Lingle v. Knox Bros Ltd.

DUFF J.-This appeal turns upon the effect of art. 217 of the Code of Civil Procedure of Quebec, which is in these words:- Art. 217. The defendant may set up by cross-demand any claim arising out of the same causes as the principal demand, and which he cannot plead by defence.

When the principal demand is for the payment of a sum of money, the defendant may also make a cross-demand for any claim for money arising out of other causes; but such cross-demand is distinct from and cannot retard the principal action.

The court, whenever it renders judgment upon both demands at the same time, may declare that there is compensation.

The question arises in this way: The appellants, as plaintiffs, declared upon a judgment of the Supreme Court of British Columbia of the 26th of November, 1923, awarding to the plaintiffs judgment against the defendant for the sum of twelve thousand odd dollars. The defendant, by cross-demand upon the allegation that the judgment was based upon a contract for the sale of lumber between the plaintiffs and the defendant, under which certain quantities of lumber were delivered, claimed certain sums by way of damages for breach of the terms of the contract. One of these claims is embodied in pars. 6 and 7 of the crossdemand, which read as follows:- 6. That of the entire quantity of lumber purchased under the said contract, the cross defendants were short in their deliveries to the extent of 1,985,901 feet, which lumber they actually disposed of according to their own admission in their statement of claim in the British Columbia action filed in this case by the cross defendants.

The claim, thus stated, could not have been set up as a defence in the original action: it could only have been put forward in a separate action or by way of counterclaim.

It would appear, therefore, that to it, art. 212 of the Code of Civil Procedure has no application; and the o question arises whether it falls within the scope of the rule laid down by art. 217.

The Court of King's Bench has taken the view that the claim under these paragraphs arises out of the same "causes"

as the principal demand, and that art. 217 therefore prescribes the procedure to be followed. The language of that article might be more precise, but it seems clearly to be open to the interpretation adopted by the Court of King's Bench; and on the whole there appears to be no very solid ground for differing from this view.

This is sufficient to dispose of the appeal.

A question may arise whether the claim under par. 5 of the crossdemand is not one which, in substance (as a claim in respect of diminution in value resulting from breach of the contract of sale), might, on the principle of Mondel v. Steele (1), have been set up, in whole or in part, as a defence to the British Columbia action; see Bow McLachlan & Co. v. The Ship " Camosun," (2).

From this point of view, the relevancy of art. 212, as respects this claim, may have to be considered; but it seems more convenient that any such question should be reserved for the trial. The appeal should be dismissed with costs.

S.C.R.