Saint Lawrence Terminal Co. v. Hallé / Saint Lawrence Terminal Co. v. Rioux, (1907) 39 SCR 47

Supreme Court of Canada

Saint Lawrence Terminal Co. v. Hallé / Saint Lawrence Terminal Co. v. Rioux, (1907) 39 S.C.R. 47

Date: 1907-06-24

The Saint Lawrence Terminal Company (Plaintiffs) Appellants;

and

Jean Baptiste Halle (Defendant) Respondent.

The Saint Lawrence Terminal Company (Plaintiffs) Appellants.

and

Joseph Rioux (Defendant) Respondent.

1907: May 13; 1907: June 24.

Present: Fitzpatrick C.J., and Girouard, Davies, Idington, Maclennan and Duff JJ.

ON APPEAL FROM THE COURT OF KING'S BENCH, APPEAL SIDE, PROVINCE OF QUEBEC.

Title to land—Promise of sale-Entry in land-register—Tenant by sufferance—Squatter's rights—Possession in good faith—Eviction — Possessory action — Compensation for improvements — Rents, issues and profits—Set-off—Tender of deed—Restrictive conditions—Evidence—Commencement de preuve par écrit— Pleading and practice—Arts. 411, 412, 417, 419, 1204, 1233, 1476, 1478 C. C.

The appellants, plaintiffs, are the grantees of the lands in question, part of the Seigniory of Metapedia, the former proprietors of which had an agent resident in the seigniory, who administered their affairs there. It had been customary, on applications by intending settlers for the purchase of their wild lands, for this agent to take memoranda of their names and permit them to enter upon the lands, and this was done in respect to the lots in question and the applicants were allowed to hold possession and make improvements thereon without notice of any special conditions limiting the titles which might, subsequently, be granted to them by the owners. The defendants, respondents,

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acquired the rights of these applicants and, when the plaintiffs tendered deeds of the said lots to them, they refused to accept them on the ground that conditions were inserted which had not been stipulated for at the time of the original entries upon the lots and of which no notice had been given. In actions, au pétitoire, the defendants pleaded that their possession had been in good faith in expectation of eventually receiving titles without such restrictive conditions as were sought to be imposed and that, in the event of eviction, they were entitled to full compensation for the value of all necessary improvements made on the lands without deductions in respect of rents, issues and profits.

Held, affirming the judgment appealed from, the Chief Justice and Duff J. dissenting, (1) that the memoranda made by the agent were commencements de preuve par écrit and, having been followed by possession of the lots, were equivalent to a binding promise of sale without unusual conditions in limitation of any titles which might be granted; (2) that the entries made upon the lands, the possession thereof held by the defendants and their auteurs and the works done by them thereon could not be held to be in bad faith nor with knowledge of defective title; (3) that, under the circumstances and notwithstanding that the defendants had actual notice of prior title, the plaintiffs could not maintain actions au pétitoire, although they might be entitled to declarations in confirmation of the deeds tendered, if approved, and to recover the price of the lots ; and ( 4 ) that the defendants could not be evicted without compensation for the full value of the necessary and useful improvements so made upon the lands with the knowledge and consent of the agsnt, and subject to being retained by the proprietors, without any deductions in respect of the rents, issues and profits derivable from the lands. Price v. Neault (12 App. Cas. 110) followed; Lajoie v. Dean (3 Dor, Q.B. 69) discussed.

Per Fitzpatrick C.J.—Under article 412 of the Civil Code of Lower Canada, the good faith of a possessor of land is dependent upon a grant sufficient to convey real estate or transmit an interest therein.

APPEALS from the judgments of the Court of King's Bench, appeal side, Province of Quebec, affirming the judgments of the Superior Court, District of Rimouski, in two petitory actions for the recovery of two lots of land in the Seigniory of Metapedia, whereby it was declared that the plaintiffs, appellants, were owners thereof but that the defendants, respondents,

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had made entries thereon and held possession thereof in good faith and that, before eviction therefrom, the defendants were entitled to compensation for the value of certain necessary and useful improvements made by them, respectively, upon the lots in question and which the plaintiffs were entitled to retain, and ordering that the plaintiffs should pay the costs of the actions.

The circumstances in each case are stated and the questions at issue on the present appeals are discussed in the judgments now reported.

Lafleur K.C. and Peers Davidson K.C. for the appellants.

G. G. Stuart K.C. and Fiset for the respondents.

The Chief Justice (dissenting).—This (Hallé's case) is an appeal from a judgment of the Court of King's Bench, Quebec, confirming a judgment of the Superior Court (Carroll J.) rendered in a petitory action brought to recover possession of a lot of land containing about 99 acres, and described in the declaration as lot 103 in the first range west of the plan of the Seigniory of Metapedia.

The lot in question forms a part of the Seigniory of Lake Metapedia at one time the property of King Bros, lumber merchants, who exploited it for the purposes of their business. The seigniory contained about forty thousand acres.

The judgment of Mr. Justice Carroll in the first court proceeds upon the principle that the respondent and his two predecessors Bélanger and Otis had been in possession of the lot from 1895, and had made substantial

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improvements to the knowledge of the then Owners and on a promise that a deed of sale would be given. I can find no evidence after a most careful examination of the record to support the finding that any promise was ever given to consent to a deed of sale except in so far as such a promise may be inferred from the conversation between Otis and Nolin, to which I shall refer at length hereafter, or that King Bros, had any knowledge of the fact that defendant or his auteurs were in possession of the lot in question.

Appellants say in their declaration that the respondent wrongfully and without any title took and obtained possession of the lot and has kept illegal possession of it, and pray deliverance of the land.

Respondent at first attempted by his plea to put in issue the validity of the appellants' title asserting a title in himself, but from this untenable position he was compelled to recede and he now relies upon the allegation that about 1895 one Otis having acquired, for the sum of $7, certain improvements made by one Laberge a squatter on the lot in question entered into possession and made substantial improvements with the consent of Nolin, the authorized agent of King Bros., and upon his undertaking that a deed would be given by his principal. From Otis through one Bélanger respondent claims to hold his title.

The appellants in October, 1902, bought the seigniory from King Bros., including the lot in question, by notarial deed duly registered. The respondent on the issues as we now have them claims no title to the land, but asserts that as possessor in good faith he has acquired the fruits and in addition is entitled to be reimbursed the value of the necessary improvements

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made by him. The judgment of the court below maintains the respondent's position and fixes the value of these improvements at $800. On this appeal there is no dispute as to this amount.

The only question to be determined here is as to whether or not the defendant, now respondent, has in the circumstances acquired the fruits and is entitled to retain possession of the property until reimbursed the value of the improvements made by him, he having been, as he pretends, a possessor in good faith; (arts. 411, 412 and 417, C.C.).

The solution of this question depends upon the character of the title under which the respondent possessed.

The Civil Code, art. 411, says:

A mere possessor only acquires the fruits in the case of his possession being in good faith * * *

And art. 417:

When improvements have been made by a possessor with his own materials, the right of the proprietor to such improvements depends on their nature and the good or lad faith of such possessor.

Art. 412:—

A possessor is in good faith when he possesses in virtue of a title the defects of which are unknown to him.

I would observe that these articles are only cited in part and at the same time draw attention to what must evidently be an omission in art. 412. The word title is used alone and not titre translatif de propriété as in the corresponding article of the C. N, 550. Title which answers to "titre? means here a written or express grant which would convey property otherwise it would not be reasonably possible to assume it as the

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basis of good faith ; e.g., a deed of lease or of usufruct would be a title but not such as is contemplated by this article.

What is the character of the title required to enable the defendant to retain the fruits of the land and justify his claim to remain in possession of a property of which he is admittedly not the owner until paid the value of the improvements made by him.

Marcadé, (code civil), vol. 2, No. 550, art. 418 :

Le possesseur de bonne foi est celui qui se croit propriétaire, et qui a un juste motif de se croire tel, parce que sa possession repose sur un titre qui lui aurait réellement transmis la propriété, s'il n'avait pas été entaché d'un vice que ce possesseur ne connaît pas.

Laurent, vol. 6, No. 208:

L'article 550 porte : "Le possesseur est de bonne foi quand il possède comme propriétaire, en vertue d'un titre translatif de propriété dont il ignore les vices. Il cesse d'être de bonne foi du moment où ces vices lui sont connus." De là suit que la bonne foi du possesseur doit être absolue, c'est-à-dire qu'il ne suffit pas de la croyance que l'auteur du possesseur était propriétaire de la chose qu'il lui a transmise, il faut qu'il ignore tous les vices du titre en virtu duquel il possède. La loi ne distingue pas, et il n'y avait pas lieu de distinguer. Pourquoi le possesseur gagne-t-il les fruits? Le motif juridique est qu'il est considéré comme propriétaire du fonds et par conséquent des fruits. Or, un propriétaire est certain de son droit, il le fait valoir contre tous. Le possesseur doit avoir cette même certitude; si non il ne peut être mis sur la même ligne que le propriétaire. Dès qu'il y a lieu à doute, l'incertitude existe, et par conséquent la bonne foi légale cesser Nous disons la bonne foi légale, car la loi la définit; il faut donc laisser de côté la notion ordinaire de la bonne foi, qui pourrait varier beaucoup d'après les sentiments et les idées, pour s'en tenir à la définition du code.

Let us now examine the respondent's title which. is printed at length on pages 13 and 14 of the case, and from which I make this extract:

Au vendeur (Belanger) appartenant ce que dessus vendu pour l'avoir acquis d'Eugène Otis suivant acte de vente devant Mtre. M.P.

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Laberge, notaire, le vingt-six décembre mil huit cent quatre-vingt-dix-huit, enregistré à Matane, sous No. 7447, Reg. A. vol. 8, l'acquéreur devant s'acquitter envers les seigneurs de la dite seigneurie de tout ce qui pourrait leur être dû pour la concession de la dite terre.

The vendor Belanger's title is printed on pages 14 and 15 of the case and there it is declared by Otis that he acquired "par conventions verbales" from King Bros. I quote the words:

Le dit immeuble appartient au vendeur pour l'avoir acquis de messieurs King Brothers par conventions verbales et l'acquéreur devra prendre à ses frais, un titre authentique des dits messieurs King Brothers, mais le vendeur ne sera pas tenu de payer aucuns arrérages d'intérêt sur le prix de vente dû aux dits messieurs King Brothers, s'il en existe.

Can it be seriously argued in the presence of these deeds that he, Hallé, was not aware from the day he purchased of a defect in his title (412 C. C.)? Did not elementary prudence suggest that he should then have approached the landlord to inquire about the verbal title which Otis claimed to have?

Defendant as witness, page 98, line 30, says:

Q. Vous avez dit que vous saviez que les MM. King attachaient certaines conditions à la vente, mais que vous ne saviez pas au juste quelles étaient ces conditions?

R. Oui.

Q. Vous êtes-vous jamais informé quelles étaient ces conditions?

R. Non.

Q. Jamais?

R. Non.

Q. Vous n'êtes jamais allé voir les MM. King ni monsieur Nolin pour demander quelles étaient ces conditions?

R. Non.

Q. Vous avez pris possession du lot sans demander à personne?

R. Non, d'après l'achat de mon contrat.

Q. Vous n'êtes pas allé plus loin?

R. Non.

It is contended that the question of good or bad faith is one of fact and having been decided by two

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courts we should not disturb their finding. It is not a pure question of fact, but is a legal inference to be drawn from facts in evidence. In the case of Mayrand v. Dussault[1] we reversed the concurrent finding of two courts on a question of fact, and as was staed by their Lordships of the Privy Council in the very recent case of Barrette v. Syndicat Lyonnais du Klondyke, even if a mere question of fact, although the natural inclination of the court is to be guided largely by the opinion of the learned judge who tried the case there may be circumstances which justify this court in departing from it.

I might here observe that the question we are now considering has not been before this court to my knowledge for judicial determination, although the subject of many conflicting decisions in the Province of Quebec. The case gathers importance not only because the judgment to be rendered affects some twenty other cases which are depending upon it, in the Superior Court at Rimouski, but also because it will determine the rights of many large property owners in the Province of Quebec who are in the same position as the appellants. The conditions existing under the old seignorial system in that province has left the impression that large areas of land formerly held under seignorial tenure are still open for settlement to be occupied by any one who chooses to enter into possession and make the necessary improvements and pay rent as appears by defendant's evidence, page 93, line 6:

Q. Lorsque vous êtes allé vous établir à Cedar Hall et que vous avez acheté cette propriété de monsieur Bélanger saviez vous quels étaient les seigneurs de cette siegneurie-là?

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R. J'avais toujours entendu dire que c'étaient les messieurs King.

Q. Pouvez-vous dire à quelles obligations vous vous croyiez tenu envers les MM. King?

R. Non, monsieur, je croyais qu'on pouvait avoir des obligations comme on peut en avoir dans les seigneuries ordinaires, payer les rentes de terre, c'est la seule chose que je pouvais croire,

Q. Si d'autres conditions que celles que vous venez d'indiquer et que vous croyiez à cette époque-là être vos obligations vis-à-vis les MM. King, avaient existées, des obligations comme celles du contrat qu'on a voulu vous faire signer, quel aurait été, à cette époque, l'effet de ces conditions additionelles, si vous les aviez connues ?

R. Si j'aurais acheté? Je n'aurais pas acheté si je les avais connues.

What are the facts? Broadly stated the respondent's contention is that his auteur, Otis, by verbal agreement conventions verbales acquired the property in question from the then owners, King Bros., in 1895 represented by their agent Nolin and through Bélanger he is in Otis's right. It is, therefore, important to examine the exact nature of the agreement which is said to have been entered into between Otis and Nolin, for, although the respondent has, by reason of the sale by King Bros, to the appellants, lost his right to get a title, nevertheless the question of good or bad faith depends as to him on what occurred at that time. His title can be no better and he can put his case on no higher ground than Otis could if he was the respondent. It is not contended and there is certainly no evidence in the record to support such a contention that King Bros, were parties to or were ever in any way either before or after made aware of the alleged conventions verbales except in so far as they were bound by what Nolin did.

First, as to the character of Nolin's agency. Can it be said that he was empowered to bind his principal by a contract of alienation. Article 1703 of the Civil Code, last par.:

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For the purpose of alienation and hypothecation, and for all acts of ownership other than acts of administration, the mandate must be express.

No attempt was made to prove that Nolin was expressly authorized to sell property. It was not contended at the argument and no reference to any such power is to be found in the respondent's factum. The only evidence on this subject is to be found in the case at pages 65-66, when Nolin was examined by the defendant as his witness:

Q. C'est vous qui les représentiez (les MM. King) â Cedar Hall?

R. C'est moi qui étais gérant.

Q. C'est vous qui aviez l'administration absolue des affaires, en bas?

R. Oui.

Q. Vous ne voyiez jamais les MM. King en bas?

R. Oui, quelque fois, une fois ou deux par année.

Q. Ils ne demeuraient pas là?

R. Non. Lorsqu'il s'agissait de vendre les terres c'est eux autres qui décidaient ça.

It should be quite unnecessary to quote authorities to support the elementary proposition that an agent with the most general powers of administration cannot validly consent to a deed of sale. In a few lines Laurent, vol. 27, No. 426, states the doctrine:

Le. mandataire général ne peut jamais aliéner les immeubles; les auteurs mêmes qui donnent le plus d'extension au pouvoir de l'administrateur lui refusent ce droit; celà est décisif.

Here we have the positive uncontradicted evidence of Nolin to the effect that he had no power to sell. He says, at pages 66-67

Q. Le. fait d'entrer son nom sur cette feuille voulait dire seulement que si les MM. King se décidaient à vendre le lot, ça donnerait un droit de préférence ?

R. Oui.

Q. Ca n'obligeait les MM. King à rien?

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R. Non, c'était à eux à décider cela. Ca c'était décidé par eux.

Q. Vous n'avaiez pas le droit de vendre le lot?

R. Non.

Q. Lorsque vous entriez le nom comme ça est-ce que celui d'ont le nom était entré savait qu'il avait à prendre un titre des MM. King et à payer?

R. Oui.

Q. Il ne payait rien pour faire entrer son nom?

R. Non.

Q. Etait-il entendu que ce titre devait être satisfaisant pour les MM. King?

R. Oui, ils devaient prendre un titre comme tous les autres.

No attempt was made to prove his authority aliunde and there is not a word of evidence that I have read to the contrary.

The respondent in his factum at page 6 says :

While it may be that in consequence of the respondent having no registered title derived from King Brothers he was unable to set up the defence, which proved successful in the case of .Price v. Neault[2], as against the present appellant, it does not admit of doubt that he was a possessor in good faith, if against the previous proprietors,. namely, King Brothers, he would have been entitled to compel them to give him a title to the land.

Can it be seriously argued that on the evidence just quoted Otis could force King Bros, on a direct issue between them to grant him a title ?

Admitting that article 1703 is to be ignored and that article 1730 would apply,

the mandator is liable to third parties who in good faith contract with a person not his mandatary, under the belief that he is so, when the mandator has given reasonable cause for such belief,

on the evidence in this record can it be said that the respondent comes within the meaning of that article and that King Bros. gave Otis reasonable cause to believe that Nolin had authority to make a contract of alienation. Price v. Neault(1) was relied on. In that

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case the respondent did not appear on the appeal and we therefore have the assurance that in accordance with the traditions of the Privy Council nothing was overlooked that could be invoked in the interest of the absent litigant. The facts in Price v. Neault[3] bearing upon the question of Beaudry's agency and his relation with his principal Price are stated by their Lordships at page 115 :

But on a careful examination of the evidence, their Lordships think that Beaudry was empowered to bind his principal by a contract of alienation. In the letter of November, 1865, Beaudry is directed by David Price to inform the. local public of the terms of sales, and Mongraine's letter of May, 1870, shews that this was done by notice at the church door. In the same letter David Price tells Beaudry that certain persons have applied to him for plots, and that he has referred them to Beaudry as his agent. The letter of Mongraine is an appeal to David Price to give him one of the plots on which he had entered and worked, in preference to a rival claimant, and David Price gives no answer except that Beaudry will do what is just. In his letter of the 5th of September, 1870, David Price instructs Beaudry to insert certain conditions "in all the sales that you effect."

In his letter of the 21st of September, 1872, David Price tells Beaudry not to sell land in range B without taking a specified sum at once, and gives him discretion to make other arrangements, it is not easy to say what, while the lots are unsold. Magnan, the municipal secretary and treasurer, who himself settled on a plot, improved it, and afterwards purchased it, being asked how the plaintiff proceeded to sell his plots says that it was through his agent Beaudry. This gentleman's evidence is of much weight as regards the course of business on the estate, because few of the neighbors could write, and he was chosen to write to Beaudry on their behalf. The postscript to Beaudry's letter of the 4th of August, 1876, is an illustration of what passed between them, and both Magnan and Beaudry say that communications in the same sense frequently took place. In view of these letters from David Price and Beaudry's action upon them, which must have been known to his employers, their Lordships have no hesitation in holding that Beaudry had authority to contract for alienation, though it is true that of the powers of attorney executed by the plaintiff, that which was given to David Price in January, 1866, expressly mentions sales, and that given to Beaudry in September, 1872, speaks only of general regulation and management.

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Where is the evidence in this case that at any time or on any occasion Nolin was held out by King as having authority to sell? Where is the letter from King; where is the conversation; what is the public act of Nolin or King which would justify such a conclusion? If such facts existed they should have been proved so as to bring this case within the rule of Price v. Neault[4].

In my opinion the case fails here because Nolin is not proved to have been an agent with power to make such a contract as that alleged to have been entered into with Otis, and the latter had no reasonable cause to believe that he had any such power.

Assuming that Nolin had some authority express or implied, let us now see what actually occurred in 1895 when Otis went to see him as he says to get permission to enter into possession of the lot, and as Nolin says to give his name so that he might have the preference if King decided to sell. There were three persons present at the interview, Otis, father and son, and Nolin. Here I give what occurred in their own words. Abel Otis, the father, at page 55, line 14:

Q. Après cela avez-vous fait quelque'autre démarche quelque part, avec votre fils ?

R. J'ai été chez monsieur Nolin,—mon fils était jeune, il n'était pas bien vieux,/ j'ai été avec lui après qu'il acheté pour faire mettre son nom, pour pas que personne ne vint à le déranger de son ouvrage.

Q. Vous êtes allé chez monsieur Nolin?

R. Oui.

Q. Qu'est-ce qu'il faisait monsieur Nolin?

R. C'était l'agent des messieurs King, de Cedar Hall.

Q. Vous étiez présent avec votre fils chez monsieur Nolin?

R. Oui, j'êtais présent avec lui pour faire mettre son nom, mon garçon a demandé de son nom dans le livre; de ce que j'ai pu comprendre il a mis son nom dans le livre.

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Q. Combien y a-t-il d'années de cela?

R. Entre huit ans à neuf ans.

Being questioned later on as to the sale by his son to Belanger from whom the respondent bought he makes it clear that, as he understood what occurred, his son had not acquired the ownership of the property, page. 58 of case:

Q. Ce que votre garçon a vendu c'est son travail?

R. Comme de raison, il n'a pas vendu la terre, elle ne lui appartenait pas.

Eugene Otis, the alleged purchaser, page 58, line 30, et seq.

Q. Avez-vous eu affaire à monsieur Nolin au sujet de cette affaire-là ?

R,. J'ai eu affaire lorsque j'ai été pour mettre mon nom, c'est tout; à part de cela je n'ai pas eu affaire.

Q. Vous êtes allé là avec votre père?

R. Oui.

Q. Que s'est-il passé?

R. J'ai demandé à monsieur Nolin de mettre mon nom sur la terre, il repondu oui, devant moi il ne l'a pas rentré ce n'est pas de ma faute.

Q. Que vous a-t-il répondu?

R. Il ma répondu que oui, qu'il le mettrait, mon nom.

Q. A-t-il été dit autre chose que cela?

R. Non, c'est tout ce que il m'a dit.

Again page 59, line 25:

Q. Lui avez-vous expliqué ce que vous aviez l'intention de faire?

R. J'avais l'intention de me mettre sur la terre pour y rester, pour me mettre habitant.

Q. Que vous a-t-il répondu?

R. Il a dit il ne m'a pas dit que je faisais bien, il n'a pas parlé, il s'est mis à sourir, il n'avait pas grand discours à faire avec moi.

Q. Qu'avez-vous conclu des paroles de M. Nolin ?

R. Il m'a dit qu'il allait mettre mon nom, et, c'est tout.

Q. Vous avez pris possession du lot après ça?

R. Oui, je me suis bâti, j'ai travaillé à la terre, j'ai bâti une grange, j'ai fait un défriché, j'ai fait du serpé.

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And on page 61, line 36:

Q. Ce que vous avez vendu à Bélanger, c'est la même chose?

R. Oui, j'ai vendu mon travail seulement.

Q. Lorsque vous avez fait entrer votre nom comme ça vous saviez qu'il fallait prendre un titre des MM. King?

R. Oui, je le savais.

And on page 62, lines 5 and 6.

Q. Vous n'avez jamais réclamé de titre de MM. King?

R. Non, je ne l'ai pas demandé, ils ne m'en ont pas donné non plus.

Raphael Nolin examined as defendant's witness, page 63, line 37 :

Q. Est-ce que vous avez concédé le lot à Otis?

R. J'ai entré son nom dans mon petit livre pour qu'il vint â avoir la .préférence de prendre la propriété lorsque les MM. King se décideraient de vendre,

Q. Que'est-ce que Otis vous a demandé en allant chez vous? Pourquoi allait-il chez vous?

R. Pour me demander à inscrire son nom sur ce lot là.

Q. Une fois leur nom inscrit dans le livre, pouvez-vous dire s'ils prenaient possession de leur lot?

R. Il y avait des fois qu'ils le prenaient; lorsqu'on s'apercevait de cela on leur disait de ne pas travailler sur le lot.

And on cross-examination at pages 66 and 67 he referred again to this interview:

Q. Le fait d'entrer, son nom sur cette feuille voulait dire seulement que si les MM. King se décidaient à vendre le lot, ça donnerait un droit de préférence?

R. Oui.

Q. Ça n'obligeait les MM. King à rien?

R. Non c'était à eux à décider cela. Ça c'était décidé par eux.

Q. Vous n'aviez pas le droit de vendre le lot?

R. Non.

Q. Lorsque vous entriez le nom, comme ça est-ce que celui dont le nom était entré savait qu'il avait à prendre un titre des MM. King et à payer?

R. Oui.

Q. Il ne payait rien pour faire entrer son nom?

R. Non.

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Q. Etait-il entendu que ce titre devait être satisfaisant pour les MM. King?

R. Oui, ils devaient prendre un titre comme tous les autres.

From all that occurred on this occasion and assuming Nolin to have been the owner of the property in question, could he be obliged to grant Otis a title? I hold not.

It is impossible to find in what occurred the elements necessary to constitute a contract of sale, Object, price, consent (art. 1472, C.C.), or a promise of sale. All that can be inferred was that Otis asked for permission to enter into possession of the lot, but that Nolin gave no formal consent to his doing so. It is in my opinion abundantly clear that both parties Otis and Nolin expected Otis would get a preference if the lot was sold, but that the Seigneurs King Bros. alone could decide whether or not the lot was to be sold, and they alone could give a title. It has been argued that because, following on the conversation, Otis's name was entered in a book improperly described as a livre terrier that he took possession of the lot and made improvements and paid the taxes he was entitled to a deed. In my opinion it is somewhat difficult to infer a contract to sell from the mere entry of Otis's name in such a book as the one produced here and described by Nolin as a mere memorandum book, and it is to be observed that Nolin denies all knowledge of Otis's possession, improvements or payment of taxes (page 64) and asserts that had he known Otis had any such intention he would have prevented him from giving effect to it.

In Price v. Neault[5] their Lordships at page 113 say:

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The ground laid by the court for their decree is that the defendant and Perron were put into possession of the land, had possessed it for more than ten years, and had made substantial improvements within the sight and knowledge and with the consent of the plain- tiff by means of his agents, and on a promise that he would consent to a deed of sale for the price of $150.

Their Lordships cannot find their way to the whole of the conclusion thus expressed. The transactions between Beaudry on the one hand and Ludger Neault and his successors on the other, rest . entirely on Perron's evidence. It has been shewn under what circumstances Perron entered and made improvements. Translating his language freely, he proceeds thus: "I did not ask to buy the plot of Beaudry. I only asked him if I might work and build a flour-mill. I had bought the plot of Neault. I was bound to observe the conditions under which the plot had been sold to him, that is to say, Beaudry had to notify to Neault to come in and take up his contract. I never asked Neault what price he was to pay to the plaintiff for the land. I did not exactly know the price at which the plaintiff was then selling those lands. I did not know that there was a price fixed for all the lots of land of the said range B. north. I do not think that the price was the same for each of the lots. I expected to pay for the ground the price for which the plaintiff was selling his lands in that range. I thought that price was $1 per arpent. I never heard tell of it. I did not know it." On that evidence it is difficult to say that there was any promise or contract as regards the purchase money. The book kept by Beaudry has not been produced, nor does he give any such description of it as would justify their Lordships in inferring a contract to sell from the entry of a name. And there is even greater difficulty in fixing $150 as the price.

For over eight years Otis, Belanger and the respondent remained in possession of the property now in question with the full knowledge that they had no title, and without at any time during all that period making an attempt to get a title or making any inquiry as to the conditions of sale. They do not appear to have at any time inquired as to the price they were expected to pay. As each successive occupant acquired the improvements of his predecessor he got by his deed formal notice of the fact that he had no title, but now that it suits the respondent to give up the property of which he has been for all these years in

[Page 64]

illegal possession, he asks to be paid for his improvements made with timber cut on the defendant's property. Pages 97 and 98:

Q. La partie principale de vos constructions a été prise sur le lot?

R. A part celui qui demandait à être varlope et embouveté, qui a été acheté chez MM. Fenderson et chez M. Price à Amqui.

Q. Le reste est de votre lot?

R. Le reste a été pris sur la terre.

In their factum the appellants conclude as follows :

The appellant on the other hand is not anxious to acquire the fruits of this man's toil either at a just valuation or for nothing. His chief aim is to keep his title clear and his lumbering interests free from molestation.

There can be no- doubt that in" the Province of Quebec because of the conditions existing there the courts have been astute, I do not say improperly, to construe article 412 broadly, but there has been considerable diversity of judicial opinion as the respondent makes abundantly clear by the numerous cases which he cites. Ellice v. Courtemanche[6]; Chinic Hardware Co. v. Laurent[7]; Galarneau v. Chrétien[8]. Hard cases make bad law.

After they entered into possession the appellants on inquiry found that a large number of persons, about one hundred in all, were in possession of different lots in the seigniory without title from King Bros. They then offered to give titles to these different persons in all respects similar to those which their pre- decessors had been in the habit of granting and this has been made a grievance against them in this case,

[Page 65]

the contention being that they would not offer to give a title if they were not bound to do so as a result of what occurred between Otis and Nolin. The fact that Nolin was not the appellants' agent in any sense and that they could not be bound by what he did is of course overlooked.

I am disposed to take a different view of the appellants' conduct in the premises. Anxious to avoid litigation and assuming that the occupants had entered into possession as they alleged on the faith of an undertaking that a title would be given to them, although the respondent and his auteurs allowed some eight years to go by without as he admits having ever asked for a title, they offer to give him a deed in all respects similar to the one generally in use in the seigniory. This was refused on the ground that the condition were too onerous.

Hallé, page 100, line 30:

Q. La pensée de réclamer vos améliorations vous est venue seulement après l'action lorsque vous avez été poursuivi?

R. J'ai pensée lorsqu'il ont commencé à me parler de signer un contrat, j'ai dit à ma femme et à n'importe quel autre, j'ai dit que plutôt que de signer ce titre ils me paieraient mon ouvrage.

In Ainsworth v. Bentley[9], Wood V.O. said:

A person might be willing to forego his rights and so avoid litigation; but, after the litigation, which he had shewn himself anxious to avoid, had begun the circumstances were altered and he surely should be allowed to insist on his rights to the utmost.

I fail to understand the principle upon which it is to be assumed that King Bros. were under any obligation to part with any portion of their property except upon such terms and conditions as they thought proper. This is not a case of expropriation, or compulsory

[Page 66]

purchase, and the question of reasonable or unreasonable terms has no place here and should not have been considered. It is not alleged and I have not heard it suggested by any one that at any time the terms and conditions of the deed of sale which it is assumed Otis expected to get as the result of his conversation with Nolin were settled. Assuming an agreement to sell, a most violent assumption in the circumstances, if both parties were silent as to the conditions of sale then the legal inference is that the conditions would at most be such as were generally in force in the locality for lands similarly situated.

It has been suggested here, but not in the courts below, that the deeds offered by the appellants to the respondent is not in terms similar to those generally granted by the Kings. From this I most emphatically dissent. The undoubted indisputable facts are that previous to the bringing of the suit a deed was tendered to the defendant for signature as appears by protest on page 16 of the case where it is said that the deed contained the usual conditions admitted to be those generally found in all deeds in the seigniory. This deed the defendant refused to sign, not because the terms were different from those generally in force, but because these conditions were not satisfactory to him.

The same thing flows from the pleas to the action as appears by paragraphs 14, 15 and 16, where it is admitted that a deed was offered and the alleged ground for defendant's refusal to sign or accept was that the conditions were exorbitant. The witnesses Nolin, case page 53, and French, case page 42, both say that the deed offered to the defendant is in effect the same as those granted by King Bros. The defendant

[Page 67]

examined as a witness in his own behalf is questioned closely as to the conditions of the deed at pages 99 and 100 and did not even remotely suggest that the deed offered him in any way differed from that granted all the other censitaires by King Bros. And finally the judge who tried the case in his reasons for judgment at page 109 says :

Ce document endossé "vente," et qui, suivant les assertions de la demanderesse et la preuve, serait analogue à tous les titres qui ont été généralement signés comporte vente du lot avec entr'autres les restrictions suivantes.

So that in my opinion this point is conclusively settled and at the argument here I assumed that this was admitted by counsel.

In my view the refusal of the respondent to accept the title offered to him greatly weakens his position.

If King Bros. were still the owners of the seigniory and had offered Hallé, the respondent, a title such as was generally used in the seigniory in 1895, at the time Otis took possession after his conversation with Nolin, could he, Hallé, refuse to take such a deed and say, "No, I will not take this deed, the conditions are too onerous. You must pay me for my improvements before you can get possession of your land." I can hardly conceive that such a position would receive the sanction of any court in this country. In effect that is what happened here. The plaintiffs are in a stronger position than King Bros., for as against them the respondent cannot claim a title as is admitted in his factum.

In the absence of an express agreement the most that Hallé was entitled to was such a title as was generally in use in the seigniory at the time Otis had his conversation with Nolin, and if he refused to take

[Page 68]

such a title, as he undoubtedly did, then he must be considered to be illegally in possession without a title and consequently in bad faith. Are the appellants to be penalized for having in the interest of peace agreed to give effect to an arrangement alleged by the respondent to have been made by their auteurs, but by which they were not legally bound? If it is urged that his case is a hard one to be ejected after all these years, the answer is that the fault is with himself as he might at the very outset before going into possession have made his position clear and certain by applying to the seignior to know what were the obligations towards them which he was assuming by the deed which he then signed, instead of taking for granted that he was merely obliged to pay rents, etc, as appears by his evidence already quoted. Having failed to do so he cannot now complain if he is made to suffer the consequences of his own negligence.

In the case of Lajoie v. Dean[10], page 71, Lajoie and his auteurs had been in possession of their property, made improvements and were entered on the valuation roll and paid taxes. The land was Government land intended for settlement, and those in possession were bona fide settlers; nevertheless Dorion C.J., found that in the absence of title they had not that good faith required by article 412 of the Civil Code, and while he declared they were entitled to be compensated for the improvements, obliged them to account for the rents and profits. That case is not, I admit, on all fours with this, but in view of the declaration made by the appellants in their factum that their sole desire is to settle the question of title and the conflicting jurisprudence in the Province of Quebec

[Page 69]

I would be disposed in this case to follow that precedent, and while holding that the defendant does not come within the rule laid down in article 412, allow him compensation for his improvements to the extent of $800, and hold him accountable for the rents, issues and profits, and I would allow the appeal, each party paying his own costs.

(This opinion applies also to the appeal in Rioux's case. )

Girouard J.—This (Hallé's case,) is a petitory action, which, as I understand it, involves a mere question of fact decided by the district judge, Carroll J., and the court of appeal, Bossé, Blanchet and Lavergne J J., and Lemieux and Cannon J J., both ad hoc, and I would require a very clear case of error on their part to reverse their unanimous finding.

By his defence, the defendant admits the prior title of the plaintiffs, and consents that they be declared proprietors of the lot in question. But he claims that, as a possessor in good faith, before he can be forced to quit, he is entitled to the value of his necessary and useful improvements on the property, which have been allowed by both courts to the extent of $800, without any deduction for rents and revenues, art 417 C.C. Mr. Justice Carroll and Mr. Justice Cannon have gone fully into all the details of this case, and the reasons they advance fully convince me that the judgment which is now attacked was the only one which could be rendered. As, however, we are far from being unanimous, and the case is an important one and affects many settlers of this same locality, I will give the grounds which induce me to concur in that judgment.

[Page 70]

The whole case turns upon the application of art. 412 of the Civil Code:

A possessor is in good faith when he possesses in virtue of a title the defects of which are unknown to him.

The appellants contend that the respondent, admitting that he has no title, that is, as he explains, no notarial or authentic title, transferring the land, cannot be considered to be in good faith. In fact they look upon him in no more favourable position than a squatter. What are the facts?

Respondent purchased this lot of land on the 7th September, 1900, from one Bélanger, by deed of sale before Gagnon, notary public, duly registered in the registry office of the County of Rimouski, where the land is situated. He purchased not only the rights of said Bélanger, but the said lot—"une terre contenant trois arpents," etc., with all the buildings thereon erected. The vendor declares that he acquired the said land from one Otis by a notarial deed of sale of the 26th December, 1898, also duly registered. The only reference to the seigneurs, King Bros., is that the said purchaser undertook to pay everything that could be due to them for the grant of the said land, "la concession de la dite terre"

And if we refer to the deed of sale to Otis, we find that it was a complete sale that was intended of the said piece of land—"une terre située en la dite paroisse" etc., and the vendor declares that the said land belongs to him for having acquired the same from Messrs. King Bros. "par conventions verbales" and the purchaser agreed to obtain an authentic title from Messrs. King Bros. at his cost.

As stated in the latter deed, Otis knew that he

[Page 71]

had no authentic title, but he considered that he had some title, and I believe he had, defective it is true, as it was not authentic and could not transfer the land against a third party having a title duly registered; but he had reason to expect that authenticity would some time follow.

About the year 1896 or 1897, Otis went to one Nolin, agent of the then seigneurs, King Bros., at Cedar Hall in the seigniory and near where the lot of land in question was situated, and according to the custom prevailing at the time, and authorized by the seigneurs, requested Nolin to put his name upon the said lot in the land-register, which he calls livre-terrier, and kept by him for the purpose of recording all applicants for lots of land, which had been properly surveyed. The book is produced and shews that the title of hundreds of settlers in that seigniory originated in that manner. The reason was very simple. There was no notary in the place, as explained by Nolin himself, and it might take several years, even as many as eight or nine, before one of the Messrs. King would go down with a notary to complete the title deeds.

Nolin says that until this deed was obtained no work could be done on the lots. The learned trial judge throws some suspicion upon this statement of Nolin. He calls it "chose étonnante" and he is right in his appreciation. Nolin is contradicted by every witness who knows something about these transactions, and by the facts. Nolin does not recollect that he gave any warning to Otis, and the latter and also his father, who was with him, both affirm that Nolin did not make any prohibition; that if he had Otis would not have entered his name. And this is

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plain common sense. How could a settler wait seven or eight or nine years for a notarial title deed to work on his lot, if in the meantime he has to pay all the taxes, school and municipal, church assessments, the opening of roads and all municipal charges, as was done in this case and in all the cases? Nolin is also contradicted by the facts.

Otis and all the other settlers took possession immediately of their respective lots, their names were entered upon the municipal assessment rolls as proprietors, they built houses, some of them even two, erected barns and" out-buildings, cleared the lands, put up fences, opened roads and ditches, and this to the knowledge of Nolin, who, as he says, never took the trouble to inquire who were so acting.

I look upon the entry in the land-register, followed by a complete possession with the knowledge and under the eyes of the local agent, as establishing between the seigneurs and the applicants for lots not only a commencement de preuve par écrit, but an implied promise of sale, which the seigneurs were bound to -carry out whenever requested by the settlers. In such a case, as was decided by the Privy Council in Price v. Neault[11], if the settler refuses or neglects to come and pay the purchase money and take a title, the remedy of the seigneur is not a petitory action, but an action to have a title offered by him confirmed by the competent court of justice, and a condemnation for the payment of the purchase money.

The respondent, however, has decided not to take that position. He says to the appellants, "If you want your land, take it; you may be in the position of a third party who has acquired under a perfect title

[Page 73]

duly registered ; but pay me fully my improvements." Is he going to be deprived of such payment?

The respondent when he bought the lot was not moved by any spirit of speculation; he says he had made up his mind to become "habitant" ; he took possession of the said piece of land immediately, commenced the enlargement and construction of buildings, the clearing of the land, building of fences, and making of other improvements ; in fact, at the time of the institution of the present action, he had sixteen acres under cultivation and in consequence the said land had increased in value to the extent of the said $800, as found by the said courts.

The respondent never applied for a title from Messrs. King Bros. or their successors, but on the 16th June, 1905, the appellants tendered to him a notarial deed or title which he refused to sign because it contained conditions which he had not agreed to. These conditions appear on the face of the deed tendered; but it is sufficient to quote the summary which the trial judge made and which is translated in appellant's factum as follows:

"a. Prohibition to cut merchantable timber or pay $2 per arpent.

"b. A reserve in favour of the appellants of all land bordering on Lake Metapedia to a depth of 300 feet, and of all land bordering any river, stream or watercourse passing through the lot to a depth of 100 feet on each side.

"c. Reserve of all falls and water-powers with a right to the seller to take at any time any land necessary for the exploitation of such water-powers, at a price of $2 per arpent for cleared land, and of $10 per arpent for cleared land.

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"d. Reserve of all merchantable timber except such as was necessary for the buildings and fencing and fire-wood of the purchaser.

"e. Eight of the vendors to explore the land at any time without indemnity.

"f. Obligation of the purchaser to conform to the conditions and fulfil the obligations stipulated in the letters patent granting the seigniory. These are unspecified.

"g. Obligation on part of the purchaser to do all fencing between him and the vendor.

"h. Right of the vendors to assess on all lands sold by him in the seigniory all sums which he should be called upon to pay for municipal or school taxes or road work, pro rata, to the extent of land sold to each purchaser.

"i. Payment by the purchaser of all costs of survey, and obligation of the purchaser to furnish a registered copy of the deed of sale.

"j. Dissolution of the sale in the event of the purchaser failing to pay two consecutive instalments of the price, or if he should cut or remove any merchantable timber with the right in such event to the Vendors to retake the land with all buildings and improvements without indemnity.

If King Bros. had never promised a title of the said land to the respondent, I cannot understand why the appellants, as their successors and without being asked to do so, should have made the said tender of a deed at $l per acre or, in fact, of any deed. If they considered themselves bound to make a tender why did they not take an action to have the same declared good and valid, and force the defendant to take the

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title they offered him and pay the price, that is $1 per acre? There is no dispute as to the price.

Nolin admits that that was the amount. At page 65 of the case, line 27, speaking of the lot in question, he says:

C'aurait été vendu une piastre de l'arpent, je suppose, comme les autres.

French, at pages 43, 45 and 46, says the same thing. At page 45 he says:

Oui, nous vendons le fonds de la terre pour une piastre de l'arpent; c'est comme cela qu'on fait les contrats, on vend une piastre de l'arpent et nous réservons le bois.

Were the said conditions reasonable? Are such conditions generally imposed by seigneurs granting concessions of land? Were they known generally in the seigniory of Metapedia owned by King Bros? Were they known especially to the respondent?

The appellants in their factum say that all the settlers accepted them with the exception of some 22, who have resisted and are to-day defendants in the Superior Court of the district to answer to petitory actions like the one in question in this cause. Moreover, that is only the saying of their agents, Nolin and French, and perhaps also their notary Laberge, but none of the settlers were examined to shew that they accepted those conditions because they understood that they existed from the beginning, or that, as a fact, any such form of deed with such conditions had been adopted by King Bros, at the time Otis entered into possession of the land. Judging from what the respondent swears, and his statement is not contradicted, they were all afraid of these new seigneurs. He says : "Iis ont peur des seigneurs" And no wonder when we see

[Page 76]

that, instead of making one test case which would afford only one appeal, we have before us two appeals entirely similar, and the counsel for the appellants admitted before us that there were many other cases pending in the first court. It is even not impossible that the present appeals will reach the Privy Council. No wonder, I say again, that these poor settlers were frightened.

The above officials, Nolin, Laberge and French, do not say that the above conditions were those imposed during the time of King Bros. French, at page 42 of the case, relied upon by the appellants, says that these conditions are to be found in all the titles which have been given for the lands in the seigniory, but he evidently refers only to the time that the appellants were landlords, because he knew nothing of what happened before. The same thing is to be said of Notary Laberge who received many deeds in favour of the settlers who submitted to the exactions of the Terminal Company ; these deeds are all to the same effect, in the same form, and having the same conditions. In fact the notary had a printed form to that effect. Nolin, who should have known what form of deed was given in the time of King Bros., before Laberge was employed, and before the latter resided in the locality, who never mentioned to applicants for entries in the livre-terrier the conditions which regulated the grants, after looking at the form of deed tendered by the appellants to the respondent, says that it looks very much like the deeds granted by King Bros., but he is not sure.

Après examen (he says) je déclare que ce document, exhibit D du défendeur, m'a bien l'air pareil au titre que donnaient les messieurs King.

[Page 77]

This statement was made by Nolin when he was recalled specially for the purpose, and was the strongest and only piece of evidence given by appellants on the point.

But suppose that Nolin had been positive that the deed offered to the respondent was just the same as those granted to settlers by King Bros., will that proof be sufficient? Will it be legal? Is it the best proof of which the case in its nature is susceptible, as required by article 1204 of the Civil Code? Why not produce one of the numerous deeds made by King Bros. to some of the settlers under similar circum-stances, for instance, that of the 8th November, 1894, before Bérubé, notary, in favour of one Lefrançois, and duly registered as the registry certificate produced shews? It was easy for the appellants to get a copy of the said deed. The onus was upon them to shew that the conditions were the same. For these reasons I attach no importance to the testimony of Nolin, French and Laberge on the point now being discussed as to whether the deed tendered substantially conformed to those used on the seigniory in the time of King Bros.

But suppose we had such a proof before us, is it established that the respondent knew or ought to have known, or must be held to have known, anything of the said conditions? He swears he knew nothing about them, except one, that the seigneurs reserved to themselves the merchantable timber beyond the quantity required by the settler for his own use; but that did not trouble him as that timber had been already removed by King Bros., less a small quantity which he had a right to use. His ignorance of a condition would not, it is true, of itself justify his refusal of a

[Page 78]

deed, but the fact that such a condition was a usual and customary condition must be proved. If no evidence of any special conditions having been customary in the deeds given by King Bros. was given, then the only reasonable inference to be drawn is that there were no such special conditions.

Nolin says that all these conditions were known in the seigniory, but I am afraid his statement in this respect is still more astonishing than the other one . that he prohibited all settlers from working on their lots until they got a deed. It is absurd to suppose that uneducated farmers would be able to recollect and talk among themselves of twelve complicated reservations, some obscure and contradictory, the effect of which would be almost to destroy their right of proprietorship. It is not surprising, therefore, that none of the settlers knew anything of those conditions except about the merchantable timber. That is all that the two Otis and the respondent knew. In fact the latter adds that when he bought the farm in question from his uncle Bélanger, he thought that he was buying the lots subject to the usual conditions in the ordinary seigniories, that is to say, that it was subject to the payment of such dues as might be payable to the seigneurs, or such additional conditions as may have been customary or expressly proved. The former is exactly what the deeds from Bélanger and Otis provide for and nothing else.

To resume, I have not a doubt in my mind that the respondent is a possessor in good faith by virtue of a title, the defects of which were unknown to him. These defects consisted in not having an authentic title, which is not the same as being without any title; so much so, that I believe the respondent having regard

[Page 79]

to the evidence in this case, could at any time have taken an action against the seigneurs King Bros. based upon the promise of sale, that is the livre-terrier and his possession, and demand that they be condemned to give him a title upon the tender of the purchase money, $ 1 an acre, and that in default of so doing, the judgment of the court should stand in lieu of the said title[12]; a fortiori, he can demand the payment of the value of his improvements on the land before he can be evicted, without any deduction for the revenues he derived from the land, having made les fruits siens in consequence of his good faith[13].

I think this conclusion is supported by the decision of the Privy Council in Price v. Neault[14], and also by many other decisions of the highest courts of the Province of Quebec: Stuart v. Eaton[15]; Ellice v. Courtemanche[16]; Joyal v. Deslauriers[17]; Savoie v. Gastonguay[18]; St. Pierre v. Sirois[19]; Montgomery v. McKenzie[20]. In some of these cases, it was held that even a squatter was entitled to his necessary or useful improvements, if they were made to the knowledge, express or implied, of the local agent of the seigneurs, a point not, however,, involved in this case.

The decision of the court of appeal, delivered by Dorion C.J., in Lajoie v. Dean[21], is cited as being contrary to this jurisprudence. I think that this case is entirely different. The possessor or defendant was

[Page 80]

not the settler who had obtained a permit or location ticket or applied for one or for an entry in the livre-terrier of the seigneur; he had done nothing to give him some reasonable expectation that he will one day have a perfect title; he was in fact a mere squatter, and was allowed his useful improvements, less the fruits and revenues. Had he been, as in this case, a recorded settler upon the lot in question, Chief Justice Dorion would no doubt have arrived at a different conclusion, as he did in Neault v. Price[22], where he held that the seigneur was not entitled to the land, but only to compel the possessor to pass title to it and pay the price for it, a conclusion which the Privy Council approved of.

For these reasons, I am of the opinion that the appeal should be dismissed with costs.

The same reasons for judgment apply to the appeal taken by the same appellants against Rioux.

Having arrived at this conclusion, I express no opinion on the point of jurisdiction raised by the respondent.

Davies, Idington and Maclennan JJ. concurred with Girouard J.

Duff J. (dissenting) concurred with the Chief Justice.

Appeal dismissed with costs.

Solicitors for the appellants: Davidson & Wainwright.

Solicitors for the respondent: Tessier, Fiset & Tessier.