Supreme Court of Canada
Davis v. Kerr, (1890) 17 SCR 235
Date: 1890-03-10
DAME LURENA DAVIS ès qualité (PLAINTIFF)
Appellant;
And
HARRIET ELIZABETH KERR
(DEFENDANT) (TWO APPEALS)
Respondent.
DAME LURENA DAVIS ès qualité (PLAINTIFF)
Appellant;
And
MARY LOUISA KERR (DEFENDANT).
Respondent.
1889: Nov 5; 1889: Nov 6; 1889: Nov 12; 1890: Mar 10
PRESENT
:—Sir W. J. Ritchie C.J. and Strong,
Taschereau, Gwynne. and Patterson JJ.
ON APPEAL FROM THE COURT OF
QUEEN'S BENCH FOR LOWER CANADA (APPEAL SIDE).
Tutor and minor—Loan to minor—Arts. 297 and 298 C.C.—Obiigation—
Personal remedy for moneys used for benefit
of minor—Hypothecary— action.
Where a loan of money is improperly obtained by a tutor for
his own purposes and the lender, through his agent who was also the subrogate
tutor, has knowledge that the judicial authorization to borrow has been
obtained without the tutor having first submitted a summary account as required
by Art. 298 C.C., and that such authorization is otherwise irregular on its
face, the obligation given by the tutor is null and void.
The ratification by the minor after becoming of age of such
obligation is not binding if made without knowledge of the causes of nullity or
illegality of the obligation given by the tutor.
If a mortgage, granted by a tutor and subsequently ratified by
a minor when of age, is declared null and void, an hypothecary action by the
lender against a subsequent purchaser of the property mortgaged will not lie.
A person lending money to a tutor, which he proves to have
been used to the advantage and benefit of the minor, has a personal remedy
against the minor when of age for the amount so loaned and used.
APPEAL from judgments of the Court of Queen's Bench for Lower
Canada (appeal side) ().
[Page 236]
The appellant, in her quality of executrix of her deceased
husband's will sued the respondent Harriet Elizabeth Kerr, for the sum of
$6,044.22, of which $3,064 was for the amount of a notarial obligation and
hypothec, dated 8th January, 1880, and given by one T. C. Fields in his quality
of tutor to said Harriet Elizabeth Kerr, and $2,360.22 was for the amount of
another notarial obligation and hypothec given by the said Harriet Elizabeth
Kerr on the 23rd of February 1885, the appellant alleging that in the said last
mentioned obligation the said Harriet Elizabeth Kerr had ratified the first
obligation granted by her tutor. To this action the respondent, Harriet
Elizabeth Kerr, pleaded that she was not indebted; that the obligation of the
8th of January,1880,was illegal, null and void; that Fields had never been
legally authorized to borrow money from the appellant for her; that if Fields
received any money from appellant it was for himself; that she had abundant
means to live on and no necessity existed for borrowing more on her behalf
there was no cause nor consideration given for said obligations and hypothec;
that her signature to the last mentioned obligation was obtained from her by
threats and violence practised upon her by George Simpson, subrogate tutor and
agent of the appellant as well as trustee and heir of his late father, Robert
Simpson, and by Mrs. Fields on the advice of whom she was accustomed to rely
when was in a feeble condition of health, bodily and mentally.
At the same time the appellant brought an hypothecary action
against the respondent, Mary Louisa Kerr, for the amount of the obligation
granted by the deed of the 8th of January 1880 and ratified by the deed of the
23rd of February, 1885. To this action the respondent, Mary Louisa Kerr,
pleaded that the obligation of the 8th of January, 1880, was illegal, null and
void.
The Superior Court gave judgment in the action
[Page 237]
Against Harriet Elizabeth Kerr in favor of the appellant for
the sum of $2380 62,being the amount of the obligation of the 23rd of February,
1885, and dismissed the action for the surplus, holding that the obligation of
the 8th of January, 1880, was null and void, having been executed without the
observance of the formalities required by law which constitute of minors under
such circumstances; and as regards the hypothecary action the obligation which
it was based being annulled it was dismissed.
Each party appealed to the Court of Queen's Bench for Lower
Canada (appeal side) from the judgments of the Superior Court in the suit of Davis
v. Harriet Elizabeth Kerr, and the plaintiff appealed in the suit of Davis
v. Mary Louisa Kerr. Court of Queen's Bench for Lower Canada (appeal
side) dismissed both actions with costs.
Three appeals were then taken to the Supreme Court of Canada
and were argued together.
The evidence given in support of the respondents' pleas is
fully reviewed in the reports of the case in the courts below () and in the
judgment of Mr. Justice Taschereau hereinafter given.
Laflamme
Q.C. for appellant.
The principal question which arises in these cases is :
Was the tutor, Fields, legally authorised to execute the
obligation of the 8th January, 1880; if not, was the want of proper
authorization, or the irregularity which accompanied it, remedied and effaced
by the ratification and confirmation by Harriet E. Kerr as mentioned in the
obligation of the 23rd of February, 1885?
The requirements of the law (arts. 297 and 298, and 1010 C.C.)
were complied with and it is proven that at least $6000 of improvements had
been made on
[Page 238]
the property of the minor when the
loan was applied for.
Now the authority to whom is entrusted the care of protecting
the minors, and who is invested with judicially determining the power to borrow
money on behalf of minors and to sanction any loan so made, is conclusive
unless there be fraud on the part of the lender, or notice given to him, or
that he has direct knowledge of serious irregularities. Such authorisation must
be held a complete protection for the party advancing the money which cannot be
questioned by the minor or his representatives at any subsequent period. It is
obvious that if the party from whom the minor seeks to obtain means which he
needs is bound to guarantee the action of the judiciary, and if the minor after
many years could question the correctness and the truth of the allegations
sanctioned a proper tribunal no minor could find relief and protection from
ruin when necessity, his manifest interests, would require the assistance and
loan of capital.
Then as to ratification I contend that under art. 1008 C.C.
the Plaintiff is entitled to recover the full amount acknowledged to have been
received by her unless she can prove violence or fear within the meaning of
arts. 994 and 995. Upon this question the Superior Court gave judgment in favor
of the appellant and the evidence fully justifies this finding.
As to art 1214 C.C. The true meaning of the article is the
expression of the existing law on the subject and as explained by our old
authorities and best commentator son the corresponding articles of the French
Code. Articles 1337, 1338, clearly show that article 1214 applies to
ratification in general terms as not sufficient to cover nullities unknown to
the party ratifying and not disclosed in the original deed, but was never
[Page 239]
intended and cannot be intended to
exact from the party obtaining the ratification a detailed mention of all the
grounds of objection or irregularities which could be opposed to the original
obligation.
The ratification set up in the present case is more an actual
execution of the original obligation than a ratification proper and the free
execution of a deed otherwise valid in form and substance, implies a
renunciation of the right to invoke any nullities, which is equal in effect to
an express formal ratification. Moreover all the conditions required by the
article 1214 are fulfilled by this act of ratification in which the substance
of the obligation is mentioned and specially referred to. The obligation was
for and on behalf of the party ratifying who was then alleged to be a minor;
the only cause of nullity would be the fact that the property was mortgaged by
the tutor without the proper formalities; but two years' after the majority of
the minor, she expressly ratifies the act and declares it to be binding on her.
What more direct expression as to the substance of the obligation the cause of
its being voidable and the intention to make it valid, can be found than what
this deed of ratification contains? She knew of the existence of the mortgage,
the circumstances under which it was granted. She must be presumed to have
taken cognizance of it. She must be held in the same manner as if it were the
ratification of an act done on her behalf without her consent and knowledge.
Every authority declares that any ratification of an act done by a third party
without authority is completely binding if the party in whose name the same was
done thinks proper to approve of it.
The learned counsel cited Rolland de Villargues, Dic.
[Page 240]
du Droit Civil, (); Duranton, (); Toullier, (); Freminville,
de la Minorite, ();
Solon, Nullités, ().
As to the case against Mary Louisa Kerr, if the mortgage
should be held valid the hypothecary action would necessarily be maintained.
Hutchinson for respondent.
The tutor has no authority to borrow on behalf of the minor
nor to hypothecate his immovable property without the authorization of the
judge or prothonotary and that only in case of necessity or for the evident
advantage of the minor. Arts. 297, 298 267 269 C. C. Meslé (); Lamoignon
Arrêtés de ();
Argou ();
Pothier, Obligations ();
Pothier, Vente ();
Toullier, Droit Civil ().
The law provides that in case of necessity the judge or the
prothonotary can only give the authorization required when it is established by
a summary account submitted by the tutor that the moneys moveable effects and
revenues of the minor are insufficient. The question therefore at once arises '.
Did the tutor present an account and show that the moneys moveable effects
and revenues of the minor were insufficient? Of course, with this provision of
the law staring the tutor and the family council in the face some account had
to be presented, and some attempt had to be made to show the prothonotary from
whom the authorization was asked that the moneys moveable effects and revenues
of the minor were insufficient. How was it done? Simply by resorting
to—falsehood.
The next question of importance which presents itself is to
know what knowledge the appellant, who it
[Page 241]
is alleged lent this money, had of the
deception that was practised upon the prothonotary, in order to get this
authorization, and as to the necessity which existed on the part of the minor
to borrow this money.
In the first place the appellant, who is an elderly lady,
acted in this matter entirely through her son, George Simpson. This fact
appears by her own evidence, consequently the knowledge of her agent is the
knowledge of the appellant. And Greorge Simpson had full knowledge of
everything that was done by the tutor with respect to borrowing this money. He
was also the subrogate tutor of the said minor, Harriet Elizabeth Kerr.
Moreover the law does not entitle a tutor to borrow money and
mortgage the property of his minor as security for the loan of money with which
to pay himself. Sirey Codes annotés, ();
Chardon, Traité des trois puissances, ();
Demolombe Code Civil, ().
The learned counsel also referred to Beliveau
v. Chevrefils, ();
Poustie v. McGregor ().
It is, however, pretended by the appellant that even if this mortgagee
given by the respondent's tutor was valueless and without effect, yet the
respondent, after she became of age, ratified and confirmed it by a subsequent
deed of the 23rd of February, 1885.
In answer to this, the respondent says :—
That this pretended ratification cannot avail the appellant
inasmuch as the first deed of the 8th of January, 1880, being voidable as above
shown, it is necessary that the act of ratification should expressly recite the
substance of the former obligation and set forth the cause of its being voidable,
and also expressly mention
[Page 242]
that it is the intention of the
parties to cover ,the nullity, which has not been done. Art. 1214.
As to the second obligation of the 23rd February, 1885 the
respondent contends that this obligation is also entirely null and void and
without effect because the respondent never received any lawful cause or
consideration for the said obligation. Art. 989.
On the question of duress, I refer to art. 994, 995, 996 C.C.;
Pothier on Obligations, ();
Marcadé, ();
Duranton, ().
The evidence is ample to justify the conclusion arrived at on this question of
fact by the Court of Appeal.
The judgment of the court was delivered by:—
TASCHEREAU J—On the 2nd
of January, 1880, one Thomas Craig Fields, in his quality of tutor to the
defendant Harriet Elizabeth Kerr, then a minor, obtained from the prothonotary
of the district of Terrebonne, acting in lieu of a judge, the authorisation to
borrow from the present plaintiff the sum of $3,664 for and in the name of the
defendant, upon the security of a mortgage on the properties of the defendant
situated at St. Andrew's within the said district. Pursuant to that
authorisation on the 8th of the same month the said tutor passed an obligation
in the defendant's name in favor of the plaintiff for the said amount, and it
is that amount inter alia, that the plaintiff now seeks to recover from
the defendant by the present action.
The defendant pleads to the action that she received no
consideration for the obligation sued upon; that the authorisation granted to
her tutor to borrow for her the said amount and give a mortgage therefor on her
property was null and void; and that the amount thereof went to pay her tutor's
personal debts.
[Page 243]
She has made out that plea, in my opinion, as to a great
portion of this item of the demand.
It appears that the plaintiff's transactions in this matter
with Thomas Craig Fields were negotiated entirely through her son, one George
Simpson, who was her general business agent.
This George Simpson carried on a general store with his
brother, Moses, and the firm had on the 8th January, 1880, an account in their
books against T. C. Fields, personally, for $1,381.
This same George Simpson was the defendant's subtutor. In
December, 1879, he, apparently getting anxious to obtain a settlement from
Fields of the large amount standing against him in his hooks, concocted with
him, Fields, the tutor, upon the suggestion and advice of a notary named Howard
whose conduct in the matter I cannot but qualify as deserving of severest
censure, the means to get himself paid by this minor child of these $1,381 due
to him by Fields personally under cover of a loan from his mother, the present
plaintiff, to this minor.
A family council had by law to be called for the purpose. One
was assembled accordingly before that notary Howard, who knew all the parties,
on the 26th Dec, 1879, at the request of the tutor, Fields, and was composed of
George Simpson himself, Field's creditor, and agent of the lender, of Moses
Simpson, his brother and partner, and as such also Field's creditor, of L. T.
Simpson another brother and creditor for $84 of one Christie Davis their uncle
and the lender's brother of one Howard, the notary's son, and two others who
are said to have been then George Simpson's clerks.
These seven persons “ having been duly sworn upon the holy
evangelists, and having examined the tutor's declaration, and the summary
statement of accounts produced by him, and maturely deliberated together,
[Page 244]
were unanimously of opinion that it was expedient and
necessary that the said tutor should be authorised to borrow from Lurena Davis
(the present plaintiff) for and on behalf of the said minor, $3,664 and to
mortgage " the said minor's property as security for the said loan."
Such are the very words of the notary's acte or procés verbal of
the deliberations of the family council.
The prothonotary of the district a few days after homologated
these proceedings in apparently the loosest possible manner. Acting in a
judicial capacity, and bound by law to scrupulously scan every proceeding
brought before him that might in any way be prejudicial to minor children's
interests this officer granted the permission to mortgage this young girls
property for the large amount of $3,664 without making any inquiry whatsoever,
without having the family council or the tutor or the sub-tutor examined before
him and even without requiring from the tutor the summary account of the
minor's revenues required by art. 298 C.C. In utter disregard of the duties
assigned to him in the matter and seemingly unconscious of the responsibility
attached to his functions, he contented himself with relying upon the notary's
proceedings, and granted the authority to borrow a large sum in this minor's name
without any attempt whatever to exercise his own judgment on the merits of the
application or on the necessity of the loan. A more iniquitous
proceeding, a more glaring fraud against the law, is hardly conceivable ; and
that it should have so readily received the sanction of two public officers in
the province demonstrates, it seems to me, that the protection due to minors is
not, under the system there in force, always surrounded with the proper
safeguards. A family council called to protect the minor and advise on the
opportunity of a loan for her, composed of two of the creditors who are to be
paid from the proceeds
[Page 245]
of that loan, one of them the special agent of the lender,
three of them sons of the lender, and a fourth a brother of the lender, called
together on a petition of the debtor, whose debt to two of the council is to be
paid from the proceeds of the loan ; all of them swearing upon the holy
Evangelists that after having maturely deliberated they are unanimously of
opinion that, in the minor's interest, the loan from their mother was expedient
and necessary; and all this upon the petition of a tutor who is to get his
share of the loan; is a proceeding so ludicrous that 1 would think it fanciful
if I had not this record before me. The whole transaction was evidently nothing
but a deceitful contrivance, and this to the knowledge of the plaintiff,
through her agent.
A party who lends money to a minor, through her tutor legally
authorized to borrow, is not bound to see that these moneys are really expended
in the minor's interest; neither has he, when in good faith, to go behind the
judicial order that authorises the loan if such order on its face is legal and
regular. But the plaintiff here was, through her agent, a party to the illegality
and fraud against the law which entirely vitiates the authorisation to effect this
loan from her. She the lender, formed, through her agent, part of the family
council called to get her to determine upon oath whether or not, in the minor's
interest this loan was expedient or necessary. She, through her agent, knew
that the proceeds of a great part of this loan were to go to the agent himself.
She, through her agent, was aware that no summary of the minor child's revenues
had been submitted to the prothonotary or family council as required by law. Qui
mandat ipse fecisse videtur. I am of opinion that all this a
nécessairement eu pour effet de vicier
dans son essence même la constitution
[Page 246]
du conseil de famille. Re Gielly
(). Fraus et dolus nemini patrocinere debent.
I do not lose sight of the fact that Simpson, examined as a
witness, swears that it was to Fields as tutor for the defendant this $1,381
was advanced, but this is directly contradicted by his own books where the
amount stands charged to Fields personally, and then, were this true the fact
remains that the loan to that amount was to go to him, Simpson, who formed part
of the family council. And this, in my opinion, absolutely avoids this
authorisation, not only as, to the $1,381, but as to the whole amount of the
loan. Could it be contended, however, that the loan was legally effected as to
the surplus over the $1,381, there remains the objection to this surplus that,
on Field's own statement produced before the family council upon his own
application, as tutor to borrow for his pupil this surplus was to reimburse
him, Fields, as creditor of his pupil, for advances made and money expended for
her. The illegality of this is patent. Sirey ().
Where the interest of a minor is to be considered and dealt with uberrima fides
must be the rule and the law will neither allow proceedings to be
instituted for a minor by a tutor interested in the result nor tolerate in the
family council the presence of any party who has directly or indirectly an interest
in the matter submitted for consideration. Towards a tutor, a sub-tutor or a
member of a family council, more than to any others perhaps, the tribunals are
bound to rigorously enforce the wholesome doctrine that " no one having
duties of a fiduciary character to discharge shall be allowed to enter into
engagements or assume functions in which he has or can have a personal interest
conflicting or which possibly may conflict with the interests of those he is
bound to protect;'' or as the
[Page 247]
Privy Council tersely puts it in Bank of Upper Canada v.
Bradshaw (),
that an agent or mandatary (and a tutor or a sub-tutor are mandataries) cannot
be allowed to put his duty in conflict with his interest.
I do not think, however, that this entails the dismissal of
the whole of the action as to this item. Anyone who lends money to a tutor even
not legally authorized to borrow for the minor or even to a minor himself
without the intervention of his tutor has the right to recover all of this loan
which he the lender proves to have been used to the advantage and benefit of
the minor. This is unquestionable. I need only refer on this and other points
arising on the case, to the authorities cited in Miller v. Demeule () * and to Gagnon
v Sylva ();
Venner v. Lortie () : Demolombe
(); Laurent
(); Sirey
(); Sirey
(); Urquhart
v. Scott ();
Payne v. Scott ().
The issue on this item of the demand is consequently reduced
to a mere question of evidence. For what amount has the defendant been proved
to have benefited? The evidence of this is very meagre. There are on the one
hand three witnesses who estimate the additional value given by Fields to the
defendant's property at from $3,000 to $6,000. But on the other hand it is in
evidence that Fields during his administration received from New York and
elsewhere for the defendant divers large sums of money. So that it is
impossible to tell, Fields being now dead, precisely which portion of this loan
was spent on the property. Yet the plaintiff cannot recover more than what she
has actually established to have benefited the defendant.
[Page 248]
That amount I cannot find to be from this record over $1,230,
that is to say $1,000 paid to McIntosh on a previous mortgage he had on the
defendant’s property, and $230 for the outbuildings erected thereon by Fields.
I would give only the legal interest, not 7 per cent., because that amount was
not even authorised by the family council, and then the plaintiff recovers on
the moneys disbursed for the defendant's benefit, and not on the obligation of
the 8th January.
As to the hypothecation granted by the deed of 1880, it cannot
stand even for the amount that the minor has benefited from the loan : Art.
1009 0.0. not in Code Napoleon. I refer for this to Duranton () ', Demolombe
(); Solon
Nullités ().
L'hypothèque constituée est nulle, lorsque les formalités
requises n'ont pas été observées, encore bien qu'elle ait en pour cause un
emprunt qui a tourné an proftt du mineur; en cc cas, le prêtêur n'a qu'une
simple action personelle; le mineur n'est point tenu en vertu d'un contrat,
mais, ex lege, en vertu 1u principe d'équité qui ne permtt à personne de
s'enrichir aux depens d'autrui().
See also re
Beauquis ().
The reporter's summary of the case of Beliveau v. Duchesneau
()is
misleading. The court there did not hold that a mortgage given by a minor is
not radically null when the nullity is invoked by the minor or on his behalf.
The hypothecation being null it follows, of course, that the
hypothecary action against Mary Louisa Kerr stands dismissed
As to the ratification by the defendant of this obligation of
the 8th of Jan., 1880, by the deed of 23rd February, 1885, the plaintiff's
contentions have been, in my opinion, rightly dismissed by the Superior Court.
[Page 249]
It was consented to by the defendant at a time when she was in
complete ignorance of the circumstances under which the first obligation had
been passed by her tutor, and at the instances and through the agency of the
very man who had been her sub-tutor, and who thereby attempted to make her
unwittingly ratify his own improper dealings in his own interest and those of
his mother, the plaintiff, when acting for her, the defendant, under the guise
of a friend and protector in the family council of 1879. A confirmation or
ratification, either express or tacit, either under art. 1213 or under art.
1720, is not binding if the arty assenting to it was not aware of the causes of
nullity or illegality of the first obligation. No one can be presumed to
abandon voluntarily his rights. And no one can be held to have abandoned them
when he did not know them. Sirey ().
" Acquiesence and ratification must be founded on a full knowledge of the
facts " said their lordships of the Privy Council, in Banque Jacques
Cartier v. Banque d'Epargnes (),
or, as the French courts put it in other words, l'intention évidente
de révarer avec connaissance de cause le
vice dont l'acte est atteint. And says Bédarride () On ne
peut renoncer à un droit dont on n' a aucune connaissance.
As to the second item oftheplaintiffs'demand, $2,385.63, for
so much acknowledged by the defendant to be by her due to the plaintiff by the
deed of the 23rd Feb., 1885, apart from the first obligation, I think she is
entitled to recover. The defendant was then of full age, and had been since
1881. This deed is expressed to be for valid consideration for advances made to
her. On the defendant then was the burden of proving that the deed was false in
this particular. She has entirely
[Page 250]
failed to do so. As to the contention that she consented to
sign this deed only through fear and pressure, I am of opinion with the
Superior Court, and Tessier and Bossé JJ. in the Court of Appeal that she has
not proved it. A plea of this nature, to destroy a solemn deed received by a
public officer, cannot prevail but on the clearest evidence The only witnesses
on the point are the defendant herself, whose testimony must be read out of the
record her sister who is herself a defendant on an hypothecary action where the
same deed of ratification is attacked by her on the same ground, and Mrs.
Fields, their foster mother, whose evidence is so palpably biassed that it is
not surprising that the learned judge before whom the evidence was taken did
not rely on it.
I would, on this item, restore the judgment of the Superior
Court.
Appeals of Davis v. Harriet E. Kerr allowed with
costs of one appeal.
Appeal of Davis v. M. L. Kerr dismissed with costs.
Solicitors for appellants : Laflamme, Madors & Cross.
Solicitor for respondents : M. Hutchison.
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