Lapointe v. Messier

Lapointe v. Messier
Collection
Supreme Court Judgments
Date
1914-02-03
Report
(1914) 49 SCR 271
Judges
Fitzpatrick, Charles; Idington, John; Duff, Lyman Poore; Anglin, Francis Alexander; Brodeur, Louis-Philippe
On appeal from
Quebec
Subjects
Municipal law
Decision Content
Supreme Court of Canada
Lapointe v. Messier, (1914) 49 S.C.R. 271
Date: 1914-02-03
Magloire Lapointe (Plaintiff) Appellant;
and
Christophe Messier (Defendant) Respondent.
1913: November 18; 1914: February 3.
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.
Municipal corporation—Member of council—Interest in municipal contract—Public policy—Legal maxim—Money received under prohibited contract—Recovery of funds—Right of action—Statute — (Que.) 58 V., c. 42, ss. 1, 2, 11—Arts. 989, 1047 C.C.
A contractor with a municipality applied to the mayor thereof for financial assistance in carrying out works he had agreed to construct and obtained the necessary financial aid from him upon an understanding that the mayor should receive a bonus in consideration of the financial assistance to be rendered. On the completion of the works, but prior to the dates when the corporation was obliged to make payment, a promissory note was obtained from the municipality which was indorsed by the contractor, delivered to the mayor as collateral security for the amount owing to him, and, by the latter, was discounted at a bank. The mayor retained the proceeds of the note for the purpose of satisfying the amount of the bonus promised to him and some other charges which he claimed in connection with his services in financing the contractor. In an action by the contractor to recover the funds,
Held, that the arrangement so made had the effect of giving the mayor an interest in the contract incompatible with his duty as a member of the municipal council, contrary to public policy and in violation of the provisions of sections 1 and 2 of the Quebec statute, 58 Vict. ch. 42, and that he was not entitled to retain the moneys.
Held, also, that, in the circumstances of the case, the plaintiff’s right of action was not affected by the illicit nature of the agreement and that he was entitled to recover the amount so retained in an action for money had and received to his use by the defendant, or under the provisions ofk section 11 of the Quebec statute, 58 Vict. ch. 42.
Judgment appealed from reversed. Consumers Cordage Co. v. Connolly (31 Can. S.C.R. 244) followed.
APPEAL from the judgment of the Court of King’s Bench, appeal side, by which the judgment of Bruneau J., in the Superior Court for the District of Montreal was varied.
In the circumstances stated in the head-note, the plaintiff brought this action to recover from the defendant the sum of $11,136.24 with interest from 17th September, 1908. With his plea the defendant tendered the sum of $5,122.25 as the whole amount of the balance due by him to the plaintiff, after deduction of the amount of the bonus and other charges mentioned in the head-note. In the Superior Court Mr. Justice Bruneau declared that the amount so tendered was insufficient and entered judgment in favour of the plaintiff for $10,519.25 with costs. By the judgment appealed from the Court of King’s Bench reduced the amount of the Superior Court judgment by the sum of $3,000, the amount of the bonus claimed by the defendant.
The questions in issue on the present appeal are stated in the judgments now reported.
Sir Auguste Angers K.C. and A. E. deLorimier K.C. for the appellant.
R. C. Smith K.C. and R. Monty K.C. for the respondent.
The Chief Justice.—This is an appeal from a judgment of the Court of King’s Bench of Quebec, varying a judgment of the Superior Court which had maintained the plaintiff’s action.
That action was brought to recover from the defendant a sum of money alleged to be illegally retained by him out of a larger sum received from the plaintiff. The facts are susceptible of simple, statement and the differences in the versions given by the parties of the circumstances out of which this suit arose are perhaps more apparent than real. Where they differ, the trial judge says that he accepts in preference the plaintiff’s story.
The undisputed facts are: In the year 1907, the defendant was mayor of the municipality of the Village of DeLorimier, and in the month of September of that year the plaintiff was awarded a contract for the building of sewers in some of the main streets of the village. The terms of the contract are fully set out in notarial deeds executed on the 26th of the same month.
At that time the parties were apparently strangers to one another. On or about the 26th of October following, the plaintiff applied to the defendant for financial assistance to enable him to carry on his work, and it is admitted that without that assistance the contract could probably not have been executed. There is some dispute as to what occurred at the time and the trial judge apparently believes the plaintiff, but, so far as the issue to be determined on this appeal is concerned, it is not material to say more than this. The parties after some negotiations agreed that the defendant would assist the plaintiff to obtain the advances he required in consideration of the payment of a bonus of $3,000 for which a promissory note was then given. The contract was proceeded with vigorously, the defendant made the necessary advances amounting in all to $12,201.30 and the work was completed in the summer of 1908, the defendant being still in office as mayor of the municipality. Notwithstanding the provision in the agreement that the contract price was to be paid in five equal annual instalments, the first falling due one year after the works were completed and accepted, on the 15th August, 1908, a pro-misssory note, payable at six months, was given for the total value of the work done. The corporation gave the note to the contractor on his undertaking to renew at maturity, but he indorsed it over at once to Messier, the mayor. No importance seems to have been attached below to this serious departure from a term evidently inserted in the agreement for the protection of the municipality. It was quite in the interest bf the mayor, creditor of the contractor, that the contract price should be paid at once, and evidently his interest prevailed against that of the ratepayers which he was supposed to protect.
There is some dispute as to what occurred at the time the note was given to the mayor. The plaintiff says that it was given as collateral security for his then existing indebtedness, the defendant is assumed below to have said that it was in payment of that indebtedness. What he really says is at page 26 of the case. The trial judge believes the plaintiff.
Be this as it may, the defendant refused at the time, under one pretext or another, to account to the plaintiff for the note against which he, the defendant, had obtained an advance of $17,797.95 from the bank, i.e., to the extent of his own claim for advances, commission and interest. There is some dispute here as to whether the note was discounted or merely given to the bank as collateral security for an advance then made. The defendant says in his examination on discovery:—
1. R. Monsieur Lapointe aurait voulu avoir la différence et je lui ai dit:—Si je ne peux pas l’escompter je ne pourrai pas vous donner la différence maintenant.
* * * * * *
20. Q. Vous ne lui avez pas crédité ce billet â son compte?
R. Je l’ai crédité le montant de $17,597.95 par le billet de la Corporation, du moment que je l’eus escompté.
* * * * * *
40. R. Je ne pouvais pas lui créditer si je ne l’avais pas en mains.
Again, I do not think, in my view of the ease, that the difference is important; the result was that the plaintiff took out of the advances made by the bank on the note of the municipality the amount of his claim against the plaintiff including the bonus of $3,000 which is in dispute here.
On these facts two questions arise: Was the promissory note for $3,000 given for an illegal consideration, and if so, is the defendant entitled to retain that sum out of the proceeds of the note given by the municipality in payment of the work done under contract?
I am quite satisfied that although there was no concert between the parties at the time the contract was awarded, the plaintiff’s subsequent undertaking to pay a bonus of $3,000 for the advances which the defendant undertook to make was, in the circumstances, within the mischief of the Act hereafter cited and come within the words of the enactment, because it gave the mayor an interest in the contract which made him liable to the penalty prescribed by 58 Vict, ch. 42, sec. 2, which reads:— Any member of a municipal council who knowingly during the existence of his mandate has or had, directly or indirectly, through a partner or partners, or through the agency of any other person, any interest, commission or percentage (in a contract) with the municipal council of which he is a partner, or knowingly during the existence of his mandate has or had derived any pecuniary remuneration from any contract for work performed or to be performed, shall, upon a judgment obtained against him under this Act, be declared disqualified from holding any public office in the said council or under the control thereof for the space of five years.
What is an interest sufficient to disqualify? See cases collected in 19 Halsbury, Laws of England, No. 627, p. 304, also Miles v. McIlwraith[1]; Mayor of Salford v. Lever[2]; Norton v. Taylor[3]; In re Campbell[4]; Burgess v. Clark[5]; Hunnings v. Williamson[6].
I have looked at the case of Le Feuvre v. Lankester[7], much relied upon at the argument and, if still binding as an authority, it can be distinguished from this case. There the defendant sold the contractor certain ironwork which was used in carrying out the contract. No attempt was made to shew fraud or any interest which would affect the price of the goods or the manner in which they were to be paid for. Here the bonus of $3,000 was to be paid at the expiration of the contract out of the profits, which the contractor expected to make, and the defendant admits that if the contract was unprofitable, he stood a chance to lose not only his bonus, but also his advances. So that, if we take the view which is most favourable to the defendant, there is no doubt that by reason of that agreement he had a pecuniary interest in the result of the contract and he was therefore, in a position where he had necessarily to choose between that interest and his duty towards the municipality. I entirely agree with what is said by Arnold, Law of Municipal Corporations, pp. 26, 27. The members of a council should have no interest to bias their judgments in deciding what is for the public good. Members of a town council should be advised to keep themselves absolutely free from the possibility of any imputation in this respect.
This case affords a striking illustration of the necessity of strictly interpreting the section above quoted. As evidence, I refer again to the way the interests of the municipality were, to say the least, put in jeopardy by the payment of the contract price before the time fixed to ascertain if the work had been satisfactorily executed.
As to the second question—the right to recover —it has been argued that the old Roman maxim nemo auditur propriam turpitudinem allegans applies, and much reliance is placed, and very properly so, upon the opinion of Pothier, Obligations, No. 45. But it must not be overlooked that the legislature had the opinion of Pothier brought to its notice when the Civil Code was enacted and that opinion was deliberately departed from. If the undertaking to pay a bonus gave the mayor an interest in the contract, then the statute makes that undertaking unlawful and the payment was without consideration. The right, therefore, to recover exists. There was no debt and the defendant received a sum that was not due him. (See arts. 1047-1048 and 1140 C.C.) Neither was there a natural obligation. (16 Laurent 164; Marcadé 4, p. 399.) It is quite evident here that the defendant took an unfair advantage of the financial necessities of the plaintiff, and the latter cannot be said to have been a party to the illicit agreement. His promise to pay the bonus was not made to give the defendant an interest in the contract, although that was the effect of it, and as Planiol puts it, vol. 2, No. 846:—
Il semble que cette action (en répétition) devrait toujours être accordée, car si l’obligation illicite or immorale est condamnée par le droit, il importe que le créancier ne soit jamais autorisé a conserver ce qu’il a reçu, quand le débiteur s’est volontairement acquitté; lui laisser l’argent en privant le débiteur de son action en répétition, ce serait donner effet à un acte illicite, contrairement à l’article 1131 qui dit que ces obligations n’en doivent produire aucun.
It would be a curious result, if, under the statute, a briber could withhold from the bribee, in a case like this, the money paid when an innocent party would be obliged to suffer his loss.
It is said in the respondent’s factum that Consumers Cordage Co. v. Connolly[8], decided in this court, is based upon modern French jurisprudence, but that is not the case. As far back as 1839, the French courts began to restrict the application of the Roman maxims nemo auditur, etc., and quod nullum est nullum producit effectum. (S.V. 33, 1, 668; S.V. 44, 1, 584; S.V. 90, 2, 97; Meynial’s note and Marcadé, vol. 4, at page 399), and to-day it is universally admitted that they do not apply where the obligation is based on an illicit, as distinguished from an immoral, cause. (Vide Fuzier-Her-man, vo. “Paiement,” No. 451. All the cases on this subject are collected in “La Revue Trimestrielle,” 1913, at page 553 et seq.)
The appeal should be allowed with costs. idington J.—Whilst respondent was mayor of DeLorimier, a municipal corporation, appellant tendered for the work of constructing some sewers and his tender was accepted and contract let accordingly.
It seems the appellant, who was not a man of much financial substance, then applied to respondent to finance him through the execution of these works.
There were proposals and counter proposals between these men, which ended by appellant giving respondent his promissory note for three thousand dollars, which is the note referred to in the following receipt given by respondent:—
Montréal, 26 Oct., 1907.
Reçu ce jour de M. M. Lapointe un billet à trois mois pour valeur reçu il est entendu que le dit billet sera renouvable jusqu’à la fin des travaux comprenant les canaux des rues Chabot, Simard et Gilford.
Ce billet est renouvable sans intérêt.
C. Messier.
Seeing that the total amount earned under said contract and owing by the corporation in respect of these works when finished was the sum of twenty-two thousand seven hundred and twenty dollars and fifty cents ($22,720.50), for which the corporation gave its promissory note, on the 18th of July, 1908, and that thé entire advances of the respondent to the appellant between the dates of his getting the remarkable document above quoted and the acquisition of this promissory note of the corporation was never more than nine thousand four hundred and fifty-nine dollars and twenty cents ($9,459.20), one is surprised at the audacity which can claim that the transaction truly represents interest or compensation of that sort for making such advances and means nothing else.
The appellant says that the respondent proferred a partnership in the contract on the basis of sharing equally in the profits, that he (appellant) did not assent, but, after several interviews that the respondent preferred it should be put in the shape of giving him the promise above set forth of three thousand dollars, and that when he discounted the corporation’s note or renewal thereof (broken into four notes spread over a term of years) and wanted him to settle up, he claimed two thousand dollars in addition to this three thousand dollars, besides an item of three hundred and ninety-six dollars and sixty-five cents, for interest, which together would so closely represent the half of the actual profits admittedly made on this small contract, that I think it quite clear the respondent never let the proposal of partnership out of his mind. In truth, I infer, he was determined on the double advantage of securing at least three thousand dollars and, if the results should so turn out that he would find half the profits to be still better, to claim that as he did, in the mode he did.
The item of three hundred and ninety-six dollars and sixty-five cents ($396.65) for interest, the respondent says was interest computed up to the 22nd of May, 1908, at 7% or 8% on the actual advances made up to that date, and, in the witness box claimed he ought to get interest on later advances, but indicates that was overlooked by reason of the disputes that followed.
If all this does not indicate that he had in mind the idea that he intended to be and was interested in the profits, I am puzzled to know what his process of reasoning was.
It is quite clear he claimed he intended he should get five thousand dollars over and above the usual bank interest.
If it could not be called anything else, it certainly was a lavish commission coming to him out of a transaction in which the corporation of which he was mayor was concerned, and, I think, unless the statute prohibiting such officers from taking commission or other interests on its contracts is to be frittered away or repealed by judicial interpretation and construction, it is a violation thereof.
There are, besides the plain import of the transaction, several things in the respondents’ evidence, such as his attempt to represent there were two contracts, when clearly only one, between the appellant and the corporation, and the erasure in the respondent’s books, which, when taken with his evidence, shew or tend to shew a possibly false and fraudulent purpose on the part of the respondent and colour the whole story as against him.
The section 1, of 58 Vict., ch. 42 (Que.), relied upon is as follows:—
1. Any member of a municipal council who knowingly, during the existence of his mandate, has or had, directly or indirectly, by himself or his partner any share or interest in any contract or employment with, by or on behalf of the council, or who knowingly during the existence of his mandate, has or had through himself or his partner or partners, any commission or interest, directly or indirectly, or who derives any interest in or from any contract with the corporation or council of which he is a member, shall, upon a judgment obtained against him under the provisions of this Act, be declared disqualified from holding any public office in the said council or under the control thereof during the space of five years.
Section 2 puts the matter thus:—
2. Any member of a municipal council who knowingly, during the existence of his mandate, has or had, directly or indirectly, through a partner or partners, or through the agency of any other person, any interest, commission or percentage, (in a contract), with the municipal council of which he is a member, or knowingly, during the existence of his mandate, has or had derived any pecuniary remuneration from any contract for work performed, or to be performed, shall upon a judgment obtained against him under this Act, be declared disqualified from holding any public office in the said council or under the control thereof for the space of five years.
I have quoted these sections to shew how clear the purpose of the legislature was to prevent any member of the council from entering into any transaction which should place his personal interest in conflict with his duty to the corporation.
From the moment the respondent accepted the document I have quoted above from a man whose financial position was such as to induce him to give it, he (respondent) was no longer fit to sit in council and effectively discharge his duty. The restrictive interpretation pressed upon us of this statute is not in harmony with the rules laid down in Heydon’s Case[9] as applicable to penal as well as other statutes.
The duty of the judge relative to statutes and their interpretation can never be better defined than as expressed therein. And, if we are ever tempted by reason of a case presenting a want of “honour among thieves” or such like cause, to forget this, let us read the rule again.
Then it is argued that the three thousand dollars by the discounting of the corporation’s note or notes were paid and cannot be recovered back.
Had the parties so proceeded as to bring this about, an arguable question might have been raised. But the best evidence they did not is that the respondent held on to the document quoted above and was driven to a tender thereof in answer to the demand of the appellant to settle by paying the balance of the proceeds of the corporation’s notes.
His rapacity was such that he insisted on retaining the whole five thousand dollars and the interest he claimed and shews how and what he thought of the question of payment. It was still an unsettled thing and so remained, has herein been in substance and effect claimed by him in his pleadings as his due, and asserting that as his right he has never so pleaded as to raise the question his counsel now seeks to raise as a matter of law.
The issue has been fought out on such contentions at the trial and the suggestion now made is the thought of the able and ingenious counsel, who was not at the trial. There is no room left for arguing that this is a suit to recover back that already paid. If there were I should have to consider the effect of 58 Vict. ch. 42, sec. 11, cited in the appellant’s factum.
The appeal should be allowed with costs here and in the court of appeal and the judgment of the learned trial judge should be restored.
Duff J.—In September, 1907, the appellant entered into a contract for the construction of certain municipal sewers. Finding himself unable to obtain the necessary advances from his bankers he applied to the defendant for assistance, who agreed to lend his credit in consideration of a bonus of $3,000. This term of the arrangement was evidenced by a promissory note for the sum of $3,000 and a contemporaneous acknowledgment in writing by the appellant of the receipt of the note which was declared to be renewable until the municipal works in question should be completed. The respondent was the mayor of the municipality and on behalf of the municipality, had executed the contract to which the appellant was a party. In August, 1908, the works in question having been finished, the appellant received from the municipality a promissory note for $22,720.50 (the sum due to him under his contract), payable in six months, the understanding being that the note was to be renewable at maturity. This promissory note, indorsed by the appellant, was delivered to the respondent; and one of the controversies at the trial related to the terms of the arrangement under which that was done. On this point it is sufficient for the present to observe that the appellant himself admits that the note of the municipality was transferred to the respondent “en garantie of the notes which I owed him.”
The respondent discounted the municipality’s note at the Merchants Bank. In September, the appellant offered to repay the respondent the sums actually advanced by the respondent to him, with interest, demanding at the same time the return of the promissory note just referred to. This the respondent refused, alleging that he was entitled to retain a sum of $17,500 out of the proceeds, offering at the same time to return the difference between that sum and those proceeds. The appellant then procured possession of the note by paying the amount due upon it at the Merchants Bank; and this action was brought to recover the difference between the amount so paid and the advances made by the respondent.
The dispute concerns the amount nominally payable in respect of the promissory note already referred to by way of bonus. The position taken by the appellant is this. He says that this note was the outcome of an arrangement which in effect gave to the respondent an interest in his contract with the municipality. And such an agreement he says is void as offending against public policy. The respondent meets this by denying that the arrangement gave him any interest in the appellant’s contract and by asserting that, in any event, the note was paid and that, consequently, the appellant is in the position of being obliged to rely upon an agreement which he alleges was unlawful to which he himself was a party.
The appellant’s contention is based upon the provisions of sections 1 and 2 of 58 Vict. ch. 42 (Que.), which are as follows:—
1. Any member of a municipal council, who knowingly during the existence of his mandate has or had, directly or indirectly, by himself or his partner, any share or interest in any contract or employment, with, by or on behalf of the council, or who knowingly during the existence of his mandate, has or had through himself, or his partner or partners, any commission or interest, directly or indirectly, or who derives any interest, in or from any contract with the corporation or council of which he is a member, shall, upon a judgment obtained against him under the provisions of this Act, be declared disqualified from holding any public office in the said council or under the control thereof during the space of five years.
2. Any member of a municipal council, who knowingly during the existence of his mandate has or had, directly or indirectly, through a partner or partners, or through the agency of any other person, any interest, commission or percentage (in a contract) with the municipal council of which he is a member or knowingly during the existence of any mandate has or had derived any pecuniary remuneration from any contract for work performed or to be performed, shall, upon a judgment obtained against him under this Act, be declared disqualified from holding any public office in the said council or under the control thereof for the space of five years.
There can be no doubt, I think, that it was understood between the appellant and the respondent in September, 1907, that the bonus of 13,000 should be paid out of the proceeds of the appellant’s contract. Such being the understanding it appears to me that the respondent acquired an interest in the contract within the meaning of this statute, and that an agreement having that as its effect and one of its direct objects must, in view of the statute, be held to be an agreement contrary to public policy and void as such.
The substantial point in issue appears to be whether or not the appellant is precluded from recovering the amount of the note in question on the principle that the court will not assist a party to an illegal contract to recover moneys paid or property delivered under it where, at all events, the illegal purpose of the contract has been completely performed.
The appellant disputes the application of this principle, first, on the ground that, in the circumstances, there was no payment. This particular contention, I think, misses the mark. As I have already pointed out the note was delivered, by the appellant’s own admission, to the respondent as collateral security for the promissory notes held by the respondent. It is not suggested that any exception of this note of $3,000 was made and, if the arrangement under which the note was given had not been tainted by illegality, it seems indisputable that the respondent would have been entitled to retain the note received from the municipality until the bonus note had been discharged. Assuming that the respondent committed a wrongful act in negotiating the municipality’s note, the appellant would still only be entitled to recover, all question of illegality put aside, the damages suffered by him which would be measured by the difference between the value of the municipality’s note and the amount for which the respondent was entitled to retain it as security. In either view the appellant must impeach the bonus note as given for an illegal consideration and could, therefore, succeed only through setting up the illegality of his own contract. The question comes squarely to be decided whether, according to the law of Quebec, such an action can succeed on such grounds. The respondent’s counsel largely rests upon the decisions of the English courts, and, since the argument was mainly devoted to a discussion of these decisions, it is worth while, perhaps, going through them, although they do not appear to me to be strictly relevant to the point to be determined.
In applying the English law it may be observed the same principles apply as if the amount of the bonus note had been paid in money. Taylor v. Chester[10].
The general rule of the English law is stated in the judgment of Lord Mansfield in Holman v. Johnson[11]:—
The objection that a contract is immoral or illegal as between plaintiff and defendant, sounds at all times very ill in the mouth of the defendant. It is not for his sake, however, that the objection is ever allowed, but it is founded in general principles of policy, which defendant has the advantage of contrary to the real justice as between him and the plaintiff, by accident, if I may say so. The principle of public policy is this: ex dolo malo non oritur actio. No court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act. If from the plaintiff’s own stating or otherwise the cause of action appears to arise ex turpi causâ, or the transgression of a positive law of the country, there the court says he has no right to be assisted. It is upon that ground the court goes; not for the sake of the defendant, but because they will not lend their aid to such a plaintiff. So if the plaintiff and defendant were to change sides, and the defendant was to bring his action against the plaintiff, the latter would then have the advantage “of it; for where both are equally in fault, potior est conditio defendentis. There are, however, apparent exceptions to this rule and the question is whether or not the present ease comes within any of those exceptions. These exceptions have been stated in two text-books of high repute and in two comparatively recent judgments. And before considering the scope of them in their application to this case it will bè convenient to reproduce the passages:—1st, Pollock on Contracts, pages 404, 405:—
Money paid or property delivered under an unlawful agreement cannot be recovered back, nor the agreement set aside at the suit of either party—unless nothing has been done in the execution of the unlawful purpose beyond the payment or delivery itself (and the agreement is not positively criminal or immoral);
Or unless the’ agreement was made under such circumstances as between the parties that, if otherwise lawful, it would be voidable at the option of the party seeking relief.—Note b. This form of expression seems justified by Harse v. Pearl Life Assurance Co.[12].
Or in the case of an action to set aside the agreement, unless in the judgment of the court the interests of the third persons require that it should be set aside.
Secondly, Anson on Contracts, p. 253-4:—
But there are exceptional cases in which a man may be relieved of an illegal contract into which he has entered; cases to which the maxim just quoted does not apply. They fall into three classes: (1) The contract may be of a kind made illegal by statute in the interests of a particular class of persons of whom the plaintiff is one; (2) the plaintiff may have been induced to enter into the contract by fraud or strong pressure; (3) no part of the illegal purpose may have been carried into effect, before it is sought to recover the money paid or goods delivered in furtherance of it.
The first of the judgments is in Kearley v. Thomson(2), where Lord Justice Fry says (pp. 745-6):—
To that general rule there are undoubtedly several exceptions, or apparent exceptions. One of these is the case of oppressor and oppressed, in which case usually the oppressed party may recover the money back from the oppressor. In that class of cases the dictum is not par, and, therefore, the maxim does not apply. Again, there are other illegalities which arise where a statute has been intended to protect a class of persons, and the person seeking to recover is a member of the protected class. Instances of that description are familiar in the case of contracts void for usury under the old statutes, and other instances are to be found in the books under other statutes, which are, I believe, now repealed, such as those directed against lottery keepers. In these cases of oppressor and oppressed, or of a class protected by statute, the one may recover from the other, notwithstanding that both have been parties to the illegal contract.
I do not think the transaction in question here could be brought within the exceptions as stated by Lord Justice Fry, by Sir Frederick Pollock, or by Sir William Anson. Take first the judgment of Fry L.J. The transaction, as I view it, is not one prohibited by a statute passed for the protection of a class of persons” of whom the appellant is one. It is a statute merely intended to disqualify from occupying certain positions of trust in relation to municipalities persons who bring themselves within the provisions of the Act. The object is to protect the municipalities and the public generally against the evils of corruption in municipal office. I do not think there is any ground for saying that this statute was passed with the object of protecting the interests of persons who engage in contracts with municipalities. The statute has nothing material to the present purpose in common with the class of statutes to which Lord Justice Fry refers—to the “Usury Acts” and the statutes against lottery-keepers.
Then, is this a transaction between “oppressor and oppressed” as the phrase is used by Lord Justice Fry? It will be convenient to expand this phrase a little. Sir William Anson puts it in a slightly different way. He speaks of contracts procured “by strong pressure.” And Sir Frederick Pollock sums up the exceptions as consisting of agreements made in
such circumstances as between the parties that, if otherwise lawful, they would be voidable at the option of the party seeking relief;
in other words, all cases in which illegal agreements completely executed may be set aside by a person who is a party to them and in the interests of such persons alone are cases in which on substantive grounds, independently altogether of illegality, the transaction would be voidable by and for the benefit of such persons according to the general principles of law or according to the true intendment and effect of the statute which forbids it. The author cites in support to his proposition the following passage from the judgment of Collins M.R. in Harse v. Pearl Life Ass. Co.[13], p. 563:—
Unless there can be introduced the element of fraud, duress, or oppression, or difference in the position of the parties which created a fiduciary relationship to the plaintiff so as to make it inequitable for the defendants to insist on the bargain that they had made with the plaintiff, he is in the position of a person who has made an illegal contract and has sustained a loss in consequence of a misstatement of law, and must submit to that loss.
Whether or not this view of the law on this point be open to criticism, it is clear enough when one comes to consider the decisions referred to in the text-books mentioned illustrating the attitude of the courts towards such plaintiffs, that one cannot bring the present transaction within the class of cases referred to by Fry L.J., as being cases of “oppressor and oppressed” or by Sir William Anson as contracts procured “under strong pressure.” In Reynell v. Sprye[14] it was held that the champertous agreement was obtained by fraud and that alone was sufficient ground for setting it aside. In Osborne v. Williams[15] the court had to consider a transaction between a father and son, the transaction itself being unfair and the son being at the time wholly within the father’s control. In Atkinson v. Denby[16] the defendant had taken advantage of the plaintiff’s situation to force him into an unfair bargain.
There is no evidence in this case of any such fraud or undue influence or unconscientious taking advantage of the appellant’s situation. The appellant had a valuable contract; he approached the respondent, not as mayor, but as a person of capital in a position to assist him. The respondent was able to dictate terms quite independently of his position as mayor, and I think there is no adequate ground for holding that in fact the appellant was intimidated by the circumstance that the respondent held that office. The appellant had not entered upon the performance of his contract; if he were unable to get the necessary assistance to carry it out there is no reason to suppose that the municipality would not have permitted him to abandon it.
It was suggested that public policy would be better served by compelling the respondent to refund. That may be so; but I do not think the law of England on this subject leaves it to the judge or the court to determine in each particular case whether or not public policy will be best served by allowing moneys paid or property delivered under an executed contract void as against public policy to be recovered back by the party paying. On the contrary the general principle of the law is that stated by Lord Mansfield in the passage quoted above. The person seeking to recover must bring himself within one of the recognized exceptions to that principle or lie must fail. I think in this case the appellant has not done so, and that if his right to recover were to be determined according to the law of England he could not succeed.
It remains to consider the question whether according to the law of the Province of Quebec the appellant is precluded from recovery because of the unlawful character of his agreement with Messier.
The present case, I think, is not a case of payment of money. The appellant affirms that the respondent had no authority to discount the note; and, in view of the conduct of the respondent in the litigation and the discredit cast upon him by the trial judge, the appellant’s story should, I think, be accepted. However, as I have already pointed out, the appellant can only make out his case by alleging the illegality of his contract and on principle he appears to be in the same position as if payment had been made; and, moreover, as I have already said, it was, no doubt, understood that the bonus was ultimately to be paid out of the proceeds of the contract. The general question is dealt with very elaborately in the judgment of the late Mr. Justice Girouard in Consumers’ Cordage Co. v. Connolly[17], with which Mr. Justice Sedgwick and Mr. Justice King concurred. The authorities cited appear to shew that according to the more modern view the effect of section 989 of the Civil Code, a plaintiff in the situation of the appellant is entitled to relief on the ground that the illegal contract being without effect the defendant ought not to be permitted to retain that to which he never had any legal right.
Although it may be doubtful whether that decision is strictly binding upon us in view of the subsequent course of the litigation, yet I think I ought to give effect to the opinion of the majority of the court which was not overruled by the Judicial Committee.
Anglin J.—The evidence, in my opinion, clearly discloses that the defendant had