Leroux v. McIntosh, (1915) 52 SCR 1

Supreme Court of Canada

Leroux v. McIntosh, (1915) 52 S.C.R. 1

Date: 1915-05-20

Moise Leroux (Defendant) Appellant;

and

Archibald Mcintosh (Plaintiff) Respondent.

1915: February 19, 22, 23; 1915: May 20.

Present: Sir Charles Fitzpatrick C.J. and Idington, Duff, Anglin and Brodeur JJ.

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

Substitution—Registration—Sheriff’s sale—Right of institute—Effect of sale under execution—Arts. 938-941, 950, 953, 2090, 2091, C.C.—Art. 781, C.P.Q.

The judgment appealed from (19 R.L.N.S. 444), affirming the judgment of the Superior Court, which maintained the plaintiff’s action to recover certain substituted lands on the ground that the rights of the substitute had not been purged by a sheriff’s sale thereof, was affirmed with a variation in regard to the expertise ordered respecting the amounts to be allowed to the purchaser at the sheriff’s sale for improvements made thereon and as to accounts for rents, issues and profits. Brodeur J. dissented.

Per Duff and Anglin JJ.—The provisions of the Civil Code in regard to the registration of unopened substitutions do not contemplate

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registration affecting immovables, as such, but refer merely to registration necessary to the operation of the instrument creating the substitution; consequently articles 2090 and 2091 of the Civil Code have no application.

Per Duff J., Brodeur J. contra.—Article 781 of the Code of Civil Procedure deals primarily with procedure and should be construed in connection with article 953 of the Civil Code so as to effectuate rights resting upon the provisions of the Civil Code relating to substantive law. Vadeboncœur v. City of Montreal (29 Can. S.C.R. 9), distinguished.

Per Duff and Anglin JJ.—The registration of an instrument creating a substitution is effective from the date upon which it is registered and protects the rights of the substitute against the right acquired by a purchaser under a subsequent sale in execution made by the sheriff. Trudel v. Parent (Q.R. 2 Q.B. 578), referred to.

Per Anglin J.—In the case of a sale under execution against an institute, subsequent to the registration of the substitution, the purchaser at sheriff’s sale acquires merely the personal interest of the institute subject to the substitution, such a title cannot defeat the claim of the substitute.

Per Brodeur J., dissenting.—Inasmuch as the claim of the execution creditor was for a debt due and exigible prior to the date when the instrument creating the substitution was registered, the effect of the sale by the sheriff was to discharge the immovable sold from the claim of the substitute and to give the purchaser at that sale an absolute title to the land having priority over that of the substitute.

APPEAL from the judgment of the Court of King’s Bench, appeal side[1], affirming the judgment of the Superior Court, District of Montreal, maintaining the plaintiff’s action with costs.

The circumstances of the case are stated in the judgments now reported.

The action was instituted by Madame E. Coulombe, in her capacity of tutrix to her minor child, the present plaintiff, issue of her marriage with the late Donald J. McIntosh, deceased, for the recovery of the

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lands in question. By the judgments rendered in the courts below, the appellant, defendant, was ordered to deliver up possession of the said lands, reserving to him, however, the right of retention, under article 419 of the Civil Code, until reimbursement of amounts expended in necessary improvements, etc., and it was ordered that experts should be appointed to ascertain the extent of such improvements and to establish the amount to be accounted for by the defendant for rents, issues and profits during the time he had been in possession.

A. Geoffrion K.C. and G. St. Pierre for the appellant.

Migneault K.C. and Erroll Languedoc for the respondent.

The Chief Justice (oral).—This appeal is dismissed with costs subject to a modification of the judgment appealed from directing that all questions as to amounts to he allowed the appellant for improvements and whether he is chargeable with rents, issues and profits from the 19th September, 1907, or some later date, shall be disposed of in the Superior Court after the expertise.

Idington J.—This case has been argued twice and as result of due consideration of all that has been urged in the somewhat varying arguments I think this appeal should be dismissed with costs.

Duff J.—The registration referred to in each of the articles 938, 939, 940, 941 and 950 of the Civil Code

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is, in my judgment, the same registration; that is to say, registration at the registry office of the domicile. It is not registration affecting immovables as such, but registration necessary to make operative an instrument creating a substitution which is unopened. I think the effect of articles 950 and 953 of the Civil Code and 781 of the Code of Civil Procedure is that an unopened substitution registered in the sense mentioned, that is to say, pursuant to article 941, C.C., is not affected by a sale under execution except in those cases provided for in article 953, C.C. I think that is the effect of the explicit provisions of these two articles; and I think the reasonable conclusion is that to apply article 2090, C.C. (relating to immovables as such), in such a way as to prejudice rights otherwise arising from such registration would be opposed to the policy of the law. Article 781, C.P.Q., it may be observed, is an article dealing primarily with procedure and it ought to be construed as far as reasonably possible so as to effectuate rights resting upon the provisions of the Civil Code relating to substantive law. It must be read with article 953, C.C., when the effect of a sale under execution upon an unopened substitution is in question and with article 1447, C.C., when it is a question of customary dower. Vadeboncœur v. City of Montreal[2], as I read it, does not proceed upon a construction of article 781, C.P.Q., alone, but chiefly on the provisions of the Special Act upon which the respondent in that case relied.

Anglin J.—The defendant attacks the judgment against him rendered by the trial judge, and confirmed

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on appeal with a slight modification, on several distinct grounds with which I propose to deal. I shall, however, first state the material facts.

It is admitted that by the will of Donald McIntosh, who died in 1846, a substitution of the property in question was created, of which the testator’s son Archibald McIntosh, who died in 1866, was the institute and first grevé, Donald J. McIntosh, who died in 1907, was the second grevé, and his son, Archibald McIntosh, the younger, now of age, is the ultimate substitute. A demand of abandonment was made on Donald J. McIntosh prior to the 17th of January, 1891. Curators of his estate were appointed on the 24th of January, 1891. On the same day the will of Donald McIntosh was first registered. Subsequently, in 1896, the defendant became a judgment creditor of Donald J. McIntosh and under his judgment procured a sale of the land in question by the sheriff at which he became its purchaser. Before paying his purchase money, however, he obtained an order that the other creditors of Donald J. McIntosh should give him security against disturbance of his possession of the property by any person taking title under the substitution of which he then had full notice; and he received such security.

The appellant now claims that because the will of Donald McIntosh was not registered before the abandonment by Donald J. McIntosh, the right of Archibald McIntosh as ultimate substitute is defeated by the provisions of articles 2090 and 2091 of the Civil Code, which read as follows:—

2090. The registration of a title conferring real rights in or upon the immovable property of a person, made within the thirty days previous to his bankruptcy, is without effect; saving the case

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in which the delay given for the registration of such title, as mentioned in the following chapter, has not yet expired.

2091. The same rule applies to the registration effected after the seizure of an immovable when such seizure is followed by judicial expropriation.

In my opinion these articles have no application. The title with which they deal is a title in or upon the immovable property of the bankrupt. The title of Archibald McIntosh the younger as ultimate substitute is in no wise derived from Donald J. McIntosh. Neither is it “in or upon his immovable property.” It is a title which comes directly from the testator who created the substitution, and it confers real rights in and upon his property. It is not as the property of Donald J. McIntosh that Archibald McIntosh the younger receives the land in question (from him only possession is taken), but as the property of his great-grandfather. (Art. 962, C.C.)

Moreover, the title asserted by the appellant is under the sheriff’s sale. He is not claiming in this proceeding under the abandonment or the bankruptcy; and I incline to think it is only persons claiming under the abandonment in bankruptcy and who have actually demonstrated by a judgment of distribution or other equivalent legal procedure that they have sustained prejudice or loss in consequence of the registration, who can attack it under article 2090, C.C. Trudel v. Parent[3]. The registration of the substitution was not a nullity. It was effectual from the date at which it was made. (Art. 941, C.C.) That was long before the defendant acquired his interest under the sheriff’s sale.

While the claims of creditors of the institute,

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which antedated the registration of the substitution, may, when duly preferred, prevail against the interest of the substitute (arts. 938 to 942; 2086-7, and 2109-10, C.C.), it does not follow that upon the sale under an execution issued upon a personal judgment, such as was that obtained by the appellant against Donald J. McIntosh, in a proceeding in which the substitute or his representative was not impleaded (art. 959, C.C.), and there was no question before the court of his interest, the title which passed to the purchaser included that interest. On the contrary it is provided by article 781 of the Code of Civil Procedure that a sheriff’s sale does not discharge the property from rights of substitution not yet opened, and article 950, C.C., states that—

Forced sales under execution * * * are likewise dissolved in favour of the substitute by the opening of the substitution, if it have been registered.

This obviously means “if it have been registered” before the sale takes place or, at all events, before delivery of judgment by which the sale is authorized. The registration of the substitution was effectual from the date at which it was made. (Art. 941, C.C.) It would therefore seem that all that was acquired by the appellant under the sheriff’s sale (no attack having been made up to that time on the substitution or on the interest of the substitute, which had then been registered for several years) was the personal interest of the institute subject to the substitution. The purchaser under the title thus acquired cannot defeat the claim of the substitute.

The next contention of the appellant was that the substitution is void because it was not published as required

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by article 57 of the “Ordonnance de Moulins”of 1566. He contends that the modifying declaration of the 17th of November, 1690, was never registered by the Superior Council of Quebec and is therefore not in force in that province. In 1855 registration was substituted for publication, 18 Vict., ch. 101. The decision in Bulmer v. Dufrene[4], at page 92; Cass. Dig. (2 ed.) 873[5], is Conclusive on this point against the appellant. Article 941, C.C., which is not new law (Meloche v. Simpson[6]), embodies the former provisions as to publication and registration and declares the effect of compliance with its requirements.

The appellant next charges that the registration of the will was defective because in the declaration the testator’s death is stated to have occurred in 1866 instead of 1846. That mistake was a mere clerical error. It could have mislead nobody because the same declaration gave the date of probate of the will as the 20th of January, 1846. Such a mistake did not affect the validity of the registration.

Counsel for the appellant further contends that as the plaintiff’s declaration in this action shews Archibald McIntosh the younger to be the heir of Donald J. McIntosh and no renunciation by him of the inheritance is alleged or proved, Archibald McIntosh must be deemed to have assumed the burden of his father’s debts. It is not in his quality of heir to his father that Archibald McIntosh takes the property in substitution. The plaintiff’s declaration alleges only the facts material to establish his title as substitute. It is true that those same facts would establish his heirship to

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his father. But they are not alleged for that purpose and he is not, merely because he claims and takes his great-grandfather’s property as ultimate substitute, to be deemed burdened with his father’s debts in default of shewing that he had made a renunciation of his father’s estate. Moreover, as a minor he would have taken with benefit of inventory.

The appellant finally maintains that he has been wrongfully held accountable for the revenue of the property—by the Superior Court from the date when he acquired it; and by the court of appeal from the date of the death of Donald J. McIntosh. He asserts that his liability to account is only from the date of the commencement of this action, because he was then first notified of the death of Donald J. McIntosh by proceedings at law. (Arts. 411 and 412, C.C.) This question may well be left open to be disposed of in the Superior Court after the report is made on the expertise directed. The judgment should be modified accordingly. With this modification the appeal should be dismissed with costs, the appellant having failed on all his principal grounds of attack. No adequate cause has been shewn for disturbing the order of the Court of King’s Bench as to costs—a thing which is very rarely done in this court when we dismiss an appeal on the merits.

Brodeur J. (dissident).—Il s’agit d’une action pétitoire instituée par un appelé contre le détenteur d’un immeuble substitué.

Leroux, le détenteur de cet immeuble, a soulevé un grand nombre de moyens de defense à l’encontre de cette action pétitoire, mais devant cette cour il n’en a discuté que deux, savoir:—

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1º. Qu’en se rendent adjudicataire de l’immeuble vendu par le shérif pour une créance antérieure à l’enregistrement de la substitution il est devenu propriétaire absolu. En second lieu, il allègue que l’enrégistrement de la substitution ayant été fait dans un moment ou le grevé de substitution était en faillite est sans effet.

Vu la conclusion à laquelle j’en suis arrivé sur le premier point, il ne sera pas nécessaire pour moi d’examiner la seconde objection soulevée par le défendeur appelant, Leroux.

Les faits qui ont donné lieu à cette cause sont les suivants. En 1845, Donald McIntosh aurait crée par son testament une substitution fidée commissaire pour l’immeuble en question dans cette cause-ci. Par ce legs, son fils, Archibald McIntosh, était grevé de substitution et au décès de ce dernier la propriété passait à son fils, Donald J. McIntosh, comme deuxième grevé, et le fils de ce dernier, l’intimé d’ans la presénte cause, était appelé à la substitution.

Le testament d’Archibald McIntosh ne fut pas enrégistré du vivant du premier grevé.

Le deuxième grevé, Donald J. McIntosh, faisait cession de ses biens le 17 janvier, 1891, et sept jours après, savoir le 24 janvier, 1891, il faisait enrégistrer la substitution. La preuve ne demontre pas les procédures qui ont été faites sur cette cession après la nomination des curateurs; mais l’intimé, Moïse Leroux, qui était porteur d’une créance due par le second grevé et antérieure à l’enrégistrement de la substitution, fit saisir l’immeuble en question; et sur décrét, en date du 17 mai, 1897, il s’est porté acquereur de cet immeuble. Après le décès du second grevé, l’appelé a

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la substitution a revendiqué cet immeuble et a institué la présente poursuite.

M. Mignault, dans sa plaidoirie devant cette cour, a prétendu que la preuve ne demontrait pas que la créance invoquée par Leroux existait antérieurèment à l’enrégistrement de la substitution.

Je crois, au contraire, que la preuve est aussi satisfaisante que possible et qu’elle resuite de la déclaration dans la cause, de la plaidoirie et du jugement rendu dans l’action instituée par Leroux contre McIntosh.

Dans ce jugement, en effet, il est mentionné que la créance réclamée par Leroux contre Donald J. McIntosh existait depuis 1889 en vertu du contrat de mariage de Donald J. MeIntosh avec son épouse, Dame E. Coulombe, que cette créance avait été plus tard transportée, en 1891, à Leroux et que ce dernier avait le droit d’en réclamer le montant.

L’intimé prétend que les allégations de ce jugement ne font pas de preuve contre lui parce qu’elles sont res inter alios acta.

Cet argument, dans un cas ordinaire, aurait certainement beaucoup de force; mais saurait-il en avoir dans le cas actuel, quand l’intimé lui-même dans son action invoque ce jugement et en fait mention?

Si toutefois il y avait quelque allégation dans ce jugement qui ne serait pas exacte, si toutefois la créance qui y était mentionnée n’était pas due par le grevé, il aurait été temps alors pour l’appelé d’invoquer ces moyens pour rendre nul et de nul effet ce jugement.

Mais il n’en dit rien. Au contraire, il allègue ce jugement dans sa déclaration et le défendeur dans

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son plaidoyer dit qu’il est vrai que ce jugement-là a été rendu et qu’il a été rendu pour une dette qui éxistait depuis 1889.

En outre de cela, un certificat du régistrateur, qui a été produit dans cettecause-ci et qui a dû également être produit lors du jugement de distribution dans la cause de Leroux contre McIntosh, c’est à dire dans la cause où le décrèt a eu lieu, démontre que la créance reclamée par Leroux éxistait en vertu de ce contrat de mariage, qu’elle était antérièure à l’enrégistrement de la substitution.

Cette question de savoir si cette créance était antérieure à l’enrégistrement de la substitution ou non ne parait pas avoir été contestée par les parties en cour inférieure. Au contraire, comme je viens de le dire, le demandeur en faisait même mention dans son action. Alors il me semble qu’il est trop tard maintenant pour venir dire que la preuve est imparfaite et incomplète, quand il est si evident par la preuve, peut-être secondaire, qui a été faite que la créance due par le second grevé était bien antérieure à l’enrégistrement de la substitution.

L’appelé à la substitution pour réclamer est obligé de démontrer que le testament en vertu duquel il reclame a été enrégistré.

L’article 938 dit que les actes qui portent substitution doivent être enrégistrés dans l’intérèt des appelés et dans celui des tiers et que ce défaut d’enrégistrement opère en faveur des tiers au préjudice des appelés même mineurs.

Les articles 939 et 940 du Code Civil disent que les créanciers du grevé peuvent se prevaloir du défaut d’enrégistrement. Il faut cependant que leur créance soit antérièure à l’enrégistrement de la substitution.

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Il n’est pas nécessaire cependant qu’elle soit enregistrée. Les créanciers ordinaires et les créanciers chirographaires ont le droit de se plaindre du défaut d’enregistrement. Mignault, vol. 5, p. 46.

Leroux, en sa qualité de cessionnaire de la créance de Mde. McIntosh, était donc créancier au moment de l’enrégistrement de la substitution et cet enrégistrement ne pouvait pas prévaloir ni contre son cédant ni contre lui-même.

Il est en preuve, en outre, que McIntosh, le grevé, à fait cession de ses biens le 17 janvier, 1891. Ses biens ont alors été mis sous séquestre judiciaire. Du moment que cette cession-là était faite aucun enrégistrement ne pouvait être fait sur les immeubles, même les immeubles dont il était grevé de substitution, de manière à affecter les droits des créanciers.

Le dossier ne nous revèle pas si l’immeuble en question était encore sous la main de la justice quand il a été saisi et vendu à l’appellant, Leroux, en 1897.

La vente judiciaire a eu lieu le 17 mai, 1897.

A cette époque les immeubles cédés en justice ne pouvaient être vendus qu’à la demande du créancier du failli.

Plus tard, le ler septembre, 1897, le code de procédure civile a été amendé et maintenant les biens immeubles cédés peuvent être vendus à la demande du curateur.

Il a été décidé cependant que le code de procédure civile en autorisant le curateur à vendre les immeubles cédés n’empèchait pas le créancier du failli qui avait un jugement de procéder lui-même à la vente des immeubles en exécution de son jugement.

Leroux en faisant exécuter son jugement a pu procéder par conséquent contre des biens qui étaient encore

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dans les mains de la justice et le décret qui est intervenu a eu pour effet de purger la substitution. Art. 781, C.P.Q.

Comme je l’ai plus haut, le créancier qui a fait vendre ces biens avait une créance antérieure et préférable à celle du grevé de substitution et, par conséquent, sous l’autorité de l’article 781, C.C., la substitution se trouve purgée.

Mais on dit: l’article 953, C.C., mentionne spécifiquement le cas dans lesquels le décret purge les substitutions.

Je ne crois pas cependant que l’article 953, C.C., doive être interprété différemment de l’article 781, C.P.C. Tous les deux doivent être interprétés l’un par l’autre et je considère que l’article 953, C.C., n’est pas limitatif ainsi que cette cour l’a décidé dans Vadeboncœur v. Cité de Montréal[7].

J’en suis donc venu à la conclusion que la substitution a été purgée par la vente dans la cause de Leroux v. McIntosh, et que l’adjudicataire, l’intimé dans la présente cause, a un titre forfait et qu’il peut l’opposer à l’action pétitoire instituée par l’appelé à la substitution.

Le jugement a quo devrait être renversé et l’action de l’appelé à la substitution devrait être renvoyée avec dépens tant de cette cour que des cours inférieures.

Appeal dismissed with costs; judgment appealed from varied.

Solicitors for the appellant: Pelissier, Wilson & St. Pierre.

Solicitors for the respondent: Greenshields, Greenshields & Languedoc.