Treacey v. Liggett, (1883) 9 SCR 441

Supreme Court Of Canada

Treacey v. Liggett, (1884) 9 SCR 441

Date: 1884-01-16

DAME ELLEN TREACEY et vir., (Defendants.)

Appellants

AND

THOMAS LIGGETT et al, (Plaintiffs)

Respondents.

1883: Nov 16; 1883 Nov 17; 1884: Jan 16.

Present. — Sir W. J. Ritchie, C.J., and Strong, Fournier, Henry, and Gwynne, J J.

ON APPEAL FROM THE COURT OF QUEEN'S BENCH FOR THE PROVINCE OF QUEBEC (APPEAL SIDE).

Articles 803,103 1/2: C. C. P. Q.—Donation in marriage contract—Proof of insolvency of donor at date of donation necessary to set aside.

On 28th June, 1876, L. et al sold to M. T. a property for $12,250, of which price $3,789 were paid in cash. On 16th June, 1879, E. T., daughter of M. T., married J. K., and in their contract of marriage M. T. made a donation to his daughter, E. T., of certain property of considerable value, and remained with no other property than that sold to him by L. et al. In July, 1881, L. et al brought an action to set aside the gift in question, claiming that, the property sold having become so depreciated in value as to be insufficient to cover their claim for the balance remaining due to them and secured only by the property so sold, the gift in this marriage contract had reduced M. T. to a state of insolvency, and had been made in fraud of L. et al, and that at the time the gift was made M. T. was notoriously insolvent. M. T. pleaded, inter alia, denying averments of insolvency, fraud, or wrong-doing. The only evidence of the value of the property still held by M. T. at the date of the donation, 16th June, 1879, was the evidence of an auctioneer, who merely spoke of the value of the property in November, 1881, and that of a real estate agent, who did not know in what condition the property was two years before, but stated that it was not worth more than $6,000 in November, 1881, adding that he considered property a 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 to obtain the revocation of the gift in question, it was incumbent on the plaintiffs to prove the insolvency or déconfiture of the

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donor at the time of the donation, and that there was no proof in this case sufficient to show that the property remaining to the donor at the date of his donation was inadequate to pay the hypothecary claims with which it was charged.

APPEAL from a judgment of the Court of Queen’s Bench for Lower Canada (appeal side) ([1]), affirming the judgment of the Superior Court.

This was an action brought to set aside a gift made by Martin Treacey to his daughter Ellen Treacey and to her husband John Killoran, contained in their marriage contract executed 16th June, 1879, to which Martin Treacey was a party for the purpose among other things of conveying to them, in consideration of their marriage, property of considerable value.

The wrong which Liggett et al complained of was, that having sold Martin Treacey a property on the 28th June, 1876, which had only been partly paid for, a balance remained due to them thereon secured only by the property so sold, which having become depreciated in value was insufficient to cover their claim, that the gift in this marriage contract had reduced Martin Treacey to a state of insolvency and had been made in fraud of Liggett et al whose claim remained unsatisfied; they further alleged that at the time the gift in question was made, Martin Treacey was notoriously insolvent, that he had remained in possession of the property so given, the same as before the date of the gift, and that a year had not elapsed since they, Liggett et al, had become aware of the existence of the donation; they therefore claimed that the donation in question should be set aside and annulled.

The defendants each pleaded separately, but to the same effect, by a special categorical denial of each of the averments in the declaration, especially the averments of insolvency, fraud, or wrong-doing.

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The facts shown in evidence were that by deed dated the 28th June, 1876, Liggett et al. had sold Martin Treacey a property for $12,250, whereof $3,787 were paid in cash, and the balance was made payable to the acquittal of Liggett et al, viz: $403 to A. M. Foster, 1^st November, 1876, and the balance to the Liverpool, London & Globe Insurance Co. as follows, viz: $4,030 on the 1st July, 1878, and $4,030 on the 1st July, 1883.

That the contract of marriage complained of was made 10th June, 1876, and contained a large amount of valuable property which Martin Treacey thereby transferred to his daughter and son-in-law, and was duly registered.

That besides the property he gave to his daughter and her husband, Mr. Treacey held no other than that sold to him by Liggett et al. ; also that they had taken judgment against him for the first instalment due under his deed of purchase, and seized and sold his moveables; further that since his daughter’s marriage, she and her husband had lived on the property he had given her.

There was no proof of fraud or collusion on the part of the daughter or of her husband.

As to proof of the value of the property still held by Martin Treacey at the date of the donation 16th June, 1879, two witnesses were examined on the 12th November, 1881.

William J. Shaw, auctioneer, stated that on that day, 12th November, 1881, sub-divison No. 40, No. 1206 St. Ann's ward, he considered worth about $6,000.

Oliver W. Stanton, real estate agent, being examined, stated that he considered about $6,000 a very fair value of No. 1206 sub-division 40, St. Ann's ward. The houses, he said, were in bad order and the building also.

He was asked: “Is it worth to-day as much as it

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was two years ago ? A. I did not see it two years ago.”

“Q. Supposing the property to be in the same state, was it more valuable two years ago than to-day? A. No; I consider property a little better now than it was two years, ago, although there is very little change in price.”

The Superior Court rescinded the donation made by contract of marriage to the female appellant by her father Martin Treacey, and that judgment was affirmed by the Court of Queen’s Bench for Lower Canada (appeal side.)

From these judgments the appellants, Dame Ellen Treacey et vir, as well for themselves personally as beneficiary heirs to the estate of the late Marlin Tracey, appealed to the Supreme Court of Canada.

The question which arose on this appeal was, whether the respondents had proved their averment in their declaration, that Martin Treacey was at the date of the said donation, and before, notoriously insolvent, en déconfiture and unable to pay his debts, and were entitled under art. 803 C. C. to obtain the revocation of the gift. Other points were argued by counsel but the court did not think it necessary to express any opinion on them.

Mr. Doutre, QC., and Mr. Joseph for appellants, and Mr. Branchaud for respondents.

Ritchie, C.J.:— .

The whole question turns on whether Martin Treacey was solvent at the time he made this conveyance, or whether making the conveyance which he did rendered him insolvent. For the reasons given by Mr. Justice Cross, and with which I entirely agree, and to which I have nothing to add, I think this appeal should be allowed. That is to say, I am of opinion that the insolvency of the party was not established.

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Strong, J:

For reasons substantially the same as those given by Mr. Justice Cross, I am of opinion that we ought to allow this appeal. Without entering upon a consideration of the important point of law which is dealt with in the opinion of the learned Chief Justice of the Court of Queen’s Bench, but assuming, for the present purpose, that the law is as he states it, that a donation of immovable property by a father to his daughter, on the occasion of her marriage, is to be considered a gratuitous alienation, I am still of opinion that the proof in the present case is inadequate to invalidate the gift made by Martin Treacey to his daughter. Article 803 of the Civil Code provides that:

If at the time of the gift, and deduction being made of the things given, the donor were insolvent, the previous creditors, whether their claims are hypothecary or not, may obtain the revocation of the gift, even though the donee were ignorant of the insolvency.

Fraud must be proved, and is not to be presumed. Therefore, it was incumbent on the respondents to show that the property remaining to Martin Treacey, after he had made this donation to his daughter, was inadequate in value to pay the hypothecary claims of the respondents with which it was charged.

This property had been sold by the respondents to Martin Treacey, on the 28th June, 1876, for $12,250, of which price $3,787 had been paid in cash. There is a presumption, therefore, that on the day of donation by Martin Treacey to his daughter, the 10th of June, 1879, the property still remained of more than sufficient value for the residue of the unpaid purchase money.

The question we have to decide is, therefore, reduced to this: is it sufficiently proved that the property on the 10th June, 1879, was so reduced in value as to be worth less than the portion of the sum remaining unpaid, in other words, is the primâ facie presumption destroyed by the counter testimony of witnesses ?

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Only two witnesses were examined on the point of value.

William J. Shaw's evidence is not material, since he merely speaks of the value at the date of his examination, which was the 12th November, 1881.

Stanton, a real estate agent, says that $6000 was the fair value at the date at which he speaks—in November, 1881. He says, he did not know the property two years ago. He then adds, he considers property a little better (when he speaks) than it was two years ago.

It appears to me, that this evidence of a single witness is much too vague and general to repel the fair inference arising from the circumstance of the sale in 1876, especially considering the well known fluctuations in the value of land in cities and towns in this country. It is true, that the only way of fixing a valuation in questions of this kind is by the estimation of persons having dealings in real estate, or otherwise experienced in its value, like the witness; but, certainly, it would be most unsafe to act on evidence like this, when it must have been easily within the power of the respondents, upon whom the burden of proof lay, to establish the value at the date of the marriage settlement by the evidence of witnesses who knew the property at that time. I doubt, indeed, if such evidence as this ought to be acted on, even in a case where there was no such criterion of the value afforded as there is here by the price agreed to be paid under the previous sale, to which the creditors were parties, but under the circumstances of the present case it seems clear to me, that there is not such distinct and clear proof of insolvency as is required to warrant the revocation of the donation.

I think the appeal should be allowed, and the action dismissed with costs in this court and the court below.

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FOURNIER, J.:

Le 28 juin 1876, les Intimés vendirent à Martin Treacey, un des Appelants, un lot de terre avec bâtisses, pour la somme de $12,250, à compte de laquelle ils reçurent au moment de la passation de l’acte de vente $3,787. La balance était payable avec intérêt à 7 p. c. comme suit: $403.00 à A. M. Foster avec intérêt au 1er novembre 1876, $4,030.00, le 1er juillet 1878, et $4,030, le 1er juillet 1883.

Le 19 juin 1879, Martin Treacey intervint au contrat de mariage de sa fille, Ellen Treacey, avec John Killoran, et lui fit donation de toutes ses propriétés à l’exception de celle qu’il avait achetée des Intimés. Ceux-ci ont, par leur action en cette cause, demandé la revocation de cette donation, comme faite en fraude de leur droit, et parce qu’à l’époque de cette donation, le donateur Martin Treacey était notamment insolvable et en déconfiture. Cette dernière allégation étant la base principale de l’action, il est important de la donner textuellement, afin de faire voir clairement la position prisepar les Intimés:

That the said Martin Treacey was at the date of the said donation and before notoriously insolvent, en déconfiture, and unable to pay his debts, and has ever since remained so to the full knowledge of the said Ellen Treacey and husband, who acted with the said Martin Treacey in fraud and collusion, to impair the interests of the said Plaintiffs.

That by the said deed of donation which was gratuitous and made by the said donor and accepted by the said donee fraudulently and with intent to defraud the said Plaintiffs in particular, the said donor divested himself in favor of the said donee, of a property which was the common pledge of his creditors.

Ils ont de plus allégué que l’existence de cette donation n’était parvenue à leur connaissance que depuis moins d’un an.

Les Intimés ont par des défenses séparées nié spécialement toutes les allégations de la déclaration et plus particulièrement celles concernant la fraude et l’iusolyabilité.

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Ils ont aussi invoqué la prescription intro-duite par l’art. 1040 C.C.

Le jugement de la Cour Supérieure, confirmé par celuide la Cour du Banc de la Reine, a maintenu l’action et' annulé la donation tout en ordonnant la discussion des autres biens de Martin Treacey.

La question très controversée de savoir si la donation contenue dans un contrat de mariage doit être considérée faite à titre gratuit ou onéreux, a été discutée par plusieurs des honorables juges appelés à decider cette cause.

Cette question qui pourrait être de la plus haute importance en certains cas, à cause de la différence de la preuve que la loi exige suivant le caractère de l’acte, n’en a aucune dans la présente cause; car la prevue est tout à fait insuffisante pour établir les allegations de fraude, d’insolvabilité notoire et déconfiture qui sont les éléments essentiels de l’action révocatoire. Si la preuve en eût été faite, il est indubitable que le jugement rendu en cette cause aurait bien jugé, mais il est évident que cette preuve fait défaut.

D’abord quant à la preuve de fraude et de collusion de la part d’Ellen Treacey et de son mari, il n’y a pas eu la moindre tentative de la faire. Quant à la prevue de l’insolvabilité, à la date de la donation, il n’y en a aucune preuve non plus, si ce n’est celle que les Intimés prétendent tirer de l’admission de faits des Appelants, que Martin Treacey n’avait pas à cette époque d’autrepropriété que celle achetée des Intimés (“no other property but the one purchased from plaintifs in this cause.”)

Cette admission qui ne fait pas mention des propriétés mobilières, ne fait pas preuve d’insolvabilité et encore moins de déconfiture. Pour suppléer à cette insuffisance et dans le but d’arriver, faute de preuve directe, à prouver l’insolvabilité, les Intimés ont fait entendre deux témoins au sujet de la valeur de la

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propriété en question. M. J. Shaw, l’un d’eux qui a été entendu, le 12 octobre 1881, estime la propriété en question à $6,000. L’autre, Olivier W. Stanton, l’estime aussi à $6,000. Il dit que les bâtisses étaient en mauvais ordre. A la question qu’on lui a faite pour savoir si cette propriété valait autant il y a deux ans, il répond qu’il ne l’a pas vue à cette époque Elle pouvait alors valoir beaucoup plus, si elle était en bon ordre, mais le témoin n’en sait rien. Ainsi ces deux témoins ne font mention de la valeur de la propriété en question qu’à l’époque de leur examen, le 12 novembre 1881. Ce qu’elle pouvait valoir plus de deux ans auparavant, à l’époque de la donation du 16 janvier 1879, ils n’en savent rien. Devonsnous présumer que cette propriété vendue $12,253 le 28 janvier 1876, n’en valait plus que $6,000 le 16 janvier 1879, 3 ans après? Non, car lorsqu’il s’agit de prouver l’insolvabilité, c’est Police accident report from New York State Department of Motor Vehicles dated des preuves directes qu’il faut le faire. Aucune tentative n’a été faite de la part des Intimés pour prouver la valeur de cette propriété à l’époque de la donation D’après la manière qu’ils ont fait leur preuve ils semblent avoir complètement perdu de vue que le fait essentiel à prouver était la valeur à l’époque de la donation, afin de démontrer que déduction faite des propriétés données il ne restait plus assez de biens à Martin Treacey pour payer ses dettes. Ils semblent aussi avoir été sous l’impression que dans un cas comme celuici, de simples présomptions seraient suffisantes pour faire la preuve requise, mais ils ont oublié qu’il s’agit dans cette cause de faire annuler un acte solennel entre non commerçants, et qu’ici les présomptions ordinaires, suffisantes lorsqu’il s’agit de l’annulation d’actes de commerçants en fraude de leurs créanciers, ne peuvent recevoir aucune application.

Il faut encore remarquer que quant à la preuve de l’in-solvabilité, il n’en est pas de même que pour celle de la

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fraude; si celle-ci, faute de preuve directe, peut être prouvée par des preuves indirectes, il faut au contraire pour établir l’insolvabilité ou la déconfiture, des preuves directes et positives.

 Pardessus dit ([2]):

La déconfiture est la position du non-commerçant qui se trouve par l’accumulation de condamnations ou de poursuites dirigées contrelui, hors d’état de payer ce qu’il doit.

Qu’un simple particulier laisseprononcer contre lui des condamnations, ne paie personne, quoiqu’il ait des meubles ou des immeubles, il ne sera pas en déconfiture, car ses créanciers peuvent le saisir, l’exproprier. Il n’y a de déconfiture que là seulement où la discussion.de tous les biens ne produit pas l’acquittement de toutes les dettes.

Si telle eût été la position de Martin Treacey le 16 juin 1879, il eût été facile d’en faire la preuve par la production de condamnations et de poursuites dirigées contre lui, et en constatant d’une manière précise la valeur, à cette époque, de la propriété qui lui restait, après la donation,—la valeur de ses biens meubles et le montant exact de ses dettes; on pouvait aisément Police accident report from New York State Department of Motor Vehicles dated ce procédé arriver à faire la preuve nécessaire d’insolvabilité. Cette preuve les Intimés s’étaient engagés à la faire par les allégations de leur déclaration. En basant, comme ils l’ont fait, leur action sur l’art. 1034, ils devaient prouver l’insolvabilité de Martin Treacey à la date de l’acte de donation dont ils se plaignent. Un autre article non moins positif sur ce point, rendait encore cette preuve obligatoire. L’article 1034 C. C. dit:

Si, au temps de la donation et distraction faite des choses données, le donateur n’était pas solvable, les créanciers antérieurs, hypothé-caires ou non, peuvent la faire révoquer quand même Insolvabilité n’aurait pas été connue du donataire.

La preuve faite ne justifie nullement le principal considérant du jugement déclarant “qu’il a été prouvé “ que le défendeur Martin Treacey s’est rendu insolvable

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par la donation dont il est question en cette “cause, et qu’il était insolvable lors de Vinstitution de la “présente action, et que les immeubles qui lui restaient “n’étaient pas suffisants pour assurer le paiement de ses “dettes et nommément de la créance des demandeurs.”

Quant à la dernière partie de ce considérant declarant Martin Treacey insolvable lors de l’institution de l’action qui a été signifiée plus de deux ans après la date de la donation, il est évident qu’elle doit être sans effet sur le sort de cette cause, car elle est en contradiction manifeste avec les articles 1034 et 803, exigeant la preuve de l’insolvabilité à la date de l’acte attaqué. Mais elle fait voir que les honorables juges qui ont rendu ce jugement n’ont pas trouvé de preuve au dossier les autori-sant à déclarer que l’insolvabilité existait au temps de la donation. Dans la première partie du considérant, quoiqu’il soit déclaré que Martin Treacey s’est rendu insolvable par la donation en question—il n’est pas dit quand cet effet s’est produit. Est-ce au moment de la donation ? - si c’est là l’interprétation qu’il faut donner au jugement, il est clair qu’il n’y a aucune preuve pour justifier cette conclusion. Pour en arriver là, il faudrait, comme il a été dit plus haut, avoir un état exact de la position de Martin Treacey au temps de la donation. Il faudrait être en élat de dire si, après déduction faite des propriétés données il ne lui restait pas assez de biens pour payer ses dettes. Il n’y a dans le dossier aucune preuve quelconque sur laquelle on puisse baser cette opération. Pourtant, d’après l’article 803, c’est la manière de constater l’insolvabilité. Cette première paitie du considérant n’est pas plus justifiée par la preuve que la seconde.

De l’existence, reconnue par la Cour, de l’insolvabilité de Martin Treacey, lors de la signification de l’action a-t-on voulu en induire qu’il en résultait une présomption

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de fraude comme celle dont Ricard fait mention dans son Traité des Donations ([3])?

Il y a peu d’analogie entre les deux cas. Dans celui dont parle Ricard il s’agissait de savoir si la donation était sujette à l’insinuation. Il est vrai qu’il dit que “ le sort de la contestation fut sur ce qu’il y avait une présomption violente que le père avait fait à son fils, par son contrat de mariage, la donation dont il s’agissait, en fraude de ses créanciers, en conséquence de ce qu’elle contenait tous les immeubles qu’il possédait et qu’il avait fait banqueroute un an après.” Il y a cette différence importante dans le cas présent, que la donation n’est pas de tous les immeubles—et que l’insolvabilité n’est survenue que plus de deux ans après la donation dont il s’agit,—tandis que dans le cas cité par Ricaid la banqueroute avait lieu un an après, et que la donation était de tous les immeubles. L’insolvabilité survenue à une époque rapprochée des actes allégués pourrait bien former une présomption de fraude,—prouver l’intention de fraude, consilium fraudis,—mais cela seul ne suffirait pas pour faire prononcer la nullité, il faudrait encore pour se conformer à une autre condi-tion essentielle de l’action révocatoire, prouver que cette insolvabilité est la conséquence Je ces actes afin d’établir le préjudice causé, eventus damni, sans lequel l’action ne peut exister.

Aubry et Rau ([4]) disent à ce sujet:

L’exercice de l’action Paulienne suppose avant tout un prejudice causé aux créanciers qui l’intentent, et ce p’éjudice ne se comprend que moyennant le concours des trois conditions suivantes:

Il faut, en premier lieu, que les biens du débiteur soient insuffisants pour le paiement de ses dettes. Si son insolvabilité ne se trouvait encore, ni établie par sa déconfiture, ni légalement presume à raison de sa faillite, le créancier demandeur devrait pour la justification de son action, discuter au préalable les biens du débiteur

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à l’exception cependant de ceux dont la discussion présenterait trop de difficultés.

Il faut, en second lieu, que le préjudice soit résulté pour le créancier de Pacte contre lequel son action eat dirigée, en d’autres termes, que le débiteur ait été audessous de ses affaires dès avant la passation de l’acte attaqué, ou que du moins son insolvabilité en ait été la cause reconnue.

Chardon dit ([5]):

De même que le dessein de tromper, sans un préjudice effectif n’autorise pas l’action révocatoire, le préjudice éprouvé ne permet de l’accueillir qu’autant qu’il a été la conséquence d’une intention hostile; Consilium fraudis, et even tus damni. L’article 1167 du Code civil offre le même sens, puisqu’il n’autorise les créanciers à critiquer que les actes faits par leurs débiteurs en fraude de leurs droits.

Les créanciers doivent donc prouver, et le dommage qui leur est fait, et l’intention qu’a eue leur débiteur de le leur faire. Il est essentiel de faire cette preuve.

Bedarride dit ([6]):

La seconde condition imposée au créancier suivant l’action révocatoire, est de prouver l’insolvabilité du débiteur. Cette action est essentiellement subsidiaire. Elle ne peut être exercée que pour amener le paiement que les biens restants sont, par leur insuffisance, dans l’impossibilité d’effectuer. Il faut donc préalablement établir cette insuffisance.

Cette condition se justifie avec autorité par cet autre principe que, pour intenter une action, il ne sut pas d’avoir qualité, qu’il faut surtout y avoir intérêt.

Chardon dit encore ([7]):

Pour établir la fraude du donateur, il suffit de prouver son infortune au moment de la donation, parce qu’en effet si alors ses dettes surpassaient son avoir, il ne pouvait en rien donner qu’au prejudice de ses créanciers. C’est donc ce préjudice que doit prouver celuiqui se plaint.

Demolombe dit ([8]):

Le préjudice éprouvé par les créanciers, c’est-à-dire l’insolvabilité du débiteur résultant de l’acte qu’ils attaquent, telle est donc la première condition, sous laquelle l’action Paulienne est recevable.

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Aussi, le premier moyen du tiers défendeur est-il, en effet, luimême tiré de l’absence de préjudice et de la solvabilité du débiteur. Le tiers défendeur peut, en conséquence, à moins que le débiteur ne se trouve déjà en état de faillite ou de déconfiture ouverte, demander qu’il soit préalablement discuté dans ses biens.

C’est en ce' sens que l’on a dit, avec raison, que l’action Paulienne est seulement subsidiaire ; en ce sens qu’elle ne peut être exercée qu’à défaut ou en cas d’insuffisance des autres biens du débiteur  bonis ejus excussis.

Comme on le voit par ces autorités qu’il, serait facile de multiplier, la condition première, comme le dit Demolombe, sous laquelle l’action des Intimés était recevable était le préjudice lui résultant de l’acte de donation attaqué. Ils ne pouvaient exercer leur action qu’en cas d’insuffisance des autres biens de Martin Treacey, constatée par une discussion préalable de ses biens Cette condition est exigée par les autorités ci-dessus citées,—à moins que le débiteur ne soit déjà en faillite ou en déconfiture ouverte. Non seulement les biens de Martin Treacey n’ont pas été discutés avant l’émanation de l’action révocatoire, mais la preuve de son insolvabilité au temps de la donation, condition essentielle du succès de leur action, n’a pas été faite.

Quant à la question de savoir si les Intimés devraient discuter les biens de Martin Treacey avant de porter leur action, je ne crois pas que les circonstances de cette cause m’obligent à la décider Cependant, je ne puis m’empêcher de reconnaître que les autorités citées plus haufrqui comptent parmi les plus considérées, sont en faveur de la discussion et la considèrent obligatoire, à moins que le débiteur ne soit en faillite ou en déconfiture ouverte. Mais comme d’après la preuve en cette cause, on pouvait considérer Martin Treacey comme insolvable à l’époque de l’émanation de l’action, cette circonstance rendait, suivant l’opinion de Demolombe, l’action recevable. Mais pour réussir à faire annuler la

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donation attaquée, il aurait fallu établir par des preuves directes et positives, que cette insolvabilité remontait à la date de la donation attaquée, ou que la donation ellemême était la cause de l’insolvabilité.

En outre des observations que j’ai faites sur la nature de la preuve de l’insolvabilité, je dois déclarer que je concours dans celles qui ont été faites sur le même sujet par l’honorable juge Cross.

Pour tous ces motifs je suis d’opinion que l’appel doit être reçu.

HENRY, J.:—

I am entirely of the same opinion. I think the party was bound to prove that at the time of the transfer from Treacey to his daughter and her husband he was insolvent. I may say that no such evidence has been given. We are asked to presume that because one man put a valuation of $6,000 on the property two years and a-half afterwards, therefore it was not worth $8,000 at the time of the conveyance. It is a principle that not only must fraud be alleged, but it must be also proved. He undertakes to assert that that was a fraudulent and illegal transaction, and that the party became insolvent by the mere fact of making that transfer. Now, have we any reason to assume fraud ? On the contrary, I think we are bound to assume the reverse on this occasion. At the time of the transfer he paid nearly onethird of the whole amount, leaving $8,000 due. At the time of the donation we could hardly assume that the property had fallen so much in value as to be worth no more than $6,000, that is, depreciated in value to the extent of one-half. I think if property went down by degrees and had two years to go down after the transfer of this property, we may assume that at the time this donation was made it had not got down to the depth of $6,000. I see no reason for imputing fraud in

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this case. He, the father of Mrs Killoran, was growing old, he had no wife and but one daughter. He was making provision for his daughter and probably for his own support in his old days. I cannot, under the circumstances, imagine, without express proof of fraud, that we are justified in assuming it. I think the appeal ought to be allowed with costs.

Gwynne, J.:

I concur in the opinion that the plaintiffs have wholly failed to prove the case stated in their declaration.

The object of the action is to have a donation of realty, made by one Martin Treacey to his daughter Ellen on the occasion of her marriage, declared to be fraudulent and void and set aside, to enable the plain-tiffs to recover thereout a balance due by the father upon a purchase of other property made by him from the plaintiffs three years previously to the daughter’s marriage, and for securing which balance, amounting to two-thirds of the purchase money, the plaintiffs at the time of the sale to Martin Treacey had taken back from him a mortgage upon the property sold by them to him.

There are three paragraphs in the declaration upon which the plaintiffs rest their right to obtain the relief sought by the action, upon their establishing any one of which they would be entitled to recover. The first is:

That the said Martin Treacey made the said donation to the said Ellen Treacey, his daughter, with a view to defraud the said plaintiffs in depriving them of the means of securing the payment of the said balance of the said price of sale herein above recited, the said defendants knowing well at the time that the property sold under the deed of sale was, and is, insufficient to secure the payment.

The second paragraph is:

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That the said Martin Treacey was at the date of the said donation, and before, notoriously insolvent, en déconfiture; that is to say, hopelessly insolvent and unable to pay his debts, and has ever since remained so to the full knowledge of the said Ellen Treacey and husband, who acted with the said Martin Treacey in fraud and collusion to impair the interests of the said plaintiffs.

The third paragraph is:

That by the said deed of donation, which was gratuitous and made by the said donee fraudulently and with intent to defraud the said plaintiffs in particular, the said donor divested himself in favor of said donee of a property which was the common pledge of his creditors.

It will be observed that in none of these paragraphs do the plaintiffs seek to avoid the contract in virtue of the provisions of the 1084th article of the civil code, namely, that the donation was gratuitous and that the donor was insolvent at the time of making it, although that is really the sole ground upon which the respondents rest their contention, that the judgment of the court below should be supported. The ground relied upon in the first of the above paragraphs states nothing affecting the solvency of Martin Treacey. It charges that the donation was made with intent to defraud the plaintiffs who were his creditors by mortgage. Unless made with intent to defraud, it could not be avoided at the suit of a creditor of the donor, but the paragraph proceeds to specify the particular mode whereby this intent to defraud was to be carried out, namely, that by this donation the plaintiffs would be deprived of the means of securing the balance due to them on their said mortgage security, the defendants well knowing at the time of making the donation that the property held by the plaintiffs in mortgage was insufficient to secure payment of the money secured by the mortgage. The gist of this paragraph plainly is that the intent to defraud charged in it is manifested by the knowledge imputed to Marlin Treacey, that at time of

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making the donation, he well knew the property held by the plaintiffs in mortgage was insufficient to secure payment of the mortgage debt. Now, not to rest upon the absence from this paragraph, and indeed from the ’ declaration, of an averment (to bring the case as stated in this paragraph within the 1038th section of the civil code, namely, that beside having been made with intent to defraud, the donation would have the effect of injuring the creditor,) to the effect that the donor had no property out of which the alleged deficiency of the mortgaged property to pay the mortgage debt could be supplied other than the property donated, it is sufficient to say in answer to the case as alleged in this paragraph, that there has been no evidence offered of a character sufficient to establish that Martin Treacey had any such knowledge as is imputed to him, or that he entertained any intent to defraud the plaintiffs when he made the donation, or that he made it with that intent. Indeed there is no sufficient evidence, that as a matter of fact, at the time of the donation in June, 1879, the property purchased by Treacey from the plaintiff in 1876 was not worth the two-thirds of the purchase money for which he purchased the property.

The charge as alleged in the second of the above paragraphs is—not only that prior to and at the date of the donation Martin Treacey was notoriously and hope-lessly insolvent and unable to pay his debts, but that such his insolvency was well known to the donee and her husband, who acted together with Martin Treacey in fraud and collusion in accepting the donation from him with intent to injure the plaintiffs. Of this knowledge in Ellen Treacey and her husband and of the constructive fraud and collusion charged, there is not any evidence whatever offered, nor, indeed, is there sufficient evidence of the alleged insolvency of Martin, assuming such insolvency alone to be sufficient to avoid the donation.

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Martin Treacey appears to have had no debt but that to the plaintiff, and which was secured by a mortgage. It is difficult to understand how a person owing no debts whatever, except one amounting only to two-thirds of the purchase money of a piece of property purchased by him, and which two-thirds was secured by mortgage upon the whole of the property, the purchase of which constituted the debt, can be ? aid to have been notoriously and hopelessly insolvent. There is no evidence whatever in my opinion sufficient to establish the averment that Marlin Treacey was insolvent when he made the donation to his daughter, nor of any fraudulent intent whatever in the daughter accepting the donation. The plaintiffs therefore failed to establish any one of the grounds upon which their claim to the relief they have prayed is based, and it is unnecessary to determine the point upon which there appears to be a conflict of opinion, whether the law of the Province of Quebec in regard to donations by a parent by way of provision for a daughter upon her marriage and for her husband and their children, is different from the law of France and that of England in which marriage is deemed to constitute valuable consideration.

The appeal, in my opinion, should be allowed with costs.

Appeal allowed with costs.

Solicitors for appellants: Doutre & Joseph.

Solicitors for respondents: Judah & Branchaud.