International Business Machines Co., Ltd. v. Guelph Board of Education, [1928] SCR 200

Supreme Court of Canada

International Business Machines Co., Ltd. v. Guelph Board of Education, [1928] S.C.R. 200

Date: 1928-03-06

International Business Machines Co., Ltd. (Plaintiff) Appellant;

and

The Board of Education for The City of Guelph (Defendant) Respondent.

1928: March 6.

Present: Anglin C.J.C. and Mignault, Newcombe, Lamont and Smith JJ.

ON APPEAL FROM THE APPELLATE DIVISION OF THE SUPREME COURT OF ONTARIO.

Conditional sale—Conditional Sales Act, R.S.O. 1914, c. 136, s. 3—Delivery to “a trader or other person for the purpose of resale by him in the course of business” (s. 3 (3))—Resale by such trader, etc., “in the ordinary course of his business” (s. 3 (4)).

G., who was a dealer in electrical and radio supplies, contracted with defendant to install in its school (then under construction) an electric signalling system, including a master clock and secondary clocks. G. had never carried such clocks on his premises as part of his stock in trade, and there was evidence that it was not usual for a dealer in electrical supplies to do so. For the purpose of installing them under his contract with defendant, he bought them from plaintiff under a conditional sale agreement, and they were shipped direct to the school premises. The conditional sale agreement was not filed pursuant to the Conditional Sales Act (R.S.O., 1914. c. 136), but the seller’s name and address were plainly set out on the clocks. G. failed to pay for them, and plaintiff sued defendant for return of the clocks or for their value.

Held, that the delivery to G. was a delivery to “a trader or other person for the purpose of resale by him in the course of business” within s. 3 (3), and that there was a resale by G. “in the ordinary course of his business” within s. 3 (4), of the Conditional Sales Act; that, therefore, under the Act, the property in the goods vested in defendant, and plaintiff could not recover.

Judgment of the Appellate Division of the Supreme Court of Ontario (61 Ont. L.R. 85, reversing judgment of Riddell J.A., ibid) affirmed.

APPEAL by the plaintiff (by special leave granted by the Appellate Division of the Supreme Court of Ontario) from the judgment of the Appellate Division of the Supreme Court of Ontario[1], which allowed the defendant’s appeal from the judgment of Riddell J.A., in favour of the plaintiff¹.

One Grinyer, who carried on business as the Grinyer Electric Company, dealers in electrical and radio supplies,

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contracted with the defendant to install an electric signalling system in the new Guelph Collegiate Institute then in course of construction. The system to be installed included a master clock and secondary clocks, which Grinyer purchased from the plaintiff under an agreement by which the title to the goods was not to pass to Grinyer until the price thereof was paid in full, and until such payment they were to remain the plaintiff’s property. The agreement was not filed pursuant to the Conditional Sales Act (R.S.O. 1914, c. 136, s. 3 (1b)), but the name and address of the seller were plainly set out on the face of the clocks (see the Act, s. 3 (5)). The goods were shipped, on Grinyer’s order, direct to the premises of the Guelph Collegiate Institute. There was evidence that Grinyer never had, as part of his stock in trade on his premises, a master clock or secondary clocks such as those in question, and that it is not usual for a dealer or contractor in electrical supplies to have master clocks and secondary clocks on his premises as part of his stock in trade.

The defendant paid Grinyer for the equipment installed, but Grinyer failed to pay the plaintiff, the balance remaining due, as fixed by the judgment at trial, being $1,263.37.

The plaintiff claimed from the defendant the return of the articles, or, in the alternative, their value. Riddell, J.A., held that the plaintiff was entitled to recover the said sum of $1,263.37[2]. His judgment was reversed by the Appellate Division, which held that the action should be dismissed².

Subsections 3 and 4 of section 3 of the said Act (as it then stood) read as follows:

(3) Where the delivery is made to a trader or other person for the purpose of resale by him in the course of business such provision [i.e., the provision in the contract that the ownership is to remain in the seller until payment of the purchase money] shall also, as against his creditors, be invalid and he shall be deemed the owner of the goods unless the provisions of this Act have been complied with.

(4) Where such trader or other person resells the goods in the ordinary course of his business the property in and ownership of such goods shall pass to the purchaser notwithstanding that the provisions of this Act have been complied with.

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The Appellate Division held[3]

that the delivery of the clocks at the school was a delivery by the plaintiffs to Grinyer in order that Grinyer in the course of his business might install them in the school, and thus resell and deliver them to the defendants pursuant to his contract already made; also that the agreement to install the clocks was made by Grinyer in the ordinary course of his business as a dealer in electrical supplies, and that in the circumstances the goods were delivered to Grinyer for resale in the course of his business, and were resold by Grinyer to the defendants in the ordinary course of his business, within the meaning of subsec. 4 of sec. 3 of the statute.

H.W.A. Foster for the appellant, contended (inter alia) that Grinyer was not a “trader or other person” (“other person” being construed according to the ejusdem generis rule) within the said subsections; that there was no evidence to show that Grinyer or other electrical dealers sold such goods as those in question in the ordinary course of business; he bought the goods in question as contractor; they were special articles which he procured to install under his contract with the defendant; he was dealing with both plaintiff and defendant as a contractor; defendant was not misled by any possession or apparent possession by Grinyer, and the design of the Act was to protect purchasers who acquire property on the faith of possession (referring to Liquid Carbonic Co. Ltd. v. Rountree[4]); that there was not a resale within the meaning of subs. 4, which subsection contemplates a resale subsequent to the delivery to the trader.

R.S. Robertson K.C. and Nicol Jeffrey K.C. for the respondent, were not called on.

On the conclusion of the argument of counsel for the appellant, and without calling upon counsel for the respondent, the judgment of the court was orally delivered by

ANGLIN C.J.C.—Notwithstanding the very able presentation of this case by counsel for the appellant, we are all of the opinion that the appeal cannot succeed. To us the reasons given by the learned judge who delivered the judgment of the Appellate Division, Mr. Justice Ferguson, seem convincing. We are satisfied that there was in this

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case a sale and a delivery to Grinyer within the meaning of subs. 3, and a resale by him within subs. 4 of s. 3 of the Conditional Sales Act. These subsections apply, with the result that the property in the goods vested in the respondents. The appeal accordingly fails, and must be dismissed with costs.

Appeal dismissed with costs.

Solicitors for the appellant: Ryckman, Denison, Foster & Cody.

Solicitor for the respondent: Nicol Jeffrey.