Supreme Court of Canada
Major v. Canadian Pacific Railway, 64 S.C.R. 367
Date: 1922-06-17
William J. Major (Plaintiff) Appellant;
and
The Canadian Pacific Railway Company (Defendant) Respondent.
1922: June 8, 17.
Present: Sir Louis Davies CJ. and Idington, Anglin, Brodeur and Mignault JJ.
ON APPEAL FROM THE APPELLATE DIVISION OF THE SUPREME COURT OF ONTARIO.
Carriage of goods—Claim for loss—Illegal purpose—Contravention of Temperance Act—Action—Contract or tort.
M. bought liquor in Montreal for shipment to Windsor, Ont., intending to re-sell it there in contravention of the Temperance Acts. It was shipped over the C.P. Ry. and arrived at Windsor where part of it was stolen before delivery. M. brought action for the value of the portion not delivered.
Held, affirming the judgment of the Appellate Division (51 Ont. L.R. 370) that whether the action is one ex contractu or ex delicto it is based on a breach of the obligation to deliver the goods and the plaintiff must fail as he has to rely on his own illegal act. The carrier being innocent of the offence against the law may set up this illegality as a defence.
APPEAL from a decision of the Appellate Division of the Supreme Court of Ontario affirming the judgment at the trial in favour of the respondent.
The facts are sufficiently stated in the above head-note. The question for decision on the appeal is—Can a plaintiff who has induced an innocent defendant to enter into a contract, involving violation of a positive statute, recover damages from that defendant for failure to complete the contract, or, in tort, for anything arising out of the illegal transaction?
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Geo. F. Henderson, K.C. for the appellant. The plaintiff could legally import the liquor for sale outside the province. See Hals. Laws of England, vol. 4, page 8, as to common carriers.
The action is not based on contract. The carrier is liable at common law for loss of the goods. Hals. ib.
Where the alleged intention is only collateral to the contract it does not defeat a claim in tort. Gordon v. Chief Commissioner Metropolitan Police.
MacMurchy K.C. for the respondent. Ex turpi causa oritur non actio. See Brown v. Moore; 7 Hals. Laws of England, page 408, sec. 845.
THE CHIEF JUSTICE.—For the reasons stated by my brother Anglin J. with which I fully concur, I would dismiss this appeal with costs.
IDINGTON J.—The appellant, through his agents in Montreal, induced the respondent to accept at Montreal a shipment of intoxicating liquor to be carried by it to Windsor in Ontario to be delivered through appellant at the latter place, by assuring it in the shipping bill as follows:—
We hereby undertake and declare that this shipment is of a class and shipped under conditions permitted by law.
The learned trial judge finds that the said shipment of liquor was in fact intended by the appellant to be used by him in way of selling same in Ontario in violation of the statutes then in force prohibiting such re-sale, and hence also in violation of 6-7 George V., (1916) c. 19, sections 1 and 2, designed to aid then existing prohibition enactments in force in Ontario.
[Page 369]
Part of the goods so shipped were stolen in Windsor from the respondent’s car wherein same had been shipped, and the appellant seeks to hold the respondent as a common carrier liable for such loss.
This pretension has been rejected both by the learned trial judge and the Appellate Division of the Supreme Court of Ontario.
Hence this appeal to us.
The relevant law is as was stated by Lord Mansfield in Holman v. Johnson as follows:—
The principle of public policy is this: ex dolo malo non oritur actio. No court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act. If, from the plaintiff’s own stating or otherwise, the cause of action appears to arise ex turpi causa, or the transgression of a positive law of this country, there the court says he has no right to be assisted. It is upon that ground the court goes; not for the sake of the defendant but because they will not lend their aid to such a plaintiff.
That remains good law to the present, seems most aptly to answer the claim herein of the appellant, and should not be frittered away by any nice distinctions.
This statement of the law is none the less applicable though not applied therein to defeat the claim made because the contract there in question was one made abroad and violated no English law; yet the principles so enunciated have been adopted and applied in a long line of cases since.
If the goods in question had been stolen in the Province of Quebec and there had been no such Dominion Act as relied upon, possibly the respondent might have been liable, but who can question the intention of the law applicable to sale, or intention to re-sell, in Ontario, and the Dominion Act being prohibitive of such traffic unless for the private consumption by the consignee.
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I need not follow the history of the application of the law so declared by Lord Mansfield.
The appellant seeks to apply the exceptional cases cited in Broom’s Legal Maxims, where only a penalty was attached to the act, and prohibition was not intended.
It is quite true that there are many cases which have arisen, under some Revenue Acts for example, when it was held that the purview of the Act not being prohibition, therefore the turpitude of which the court must take notice did not exist.
I am afraid that is asking us to go blind in this case. In like way conversely the case law relative to the results arising out of the Gaming Acts and other such Acts do not help much unless to confuse one and so mislead.
Again it is suggested that this action is founded on tort and not on contract.
I cannot so hold for it clearly is founded on the contractual relation between the appellant and respondent as a common carrier, though these relations are so often changed by statutory provisions.
I would dismiss the appeal with costs.
ANGLIN J.—In my opinion, however the plaintiff’s case is put, upon the pleadings and facts in evidence his claim must be for breach by the defendant of its obligation to deliver certain of his goods to him at Windsor, Ontario. His sole cause of action consists of the duty so to deliver and its breach. To establish that duty he is obliged to shew the placing of his goods with the defendant for delivery as alleged. But the placing of the goods with the defendant for that purpose was, upon the evidence, a contravention
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of the Dominion statute 6-7 Geo. V., c. 19, sec, 1 (a), inasmuch as it was a step in causing them to be sent or carried from one province of Canada into another province of Canada with the intention of there dealing with them in violation of the law of such latter province. The plaintiff is, therefore, in establishing his cause of action, obliged to invoke an illegal act in which he participated and consequently cannot maintain his action; Simpson v. Bloss; Taylor v. Chester; Scott v. Brown. Doering, McNab & Co. The illegality is not in a collateral matter but in the very transaction out of which the alleged duty arose of the non-fulfilment of which the plaintiff complains.
The defendant being itself innocent in the matter, is not precluded from setting up as a defence the illegal intent of the plaintiff.
The statute 6-7 Geo. V., c. 19 (D.), was passed in aid of provincial Temperance Acts. Its penalizing clauses were enacted not merely for the purpose of revenue but to supplement and render more effective certain prohibitory provisions of such provincial enactments. They therefore impliedly prohibit and render illegal the acts they penalize. Broom’s Legal Maxims, 8th ed., page 579.
I have no doubt that the judgment appealed from is right and should be affirmed.
BRODEUR J.—In 1916 the Province of Ontario passed a law by which no person could sell liquor without a licence. In the same year the Federal Parliament, for the evident purpose of reinforcing the
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temperance sentiment of the provinces, passed a law declaring that any person who sends, ships, etc. into any province from any other province any intoxicating liquor
knowing or intending that such intoxicating liquor will or shall be thereafter dealt with in violation of the law of the province into which such intoxicating liquor is sent, shipped * * * shall be liable * * * to a penalty.
In March, 1920, the appellant Major, who had been for years connected with the liquor trade in Ontario, bought in Montreal 100 cases of liquor from Law, Young & Co. and had them shipped by the Canadian Pacific Railway to Windsor, Ontario. The railway company would not undertake to carry these goods without having from the shipper a written guarantee that the liquor was
of a class and shipped under conditions permitted by law.
The goods arrived at their destination in Windsor but a part of the shipment was stolen in the yards of the railway company. There is no evidence that this robbery had been rendered possible by the negligence of the company in not properly guarding the yards or in not maintaining therein sufficient police protection. Major now sues the company to recover the value of the cases which have been stolen.
I should state also that in the month of May, 1920, Major was convicted under the Ontario Temperance Act for having sold in breach of the Act all the liquor he had received from that shipment and from other similar shipments. The irresistible inference from this conviction is that Major was still busily engaged in the liquor business but was now carrying out that business illegally without having the required licence.
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The railway company pleaded in answer to Major’s action that the liquor had been purchased by Major with the intent of violating the Ontario Temperance Act; that he was in bad faith when he represented through his agents that the shipment was made for legal purposes; that the contract to carry that liquor was illegal and that he could not recover under it.
The trial judge found that these goods had been bought by Major for illegal purposes. The latter tried to establish that the liquor had been imported in Ontario for his own personal use but the trial judge did not believe him.
It is evident that he was engaged in an illicit trade and that when he shipped these goods he knew and intended that such liquor was to be dealt with in violation of the law of Ontario.
This finding of the trial judge was concurred in by the Appellate Division and there is certainly no justification for us to interfere with this finding.
As far as he was concerned the contract of carriage which Major made with the Canadian Pacific Railway of that liquor was illegal.
Then could Major, who has induced an innocent defendant to enter into a contract involving a violation of law, recover damages from that defendant for failure to complete the contract?
As I have already said, no negligence is charged against the defendant railway company. I am of opinion that the plaintiff, having delivered these goods under an unlawful agreement, could not recover them back. Taylor v. Chester.
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No action (says Halsbury Laws of England, vol. 7, page 408),. can be brought for the purpose of enforcing an illegal contract whether directly or indirectly, or of recovering a share of the proceeds of an illegal transaction, by any parties to it. Where the object of a contract is illegal the whole transaction is tainted with illegality, and no right of action exists in respect of anything arising out of the transaction. In such a case the maxim in pari delicto, potior est conditio defendentis applies, and the test for determining whether an action lies is to see whether the plaintiff can make out his claim without relying on the illegal transaction to which he was a party.
Applying those principles as laid down in Taylor v. Chester8 and in Halsbury to the facts of this case, I consider that the plaintiff Major made an illegal contract when he shipped his liquor to Windsor with the intent of violating the Ontario Temperance Act.
Mr. Henderson, in his able argument, stated that the action was in tort and that in such a case the principles above quoted would not apply. Whether his claim is for the recovery or delivery of the goods or whether it is for damages arising out of non-delivery, the plaintiff has to rely on the contract of carriage which he made with the company; and, as this contract is illegal, he could not recover whether his action is in tort or ex contractu. In such cases the courts cannot lend their assistance to an action which appears to arise ex turpi causa, or the transgressing the laws of this country. Holman v. Johnson.
For those reasons, I am of opinion that this appeal should be dismissed with costs.
MIGNAULT J.—Notwithstanding Mr. Henderson’s very ingenious argument for the appellant, I cannot escape from the conclusion that to succeed he must rely on an illegal contract, although an innocent one in so far as the respondent is concerned.
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Mr. Henderson argued that the shipment of liquor was not prohibited by the statute 6-7 Geo. V., ch. 19, but that the person shipping it, with the intention that it be thereafter dealt with in violation of the law of the province into which the liquor was sent, merely incurred a penalty. I cannot so read the statute; it is clearly prohibitive as the context shews. So the intention of the appellant, when he made the shipment, to deal with the liquor when it reached him in Windsor, Ont., in violation of the Ontario Temperance Act rendered the shipment an illegal one.
Mr. Henderson also argued that he could claim damages from the respondent for non-delivery of the liquor without relying at all upon an illegal contract of shipment, but on the ground that the defendant having come into possession of the appellant’s property, and having by its negligence suffered it to be stolen, the appellant could proceed against the defendant in tort and not upon any contract of shipment. The refinement of this distinction shews the ingenuity of the learned counsel, but to my mind it is utterly impossible to get away from the contract. The appellant had the liquor shipped to him, and a portion of it was lost or stolen before it reached him. The liability clearly arises here out of the contract. The respondent, acting as a common carrier of goods, was in possession of this liquor by virtue of a contract of carriage. It was liable without proof of negligence, this liability being one at common law. It is true that an action of tort lies against a common carrier without proof of any contract (Halsbury, vo. Carriers, no. 13), but it is impossible to disregard the contract in a
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case like this one, where it was made in violation of the law. Even if the plaintiff could state a cause of action without referring to any contract—on the contrary, in his statement of claim he expressly alleges the contract of carriage—still if it appears from the evidence that there has really been an unlawful contract between the parties, the court would be bound of its own motion to take the objection that the contract is void. Montefiore v. Menday Motor Components Co.
I think, therefore, that the appeal should be dismissed with costs.
Appeal dismissed with costs.
Solicitors for the appellant: Davis & Healy.
Solicitors for the respondent: MacMurchy & Spence.
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