Beausoleil v. Normand

in 1878, being unable on account of the depression of business' to meet his liabilities, applied to his creditors for an extension of time for the payment of their claims, showing a surplus of $6000, after deduction of his bad debts. The creditors consented to grant his request and agreed to accept G's notes at 4, 8, 12 and 16 months, on condition that the last of them should *PRESENT.-Sir W. J. Ritchie, C. J., and Strong, Fournier, Henry, Taschereau and Gwynne, JJ.

(2) 2 De G. & S. 496.

(3) 4 De G. J. & S. 150.

(4) 1 De G. J. & S. 185.

be endorsed to their Fatisfaction. N. (the respondent) agreed to endorse the last notes on condition that G. should deposit in a bank in his (N's) name $75 per week to secure him for such Non endorsation, and G. signed an agreement to that effect. Thereupon N. endorsed G's notes to an amount of over $4000, and they were given to G's creditors.

On 31st July, 1879, G., after having deposited $2,007.87 in N's name, in the Ville Marie Bank, failed, and N. paid the notes he had endorsed, partly with the $2,007.S7.

B., as assignee of G., brought an action against

., claiming that the payments made to N. by G. were fraudulent, and praying that the money so deposited might be reimbursed by N. to B. for the benefit of all G's creditors.

Held,-Affirming the judgment of the Court of Queen's Bench (Ritchie, C.J., and Fournier, J., dissenting), that the arrange. ment betweeu G. & N. by which the moneys deposited in the bank by G. became pledged to N. was not void either under the Insolvent Act or the Civil Code; there was no fraud on the creditors, nor such an abstraction of assets from creditors as the law forbids, but a proper and legitimate appropriation of a portion of G.'s assets in furtherance and-not in contravention of the rights of the creditors, giving at the most to the surety a preferential security which could not be said to have been in contemplation of insolvency or an unjust preference.

APPEAL from the judgment of the Court of Queen's Bench for Lower Canada (appeal side) rendered on 28th April, 1882, reversing the judgment of the Superior Court and dismissing the present appellant's action. This action was instituted by the appellant in his capacity of assignee to the estate of J. P. Godin, a trader of Three Rivers.

In November, 1878, Godin became embarrassed and exhibited to his creditors a statement of his affairs shewing that he had a surplus of assets over his liabilities to the extent of $6,000.

They signed. a written agreement giving him an extension of time to meet his then liabilities, accepting his promissory notes for instalments at four, eight, twelve and sixteen months, those faling due gt the last date being endorsed by the respon4oet Nor mand. To induce Normand to become his security Godin agreed to deposit weekly in the Banque Ville-Marie $75 to the credit of Normand in trust, which, he Normand, . was authorized at any time to draw and apply in payment of the paper he had so endorsed for Godin. This agreement was reduced to writing and was made known to Godin's principal creditor,who took a leading part in getting the extension of time sanctioned by the other creditors (1).

The extension was obtained.

Godin continued to make his payments until July,

1879, by which time he had deposited to the trust fund in Normand's name $2,007.87, but, having to succumb to the then prevailing depression, he was, in July, 1879, put into insolvency, whereupon Normand withdrew the monies so placed to his credit in trust in the Banque. Ville-Marie and employed them to liquidate the notes he had so endorsed for Godin, but the sum being insufficient'for that purpose, he was obliged to contribute about

$2,000 of his own means to take up the endorsed notes in question.

Godin and respondent was not in contravention of any of the sections of the Insolvent Act, that all the conditions to perfect a contract of pledge having been filled, the moneys deposited by Godin in the bank Ville- Marie in the name and to the credit of the appellant had been legitimately pledged.

I think the agreement between Normand and Godin, not communicated to the creditors, was a fraud on the arrangement by which the creditors gave an extension of time on their claims of 4, 8, 12 and 16 months without interest, the last payment secured by Normand; that any agreement by which Normand was to be secured out of the assets of Godin for his so being surety for such last payment in preference to the creditors, without the same being communicated to them, was a fraud on the creditors.

They had a right to assume that Normand was a security in addition to the assets of Godin, and if he was to be secured out of these assets, whereby the creditors' security for the payment of the first three notes was to such an extent diminished, they had a right to know it. When Godin applied for an extension of time the creditors were entitled to the strictest good faith on his part, and on the part of those securing the fulfilment of the undertakings, on the strength of which the extension was to be granted, and if any preferences were to be given, to know the nature and extent thereof, whether to the individual creditors or the sureties of the creditors. The agreement between Godin and Normand appears on the face of the writing to be dated December, 1878, but it was evidently entered into before the agreement of the 29th November, 1878, for extension of time between Godin and his creditors, for that agreement is based on Normand's securing the last payment, and on Normand's consent to do so, which is made apparent by the defendant's factum, so that in point of fact this agreement between Normand and Godin wa sactually entered into while Godin was unquestionably insolvent and unable to meef his liabilities. The respondent's factum thus puts

Godin being at the time insolvent, and the creditors being willing to give their debtor time on receiving security for the last instalment, Godin had no right to bargain behind the backs of the creditors with a person to - become such surety, who must also have known of his inability to meet his engagements and' therefore in that sense insolvent, to the detriment of the creditors who were about to grant him the extension of timeby giving the surety such a control over the debtof's assets for his protection, as must necessarily depreciate the security of the creditors in respect of the notes given them for the three first instalments: in other words,'entering into such an agreement with the debtor, the creditors were entitled to be informed of everything connected with the arrangement, so that they might be enabled to form an intelligent judgment as to the proprietf-of acceding or not to it; that no one creditor should -obtain an unequal advantage over the other, still less that he who professed to be securing the arrangement in whole or in part should be permitted to do so.

In agreeing to give time without security for the first, second and third instalments, it is not reasonable to suppose creditors could have contemplated that the funds out of which the unsecured notes should o"on. be paid would be weekly set apart, not to pay these notes as they became due, but to remain in the bank to meet the secured instalment due four months after the time when the last of the three would fall due, and therefore the withholding of the information of this important fact from the creditors was calculated to mislead the creditors ignorant of it into agreeing to that to which they might not otherwise have assented. There is no room for the contention of defendants that if the security to defendants is not good, his endorsation is not. The one has no dependence on the other at all, endorsement as between the creditors and Normand is all right as carrying out Godin's and Normand's agreement with them, but the security between Godin and Normand, of which they knew nothing, is all wrong, as a fraud on the creditors.

The communication to Mr. Linton, who appears to have been a friendly creditor, and acting in the interest of the debtor rather than the creditors, by no means relieves, in my opinion, the burthen alike on Godin and Normand of acting in the utmost good faith with all the creditors, and does not relieve a preference to an individual creditor or a surety, a knowledge of which is withheld from the creditors, from being an unjust preference.

The very withdrawal of this amount from his business may have led to or accelerated his final insolvency. Under these circumstances, I am of opinion, that the appeal should be allowed.

STRONG, I.:- I am of opinion that the judgment of the Court of Queen's Bench ought to be affirmed.

It is impossible to say that the arrangement between Godin and the respondent was void under any of the provisions of -the Insolvent Act, and it is equally impossible to point out any express provision of the common law, as contained in the Civil Code of Quebec, ' against which it offends.

Then, can it be said to have been in fraud of the creditors of Godin ? It seems to me very clear that it cannot. By the arrangement with his creditors Godin was left free to deal with his assets as he thought fit; subject only to this, that, like every other debtor, he was bound not to make any fraudulent disposition of them so as to defeat. the just claims of his creditors.

The question therefore is reduced to this, was the agreement to make the deposit of $75 a week, upon the faith of which the respondent became a surety for the last payment, such an abstraction of assets from creditors as is forbidden by law? And that this question must be answered in the negative seems to be plain; since the very object of these weekly deposits was to create a fund for the payment of the creditors.

The money raised by it was always intended to be paid to the creditors, and was in the result actually so applied. It is, therefore, a contradiction in terms to say that it was a contrivance in fraud of creditors.

The fallacy of the argument on behalf of the appellant consists in this, it assumes that the surety whom Godin was to find to guarantee the last payments was himself to bear the burden of the payments without any recourse to Godin or his assets.

This is altogether an erroneous assumption, for it is manifest from the very terms of the agreement with the creditors that Godin himself was, as is the case in every contract of suretyship, to be the party principally liable, and the surety was only to be liable in the event of Godin's default, such an order of liability being necessarily implied in the very words used in the agteement of the 29th November, 1878,

" the last payment secured by T.

The agreement between Godin and the respondent therefore merely provided for a proper and legitimate application of a portion of Godin's assets, and has resulted in such an application accordingly.

Had an arrangement of a similar nature been made with one of the prior creditors of Godin, providing, for instance, that Godin should make a deposit for the purpose of creating a fund for the payment of the extension notes of that particular creditor, and had that arrangement not been communicated to the whole body of creditors, such an arrangement would have been clearly in fraud of creditors generally, and the assignee would have been entitled to the money deposited in pursuance of its terms, and to recover from the favoured creditor any sum which might have been paid over to him.

But the respondent does not stand in the -same position as one of the old creditors who entered into an agreement to give time to the debtor on the implied uiderstanding and agreement between each of them and all the others that all were to be treated on terms of perfect equality. The respondent, on the other hand, comes in subsequently under an agreement made with Godin alone, and which the latter was perfectly free to make, provided it did not unlawfully prejudice his creditors, and that it did not prejudice them is apparent from two considerations, for, first, it tended to carry out the ar. rangement that they were to have security for the last payment ; and, secondly, it provided for the formation of a fund out of Godin's assets for the purpose of being handed over directly to the creditors in satisfaction the last deferred payment, to which purpose the moneys accumulated under it have in fact been applied. It was therefore in all respects an agreement in furtherance and not in contravention of the rights of the creditors under the arrangement made by them with Bli their debtor. Again, when the creditors stipulated for N a surety for the last payment, they must have contem- plated that Godin would, under the general law, be J. bound to indemnify him, and how, then, can they say that a provision for securing this indemnity to the surety is in fraud of their rights ? At the most, it was but to give the surety a preferential security; but there is nothing in the law to forbid such a preference, for it could not be said to have been made in contemplation of insolvency, or an unjust preference.

I am also of opinion. for the reasons given in the judgment of Mr. Justice Tessier, in the Court of Queen's Bench, that at the time of the insolvency, the. respondent had, pursuant to art. 1970 of the civil code of Quebec, acquired, through the delivery of these moneys to a third party (the bank) a right of " gage " which, not being, for the reasons before given, tainted with any illegality, gave him a valid preference over the assignee as representing the general body of creditors. The case of exparte Bunell resembles the present case in every particular, and is an authority for the present decision.

In my judgment, this appeal must be dismissed with costs.

FOURNIER,,J.:

En 1878, J. P. Godin, marchand de la ville de Trois- Bivieres, forc6 de suspendre ses paiements, fit avec ses cr(anciers un concordat par lequel ceux-ci consentirent 6 accepter le paiement de leurs cr~ances respectives par versements a 4, 8, 12 et 16 mois de date, mais S1PREUMi COURT OF CANADA.

[VOL. 1d. sans int6rit. Suivant les termes de 1'arrangement, (the last payment secured by T E. Normand of Three Rivers,) le paiement du dernier versement devait tre garanti par l'Intim6.

Ainsi pour compl6ter ce contrat if fallait le concours de trois diff6rentes parties contractantes, siivoir : parties de premibre part, les cr6anciers, de Godin; partie de la seconde part, Godin lui-msme; enfin, de la troisibme part, l'Intim6, comme caution. Toutes ces parties y donnrent leurs concours, d'abord les cr6anciers en accordant les d6lais et la remise deman d6s, Godin en les acceptant et 1'Intirin6 en fournissant la stret6 requise. Conform6ment A cet arrangement, Godin remit A ses cr6anciers, les billets promissoires, payables aux 6ch~ances convenues.

Les derniers portaient, suivant la convention, 1'endossement de 1'Intim6. L'obligation par lui contract~e comme caution et endosseur est g6n6rale; il n'y a 6t6 apport6 aucune restriction quelconque, si ce n'est la limite du montant du cautionnement fix6e a un quart du passif de Godin repr6sent6 par les billets portant 1'endossement de l'Intim6. Mais qelui-ci, avant m~me de se porter caution, avait, A 1'insu des cr~anciers, fait avec Godin l'arrangement suivant suit: Philippe Tlesphore A & int6rit, d'autant T. E. et dit T. in trust, dit dit et A la dit dit dicenbre

T. E. NORMAND. PHI. GODIN. Lors de la remise des billets portant l'endossement de Normand (1'Intim6) aucun des cr6anciers ne connaissait 1'existence de cette convention.

Un seul, Linton, en fut inform6, mais aprbs l'ex6cution compl6te et finale du concordat.

En vertu de cette convention la somme de $2,360 avait t6 retir6e du commerce de Godin et d~pos~e en banque au nom de Normand in trust.

Godin ne paya que le premier verserment de sa composition; A 1'6ch6ance du second il tomba de nouveau en faillite.

Le jour. meme et pendant les quelques jours qui pr~cdbrent cette seconde faillite, Normand retira le montant des d6p6ts et 1'employa a acquitter pour partie la dette qu'il avait cautionn6e. L'appelant ayant 6t6 nomm6 syndic 6 cette faillite intenta une action contre l'Intim6 pour le faire contraindre i rapporter a la masse en faillite de Godin les deniers ainsi d6pos6s et retires par lui. En outre de ces faits 'appelant allkgue que lorsqu'il donna ses endossements, l'Intim6 connaissait l'6tat de faillite de Godin, que c'6tait en consid6ration du d61ai accord que cet endossement avait 6t exig6 pour les derniers paiements;-que 1'arrangement particulier au sujet des d~p6ts avait 6t fait A 1'insu et en fraude des cr6anciers, que l'Intim6 n'6tait crbancier de Godin ni A l'6poque de 1'arrangement ni lorsqu'il a retir6 le montant de ces d6p~ts frauduleusement d6tourn6s de la masse des biens du failli :-que leur convention A ce sujet 6tait contraire aux termes de l'arrangement fait avec les cr6anciers, et que les paiements faits a l'Intim6 par ces d6p6ts avaient l'effet d'an6antir la garantie qu'il avait lui-meme donn6e aux cr6anciers. [YOL. Il. L'Intim6 a plaid6 que la 6onvention attaqu6e 6tait une des conditions auxquelles il avait consenti A se *.

porter caution pour Godin; qu'elle n'avait pas tenue secrbte, et que certains cr6anciers de Godin en avaient r Jt6 inform6s, qu'avec les argents ainsi d6pos6s et par lui retir6s de la banque, il avait pay6 des billets de Godin endoss6s par lui, se montant A une somme exc6dant celle reque de cette manibre.

niait aussi la fraude imput6e.

Par sa r6ponse A ce plaidoyer, I'appelant a ni& que les cr~anciers eussent 6 informbs de l convention en question; que l'information reque par quelques-uns d'entre eux ne pouvaient lier les autres; que cette convention particulibre entre Godin et l'Intim6 aurait dA Atre port~e A la connaissance de toutes les parties A 1'acte de Godin avec ses cr6anciers.

La preuve 6tablit les faits all6gu6s par Irappelant. Celle faite par 1'Intim6 a prouv6 qu'un seul des cr6anciers, M. Linton, avait eu connaissance - de cette convention, mais apras la signature du contrat comme le fait voir 1'extrait suivant du t6moignage:- Question:-Did Answer:-He pretty Question:-Was it Question:-Did that the Answer:-I from that at stated

Answer:-I [At tion:] Question:-Did intent Godin, dans sa deposition, r6pond affirmativement A la question suivante : - X. Linton A 1.-Oui,

Par cette preuve il est 6vident que Linton a t6 le seul inform6 qu'il devait 6tre fait un d6p6t; mais n'a pu dire si ce d6p6t devait Stre fait au nom de Godin on 4e Normand. Encore n'a-t-il su cela qu'aprbs l'ex~cution dii concordat.

I y a consenti, ajoute-t-il. Mais il n'y a rien dans son t6moignage qui fasse voir qu'il consentait A ce qiue ces d6pcts fussent faits en d6duction du cautionnement de Normand. Dans tous les cas, e'est Wh fait positiftque le consentement, quelle qu'en soit la 3ort6e, n'a t6 donn6 que par lui seul et par aucun autre creancier; et il n'6tait non pas le plus fort, hais un des plus'Thrts cr6anciers. Aucun des autres n'a eu connaissance de cette convention.

L'assertion contraire, faite ih ce sujet par l'hon. juge Cross, est en contradiction 6Vidente avec la preuve. Au surplus la connaissance que Linton avait de cette convention pdrticulibre ne pouvait Her que lui seul. Il n'6tait pas l'agent des cr~anciers, car ceux-ci out agi personnellement dans cette tiansaction.

La cour de premibre instance pr6sid6e par l'hon. juge Sicotte a donn6 gain de cause a 1'appelant. - La Cour du Banc de la Reine a 6t divis~e, deux juges 6tait pour la confirmation, et trois pour l'infirmation, le jugement a 6t6 en cons6quence infirm6..

L'hon. juge Cross est d'opinion que la convention entre Godin et 'Intim6 n'est ni une fraude, ni m6me une pr6f6rence. Cela pourrait tre vrai si les faits de la cause permettaient d'adopter le point de d6part de son argumentation: la solvabilit6 de Godin. L'hon. juge fait i ce sujet les remarques suivantes :

at 2SPREME COURT Oi. CAxAt)A.

[VOL. 1X. his being considered solvent, consequently with the power to deal with, and to dispose fairly of his own estate.

BEAUrSOLEIL

.U

As being solvent, it was quite competent for him to bargain with a person to become his surety, and even to give that person a consideration for becoming such surety. I he obligation of that surety, was Fournier, J.

Forr Jnot that in any event he should himself pay without reference to Godin's estate; but that Godin would himself pay out his own estate, and that if he failed to do so, he the surety would make good the deficiency which Godin had failed to pay by his own exertions, with his own means, and out of his own estate.

C'est sur 1'exc6dant apparent de l'actif sur le passif dans 1'6tat soumis A ses cr6anciers, que deux des hon. juges s'appuient pour dire que Godin, lors du concordat avec ses cr6anciers n'6tait pas insolvable.

Cependant il 6tait forc6 de suspendre paiement, et au lieu de rencontrer ses dettes A leur 6ch6ance, il demandait un d61ai de seize mois, avec r6duction de l'int6rat. Le commergant qui se trouve dans cette condition est en faillite; c'est indubitable. Pardessus (1), en parlant de la diffrence qu'il y a entre la d6confiture et la faillite, dit trbs positivement que le commergant qui a suspendu ses paiements, quel que soit 1'excedant de son actif sur le passif est enfaillite.

Ind6pendamment de cette diff&rence tir~e do celle des personnes qui peuvent devenir insolvables, la faillite diffdr6 essentiellement de la d6confiture. La premibre est un 6tat de cessation do palement, sans distinction s'il provient d'une insolvabilit6 rhelle et absolue. ou seulement d'un embarras momentan6.

Quelque soit l'actif d'un commergantfut-il dix fois au-dessus de son passif, s'il cesse de payer, il est enfaillite. An contraire, s'il est exact dans ses palements, ei, par un cr&dit toujours soutenu, il fait constamment honneur A ses engagements, dtt-il dix fois plus qu'il no possde, il n'est pas en dtat defaillite.

Ainsi le commer9ant estfailli lorsqu'il ne possede plus de cr6dit, qaund mime it aurait plus do biens quo de dettes, ce qui n'est pas impossible. On a vu des commergants avoir pour un million d'immeubles, et au plus 300,000 francs de dettes, 6tre cependant constitu6s en faillite, parce qu'ils ne payaient pas aux kch6ances. La faillite, d'apris le code civil, art. 17, sec. 23, est l'tat (1) 4 Vol. p. 579 No. 1321.

d'un commergant qui a cess6 ses paiements.

O'est le cas aussi d'aprbs la loi de faillite de 1875, sec. 4, qui autorise les crbanciers ! prockder en liquidation forc6e . contre un d6biteur qui a cess6 de rencontrer ses engage- - J. ments k leurs 6ch6ances.

Si an lieu d'adopter les proc6d6s de la sec. 4 que la position de Godin aurait justifibs, les cr6anciers ont pr6f6r6 s'entendre A l'amiable et accepter la garantio de Normand, cela ne change pas sa position de commergant qui a cess6 ses paiements. Sans cette garantie il eiit t6 mis en liquidation forc~e comme le fait voir le t616gramme du 27 d6cembre:- If at D'ailleurs le fait d'avoir runi ses cranciers pour faire un compromis avec eux enlave tout doute our la question de son insolvabilit6, puisque d'aprbs la sec. 3 de ]a loi de 1875, c'est pr~cis6ment 'un des cas ou un commergant doit 6tre consid6r6 en faillite. " Un debiteur, dit-elle, sera (shall) consid6r6 insolvable, s'il a convoqu6 une assemblke de ses cr~anciers dans le but de composer avec eux."

Godin en convoquant comme i l'a fait ses cr6anciers pour prendre des arrangements avec eux s'est constitu6 en faillite.

Cela n'est pas discutable.

Quant A 1'argument en faveur de la solvabilit6 de Godin, tir6 du fait que son actif exc6dait le 'passif, la citation ci-dessus de Pardessus le reduit A n6ant.

Mais, disent encore les hon. juges, les cr6anciers par leur arrangement 1'ont consid6r6 comme solvable. L'hon. juge Cross dit:

to L'hon. juge Tessier dit:

4e statut, n'ont dclarer aillite,-ils La conduite des cr6anciers fait voir au contraire qu'ils ne consid6raient pas Godin comme solvable lors J du concordat. Avec 1'exp6rience qu'ils ont de ces sortes d'affaires ils ont cru ne devoir estimer son actif qu'A 75 p. c. du passif, en exigeant pour les autres 25 p. c. le cautionnement de 1'Intim6. Si Godin est alors redevenu solvable et capable de contracter de nouveau pour les fins de son commerce, c'est grAce A cet arrangement. Pouvait-il en d6truire les conditions et rester solvable. Du moment qu'il d6truisait la garantie des 25 p. c. qui avait eu l'effet de le rendre solvable, il cessait de l'tre et retombait dans la position od il so trouvait avant ]a signature du concordat. C'est clairement ce qu'il a fait par sa convention particulibre avec l'Intim6. Il n'6tait au pouvoir ni de Godin ni de Normand, sa caution, de faire aucune transaction quelconque tendant A diminuer l'effet du cautionnement donn6 aur: cr6anciers. Le principe sur lequel est bAs6 le jugement de la Cour du Banc de la Reine, estfqu'un commergant sorti de l'6tat de faillite par un concordat est habile.. A faire toutes sortes de contrats pour son commerce. L'appelant n'entend pas contester cette proposition-bien que formulbe d'une manibre anssi g~n6rale, elle ne soit pas sans exception-mais il en conteste l'application .A cette cause. Godin pouvait saus doute faire des contrats,-mais avaitil le droit de les annuler, modifier. ou rendre illusoire seul et sans le consentement des autres parties avec lesquelles il avait contract6 ? Lui et l'Intim6 pouvaientils seuls d6truire 1'effet du cautionnement donn6 suivant la convention faito avec les cr6anciers. O'est un principe 616mentaire en matibre de convention que pour les annuler on modifier il faut le consentement de toutes les parties qui y ont pris part. Cette convention ayant t faite A 1'insu de tous les cr6anciers, except6 un seul, peut-elle modifier d'une manibre quelconque les engagements r6sultant du concordat ? Evidemment non. II faut aussi ne pas oublier que les lois concernant le cantionnement, ne permettent pas A la caution de faire aucun acte qui puisse avoir 1'effet de diminuer les sAret6s stipul6es par les cr6anciers. Ce serait le r6sultat in&vitable de cette convention particulibre si elle doit recevoir son execution.

En effet, du moment que Normand prenait Ai leur insu sur 1'actif les sommes qu'il avait d6pos~es, les cr~anciers cessaient d'8tre assur6s du paiement de leurs cr6ances. Les si sret~s donn6es et convenues se trouvaient diminu6es d'autant, en violation des conditions stipules. L'hon. juge Cross, dans la partie ci-dessus cit6e de son jugement, a fait encore l'observation suivante au sujet du cautionnement de Normand:but that Oil 1'hon. juge a-t-il trouv6 la preuve de la restriction qu'il met aux obligations resultant du cautionnement de Godin ? Je n'ai pu la trouver nulle part. Bien au contraire, il n'a t fait 4 ce cautionnement et aux obligations qui devaient en r6sulter aucune autre restriction que celle du montant, comme le d6montrent les termes dans lesquels il a 6t6 stipul6 :- L'obligation de Normand est done g6n6rale d'aprbs la convention. La restriction indiqube par I'hon. juge existe-t-elle dans la loi en faveur de la caution? Je ne crois pas que 1'hon. juge ait voulu exprimer cette opinion, car on verra par les autorit6s citbes ci-apr~s qu'elle n'est pas fond6e en loi. L'obligation r6sultant du cautionnement peut bien Atre limit~e, mais il faut s'en expliquer. Si dans le cas actuel, les cr6anciers eussent 6t6, avant de contracter, inform6s que Normand ne consentait a Atre la caution de Godin qu'aux condi- Fourr, J.tions stipulkes entre eux et qu'ils eussent accept6 en connaissance de cause, ils ne pourraient certainement pas attaquer cette convention. Ils auraient alors fait une convention diff6rente de celle qu'ils pr6tendent avoir faite. Au lieu de la garantie additionnelle de Normand, qu'ils ont exig6e, ils seraient en r6alit6 rest~s seulement avec leur recours personnel contre Godin et la garantie de son fonds de commerce. Mais est-ce hien ce qu'ils ont voulu faire ? Certainement non.

Ils ont au contraire voulu s'assurer 25 p. c. en sus des 75 p. c. garantis par le fonds de commerce et ils ont fait une convention en tout semblable A celle au sujet de laquelle Ponsot (1) fait les remarques suivantes, en parlant de cautionnement de partie de la dette:- 6tait perte par ment dite Primus O'est une convention absolument semblable A celle-ci que les cr6anciers ont fait en exigeant de l'intim6 son cantionnement pour 25 pour cent du passif de Godin. O'est A cette condition qu'ils se sont d6ssaisis du fonds de commerce et de tons les autres biens de Godin. Mais I'auraient-ils faits si Normand leur efit dit " Je suis la caution de Godin pour 25 pour cent du montant de vos creances,mais A la condition que je prenne de suite sur les biens de Godin m~me,le montant que je vous garantis. Jen'entends pas vous payer sur ce cautionnement un seul denier de ma bourse.

Ce que je paierai sera tir6 de la masse en faillite qui vous appartient." La r6ponse A une telle d6claration eut t6 saus doute-" Nous ne vou- Ions pas de cela-la grantie que vous nous offrez nous appartient dejA.

C'est notre bien.

Ce que nous von- Ions, c'est une garantie additionnelle."

Si Normand 1'eit refus6e, tout arrangement et sans doute 6 fini.

Car il n'est pas possible de supposer que les cr6anciers eussent accept6 une semblable condition qui aurait eu l'effet de rendre illusoire la garantie demand6e.

Us eussent sans doute pr~f6r6 proc~der 9 la liquidation.

O'est pour cette raison que Normand s'est bien gard6 de n'en rien dire; Godin seul en a parl6 A Linton. En se portant caution, sans faire de conditions sp6ciales avec les cr~anciers pour restreindre 1'effet de son cautionnement, Normand, qui est notaire de profession connaissait toute 1'tendue de 1'obligation qu'il contractait. Il en a limit& le mont ant seulement, mais quant A ce montant son obligation 16gale 6tait de payer pour Godin si celuici ne payait pas lui-m~me.

n'est guere utile d'ajouter d'autres autorit6s A ce sujet. Il comprenait l'6tendue des obligations r6sultaut de son cautionnement.

II devait savoir, comme le dit Laurent " que le cautionnement est un acte de disposition; en eflet la caution s'oblige A payer sans rien obtenir, en compensation des risques qu'elle court, ni du cr6ancier, ni du d6biteur. Elle dispose de ce qu'elle s'oblige de donner au cr6ancier, car payer, c'est disposer."

est clair que la convention. particulibre est contraire A la nature du cautionnement ainsi expliqu6. L'obligation de la caution 6tant de donner au crdart.

130..

SUPREME COURT OF CANADA.

[VOL. IX. ancier ce h quoi elle s'est oblig6e.

Ce serait anantir pour partie, cette obligation si elle prenait sur les biens du dbbiteur au detriment du cr6ancier non compl~tement -d6sint6ress6, une partie de ce qui est n6cessaire Fournier, J pour s'acquitter.

Ce serait diminuer 1'effet de son obligation,

Ce serait aussi, en mime temps, donner et retenir,-ce qui ne se peut.

Le principe que la caution ne peut faire aucun acte qui puisse avoir 1'effet de diminner les obligations r6su Itant de son cautionnement, a 6t6 plusieurs fois sanctionn6 par les tribunaux. La doctrine A ce sujet est si bien r6sum6e dans un article cit6 au Journal du Palais, 1842 (1), qu'il n'est gubre possible d'entretenir de doute sur ce point aprbs en avoir In l'extrait suivant : ....... qu'aux termes de l'art. 2011 C.C. celui qui se rend caution d'une obligation se soumet envers le cr~ancier A satisfaire A cette obligation si le d6biteur n'y satisfait pas lui-mame; que de la nature et de l'objet du cautionnement, des termes de cette article, des principes g~ndraux du droit et des rbgles de 1'Aquit6, il r6sulte que le cr6ancier est fond6 A s'opposer A tout acte, A r6sister A toute pr6tention de la ciution qui pourrait avoir pour r~sultat de porter atteinte A 1'iNt& gralit& de ses droits contre le d6biteur principal, et- de 1'empacher de tirer de 1'actif du d6biteur toutes les ressources qu'il pent pr&senter; que c'est par une application de ce principe que 1'art. 1292, du meme code dispose que la subrogation 6tablie par 'art. 1251 contre le d6biteur principal en faveur de la caution qui a pay6 le cr~ancier ne peut nuire A celui-ci lorsqu'il n'a pay6 qu'en partie.

La mime doctrine a t6 suivie dans un autre arrt rapport6 par Devilleneuve et Carrette (2), oii on lit ce qui suit:

....... un falli qui a obtenu un concordat avec des termes pour le paiement des dividendes, vend A r6m6rb son fonds de commerce A 1'un des cr6anciers concordataires et n~anmoins continue A exploiter ce fonds de manidre A tromper ses cr~anciers anciens et nouveaux sur sa solvabilit6.

Un tel acte de vente doit @tre annul6 comme fait en fraude des cr6anciers, (C.C. 1167.)

Le commergant dans ce cas 6tait aussi habile A faire (2) Vol. 15, p. 356 et 351.

toutes sortes de transactions que Godin pouvait 1'6tre dans le cas actuel. Cependant cet a6te est consid6r6 comme un dol A l'6gard des cr6anciers auxquels il n'a pas t6 communiqu6.

N'en doit-il pas tre de-m~me de.

la convention particulibre entre Normand et Godin ? Fournier, J. La diff6rence c'est que dans le cas actuel les cr6anciers sont tromphs avant le concordat et que dans l'autre ils le sont aprbs. Quant A .'effet sur la transaction, il est le mime.

Pour confirmer le principe que la caution ne peut rien faire qui puisse rendre son obligation illusoire on peut encore rbf6rer h la cause de Whitney v. Craig et

Craig opposant (1).

Dans cette cause, le d6fendeur

Craig avait fait une composition par laquelle il devait payer ses cr~anciers en 7 versements, dont les trois derniers seuls 6taient garantis par le cautionnement de L. D. Craig l'opposant.

Ce dernier avait stipul6 avec les cr6anciers eux-m6mes qu'il aurait, pour ce qu'il serait tenu de payer, pr6f6rence sur les effets que le d6fendeur posshderait alors.

La caution, l'opposant, paya d'avance les trois derniers versements qu'elle avait garantis, afin de r6clamer le privil6ge stipul6 contre les cr6anciers qui n'avaient pas encore 6t pay~s des premiers versements.

fut colloqu,-mais sur contestation, sa collocation fut rejet6e par le jugement de la cour

Sup6rieure pour les motifs suivants:

If put

Ce principe doit recevoir son application dans cette cause. La convention particulibre de Normand et de

Godin a clairement pour effet de rendre le cautionnement illRsoire, en violant en mime temps le principe que la caution ne peut jamais venir A contribution avec le crtancier qu'elle a cautionn6.

Prendre d'avance, Jmme sous forme de gage, comme l'a fait Normand, partie des biens du failli qui 6taient la saret6 des cr6anciers, c'6tait plus que venir A contribution, c'6tait aniantir son cautionnement,-ce qu'il ne ponvait faire sans le consentement des cr6anciers.

O'tait, dans tous les cas, se payer de son cautionnement au d6triment des cr6anciers cautionn6s, en diminuant leurs garanties, -ce que, d'aprs les autorit6s ci-dessus cit6es, il ne pouvait faire.

La loi reconnait sans doute A la caution un recours en indemnit6 contre le d6biteur; mais dans 1'exercice de ce recours, celle-ci ne peut jamais venir en concurrence avec le cr~ancier cautionn6, ni faire aucun acte qui puisse porter atteinte A 1'int6gralit6 de ses droits contre le d6biteur.

Mais il faut remarquer que ce recours n'est accord6 qu'd la caution qui a pay6 le montant de son cautionnement, et pas avant, except6 en quelques cas. Normand n'avait rien pay6 et n'6tait pas cr6ancier de Godin lorsqu'il a commenc6 A tirer du fonds de commerce les deniers avec lesquels il pr6tend acquitter son cautionnement.

L'article 1953 de notre code, donne aussi en quelques cas une action i la caution contre le d6biteur avant qu'elle ait pay6.

Le cas de faillite est un de ceux-ld; mais mme dans ce cas, elle ne peut jamais venir en concurrence avec le cr6ancier cautionn6.

Laurent (3) Laurent

A 4tre et & Duranton (2) d6veloppe au long les raisons pour lesquelles la caution ne peut tre admise ! concourir avec le cr6ancier.

Il dit comme Ponsol que ce serait faire figurer deux fois la mAme cr6ance dans les distributions faites sur le d6biteur, " et cela, contre tous les principes et le simple bon sens."

Cette opinion est soutenue par celle de Pardessus (3).

L'autorit6 de Troplong (4), est au m~me effet. Il ne peut done y avoir conflit entre le cr6ancier et la caution.

Celle-ci n'a de droit contre son d6biteur qu'aprbs avoir pay6 on d6sint6ress6 le cr6ancier. Dans le cas actuel, il est 6vident que les $2,860 que l'Intim6 a tir6es du fonds de commerce de Godin 6taient la propri6t6 de celui-ci.

Normand dit qu'il les a employ6s A payer son cautionnement.

O'est done en r6alit6 Godik et non lui qui a fait ce paiement. II doit done tre consid6r6 fait en d6duction non du cautionnement mais -I l'acquit de la dette non cautionn6e, pour le paiement de laquelle le fonds de commerce Atait la seule garantie. O'est en r6alit6 un paiement fait par Godin lui-m~me auquel appartenait cet argent, bien que les deniers soient parvenus aux cr6anciers par les mains de Normand c'est un A-compte donn6 par Godin.

les plutat dont

Sur le tout, j'en suis venu A la conclusion qu'il faut consid6rer Godin comme 6tant en faillite le 29 novembre 1878, date du concordat; que la convention particulibre entre lui et l'Intim6 ne peut 6tre justement appr6cide sans prendre en consid6ration 1'6tat de faillite de Godin et qu'en cons6quence, elle constitue une injuste pr6f6rence sur les biens du failli, et qu'admettre la validit6 d'une pareille convention, ce serait effectivement reconnaitre A 1'une des parties A un contrat le droit de se d61ier de ses engagements, sans le consentement de 1'autre;-que cette convention est encore contraire aux principes du droit civil qui ne reconnaissent pas. A la caution le pouvoir de faire aucun acte diminuant les droits du cr6ancier cautionn6, ni de venir en concurrence avec lui A moins qu'il n'ait 6t6 compltement d6sint6ress6.

Qu'en consequence les $2,360, prises sur les biens de Godin et d6pos6es dans une banque d'ok elles ont t6 retir6es par l'intim6, doivent Atre rapport6es a la masse en faillite.

HENRY, J.:

To ascertain the true merits of this case, it is necessary to look at the position of Godin in the month of November, 1878, when these arrangements were completed.

At that time it is shown that the assets amounted to $23,000, after making deductions for all doubtful and bad debts. It is also shown that he owed about $16,000, and therefore he had good assets, not 734 .

available at the time, -but subsequently available, to the extent of $6,000 over and above all his liabilities. He felt, like the inhabitants from one end of the Dominion * to the other, the depression of the time, and he felt the difficulty of collecting in what was due. Under -he ' circumstances, he said to his creditors "I have plenty of means to pay, but I cannot realize.

I want time from you-if you think proper to give it-to realize my assets."

The creditors consented on the terms which have been mentioned.

Now, it is said that man was bankrupt. I cannot think so.

It is true, the Insolvent Act says that a man who is not able to meet his engagements may, by his creditors, be made a bankrupt, but if a man comes to his creditors and says " the times are bad, I want you to give me time to pay, I have plenty to pay you, but I cannot convert it," that does not make a man a bankrupt; on the contrary, if they had attempted to put him in bankruptcy he could have resisted it. He could have said, " I have plenty to pay my debts," and I doubt if a court would decree bankruptcy in such a case. He stood, then, as I take it, a free agent.

He goes to his creditors and agrees with them to make his payments in four equal instalmentsfour, eight, twelve and sixteen months. They agree to this and to withdraw any claim whatever they had over his property, and they took his own personal security, and they could have had no claims against his property for twelve months, at all events until the third note fell due. That man was not in the position of a bankrupt ; he was in the position of one who had felt the bad times, like possibly a good many of his own creditors, and wanted a little further time, but the creditors said " we would like to have the last payment good."

They felt perfect security for the first three, but they said sixteen months is a long time, and we want security.

He goes to Normand and says: " I have plenty to pay every man I owe ; will you go security for $4,000 for the last instalment, which falls due in 16 months?"

Normand says: "I will do so, provided you will make provision to meet that payment by paying HenryJ. $75 a week into the bank."

Was there fraud in that? I think not. There was a man who asked no deduction from any of his creditors. He only wanted a little time to collect in his assets.

Where is the fraud 2 It does not come within any denomination of fraud under the Insolvent Act. But we are told there are a number of French authorities which show that a party who goes security for another, as Normand did in this case, must pay, and he has no right to make an arrangement of this kind to secure himself. I have looked at a number of the authorities which have been shown to see if that principle is recognized, and I have read and considered the authorities cited, but I fail to see the applicability of the doctrines there found, or any of them, to the case now under consideration.

I need not take up time by reading them, but I have made an estimate of the decisions in all these cases referred to, and I find there is not one of them which touches this case.

Nearly the whole of them go to show that a party who is a surety shall not rank on the estate-Normand cannot recover on the estate. In one case the bankrupt made a sale his stock in trade to one of these parties, but retained the possession and dominion over the goods and stock in trade himself, and was the means of deceiving all his other creditors and those who gave him advances, and the court decided that was fraud-and it was fraud. There the transaction was with one of the creditors who agreed with all the others that they should come in and take a common position with him. Therefore it was fraud on his part. The different circumstances of this case are then apart from all of those to which I have referred.

But it is said that this man made this arrangement privately-without communicating it to the creditors.

In the first place, I consider there was no fraud in it, and I do not consider there was any obligation in him to do so. If the creditors ascertained that Normand was willing to give security, it was for J. them to ascertain what terms Normand was entering into.

If they chose to take Normand as security without enquiring into the transaction between him and

Godin, then I take it they cannot accuse Normand of fraud.

But there is evidence that Linton, who is a partner of one of the firms who are the creditors, and the largest of the firms, knew all about it and approved of it, and it is not unreasonable to suppose that he communicated his knowledge to the other creditors.

If, therefore, they knew of it and did not object to it, the subsequent assignee of the estate could not come in and say that these parties claim that that is a fraud.

But, as I said before, the Insolvent Act of the Dominion supersedes all other laws on the subject. As I take it, there are certain provisions in the statute, and unless there is legal and actual fraud proved

(which of course vitiates all contracts,) we must look to that statute. There is a provision made there

.against preferential assignments to creditors, and there are other provisions made by which a party cannot convey away his estate without value for it ; and again, there are other provisions for protecting creditors, and the legislature therefore provided all that was necessary to guard creditors.

Now, under all these circumstances, I must say, I can see no fraud, moral or legal, on the part of Normand, or on the part of Godin.

Suppose a man owes another $5,000, and he goes to his neighbor and says to him " I owe such a party so much, and if I find security he will give me time to pay it."

The other says: " I will give you the money if you will give me security."

He says: "I will do so; I will give you a chattel mortgage on all my estate." I cannot see fraud in that. The party has the security he wants, and if he wants any stipulation from his creditor Henry, J. not to go outside and pledge his property, it is his duty not to receive that security until he makes the necessary enquiries.

I can see no fraud here, and I do not think the appellant has made any case for our consideration. 1 think the appeal should be dismissed, and the decision of the court should be sustained.

This action has been instituted by the appellant in his capacity of assignee to the estate of one Godin, a trader at Three Rivers.

During the month of November, 1878, Godin, not being able to collect sufficiently to meet his liabilities, on account of the depression of business prevailing at the time, applied to his creditors for an extension of time.

He fyled with that application an exact statement of his affairs, which showed a surplus of $6,000, after deduction of his bad debts, and of $13,000, including these bad debts.

His creditors consented to grant him the extension demanded, and agreed to accept his notes at four, eight, twelve and sixteen months, on condition that the last of them should be endorsed to their satisfaction. Godin then-applied to the respondent for his endorsation.

The respondent first asked for a statement of Godin's affairs, and subsequently consented to endorse the last notes of Godin's composition, on condition that he (Godin) would deposit in the Ville Marie Bank, at Three Rivers, in the name of him (the respondent), and to secure him for such endorsation, seventy-five dollars every week.

The agreement reads in the following terms

Nous, soussigng, convenons de ce qui suit: "Moi, Joseph Philippe Godin, m'oblige envers Telephjpre Eusabe Normand, A verser tous les samedis, durant une ann6e, A"dater du premier d~cembre courant, unesomme de soixante-quinze piastres, dans le fonds d'6conomie de banque Ville-Marie, portant int~rt, pour garantir d'autant le dit Taschereau T. E. Normand, de divers efidossements faits en ma faveur poldr mon. J. b~n.fice au profit de mes cr~anciers et de moi, les dits endossements se montant A la somme de quatre mille sept cents piastres, payables par billets A seize mois de la date du vingt-neuf novembre, mil huit cent soixante et dix-huit. Le dit d6pit sera fait au nom de T. E. Normand in trust, le dit T. E. Normand aura le droit de retirer le dit argent et le payer A compte de ses endossements de manidre A le librer, ainsi que moi, de ses dits endossements i les interats pergus sur le dit argent soit de la banque Yille-Marie on par le rachat des dits billets sera pour le bin'fice du dit Godin, ce A quoi le dit . E. Normands'oblige.

Sign6 en double A Trois-Rivi res, D~cembre 1878.

Jos. Ph. Godin,

T. E. Normand.

The respondent in conformity with this agreement endorsed Gudin's notes to an amount of over. $4,000, and these notes were delivered to Godin's creditors through Mr. Linton, a merchant of Montreal. Godin continued to carry on business and obtained new advances from the same creditors, but on the 31st July, 1879, he was put into insolvency, the first only of his composition nots having been paid.

Some time after the assignment, the respondent withdrew from the Villellarie bank the amount which had been deposited in his name weekly by Godin, amounting to $2,007.87 and paid the notes which had been endorsed by him.

Besides the amount of this deposit so made to his credit and which he had withdrawn as aforesaid, he had to furnish out of his own funds an amount exceeding two thousand dollars to meet these endorsed notes.

This suit was instituted by the assignee to compel Norm and, the respondent, to return to the mass of the estate the amount of these deposits so received by him from the bank. It is alleged in the declaration that the arrangement between the respondent and Godin was made BEASOLeIL secretly and with intent to defraud Godin's creditors. By the judgment of the Superior Court, the respon- dent was condemned to reimburse to the assignee the j.

'amounts so deposited in the banks by Godin, but this judgment was reversed in the Court of Queen's Bench, and the assignee's action dismissed. The assignee now appeals from the judgment of the Court of Queen's Bench. I am of opinion to dismiss his appeal.

The considerants of the judgment appealed from so completely, in my mind, resume the whole case, that I cannot do better than to quote them:- Considering that in November, 1878, Jos. P. Godin obtained an extension of time from his creditors, his estate then showing a surplus over and above what was necessary to pay all his creditors, and by virtue.of said extension and by law he became and was entitled to manage h's own estate and affairs, and to enter into and make all legitimate contracts permissible to a merchant doing business on his own account;

Considering that the contract by him at the time entered into with the now appellant, by which the latter became security for and endorsed his promissory notes for the last instalment which he was to pay to his then creditors, and by which Godin undertook to deposit weekly in the banque Ville-Marie, at Three Rivers, in the name and to the credit of the appellant in trust seventy-five ($75.00) per week, as a pledge and security against his endorsement, was'a legitimate contract which the said Godin had a right to make with the appellant;

Considering that the monies deposited by Godin under and in virtue of said contract became pledged to the appellant to secure him against his said endorsement, and did not fall into the estate of the said Godin on his subsequent insolvency which occurred on the 31st day of July, 1879, and that the same were subsequently withdrawn by the appellant and by him applied in payments so as to liberate him pro tanto from his said endorsement

And for these reasons the Appeal Court dismissed the assignee's action.

This reasoning is, in my opinion, unanswerable. The allegations of fraud and concealment of the IX.]

transaction are, I may at once remark, entirely disproved. Godin and Normand acted in perfect good faith.

The appellant seems to take it for granted that if the respondent had not got this amount from Godin, the- - Taschereau, creditors would have got it. But quid constat that it J. ' would have been so?

Godin, as the Court of Queen's Bench well remarks, after the extension of time given to him in 1878, remained the sole master and manager of his stock in trade and property of any nature. These $2,000, if he had not deposited them in Normand's name, he might have lost in speculation, or in any other manner whatever.

Normand had guaranteed that this sum would be, with another, paid by Godin to the creditors.

Godin paid it to Normand, who, in turn, handed it back to the creditors.

What else can the creditors ask ? They got the sum of $2000 in its entirety, but now, they ask Normand to pay them from his own pocket, another sum of $2000.

How can they ask this? Normand never promised that if Godin paid these $2000, he, Normand, would pay over to their creditors another $2,000 of his own moneys, besides the $2,000 he had to pay for the balance of the notes. That would be equivalent to saying that he was surety for $6,000, whilst he was surety for $4,000 only. He got Godin to pay $2,000, and he paid the other himself out of his own pocket. He thus fulfilled his obligation in its entirety. The judgment of the Court of Queen's Bench is right, and the appeal must be dismissed.

J.:- I agree that this appeal must be dismissed. When the creditors entered into the conditional agreement with him in November, 1878, to the effect that if he would get Normand to endorse the last of the series of notes which they agreed to accept from Godin in settlement of their demands upon him, so as to enable him, notwithstanding his previous default, to continue carrying on his business as a solvent trader, they ga-ve him, as were, carle blanche, as such to go and treat with J Normand in order to procure his consent to become endorser for him upon the last of such series of notes. -It was not to have been expected that Normand should consent to endorse Gidin's notes without any consideration for his so doing, so as to protect himself against loss. That he should have insisted upon the terms contained in the agreement which is now assailed as fraudulent within the meaning of the Insolvent Act was very natural, and the agreement so made was good and valid: such a transaction has in it no ingredient of fraud which would render it void within any of the provisions of the Insolvent Act, and Normand cannot be deprived of the benefit of the conditions which constituted the sole consideration upon and for which he consented to incur, and did incur, the responsibility incident to his endorsing Godin's notes.

ABANDONMENT-Notice mortgagee.]

a mortgagee, upon giving notice of abandonment, not precluded from recovering for a constructive total loss.

of Succession-Efect of, fraud-Not valid in Election-Limited powers of.] Held:

That an agent not general agent, but agent with powers expressly limited, cannot bind the candidate anything done ond the scope of his authority.

AGREEMENT-Agreement to pledge moneys by a debtor, Validity of-Articles

0. 0.]

in being unable, on account depression in buiness, to meet his liablities, applied to his creditors for an extension of time the payment of their claims, showing a surof after deduction of his bad debts.

The creditors consented to grant his request, and agreed to accept G.'s notes at and months, on condition that the last of them should endorsed to their satisfaction. N. (the respondent) agreed to endorse the last notes condition that should deposit in bank in

(N.'s) name per week to secure him for such endorsation, and signed an agreement to that

Thereupon endorsed G.'s notes to an amount of over and they were given to

's creditors.

July, having deposited in N.'s name, in the

Marie Bank, failed, and N. paid the notes had endorsed, partly with the

B., as assignee of brought an action against N, claiming that the payments made to N. by were fraudulent, and praying that the money deposited mightbe reimbursed by

. to B.,forthe benefit of all G.'s creditors.

Beld:

thejudgmentofthe Court of Queen's Bench,P.Q.

Ritchie, and Fournier, dissenting)-That the arrangement between and which the moneys deposited in the bank became pledged to was not void either under the Insolvent Act or the Civil Code; there was no fraud the creditors, nor such an abstraction of assets from creditors as the law forbids, but a proper and legitimate appropriation of a portion of assets in futherance and not in contravention of the rights of the creditors, giving at

AGREEMENT.-Continued.

the most to the surety a preferential security which could not said to have been in contemplation of insolvency or an unjust preference. APPEAL-On matters offact in election appeals.] The judgment of the Court below will not reversed unless clearly wrong.

2-Questions

3-From (P.

amount claimed.] Held: That although the amount claimed the declaration was made to exceed including interest which had been barred by. prescription the appeal would lie.

AWARD-Efect of Insurance claim BANK-Liability for deposited ---- - Sec. Powers of Local Legislature over sale Liquors

PARTY-Charter Party-Damage to ship-Unavoidable delay-Refusal of charterers load-Action shipowners.] a charter party of December it was agreed that plaintiff's vessel, then on her way to Shelburne, N.S., should proceed with all possible despatch St. John, for Liverpool; and if the vessel did not arrive at lst the charterers were to at liberty to cancel the charter party.

The vessel arrived at Shelburne at John. the entrance of the harbor of St. John got upon the rocks and was badly damaged that it became necessary to put her the blocks repairs.

Although she was repaired with all possible despatch, was not ready to receive her caro until of April following, prior to which time-on 26th March-the charterers gave the owners notice that they w9uld not furnish a PARTY.-Continued.

cargo for her. The owners sued for breach the charter party, and the trial defendants gave evidence, subject to objection, that freights between St. John and Liverpool were usually higher in winter than in summer; that lumber would depreciate in value being wintered over at St. John, and also as the relative value of lumber during the winter and in the spring in the Liverpool market; and it was contended that the time occupied in repairing the damage was unreasonable and had entirely frustrated the object of the voyage.

The judge directed the jury that if the time occuied in getting the vessel the rocks and repairing her was long to put an end, in a commercial to the commercial speculation entered into the shipowners and charterers, they should the defendants.

(affirming the judgment the Court a

That as there was condition precedent in the charter that the should at St. John any date, and as the time taken in repairing the damage was not unreasonable, and the delay did not entirely frustrate the object of the voyage, the charterers were not justified in refusing to carry out the contract.

(P. Q.)-Aria.

3--&rts.

4-Arts.

Art. ----- CONSIGNMENT-Consignment of goods subject to payment-Agreement that purchaser shall not sell- Passing property.] The plaintiff consigned crude oil who was refiner, on the express agreement that no property in the oil should pass until made certain payments.

making such payments, however, the to the defendants, without the knowledge of the plaintiff. Held: the judgment of Court of Appeal for Ontario:) That although the defendants were purchasers value from in the belief that he was the owner and entitled to sell the in question, the plaintiff, under his agreement with having retained the property in the oil, and not having done anything to estop him from maintaining his right of ownership, was entitled to recover from thepurchasers the price the

The contract the coal was made who was a large stockholder in the plaintiff company and entitled to yearly dividends on his stock. The agreement, as proved plaintiffs, was that purchased the coal for the Albertine pany, the members of which named ; that the president of the plaintiff company told they would look to him for payment, as the other partners were ; that the terms of sale were cash on delivery board the vessels; and that agreed that the dividends payable to his stock should applied payment for the coal; that in consequence this arrangement the plaintiffs credited the Albertine Oil Cempany with the amount of S.'s dividends as they were declared from time to time down to August, leaving a balance due to also appeared that the coal delivered was charged in the plaintiffs' books to the Albertine Oil Company, and that the bills of lading the shipments of the coal also made out their name, and that time afterwards a notice, signed and was given to the plaintiffs, complaining of the inferior quality the coal, and claiming damages in consequence. In the latter part of the year 8. repudiated the agreement to appropriate his dividends to the payment of and refused to sign the receipts therefor in the plaintiffs' books. had signed the receipt the dividend The present action was then brought (in against and the surviving partners of the Aibertine Oil Company, having died, to recover the value of the shortly afterwards brought an action against the plaintiffs the dividends; this latter claim was referred to arbitration and an award was made in favour S. for upwards of which the plaintiffs paid in July,

The receipt given for the payment stated that it was in full satisfaction of the judgment the suit of against the Albert Zlning Company, and it appeared (though evidence of this was objected to in the present action) that it included the dividends the years and

The learned judge before whom the action was tried, non-suited the plainbut the Supreme Court of Nova Scotta aside the non-suit. Held: (Reversing the judgment of the court below) Strong, J., dissenting- That there being clear evidence of the appropriation S.'s dividends in pursuance of agreement made with him, and therefore of the plain- C. R. VOiL. IX.]

having been paid for the coal in the manner and on the terms agreed the plaintiffs were properly non-suited.

SuR

2-Contract-Breach of-Master and

Damages, Aeasure This action was brought against P. S. S. to recover damages for an alleged breach contract.

plaintiff was master of the Shattuck, trading between Halifax and St. Pierre and other ports in the

She was owned defendant company, the plaintiff being one the largest shareholders of the company. Plaintiffs contract was that he was to supply the ship with men and provisions for the passengers and crew, and sail her as commander a month, afterwards increased to ship had been originally accustomed to remain at St.

Pierre hours, but the time was afterwards lengthened to hours the company, yet the plaintiff insisted on remaining only hours, against the express directions of the pany's agents at St. Pierre, and was otherwise disobedient to the agents, in consequence which was, the without prior notice, dismissed the service of the pany.

The case tried before Sir William

Young, without a jury, who, considering that the plaintiff was not a master in the ordinary held that he had been wrongfully dismissed and found a verdict in his favor rule nisi was made absolute the full court for a new trial. appeal to the

Supreme Court of Canada it was Held:-1st.

That if the dismissal had been wrongful, the damages excessive, and the case should go back for a new trial on this ground.

2nd. Per

Ritchie, C.J. and Fournier and JJ.,

That the fact of the master being a shareholder in the corporation owning the vessel had no bearing on the and that it was proper to grant a new trial to have the question to whether the plaintiff acted to justify his dismissal the owners submitted to a jury, or a judge, if be tried without a jury.

8.S.

DEBTOR-Relation of-Agency

-Payment-C. C. art. 1143-Parties.]

acquired during the life his first

B., certain immovable property which part of the communautJ biens existing between them.

At his death, after his marriage with H.

S., his second he was greatly involved.

His widow, H. having accepted sous d'inventare the universal usufructuary legacy made in her favor continued in

DEBITOR.-Oontinued. sion of her estate well as that of A.B., the first and administered them both, ploying one 6. to tollect, debts, etc. Shortly afterwards, at meeting of the creditors of S.G., of whom the respondents were the chief, a resolution was adopted authorizing H. S. to sell and lieitate the properties belonging to the estate of S. with the advice of an advocate and the cashier of the respondents, and promising to ratify anything done on their advice, and the creditors resolved that the moneys derived from the sale or licitation of the properties should deposited with the respondents, to be apportioned among G.'s creditors pro rata. continued to collect the fruits and revenues and rents, and acted generally for H. S. and under the advice aforesiid, and deposited both the moneys derived the -estate of S. and those derived the estate B., the first with the respondents under an account headed Succession balance remained after cheques thereupon had been paid, for which this action was now brought the heirs and reprepentatives of Dame M. A. B. Held: Per Strong, Taschereau and Gwynne, JJ. (Ritchie, C.J., and Fournier and Henry, JJ., contra)-That, the bank there was relation creditor and debtor, nor any fiduciary relation, nor any privity whatever; and the moneys collected belonging to the heirs of B. were collected him as the agent of H. and not as the agent of the bank, and received the bank in good faith, as applicable to the debts of the estate of S. and as the representatives of H. were not parties to the action, the appellants could not recover the moneys sued for. Fismar

2-Measure

4-To

DONATION-Articles C. P. Donation in marriage contract-Proqf of insolvency donor at date donation necessary to aside.] 28th June, L. al sold to T. a property for of which price were paid in cash.

June, E. his daughter, E. of certain property of considerable value and remained with no other property than that sold to him L. al. In J

L. at brought an action to aside the gift in question, claiming that, the property having so depreciated in value as to insufficient to cover their claim the balance remaining due to them and secured only DONATION.-Continued.

the property the gift in this marriage contract reduced T. to a state of insolvency, and in fraud of L. al, that at time the gift was T.

was notoriously insolvent. ff. T. inter alia, denying averments of insolvency, fraud, or wrong-doing. The only evidence of the value of the property still held by A. T. at the date of the donation, June, was the evidence of auctioneer, who merely spoke of the value of the property in November, and that of a real estate agent, who did not know in what condition the property was two years but stated that it was not worth more than in November, adding that he considered property 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 obtain the revocation of the gift question, it was incumbent on the plaintiffs to prove the insolvency or diconfiture the donor at the time the donation, and that there was no proof in this sufficient to show that the property remaining to the donor at the date his donation was inadequate to pay the hypothecary claims with which it was charged. e.

92, and 100-Questions offact in appeal- Aenst, limited power In appeal,,four charges bribery were relied upon, three of which were dismissed in the Court below, because there was not evidence that the electors had been bribed an agent of the candidate; and the fourth charge was known as the Lamarche case.

The facts were as follows :-One L., the agent of the respondent, gave certain electors employed certain steamboats, tickets over

North Shore Railroad, to enable them to go without paying any fare from Montreal to Berthier, to vote at the thier election, the voters having accepted the tickets without any promise being exacted from or given by them.

tickets showed on their face that they had been paid for, but there was evidence L. had received them gratuitously from one of the officers of the company.

The learned judge who tried the case found as a fact that the tickets had not been paid for, and were given unconditionally and therefore held it was not a corrupt act.

Held: 1. (Fournier and Henry,

JJ., dissenting.)

That the taking unconditionally and gratuitously of a voter to the poll by a railway company or an individual, whatever his occupation may be, or giving a voter a free pass over a railway, or by boat, or other conveyance, if unaccompanied by any conditions or stipulations that sball affect the voter's action in refereace to the vote to be given, is not prohibited b

That ifa ticket, althoug

!ien unconditionally to a voter by an agent of the candidate, has been paid for, then such a

ELECTION.-ontisued.

practice would unlawful under section and by virtue of section a corrupt practice, and would avoid the election.

That an agent who not a general agent, but an agent with powers expressly limited, cannot bind the canidate by anything done beyond the scope of his authority.

As to the remaining three charges, the Court was of opinion that on the facts the judgment of the Court below was not clearly wrong and should therefore not be reversed.

BaTman 2-Appeal mattra offact-Bribery-Corrupt intent.] Among other charges of bribery and treating which were decided on this appeal was the following:-One Mireas, a blacksmith, who was a neighbour of the respondent, had in his possession for two years, several pieces of broken saws which the respondent had left with him for the purpose of making scrapers out of them on shares.

A few days prior to nomination the respondent went Into Mireau's shop with a scraper he wanted to be sharpened, and in return for sharpening the scraper told him to keep the old pieces of saw which he might still have.

Mireau in his evidence answered as follows:-" 0. He did not s eak of your vote? A. No. Q. What has he said ? A. He said that Magnan was coming like mustard after dinner? Q. H. Dugas did not ask you for whom you were ? A. No.

* *

Q. Do you swear on the oath that you have taken that ff. Dueas left with you these two pieces of saw in question with the intent to buy (bribe) you? A. I think so, I cannot say that it is sure, I don't know his mind (son idee). It is all I can swear. Q. It has not changed your opinion? A. No. Q. For whom were you in the last election ? A. For M. Magnan.'

The scrapers were worth In all about two dollars, and were of no use to the respondent, and no other conversation took place afterwards between the parties. The judge who tried the case found that there was no intention on the part of the respondent to corrupt Held: That the Supreme Court on appeal will not reverse on mere matters fact the judgment of the judge who tries election petition, unless the matter of the evidence is of such nature to convey an irresistible conviction that the judgment not only wrong, but erroneous, and that the evidence in support of the charge of bribing Mireau, as well of the other charges of bribery and treating, was not such would justify an Appellate Court drawing the inference that the respondent intended to corrupt the voters.

Cas- - - - - - - 3-Status of Petitioner proced-0Gif a charity or liberality -Bribery

Bhorthand writer's notes.]-At the trial the petition, the returning officer, who was also the registrar of the county of Megantic, and secretary of the municipality of Inverness, was called witness, and produced in court in his official capa- ELECTION.-ontinued.

city the original list of electors for the township of Inverness, and proved that the name L. McM., one of the petitioners whom personally knew, the list. The original document was retained the witness, and, neither of the parties requested that the list should the judge made no order to that effect.

status of the other petitioners was proved in the same way. Held: that there was evidence that the petitioners were persons who had a right to vote at the election to which the petition related under ch. 7 (D).

The shorthand notes of the shorthand writer employed the court to take down the evidence were not extended in his handwriting, but were signed him. Reld: That the notes of evidence could not objected to.

setting out on a canvassing tour the appellant, the sitting member, placed in the hands of one B., who was his financial agent, to used for the purpose of the election.

While visiting apart of the county with which the appellant was not much acquainted, but with which B.

was well acquainted, they paid an electioneering visit to one K., leading man in that locality, who indicated to B. his dissatisfaction with the candidate of his party, and stated that, although would vote for the liberal party, would not exert himself as much as in the former elections. The appellant then went outside, and B.

asked his host, " you want any money your church And having received negative reply, added, you want any money anything ?" K. then answered, If you have money to spare there plenty of things want it are building a town hall, and

Will

?" K. answered, "Whatever you like, it is nothing to

The money was left the table. Then, when bidding the appellant

B. good-bye, K. " Gentlemen, remember that this money has no influence as far I am concerned, with regard to the election."

appellant did not at the time, nor at any subsequent time, repudiate the act of B. This amount was not included in any account rendered by the appellant or his financial agent, and large sums were admittedly corruptly expended in the election the agent of the appellant.

Held: the judgment of the court below, that the giving of the B. to K.

was not an act of liberality or charity, but gift out of appellant's money, with a view to ina voter favorable to the appellant's candidature, that. although the monet was not given in the appellant's presence, yet it was given with his knowledge, therefore that the appellant had been personally guilty of a corrapt

FERRY

2, (D)-Order-in- Council, 11th June, construction of- Notice not necessary-Damages,xecessive.] Three several actions trespass and assault were brought B. and respectively, riparian proprietors of land fronting on rivers above the ebb and of the tide, against for forcibly seizing and taking away their fishing rods and lines, while they were engaged in fly-fishing salmon in front of their respective lots. The defendant was a fishery appointed under the Fisheries Act and justified the seizure on the ground that the plaintiffs were fishing without licenses in violation of an Orderin -Council of June Ilth, passed in pursuance of section of the Act, which order was these words:-" Fishing for salmon in the Dominion of Canada, except under the authority of leases or licenses from the Department of and Fisheries, hereby prohibited." The dant was armed and was in company with several others, a sufficient number to have enforced the seizure if resistance had been made. There was no actual injury.

A. recovered afterwards reduced to damages; B. and

Held: That sections 2 and of the Fisheries Act, and the Order-in- Council of the of June, did not authorize the defendant. in his capacity of Inof Fisheries, to interfere with B. and U.s exclusive right as riparian proprietors fishing at the locus in quo; but that the damages in all the cases excessive, and therefore new trials should granted.

Held: Also (Gwynne, J, dissenting), that when the defendant committed the trespasses complained of, he was acting as a Dominion under the instructions of the Department of Marine and Fisheries, and was not entitled to notice of action under 0. ch. s. 1, or Trade

INSOLVENCY-Insolvent

Act of just vreference-Fraudulent preference-Presumption of innocence.] the respondent, was private banker, had had various dealings with one D., and had discounted him at an exorbitant rate of interest notes received D. the course his business. D.'s indebtedness on new transactions amounted to a large of money, but, being man of very sanguine temperament, he had entered into a line of business, after obtaining goods credit to the amount or upon a representation to the parties supplying goods that, although without available capital, had experience in business. About twelve days after had commenced business, being threatened a mortgagee with #147 INSOLVENCY.-Continued.

foreclosure proceedings, applied to who advanced him part of which was applied in ping the overdue interest on the mortgage, and the surplus retiring note of D.'s

D. executed mortgage in favor of W.

and was granted reduced rate of interest his indebtedness, and was told he would have to work carefully get through.

D. became insolvent about four months afterwards.

In a suit by as assignee, impeaching the mortgage to it was Held: (affirming the judgment the Court of Appeal) That McR. had not satisthe onus which was cast upon him the

Insolvent Act, of showing that the insolvent the time of the execution of the mortgage question contemplated that his embarrassment must of necessity terminate in insolvency.

Agreement pledge moneys debtor unable to his liabilities- When valid donor at dateof donation necessary asidi donation in marriage contract

JURY-Finding of- 2-Findings ofnot against ofevidence

FERRY-Construction f- Ferry, disturbance

Crown granted a license to the town of Bellevslle, giving the right ferry

" between the town of Belleville toAmeliasburg.

Held: grant of a right of ferriage to and the two places named.

Under the authority of this license the town

Belleville executed lease to the plaintiff granting the franchise to ferry and the town

Belleville to Ameliasburg," a township having a water frontage about ten or twelve miles, directly opposite to Belleville, such lease providing only landing place on each and a was established within the limits of the town of Belleville on the side, to a point across the of Quint, in the township

Ameliasburg, within an extension of the east and west limits of Belleville. defendants established another ferry across another part of the

Bay of Quinte, between the township of Ameliasburg and place the township of Sidney, which adjoins the city Belleville, the termini being the two miles from the western limits of Belleville, and the Ameliasburg shore, about two west the landing place the plaintiff's ferry. Held: (reversing the judgment appealed That the establishment and the plaintiff a ferry within the limits aforesaid for many years had the termini of the said ferry, and that the defendants' ferry was no ipfringement of the plaintiffs rights.

. H. The and mortgages were assigned to L. al. (the appellants) in and the principal money has never been paid.

. W. died in and his will devised all his residuaryreal estate,including the lands and premises in the above mentioned mortgage, to W. (one of the respondents) and others.

J W, his lifetime, was, and since his death the respondents have in sion of the premises mortgaged J. W. Neither I nor any person claiming through, or under ever paid any interest said bond and mortgage, or gave any acknowledgment in writing the title of M. or assigns. J. H., the co-obligor, paidintereston the bond from its date to On January, under Consolidated Statutes of Brunswick, suit of forclosure and sale of the premises mortgaged J. W. was commenced the appellants in the Supreme Court of New Brunswick in equity, and the court gave judgment for the respondents. On appeal to the Supreme Court of Canada. Beld: the judgment the *Court below, Strong, ., dissenting)-lst. That all liability J. W.'s personal representatives and of his heirs and devisees to any action whatever upon the bond was barred and of solidated Statutes of New Brunswick, although payment a co-obligor would have maintained the action alive in its integrity under the English Statute and William IV., That the rightot foreclosure and sale the lands included in the J. W. mortgage was barred the statute of Limitations in real actions, Stats. N. B., Per J.: The only person payment can made, an acknowledgment in writing signed, so as to stay the currency of the Statute of Limitations to a point which, being reached, the mortgaged lands from all liability under the mortgage, must either the original party to the mortgage contract, that is to say, the mortgagor, or person in privity of estate INDE.

LIMITATIONS.-Continued.

with or the agent of one of such persons, and that moneys paid J. H. in discharge his liability had none of the characteristics or quality of a payment made under the liability created W.'s mortgage.

LIQUORS-Sale of - ---- LOSS-Total-Constructive

W. al in Ins. a policy of insurance a ship. The policy among other clauses contained the following: "In the premium, the note, or other obligation given for the premium, or any part thereof, should be not pairl when due, this insurance shall void at and from such default; but the full amount of premium shall considered earned, and shall payable, and the insurer shall entitled to recover for loss or damage which may have occurred before such default. Should the or any of the persons liable to the company the premium, or any note or obligation given therefor, or any part thereof, fail in business bankrupt insolvent before the time for payment has arrived, this insurance shall at once beome and void, unless and until loss the premium paid or satisfactorily secured to the company."

There was also in the policy an arbitration clause, which arbitrators were to decide any which might arise between the company and the insured " as to the loss damage any other matter relating to the insurance," in accordance with the terms and conditions of the policy and the laws

Canada, and the obtaining of the decision of the arbitrators was to condition precedent to the maintaining of an action the insured against the company.

al gave a promissory note the premium, which was not yet due when they became insolvent; and the respondent was appointed assignee.

guarantee was then given and accepted the company as a satisfactory security for the premium.

The note became due on the 30th

September, and not paid but remained overdue and unpaid at the date of the loss, the of October,

After the the matters in dispute arising out the policy were submitted to three arbitrators, who awarded act'on was then brought the policy, the containing a count the award. H'..; (affirming the judgment the Court bele .) 1. That the premium having, on the insolvency of the insured, been satisfactorily guaranteed to the company, the policy was thereby kept full and and did not void on non-payment of the

INBURANCE.-Continued.

premium note at maturity. (Strong, J., dissent- That the award was binding the company, the question as to the payment default in payment of the premium being a difference " relating to the insurance " within the meaning of the policy, and the award not appearing on its face to be bad any mistake of law

2-Marine policy-Construction of - Trading voyage-Insurable interest.] The respondents (plaintiffs), an arrangement with who had chartered the schooner Mabel Claire for a trading voyage Nova Scotia to Labrador and back, were to furnish the greater part of the cargo, and were to have complete control of all the goods put board the vessel until it should return, when the return cargo was to disposed of the plainwho were to pay themselves for their advance, and pay over any balance remaining and others. In trading the voyage and others were not to dispose any goods credit, but were to bring back such goods as thay could not to obtain return cargo in thereof. The plaintiffs put board the vessel at Halifax merchandise to an amount exceeding and after having done and upon the day which the vessel sailed from Halifax, with the appellants (defendants) the policy sued upon, an extract which is follows:-" Rumey, Johnson & "have this day an insurance to the "extent the undermentioned pro- "perty, from Halifaxto Labrador and back to "Halifax on trading voyage.

Time not to exceed four months, shipped in good order "and well conditioned board the schooner Mabel Claire, whereof Mouzar master, this "present voyage.

Loss, if any, payable to " umsey, Johnson Said insurance to subject to all the forms, conditions, provisions and exceptions contained in the policies the "company, of which are printed the "back hereof. Description of goods insured, merchandise under deck, amount rate per cent., premium, to return two (2) "per cent., if risk let October, and loss "claimed; additional insurance of warranted from capture, seizure and detention, "the of any attempt thereat." Against the respondents' right recover, it was contended that they merely unpaid vendors and had no insurable interest, and that goods previously put board at Liverpool, N. S., were not covered this policy, and that it was not to cover the return cargo. Held: (affirming the judgment of the Court below, discharging a rule nisi to set aside verdict for the plaintiffs) That the policy covered not only goods put board at Halifax, but all the merchandise under deck shipped in good order board said during the period mentioned in the policy. Held: also, that there was evidence to 749F INSUBAJCE.-Oontinued.

show that the plaintiffs had an insurable interest in all the goods obtained and loaded on the vessel.

Co. V.

Ruxssr- - - - 3-Marine policy-Voyage policy

Mortgagee as collateral security has an insurable intereat-Total loss-Right recover-Notice abandonment mortgagee-Constructive total loss.]

While the barque Charley was at

Cochin, on or about the April, the master entered into a charter party for a voyage to and thence New York by way

Alippee.

The vessel sailed the 22nd April, and arrived at which place she left and while on her way to

Alippee she struck hard on reef and was damaged and put back The was damaged that the master cabled to the ship's husband at York the and in reply received orders to exhaust all available means and do the best could for all concerned.

The repairs needed were extensive and it was impossible to get them done there, and

Bombay, miles distant, was the nearest port.

After proper surveys and cargo discharged, on the June the vessel was stripped and the master sold the materials In lots at auction.

the the respondent, a mortgagee of U in the vessel, which had assigned to the of Nova Scotia by endorsement the mortgage, collateral security pre-existing debt the Bank of Nova Scotia, being aware of the charter Cochin to

York, insured interest with the appellant company, the nature of the risk being thus described the policy:

" the bod of the good ship or vessel called the arque

Charley beginning the adventure (the said being warranted the insured to then in safety), at and Cochin Colombo and

Alippee to New York."

an action on the pohcy for total loss-the defendants pleaded inter alia 1st-that the plaintiff was not interested; 2nd, that the ship was not lost the perils insured against; concealment.

That this was a voyage policy, and that the warranty safety referred entirely to the mencement of the voyage and not to the time the insurance

That the fact of the plaintiff having assigned his interest as a collateral security to a creditor not divest him of all interest so as to disentitle him to recover. 3rd.

That the vessel in this case being injuredthat she could not taken to port at which the necessary repairs could executed, the mortgagee was entitled to recover for an actual total and no notice of abandonment was neces- INSURANCE.-Obntinue.

Per Strong, J., that mortgagee, giving notice of abandonment is not precluded from recovering for a constructive total 4-Total or constructive total what constitutes-Notice of abandonment not accepted underwriters

Right abandonale master as assignee of was insured upon the schooner Janie R., to the amount of by voyage policy. the February, the Janie B., which had been in the harbor of Shelburne since the 7th February, left with a cargo ofpotatoes to pursue the voyage described in the policy, but was forced stress of weather to put back to Shelburne, the morning the went ashore, when the tide was about its height. 17th notice of abandonment was given to the defendants (appellants) not accepted, and on the the master, after survey, sold her. The next the purchaser, without much culty, with the assistance of an American vessel that was in the harbor, and the of casks for floating her (appliances which the master did not avail himself of), got her There was no evidence whatever of the vessel having been so wrecked as to have been worthless to repair, or to have been much damaged that she would not have been worth, after having been repaired, more than the money expended for that purpose.

The vessel afterwards made several voyages, and was sold the purchasers for

In an action brought on the policy against the defendant company, tried befor a judge without jury a verdict given in favor of plaintiff for 1,913, which verdict was sustained the Supreme Court of Nova Scotia. appeal to the Supreme Court of Canada- Held: (reversing the judgment of the courts below) 1. That the sale the master was justified in the absence of all evidence to show any stringent necessity " for the sale after the failure of all available means to rescue the vessel. That the undisputed facts disclosed no evidence whatever an actual total loss and not constitute what in law could pronounced either an absolute or a constructive total Per Strong, J., That the right to abandon must be tested the condition of the vessel at the time of action brought, and not that which existed when notice of abandonment given. CO. V. nisifor-Coanty School Rates for 1873-78-Rev. Stat., N.S.] A mandamus was applied for at the instance of the sessions for the county Halifax, to the warden and council of the town of Dartmouth to assess, on the property of the town liable assessment, the sum of for its proportion of county school rates for the years under the Educational Act, The Supreme Court of Nova Scotia, without determining whether the required INIE.

MANDAMUS.-Continued.

sessment was possible and was obligatory when the writ was issued, made the rule nisi for a mandamus absolute, leaving these questions to determined on the return of the writ.

appeal to the Supreme Court of Canada, it was

Held: and Gwynne, JJ., dissenting)

That the granting of the writ in this case was the discretion of the court below, and the exercise of that discretion cannot at present tioned.

Per Ritchie, C.J. :-That the town

Dartmouth is not, but that the city of Halifax is, exempted by contribution to the county school rates.

CONTRACT-Donation in.

2-Mortgagee of Vesel-Notice of abandon- Covenant

WATERS-Obstruction in navigable waters, water mark-Nuisance-Trespass E. al. brought an action of tort against having pulled up piles in the harbor

Halifax below low water mark, driven in them as supports to an extension of their wharf built certain land covered with water in said

Harbour of Halifax, of which they had obtained grant from the Provincial Government of Nova

Scotia in August, pleaded, inter alia, that !' was possessed of whart and premises in said harbour, in virtue which and his predecessors in title had enjoyed for twenty years and upwards the action, and had now, the right of having and uninterrupted access from and to Halifax harbour to and the south of said wharf, with steamers, and because certain piles and timbers, placed the plaintiffs said waters, interfered with rights, (defendant) removed the the trial there was evidence that the erections which E. al were making for the extension their wharf did obstruct access steamers and other vessels to W's wharf.

verdict was rendered against which the full court refused to set aside. appeal to the Supreme Court

Canada it was Held :-(reversing the judgment of the Supreme Court of Nova Scotia) that, the Crown could not, without legislative sanction, grant to E. al, the right to place

Continued.

said harbour below water mark any obstruction or impediment to prevent the and full enjoyment of the right of navigation, and as W. had shown special injury, he wasjustified in removing the piles which were the trespass complained of.

ACTION-Against Fishery June, 1879-Construetion of.

The article the deed of partnership executed a notary public the Province of under which the respondent claimed to entitled to credit is follows:-" The stock the said tools, horses and appliances now used for the construction of said works the said parties the first part A. P. . Sons; also all quarries, steam tugs, scows; and also all the rights in said quarries that are held the said parties the first part, or any of them, the whole of which valued at the sum and contained in an inventory thereof hereunto annexed reference after having been signed identification the said parties and notary; but whereas the said plant, tools, horses, appliances, steam tugs, scows, quarries and other items had heretofore sold the said party of the first part to the of 4- of the city Montreal, hardware merchants, to secure them certain claims which they had against the said P. M. it for moneys used in the construction of the works referred to, to the extent and of about and interest; and whereas the said ,. has paid said amount of and deemed said plant, tools, horses and appliances and quarries, steam tugs and scows, and now stands the proprietor of the under a deed of conveyance; it is hereby well agreed and understood that the said plant, tools, horses and appliances that are or may put on the said work shall and continue to the entire property the said J. W. until such time as he PABTNEBBRIP.-Continued.

shall have realized and received out of the business and profits of the present partnership sum sufficient to reimburse him of the said and interest advanced him afore.

said, as also any other or advances and interests which shall or may paid or advanced to the present or partnership, after which time and event the whole of the said stock shall the property of the said of J. W. &that say: That one-half thereof shall revert to and belong to the parties of the part, and the other half to the said party of the second part, the said J. W. has a half interest in this contract and all its profits, and liabilities, and the said P. W. E. M.

and R. parties of the part, jointly and severally, the other half-interest in the same."

There was evidence that the plant had originally and that it was valued in the inventory at at the request of the appellant ; it was also shown and admitted that the profits of the business were sufficient to reimburse the appellant the sum of and other moneys advanced, and that there was still a large balance to the credit of the partnership.

Held: (Henry and JJ., dissenting), that the plant, furnished the respondents having inventoried and valued in the articles of partnership at the respondents had thereby become creditors of the partnership for the said sum of but it appeared the said articles of partnership that the said plant was subject at the time to a lien of and that said lien had been paid with the partnership the respondents only entitled to credited, creditors of the partnership, with the sum of being the between the sum paid the partnership to the plant and the value at which it had estimated both parties in the articles of partnership.

PATENT-Combination- Novelty - Inventor- Prior patent to person not inventor-Pleading and Practice -Section Patent Act, 1872-Use by others in Canada-Use patentee inforeign countries-Section28 Patent Act,1872-Final decision

-Judgment in rem-Section 7 Patent Act,

-Commencement to manufacture before application in Canada-Section 48-Use defendant patent.]

combination in a machine of three parts, or ments, B and each of which was old, and of which had previously combined with

B one machine and B and 0 another mabut the united action of which in the patented machine produced new and useful results.

Held: 1. (Strong, J., dissenting) to a patentable invention.

entitled to a patent in Canada, the patentee must the first inventor in Canada or elsewhere.

prior patent to a person who not the true inventor no defence against an action the true inventor under a patent

PATENT.-Continued.

issued to him subsequently, and require to cancelled or repealed sire facias, whether it is vested in the defendant or in a person not a party to the suit. 2. words the 6th section of the Patent "not being in public or on sale for more than one year previous to application Canada," are to read meaning "not being in public use or on sale in Canada for more than one year previous to his application." the Minister of Agriculture or his Deputy exclusive jurisdiction over questions of forteiture under the 28th section of the Patent Act, and a the ground that a patent has become forfeited for breach of the conditions the said 28th section cannot supported after a decision of the Minister of Agriculture or Deputy declaring it not void reason of breach. Per Henry, J.-The jurisdiction of the Commissioner administrative rather than judicial, and he may at the motive and of an act of importation, and single act, such as the importation a sample tending to introduce the invention, is not necessarily a breach of the spirit of the conditions of the section. Under the 7th and 48th sections of the Patent Act, persons who acquired used one more of the patented articles the date of the patent, who had to manufacture before the date of the application, are not not entitled to a general license to make the invention after the of the Conignment of subject IN ELECTION PETITION-Status of-How

REGULATIONS-42 # Vi., ch. 1 (P.Q.), construction of-Prohibition, writ of-Sale liquors.]

Under the authority of the Act of the Legislature of &

1, penal suit was, on the 20th of January, instituted against P. in the name of the corporation before the Recorder's Court of the city of alleging that " Sunday the day of January, the said defendant has not closed, during the whole of the the house or building in which the said defendant, sells, to sold, or allows to spirituous REGULATIONS.-Cntinued.

liquors retail, in quantity less than three half pints at a time, the said house or building situate, P. was convicted.

writ prohibition, to have the conviction revised the

Superior Court, was subsequently issued, and uyon the merits was set aside and quashed.

(Per Ritchie, and Strong and Fournier, JJ.) That the provisions of the Provincial

Statute & Vic., ch. ordering houses which spirituous liquors, are sold, to closed on Sundays, and every day between eleven o'clock of the night until the clock of the morning, are police regulations, within the power of the Legislature of the Province and as the complaint was clearly within the Act, the Recorder could not interfered with on prohibition. Per Henry, Taschereas and

J., That the penalty imposed upon P.

the recorder was not authorized the statute, even such statute was intra vires the Provincial Legislature, and that the prohibition was therefore rightly granted.

The court being equally divided, the appeal was dismissed without costs.

PREFERABLE-Unjust-Fraululent

the 7th December T. G., a promise of sale, agreed to sell a farm to D. if., then a minor, -of which were paid at the time, balance payable yearly instalments of each, with interest at 7 cent. D. A. was to have immediate possession and to ratify the deed becoming of age, and to entitled to a deed of sale, if instalments were paid as they became due, " but if, on the contrary, D. fails, neglects, or refuses to make such payments when they then said D.

. will forfeit all right has these presents to obtain a deed of sale of said herein mentioned farm, and will moreover forfeit all monies already paid, and which hereafter may paid, which said monies will considered as rent of said farm, and these presents will then considered as null and and the parties will considered as lessor and

After

D. became of age left the country without ratifying the promise of sale, paid none the instalments which became due, and

T. regained possession of the farm. In October, D. returned and tendered the balance of the price, and claimed the

Held: Reversing the judgment

SALE.-ContinuecL

(Strong and Taschereau, JJ., dissenting), that the condition precedent on which the promise of sale was made not having been plied with within the time in the contract, the contract and the law placed the plaintiff en demeure, and there was necessity for any demand, the necessity for a demand being inconsistent with the terms of the contract, which immediately,ou the failure of the performance of the condition, ipso facto changed the relation of the parties from vendor and vendee to lessor and lessee.

RAILWAY-Failure sound whiste-Accident from horse takingfright-C cap. Finding of Jury-Evidence.] Held:the judgment of the Court of Appeal for Ontario) that Consolidated Statutes Canada, must be construed as enuring to the benefit of all persons who, using the highway which is crossed a railway the level, receive damage in their person their property from the npglect of the railway pany's servants in charge of a train to ring a or sound a whistle, as they are directed to do said statute, whether such damage arises from actual collision, or as in this case a horse being brought over near the crossing and taking fright at the appearance or noise of the train.

The jury in answer to the question, " If the plaintiffs had known that the train was coming would they have stopped their horse further the railway than they did said "

Held: Though this question was indefinite, the answers to the questions as whole, viewed connection with the judges charge and the evidence, warranted the verdict. $12 FisaaY OricER.

SALE-Offer of-Property-Ofer to sell-Acceptance on completion of title-Specific performance.] the 26th of January, wrote to H follows McL agrees take property known as Terms-one-third cash, balance in one year at eight per cent. per annum.

until Saturday, noon." the same day H. accepted this the following terms : " I beg to accept your made this morning. I will accept the property known as McM. block, being the property f. street, for payable one-third cash on completion of title, and ance in one year at eight per cent. You will please have papers and abstract submitted your solicitor to N. F. H., Esq., D. block, soon as possible; that I may et conveyance and give mortgage.' a or perthe Court queen's Bench (Man.) decreed that H. was entitled to have the agreement spcifically performed.

Held: (Ritchie.

---- 2-Ofship in his handwriting, but signed him, admis- SHIP-Damage

1-Construction

Fisusay

4-31

Limited liability not apply to cases other than those

5-37 9,

Act, 7,

N.B., e. 1, and ch.

Fisssa

10-Statutes of Limitation (A.B.),

11obtainedbyfraud-Notary, duty of- C. P.Q.-Appeal.] had a claim against the insolvent estate Dr. B., purchased a right of redemption Dr. B. atthe time death in a certain ofland; and in order that B. at (the respoadents, children) perfectly solvent, should accept the succession of B., caused prepared a assignment by.a notary

SUCCESSION.-Continued.

this right of redemption to B. al, who, days after the death of their father, had induced for a of to consent to exercise this right of redemption.

The notary who prepared the deed. without the knowledge of returned it to telling him that did not like receive the deed because believed that in signing it B. made themselves heirs Dr. and besides believed that if knew that in signing the they accepted the succession of their father, and were responsible for debts, they would not sign. Another notary residing at a distance was sent for to whom gave the as prepared, and the notary then went to the residence of read the deed to the parties, and without any explanation whatever passed and executed the cession whereby B. al became responsible for the debts of their father. being informed of the legal of their signature, B. et at formally renounced to the succession their father. There was also evidence that B. at had done conservatory acts and acts of administration for their mother, but it was not proved that in of these transactions they had taken the quality of heirs. The amount in dispute was made up including interest which the of the declaration was prescribed.

The respondents did not demur to this part of the demand, nor was any separate judgment rendered as to it. Held : 1. That the case was appealable.

That the acceptance of an insolvent succession is null and of no when it the result of and corrupt practices,artifices and fraud. 2. That as in this case obtained the signatures of B. et at to the in question fraud, the latter should not beburthened with the debts of their solvent father.

That it is the duty of a notary when executing deed explain to an illiterate grantor the legal and equitable obligations imposed the and consequent its cution.

(Henry, J., dissenting.)

of-Liability under-Sea defendas- of mill tug-Lisbility limited-25 63-31 12-Motionfor of jury of evidence-Practice.] The B. T. entered into contract of towage with S. to tow the from to there to load with coal, and when loaded to tow her back to sea. After the was towed Nasaimo, under arrangement between the B. T. and the ff. S. the remainder of the engagement was undertaken batween the two companies, and the M. Co.'s tug boat, Etts and the B. T. tug, proceeded to tow the Thrasher out of Nanaimo her the Etta

White being the foremost tug. Whilst thus tow the ship was dragged a reef, and became a complete wreck. The night of the accident was light and clear, the tugs did not steer according to the prescribed the charts and sailing directions ; and there was the other of the course they were steering, upwards of ten miles open sea free from dangers of navigation, and the ship was lost a spot which was plainly indicated the sailing directions, although there was evidence that the reef was unknown.

The ship had pilot, and those aboard were strangers to the coast.

In an action for damages for negligently towing the ship, and so causing her destruction,

Held :-1. That the tugs had not observed those proper and reasonable precautions adopting and keeping the courses to steered, which aprudent navigator would have observed, and the accident was the result of their omission to the owners of the tugs were jointly and severally liable, (Taschereau, J., dissenting as to the liability of the M. S. and holding that the B. T. were alone liable). 2. That under the British Columbia Judicature the action was maintainable in its present joining both companies as defendants.

there was nothing in the M. Co.'s charter or act of incorporation to prevent their purchasing and owning a steam tug, and the use a vessel was incidental to their business, they had a perfect right to let the tug to hire such purposes as it was used for in the present

That the tugs question were not registered as British ships at the time of the accident their owners were not entitled to have their liability limited under and

That the limited liability under section (D )

apply to cases other than those of collision.

This coming the court below motion for judgment under the order which governs the practices in such cases, and which is identical with English Order Rule the orders of the Ocurt could give judgment, finally determining all questions in pute, although the jury may not have found them but not enable the Court to dispose of a case contrary to the finding of a jury. the Court consider particular ings to against evidence, all that can done to award a new trial, either generally partially under the powers conferred the rule similar to the English Order Rule

Supreme Court of Canada, giving the judgment that the Court below ought to have given, was in this in position to give judgment upon the evidence at large, there being no findings the jury interposing any obstacle to their doing, and therefore a judgment should entered against both defendants for and

Injunction.]- B.

at manufactured and sold cakes soap, having stamped thereon registered trade mark, described as follows :-A horse's head, above which were the words " The Imperial; " the words "Trade Mark," each side thereof; and underneath it the words " Laundry

"J.1 Barsalou Montreal," was stamped on the reverse at manufactured cakes of soap similar in shape and general appearance to B. at, having stamped thereon an imperfect unicorn's head, being a horse's head, with a stroke the forehead to represent horn. The words "Very were stamped, one on each side of the head, and the words St. Dominique St.," and " Laundry " over and under the head. At the trial the evidence was contradictory, but it was shown that the appellants' was known, asked for and purchased a great number illiterate persons as the "horse's head soap." Held: (Henry, dissenting). reversing the judgment of the Queen's Bench (appeal side) and restoring the judgment of the Superior Court, that there was such an imitation al's trade mark to mislead the public, and that they were therefore entitled to damages, and to an injunction restrain D. at using the device adopted them.

------- Construction of- Art. Civil - Liability of universal legatee for on. immoveables bequeathed to a particular the 30th April, H. being indebted to f P. in the sum of granted a hypothee on certain real estate which owned in the city of Montreal. 28th June, H. made his will, in which the following clause to be found: " That all my just debts, funeral and testamentary expenses paid my executors, hereinafter named, as soon possible after w death."

another clause left to H. in usufruct, and to his children in property, the said immoveables which had been hypothecated to secure the said debt of

In H. died, and a suit was brought against the representative of his estate to recover this sum of and interest. Held: (Reversing the judgment of the Court of Queen's Strong, J , dissenting) That the direction the testator to pay all debts included the debt of secured the hypothee. Per Fournier, Taschereau and JJ.: testator not expressly direct particular legatee to dischage a hypothec on an immoveable devised to him, art. of the C. C. does not bear the interpretation that particular legatee liable for the payment such hypothecary debt without recourse against the heir or universal