The business of the taxpayer ("N.B.") comprised the selling of stoves in Quebec that were manufactured by an affiliated company whose manufacturing facilities were in New Brunswick. N.B.'s key employee ("Dukelow") resided in Montreal, was in charge of N.B. stock that was kept in a Montreal warehouse owned by an independent warehouse company, attended twice daily at the warehouse in order to handle various matters including approving the orders of other salesmen for shipment, and appeared to all and sundry as the taxpayer's Montreal agent. In finding that the taxpayer had a permanent establishment in Quebec under the predecessor of what now is Regulation 400(2)(b), Mr. Weldon stated (p. 665), that the taxpayer carried on business in Quebec:
"through an employee, Ralph Dukelow, who not only had general authority (which obviously did not need to include power to quote special prices) to make contracts for N.B. but who had a stock of merchandise owned by N.B. (the stock in [the] Montreal warehouse was under Mr. Dukelow's control) from which he regularly filled the various substantial orders which he received."
In addition, "it would be reasonable to treat the Montreal warehouse as that of the taxpayer in a broad sense thereby bringing it within Regulation [400(2)]" (p. 666).
Speaking more generally, he stated at (p. 669) that the taxpayer had a permanent establishment in Quebec because there was an affirmative answer to the following question:
"Is there a definite sales organization large or small in that province, set up on a permanent or stable basis, which is clothed with authority to transact business, complete sales contracts, and arrange shipment of the products covered thereunder?"
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