Mitchell v. The Mortgage Co. of Canada, (1919) 59 SCR 90

Supreme Court of Canada

Mitchell v. The Mortgage Co. of Canada, (1919) 59 S.C.R. 90

Date: 1919-06-17

John D. Mitchell (Plaintiff). Appellant;

and

The Mortgage Company of Canada (Defendant). Respondent.

1919: May 13; 1919: June 17.

Present: Idington, Duff, Anglin, Brodeur and Mignault JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR SASKATCHEWAN.

Landlord and Tenant—Lease—Agreement for lease—Memorandum— Statute of Frauds—Date when term begins.

The appellant, suing for the specific performance of an agreement for a lease, relied on the following memorandum:

Prince Albert, Sask.

Received from Mr. John D. Mitchell the sum of Fifty Dollars, being deposit on rental of St. Regis ground floor, building taken at $100.00 per mo., for a term of five years to start from completion of repairs or when handed over to Mitchell.

$50.00. Romeril, Fowlie & Co.,

"A. Romeril."

Held, Idington and Brodeur JJ. dissenting, that the document was insufficient to satisfy the requirements of the Statute of Frauds, it being impossible to determine from it the time of the beginning of the contemplated term.

Judgment of the Court of Appeal (11 Sask. L.R. 447; 43 D.L.R. 337), affirmed, Idington and Brodeur JJ. dissenting.

APPEAL from the judgment of the Court of Appeal for Saskatchewan[1], reversing the judgment of the trial judge, Taylor J., and dismissing the plaintiff's action with costs.

The material facts of the case and the questions in issue are fully stated in the judgments now reported.

Eug. Lafleur K.C. for the appellant.

F. H. Chrysler K.C. for the respondent.

[Page 91]

Idington J. (dissenting).—The authority given by the respondent in its telegram of 21st December, 1916, confirmed by its letter of 22nd December, 1916, would seem to confer ample authority on the alleged agents to make an agreement for a lease for five years subject to submission to the respondent of the tenders for repairs and improvements.

Pursuant thereto the agents on 27th January, 1917, and 30th January, 1917, reported all that seemed required as condition precedent and named appellant as proposed tenant.

To this respondent answered by a telegram on 5th February, 1917, as follows:

290 Garry Street, Feb. 5, 1917.

Romeril, Fowlie & Co.,

Prince Albert, Sask.

What rental is Mr. Anderson prepared to pay for ground floor? Not given in your letter.

Mortgage Company of Canada.

To this wherein the name of the proposed tenant was accidentally confused with that of the man tendering for the work to be done, the following reply was sent by the agents:—

Prince Albert, Sask., Feb. 5th, 1917

Mortgage Company of Canada,

290 Garry Street,

Winnipeg, Man.

Ground floor one hundred month not including heat. Tenant John Mitchell, rush lease Avenue.

(Sgd.) Romeril, Fowlie & Co.

On the 8th February, 1917, the appellant and the said agents of respondent agreed as evidenced by the following receipt:—

Prince Albert, Sask.

Received from Mr. John D. Mitchell the sum of Fifty Dollars, being deposit on rental of St. Regis ground floor, building taken at $100.00 per mo., for a term of five years to start from completion of repairs or when handed over to Mitchell.

$50.00.                                                                         Romeril, Fowlie & Co.,

A. Romeril.

[Page 92]

The date is not given but that is supplied by the cheque of the appellant shewn to have been given at same time.

This documentary evidence read in light of the surrounding facts and circumstances leaves no doubt in my mind of a concluded contract sufficient to meet the requirements of the Statute of Frauds.

The date of the beginning of the term was made certain within the recognized maxim id certum est quod certum reddi potest.

Cases of this nature requiring certainty of the term of a lease are curiously enough those which the learned author of Brooms Legal Maxims puts in the foreground of his commentary on this maxim and cites in 7th ed., p. 465, as illustrative of the meaning of the maxim.

The only question raised by the Court of Appeal seems to have been the effect to be given the concluding words of the receipt "or when handed over to Mitchell" which that court seems to have read as casting a doubt upon the certainty of meaning in the receipt.

I feel no difficulty in regard thereto for obviously there is nothing more implied than if there had been added to the preceding language a stipulation that in the event of the parties agreeing on another date that might by consent be substituted for the operative words already used, which in themselves were binding.

These words on which stress is laid are clearly, as counsel for appellant suggests, mere surplusage.

The bargain thus closed could not be affected by the later correspondence between respondent and its agents, which tried to introduce a term, previously unthought, of giving the right to the respondent to terminate by a three months' notice the five years' lease it was bound to give.

Nor could the doubt suggested later of the repairs

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and improvements contemplated throughout by the earlier correspondence being likely to exceed the estimate, affect the contract.

Any possible difficulty on that score was, as matter of fair dealing, removed by the offer of appellant to bear the extra expense.

The contract if need be might be read as one to spend at least the sum named in such repairs, alterations, or improvements and thus remove any difficulty of non-compliance with the Statute of Frauds which might in law attach to the verbal offer of the appellant to bear such extra expense.

The question of the agents signing their own name instead of the respondent's was not very seriously pressed in argument, but is amply answered by the authorities cited in Leake on Contracts, 4th ed., 189: and in Fry on Specific Performance, 4th ed., 236: and see also the case of Rosenbaum v. Belson[2], and the case of Fred Drughorn Limited v. Rederi Aktiebolaget Transatlantic[3].

I do not think we are bound to exercise our mental ingenuity to find excuses for any one pursuing the course respondent saw fit to pursue.

The appellant if confined to a claim for specific performance might be sufficiently met by some of these subterfuges but I submit it had broken a pretty plain obvious agreement and should pay the damages thereby suffered.

The appeal should be allowed and the judgment of the learned trial judge restored with costs here and below.

Duff J.—The contract, if there was one, between the appellant and the respondent company was that a

[Page 94]

certain building, of which the respondent company was the proprietor, should be altered in certain respects; and that on the date of the completion of the alterations the appellant should receive and accept a lease of part of it for five years, subject to determination on three months' notice. This contract as a whole would be a contract within the fourth section of the Statute of Frauds, the agreement to make the changes being in part consideration for the undertaking by the appellant to accept the lease.

I am inclined to think that the provision as to determination upon notice is not sufficiently evidenced in writing, but assuming it to be so, it is quite evident that it is at least doubtful whether the respondent company's agents had authority to undertake to effect alterations at a cost greater than $800.00, and there is no doubt that when it was discovered that the cost of the projected alterations would exceed this figure both the appellant and the company's agents proceeded to negotiate afresh, treating the whole matter as at large. An understanding between them was reached, but the conclusion I have arrived at, after carefully reading the statement of the 15th of February and the letters of the 20th and 24th of the same month, is that there is too much indefiniteness in the expressions used in relation to the subject of alterations to enable one to say that the beginning of the contemplated term is ascertained by reference to the date of the "completion of repairs" within the meaning of the memorandum of February 20th.

The appear should be dismissed with costs.

Anglin J.—I concur with Mr. Justice Duff.

Brodeur J. (dissenting).—This is an action for specific performance of an agreement for a lease or for damages

[Page 95]

The property in question is on the ground floor of a property known as the St. Regis Hotel in the Town of Prince Albert, Saskatchewan. It had been for a few years without any tenant and was probably in a very dilapidated condition. The respondent company was the owner of it and as its office is in Winnipeg it had instructed the firm of Romeril, Fowlie & Co., of Prince Albert, to rent the ground floor of the building, the company undertaking to make some repairs not to exceed $1,000.00, and they wrote them on the 22nd of December, 1916, that they would "rent the ground floor at $100.00, per month, we to do the repairing to the plumbing and heating, and any other repairs that are absolutely necessary."

On the 8th of February, those agents agreed with the appellant to rent that property and gave him the following receipt:

Prince Albert, Sask.

Received from Mr. John D. Mitchell the sum of Fifty Dollars being deposit on rental of St. Regis ground floor, building taken at $100.00, per mo., for a term of five years to start from completion of repairs or when handed over to Mitchell.

$50.00.                                                                              Romeril, Fowlie & Co.,

A. Romeril.

It appears that the appellant intended to carry on on those premises a restaurant and that a man named Maclean, who was keeping a restaurant in the vicinity, did not like the idea of having a competitor in his neighbourhood and tried to obtain the lease for himself, offering to pay part of the repairs and also to give a larger rent.

Those new offers evidently tempted the respondent company; and, disregarding the most elementary principles of honesty, it accepted the proposition to lease the property to Maclean.

Being sued by Mitchell for specific performance or for damages, it was condemned by the trial judge to pay a sum of $550.00 in damages.

[Page 96]

The Court of Appeal[4], reversed that judgment on the ground that the agreement was not a concluded agreement which would satisfy the Statute of Frauds and that the receipt given by the real estate agents did not specify the date at which the lease would start.

The respondent company pleaded also that the agents had no authority to give the receipt which they had given to the appellant; but the two courts below decided against it in that respect and this point was not very strongly pressed at the argument. There is no doubt that Romeril, Fowlie & Co. were the agents of the respondent company, that they had been instructed to lease the property in question for a sum of $100.00 per month and that they had agreed to do some repairs and alterations in order to render the property habitable; and there is nothing in the receipt which would induce one to question the authority of the agents. It must be stated to credit of the agents that they had been urging upon the respondents to carry on their agreement with Mitchell; but evidently the temptation of having a larger sum of money was too strong for the honesty of the company.

There is no doubt that it is essential to the validity of a lease that it shall appear on what day the term is to commence. There must be a certain beginning: otherwise it would not be a perfect lease, and in a contract for lease, in order to satisfy the Statute of Frauds, the term of commencement must be shewn. Marshall v. Berridge[5].

But the commencement of the term may be collected from the memorandum or by reference to some of their writings. Then the question comes up whether

[Page 97]

we can collect from the language of the agreement at what date the lease was to commence.

In the case of Oxford v. Provand[6], it was decided that where a certain amount of rental has to be paid from the date at which a building should be completed that those terms expressed with sufficient clearness the intention of the parties to bind themselves from the time it was made to do the several acts stipulated. Mr. Justice Lamont in the Court of Appeal admitted that, if the agreement provided simply that the term should commence when the repairs should be completed, the case of Oxford v. Provand6, would apply; but that by inserting in the receipt given by Romeril, Fowlie & Co. an alternative time for the beginning of the term it was impossible to hold that the commencement is fixed or can with reasonable certainty be concluded from the document.

The lease stated that the term was to start from the completion of the repairs or when the building was handed over to Mitchell. I would construe this language as meaning that the lease shall commence at the termination of the repairs; but if by a new agreement between the parties the property was handed over before or after the repairs were complete, in such a case the lease would start from the latter date. But I maintain that the primary agreement of the parties was that the rent should start from the date at which the repairs would be complete and that there is no reason then to distinguish the present case from the case of Oxford v. Provand6.

In those circumstances, I have come to the conclusion that the judgment of the trial judge should be restored and the appeal allowed with costs of this court and of the court below.

[Page 98]

Mignault J.—The appellant sues for specific performance, or, in the alternative, for damages on a contract of lease which he alleges he made with the respondent of certain premises in the City of Prince Albert, Saskatchewan. The agents of the respondent for renting these premises were Messrs. Romeril, Fowlie & Co., and assuming that the latter did rent the premises to the appellant, there is a question whether the agents did not exceed their authority by not stipulating the right of cancellation on giving three months' notice. I think however that for the decision of this case it will suffice to determine whether or not the writing on which the appellant relies satisfies the requirements of the Statute of Frauds. This writing is in the following terms:

Prince Albert, Sask.

Received from Mr. John D. Mitchell the sum of Fifty Dollars, being deposit on rental of St. Regis ground floor, building taken at $100.00 per mo., for a term of five years to start from completion of repairs or when handed over to Mitchell.

$50.00.                                                                Romeril, Fowlie & Co.,

A. Romeril.

The rule to be applied has been authoritatively stated as follows:

It is essential to the validity of a lease that it shall appear either in express terms or by reference to some writing which would make it certain, or by reasonable inference from the language used, on what day the term is to commence. There must be a certain beginning and a certain ending, otherwise it is not a perfect lease, and a contract for a lease must, in order to satisfy the Statute of Frauds, contain those elements. Marshall v. Berridge[7], at p. 244.

Measured by this rule, the receipt relied on by the appellant evidently fails to satisfy the requirements of the Statute of Frauds. I doubt whether the parties ever intended it to be a memorandum witnessing a contract, or anything more than a receipt for the money paid by the appellant. Even if it can be looked

[Page 99]

on as a memorandum it is impossible to determine from it the time of beginning of the lease. The term of five years is stated

to start from completion of repairs or when handed over to Mitchell.

These repairs are not described, nor is it said who is to make them. It is true that the respondent, in correspondence with the agents, expressed its willingness to spend on repairs the sum of $800.00, and that the agents, but only after the date of the receipt, sent it an estimate specifying certain repairs and improvements amounting to $1,122.00. When the respondent demurred at paying more than $800.00, the appellant says that he agreed to pay the excess in cost, over and above the $800.00, which would shew that the matter had not been finally closed by the receipt which imposed on him no such obligation.

But looking at this receipt, the time of commencement of the lease is not stated nor can it be inferred from its language. Could Mitchell be forced to take possession and pay rental before the repairs were completed? Or when these repairs, and they had not then been specified, were made, and a delay ensued before the premises were handed over to Mitchell, from which of the two events, the completion of the repairs or the handing over of the premises, would the five year lease begin? The receipt is too vague to permit any answer being given to these questions, and consequently it cannot be taken as complying with the Statute of Frauds.

The appellant relies on the decision of the Privy Council in Oxford v. Provand[8], but I think that this decision is clearly distinguishable from the present case. In Oxford v. Provand8, the Privy Council as a court of equity considered the surrounding circumstances

[Page 100]

and the conduct of the parties in dealing with the property comprised in an agreement vague in its language, in the interval between the making of the agreement and the commencement of a suit for its enforcement. The tenant, who attacked the memorandum, had before the suit taken possession and had sub-rented a part of the buildings referred to in the agreement as having to be constructed, or the building of which had then to be completed. I would have had no hesitation in the present case had the appellant been put in possession of the premises referred to in the receipt. But such was not the case and the receipt stands alone and without the aid of any surrounding circumstances or of any conduct of the parties in dealing with the property that can shew a certain time at which the term of the lease would begin.

Although I cannot think that the respondent acted in the matter as the rules of fair dealing required, still there is no escape from the conclusion that in law the appellant cannot succeed in this appeal, which must in my opinion be dismissed with costs.

Appeal dismissed with costs.

Solicitors for the appellant: Halliday & Davis.

Solicitors for the respondent: Lindsay & Mudie.