Boyd v. Attorney-General of British Columbia

Boyd v. Attorney-General of British Columbia
Collection
Supreme Court Judgments
Date
1917-02-06
Report
(1917) 54 SCR 532
Judges
Fitzpatrick, Charles; Davies, Louis Henry; Idington, John; Duff, Lyman Poore; Anglin, Francis Alexander
On appeal from
British Columbia
Subjects
Estates
Decision Content
Supreme Court of Canada
Boyd v. Attorney-General of British Columbia, (1917) 54 S.C.R. 532
Date: 1917-02-06
IDA Lillian Boyd and Others (Petitioners) Appellants;
and
The Attorney-General For The Province Of British Columbia Respondent;
and
The Attorney-General For The Province Of Ontario Intervenant.
1916: October 19, 20; 1917: February 6.
Present: Sir Charles Fitzpatrick C.J. and Davies, Idington, Duff and Anglin JJ.
ON APPEAL FROM THE COURT OF APPEAL FOR BRITISH COLUMBIA.
Succession duties—Partnership property—Owners not domiciled in Province—Interest of deceased partner—R.S.B.C. 1911, c. 217, s. 5, s.—s. la—Taxation—Legislative jurisdiction—"B.N.A. Act, 1867," s. 92.
By section 5 of the "Succession Duties Act". of British Columbia (R.S.B.C. [1911] ch. 217), on the death of any person his property in the province "and any interest therein or income therefrom * * * passing by will or intestacy" is subject to succession duty whether such person was domiciled in the province or elsewhere at the time of his death. M. B. and his brother were partners doing business in Ontario and owning timber limits in British Columbia. The firm had no place of business nor man of business in that province and never worked the limits. The partnership articles provided: "8. If either partner shall die during the continuance of the partnership his executors and administrators shall be entitled to the value of his share in the partnership assets. 9. On the expiration or other determination of the said partnership a valuation of the assets shall be made and after providing for payment of liabilities the value of such property stock and credits shall be divided equally between the partners, etc." M. B. having died while the partnership existed his share in the partnership assets passed by his will to executors. The Province of British Columbia claimed that his interest in the timber limits was subject to succession duty.
Held, Davies and Anglin JJ. dissenting; that under the terms of the articles of partnership M. B. at the time of his death had an interest in the timber limits in British Columbia which passed by his will and such interest was subject to duty under section five of the B.C. "Succession Duty Act."
Held, also, that the imposition of the duty, if taxation, was "direct taxation within the province" and within the competence of the Legislature of British Columbia.
APPEAL from a decision of the Court of Appeal for British Columbia[1] affirming the order of the Chief Justice who dismissed the appellants' petition.
The essential facts will be found in the above headnote. The proceedings commenced by petition to the Supreme Court of British Columbia praying for a declaration that no succession duty was payable by the estate of Mossom Boyd in respect to the lands in the Province.
Lafleur K.C. and David Henderson for the appellants. The share of a deceased partner is situate where the partnership business is carried on. Hanson on Death Duties, pages 109, 113; In re Ewing[2], at page 22; Commissioners of Stamp Duties v. Salting[3], at page 453.
A partner's property consists of his proportion of the surplus assets after conversion and payment of liabilities. Lindley on Partnership, 8 ed., pages 402, 403; In re Ritson[4].
J. A. Ritchie for the respondent. This case is governed by the decision of the Privy Council in Rex v. Lovitt[5], on the Succession Duty Act of New Brunswick which is substantially the same as that of British Columbia.
Nesbitt K.C. for the intervenant, the Attorney- General for the Province of Ontario, referred to Cotton v. The King[6]; In re Muir Estate[7] Attorney-General v. Hubbuck[8].
THE CHIEF JUSTICE.—I think this case must be governed by the decision in Rex v. Lovitt[9]. The only question is whether the fact that the lands were, as is alleged, the property of the partnership instead of being vested in an individual can make any difference, and I do not see that it can.
It is said that all that those claiming under the deceased would be entitled to would be a share in the surplus of assets over liabilities of the partnership. How does this differ from the ordinary case of a residuary legatee who is only entitled to the balance of the testator's estate after payment of debts? In the judgment in Rex v. Lovitt[10] it was said:—
The tax is on the gross sum though it may be money used in trade and as such be subject to many deductions before it can fairly be treated as not property.
The case has been argued as if it depended solely upon the law governing such matters in the absence of express agreement. I am far from satisfied that that is the correct view. Paragraphs 8 and 9 of the articles of partnership are certainly not apt for providing for the usual sale, winding-up and division of the surplus of the partnership. It may well be that on a division and execution of proper releases and instruments, such as is contemplated by paragraph 9, each of them, the executors and the surviving partner, would hold onehalf of the lands, the only difference being that they would hold divided instead of undivided shares. Be this as it may I am satisfied that this real estate in the Province of British Columbia passes under the will and I do not think it possible that payment of succession duty can be avoided on any allegation that the devise may be subject to answer possible liabilities of the partnership:
I do not wish to embarrass the case by suggesting unnecessary points of doubt, but it is remarkable that though the testator appointed executors and trustees of his will, there is no devise or bequest to them of any property whatever. If the land passes under the devise in the will to the widow and three sons of the testator there would seem a still stronger case why they should be liable for payment of the succession duty.
That the lands must be considered as personal property is, I think, a question that chiefly concerns the intervenant, but it must be noted that in most, at any rate, of the cases to which reference has been made the question for decision has been whether the property was liable for probate duty.
The claim that the share of a deceased partner is situate where the business of the partnership is carried on, does not, I think, further the appellant's case. The distinction is overlooked between the locality where the asset forming part of the partnership property is situated and the place where the share of the partnership is considered to be situate. So far as this particular asset is concerned the business of the partnership must, I think, be considered to have been carried on in British Columbia. In Beaver v. The Master in Equity of the Supreme Court of Victoria[11], where a firm carried on business in London, Melbourne and Adelaide, it was held that the interest of a deceased partner in the business carried on at Melbourne was locally situate in the Colony of Victoria so as to be liable to probate duty in respect of his will.
DAVIES J. (dissenting).—The question to be determined on this appeal is whether the share or interest of Mossom Martin Boyd, deceased, in certain real estate situate in British Columbia standing at his death in his name and in that of his partner William T. C. Boyd, is liable for succession duties under the "Succession Duties Act" of British Columbia, R.S.B.C. 1911, ch. 217.
The 5th section of this Act, sub-sec. (a), enacts that:—
On the death of any person the following property shall be subject to succession duty. All property of such deceased person situate within the province and any interest therein or income therefrom whether the deceased person owning or entitled thereto was domiciled in the province at the time of his death or was domiciled elsewhere passing either by will or intestacy.
The case came before the courts on the petition of the executors of M. M. Boyd's estate praying for a declaration that the properties in question were not liable for succession duties because they were acquired by the partnership the "Mossom Boyd Company" and were paid for out of the partnership funds; and although standing and held in the names of the individual partners were so held by them on behalf of and as part of the assets of the partnership—and that as the 'business of the partnership was carried on in Ontario, where the head office was and where the books were kept, the interest of the deceased partner in these partnership lands was not liable to succession duty under the British Columbia Act.
The Chief Justice of British Columbia dismissed the petition without stating his reasons. On appeal to the Court of Appeal for that province the court was equally divided and the judgment of the Chief Justice therefore stood.
I think the evidence shews that the partnership carried on its business in Ontario at Bobcaygeon where its head office was and its books were kept and that it had no partner or paid agent to transact business in British Columbia though it purchased and sold lands there as elsewhere in Canada under the terms of the partnership deed.
I think also it is clearly shewn that the lands in question were purchased and paid for out of the partnership funds and that although they stood in the names of the individual partners they did so in trust for the partnership and must on the death of one of the partners and for the purposes of succession duty be treated as partnership property of the firm.
I am also of opinion that the shares of the individualpartners in these real properties of the firm must betreated in the absence of any binding agreement between the parties as personalty: Attorney-General v. Hubbock[12].
The reasons why this must be so are clearly explained by Brett, M.R., at page 285, and Bowen, L.J., at page 289.
But in my judgment it does not matter for the determination of the question on this appeal as to the liability of the property in question to pay succession duties whether it is treated as personalty or realty.
The sole question is whether the interest, whatever it may be, of the deceased partner comes within the section of the Act I have quoted.
The section clearly overrides and excludes the rule of law based upon the maxim “mobilia sequuntur personam'' and therefore, though the deceased's domicile was in Ontario and the lands were treated as personalty, they would not escape liability on that ground.
That point being disposed of by the express terms of the statute, we must determine whether the other judicial rules relating to partnership property have also been set aside or overruled by the statute.
It is contended on the part of the appellants, that although the lands were situated in British Columbia and the title stood in the individual names of the partners, still, as they were partnership property of a firm carrying on its business in Ontario, they were not liable under the Act for the succession duties.
The contention was made and I agree with it that as under the facts the deceased partner had in law and equity no interest in these lands within the meaning of the statute they were simply these British Columbia assets of the partnership and must be held at its dissolution and for the purposes of succession duty to be situate in Ontario where the business of the partnership was carried on—ad tat the only right or interest the deceased partner or his representative had at the time of his death was a right to share in the surplus assets of the partnership.
The law on this subject as above—stated is clearly put in Lindley on Partnership, 8th ed., pp. 402 and 403, and Halsbury, vol. 22, p. 55, where the authorities are collected.
Mossom Martin Boyd's interest in the partnership property under these authorities consisted at the time of his death of the surplus assets of the partnership after its debts and liabilities were paid and discharged and this is the only interest which passed or could pass on his death to his representatives. The only right of the executors of the will of the deceased partner, the petitioner in this court, is a right to have such share of the deceased properly ascertained and paid. The right of the British Columbia Legislature to change and displace these rules of law and to make the interest of a deceased partner in partnership property situate in British Columbia liable to succession duties is not disputed.
The question is: Has it done so in the section of the statute quoted above, either expressly or by necessary implication? If it has not so changed and displaced these judicial rules with reference to the interest of a deceased partner in partnership property situated within the province, then cadit questio.
In the case of Rex v. Lovitt[13],so much relied upon by the two learned Judges in the Court of Appeal as supporting the right of the province to claim the succession duties in this case, the Judicial Committee did certainly determine that a competent legislature may if so minded and by the use of apt language in its legislation impose a succession duty on property within its jurisdiction, even if in so doing it displaces the rule of law based upon the maxim lia sequuntur personam.
Their Lordships first decided that the monies there in question being deposits made by the deceased testator in his lifetime in a branch bank in New Brunswick of the Bank of British North America whose head office was in London, England, were primarily at least payable in St. John, New Brunswick, where the branch bank was and came therefore within the words of the statute
property within the province. They held further that the rule of law based upon the maxim mobilia sequuntur personam had been expressly displaced by the language of the section which made all such property liable to succession duties though the testator's domicile may have been outside of the province.
But the decision in that case does not help the Crown in the case before us because the British Columbia statute does not profess to displace any of the rules of law relating to partnership property or to alter the rights of a deceased partner or his representatives on his death in or to such property.
I am quite at a loss to understand what words in the section now under discussion can be invoked to displace any of such judicial rules. If none can then these rules must be given effect to.
The mere fact that the property stood in the individual names of the two partners cannot affect the question.
It was partnership property and the partners held it in trust for the partnership.
The only interest which the partner held was a right to share in the surplus assets of the partnership and as the business was carried on outside of the province the succession duties, if any such were payable at all, would be payable in the province where the business was carried on.
The words of the section relied upon as displacing by implication the ordinary rules of law relating to partnerships and the interest of the partners therein are no doubt these,
all property of such deceased person situate within the province and any interest therein or income therefrom.
From what I have already said it will be apparent that my conclusions are that the deceased partner had no interest in these properties at his death within the meaning of the section in question and that any interest he had with respect to them or that his representatives had under his will was a right to have them treated as partnership properties and to share in the surplus assets of the partnership the business of which was carried on in Ontario and not in British Columbia. In other words, the property was not that of the deceased partner nor had he any interest in it. His sole right and that of his representatives on his death was the right to have the property treated as a partnership asset in winding-up its affairs in Ontario.
The answer to the argument arising out of the title to the lands standing in the individual names of both partners at the decease of Mossom Martin Boyd is that previously stated by me, namely, that it being shewn to be partnership property purchased with partnership funds the deceased and his partner would be held respecting them to be trustees for the partnership and the executors of the deceased's will would be compelled to join in a sale of the properties for partnership purposes or otherwise to convey and assure the properties to the surviving partner for partnership purposes. No interest other than his right to a share of the surplus assets of the partnership was held or possessed by the deceased partner at his death or could be disposed of by his will in these properties.
If the legislature intended to make any such interest liable to succession duties they would have used express language to displace the rules of law respecting it as they did when they desired to displace the rule of law respecting personal property founded on the maxim mobilia sequuntur personam. I would therefore allow the appeal and grant the declaration prayed for.
IDINGTON J.—The late Mossom Martin Boyd carried on business in Ontario along with his brother under articles of partnership which I will presently refer to, and having made a will, also to be referred to, died 8th June, 1914, when amongst other assets they held timber lands situate in British Columbia.
These lands had been acquired and registered in the names of the said Mossom Martin Boyd and his said brother William Thorncroft Cust Boyd and were held as partnership property.
The question raised herein is whether the Province of British Columbia can, under its "Succession Duties Act," R.S.B.C. 1911, ch. 217, sec. 5, claim that any interest in said lands or income therefrom was subject to succession duties.
Said section 5 so far as directly dealing with the matter involved, is as follows:—
5. (1) Save as aforesaid the following property shall be subject on the death of any person, to succession duty as hereinafter provided, to be paid for the use of the province over and abave the probate duty prescribed in that behalf from time to time by law;
(a) All property of such deceased person situate within the province, and any interest therein or income therefrom whether the deceased person owning or entitled thereto was domiciled in the province at the time of his death, or was domiciled elsewhere, passing either by will or intestacy.
It is denied by appellant that this enables the province to .collect duties in any case of death of a partner when the partners had carried on business and resided beyond the province at the time of such death.
We have been by means of the liberal citation of cases invited to consider the probate .duties, the succession duties, the death duties, the legacy duties payable heretofore and now under a variety of English statutes, the voters' franchise and legislation bearing thereon, and in the same way the several Acts in force in England and her colonies bearing respectively upon such like duties or rights not overlooking sundry other Acts such as "Locke King's Act," and last but not least the "Mortmain Acts," in order to be helped to a proper understanding of the sections just quoted.
Briefly put the argument was based upon the theory that land held by the members of a partnership was held as joint tenants and therefore the share of one dying would by due course of law become vested in the survivor or survivors to be held subject to the terms of the articles of partnership as part of the assets of the firm and only be accounted for by the survivor or survivors in course of his or their winding-up the firm business or default through the court which necessarily must observe the doctrine of equity jurisprudence by which all the assets must be treated as personal property and as there could be no claim made by the personal representative of a deceased partner to any of the assets and only a possible claim to share in the residue of the proceeds realized by survivor or court in Ontario in due course of liquidation there was nothing for the said statute to operate upon.
I have in deference to the course which that argument has taken in the hands of able counsel considered all these cases, but I cannot say that I am much helped thereby to a solution of the actual problem presented to us to determine. Many of these cases cited to us had to distinguish between what should be held to be real and what personal property in certain contingencies for the purpose of applying the Act imposing a pro- bate duty, or for other purposes the equitable doctrines properly relevant in certain cases wherein land had in fact furnished the basis of the dispute but in such view had to be treated as personal property.
We have no such distinctions to make herein or at least if such like distinction has to be observed it rests upon other conditions than those arising in many of the cases cited.
It matters not whether the interest that passes by this testator's will is real or personal or a mixture of both. Whatever it is the clear purpose of the Act is, if we study its provisions as a whole and regard its purview, to see that whatever passes shall be taxed.
There are some rather cogent reasons for holding that under the state of the law in England nothing in said land would have, if governed thereby, passed by such a will but the possible share of the personal representatives of deceased in the ultimate residue of the realized'assets of the firm. .But when I come to try and apply such reasons to this particular statute and its entire purpose and the relation thereof to the peculiar facts of the case and to the laws of British Columbia, to which I am about to advert, I must hold that something in the nature of an interest in the property or the income thereof has passed.
It would surprise the appellants to be told that nothing in British Columbia passed by the will.
It is self-evident that everyone concerned felt the necessity of holding that something else than suggested in argument passed; else why resort to the British Columbia Probate Court for ancillary letters through the statutory provision for recognition of the Ontario probate?
And when we go a step further we find that, in order to make a title to any purchaser of the British Columbia lands in question, or even to one of those concerned in the event of a partition thereof, it seems necessary in order that there should be any title pass in either such case (the provisions of the '' Land Registry Act" are such) that the parties concerned must resort to the will and probate and only by means thereof can title be made.
These features seem to me to furnish the crux of the case to be considered and decided.
There does not seem to be anything in the nature of a transmission to the surviving partner such as formerly enured in England and does yet, by reason of the title being one of joint tenancy.
That phase of the English law of real property seems to be practically taken away by reason of the provision of the "Land Registry Act," ch. 127, of the Revised ,Statutes of British Columbia, 1911, sec. 52, which enacts as follows:—
Section 52. Where by any letters patent, conveyance, assurance, or will, or other instrument made and executed after the twentieth day of April, 1891, land has been or is granted, conveyed or devised to two or more persons, other than executors or trustees, in fee-simple, or for any less estate, it shall be considered that such persons took or take as tenants in common, and not as joint tenants, unless a contrary intention appears on the face of such letters patent, conveyance, assurance, or will, or other instrument, that they are to take as joint tenants.
It will be observed that executors or trustees are the only grantees who may receive a title in joint tenancy to be governed by the incidents of survivorship peculiar to such a tenure unless by express provision to the contrary.
There is no such implication to be presumed from the mere fact of the existence of a partnership between the grantees.
There is no such statutory provision in England, so far as I can find, and certainly the text books indicate that the presumption of a grant to more than one person whether partners or not is, unless otherwise expressed, a grant to hold as joint tenants with all the incidents of survivorship incidental to joint tenancy.
I need not dwell on the exceptions presumed from circumstances. It may be observed that many English decisions and some of those cited to us turn upon this conception of the law in England
The right of survivorship in law founded thereon has often enabled surviving partners to deal properly and advantageously with the partnership estate and even wind it up.
We. must also remember "that the jurisdiction of courts of equity over the administration of partnership is so comprehensive that the views of these courts, treating the entire property of such partnerships for that and like purposes as personal property, being that to which everything in the last resort is reducible by the process they adopt, dominate legal minds.
Hence we find the propositions laid down, perhaps rather broadly, by high authority that all partnership property is personal. Obviously the expressions so quoted relate to such cases as happen to be dealt with for some purpose incidental to a partnership as such, or to the view of courts of equity in administering partnership assets.
I cannot accede to such a proposition as of universal application and covering cases where the partners see fit expressly to provide for an entirely different treatment of their assets.
What a court of equity may do and find necessary to do in the course of administering a partnership estate in order that third parties may get their share, when no other provision has been made therefor, and the principles and practice of proceeding in a court of equity have to be observed, is one thing. But when third parties have not to be protected and the partners have by their contract between themselves made ample provision for the manner of dealing with partnership assets, it is entirely another thing, and I venture to think that in such a case no court of equity would interfere with that provision or the mode of carrying it out, but rather would aid in the due execution thereof according to the agreement.
Now what is the condition of things existent in the partnership we have to deal with and to which we have to apply if we can the statute now in question?
The articles of partnership are in the case and dated 23rd November, 1892, subsequent to the coming into operation of the statute I have quoted above relative to the nature of the tenure under which the lands acquired by the firm should be held, and constituting it, presumptively at least, a tenancy in common.
I may remark here that in Ontario there had long existed a statutory provision from which I imagine the British Columbia Legislature copied that which I quote above, substituting the year 1891 for that of 1834 in the Ontario enactment.
This fact is, of course, of no further consequence than to suggest the mode of thought likely to prevail with business men of Ontario when acting as partners they enter into a bargain for the management of and dealing with their property including real estate at home and abroad. It may require that due heed should be paid to that circumstance in interpreting the language they have used in framing their articles of partnership and the agreement therein for the winding-up of their estate. When due heed is paid thereto and to the language used in such articles and they are thus found to possess a meaning in accord with what a business man would read therein freed from the hampering preconceptions lawyers often have of what men are about, I submit no court should interfere with, but try to execute, the purpose in the business man's mind.
The articles of partnership in question herein provided for its continuation for ten years from the date thereof or until the partnership had been determined by either party giving six months' notice to the other.
Following such provisions are articles 8 and 9 which are as follows:—
8. If either partner shall die during the continuance of the partnership his executors and administrators shall be entitled to the value of the partnership property, stock and credits to which the deceased partner would have been entitled on the day of the date of his death.
9. On the expiration or other determination of the said partnership, a full written account shall be taken of all the partnership property, stock, credits and liabilities, and a written valuation shall be made of all that is capable of valuation, and such account and valuation shall be settled, and provision shall be made for the payment of the liabilities of the partnership, and the balance of such property, stock and credits shall be divided equally between the partners, and each shall execute to the other proper releases and proper instruments for vesting in the other, and enabling such other to get in such property, stock and credits.
Clearly this partnership ended by the testator's death and what article 9 provided, probably was duly carried out. And however that may be it is to be presumed it was so until the contrary appears.
We are not informed on all this as we might have been. Probably a full exposition of the results of the provisions just quoted and what done pursuant thereto, would have deprived the theoretical argument submitted of much of its application.
The will of the testator is produced and assuming it was intended thereby, as suggested by counsel on the argument, to deal with the interest of the deceased in the lands in question it furnishes an illuminating com mentary on the pretensions set up in argument.
The will provides a period of ten years is to be allowed for carrying out the greater part of the provisions made therein, in order to prevent any loss to this testator's estate by too hasty a realization of the assets.
Is not the fair inference that the testator well knowing the above quoted provisions for the settlement of the partnership affairs expected and intended that there should be no enforced winding-up thereof in the manner contemplated in the argument herein, but that after the valuation there should be a division of the lands as well as goods available for partition and the trustee executors be enabled thereby to execute the testator's directions. Every one of long experience in Canada knows the need that exists for dealing with timber limits and lands as this testator directs.
Such seems to me to have been the scope and purpose of both the articles of partnership and the will, and that there was thereby a transmission of the testator's interest in the lands in question clearly within the meaning of the statute in question rendering it liable beyond peradventure to the payment of succession duties in British Columbia.
In that view there is no need for speculation as to the possible outcome of a winding-up of the partnership by a sale of the assets and on the realization thereof a payment of money in Ontario where the surviving partner and the executors presumably would execute their respective duty or trust and the money be payable.
There also seems clearly in such a view no room for the argument presented on the basis of the results of such a speculative way of looking at the matter. Even in such an alternative I by no means have a doubt as to what the legislature intended.
The expression of that intention might well have been better put, so as to cover the grounds taken in argument.
However that may be, there is in sub-section (d) of section 5 a provision made against the possible vesting of an estate in a joint tenancy whereby the beneficial owner might under the strict literal terms of sub-section (a) escape.
This provision against any possible resorting to such subterfuge clearly suggests, that the case of any other analogous result arising from the doctrine of survivorship in a joint tenancy was not expected as a thing that could arise under the law of British Columbia.
It is difficult to imagine a more tangible asset possessing a local situs than land in any country and especially so where both by virtue of the provisions I have quoted the tenancy would be presumed to be a tenancy in common and by the provision of the "Land Registry Act" it is contemplated that each of the parties named in the registry as owners, or their representatives, must join in order to effect a transfer of the entire estate.
The provision of section 25 of the "Partnership Act" declaring that real estate as between the partners shall "be treated" as personal or movable and not real and heritable estate, does not seem to me to affect the operation of the Act in the slightest degree so far as it relates to the situs of the property or interest therein to be taxed. It simply fits what courts of equity for purposes of administration have always, at least primâ facie, maintained. There may arise sometimes but cannot in this case an arguable question as to the measure of interest of a partner in an insolvent partnership concern or one possessing little value. I express and indeed have no opinion in regard thereto.
I only refer to it to illustrate that there may be questions other than that of situs arise out of said section 5 in relation to which section 25 of the "Partnership Act" may have a bearing.
The Province of Ontario desired and was allowed to intervene. The fullest argument possible is always desirable in these cases. But we have no right, and are indeed not asked to pass upon the possible claims of that province, resting upon such theories as the argument presents, to maintain another succession duty even if the British Columbia claim is maintained. That possibility is properly suggested in argument as a reason for great care on our part.
The case of Rex v. Lovitt[14], goes a long way to maintain the respondent's claim.
The actual situation of the properties and the necessity to obtain probate where situated in order to secure the recovery of it or to enable any dealing with it, were cogent reasons in that case for maintaining the claim. Both exist and are strengthened in this case by the need for compliance with the "Land Registry Act."
Moreover, in this case it was not seriously disputed in argument that the province would have the power within the jurisdiction conferred by the "B.N.A. Act" to impose direct taxation upon or in respect of the land in such a contingency as appears to result from the dissolution of a partnership by death and all involved therein.
It comes back to the narrow question of whether or not the legislature has succeeded in expressing it- self within the meaning of that power. I think it has. The act of doing or attempting to do so has to bear the test of its being fitted to British Columbia laws and the condition of things created thereby, or flowing therefrom. Neither the power nor the mode of expressing its exercise can be very adequately helped by analogous cases founded on other laws and other conditions of things.
I think the appeal should be dismissed with costs.
DUFF J.—The Mossom Boyd Company was a firm composed of two members, Mossom Boyd and William Boyd, carrying on (inter alia) a lumber business with its head office at Bobcaygeon in Ontario. The partnership was formed on the 23rd November, 1892, and by the articles was to last for ten years; but the partners continued to carry on business as a partnership at will down to the death of Mossom Boyd in June, 1914. Both partners were domiciled in Ontario. Certain timber lands and timber leases were acquired in British Columbia and, it is admitted, became partnership property, and were partnership property on the death of Mossom Boyd. These properties were acquired and were registered in the names of the partners as individuals, as tenants in common in fee simple or as lessees.
The partnership acquired property in Saskatchewan, Manitoba and Quebec as well as in Ontario and British Columbia. There was no place of business in British Columbia and, excepting the acts done in acquiring the properties mentioned, in the payment of rent and taxes and license fees and in other acts incidental to the ownership of the property, it did not at any time carry on business in British Columbia.
The question is whether the deceased Mossom Boyd had in these properties in British Columbia an interest that on his death became subject to succession duties under section 5, sub-sec. 1a of the "Succession Duty Act," R.S.B.C. 1911, which enactment is in the following words:—
Sec. 5 (1). Save as aforesaid, the following property shall be subject, on the death of any person, to succession duty as hereinafter provided, to be paid for the use of the province over and above the probate duty prescribed in that behalf from time to time by law:—
(a). All property of such deceased person situate within the province, and any interest therein or income therefrom, whether the deceased person owning or entitled thereto was domiciled in the province at the time of his death, or was domiciled elsewhere, passing either by will or intestacy.
That no such interest was vested in the decedent is alleged for the reason that by the law of British Columbia as well as by that of Ontario the "share" of a partner in the partnership assets is not an interest in any specific asset of the partnership but is merely a right ultimately to receive his share of the proceeds of the sale of the surplus assets after payment of the partnership liabilities. This right, it is said, is of the nature of personal property and the right had its situs, it is alleged (referring to the right of Mossom Boyd), in Ontario where the head office of the business is and where for many purposes the business must be deemed to have been carried on.
The conclusions to which we are asked to assent as flowing from this are, first, that no interest devolved under the will of Mossom Boyd which was "property" belonging to him
situate within the province
and secondly, that any attempt to subject this right of the decedent to succession duty would be ultra vires as not being
taxation within the province
according to the meaning of sec. 92 "B.N.A. Act." The second of the questions raised presents little difficulty. The title to land and to interests in land within the boundaries of the province is a subject within the exclusive jurisdiction of the province and no question can be raised touching the authority of the legislature to declare that on the devolution of a registered title consequent upon the death of one of two tenants in common the land or the undivided half interest vested in him whether as trustee or otherwise shall be charged with the payment of a duty to the Crown or that a condition of the registration of the title devolving by reason of his death or of the recognition as jura in re of the rights of the beneficiaries for whom that title is held in trust shall be the payment of such a duty. The extent of the legislative jurisdiction with respect to lands within the province may be gathered by reference to the decision of the Privy Council in McGregor v. Esquimalt and Nanaimo Railway Co.[15]. This observation is subject to one qualification and only one, and that is that such legislation would not be effective if it appeared that, although "taxation," it did not when its real purpose was considered, fall within the description "direct taxation." Payne v. Rex[16], at page 560.
The first proposition stated above rests upon the assumption that at the time of his death Mossom Boyd had no interest in the partnership lands in British Columbia which could be described as "property" or interest in "pr