Windsor v. Cross, (1886) 12 SCR 624

Supreme Court of Canada

Windsor v Cross, (1886) 12 SCR 624

Date: 1886-05-17

THE WINDSOR HOTEL COMPANY OF MONTREAL (Defendants)

Appellants:

And

the hon. Alexander cross (Plaintiff)

Respondent.

1886: Mar 17; 1886: Mar 18; 1886: Mar 19; 1886: May 17

PRESENT—Sir W. J. Ritchie C.J., and Fournier. Henry, Taschereau and Gwynne JJ.

ON APPEAL FROM THE COURT OF QUEEN'S BENCH FOR LOWER CANADA (APPEAL SIDE).

Sale of land—Warranty against caress and incumbrances—Promise to pay without reserve by subsequent deed with knowledge of assessment—Interest, agreement as to—Compensation—Cross appeal

On the 28th June, 1877, the appellants entered into an agreement before Hunter, N. P. by which without any reserve they acknowledged to owe and promised to pay certain sums of money, amongst others to Mrs.L., transferee of one of the vendors, who on the 3rd April, 1875, sold the Windsor Hotel property in Montreal to the appellants, and by the same deed Mrs. L. agreed to assist the appellants in obtaining a loan of $350,000, to relinquish the priority of her hypothec for her share on the property, and also to extend to 6 years the period for the payment of the balance due her, waiving any right to interest until the appellant company had an available surplus after paying interest and insurance in connection with the new loan. Subsequently, on 15th June, 1880, Mrs. L., by notarial deed, transferred to the respondent the balance alleged to be due her under the deed of the 28th June, 1877, and the respondent brought an action to recover this balance with interest from 1st July 1877, to the 15th December, 1885, date of the action.

To this action the appellants pleaded inter alia, that under the deed of the 28th June, 1877, interest could be demanded only from the 1st July, 1881, the secretary of the company having on said date testified for the first time there was an available surplus: and also that both principal and interest were compensated by the sum of $1,901.70 paid the city for assessments imposed under 42 and 43 Vic. ch. 53, P.Q., for the cost of public improvements

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made in the vicinity of the property prior to the sale of the property to the company in 1875. The assessment rolls originally made for these improvements were set aside by two judgments in 1876 and 1879.

Held—affirming the judgment of the court below that under the circumstances the respondent, cannot be said to be the garant of the purchasers of the said puppetry, and therefore he is entitled to the payment of the balance alleged to be due under the deed of the 28th June, 1877, no Withstanding any claim the appellants might have against their endorse under the general warranty stipulated in the deed. of purchase of .April 1875

Held also, that by the terms of the deed of the 28th June 1877 interest could be recovered only from this of July 1881.

APPEAL from a judgment of the Court of Queen's Bench for Lower Canada (appeal side) ([1]) reversing the judgment of the Superior Court dismissing. respondent's action.

The suit was brought by the respondent t\ recover from the appellants a balance which the latter Knowledged to owe and promised to pay to Mary Ann Lampbell, widow of Elisha Lane, by a deed executed 1f_ore Hunter, N. P., on the 28th Juno, 1877, and transferred to the respondent by deed before the same notary 26th June, 1882, duly signified.

The facts which gave rise to the litigation between the parties are as follows .

On the 3rd of April 1875, David Torrance Mary Lunn, Julia Lunn, Emma H. Lunn, and Alexander H. Lunn, sold to the company, appellants, the property on which the Windsor hotel has been since built in the city of Montreal, for the sum of $112212 whereof $18,702 were paid, leaving a balance of $93510 unpaid.

Alexander EL Lunn, one of the vendors, transferred to Mrs. Lane on the 7th June 1876 his share of the purchase money, and by deed of the 28th June, 1877 the company agreed to pay Mrs. Lane, representing one of the vendors, and the other vendors, $86,034.46 (1) 4 Dorion's Q. B. Rep. 280 S. C. M. L. R.1 Q. B.

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being 871/2 per cent, of their claim in principal and R interest. Mrs. Lane and the vendors David Torrance and others, excepting Alexander H. Lunn, who was not a party to the deed, agreed to assist the company in obtaining a loan of $350,000 and to relinquish the priority of their hypothecs upon the property, and also to extend to six years the period for the payment of the balance due them, they relinquishing and waiving a any right to exact and require any interest upon the a amount of said balance until the net revenues of the company shall be sufficient to pay the annual liabilities of the company for interest, insurance, etc., in connection with the said loan of $350000 after which "the would be entitled to receive interest to the e extent of 7 per cent., out of the surplus of revenue, "according to its sufficiency."

Previous to the sale of the property to the company, certain, public improvements had been made in the vicinity by the opening of Stanley street and of Dominion square, and the property had been assessed for a share of the costs of these improvements. The claim of the city was, however, disputed, and by the deed of sale of 3rd of April, 1875, the vendors reserved all right of action, claims and demands they might have against the mayor, aldermen and citizens of Montreal for the recovery of the special assessment for the opening of Stanley street and for the drain in said street paid by the vendors to the corporation,

By two judgments rendered in 1876 and 1879 the assessment rolls, by which the property sold to the company had been charged with a proportion of the cost for opening and widening Stanley street and for opening Dominion square, Were set aside.

Subsequently the city obtained from the provincial legislature authority to cause other assessment rolls to be made for the purposes of assessing, in whole or in

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part, the cost of the improvements already made upon all and every the pieces or parcels of land or real estate which the commissioners (to be named) should determine to have been benefited. (Act of 1879 42 and 43 Vict, ch. 53 s. 4 § 1 and 4.)

New assessment rolls were made under this act and the commissioners having determined that the property of the company was benefited by the improvements referred to assessed the amount to be paid by the company to the sum of $522900 for the opening and widening of Stanley street, and to the sum of $1350 for the opening of Dominion square.

These two sums, with interest, amounting in all to $1,901.70 were paid in 1882 by the company who was subrogated to the rights of the city.

The pleadings sufficiently appear in the head note and are fully set out in the report of the case in the court below.

At the hearing of the case before the Superior Court the secretary of the company testified that it was only since July, 1881, that the company had a net surplus available to pay interest on the claim of the respondent and judgment was rendered on the 9th June, 1884, declaring the compensation pleaded by the appellants to have taken place and dismissing respondent's action.

The Court of Queens Bench for Lower Canada (anneal side) on the 25th September, 1885, reversed the judgment of the Superior Court and condemned the appellants to pay the respondent the sum of $1,801233, with interest from the 17th December 1883 and costs.

From this judgment the present appellants appealed to the Supreme Court of Canada and the respondent filed a cross appeal claiming to be entitled to interest on the capital from the 1st of July, 1877 under the deed of agreement of the 25th June. 1877

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The principal question which arose on this appeal was as to the right of the appellants to set off, in compensation of the respondent's demand for a balance due under a deed of sale the amount of certain special assessments on the property sold, which they were afterwards compelled to pay or in other words whether the respondent was a warrantor ?

Paynuelo, Q.O., and Abbott, for appellants, contended on this point that the respondent, as representing one of the vendors under the said deed of sale was bound equally and jointly and severally with the other vendors to warrant the appellants, and indemnify them for the payment of the amount of these assessments, which were created before and existed at the time of the granting of the deed of sale.

The germ of the obligation was in existence and they were liable for the cost of the improvement as fixed by the subsequent assessment roll, whenever made.

The fact of the respondent being a transferee does not relieve him from this claim of compensation. There is nothing to show that the assignment to him was accepted by the company defendants. The Iransfer from Mrs. Lane to him was only signified upon the company on the 14th December, 1883; but there was no acceptance by the company of that assignment, or of the assignment to Mrs, Lane, which never appears to have been signified to them. And any acceptance which might be inferred from the agreement of June, 1877, was before any right to claim compensation existed.

The learned counsel cited Pothier Comminute ([2]) Marcade ([3]) Laurent ([4]) Arts Civil Code ([5]) Black well Tax Titles ([6]).

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Geoffion for respondent.

The agreement contained in the notaries document of the 28th June 1877 settled the relations and obligations of the parties towards each other, and precludes the appellants from raising the questions put forward by them

That document formally recognized Mary Ann Campbell as a creditor, and distinctly undertook to pay her according to its terms.

It made no allusion whatever to the debt having been originally created as part of the consideration of the purchase of property nor to its having come by transfer from Torrance et al.

The appellants must be considered to have waived, as far as Mary Ann Campbell was concerned, any demand they may have had against Torrance et al., or otherwise, and to have given her the assurance that she might rely upon them for her payment.

Her case is much stronger than that provided for by Art. 1192 C. C, which itself is very clear that provides merely for an acceptance of notice of the assignment; but here a debtor distinctly acknowledged to owe and promised to pay a debt, without reference to its having proceeded from another party by transfer.

The learned counsel also referred to Larombiere ([7]); Demolombe ([8]); Civil Code ([9]); Dalloz Vo. Vente ([10]).

TASCHEREAU J. delivered the judgment of the court: The respondent as transferee of a balance due by the appellants on the purchase price of the property known as the Windsor hotel and whose assignment had been accepted by the debtors, sued the appellants for the same. The appellants claim that the sale from Torrance et al. of 3rd April 1875 was made with warranty

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and being respondent's auteur they are bound to a warrant the appellants against charges and incumbrances. We are of opinion that the judgment of the court below should be affirmed for the reason given by Chief Justice Sir A. A.Dorion, that even supposing the vendors to have been under the general warranty stipulated in the deed of sale of 3rd April 1875 liable to reimburse the sums paid by the company on the assessment rolls made under the Act of 1879 the respondent is not one of the vendors nor bound to the warrant stipulated in that deed of sale. He did not sue on this deed of sale but upon the deed of the 28th June 1877 which was duly signified and by which the appellants promised to pay Mrs. Lane, respondent's transferor, without any reserve the sum he claims this promise having been made by the company after full knowledge of all the circumstances, and after one of the original assessment rolls had been set aside. Under such circumstances the respondent cannot be held to be a garant of the said company and therefore this appeal must be dismissed with costs.

As to the cross appeal we are of opinion that the court below properly held that the interest should be allowed only from the 1st July, 1881.

Appeal dismissed with costs and cross appeal dismissed with costs.

Solicitors for appellants: Abbott, Tait, Abbott and Campbell.

Solicitor for respondent: Selkirk Cross.