32 EXCHEQUER COURT OF CANADA [ 1929 1928 PERCY CHARLES BONHAM AND Oct. CLAIMANTS; . FREDERICK R. JOHNSON 1 Nov. 19. AND HIS MAJESTY THE KING RESPONDENT. AND THE CANADA STEAMSHIP LINES LIMITED, CREDITOR MIS-EN-CAUSE Prescription—Commercial Transaction—Article 2260 Civil Code—Law of of the Province of Quebec The Sarnor, owned by claimants and another, was requisitioned by the Crown during the war, and handed over to the C.S.S. Lines to be operated. The C.S.S. Lines advanced various sums to B. & J. amounting to $25,000 in connection with the Sarnor, and the said B. & J. transferred their interest of 60 per cent in the Sarnor to the C.S.S. Lines as collateral security for the repayment of the said sum. On the 29th September, 1924, the Sarnor became a hulk and was destroyed. By judgments on the Petitions of Right by the co-owners of the Sarnor, B. & J. bacame entitled to recover 60 per cent of $11,000, fixed as the compensation for the Sarnor, and the C.S.S. Lines applied to have this amount paid to them as assignee of B. & J. B. & J. denied any liability and contended that the transaction was of a commercial nature and was prescribed by five years. Held, that it was not in the company's ordinary course of business to advance money for the repair of vessels belonging to others, and that the transaction in question was not one of a commercial nature within the meaning of sub-par. 4 of Article 2260 of the Civil Code, of the Province of Quebec, but was in the nature of a loan only prescribed by thirty years. MOTION by the Creditor Mis -en-cause to be paid out of the fund in Court as assignee of the Claimants. The motion was heard before the Honourable Mr. Justice Audette, at Ottawa. J. A. H. Cameron, K.C., for the Claimants. O. M. Biggar, K.C., for the Crown. W. F. Chipman, K.C., for the Creditor Mis-en-cause. AUDETTE J., now (November 19, 1928), delivered judgment. This is a matter coming up with respect to the distribution of moneys realized as compensation for the requisition of a ship during the Great War, wherein, on the 15th May,
Ex. C.R.] EXCHEQUER COURT OF CANADA 33 1928, by judgments of this Court, the amount of compensa- 1928 tion was duly fixed in respect of the same, at the total sum BorrHAM of $11,000; the claimants in this case and the claimants in Jos eoN the case of McKay (No. 7372) making claim thereto. By v. such judgments it was inter alia provided that THE KING. AND the compensation moneys would only be paid after hearing all parties THE claiming to be entitled to the same, or any part thereof, and the matter CA LI N N A ES D H A Z P of the distribution of these $11,000 could be brought on before this Court LINES LTD. byanyof the parties interested making a claim thereto, upon giving notice to all interested parties. Audette J. When the matter came up before this Court upon this reserve, the interest of the claimant McKay was duly disposed of and upon application, the Canada Steamship Lines Ltd. were mis-en-cause as party creditors, asking to be collocated upon these $11,000 in lieu and place of the claimants in this case, under an agreement or covenant (Exhibit B.) passed between themselves and the claimants. This agreement reads as follows, viz:— THIS INDENTURE MADE IN TRIPLICATE, THE 22ND DAY OF FEBRUARY, 1919. BETWEEN :— FREDERICK R. JOHNSON, of the Town of Port Colborne. Province of Ontario, Master Mariner, and PERCY CHARLES BON-HAM, of the City of Montreal, Province of Quebec, Marine Engineer and Surveyor, hereinafter called THE ASSIGNORS; Of the First Part; AND CANADA STEAMSHIP LINES LIMITED, a body politic and corporate, having its principal office in the City of Montreal, here-inafter called THE ASSIGNEE; Of the Second Part; WHEREAS the assignors are owners of a sixty per cent (60%) equitable interest in the Steamship Sarnor, subject to the provisions of the Judgment of the Appellate Division of the Supreme Court of Ontario, dated January sixteenth, 1918, in an action in which A. B. MacKay, of the City of Hamilton, is plaintiff, and the assignors are defendants, and also subject to the provisions of the judgment of the Honourable Mr. Justice Latchford, in the Supreme Court of Ontario, dated June twelfth, 1918, in an action for an accounting in which the assignors are plaintiffs and A. N. MacKay is defendant; WHEREAS said Frederick R. Johnson is registered as owner of the said steamship Sarnor in the Registry Office at the Port of Montreal, Province of Quebec; WHEREAS the assignors have agreed with the assignee to assign their said interest in the steamship Sarnor as collateral security to secure the assignee against any loss on account of having up to date disbursed money in connection with the said Sarnor to the sum of twenty-five thousand dollars ($25,000), as also against all and any loss that may be suffered by 76551-2a
34 EXCHEQUER COURT OF CANADA [ 1929 1928 said assignee from and in connection with any moneys the assignee may hereafter advance in connection with the said vessel either for the main- BONHAM AND tenance or the operation thereof; JOHNSON Now THIS INDENTURE WITNESSETH :— THE y K ' INo . 1. In consideration of the premises, the assignors hereby assign to the AND assignee, their said interest in the steamship Sarnor as collateral security THE to secure the repayment to the assignee of the sum of twenty-five thousand CANADA dollars ($25,000), as also any other sum or sums which the assignee may, STEAMSHIP LINES LTD. as hereinabove mentioned, be called upon to pay in connection with the said steamship Sarnor and litigation now pending in connection with the Audette J. ownership of same; 2. The assignors hereby give the assignee the right or option to purchase the assignors' said interest in said steamship Sarnor for the sum of five thousand dollars ($5,000), of which two thousand five hundred dollars ($2,500) would be payable to the said assignors and two thousand five hundred dollars ($2,500) to one J. H. Cameron, Barrister, on account and in deduction of his bill for services in connection with the said steamship Sarnor provided the said Cameron will have a valid claim against the said assignors and the said vessel far said services to the extent of the said sum of two thousand five hundred dollars (S2,500); 3. The present option, which is given in consideration of the payment by the assignee to the assignors of the sum of One Dollar ($1), is to be valid and hold good up to and including the twenty-first day of Febru-ary next, 1920; 4. It is hereby declared and agreed that these presents and everything herein contained shall respectively be binding upon and enure to the benefit of the executors, administrators, successors and assigns of the parties hereto respectively." The option to purchase therein referred to was never acted upon and lapsed. The parties then filed the following admission:— Under reserve of allegations in pleadings herein, particularly allegations in amended defence, and for the purpose of this action only, the abject being to save time and costs, I admit, on behalf of claimants: (a) That not less than $25,000 was paid out by the Canada Steamship Lines, Limited, on behalf of steamship Sarnor up to the date of the assignment, namely, February 22, 1919; (b) That subsequent to February 22, 1919, further sums were paid as aforesaid, the last payment being a payment of $500, having been made August 12, 1922. Made in Court, October 5, 1928, by consent. J. A. H. CAMERON, Attorney for claimants Percy Charles Bonham and Frederick R. Johnson. BROWN MONTGOMERY AND MCMICHAEL, Attorneys for intervenant. The claimants deny any liability to the Canada Steamship Lines Limited (hereinafter called the Company), asserting that the transaction between them is of a commer-
Ex. C.R.] EXCHEQUER COURT OF CANADA 35 cial nature and is prescribed by 5 years under subsec. 4 of 1928 Art. 2260 C.C.P.Q., which reads as follows: BONHAM 4. Upon inland or foreign bills of exchange, promissory notes, or notes JoaA NDso N v. for the delivery of grain or other things, whether negotiable or not or v. upon any claim of a commercial nature reckoning from maturity; this THE Kiuo. prescription does not apply to bank notes. AND THE The question as to whether or not a transaction is of a CANADA commercial nature is rather impossible of precise defini- tion, and the will alone of the parties will not make it so. — Would it not seem that these words used in Art. 2260 should Audette J. be approached and considered as ejusdem generis with matters therein mentioned, thus eliminating a transaction in the nature of the one subject to the present controversy. Moreover if the delay for prescription is to be reckoned, as mentioned in the article, from maturity, it would seem that as long as the vessel remained in possession of the company, or was in existence, that prescription could not run and that it only began to run on the 29th September, 1924, when the vessel became a hulk and was destroyed for all practical purposes, a date determining that statement alleged in the claimants' written argument. Should not therefore the prescription, if any, run from that date? If so, the delay of five years is wanting. See Planiol, Droit Civil, vol. 2, p. 759, no. 2462. The claimants are mariners and the company runs dif- ferent lines of vessels. It is not in the nature of the claim- ants' occupation to purchase vessels or portions thereof, and it is not in the ordinary course of business of the com- pany to advance moneys for the purposes of repairing ves- sels belonging to others. All of this occurred as a result of the Great War and was but a casual transaction, a civil loan, outside of their respective usual occupation. The vessel, after being requisitioned, has been the subject of long, protracted and numerous litigations, before the matter of compensation came before this Court. In the result it appears that the $25,000 and more advanced by the company was nothing but a loan to the claimants for the purposes of repairing the vessel, to put her in operation during the war. The company at no time became owner of the same. The vessel has disappeared, and there is no privilege attaching to the same for the loan so made for her repair, but the civil obligation between the 76551-2ja
36 EXCHEQUER COURT OF CANADA [1929 1928 parties to the agreement is still extant and I fail to see any BONHAM justification by the claimants to repudiate to-day the obli-JoHA gation assumed under this indenture. This agreement sow D. (exhibit B) shows that the parties were acting in good faith THE KING. AND and they intended the contract to be as set forth. The THE company did actually advance the money and the claim-CANADA STEAMSHIP ants received the benefit of the same. Salvas v. Vassal (1). LINES LTD. The claim may rest on the loan appearing in the in-Audette J. denture as a civil debt or obligation, outside of any privilege. Macdonald v. Dillon (2) ; DeSola v. DeSola (3) ; Casgrain v. Prevost (4); Laliberté v. Godoua (5). The moneys advanced were in the nature of a loan which can only be prescribed by thirty years and the claim is not affected by the five years prescription under art. 2260. Darling v. Brown (6). Therefore, the sum of $6,600 found coming to the claimants as owners of 60 per cent of the vessel, will be paid to their assignee, the Canada Steamship Lines Company, Limited, with costs of this issue in favour of the latter. Judgment accordingly.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.