal ought to be allowed with costs.
I concur in the opinion that the plaintiffs have wholly failed to prove the case stated in their declaration.
The object of the action is to have a donation of realty, made by one Martin Treacey to his daughter Ellen on the occasion of her marriage, declared to be fraudulent and void and set aside, to enable the plaintiffs to recover thereout a balance due by the father upon a purchase of other property made by him from the plaintiffs three years previously to the daughter's marriage, and for securing which balance, amounting to two-thirds of the purchase money, the plaintiffs at the time of the sale to Martin Treacey had taken back from him a mortgage upon the property sold by them to him.
There are three paragraphs in the declaration upon which the plaintiffs rest their right to obtain the relief sought by the action, upon their establishing any one of which they would be entitled to recover. The first is:
The second paragraph is:
The third paragraph is:
It will be observed that in none of these paragraphs do the plaintiffs seek to avoid the contract in virtue of the provisions of the 1084th article of the civil code, namely, that the donation was gratuitous and that the donor was insolvent at the time of making it, although that is really the sole ground upon which the respondents rest their contention, that the judgment of the court below should be supported.
The ground relied upon in the first of ihe above paragraphs states nothing affecting the solvency of Martin Treacey. It charges that the donation was made with intent to defraud the plaintiffs who were his creditors by mortgage. Unless made with intent to defraud, it could not be avoided at the suit of a creditor of the donor, but the paragraph proceeds to specify the particular mode whereby this intent to defraud was to be carried out, namely, that by this donation the plaintiffs would be deprived of the means of securing the balance due to them on their said mortgage security, the defendants well knowing at the time of making the donation that the property held by the plaintiffs in mortgage was insufficient to secure payment of the money secured by the mortgage. The gist of this paragraph plainly is that the intent to defraud charged in it is manifested by the knowledge imptv4 tq 4qrtin 'Treacey, that at the time of making the donation, he well knew the property held by the plaintiffs in mortgage was insufficient to secure payment of the mortgage debt. Now, not to rest upon the absence from. this paragraph, and indeed from the Gw.ne, declaration, of an averment (to bring the case as stated in this paragraph within the 1038th section of the civil code, namely, that beside having been made with intent to defraud, the donation would have the effect of injuring the creditor,) to the effect that the donor had no property out of which the alleged deficiency of the mortgaged property to pay the mortgage debt could be supplied other than the property donated, it is sufficient to say in answer to the case as alleged in this paragraph, that there has been no evidence offered of a character sufficient to establish that Martin Treacey had any such knowledge as is imputed to him, or that he entertained any intent to defraud the plaintiffs when he made the donation, or that he made it with that intent. Indeed there is no sufficient evidence, that as a matter of fact, at the time of the donation in June, 1879, the property purchased by Treacey from the plaintiff in 1876 was not worth the two-thirds of the purchase money for which he purchased the property.
The charge as alleged in the second of the above paragraphs is-not only that prior to and at the date the donation Martin Treacey was notoriously and hopelessly insolvent and unable to pay his debts, but that such his insolvency was well known to the donee and her husband, who acted together with Martin Treacey in fraud and collusion in accepting the donation from him with intent to injure the plaintiffs.
Of this knowledge in Ellen Treacey and her husband and of the constructive fraud and collusion charged, there is not any evidence whatever offered, nor, indeed, is there sufficient evidence of the alleged insolvency of Martin, assuming sucha insolvency alone to be sufficient t Q avoid the dona- IX.]
tion. Martin Treacey appears to have had no debt but that to the plaintiff, and which was secured by a mortgage. It is difficult to understand how a person owing no debts whatever, except one amounting only to two-thirds of the purchase money of a piece of property purchased by '?e, . him, and which two-thirds was secured by mortgage upon the whole of the property, the purchase of which constituted the debt, can be said to have been notoriously and hopelessly insolvent.
There is no evidence whatever in my opinion sufficient to establish the averment that Martin Treacey was insolvent when he made the donation to his daughter, nor of any fraudulent intent whatever in the daughter accepting the donation. The plaintiffs therefore failed to establish any one of the grounds upon which their claim to the relief they have prayed is based, and it is unnecessary to determine the point upon which there appears to be a conflict of opinion, whether the law of the Province of Quebec in regard to donations by a parent by way of provision. for a daughter upon her marriage and for her husband and their children, is different from the law of France and that of England in which marriage is deemed to constitute valuable consideration.
The appeal, in my opinion, should be allowed with costs.
Appeal allowed with costs.