Rawlings and Ball v. Galibert

Rawlings and Ball v. Galibert
Collection
Supreme Court Judgments
Date
1919-12-22
Report
(1919) 59 SCR 611
Judges
Davies, Louis Henry; Idington, John; Duff, Lyman Poore; Anglin, Francis Alexander; Brodeur, Louis-Philippe; Mignault, Pierre-Basile
On appeal from
Quebec
Subjects
Guarantee and suretyship
Decision Content
Supreme Court of Canada
Rawlings and Ball v. Galibert, (1919) 59 S.C.R. 611
Date: 1919-12-22
W. T. Rawlings and G. Ball (Defendants) Appellants;
and
Paul Galibert (Plaintiff) Respondent.
1919: May 21; 1919: June 17; 1919: November 10; 1919: December 22
Present: Sir Louis Davies C.J. and Idington, Duff, Anglin, Brodeur and Mignault JJ.
ON APPEAL FROM THE SUPERIOR COURT OF THE PROVINCE OF QUEBEC, SITTING IN REVIEW AT MONTREAL.
Suretyship—Accommodation notes—Representations by payee to maker— Parol evidence—Commercial matter—Arts. 1233 (1) and 1955 C.C.
The appellants and the respondent were shareholders in the Star, Films company. In order to help the company to discount its note of $15,000, one Lubin, the president of the company, obtained from the respondent his own note for $10,000 made payable to the company and to be used as collateral security. According to evidence adduced by the appellants, although objected to by the respondent, Lubin afterwards approached the appellants, informed them that the company held respondent's note for $10,000 and agreed with them that, if they would indorse the company's note for $15,000 to enable him to discount it with the bank, he would pledge the respondent's note as collateral and they would thus be liable only for $5,000; and, on this understanding, the appellants indorsed the company's note. The company went into liquidation before its note of $15,000 became due. The appellants paid the bank $5,000, but refused to pay more. The bank then sued the respondent for $10,000 which he paid; but he called the appellants in warranty asking to be reimbursed in full of his payment to the bank.
Held, Brodeur and Mignault JJ. dissenting, that the respondent, by giving his note to Lubin without any limitation placed on its use, had given him authority to use it as collateral in any manner he might deem advisable to enable the company to discount its own note, and that such authority was lawfully exercised by Lubin to impose on the respondent the obligation of indemnifying the appellants against their indorsement to the extent of $10,000.
Held also, Brodeur and Mignault JJ. dissenting, that, as the appellants as to $5,000 were sole sureties and as to $10,000 were sureties to the bank but not co.-sureties with the respondent, such arrangement takes this case out of article 1955 C.C. as the parties did not "become sureties for the same debtor and the same debt." Held also, Brodeur and Mignault JJ. dissenting, that parol evidence as to the understanding between Lubin and the appellants, although the civil contract of suretyship was the subject matter of the testimony, was admissible under art. 1233 (1) C.C., as it concerns liability on promissory notes discounted with a bank in the carrying out of what was undoubtedly a commercial transaction.
Judgment of the Court of Review (Q.R. 55 S.C. 516), reversed, Brodeur and Mignault JJ. dissenting.
APPEAL from a judgment of the Superior Court sitting in review at Montreal[1], affirming the judgment of the trial judge[2], and maintaining the respondent's action in warranty.
The material facts of the case are fully stated in the above head-note and in the judgments now reported.
Falconer K.C. and Ogden K.C. for the appellant.
Perron K.C. and Vallée K.C. for the respondent.
The Chief Justice.—I concur with Mr. Justice Anglin.
Idington J.—This action was brought by respondent to recover from appellants contribution as alleged co-securities with him for a debt due by Star Films Limited, a corporation carrying on a moving picture show in Montreal.
Appellants and respondent were respectively shareholders in said company. The respondent by reason of his holding of shares for a much larger amount than either of the others, as well as by reason of liabilities he had undertaken on behalf of the company prior to that now in question, was far more deeply interested in the company's success than either of the appellants, or indeed both together. The pith of his story as to the transaction in question is told in the following passage from his evidence:—
M. Lubin voulait d'abord escompter un billet de vingt mille piastres ($20,000). Je me suis rendu au bureau de la compagnie, en compagnie de M. Ecrément et d'une autre personne. Il voulait me faire endosser le billet. J'ai refusé. J'ai dit: "Je n'endosserai jamais le billet. Ce que je suis prêt à faire, pour aider la compagnie, je suis prêt à donner un billet en sureté collatérale à la banque, engageriez-vous votre billet pour dix mille piastres ($10,000) à la banque?"
J'ai dit: "Pour aider l'affaire, je ferai cela."
Nous avions à la banque les cent cinquante mille piastres de débentures et je me pensais parfaitement garanti.
At another part of his story he speaks as follows:—
Q.—You have already stated in your examination on discovery that you did not see either Mr. Ball, or Mr. Rawlings in connection with this transaction? A.—I never saw them.
Q.—You also stated in your examination on discovery that you had received one hundred and fifty thousand dollars ($150,000) worth of the capital stock of the Star Films, Limited, in consideration of lending the company your name to the extent of ten thousand dollars ($10,000)? A.—I received ten thousand dollars ($10,000) of bonds first of all, and fifteen hundred shares of the company's stock.
Q.—That is one hundred and fifty thousand dollars ($150,000) worth of the capital stock of the company? A.—Yes.
By the Court. Q.—You obtained ten thousand dollars ($10,000) worth of bonds? A.—Yes.
By the Court. Q.—How ínany shares? A.—Fifteen hundred shares, amounting to par value one hundred and fifty thousand dollars ($150,000) which I took as collateral to guarantee me in signing the note.
By defendant's counsel. Q.—Did you not get that stock in consideration of indorsing this note? A.—Yes.
Q.—But you were not to give those shares back to Mr. Lubin if the company paid its notes? A.—No.
Q.—You were to keep the shares? A.—Yes.
Q.—Did you receive those shares previous to the discount of the company's note of the 4th of March, nineteen hundred and sixteen (1916)? A.—Yes, I had some shares of the Allied Features and some shares of the Star Films Company Limited, and Mr. Lubin bonded them all in one certificate of fifteen hundred shares.
Q.—You had already eighteen hundred and thirty-three (1,833) shares. A.—Yes.
Q.—Of which fifteen hundred (1,500) shares came to you on this transaction? A.—I had some before.
Q.—You had eighteen hundred and thirty-three (1,833) before? A.—Yes. Q.—Fifteen hundred (1,500) came to you from this transaction under your letter Exhibit D-4 on discovery. A.—Yes.
Q.—According to that letter you were to get fifteen hundred shares (1,500) on account of this transaction? A.—Yes, but I still maintain that those fifteen hundred (1,500) shares comprised previous shares, but my book-keeper can tell you that.
Q.—Anyway, some of the fifteen hundred (1,500) shares came to you in connection with this transaction? A.—Yes, most of them.
Q.—Were those shares delivered to you before the 4th of March, nineteen hundred and sixteen (1916)? A.—I could not say. I do not remember that.
Q.—In any event you obtained them? A.—Yes.
Q.—Did not you get those shares delivered to you almost immediately after you signed the note? A.—I do not remember, but I know I got bonds and these shares came after, as far as I can remember. In fact I attached very little importance to those shares as I knew the company was on the rocks, if we did not help them along.
Q.—That money you gave them to help them along. A.—Yes.
Q.—And you got consideration for doing so? A.—Yes, as they were insolvent.
Lubin was president and general manager of the company. He having thus got the $10,000 note which reads as follows
Montreal, Feb. 17th, 1916.
$10,000.
Four months after date I promise to pay to order of Star Films Limited, Ten Thousand Dollars at 26 Wellington Street, Montreal. Value received.
Paul Galibert.
from respondent, moved by said several considerations to give same, approached each of the appellants and by shewing them said ten thousand dollar note of respondent, a man well able to pay it, and assuring them that it was given for good consideration and would stand between them and loss to the extent of $10,000, induced them to agree to indorse, merely as sureties, a fifteen thousand dollar note of the company.
Both notes were used at the bank to obtain the desired loan.
The parties hereto never met each other, nor did any of them go to the banker, who discounted said note, until at a later date when the company failed and the bank looked, of necessity, to these parties hereto for payment. As none of them seemed prepared to produce the cash, the bank dropped the company and took by way of renewals from the appellants their note for $15,000 and from respondent a renewal of his note concurrent therewith. And so the business was continued till appellants has paid the $5,000, which they had agreed to go surety for, and refused to pay more as the respondent's turn had come to meet the balance. Of course that could have been no answer in law to the bank.
The bank, however, no doubt recognizing from its knowledge of the transaction, and as I should say any business man would from looking at the face of the transaction, and noting the original dates and being told how all these parties came to be co-sureties for $15,000, the justice of the appellant's contention, demanded payment from the respondent who refused until sued by the bank. Then he paid up and claimed to recover from the appellant.
The learned trial judge allowed such recovery to the extent of one-third of eight thousand dollars from each of the appellants.
In that regard he was upheld by the Court of Review. From that this appeal was taken and, I think, should.be allowed.
I cannot understand upon what principle the judgment is founded.
The learned judge, who writes the only notes of reasons appearing in the case, quotes largely from English authorities and indeed cites no other except article 1955 of the Civil Code of Quebec.
I have no doubt that the law is identical, whether English law or French law as presented in said article is proceeded upon and that both are derivable from the same source.
The first puzzle is: Why, if the doctrine of common suretyship for the same debt (which was one of $15,000) is to prevail in enforcing contributions, the judgment did not proceed upon the recognition of these men becoming surety for the same debt, and why that debt was not assumed to be as it is contended the facts demonstrate a debt of $15,000; and each allotted an equal share of the burden to be borne which would have resulted in each being called upon to contribute $5,000?
Instead of that the result of the judgment appealed from is that whilst appellants each pay $5,166, the respondent only pays the sum of $4,666.33 of which he had got out of the said original joint transaction, $2,000, by being relieved to that extent of $20,000 for which he had become liable, long before appellants had anything to do with the liabilities of the company, save indirectly as shareholders.
That $2,000 item, and all involved therein, presents us with our next puzzle. As between the parties hereto it was respondents' debt, existent when they became indirectly in appearance concurrent sureties for the $15,000. The theory of concurrent suretyship for the payment of the said $2,000 part thereof is indefensible, if good faith is to be observed, and it should be eliminated. Then the debt for which each must be held to have become, though separately liable, yet joint sureties, would be $13,000.
In any event, on that theory of the total being the same debt, the third of $13,000 would be what each should have borne, and the respondent have paid $3,333.33 and become entitled to call upon each of the appellants for the like sum. But they had each by paying their share of the $5,000 already discharged their respective shares of the whole debt to the extent of $2,500 as against respondent's nothing.
The courts below appropriate that $2,000 in the reduction of $10,000 which they seem to assume was "the same debt" for which in the language of the Code all the parties had become liable.
But why so assume? For surely "the debt of the same debtor" was $15,000, if anything is clear in this case. Of course the reply is: Oh, no, for respondent only agreed to go surety for $10,000.
Quite so; and appellants only agreed to go surety for $15,000 if and when, or so far as, the respondent should fail to meet the $10,000 he had agreed for good consideration prior to their assuming any responsibility to pay.
As the old saying has it: That is a poor rule that won't work both ways.
If the court can examine the facts behind the appearances and take upon itself to appropriate that $2,000 to do justice in one way of looking at the situation, I most respectfully submit, it must go further and examine all the facts and thus find that the real situation involved not only the appropriation of that $2,000, but the application of the entire actual facts, and they demonstrate beyond peradventure that the parties never in fact intended to become or were sureties for the same debts of the same debtor but that the respondent was surety previously for $10,000 of the debt incurred and the appellants for $5,000 of it and no more unless and until he had failed to meet his prior obligation.
Moreover, when we bear in mind that Lubin had induced the appellants, by shewing them the note which respondent had given, and assuring them it was for good consideration, and their protection against the payment of more than $5,000, I fail to understand why the man who put the power in Lubin's hands of so misleading them, can thus be permitted to escape from the natural consequences of his placing it in Lubin's power to so mislead these others.
It seems to me respondent was thereby estopped from claiming relief against those his conduct had so misled.
This is in effect a suit to recover, at the call of him who had so misled, from those he induced to incur a responsibility which, as regards him, they were assured he had assumed and would bear for himself.
It seems to me, with due respect to others, a very plain violation of the principles of justice which are what constitute the relevant law governing parties so concerned.
Article 1955 of the Quebec Civil Code relied upon is as follows:—
1955. When several persons become sureties for the same debtor and the same debt, the surety who discharges the debt has his remedy against the other sureties, each for an equal share.
But he can only exercise this remedy when his payment has been made in one of the cases specified in article 1953.
The obvious intention of each set of sureties was that respondent should be surety for the ten thousand and appellants for the balance of five thousand which they have discharged leaving respondent to bear that burden he faced and was paid for facing.
In other words, I repeat that on the true interpretation of the facts, these parties never were to become sureties for the same debt, and hence the claim does not fall within the provisions in said article.
I fail to see how the case of The Oriental Financial Corporation v. Overend Gurney & Co.[3], which decided only the question of a surety being discharged by an agreement to give time, can help herein.
Possibly it was argued before the court below that because the surety was paid for his suretyship that he had not the ordinary rights of a surety to contribution.
To prevent misapprehension I may say that in my opinion the fact of being paid to act as surety does not of itself necessarily so affect the rights of the surety. But when we have to determine whether or not the sureties were such jointly for the same debt or only each to bear a relative part of the total debt, then it becomes a very weighty matter in order to ascertain clearly whether or not the sureties stood upon the same footing or not, to learn all that passed.
In this case the incidents of payment and other advantages which the prior surety had, and especially the significant fact that there was given respondent a corresponding amount of bonds equivalent to the sum guaranteed, ought, I submit, to go a long way in supporting the conclusion of facts I have reached. That is that as between the sureties respondent became alone surety for the last $10,000, and appellants alone cosureties for the balance of the total of $15,000.
As I read Lord Blackburn's judgment in Duncan Fox & Co. v. North and South Wales Bank[4], at page 19, cited by the learned judge below, I think it supports what I have been urging against the non-observance of the principle there enunciated that
each shall bear no more than its due proportion.
What was the due proportion? Certainly not what has been allotted to each herein.
Moreover, the partner there, as the shareholder here, deposited security to answer the debt. And the consequences of such act, in Lord Blackburn's view, appears on page 20 of the report (1), where he says:— And if the bank had applied the whole of the proceeds of the security, as far as they went, to the payment of those bills, it seems quite clear that Samuel Collins Radford could not have come to the indorsers to repay him part of the debt which he had thus paid. The answer would have been that he was, as between him and the indorsers, bound to pay the whole.
It seems to me that the bank having chosen to call upon respondent on his general security up to the sum of $10,000 and make him pay, he has no more recourse than said Samuel Collins Radford in Lord Blackburn's opinion might have had.
It has been clear ever since Dering v. Earl of Win-chelsea[5], that the sureties whether known to each other or not are in equity bound to contribute and it has been equally clear ever since Craythorne v. Swin-burne[6], that a surety may contract himself out of such a liability by limiting his share.
The doctrine in each case rests not upon contract but upon the equities of the case.
Here it is quite clear upon the facts that it would be most inequitable to permit the respondent to call upon the appellants for that which they distinctly contracted against.
The cases upon the liabilities of co-sureties are collected in the notes to the Dering Case5, in White & Tudor's Leading Cases in Equity, vol. 1, part 1, and on this branch now in question at page 123 et seq. of the American edition in 1888.
The principle in its application to suretyship arising from accommodation indorsement presumes that the first of such indorsers has no recourse over against the later indorsers. And why? Simply that the acts of the persons so indorsing shew the relation they stand without any oral evidence. The English law permits oral evidence in other cases to shew what the parties intended. Here the written evidence properly read shews that.
Of course it goes without saying that the relation as established at the origin of the transaction is what must govern and cannot be affected by what happens later unless there is an express contract changing the relationship for which latter case there is no foundation herein.
I think, notwithstanding second argument, the appeal should be allowed with costs and the respondent's action in warranty dismissed with costs.
Duff J.—I concur with Mr. Justice Anglin.
Anglin J.—While they appear to have acceded to the admissibility of the parol testimony given at the hearing of this action and to have credited it, the learned trial judge and the learned judges of the Court of Review seem to me, with great respect, to have failed to give effect to it. The respondent objected at the trial to the reception of the oral evidence given by the appellants as to the understanding in regard to the respondent's liability upon which their indorsement of the company's note for $15,000 was procured, and he now strenuously contests its admissibility. That evidence had relation to the respective obligations inter se of the appellants and the respondent. It was, in my opinion, testimony upon "facts concerning a commercial matter" admissible under article 1233 (1) C.C. It is neither contradictory of, nor inconsistent with, the obligations which the signatures of the parties to the promissory notes in question evidence, but is merely explanatory of the relations which existed between them, on which their respective rights and obligations depend. It established the authority given by Galibert, the maker of a promissory note for $10,000 in favour of Star Films Limited, to one Lubin, the president of the company, in regard to the use to be made of that note; and it shewed what took place between Lubin—both in his capacity of president of Star Films and as the quasi-mandatory of Galibert— and the appellants, Rawlings and Ball (indorsers of a note of the company for $15,000, for which the $10,000 note was pledged as collateral on its discount with the Provincial Bank) in regard to the manner in which the Galibert note would be dealt with and as to the rights and liabilities inter se of Galibert and of Rawlings and Ball.
So far as it goes to establish the nature and the scope of Lubin's authority from Galibert and what he did in execution of it Forget v. Baxter[7] would seem to afford conclusive authority for its admissibility. See, too, Desrosiers v. Brown[8], Although the civil contract of suretyship is, no doubt, the subject matter of the testimony in question, yet since it concerns liability on promissory notes discounted with a bank in the carrying out of what was undoubtedly a commercial transaction of a company engaged in commerce (Une entreprise de spectacles publics; 6 Mignault, Droit Civil, p. 64) I cannot entertain any doubt of its admissibility. Ibid, note (e): Ville de Maisonneuve v. Chartier[9]; Hamilton v. Perry[10]; Hébert v. Poirier[11]; Banque d'Hochelaga v. Macduff[12]; Scott v. Turnbull[13].
What does the testimony establish? In the first place it shews that having refused to indorse Star Films' note for the $20,000, Galibert, for certain valuable consideration, gave to Lubin his own note for $10,000, made payable to that company, to be used
to help them (the company) finance the note of $20,000 (afterwards reduced by agreement with Galibert to $15,000), to help discount Star Films' note.
These are Galibert's admissions on discovery. There was no limitation placed on the use that Lubin might make of the Galibert note for the purpose indicated, except that Galibert's liability was to be collateral to that of the company.
Armed with this authority, Lubin approached the appellants (who had likewise refused to endorse the company's note for $20,000), informed them that the company held Galibert's note for $10,000 for valuable consideration, assured them that it was good for this amount, and agreed with them that, if they would indorse Star Films' note for $15,000 to enable him to discount it with the bank, he would pledge the Galibert note as collateral and they would thus be liable only for $5,000 as Galibert's note would protect them as to the other $10,000. On this footing the appellants agreed to indorse the company's note which was duly discounted by the Provincial Bank, Galibert's note being pledged as collateral. While the appellants no doubt assumed liability for the entire $15,000 to the bank, the basis of their obligation as between themselves and Galibert was that, on Star Films' default, he should pay $10,000 and they $5,000. It was within the scope not merely of the ostensible, but of the actual, authority given by Galibert to Lubin that the latter might so use the $10,000 note as to commit Galibert to such an engagement and what took place between Lubin and the appellants should, I think, be regarded as having effected a contract between Galibert and them that he would indemnify them against their indorsement of the company's $15,000 note to the extent of $10,000. That I take to be within the intendment of the 7th paragraph of the plea of the defendants in warranty. If not, the facts having been fully gone into at the trial, I would allow whatever amendment may be necessary to raise that defence formally as equity would seem to require. "Supreme Court Act," secs. 54, 55. This arrangement of the sureties' liability inter se in my opinion takes the present case entirely out of article 1955 C.C. They did not "become sureties for the same debtor and the same debt." As to $5,000 the appellants were sole sureties. As to the other $10,000 they were sureties to the bank, but not co-sureties with Galibert. They were rather sureties to the bank for him, i.e., their obligation was to pay the bank on his default, while his obligation was to pay the bank in the first instance on the default of Star Films and to indemnify Rawlings and Ball should they be compelled to do so. This also accords with the English law applicable to a case such as this. See Craythorne v. Swinburne[14]; Re Denton's Estate[15]; Macdonald v. Whitfield[16].
The courts below, with respect, would seem to have overlooked the unlimited scope of the authority given by Galibert to Lubin to use the $10,000 note as collateral in any manner he might find necessary or deem advisable to enable the company to obtain the discount of its $15,000 note and the fact that the authority was lawfully exercised by Lubin to impose on Galibert the obligation of indemnifying Rawlings and Ball against their indorsement to the extent of $10,000.
What took place subsequent to the commencement of the liquidation of Star Films was not intended to alter or affect the existing rights and liabilities of the appellants and respondent inter se. Rawlings and Ball did not by signing the renewal note then required by the bank assume the position of principal debtors or otherwise increase their liability.
These were my views after the first argument of this appeal. Nothing advanced on the re-hearing, in my opinion, warrants modification of them.
I would allow the appeal with costs here and in the Court of Review and would dismiss the action in warranty with costs to be paid by the plaintiff to the defendants.
Brodeur J. (dissenting).—Il s'agit de savoir si les dispositions de l'article 1955 du Code Civil de Québec doivent être appliquées dans la présente cause.
Les cours inférieures ont été unanimes à dire que cet article devait régir le litige.
Voici/?/ce qu'il dit:—
Lorsque plusieurs personnes ont cautionné un même débiteur pour une même dette, la caution qui a acquitté la dette a recours contre les autres cautions chacune pour sa part et portion.
Les faits de la cause sont les suivants :— Les appelants, Rawlings et Ball, et l'intimé Galibert étaient actionnaires d'une compagnie appelée "Star Films" qui, en février 1916, s'est trouvée dans un pressant besoin d'argent. Le gérant de la compagnie, Lubin, s'est adressé à Galibert et, après certaines négociations, il a obtenu la signature de ce dernier sur un billet de $10,000.00, qui ne devait pas être escompté mais déposé à la Banque Provinciale en garantie collatérale d'une somme de $15,000.00 que la compagnie devait emprunter de cette banque.
Lubin s'est alors adressé aux appelants Rawlings et Ball et, ayant obtenu leur endossement, sur un billet de la compagnie, de $15,000.00, va le faire escompter à la Banque Provinciale et il dépose en garantie collatérale du prêt que la banque faisait le billet de Galibert.
Il paraît bien évident que, dans toutes les négociations de Lubin avec Galibert et de Lubin avec Ball et Rawlings, il s'agissait pour la compagnie de trouver une somme de $15,000.00 dont elle avait absolument besoin pour continuer ses opérations. Comme Galibert, Ball et Rawlings étaient des actionnaires, il était assez naturel que son gérant essayât de les induire à l'aider. L'emprunt qu'il s'agissait de faire ne constituait qu'une seule et même dette dont Rawlings et Ball étaient les cautions pour le tout, vu qu'ils avaient endossé le billet de $15,000.00 et que Galibert avait également cautionné jusqu'au montant de $10,000.00.
La compagnie n'a pas pu être sauvée du naufrage et elle est tombée en faillite. Il s'agit de savoir si cette somme de $10,000.00 doit être partagée entre les cofidéjusseurs en portions égales, ou bien si elle doit être payée intégralement par Galibert.
Rawlings et Ball allèguent dans leur plaidoyer que Lubin, en leur demandant d'endosser le billet de $15,000.00, leur a déclaré qu'il avait l'endossement de Galibert pour $10,000.00 et qu'alors, pour me servir de l'expression de leur défense
the liability of the pleading defendant in warranty in any event would not exceed the sum of $5,000.00 inasmuch as if the Company Star Films Limited did not pay its note or retire the same that pleading defendant in warranty would be protected by the note of the said Paul Galibert for $10,000.00 to the extent thereof.
Ces déclarations de Lubin changent-elles la nature des relations des cofidéjusseurs? Je dis que ces déclarations ne pourraient exempter les défendeurs d'être condamnés à payer sous les dispositions de l'article 1955 du Code Civil. Lubin, en recevant le billet de Galibert, aurait pu facilement le transférer à Rawlings et Ball et ces derniers, en l'endossant et en le payant, auraient eu un recours plus tard, comme porteurs de bonne foi, contre Galibert, en vertu de l'acte des lettres de change.
Mais malheureusement pour les défendeurs ce n'est pas ce qui a été fait. Ils ne sont pas devenus porteurs du billet promissoire endossé par Galibert. Ils ont eux-mêmes endossé un billet pour l'accommodation de la compagnie Star Films. Ce billet devait être escompté à la Banque Provinciale, comme de fait il l'a été : et en garantie collatérale de ce billet de $15,000 on y a déposé le billet de Galibert.
Plus tard, même quand la compagnie est devenue insolvable, Rawlings et Ball ont renouvelé le billet de $15,000.00 non pas en l'endossant mais en le signant eux-mêmes: et Galibert renouvela lui aussi son billet, mais en déclarant que ce renouvellement était donné en garantie collatérale du billet de Rawlings et Ball.
En admettant que Lubin ait dit à Rawlings et Ball, quand il a obtenu leur endossement sur le billet de $15,000.00, que leur responsabilité ne serait que de $5,000.00, vu la garantie collatérale donnée par Galibert, cela constituait de la part de Lubin une opinion légale qu'il a donnée sur la portée et la nature de leurs obligations respectives: mais s'il a erré, s'il a fait des représentations qu'il n'était pas autorisé par Galibert de faire, alors ils ne sont pas déchargés de la responsabilité que la loi leur impose comme cautions, c'est-à-dire de payer leur part de la dette cautionnée.
Mais on dit: Lubin, en faisant ces représentations agissait comme mandataire de Galibert et la portée de ces représentations de Lubin constituait Galibert responsable de toute la dette vis-à-vis ses cofidé-jusseurs. Naturellement une des cautions peut par son acte de cautionnement stipuler à l'égard de ses cofidéjusseurs une plus grande responsabilité que celle édictée par la loi. Ce contrat ne serait pas contraire à l'ordre public et serait par conséquent valable. Son mandataire pourrait également le faire pour lui. Mais le mandat étant un contrat civil, il ne pourrait être prouvé que par écrit ou par l'aveu du mandant. La preuve testimoniale ne pourrait pas être faite. Dans la cause actuelle, où est la preuve légale du mandat donné à Lubin par Galibert de modifier son obligation à l'égard de ses cofidéjusseurs? La preuve testimoniale qui a été faite ne nous dit pas que Galibert lui-même sût qu'il devait y avoir d'autres cautions. Il n'a donc pas pu donner mandat à Lubin de modifier la portés de son obligation. Il remet simplement son endossement à Lubin sur un billet de $10,000.00. Comme porteur de ce billet, Lubin pouvait le transporter à un tiers et alors Galibert serait devenu responsable pour tout le montant (article 40, acte des lettres de change). Mais Lubin dépose ce billet en garantie collatérale d'une dette qu'il contracte à la banque, dette que Rawlings et Galibert ont cautionnée. Alors les relations qui s'établissent entre les parties sont celles de cofidéjusseurs et nous devons déterminer leur responsabilité entr'eux suivant les dispositions de l'article 1955 du code civil.
Le cautionnement est un contrat civil et il conserve ce caractère lors même que l'opération principale est commerciale; telle est du moins l'opinion généralement admise en doctrine et en jurisprudence. Laurent, vol. 28, no. 165; Massé & Vergé sur Zachariae, vol. 5, p. 759, note 55. Pardessus, vol. 6, p. 24; Pont, vol. 2, no. 88; Dalloz, 1907-1-90; Dalloz, Répertoire Pratique, verbo cautionnement, no. 7. On a cité, lors des auditions dans la présente cause, certaines décisions rendues en Angleterre mais qui ne sauraient être invoquées sous les dispositions du code civil. Nous ne devons pas sortir d'un système juridique pour chercher des décisions dans un autre système, même dans le cas où les deux textes sont apparemment semblables. Il est toujours dangereux d'aller chercher dans le droit anglais des autorités ou des décisions qui se seront inspirées d'une système propre à ce corps de loi mais qui seraient absolument étrangères aux principes généralement suivis dans le droit civil.
Pour ces raisons l'appel devrait être renvoyé avec dépens.
Mignault J. (dissenting)—Les appelants nous demandent d'infirmer le jugement de la cour de revision à Montréal qui a unanimement confirmé celui de la cour supérieure.
Cette cause avait été plaidée au terme de mai dernier et une question s'étant présentée au cours du délibéré sur laquelle les parties n'avaient pas été entendues, la cour a ordonné une réaudition et a formulé cette nouvelle question comme suit :-—
Whether upon the facts in evidence it was within the authority as to the use to be made of his note given by Galibert to Lubin to so use it that he, Galibert, should be liable to indemnify any indorser for Star Films in respect of his endorsement of that company's note to the extent of $10,000.00.
Avant d'exprimer mon opinion sur le jugement qu'il convient de rendre sur la contestation mue entre les parties comme sur cette nouvelle question, il sera utile d'exposer les faits de la cause qui sont peu compliqués.
Les appelants, Rawlings et Ball, et l'intimé, Galibert, étaient actionnaires d'une compagnie connue sous le nom de Star Films, Limited, et partant intéressés à son succès. Pour étendre les opérations de cette compagnie, le nommé Herbert Lubin, son président, cherchait à obtenir de l'escompte de la Banque Provinciale du Canada. Il voulait d'abord escompter un billet de $20,000.00 et avait obtenu de l'intimé Galibert un billet de $10,000.00 dont il devait se servir comme garantie collatérale, et en retour il promettait de donner à Galibert $150,000.00 d'obligations de cette compagnie et $150,000.00 de ses actions et un chèque de $5,000.00 en paiement d'une dette antérieure. Cependant la banque ne voulant avancer que $15,000.00, Lubin fit un billet de ce montant, et s'adressa aux appelants. Rawlings et Ball, pour obtenir leur endossement, leur représentant qu'il avait déjà un billet de Galibert pour $10,000.00 et que le plus qu'ils pourraient être appelés à payer serait $5,000.00.
Cette conversation entre Lubin et Rawlings prend de l'importance surtout en vue de la question qui a donné lieu à la réaudition, et je vais citer la version de. Rawlings lui-même, que ce dernier a donnée sous réserve de l'objection à la preuve testimoniale faite par l'intimé :—
Mr. Lubin came to me with a note for fifteen thousand dollars ($15,000:00), and wanted me to endorse it: I refused. I said "I will not," he tried a second time and I refused: then he came back some time after that, and asked me to do it again. I said: No; he said "It will be allright, I have a note from Mr. Galibert for ten thousand dollars made out in favour of Star Films Limited, now this note of Galibert's for $10,000 and this other note of fifteen thousand dollars ($15,000.00) which I want Mr. Ball and yourself to endorse will be handed over to the bank, and the only liability that you would have would be the difference between your fifteen thousand dollars ($15,000.00) and Mr. Galibert's ten thousand dollars ($10,000.00) which is five thousand dollars ($5,000.00),. and that five thousand dollars ($5,000.00) would be between you and Mr. Ball: I said "Well, if you have Mr. Galibert's note in favour of the company and as Mr. Galibert's note would come before my note, I would be agreeable to sign it or endorse the company's note." La date de cette conversation n'a pas été précisée, mais le billet de $10,000.00 de Galibert en faveur de Star Films et le billet de cette compagnie pour $15,000.00, endossé par Rawlings et Ball, sont datés tous deux du 17 février 1916, et le billet de $15,000.00 garanti par le billet de $10,000.00 a été escompté par la Banque Provinciale le 4 mars 1916.
Pour revenir à la conversation entre Lubin et Rawlings et aux représentations qu'on prétend que Lubin aurait faites, Rawlings et Ball, au lieu d'exiger que Galibert confirmât ces représentations—ce qui eût été de prudence élémentaire—consentirent à endosser le billet de $15,000.00 préparé par Lubin. Ce billet fut escompté par la banque, et le billet de $10,000.00 de Galibert, fait par celui-ci à l'ordre de la compagnie Star Films, Limited, fut transporté à la banque en garantie collatérale. Galibert ne reçut pas de la compagnie les $5,000.00 qu'il s'attendait à avoir à même le produit de l'escompte, mais seulement $2,000.00 en argent. La banque ayant exigé les obligations de la compagnie que Galibert devait recevoir, celui-ci paraît n'en avoir eu que pour $10,000.00, mais il reçut $150,000.00 d'actions. Dans toutes ces négociations, les appelants d'une part et l'intimé de l'autre restèrent étrangers les uns aux autres, et il n'est intervenu entre eux aucune convention quelconque.
La compagnie Star Films, Limited, fut mise en liquidation avant l'échéance du billet de $15,000.00, et ce billet fut renouvelé pour un montant moindre (les appelants ayant fait un paiement à compte), en par Rawlings et Ball signant eux-mêmes le billet de renouvellement et déposant le billet de Galibert en garantie, ce billet, dès ce moment, comportant à sa face être donné en garantie collatérale du billet de Rawlings et Ball. Après plusieurs renouvellements, Galibert refusa de renouveler davantage son billet en garantie, et la créance de la banque ayant été réduite à $10,000.00 par des paiements effectués par Rawlings et Ball, la banque poursuivit Galibert pour ce montant, et celui-ci appela en garantie Rawlings et Ball, leur demandant de le garantir pour le plein montant de la poursuite. C'est sur cette instance en garantie que les jugements a quo sont intervenus. Il appert par la preuve que la banque ayant obtenu jugement contre Galibert, celui-ci acquitta la dette en capital, intérêt et frais.
Ainsi que je l'ai dit, Faction en garantie de Galibert demande aux appelants de l'indemniser en plein de toute condamnation qui serait portée contre lui à la poursuite de la banque. Cependant, la cour supérieure, envisageant les parties comme étant toutes des cautions de la compagnie Star Films, Limited, et tenant compte des $2,000.00 reçus par Galibert, condamna chacun des appelants à garantir Galibert pour le tiers de $8,000.00 et cela en appliquant les principles du cautionnement, et notamment l'article 1955 du code civil, qui dit que
Lorsque plusieurs personnes ont cautionné un même débiteur pour une même dette, la caution qui a acquitté la dette a