Bonanza Creek Gold Mining Co. v. The King

Bonanza Creek Gold Mining Co. v. The King
Collection
Supreme Court Judgments
Date
1915-02-02
Report
(1915) 50 SCR 534
Judges
Fitzpatrick, Charles; Davies, Louis Henry; Idington, John; Duff, Lyman Poore; Anglin, Francis Alexander
On appeal from
Canada
Subjects
Constitutional law
Decision Content
Supreme Court of Canada
Bonanza Creek Gold Mining Co. v. The King, (1915) 50 S.C.R. 534
Date: 1915-02-02
The Bonanza Creek Gold Mining Company (Suppliant) Appellants;
and
His Majesty The King (Respondent) Respondent.
1914: December 3, 4; 1915: February 2.
Present: Sir Charles Fitzpatrick C.J. and Davies, Idington, Duff and Anglin JJ.
ON APPEAL FROM THE EXCHEQUER COURT OF CANADA.
Constitutional law—Provincial mining company—Power to do mining outside of province—Incorporation “with provincial objects”—Territorial limitation—Comity.
A mining company incorporated under the law of the Province of Ontario has no power or capacity to carry on its business in the Yukon Territory and an assignment to it of mining leases and agreements for leases is void. Idington and Anglin JJ. contra.
Held, per Fitzpatrick C.J. and Davies J., that “the incorporation of companies with provincial objects” as to which the provinces are given exclusive jurisdiction (“B.N.A. Act,” 1867, sec. 92, sub-sec. 11), authorizes the incorporation of companies whose operations are confined, territorially, to the limits of the incorporating province.
Per Idington and Anglin JJ.—Such company has capacity to avail itself of the sanction of any competent authority outside Ontario to operate within its jurisdiction.
Per Duff J.—The term “provincial objects” in said sub-section means provincial with respect to the incorporating province, and the business of mining in the Yukon its not an object “provincial” with respect to Ontario. The question whether capacity to enter into a given transaction is compatible with the limitation that the objects shall be “provincial objects” is one to be determined on the particular facts.
Also, per Duff J.—On the true construction of the Ontario “Companies Act,” the appellant company only acquired capacity to carry on its business as an Ontario business; and there was no legislation by the Dominion or the Yukon professing to enlarge that capacity.
Held, per Fitzpatrick C.J. (Duff and Anglin JJ. contra), that to enable a joint stock company to obtain a free miner’s certificate under the regulations in force in the Yukon Territory it must be authorized by an Act of the Parliament of Canada, and at present only a British or foreign company could be so authorized (61 Vict. ch. 49, sec. 1 (D.)).
APPEAL from the judgment of the Exchequer Court of Canada dismissing the appellants’ petition of right.
The suppliant is a joint stock company, incorporated by the Province of Ontario, under the provincial “Companies Act.” Its charter professes to authorize it to carry on the business of mining.
Being so incorporated, it purported to obtain tranfers of two certain hydraulic mining locations in the Yukon Territory, theretofore issued by the Dominion Government to certain individuals, and to enter into certain agreements in respect thereof with the Dominion Government which are set out in the case, and to obtain certain certificates which are referred to in and form part of the evidence taken in the case.
Disputes having arisen between the suppliant and the government regarding the alleged rights of the suppliant in respect of the hydraulic leases above referred to and under the agreements also referred to, the suppliant filed its petition of right in January, 1908, claiming damages against the Crown.
In January, 1909, His Majesty filed an answer to the said petition, raising two grounds of defence:—
(a) Want of corporate capacity on the part of the suppliant company to carry; on its business in the Yukon Territory, or to enter into agreements with the government in respect thereof, or to acquire or maintain any rights thereunder, or to receive any certificates or licenses purporting to entitle the suppliant to carry on its business of mining in the Yukon Territory, or to acquire any rights under such certificates or licenses;
(b) Want of authority on the part of either the Yukon or the Dominion executive to issue any such certificates or licenses to the petitioner, or to confer any such rights upon the petitioner, as the petition of right claims.
These particular grounds of defence were, in due course, directed to be determined in advance, of any general trial of the petition, and without prejudice to the other matters which the record presented.
Mr. Justice Cassels, who tried these preliminary questions of law upon such evidence as the parties saw fit to present upon the particular points raised by the preliminary questions, determined them adversely to the suppliant, who appealed from this determination of the preliminary questions.
Hellmuth K.C. and Moss K.C. for the appellants.
Shepley K.C. and Newcombe K.C. (Mason with them) for the respondent.
The Chief Justice—This is an appeal from a judgment of the Exchequer Court on a petition of right launched to recover damages in respect of breaches of agreements and leases alleged to have been vested in the appellant by assignments in the circumstances set forth in great detail in the petition.
The claim was disposed of in the court below on the short ground that the appellant was without capacity to accept the assignments of the leases and collateral agreements or to carry on mining operations in the Yukon Territory or to recover damages for the breach of the said agreements. The appellant is a joint stock company incorporated by the Province of Ontario under the provincial “Companies Act.” The charter professes to authorize it to carry on the business of mining.
Being so incorporated it purported to obtain transfers of two certain hydraulic locations in the Yukon Territory, theretofore issued by the Dominion Government to one Doyle and one Matson, and to enter into certain agreements in respect thereof with the Dominion Government, and to obtain certain certificates which are referred to in the documents introduced and the admissions made with a view to the final determination of the questions which arise upon the two grounds of defence hereinafter referred to.
The petition of right was granted to settle certain disputes which arose between the appellant and the Government in respect of these leases and agreements. In answer to the petition two grounds of defence were raised which I think are fairly set out in the respondent’s factum as follows:—
(a) Want of corporate capacity on the part of the suppliant company to carry on its business in the Yukon Territory, and, in consequence thereof, incapacity to acquire the hydraulic leases already referred to, or any rights thereunder, or to enter into the agreements with the Government in respect thereof also already referred to, or to acquire or maintain any rights thereunder, or to receive any certificates or licenses purporting to entitle the suppliant to carry on its business of mining in the Yukon Territory, or to acquire any rights under such certificates or licenses;
(b) Want of authority on the part of either the Yukon or the Dominion executive to issue any such certificates or licenses to the petitioner, or to confer any such rights upon the petitioner, as the petition of right claims.
This defence raises squarely in the first paragraph the important question, so frequently considered here and, in my opinion, now finally disposed of by the Judicial Committee, of the power or capacity of a company incorporated by a local legislature to carry on its operations in a territorial area over which the incorporating legislature has no jurisdiction. I adhere to what was said by me on this point in The Companies Reference[1]:—
The Parliament of Canada can alone constitute a corporation with capacity to carry on its business in more than one province. Companies incorporated by local legislatures are limited in their operations to the territorial area over which the incorporating legislature has jurisdiction. Comity cannot enlarge the capacity of a company where that capacity is deficient by reason of the limitations of its charter or of the constituting power. Comity, whatever may be the legal meaning of the word in international relations, cannot operate between the provinces so as to affect the distribution of legislative power between the Dominion and the provinces under the “British North America Act.”
This does not imply that a provincial company may not, in the transaction of its business, contract with parties or corporations residing outside of the province in matters which are ancillary to the exercise of its substantive powers. I use the terms “substantive” and “ancillary” as descriptive of the two classes of powers inherent in the company, as these are used in the judgment of the Judicial Committee in City of Toronto v. Canadian Pacific Railway Co.[2].
It is not, of course, suggested that a provincial legislature may not incorporate a company for one of the objects enumerated in section 92 of the “British North America Act,” which upon its incorporation enters into existence as an entity clothed with corporate powers; but the question raised and which must be decided in this appeal is: Can such a company exercise its functions or pursue the activities of its particular organization beyond the jurisdictional limits of the constituting power? In other words, can a properly constituted provincial company exercise its powers (purposes or objects) locally outside of the province of incorporation. It may be that a provincial company can with the consent of another province exercise its civil capacities within the area of that province, but I am still of opinion that a provincial company cannot either with or without that consent fulfil the purpose for which it was organized, that is, discharge what may be described as its functional capacities, in this case mine for gold, outside the limits of the constituting province. To admit juristic persons to the enjoyment of civil rights is not the same thing as to admit them to exercise their functions or to pursue the activities of their particular organization or in other words to transplant their institution to a foreign jurisdiction (Lainé, des Personnes Morales en Droit International Privé, 282).
The Ontario “Joint Stock Companies Act” under which the petitioner obtained its charter, enables a provincial charter to be granted
for any of the purposes or objects to, which the legislative authority of the Legislature of Ontario extends.
The legislative authority of Ontario has never been deemed to extend to mining upon lands geographically or jurisdictionally situated beyond the province, and a provincial charter, issued to a company for the purpose of mining, must find “the object or purpose” for which it was created within and only within the field to which the legislature itself has deemed its authority to extend. There is not, it is quite true, a geographical limitation in the appellant’s charter as to the territory in which it may carry on its operations, hut the limitations of the constituting power must be read into the charter which must be construed as if it read: “the subscribers to the memorandum of agreement are created a corporation for the purposes and objects described in the letters patent in so far as these purposes and objects are geographically and jurisdictionally situate within the province.”
As the Lord Chancellor said in John Deere Plow Co. v. Wharton[3], at page 339,
the incorporation of companies with provincial objects cannot extend to a company the objects of which are not provincial.
The business of mining in the Yukon Territory is not a provincial object with respect to Ontario. The Yukon Territory is not a province and is exclusively with respect to its public lands under legislative jurisdiction of the Dominion.
If this limitation is inherent in its constitution how could the appellant company acquire by transfer or otherwise hydraulic mining locations in the Yukon Territory or enter into agreements for the purpose of operating those mines’ with the Dominion Government.
I agree with counsel for the Crown on the second branch of his defence for the reasons given in his factum.
Assuming that the company had the power to engage in mining operations in the Yukon Territory it did not comply with the statutory conditions subject to which it was entitled to carry on its operations. No joint stock company is recognized under the statute and the regulations as having any right or interest in any placer claim, mining lease or minerals in any ground comprised therein unless it has a free miner’s certificate unexpired. No joint stock company can obtain a free miner’s certificate unless it is incorporated for mining purposes under a Canadian charter or licensed by the Government of Canada, and I interpret the statute 61 Vict. ch. 49, sec. 1, to mean that a British company and a foreign company are the only sort of joint stock companies that could be licensed there.
The same argument applies to the license given by the Deputy Minister of the Interior. He was without authority to grant any such license. To be effective such a license could only be issued by the Government through the Secretary of State and it is admitted that no such license was ever taken.
In effect I hold that the company was not competent to take the assignment from Matson and Doyle upon which it bases its claim, or enter into the alleged agreement with the Dominion Government with respect thereto, and also that the company could acquire no right or interest in or to a mining claim in the Yukon because it was excluded by the statute from obtaining a free miner’s certificate.
The appeal should be dismissed with costs.
Davies J.—This action raises in a concrete form one of the questions referred to this court by His Royal Highness the Governor General in Council as to the limitations, if any, which the “British North America Act” imposes upon the legislatures of the provinces in giving them exclusive power to legislate in section 92, sub-section 11, respecting
the incorporation of companies with provincial objects. In answering the questions submitted to us on that reference I gave at length my reasons for holding that the power conferred was a limited one and that its limitation was territorial.
I have seen no reason to change the opinions I there expressed. The company appellant in this case was incorporated in the Province of Ontario as a mining company. In my opinion it has neither the power nor the capacity to carry on mining operations in the Yukon Territory or district, that being a part of Canada thousands of miles distant from Ontario. It would seem quite unnecessary for me to repeat the reasons given by me in the reference above referred to.
I would, therefore, dismiss the appeal with costs.
Idington J.—The questions raised herein relate to the limits of the capacity of a company incorporated by provincial authority acting within the powers conferred in section 92, sub-section 11, of the “British North America Act,” to acquire property outside the province, or to contract for anything to be done for its benefit or omitted by it or any one else to be done for its use or benefit outside the province.
It has been heretofore usually assumed that men incorporated for any object might in their corporate capacity, acting within the scope of such object, do anything relative thereto for the purpose of serving such object, wherever the law of the country where done did not prohibit the doing thereof. This has been recently denied so far as provincial corporate creations are concerned. That denial is founded upon the discovery (long hidden from the ken of man) of manifold possible limitations inherent in said sub-section. It has assumed many shapes. That involved in the absolute denial of capacity for either contracting beyond, or contracting for anything to be done or to be got beyond the territorial limits, is easily understood whatever may be thought of its legal validity.
But this denial of ordinary capacity which has assumed such various and varying shades of meaning that it is impossible to accurately define any line by which to bound the permitted operations of a limited sort beyond the territorial limits, is not quite so comprehensible.
The facts involved herein are so complicated that they may give rise to the application of any one of these propositions comprehended in such denial of capacity, or specific shade thereof, that I think better they should be set out with some detail.
The appellant was incorporated in 1904 by letters patent issued under and by virtue of the Ontario “Companies Act” (a) to carry on as principal, agent, contractor, trustee, etc., etc., the business of mining and exploration in all their branches, and (b) to apply for, purchase, lease, or otherwise acquire, patents, patent rights, trade marks, improvements, inventions and processes, etc.; and apparently incidental to these main purposes, by the means specified in ten succeeding clauses to do a great many things needless to state in detail here.
All we are concerned with is that what was specified either in said clauses (a) and (b) or in the other subsidiary clauses, or both combined, contemplated the exercise, without saying where, of contracting powers and the acquisition of such kind of rights and properties as involved in the issues raised herein. The place where operations of any kind were to be carried on is not stated further than that the head office of the company is to be at the City of Toronto. That must, therefore, be taken as the home wherein it carried on its business.
From the pleadings and the contracts, licenses, and correspondence, made part of the case, we find the following facts or what have to be assumed such as to be dealt with herein.
The suppliant, now appellant, sets forth in its petition that one Doyle and his associates, and one Matson and his associates, each set respectively had, in 1899 and 1900, applied to the Department of the Interior for Canada, each for a separate hydraulic mining location, and each became entitled thereto, and got leases from Her late Majesty therefor; and thereupon looking to the further and better development of these properties, collateral agreements were entered into between Her late Majesty, represented by the Minister of the Interior for Canada, and each of said set of parties respectively, in January, 1900, whereby the Minister was to observe that certain other properties should, in certain contingencies which took place, be granted by way of lease to these parties respectively. These leases and agreements entitled each of said set of parties with whom they were made to valuable privileges. It is to be assumed for the present that they were valid and that there were moneys paid to the Crown thereunder and that, for or by reason of any breach of the obligations incurred on the part of the Crown, said parties or their assignee would thereby be entitled to claim heavy damages for losses so caused.
The appellant acquired these leases and agreements by assignment thereof, presumably in Ontario. I presume it thereby became entitled to such indemnification as the original holders respectively might have had at the time against the Crown, besides acquiring the right thereafter to realize the hopes and expectations of said parties and of the appellant thereunder. The appellant on the 24th December, 1904, the day after its incorporation, got a free miner’s certificate, under the regulations then in force, for which it paid the respondent a fee of $100 and kept it renewed, paying for such renewals, it is alleged, so long as the regulations governing mining in the Yukon required the owners of a hydraulic concession to hold a free miner’s certificate. It is by no means clear that the possession of such a certificate was necessary to enable it or any one else to make such acquisitions, though probably needed before actively engaging in operating a mine.
The appellant upon acquiring said leases and agreements found the obligations of the Crown thereunder had not been lived up to and that land which fell within the scope and under the operation thereof, instead of being leased to appellant or its predecessor, had been relocated or let to other parties to the detriment of appellant either through its said predecessor in title or directly. Against such omissions, for a time, the appellant made fruitless protests.
On the 16th March, 1907, however, the Crown; represented by the Minister of the Interior, entered into an agreement with appellant—after reciting said leases, and that they had, and all the interests therein and thereunder of said lessee Doyle and others, and Matson and others, had become vested in the appellant and otherwise as appears therein — whereby the respondent leased to said appellant the lands in said mining claims enumerated in the schedule thereto, together with the exclusive right and privilege of extracting and taking therefrom, by hydraulic or other process, of royal or precious metals, etc., for the remainder of said terms of years, respectively, for which the said leases ran for the hydraulic mining locations within which the said claims were situate.
And there are assurances given therein that the Crown will in certain contingencies grant appellant a lease of other locations as and when reverting to the Crown. This agreement and lease from respondent was executed at Ottawa.
Founded upon those things of which the foregoing is a brief outline, the appellant alleges it became and was entitled to certain services of water and water-rights and other privileges, all of which are to be presumed to be admitted; and the loss of large sums of money expended by relying upon each and all of said agreements being observed and of profits which might have been got, I assume is also admitted for the present.
On the 7th of September, 1905, the appellant got a license in pursuance of chapter 59 of the Consolidated Ordinance of the Yukon Territory, authorizing it to use, exercise and enjoy within the Yukon Territory, the powers and privileges and rights set out in the appellant’s memorandum of association; for which it paid a fee of $500.
The authority of this is section 2 of said ordinance and is thus expressed:—
Any company, institution or corporation incorporated otherwise than by or under the authority of an Ordinance of the Territory or an Act of the Parliament of Canada desiring to carry on any of its business within the territory may petition therefor, etc., and the Commissioner may thereupon authorize such company, etc., etc. Again by the issue of the free miner’s certificate, already referred to, appellant seems to have been recognized pursuant to an Order-in-Council bound up with a Dominion statute for 1898, on page 39 of which the interpretation clause gives the following:—
“Free miner” shall mean a male or female over the age of eighteen but not under that age, or joint stock company, named in, and lawfully possessed of, a valid existing free miner’s certificate, and no other.
* * * * *
“Joint stock company” shall mean any company incorporated for mining purposes under a Canadian charter or licensed by the Government of Canada.
The law of England relating to civil and criminal matters as it existed on the 15th July, 1870, was brought into force in the North West Territories subject to certain exceptions, and the law in said territories continued in the Yukon by the statute 61 Vict. ch. 6, setting it apart saving also some exceptions.
Hence the English rule of law by which foreign corporations are by the comity of nations recognized, I presume must prevail, until the contrary is shewn.
No Dominion Act is shewn prohibitive of any provincial incorporation doing business in the Yukon. If such a purpose ever existed it was quite competent for the Dominion to have so enacted inasmuch as the Yukon is within its legislative jurisdiction. As there are many mining companies operating elsewhere than in the Yukon and by virtue of provincial legislation, I imagine the possibility of such being tempted to help develop the Yukon would forbid such an imprudent policy as forbidding them. Yet we are asked to imply such from the omission in the Dominion “Companies Act” to provide specifically for their being licensed by the Dominion. The fact that the Yukon Ordinance as already pointed out did provide for such licenses and no objection made thereto, indicates the policy of Parliament as to the Yukon as does also the above order-in-council.
All the foregoing claims, and possibilities thereof, are held by the Exchequer Court to have been answered by the legal effect of the following two paragraphs of the defence:—
1. The respondent denies that the suppliant has now or ever has had the power either under letters patent, license, free miner’s certificate, or otherwise, to., carry on the business of mining in the District of the Yukon, or to acquire any mines, mining claims or mining locations therein, or any estate or interest by way of lease or otherwise in any such mines, mining claims or locations.
2. Should a free miner’s certificate have been issued to the suppliant the respondent claims that the same is and always has been invalid and of no force or effect — that there was, no power to issue a free miner’s certificate to the suppliant, a company incorporated under provincial letters patent, and that there was no power vested in the suppliant to accept such a certificate.
And the said petition has been dismissed.
The learned trial Judge assigns as reason for said dismissal, the answers given by the majority of this court in the Companies Case[4].
With great respect I do not think that position is tenable unless by first forming an opinion which the learned trial judge disclaims. If a person approaches the problem of ascertaining what the said judges meant with the preconceived opinion that a limitation is necessarily implied in appellant’s charter, or in any other provincial charter, then his conception of what the majority had agreed in is possibly warranted, but not otherwise. However, as expressed by the court above, these opinions bind no one. And unless approached in the way I suggest there is not a majority maintaining the view the learned judge acts upon.
On the other hand this court had decided in the concrete case of the Canadian Pacific Railway Co. v. Ottawa Fire Ins. Co.[5], against the view which the learned trial judge adopts as that of this court. True in that case, if the refusal of the late Mr. Justice Girouard to express an opinion is counted as against what seems to have been the opinion of three members of the court, it would then be an equally divided court and the appeal resting upon the like contention set up herein failed. In such a case in appeal the negative thereby established the rule of law binding it for the future, for whatever it may be worth.
It is not for the mere triviality of the marshalling, so to speak, of judicial opinion in this court with which I am concerned. It is the fact that the seat of the Dominion Government is in Ontario, the home of appellant and that the transactions in question herein took place with that government there and by virtue thereof, and that the appellant paid moneys to respondent which at all events it is entitled to recover back on the principle this court almost unanimously followed in the said case. More than that, the same principles as supported by a majority of this court in that case would, I submit, entitle appellant to take an assignment of a lease and of a claim such as those parties had under whom appellant claims. How far the facts would have carried the matter and entitled the appellant to relief I cannot say.
It is to be observed further that the matter of a contract being ultra vires and hence unenforcible is not the same as one to be held void by reason of what may more accurately be described as illegal. From the latter nothing can spring entitling a plaintiff to recovery. There may arise herein such rights as to be cognizable by the court in order that justice may be done. Indeed, in the said case of the Canadian Pacific Railway Co. v. Ottawa Fire Ins. Co.[6] the right was asserted alternatively by the plaintiff to a recovery of the premiums paid, and that right was maintained by the opinion of the judgments of the Chief Justice of this Court and Mr. Justice Davies, though holding the contract in question ultra vires of the defendant company.
In this case the recovery sought was not limited thereto, but I apprehend the greater might well have been held to include the less if that was all the suppliant had been found entitled to.
It hardly seems right (or indeed consistent with what one should expect to find following that decision) that the Crown having recognized the standing of the appellant and taken its money when denying appellant’s capacity to pay, should yet refrain from at least tendering so much amends.
Moreover, the opinion of Mr. Justice Davies, concurred in by the Chief Justice, recognized the possibility of a provincial incorporation being entitled, in the way of that which might be found ancillary to its business, of going beyond the boundaries of the incorporating province and thereby acquiring rights of property and rights of action arising out of such contracts as it may thus have engaged in. (See page 431 of the report of that case.) What the range of possibilities may be of putting into operation such a view, I do not intend to attempt to define. Certainly the acquisition by assignment of the leases and agreements to the company do not seem necessarily excluded therefrom.
Exploration was one of the objects written in this charter and as incidental thereto there are specified many things it is permitted to do in the way of acquisition. The ultimate aim of such exploration and that incidental thereto doubtless was gain.
Proceeding upon any and all of the foregoing grounds and having regard to these results of a concrete case in this court, I most respectfully submit that the petition should not have been dismissed.
Passing these considerations let us come to the broader issue presented by the denial of the inherent capacity of any provincial corporate company going beyond the territorial limits of its parent province, either to contract there, or acquire there, property or rights of any kind, serving its uses in pursuit of its objects. Such companies are incorporated by virtue of the power in sub-section 11 of section 92 of the “British North America Act,” expressed as follows:—
The incorporation of companies with provincial objects.
Such a view as involved in that denial I rather think was never presented in any court in Canada till the Canadian Pacific Railway Co. v. Ottawa Fire Ins. Co.[7] case, already referred to. Assuredly the contrary view was acted upon for forty years, to such an extent as to involve in the aggregate enormous sums of money in the way of contracts, by and with companies, which must be held ultra vires and void, if the contention set up should prevail.
A microscopical examination of the phrase “provincial objects” cannot help much.
It is to be observed, however, that the word “objects” had been used prior to said Act, both in the English “Joint Stock Companies Act of 1862” and the Canadian Act, in chapter 65, section 1, of the Consolidated Statutes of Canada, as an apt description of what by the articles of association must form the basis of incorporation in either case respectively falling thereunder. And the word “provincial” can be given full force and effect, in the way I am about to submit, without further qualifying or restricting the well known use of the word “objects” in relation to companies so as to produce something as curious as contended for.
No one pretends the whole item No. 11 can apply to anything relative to the purposes, aims or affairs of the Government or its direction of the public institutions of the province, which are primâ facie the only “provincial objects” as such. Counsel for the Dominion in the Companies Case[8], by introducing history, let us see how the unhappy phrase was begotten. If permissible to refer thereto, I have recorded it in pages 362 and 363 of 48 Can. S.C.R., containing the report of that case.
Is there another possible meaning of the phrase “provincial objects”? Seeing it is an incorporation of companies that is designated it can surely mean nothing else than a provision for the incorporation of persons likely to develop the business activities of any kind seeking such development in any province. Does that necessarily imply that the business in any such case seeking development is to be confined in all or any of its operations within the territorial limits of the incorporating province? Surely such a limitation is and always has been since before the “British North America Act,” something quite inconsistent with the requirements and expectations of business men looking to commercial success.
But why should we suppose it was by the word “provincial” intended to engraft upon each provincial incorporation of a company the limitation that it could not transact any business beyond the limits of the incorporating province? Those provinces which negotiated and arranged for this creation of a federal system and thereby determined what as result thereof should appear in the Act, had each up to its enactment coming into force, absolute power over the subject of the creation of incorporate companies. It is somewhat difficult to understand why they should be supposed to have intended to surrender that power essential to their local prosperity save in so far as necessary to facilitate the furtherance of the purpose had in view.
Can it fairly be said that such extreme limitations and restrictions as argued for herein were so necessary? Was there not something else to be guarded against?
In assigning the control of property and civil rights in the provinces to the exclusive jurisdiction of provincial legislatures which would impliedly carry with it the right of incorporation, it may have been thought that the power of incorporation relative to the subject matters assigned to the Dominion might be impaired, or indeed render it necessary for its Parliament to look to the province possessed of such far-reaching powers, relative to property and civil rights, to aid it in that regard. To have thus by any possibility impliedly rendered Parliament subservient to the will of any legislature, would have been embarrassing.
Again, it may have been conceived undesirable that there should be the possibility of any conflict between the provinces by reason of one asserting as of right the power over or against another to invade its territory against its will, by any such legislation relative to companies. That view was upheld later by Ministers of Justice for the Dominion, as will presently appear.
By framing the enactment as it is, these, and possibly other contingencies, were averted and the general rule of private international law (which I submit was well known) relative to the recognition of corporations abroad by virtue of what has been called the comity of nations, was left to work out the solution of the question; as it has been in each individual case for nearly half a century with great benefit to all and detriment to none.
Some such reasons, as well as the desirability of marking the contradistinction between the provincial corporations, which ought not to have for their objects any of the subject matters assigned to the Dominion, and Dominion corporations, or such of them as relate to any of the subject matters assigned to the exclusive legislative jurisdiction of the Dominion, one can understand as having been deemed, if not necessary yet desirable, to facilitate the working out smoothly of the scheme as a whole. But why should that necessity have reached to the wholly unnecessary exclusion of trading either with the mother country or its other colonies or the United States or any other foreign country, as had been done for many years by provincial companies?
In short, why should it be supposed to have been intended to render trading by provincial companies impossible?
The scheme of the Act was primarily to arrange for the federal union of four or five provinces until then having very large powers of self-government. The trainers thereof followed the example of the United States constitution and its method of assigning very large powers of legislative or administrative control to the Governments to be created, by merely specifying the subject matter over which such powers were to be exercised, without elaboration of how; and in like manner prohibiting in terse terms the exercise of power over other subject matters.
They departed, as experience had then dictated in a marked degree, from the substance of the model. All I here desire to press is for a realization of the fact that they made the best use they could, under the circumstances, of such a model, endeavouring to avoid rocks ahead, while trying to cure the ills the provinces laboured under.
Incidentally thereto it is not conceivable that they shut their eyes either to the commercial necessities, to which I have already adverted, or to the history of the development of the recognition of corporate capacity both an the United States and elsewhere, when transacting business beyond the limits of the corporate-creating state. That question had theretofore, both in England and Canada, as well as in the United States, received much consideration. In the United States the question had also been considered with relation to the constitutional limitations of the incorporating state as it is now presented relative to the powers of the provinces.
The discussion it gave rise to in the United States was long and keen. It culminated there in the decision of the case of Bank of Augusta v. Earle[9], decided in the United States Supreme Court in 1839, which stands good law to-day.
The argument there as here was that the company should not go beyond its home state to do business, and the limitations of state powers were also relied upon. That eminent and able court held it could go wherever the comity of state or nations might permit.
The very different question, of a foreign company, by its constitution inherently incapable of going abroad, had been presented to our old Upper Canadian Court of Queen’s Bench in the case of the Genesee Mutual Insurance Company v. Westman[10]. Indeed, some obiter dicta therein would go further, but the day was young then. Shortly after Confederation there arose in same court, the case of Howe Machine Co. v. Walker[11], where the issue of the right of a foreign corporate company to do business in Canada was likewise presented and the right maintained with the proper distinction made between that and the Genesee Case10. This was in 1873.
The decision is only of significance here as indicative of the view then taken and thus likely to have been held six years earlier by those framing the clause now in question. The English view is presented by the authorities collected in Westlake, at section 305 of his work on Private International Law.
Is it conceivable that men, presumably holding the views of English law as thus expressed by either Canadian or English authorities, and knowing how that had been applied and worked out at that time under a federal system, deliberately designed the creation of something new and wonderful to be operated with under the Canadian federal system? I cannot assent to such a proposition. Those men had sense, and some of them, wide experience and great grasp of public affairs. To say that they had not in view the daily experience of Canadian trade and industries befor