MONTREAL AND ST. LAWRENCE LIGHT AND POWER Co. v. ROBERT. (2) Did the company, in fact, buy it? The company was incorporated in 1888 by a Quebec statute, 51 & 52 Vict. c. 73, under the name of the Chambly Manufacturing Co., for the purpose of creating water power on the River Richelieu near Chambly, and carrying on business there as an electrical lighting and power company. That Act, and a subsequent Act passed in 1895, were replaced by a Quebec statute passed in 1898 (61 Vict. c. 65). By it the company was re-incorporated under its original name, and its powers were increased. In 1901, by another Quebec statute (1 Edw. 7. c. 67), assented to on March 28, 1901, the corporate name of the company was changed to the name of the Montreal and St. Lawrence Light and Power Co., and its powers were again increased. It appears, therefore, to their Lordships that the transaction in itself was not ultra vires, and consequently the first question must be answered in the affirmative. The provisions of the Act of 1898 were discussed at considerable length. On the one hand, it was argued that by that Act the company was empowered to set up works on any river in the Province of Quebec, except that part of the province which forms the judicial district of Quebec. On the other hand, it was contended that, notwithstanding the generality of the language of the Act, the company was still restricted to the use of the river Richelieu and its tributaries, and that its operations must be confined within certain prescribed limits, which do not include or extend to Buisson Point. In the opinion of their Lordships, it is not necessary to pronounce a decision on the construction of the Act of 1898. In view of the provisions of the Act of 1901, under which the company seems to have been absorbed or acquired (as its president prefers to say) by another company known as the Montreal Light, Heat, and Power Co., it would serve no useful purpose to do so. Whatever may be the sphere of the company's operations as described in the Act of 1898, it is clear that the company was empowered to acquire and hold, for the purpose of its business, real or immovable estate not exceeding a specified sum in yearly value in any part of the province outside the prohibited district. The company acting The company acting bona fide must be the sole judge of what is required for the purpose of its business. As regards the second question-the question whether the company did in fact buy, or bind itself to buy, the propertythe real difficulty is to ascertain the gist and substance of the company's complaint. plaint. There is no suspicion of fraud or circumvention or surprise or collusion. It is not suggested that Robert took advantage of the innocence or inexperience of those with whom he was dealing. They were "all," as James Ross, the Vice President of the Montreal Light, Heat, and Power Co., said, "first-class business men, and associated with him in many enterprises." It is not suggested that Porteous, the president of the appellant company, or the secretary, or the notary betrayed the interests of the company confided to them. There is no entry in the minutes disavowing the action of the president or censuring him for exceeding his instructions. The case presented by the learned counsel for the company in his opening address was that the notion of buying was not in the mind of the directors at all. They wanted-or James Ross, who, though not a director, had a controlling interest in the company and in other companies of the same class, and was the prime mover in the matter, wanted-an option, an option pure and simple, that would lapse of itself if nothing was done. That was the real meaning, it was said, of the resolution of July 17, 1901; but somehow, without any fault on the part of anybody in particular, the company found itself committed to a purchase. Now, the facts of the case, when examined, tell a very different story. It is quite true that at first the negotiation was for an option. It seems that a tender for the lighting of the City of Montreal was then in the market, and Ross and his associates thought that the water power at Buisson Point was at any rate worth securing. They had obtained the offer of an option from Robert, the owner of Buisson Point. Robert saw his opportunity, and, after a week's delay on the MONTREAL AND ST. LAWRENCE LIGHT AND POWER Co. v. ROBERT. part of Ross, pressed for an immediate reply. On July 11, 1901, he wrote: "I shall consider myself free unless I hear from you to-day." There was no reply, or no satisfactory reply, to this communication. Then he made a definite offer in writing to sell the property to Ross or his nominee on certain terms which gave an option to the purchaser of abandoning the purchase within a fixed time on forfeiting the deposit. On the same day (July 11, 1901), in the absence of Ross, Porteous, who held a power of attorney from Ross, and was, as Ross said, his "trusted ally,” accepted the offer in Ross's name, and declared his nominee to be "The Montreal and Saint Lawrence Light and Power Co." Then came the directors' meeting of July 17. The minutes of that meeting were entered by Porteous himself. The preamble to the resolution certainly contains the word "option." "The purchase," it says, "was to be in the shape of an option up to the 30th of November 1901 for the sum of $275,000, of which $15,000 is to be paid in cash on the passing of the deed to the Company." The resolution is: "That the President and Secretary be authorized to complete the transaction and sign the necessary documents." If the minutes are read with any attention it becomes quite plain that what was meant was not a mere option but an actual conveyance with the option of reconveyance within a specified time. So the company's notary must have understood it. In order to prepare the conveyance he must have had before him Robert's offer of July 11, and Porteous's acceptance of it, as well as the resolution of July 17. It was his duty "to complete the transaction," so far as the legal part of the business was concerned, and prepare "the necessary documents," and no fault can be found with what he did. The deed was passed and the deposit of 15,000 dollars duly paid by the company. their own business. Porteous may have forgotten the terms of the bargain, or he may have judged it inexpedient to throw the bargain up at that particular moment Whatever the cause was, Robert was not to blame. His conduct seems to have been quite straightforward and above board. It was no fault of his if the directors of the company were careless or supine. There is no satisfactory explanation why the directors allowed November 30 to slip by without making any move. The directors may have thought that Ross had assumed the management of their affairs. Ross may have supposed that the directors were then looking after Another point was made on behalf or the company. It seems to have been a mere afterthought, for there is no hint of it before the action was launched. It is said that the meeting of July 17 was irregular there was not a quorum present; therefore the resolution passed on that occasion was invalid and goes for nothing. It is quite true that the bylaws require the presence of three directors to make a quorum-and only two attended on the 17th. But, after all, the by-laws of a company constituted as the Montreal and St. Lawrence Light and Power Co. was constituted are not public property. They concern matters of internal management. Those who deal with the company have no means of access to them, no right to pry into the company's archives or interrogate its officials. There was nothing to put Robert on enquiry. The officials of the company, the president, the secretary, and the notary, furnished him with a copy of a resolution which purported to be a resolution of the directors duly and regularly passed. On the faith of that representation Robert altered his position and parted with his property. The company cannot now be heard to say to the vendor, "You should not have given credit to what our people told you." such a plea were listened to, no one would be safe in dealing with a company having private regulations of its own inaccessible to the outside world, to which appeal could be made, in case of need, to relieve it from solemn obligations, or save it from a bad bargain. If Such being their Lordships' view, it would seem to be a work of supererogation to enquire whether the resolution of July 17, if invalid, has been validated by subsequent resolutions or by the subsequent conduct of the company. MONTREAL AND ST. LAWRENCE LIGHT AND POWER Co. v. ROBERT. On the whole their Lordships agree with the Superior Court sitting in review and the Court of King's Bench, and they will humbly advise his Majesty that the appeal should be dismissed. Court affirmed this finding; but the Court of Appeal reduced the interest to 4 per cent. The appellants will pay the costs of the appeal. Solicitors-Blake & Redden, for appellants; Lawrence Jones & Co., for respondent. [Reported by J. Eyre Thompson, Esq., Barrister-at-Law. 1905. July 28, 31. Nov. 8. Ontario TORONTO RAILWAY . TORONTO CITY.* Contract Payments in Arrear-Interest-Ontario Judicature Act, 1897, c. 51, s. 113. By the Ontario Judicature Act, 1897, s. 113, "interest shall be payable in all cases in which it is now payable by law or in which it has been usual for a jury to allow it." The effect of this enactment is that in all cases where, in the opinion of the Court, the payment of a just debt has been improperly withheld, and it seems to be fair and equitable that the party in default should make compensation by payment of interest, it is incumbent upon the Court to allow interest for such time and at such rate as the Court may think right. Appeal from an order of the Court of Appeal for Ontario dated February 23, 1905, affirming a decision of the Divisional Court of February 9, 1904. The only question in dispute was whether the respondents were entitled to recover interest on the sums due from the appellants in the circumstances mentioned in the judgment. No interest was asked for in the statement of claim, nor was mention made of interest at the trial or on the appeal. But the Master in Ordinary, on reference made to him, had allowed interest at 6 per cent. as on a sum certain. The Divisional *Coram, Lord Macnaghten, Lord Davey, and Sir Arthur Wilson. Laidlaw, K.C., and Blackstock, K.C. (both of the Colonial Bar), for the appellants. The enactment in the Judicature Act only applies to a sum certain. At the date of the order for payment of interest there was no such sum, and there was no delay in payment as soon as the amount was ascertained. There was no contract to pay interest, and no claim for interest made at the trial or on the appeal. That no interest will be allowed until the amount of principal due has been determined is shewn by Sinclair v. Preston [1901], and was so held in London, Chatham, and Dover Railway v. South-Eastern Railway [1893].2 Shepley, K.C. (of the Colonial Bar) and Rowlatt, for the respondents.-This was clearly a case in which a jury would have allowed interest. The amount was easily ascertainable, and the delay in determining it was entirely due to the refusal of the appellants to co-operate with the respondents in taking the measurements. In M'Cullough v. Newlove [1896] 3 interest was allowed on sums due from time to time. In M'Cullough v. Clemow [1895], though in the circumstances interest was not allowed, it was held that it ought to be allowed in cases where the elements of certainty existed and nothing more was required than calculation. To the same effect is Duncombe v. Brighton Club and Norfolk Hotel Co. [1875],5 which was expressly left untouched in London, Chatham, and Dover Railway v. SouthEastern Railway.2 Laidlaw, K.C., replied. LORD MACNAGHTEN delivered the judgment of their Lordships: This is an appeal from the Court of Appeal for Ontario. The result of the appeal to that Court was that the appellants, the Toronto Railway Co., were found liable to the Corporation of the City of Toronto for the payment of a (1) 31 Can. Sup. Ct. 408. (2) 63 L. J. Ch. 93; [1893] A.C. 429. (5) 44 L. J. Q.B. 216; L. R. 10 Q.B. 371. TORONTO RAILWAY v. TORONTO CITY. mileage rate in respect of 940 feet of street railway track in Queen Street or Lake Shore Road west of Roncesvalles Avenue. They were, besides, ordered to pay interest on the moneys recovered in the action, but at a lower rate than that fixed by the Court from which the appeal was brought. These two points are the only matters involved in the present appeal. All other questions between the parties have been settled in the course of the action. This The action was brought in 1897 on a contract dated September 1, 1891, under which the railway company acquired from the corporation the exclusive right of working street railways within the city, which at that time extended no further west than Roncesvalles Avenue. privilege or franchise was granted for a term of years in consideration of the payment of certain mileage rates. Disputes, however, soon arose about measurements. In February, 1897, the corporation brought this action against the railway company, claiming a large sum over and above the periodical payments which had been made from time to time. At the original hearing in 1898 it was, among other things, declared that the company were not liable to pay a mileage rate in respect of the 940 feet of track in dispute. On appeal this part of the order was discharged, and it was referred to the Master in Ordinary to enquire and report by whom the track was constructed, and at what time and what rights of running upon it the railway company possessed. The Master, after reviewing the evidence taken before him, found that this portion of the track was constructed by the railway company on or about June 30, 1893, as part of their own undertaking, and that their rights of running upon it were governed by the agreement of September 1, 1891, and were subject to the same obligations as were imposed upon the company with reference to their other tracks. The Master's finding was upheld in the Divisional Court and also in the Court of Appeal. In their Lordships' opinion the conclusion thus arrived at is plainly right. At the date when this piece of the track was laid the portion of Queen Street or Lake Shore Road on which it was constructed was within the limits of the city, and no person or body other than the corporation of the city had any jurisdiction or control over it or any right of interfering with its surface. As the Chief Justice observes: "The only lawful way in which the line could then be laid was under authority from the Plaintiffs." The position of the corporation was undisputed, and their consent was taken for granted and treated as a matter of course. It was not until four years later, after the commencement of the action, that the railway company professed to have derived their authority from another source. The evidence offered in support of that suggestion is unsatisfactory and altogether inconclu sive. Sec The question as to interest is not so simple. If the law in Ontario as to the recovery of interest were the same as it is in England, the result of modern authorities ending in the case of London, Chatham, and Dover Railway v. South-Eastern Railway would probably be a bar to the relief claimed by the corporation. But in one important particular the Ontario Judicature Act, R.S.O. 1897, c. 51, which now regulates the law as regards interest, differs from Lord Tenterden's Act. tion 113, which is a reproduction of a proviso contained in the Act of Upper Canada, 7 Will. 4. c. 3, s. 20, enacts that "Interest shall be payable in all cases in which it is now payable by law, or in which it has been usual for a jury to allow it." The second branch of that section (as Mr. Justice Street observes) is so loosely expressed as to leave a great latitude for its application. There is nothing in the statute defining or even indicating the class of cases intended. But the Court is not left without guidance from competent authority. In Smart v. Niagara and Detroit Rivers Railway [1862] Chief Justice Draper refers to it as a settled practice “to allow interest on all accounts after the proper time of payment has gone by." In Michie v. Reynolds [1865]7 the same learned Chief Justice observed that it had been the practice for a very long time to leave (6) Up. Can. 12 C.P. 404. (7) 24 Up. Can. Rep. 303. 6 TORONTO RAILWAY v. TORONTO CITY. 4 it to the discretion of the jury to give interest when the payment of a just debt had been withheld. These two cases are cited by Osler, J.A., in M'Cullough v. Clemow, which seems to be the earliest reported case in which the To the same question is discussed. effect is the opinion of Chief Justice Armour in M'Cullough v. Newlove.3 The result, therefore, seems to be that in all cases where, in the opinion of the Court, the payment of a just debt has been improperly withheld, and it seems to be fair and equitable that the party in default should make compensation by payment of interest, it is incumbent upon the Court to allow interest for such time and at such rate as the Court may think right. Acting on this view, the Divisional Court and the Court of Appeal, consisting in all of seven learned Judges, have given interest in the present case, though not without some hesitation on the part of Mr. Justice Britton, in the Divisional Court, and some hesitation on the part of Osler, J.A., in the Court of Appeal. Their Lordships have come to the conclusion that the judgment under appeal ought not to be disturbed. The question is one in which the opinion of those familar with the administration of justice in the Province is entitled to the greatest weight. Their Lordships are not satisfied that the decision of the Court of Appeal, which evidently has been most carefully considered, is in any respect erroneous. Their Lordships will therefore humbly advise his Majesty that the appeal should be dismissed. The appellants will bear the cost of the appeal. Solicitors-Harrison & Powell, for appellants; British Columbia-Railway Company -Foreshore-Public Rights of WayObstruction Statutory Powers-Harbour -Provincial Crown Lands—Jurisdiction of Parliament of Canada-British North America Act, 1867 (30 & 31 Vict. c. 3), 88. 91 and 92-Consolidated Railway Act (Canada), 1879, s. 15-Canadian-Pacific Railway Act, 1881 (44 Vict. c. 1), 8. 18 (a). By section 108 of the British North America Act, 1867, public harbours in each province are within the legislative powers of the Dominion Parliament, and where a foreshore is used for a harbour it must, in accordance with Att.-Gen. for Canada v. Atts.-Gen. for Ontario, Quebec, and Nova Scotia (67 L. J. P.C. 90; [1898] A.C. 700), be regarded as part of a harbour. Under sections 91 and 92 of the British North America Act, 1867, which give the Dominion Parliament legislative authority over railways and other works extending beyond the limits of a province, the Dominion Parliament may dispose of provincial Crown lands for the purposes mentioned in those sections, and by section 18 (a) of the Canadian-Pacific Railway Act, 1881, that power has been exercised. The Consolidated Railway Act, 1879, which is incorporated in the CanadianPacific Railway Act, only applies where its language is not inconsistent with the special incorporating Act. Appeal from a decision of the Supreme Court of British Columbia. The facts and statutory provisions sufficiently appear in the judgment. Wilson, K.C. (Att.-Gen. for British Columbia), C. A. Russell, K.C., and Simon, for the appellant. Sir R. B. Finlay, K.C., Davis, K.C. (of the Colonial Bar), and Rowlatt, for the respondents. *Coram, Lord Macnaghten, Lord Davey, Sir Ford North, and Sir Arthur Wilson. |