Pacaud v. The Queen, (1899) 29 SCR 637

Supreme Court of Canada

Pacaud v Queen (1899) 29 SCR 637

Date: 1899-10-03

ERNEST PACAUD (DEFENDANT)

Appellant;

And

HER MAJESTY THE QUEEN (PLAINTIFF)

Respondent.

1899: Mar 13; 1899: Oct 3

PRESENT:—Sir Henry Strong C.J., and Taschereau, Sedgewick, King and Girouard JJ.

ON APPEAL PROM THE SUPERIOR COURT FOR LOWER CANADA, SITTING IN REVIEW AT QUEBEC.

Condictio indebiti—Répétition de l'indu—Fictitious claims—Misrepresen-tation—Evidence—Arts. 1047, 1048, 1140 C. C.—Railway subsidies—54 V. c. 88 (Que.)—insolvent company—Construction by new company—Payment by Crown—Transfer by payee.

A company formed for the construction of a subsidised railway having failed, another company undertook to complete it, and the Government of Quebec agreed to pay all the actual debts against the road out of the unearned subsidies. A. the contractor of the former company, presented a claim which was approved of and paid to the extent of $175,000, whereupon he paid over $100,000 of the amount to P. for services performed in organizing the new company and obtaining payment of the claim. The Government afterwards brought an action against P. to recover back the $100,000 on the ground that A.'s claim was fictitious and was paid on fraudulent misrepresentations.

Held that the action must fail if it could not have been maintained against A. ; that the onus was on the Crown of proving A.'s claim to be fictitious ; that the Crown not only failed to satisfy such onus but the evidence clearly established the claim to be a just and reasonable one ; and that the action could not be maintained as it did not ask for cancellation of the Order-in-Council and the letter of credit issued and that the payment made by the Crown thereunder should be set aside

Held, further, that the payment to A., with the consent of the new company, was a discharge to the Government pro tanto of the subsidy due to the company, and if wrongfully paid the latter only could recover it back

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Held) also, that even if the Crown could have recovered the amount from A., it could not succeed against P., who, as the record showed, had ample reason for believing that the company was indented to A., as claimed.

Evidence received before the a Royal Commission was filed of record by consent " to avail as evidence " on the trial.

Held, that, notwithstanding the consent, such evidence could not be accepted as proof in the cause.

APPEAL from the judgment of the Superior Court for Lower Canada, sitting in review, at Quebec, affirming the judgment of the Superior Court, District of Quebec, maintaining the action with cost.

The action was upon information by the Attorney General for Quebec against the defendant, (with Armstrong, a contractor, and the Baie des Chaleurs Railway Co., mis en cause,) for the recovery from defendant of $100,000 alleged to have been obtained from the Quebec Government by unlawful and improper means contrived by him and Armstrong with the aid of others, who obtained the passing of an Order-in-Council for payment by the Provincial Government of a subsidy to the railway out of which $175,000 was paid to Armstrong and $100,000 thereof handed over by him to the defendant. It was alleged that neither Armstrong nor defendant had any claim which could entitle either of them to any part of said subsidy, nor had the defendant any legal claim against Armstrong and, consequently, that the money had been misapplied and paid out in error. The information prayed judgment against defendant for $100,-000 and that the other parties should be summoned to hear such condemnation. The defendant alone appeared and pleaded a demurrer and perpetual exception setting up that the money paid to him belonged to Armstrong, and that the province had no claim thereto.

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The Superior Court, Andrews J. dismissed the demurrer and plea and entered judgment for the $100,-000 and costs on the following grounds, viz. :

Considering the said demurrer is unfounded in law ;

Considering it is proved that the said C. N. Armstrong had in fact no legitimate right to any portion of the said subsidy, and the said Ernest Pacaud, on his part, no right, even as against the said C. N. Armstrong, to be paid any amount whatever, his only claim thereto being based on an unlawful agreement with the said C. N. Armstrong, contrary to public order, whereby he was to use his influence with certain members of the then executive of this province to bring about the passing of the said order in council and the recognition of rights in Armstrong having no-legal existence ;

Considering it has been made apparent that the payment of the said sum of one hundred thousand dollars out of the Provincial treasury was the contemplated result of a scheme continued by the said Ernest Pacaud and C. N. Armstrong to obtain from the said treasury to their mutual gain, a sum of one hundred and seventy-five thousand dollars, whereof it was from the first designed and understood between them that the said Ernest Pacaud should get one hundred thousand dollars as his share ;

Considering that as to the said sum of one hundred thousand dollars, Armstrong was a mere instrument and confederate aiding the said Pacaud to possess himself of it ;

Considering it is also proved that the Baie des Chaleurs Railway Company did not complete the works which they undertook as a consideration for said subsidy, and only on the completion of which they would become entitled thereto ;

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Considering it is also proved that the said Baie des Chaleurs Railway remains encumbered by a privileged claim carrying with it a lien, in favour of one Henry Macfarlane for work by him done on the said railway as a sub-contractor of the said C. N. Armstrong, for a sum much exceeding one hundred thousand dollars s

Considering that the said plaintiff, as the custodian of the said subsidy, has a legal interest and right to recover the said sum of one hundred thousand dollars, forming part thereof, and so misapplied and unlawfully taken therefrom, in order to apply it to its legitimate purpose of freeing pro tanto, the said railway from the said lien of the said Henry Macfarlane :

Considering not only that the said Ernest Pacaud has no right whatever to the said sum of one hundred thousand dollars, but that it is also against public order that he should be allowed to retain it."

The present appeal is from the judgment of the Court of Review affirming the decision of the Supreme Court.

Fitzpatrick Q.C. (Solicitor General of Canada), and O'Gara Q.C. for the appellant. The money paid to the defendant appears, even by the notes of the trial judge, to have belonged to Armstrong. It had been certified to by the directors of the railway company and the engineer in charge, in settlement of a genuine claim and payable to him on handing over the road free from debt to the new company. Armstrong had fulfilled this condition and was entitled to full control of the $175,000. There has been no duress «or unlawful action shown against either him or the defendant. The Crown had no control or right of action in respect of it after it had been paid, and cannot inquire as to what disposition was made of the funds. We refer to the following cases as bearing on

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the questions at issue, viz. ; Mogul Steamship Co. v. McGregor Gow & Co ([1]) ; Allen v. Flood ([2]) ; Badische Anilin und Soda Fabrik v. Schott, Segner & Co. ([3]) ; The Queen v. Dunn ([4]), at page 402; Canada Central Railway Co. v. The Queen ([5]) ; Clarke v. Eckroyd ([6]) ; Hereford Railway Co. v. Tue Queen ([7]). Even if the contract between Armstrong and the defendant had been illegal, the money paid cannot be recovered back ; Kearley v. Thomson ([8]).

Matthew Hutchinson for the Crown. The money was paid under misapprehension, in error of law and in error of fact. It was a payment sine causÆ without the existence of any lawful debt and through the mis-representation made by the defendant and mises en cause. See Dalloz '55, 1,108. The pretended services, or more accurately artifices, for which defendant himself admits he did not expect to receive more than four or five thousand dollars, are essentially immoral and contrary to public order, and the payment made of them bears, in itself, this character of immorality and illegality which removes all possibility of claiming-payment There was thus between Armstrong and the defendant illegality and immorality of consideration, condictio ob turpem causam, and there was a nullity contrary to public order, and to these there was added the nullity of the execution itself by which they knowingly appropriated Government money to themselves. Both of them must then be declared to have been in bad faith and if the defendant was in bad faith there is a direct action against him. 3 Arntz, no. 473, p. 255 ; 13 Locré p. 39, no. 7 ; 5 Pothier, no. 170 p. 119 ; St. Michel v. Guilleminot ([9]) ; 2 Mourlon p. 885

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4 Aubry et Rau, p. 789, par. 40, no. 3 ; Dalloz, Rép. Vo. Obi. no. 5489. See also arts. 989, 990 and 1047 C. C.

The defendant argues that the Government has no right of action, as it has lost nothing ; that this money was to be handed over to the railway company. That is true, but only upon certain conditions which were not executed, that is to say, after the completion of works which were not done, and especially upon the conditions that the privileged debts should be paid with the moneys which have been diverted from their express destination. Again a Government subsidy to a railway is not so much for the railway company as for the section of country to be developed, a political, social obligation, a need to satisfy. If the grant is diverted the need still subsists and with it the obligation to satisfy it, a matter of public interest which the Government is bound to see properly discharged.

THE CHIEF JUSTICE.—I concur with Mr. Justice

Taschereau and Mr. Justice Girouard.

Taschereau J.—The facts that bear upon this case are not complicated. Of the formidable volume of rover 1,000 pages containing the inquiry Of the Royal Commission more than two thirds of the eighty-nine depositions and two hundred exhibits thereof filed by consent as part of this record (assuming them to have been legally filed) are altogether irrelevant and have no application whatever to the issue between the parties, besides being in a large measure inadmissible as evidence in a court of justice As to the law a correct appreciation of the facts leaves no room for controversy.

In 1891, the undertaking known as the Baie des Chaleurs Railway was on the verge of a total failure.

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The company, the contractors, the sub-contractors, were all insolvent ; the whole of the earned subsidies granted by both the federal and the provincial governments had been exhausted ; all work on the ground had been suspended for over a year ; whatever had been done was in a dilapidated state and deteriorating more and more every day ; the distressing condition and sufferings of the contractors' unpaid workmen were engaging the attention of the whole country ; a statute had been passed enabling the Government to cancel the company's charter and wind up its business 54 Vict., ch. 37, and all previous attempts to reorganize the company and enable it to continue and complete its undertaking had proved abortive.

It was under these circumstances that, in March 1891, one Thorn, who was a creditor of the company as a member of the firm of Cooper Fairman & Co. taking advantage of an additional subsidy granted by the provincial legislature on the 30th December preceding (54 Vict., ch. 88), at the suggestion of one Armstrong, the contractor of the company and interested therein, succeeded in forming a syndicate accepted as being of sufficient financial strength to complete this railway, which, it was admitted on all hands, was a work greatly needed in the public interest and of vast importance not only to the large extent of the country which it was intended by the legislature thereby more directly to benefit, but also to the whole Dominion as a feeder to the federal road known as the Intercolonial Railway.

Having come to an understanding with the owners of the charter, Thorn, acting for the syndicate so formed, entered with the Government into negotiations, which resulted in the acceptance by the Government of his propositions by the order-in-council no. 237, approved of by the Lieutenant-Governor on

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the 23rd April, 1891. This order-in-council appears to have been carefully drawn and bears intrinsic evidence of the Government's desire to protect the company's creditors by the right thereby reserved to the Government to itself pay under certain conditions the actual debts of the company, through an officer appointed for that purpose, out of the land subsidy converted into cash (conceded to be equivalent to $280,-000) granted by the Act of the then last session of the Legislature, 54 Vict., ch. 88, already referred to, which said subsidy converted into cash to the amount necessary therefor, the Government bound itself by the said order-in-council to pay to the creditors of the company whose claims would be approved of by Thorn or determined by arbitration. On the same day, by another order-in-council one J. C. Langelier was appointed the commissioner to pay these claims as provided for by aforesaid order-in-council no. 237.

Afterwards, on the same day again, Armstrong handed to the said Commissioner Langelier a claim of $298,943.62, which he had against the company.

Immediately, or on the next day, Langelier sent this claim to Thorn for the approval required from him by the order-in-council no. 237. Thorn, who had seen or heard of it before, answered that he approved it but only to the amount of $175,000. Langelier then wrote to the Commissioner of Public Works that Thorn had deposited in his hands $500,000 worth of debentures as required by his contract with the Government contained in the order-in-council no. 237, and had otherwise fulfilled all the obligations imposed upon him by the said order-in council, asking at the same time, as prompt action was required, that the funds necessary to enable him to immediately commence the payment of the debts of the company be placed at his disposal. The commissioner, or his

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deputy, being subsequently shown Armstrong's claim, the consent by Thorn that $175,000 of that claim should be paid by the Government, the certificates of the engineers, and the admission by the managing director and by the secretary of the old company that the claim as filed was a correct statement of the work done by him remaining unpaid, after, moreover, getting the opinions of the law officers of the Crown, and acting altogether as cautiously as possible m the matter ordered the payment of the claim to the amount of $175,000 and informed Langelier of it. Langelier accordingly paid $100,000 thereof to Armstrong by his cheques on the Union Bank to Armstrong's order, five in number, for $20,000 each, which cheques Armstrong immediately indorsed and handed over to the appellant who later on got them cashed The balance of $75,000 was also paid to Armstrong or to his order, but these $75,000 are not in question here. It is simply the $100,000 paid as aforesaid to Armstrong, and repaid by Armstrong to appellant, of which the Crown now demands the reimbursement from the appellant. This demand is based exclusively on the ground that Armstrong's claim was a fictitiuss and a fraudulent one and that the company did not owe him anything, to the knowledge of the appellant ; that it was the appellant who, at Armstrong's request, had succeeded by undue influence and corrupt means in obtaining from the Government these $100,000 which immediately upon receiving them, under a previous agreement between them, Armstrong had paid over to him the appellant without consideration or for an illegal and immoral consideration.

It is admitted by the appellant, whilst denying all fraud on his part or on the part of Armstrong in the matter, and all the allegations of the information as to bribery undue influence or fraudulent acts whatsoever

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on their part, that under a previous agreement with Armstrong, he, Armstrong, immediately upon receiving those $100,000 from Lansrelier, indorsed the cheques and handed them over to him, the appellant, as remuneration and payment for his services in acting as agent for the said Armstrong in the negotiations with the Government relating to the formation of the new syndicate and the settlement of said Armstrong's claim.

It results from this synopsis of the case that the fact to be first investigated is the one declared upon on the part of the Crown, that Armstrong had no claim whatever against the railway company. For it was conceded at the argument that the Crown cannot recover these $100,000 from the appellant if they could not recover them from Armstrong. And it is a rather singular fact, which remains unexplained, that no condemnation is asked by the Crown against Arm-strong in this case. If consideration was given to Thorn or to the company by Armstrong for the payment of these $175,000 to him by the Crown for the company, the case is at an end. What Armstrong did with the money, whether he spent it illegally or repaid it to appellant for an immoral consideration, assuming that to be so, cannot give to the company, and still less to the Crown the right to recover it back from him, Armstrong, and a fortiori not from the appellant if it was due or if consideration was given by Armstrong for it.

Now the onus probandi was on the Crown. It had to prove that these $100,000 were not due to Armstrong, and that it had paid them through error, upon false representations. And on the present issue with appellant more especially the proof of these facts had to be clear, positive and convincing. The Crown's demand is based on a negative allegation, the allegation

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that nothing was due to Armstrong ; the establishment of that negative is an essential element of their case. Appellant could not be expected to have to prove that Armstrong's claim was a legitimate one. Then the Crown had to prove not only that it was a fictitious one, but also that appellant knew that it was a fictitious one. Now the Crown has failed on both these points. As to Armstrong's claim there is abundant evidence and what should in this issue between the Crown and the appellant be taken as conclusive evidence, that it was a just one. He repeatedly himself swears to its accuracy, and his evidence is unimpeached. It seems to have been given fairly and frankly. It is, moreover, certified for a large portion thereof by Leduc, his engineer, and by Light, the company's engineer and inspector for the local Government, who by Armstrong's contract with the company was stipulated to be the sole judge of the quality and the quantity of the work done. It is moreover admitted as correct by the managing director and the secretary of the old company whose contractor he was. What more could the Government require, as Mr. Garneau, the Commissioner of Public Works, says in his evidence, than these certificates and the admission of the company itself, coupled with the admission of Thorn himself, for the new syndicate as to $175,000 thereof that the claim filed was a correct and legitimate one, at least to that amount ? It is true that it was not cash but bonds only that Armstrong had then a right to demand according to his contract, and that the whole was not then exigible ; but it was a compromise, a new contract virtually that intervened between him and Thorn with the consent of the old syndicate or company. In consideration of these $175,000 he signed the following document :

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I, Charles N. Armstrong contractor for the construction of the Baie des Chaleurs Railway, do hereby grant a full and complete discharge and quittance to the Baie des Chaleurs Railway Company of all and every claim, of whatsoever nature and kind, that I have or may have against the said company ; and I further agree to cancel and annul and I do hereby cancel and annul the contract and agreement entered into with the said company on the 9th day of June, 1886, for the construction of the said railway. I hereby authorize the said company to take possession of the works on the said rail-way and all materials provided for the construction of the line, together with all the rolling stock placed on the line in furtherance of the provisions of said contract of the 9th June, 1886. And I further transfer, assign and make over to the said company, all and every claim which I have or may have against Henry MacFarlane & Son, and the said company is hereby authorized to use my name in enforcing or collecting such claim.

Signed at Quebec, this 28th day of April, 1891.

C. N. ARMSTRONG.

If he had not agreed to accept these $175,000 for his claim, the whole of these negotiations would have failed, and the company would most probably have been put into liquidation. He gave up all claim against the company under his contract ; he gave up not only his contract itself but also the possession of the railway, of the rolling stock and of the construction materials and plant on the ground ; he further assigned to the company a claim he had against the Macfarlane’s. It cannot therefore be contended that this sum of $175,000 was paid to him without consideration even if it was paid to buy him out, to use his own expression. And even if paid before it was due it cannot be recovered under the express terms of Art. 1090 of the Civil Code. But, in fact, by mutually putting an end to the contract, what was due thereunder became unconditionally immediately exigible. It was moreover, one of the express conditions of his so giving up his contract that he be paid these $175,000 immediately. He was master of the situation ; he had or his sub-contractors had, de facto

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possession of the road ; lie had the contract It was only upon payment of these $175,000 as a compromise that the new company could succeed in going on with the enterprise, as it appears by the evidence they satisfactorily did soon thereafter. And the company never complained that they had paid too much for that compromise. How can the Crown be admitted to complain of it? It is true that Armstrong would have taken $75,000 for his claim in 1890 but that is satisfactorily explained in his evidence and in Thorn's evidence. Rather than lose everything as he then had to fear he would have taken that amount or perhaps less. But as the company had since been granted an additional subsidy of $280,000, he positively refused thereafter to be satisfied with $75,000. The fact that his claim was not filed in the Department of Public Works before it was filed with Langelier has been insisted upon on the part of the Crown as a suspicious one. But that is also satisfactorily explained. Armstrong had no claim whatever against the Government. It was with the company and the company alone that he had contracted, and he had duly filed his claim in the office of the secretary of the company. He could not reasonably be expected to file his claim with the Government when the Government owed him nothing. It had all along the previous negotiations in 1890 been known that he had a claim against the company which had to be settled some way or another before any attempt to reorganize the company and put it in a sound financial position could be expected to succeed.

It has been urged, though but faintly, on the part of the Crown, that Armstrong's claim was not a privileged claim under the terms of the statute granting the $280,000 subsidy, 54 Vict. ch. 88. But Thorn or the company, the interested parties, do

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not attack this payment, and such a ground more specially cannot be invoked by the Crown against this appellant in an action of this nature. Then Armstrong had possession of the road and the right of retention. That constituted a privilege ; and it was so treated as a privileged claim by Thorn himself, by the Government special commissioner, Langelier, and by the Commissioner of Public Works. How could the appellant have been expected to know that this was not a privileged claim, assuming that to be so ? How could he be expected to make an investigation of the matter ? Then by the order-in-council no. 237, the Government was bound to pay out of the subsidy the actual debts not only the privileged debts of the company, as Thorn had proposed. The contention by the respondent that the acts of the Lieutenant-Governor-in-Council are to be assimilated to the acts of a subordinate officer who cannot exceed his mandate are totally unfounded. The acts of the Lieutenant-Governor-in-Council are the acts of the Crown. However in this case, this point does not necessarily come up for adjudication. The expression, a actual debts," clearly included the privileged debts, and the order-in-council is supported by the statute. Then, by the statute, these payments had to be made to the satisfaction of the Lieutenant-Governor-in-Council, and the Lieutenant-Governor-in-Council, through Langelier, its commissioner specially authorized to determine which were and which were not privileged, treated Armstrong's claim as a privileged one.

Then it is not as a condition precedent nor necessarily out of the subsidy that, by the statute, the privileged debts of the company were to be paid. The subsidy could legally have been paid to the company upon condition, the performance of which guaranteed to the satisfaction of the Lieutenant-Governor-in-Council,

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that these debts were to be thereafter paid. We have been asked on the part of the Crown to read subsection (j) of the statute ([10]) as if the words " out of the said subsidy'' were in it after the word u paid " but there is nothing in the statute that would justify this being done.

Moreover there is no allegation whatever in the information that there were at that time other outstanding claims against the company privileged or not privileged.

It has further been urged on the part of the Crown that the conversion into cash of the land subsidy granted by 54 Vict. ch. 88, was not authorized by the statute. But there is nothing in that contention, could the Crown lawfully avail itself of the objection in this case against the present appellant. That statute, section 7, authorizes the conversion and, it is obvious, necessarily authorized it as regards the creditors of the company, without requiring any previous formality whatever.

If the Lieutenant-Governor-in-Council ordered that the creditors privileged and not privileged were to be paid by the Government out of this subsidy, as it could be done and has been done in this case, before any part of it was paid to the company ([11]), then the conversion of the land grant into cash was in that case necessarily implied by the statute to have been provided for, at least to the amount of their claims, as it was cash, not land, with which the Legislature must have intended them to be paid. The resolution of the directors required by the said statute could not be required in such a case. Then this might be an objection on the part of the company, but it is not one open to the Crown, after having paid the money knowingly without asking for such a resolution. And

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the company, a party to this case, never took this or any objection whatever against this payment to Armstrong, and never could have taken it, as it was made with their consent and by their order.

There is another obstacle to the respondent's demand, which Armstrong could have successfully invoked had it been instituted against him and which, therefore, is available to the appellant. The payment was a direct one to Armstrong, as conceded by paragraph 37 of the information. It was a payment for and in the name of the company in satisfaction of the company's debt, with the company's assent. In fact, the warrant is " to pay or cause to be paid unto the Baje des Chaleurs Railway," to be taken from 40 Vict. ch. 2 "An Act Respecting the Consolidated Railway Fund." This payment made with the company's assent is a discharge to the Government pro tanto towards the company of the subsidy granted to the company in 1890. It is so much less that the company can expect to receive from the Government. If since the company has not fulfilled its obligations, that is a matter which does not concern Armstrong, still less the appellant. If the Government had given that money to Thorn for the company, and Thorn had repaid it over to Armstrong, it is the company alone who could recover it back, if any one could, not the Crown. "Who would benefit by it if the Crown succeeded in this case ? Evidently the company and the company alone. Whose monies did the Crown pay to Armstrong? The company's money, the money voted to the company. Thorn's approval of Armstrong's claim for $175,000 was equivalent to an order on the Government to pay so much to Armstrong out of the grant by the Legislature, in satisfaction of the company's indebtedness to him (Armstrong), with the company's assent. The Crown, therefore, has no right to this

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action, even if the facts established any liability whatever by Armstrong or the appellant.

For these reasons I am of opinion that the Crown could, not have recovered these $100,000 from. Armstrong", and that, consequently, they cannot be recovered from the appellant.

But even if the Crown was in a position to recover from Armstrong, it does not follow that it can recover against the appellant. One of the essential conditions required to enable the Crown to maintain its demand against the appellant is that he, the appellant, knew, assuming it to he so, that Armstrong had no right to these $100,000, or to any part thereof. Now there is not the least ground for that contention in the whole record. And how could he have any but the sincere conviction that the company was indebted to Armstrong, when not only did Armstrong himself always assert it, and it was conceded by every one to appellant's knowledge in all the previous negotiations that had taken place to re-form the company but also when he had before him not only the engineers' certificates and the confession of judgment, as it were, by the officers of the old company, for a much larger amount than the one compromised for but also Thorn's acknowledgment of the legitimacy of the claim up to $1750000, an acknowledgment acquiesced in and never complained of by the new company he represented. The fact that his agreement to get $100,000 was kept secret cannot be taken by itself as evidence of fraud When fraud is charged, it has to be proved, and proved clearly. Suspicions will not do.

It is true that Mr. Garneau, the commissioner of public works swears that if he had known that the appellant was to get anything out of these $175,000 Armstrong would not have had a cent. But that is obviously a voluntary statement made by the witness

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before the Royal Commission with a political object, or to emphasize his repudiation of any dishonourable conduct whatever on his part in the whole transaction. In law, if the money was due to Armstrong, it had to be paid to him whether the commissioner knew or not that he was to spend it illegally or immorally, or to give it or throw it away. And what Mr. Garneau says only tends to prove that the interests of the railway required the secrecy of this agreement between Armstrong and the appellant.

The allegations of the information as to deception, circumvention, bribery, immorality and undue influence in the negotiations with the Government, of either the company or Thorn or Armstrong and the appellant as his agent, are not made out in the case. There is nothing in this record to cast any doubt upon the statement of the Commissioner of Public Works when he swears that everything was done honestly, openly and regularly.

As to this agreement for $100,000 between the appellant and Armstrong, it is certainly an extraordinary one. No doubt the appellant performed some services for Armstrong and was entitled to some remuneration therefor. And there is nothing to find fault with in the fact that Armstrong, who lived in Montreal, employed an agent in Quebec to transact his business with the Government in Quebec and paid for hisservies. Neither was he guilty of any improper conduct because he chose as such a friend of the Ministers and a supporter of the Government, and gave him an interest as one of the promoters of the enterprise. If any one in his position wishes to employ an agent, he is not obliged as evidence of the honesty of his claim to resort to an adversary of the Government or to a personal enemy of the officials to be dealt with. Influence should not be required, it is true, to procure

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the payment by the Government of an honest claim ; but, if one requires more than usual promptness in the matter, the use of legitimate influence with the officials to procure it does not justify accusations of a nature to throw discredit on the whole country, Evidently Armstrong thought that if he did not succeed in getting up a new syndicate and obtain then a settlement of his claim, he was in immediate danger of irretrievably losing everything". No time, he had reason to think, was to be lost. The act then recently passed empowering the Government to revoke at will the charter of the company was hanging as a heavy cloud over the whole business. There might at any time intervene a political crisis and a change in the Government with an entire change of policy as to subsidies to these companies. Then other parties unfriendly to him might at any moment offer to organize a syndicate and take up the charter. Thorn himself, unable as he was to take up the charter unless Armstrong's claim was settled, threatened that if the Government did not settle it without delay he would give up the transaction. The forty days delay fixed by his agreement with the old shareholders for the necessary assignment of their rights and of the charter were very soon to expire when the order-in-council was passed. There were only five days left. Evidently, he and the appellant as his agent were justified in pressing the matter and employing all the legitimate influence they could obtain to hasten a final settlement.

The amount the appellant received is, however, altogether out of proportion to his services. But that is a matter entirely between himself and Armstrong. It does not in the least concern the Crown. It is a dealing that leads to suspicion, no doubt, but all suspicion is dispelled as against the Crown's demand in this case by the evidence adduced ; 1st that Armstrong's claim

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was a legitimate one ; 2nd, that were there now, or had there been at any time since, any room for doubt on that first point the appellant had no reason whatever then to doubt that it was a legitimate one.

I would allow the appeal with costs and dismiss the action with costs. Such is the unanimous judgment of the court.

Sedgewick and King JJ. Concurred.

GIROUARD, J.—Sans vouloir faire l'appréciation de la preuve faite devant la Commission Royale, pour les raisons que j'indique plus loin, je ne puis m'empêcher d'observer que cette action ne me paraît pas avoir été intentée dans le but d'obtenir le remboursement des milliers de piastres que la Couronne allègue avoir été soustraits du trésor public. Comment en effet expliquer le défaut de conclusions contre Armstrong et le -défaut d'assignation contre d'autres personnes qui ont aussi bénéficié des procédés de Pacaud et Armstrong. D'ailleurs, dans les pays regis par le droit constitutionnel anglais, les crimes politiques, comme celui que l'on reproche à l'appelant, sont poursuivis et punis devant Jes tribunaux de juridiction criminelle ou la haute cour du parlement on l'électorat. On n'a Pu nous signaler un seul précédent analogue à. la poursuite civile que nous sommes appelés à decider. M. le juge Andrews cite bien quelques exemples où les tribunaux français, à la demande de l'une des parties, out annulé des contrats comme celui que signèrent Pacaud et Armstrong, ce qui ne peut être contesté sérieusement ; mais quant à la répetition de l'indu dans les circonstances de la présente cause, ii n'en indique aucun. Avant de confirmer le jugement dont est appel, il faut donc examiner -si l'action est bien fondée et prouvée. Je suis oblige de donner à la Couronne ses justes droits, mais je ne me

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sens pas dispose d'être généreux à propos d'amende ments ou de consentements sur la procedure suivie. Je suis entièrement oppose à tout ce qui tend à faire des tribunaux une arène politique.

Les particuliers n'ont l'action en répétition de l'indu, qu'en alléguant et prouvant lo, que ce qui a été payé n'était pas dû, et 20, que le paiement a été fait par erreur. C.C., Art. 1047, 1048, 1140. Lorsque le débiteur paie en pleine connaissance de cause et sans erreur, il ne peut répéter ; il est censé faire une libéralité. Il est vrai que l'article 1140 dit tout simplement que c ce qui a été payé sans qu'il existe de dette est sujet à répéti-tion," mais l'article 1047 y supplée en ajoutant que Ia. répétition de l'indu n'a lieu que s'il y a erreur. C'était l'opinion de Pothier, Cond. Ind. n. 160, et des anciens auteurs. Laurent ajoute, et son opinion est generale» ment enseignée par la majorité des commentateurs modernes :

L'article 1235 dit que ce qui a été payé sans être dû est sujet à répé-tition. Cela est trop absolu. Il ne suffit point que j'aie payé ce que je ne doss pas pour que j'aie le droit de répéter, ii faut que j'aie payé par erreur. VoL. 20, nn. 352, 368.

Il v a dans ce sens un arrêt de la Cour de Cassation du 11 mars, 1885, S. V. 86, 1, 49. C'est aussi ce que cette cour décida en 1882 en Bain v. Cité de Montréal ([12]). Le Recueil des Arrêts de Sirey pour l'année 1884 note (1) part. IV p. 1 contient un résumé complet de la jurisprudence et de la doctrine sur le sujet. Voir aussi 8 Hue, n. 388 ; 2 Baudry-Lacantinerie, (5e. éd.) n. 1342.

Si les particuliers ne peuvent répéter sans invoquer l'erreur ; il doit en être autrement des gouvernements qui ne peuvent faire des libéralités sans l'autorité de la legislature ; mais si le paiement a été fait en vertu d'actes ou de documents obtenus par fraude ou dol, la resolution de ces actes doit être demandée La fraude n'est pas une cause de nullité absolue. L'article 1000

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de notre code dit qu'elle donne seulement un droit d'action ou une exception pour faire rescinder les actes et contrats qui en sont entachés. A mon avis, Ia Couronne, qui allègue dol et fraude, aurait dû demander la rescision du paiement et de la lettre de credit, au moins de l'ordre en conseil qui les autorisait, et dont la nullité n'était pas apparente à la face même de ces documents. En effet c'est l'ordre en conseil qui autorisait le palement des dettes de la compagnie sur le certificat de Thom, un des actionnaires de la nouvelle compagnie, et apparemment son représentant dans le cours de toutes les négociations. Laurent enseigne, avec raison que

si la resolution ou la revocation doit être demandée en justice, l'action en répétion de l'indû se confond avec l'action qul tend à résoudre ou à révoquer le contrat. Vol. 20, n. 346.

Voir 5 Larombière, p. 614.

L'intimée a demandé la nullité du traité secret entre Pacaud et Armstrong. Mais cela n'était pas nécessaire, car les contrats n'ont aucun effet à l'égard des tiers. Si le montant payé eût été dû à Armstrong, ce dernier pouvait en faire present à Pacaud ou à d'autres, et ii est en preuve qu'il lui permit de toucher Ia somme de $100,000, ce qui paraît extraordinaire et fut la cause de foute l'agitation politique de l'époque, où nous n'avons Tien à voir ; mais je ne puis voir l'intérêt que l'intimée peut avoir de demander la nullité du traité, indépendamment de l'ordre en conseil de la lettre de crédit et du paiement ; elle n'allègue pas la déconfiture d'Armstrong afin de lui permettre d'exercer l'action qu'il pouvait avoir contre Pacaud. D'ailleurs, ce ne fut pas ce traité secret qui fut la cause du paiement et du tort fait à la Couronne mais bien l'émission de la lettre de credit et la passation de l'ordre en conseil ; et ce sont ces documents, particulièrement le dernier, dont on aurait dû demander la resolution.

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Est-il bien vrai qu'il n'était rien dû à Armstrong? ii est prouvé par le témoin Macfarlane, entendu dans la cause, qu'Armstrong avait fait des travaux considérables sur la ligne du chemin de fer, dont ii ne pent estimer le montant Il est difficile d'en fixer la valeur sans examiner toute Ia preuve qui a été faite devant la Commission Royale et qui forme un volume d'au delà de 1000 pages. Armstrong demandait $298,943.22 certifiées comme dues, suivant les stipulations du contrat, par l'ingénieur de la compagnie, agissant en même temps comme le surintendant du gouvernement, et aussi par l'ingénieur des contracteurs, le secrétaire-trésorier et le directeur-gérant de la compagnie. L'ingénieur de la compagnie jure devant la Commission que le compte d'Armstrong était exagéré de 50 par 100, et qu'il ne l'avait approuvé que sur les representations du président Mais alors il lui était réellement dû prés de $150,000, à tout événement plus que les $100,000 demandées. Le gouvernement paya plus que cette somme à Armstrong, ou à d'autres pour son compte, dont ii ne demande pas la répétition, bien que payee en vertu du même ordre en conseil et par suite des mêmes manœuvres. Thom avait vu la reclamation d'Armstrong an bureau des Travaux Publics à Québec le ou vers le 23 avril 1891. Il croyait qu'elle était bien fondée, au moins en partie, et aprés l'avoir vérifiée par l'examen des certificats de l'ingénieur et avoir consulté M. Cooper, le plus fort actionnaire de la nouvelle compagnie qui succédait à l'ancienne, il l'approuva jusqu'à concurrence de Ia somme de $175,000.

L'intimée pretend que ce qui était alors dû à Armstrong n'était pas exigible et dépendait d'une condition suspensive, savoir, le parachèvement du chemin de fer. Mais le contrat declare en termes formels que si les subsides en terres étaient convertis en agent Armstrong " shall be paid and receive the said cash." C'est

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précisément ce qui eut lieu en vertu d'actes de la legislature.

Enfin la demande est sans preuve, si l'on écarte le dossier de la Commission Royale, produit dans cette cause du consentement des parties et déclarant qu'il

shall avail as evidence in the present cause in the same manner as though the several depositions has been taken and sworn herein and as though the several Exhibits had been filed herein ; all copies of authentic instruments as printed therein shall avail as though authentic and other Exhibits to the extent to which the same may he proved by the said deposition.

L'autorisation du tribunal ne fut pas même demandée contrairement à l'article 319 du Code de Procedure.

Le Code de Procedure donne bien aux parties le pouvoir d'examiner leurs témoins de consentement, devant le protonotaire, on un commissaire ; mais il a fallu l'intervention de la legislature. Pinsonnault v. Valade. ([13]) C. P.C. Art. 255, 285 ; 33 Vict., c. 18. Egalement il a fallu un texte de loi pour leur permettre de procéder de consentement à 1a preuve au long. C. P. C. Art. 284. L'Article 25 indique comment on peut transmettre un dossier d'une cour à une autre et ajoute que cette transmission pent se faire de toute autre manière du consentement des parties. Dans des circonstances spéciales, un juge peut bien accepter la preuve faite dans une autre cause, avec on sans le consentement des parties ; mais je ne sache pas qu'il puisse admettre une preuve prise en dehors des tribunaux. Tontes ces exceptions établissent que la regle genérale promulguée par le Code de Procedure, art. 263—que Ia preuve doit être faite en justice—est d'ordre public et qu'il n'est pas permis d'y déroger par des consentements. Carré, Lois de La Procédure civile, (3e, éd.,) t. ler, p. XVI, n. 43, dit que les lois qui établissent les formalités snbstan-tielles on intrinsèques de la procedure civile font une

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partie essentielle du droit public ; puis ii' cite l'auteur de l'article Droit public, au nouveau repertoire qui ajoute que

Les particuliers ne peuvent y déroger que dans le cas où Ia loi leur en a laissé la faculté

Voir aussi Carre n. 118. Il y a d'autant plus de raison de refuser cette preuve que l'on salt qu'une commission royale, comme le comité des Privilèges et Elections ne sont pas assujettis à ces regies. M. le juge Baby l'un des commissaires en réponse à l'un des avocats, remarquait au commencement de l'enquête :

We have endeavoured to proceed as far as possible in the same way as proceedings are before the courts, but you must know that before the courts this is not done.

La preuve fut cependant admise, sur les précédents politiques cites. Todd, Parl. Gov., 2e éd., t. 2e, p 445,

observe :

Within the limits of their prescribed functions and subject to the provisions of any Act of Parliament defining the same, commissions have the absolute power of regulating the proceedings of their own tribunal

S'il y a lieu d'appliquer l'article 1204 du C. C. c'est bien dans le cas présent : la preuve offerte dolt être la meilleure dont le cas par sa nature soit susceptible.

Je suis donc d'avis d'accorder l'appel, de maintenir la défense en droit et de renvoyer l'action de l'intimée avec dépens pour les raisons suivantes : 10. L'intimée ne demande pas la resolution du paiement, de la lettre de credit ou même de l'ordre en conseil pour cause de fraude et dol ; 2o. En dehors de la preuve devant Ia Commission Royale que je ne puis accepter nonobs-tant le consentement des parties, il n'y a aucune preuve légale de la part de l'intimée qu'au moins la somme de $100,000 n'était pas légitimement due à Armstrong.

Appeal allowed with costs.

Solicitors for the appellant : Filzpatrick & Taschereau

Solicitor for the respondent : F. X. Drouin.