The Queen v. Belleau

The Queen v. Belleau
Collection
Supreme Court Judgments
Date
1881-02-10
Report
(1881) 7 SCR 53
Judges
Ritchie, William Johnstone; Fournier, Télesphore; Henry, William Alexander; Taschereau, Henri-Elzéar; Gwynne, John Wellington
On appeal from
Federal Court of Appeal
Subjects
Contract
Decision Content
Supreme Court of Canada
The Queen v. Belleau (1881) 7 SCR 53
Date: 1881-02-10
The Queen
Appellant
And
Sir Narcisse Fortunat Belleau, Knt., and Others
Respondents.
1880: May 17; 1881: Feb'y. 10.
Present:—Sir William Johnstone Ritchie, Knight, C.J,, and Fournier, Henry, Taschereau and Gwynne, JJ.
ON APPEAL FROM THE EXCHEQUER COURT OF CANADA.
16 Vic, ch. 235—Construction—Debentures issued by Trustees of the Quebec Turnpike Roads—Legislative recognition of a debt—Trustees—Parliamentary agents, Liability of the Crown for acts by.
Held, (Ritchie, C.J., and Cwynne, J., dissenting,)—That the trustees of the Quebec North Shore Turnpike Trust, appointed under ordinance, 4 Vic., ch. 17, when issuing the debentures in suit, under 16 Vic., ch. 235, were acting as agents of the government of the late province of Canada, and that the said province became liable to provide for the payment of the principal of said debentures when they became due.
Per Henry and Taschereau, JJ., That the province of Canada had, by its conduct and legislation, recognized its liability to pay the same, and that respondents were entitled to succeed on their cross appeal as to interest from the date of the maturing of the said debentures.
Per Ritchie, C.J., and Gwynne, J.: That the Trustees, being empowered by the ordinance to borrow moneys "on the credit and security of the tolls thereby authorized to be imposed and of other moneys which might come into the possession and be at the disposal of the said trustees, under and by virtue of the. ordinance, and not to be paid out of or chargeable against the general revenue of this province" the debentures did not create a liability on the part of the province in respect of either the principal or the interest thereof[1].
Appeal and cross appeal from a judgment of the Exchequer Court of Canada (December 2 4, 1879) decreeing that appellant was legally liable to the respondents for the payment of the principal of certain debentures issued by the Trustees of the Quebec Turnpike roads under the authority of 16 Vic., c. 235.
The respondents by petition of right set forth in substance:
That the province of Canada had raised, by way of loan, a sum of £30,000 for the improvement of provincial highways situate on the north shore of the river St. Lawrence, in the neighbourhood of the city of Quebec—and a further sum of £40,000 for the improvement of like highways on the south shore of the river St. Lawrence—that there were issued debentures for both of the said loans, signed by the Quebec turnpike road trustees, under the authority of an act of the Parliament of the province of Canada, passed in the sixteenth year of Her Majesty's reign, intituled: "An act to authorize the trustees of the Quebec turnpike roads to issue debentures to a certain amount and to place certain roads under their control"—that the moneys so borrowed came into the hands of Her Majesty, and were expended in the improvement of the highways in the said act mentioned—that no tolls or rates were ever imposed or levied on the persons passing over the roads improved by means of the said loan of £30,000— that the tolls imposed and collected on the highways improved by means of the said loan of £40,000 were never applied: to the payment of the debentures issued for the said last mentioned loan in interest or principal—that the trustees accounted to Her Majesty, as well for the said loans as for the tolls collected by them—that at no time had there been a fund in the hands of the said trustees adequate to the payment, in interest and principal, of the debentures issued for said loans—that the respondents are holders of debentures for both of the said loans to an amount of $70,072, upon which interest is due from the first day of July, 1872—that the debentures so held by them fell due after the union, and that Her Majesty is liable for the same under 3rd sec. of British North America Act, 1867, as debts of the late province of Canada existing at the union.
In his defence to this petition, Her Majesty's Attorney-General did not deny the liability of Her Majesty for the debts of the late province of Canada, but he denied that the debentures in question were debentures of the province of Canada—that the moneys for which they issued were borrowed and received by Her Majesty—that there was any undertaking or obligation in the province of Canada to pay the whole or any part of the said debentures.
The questions of law arising out of the defence set up by the Attorney-General and argued at length may be resumed into the following:—
Whether the debentures in question were or not debentures of the late province of Canada?
Whether the moneys for which they issued, did or not come into the hands of Her Majesty, and were expended in the improvement of provincial highways?
Whether there was any undertaking or obligation in the late province of Canada to pay the said debentures?
And whether Canada is or not liable to pay the said debentures under the provisions of the British North America Act, 1867?
The case was argued in the Exchequer Court, Fournier, J, presiding, by Mr. Irvine, Q. C, and Mr. Andrew Stuart, on behalf of the suppliants, and Mr. Langelier, Q C., and Mr. Langlois, Q. C., on behalf of the Crown, and the following judgment in favor of the suppliants was delivered:—
Fournier, J: — [Translated.]
"This is a petition of right, by which the suppliants seek to recover from Her Majesty the sum of $70,072, with interest from the 1st July, 1872, in payment of an equal sum loaned on debentures issued by "the trustees of the Quebec Turnpike Roads" under the authority of an Act passed by the legislature of the province of Canada, 16 Vic. ch. 235.
"The question submitted for the decision of this court is whether the crown can legally be held liable for the payment at maturity of the debentures so issued.
"In order to determine this point it will be necessary to refer to the special legislation originally effected in reference to these turnpike roads.
"It was by the ordinance 4 Vic. ch. 17, that this mode of improvement of roads was introduced in the late province of Lower Canada, now the province of Quebec. The object and the intention of this legislation, in making the change in the system then followed for the management of the roads, are thus stated in the preamble to the ordinance:
"'Whereas the state of the roads hereinafter mentioned, in the neighborhood of, and leading to the city of Quebec, is such as to render their improvement an object of immediate and urgent necessity, and it is therefore expedient to provide means for effecting such improvement, and to create a fund for defraying the expense thereof, and the expenses necessary for keeping the said roads in permanent repair.'
"It then proceeded to enact, that the powers and authorities vested by 36 George III., in any magistrates, grand voyer and other officers should cease and determine from and after the time when the trustees, authorized to be named by the ordinance, should assume the management and control of the roads. The governor is authorized by letters patent, under the great seal of the province, to appoint not less than five, nor more than nine persons, to be, as well as their successors in office, trustees, for the purpose of opening, making and keeping in repair the roads specified in the ordinance.
"In case of a vacancy in the said trust the governor was to supply and fill such vacancy by the appointment by letters patent of another trustee.
"The trustees are then declared to be a corporation to be known by the name of 'The trustees of the Quebec 'Turnpike Roads' and may sue and be sued, and 'may acquire property and estate, movable and immovable, which, being so acquired, shall be vested in Her Majesty for the public uses of the province, subject to the management of the said trustees for the purposes of this ordinance,' and who are given all the necessary powers to cause to be improved and widened, repaired and made anew all the roads and bridges put under their control.
"By the 4th, 5th, 6th and 7th sections provision is made for expropriation and the payment of compensation for damages.
"The trustees are also authorized to levy on each of the said roads, at the turnpike gates or toll bars to be thereon established, the tolls specified in said ordinance.
"The trustees were authorized to raise by way of loan, on the credit and security of the tolls, and of other moneys in the possession of the trustees, under and by virtue of this ordinance, 'and not to be paid out of or be chargeable against the general revenue of this province, any sum or sums of money not exceeding £25,000.'
"The trustees are authorized to issue debentures in the form contained in the schedule A, bearing interest at six per centum per annum, and redeemable at such times as the trustees may think convenient. With the approval of the governor the debentures may be redeemed before the time they are made redeemable. All arrears of interest were to be paid before any part of the principal sum. In case of deficiency of funds at the disposal of the trustees to pay interest accrued, the governor, by warrant under his hand, may authorize the Receiver General to advance to the said trustees out of any unappropriated moneys in his hands the necessary amount sufficient to pay such arrears of interest, and which sum shall be repaid by the trustees to the Receiver General in the manner specified in the ordinance.
"The trustees were also authorized, with the approval of the governor, to raise further sums to pay off the principal of any loan becoming due at a certain time, under the same provisions as the previous loans.
"It was further enacted that due application of all public moneys, whereof the expenditure or receipt was authorized, shall be accounted for to Her Majesty through the Lords Commissioners of Her Majesty's treasury for the time being, in such manner and form as Her Majesty, her heirs and successors, shall be pleased to direct.
"The trustees were also bound to lay detailed accounts of all moneys by them received and expended, supported by proper vouchers, and also detailed reports of all their doings and proceedings before such officer, and in such manner and form, and publish the same in such a way, at the expense of the trustees, as the governor shall be pleased to direct.
"The ordinance was declared to be a public and permanent ordinance.
"All the provisions of this ordinance were put into force by trustees duly appointed, who took the management and control of these roads for the use and benefit of the public.
"The late province of Lower Canada borrowed through these trustees the sum of £25,000 for the amelioration of these roads as authorized by the said ordinance.
"This amount was employed in conformity with the provisions of the Act—detailed accounts of the same as public moneys were rendered to Her Majesty as ordained by the ordinance, as well as of the tolls collected on said roads.
"After the union of Canada, the provisions of this ordinance were extended and made applicable to divers other roads. The legislature and the executive government of the late province of Canada have always exercised over these roads, and other property under the control of the trustees, the most absolute and unlimited powers.
"By 16 Vic. ch. 235, the statute under which the debentures now in question were issued, the provisions of the ordinance 4 Vic. ch. 17 which I have just summarized, and the powers of the trustees, are extended and made applicable to a certain number of other roads and bridges therein mentioned, and situated on the north and south shores of the St. Lawrence.
"The principal provisions of this Act, which have reference to the point raised in this suit, are contained in the following sections:—
"The seventh section authorizes the issue of debentures for a loan of £30,000 for the construction and completion of the works authorized by this Act, and an Act of the preceding session, on the roads on the north shore of the St. Lawrence, and which loan is made subject to the provisions of the ordinance 4 Vic. ch. 17, as follows: 'and this loan, the debentures which shall be issued to effect the same, and all other matters having reference to the said loan, shall be subject to the provisions of the ordinance above cited With respect to the loan authorized under it: Provided nevertheless, that the rate of interest to be taken under this act shall in no case exceed the rate of six per centum, and no moneys shall be advanced out of the provincial funds for the payment of the said interest, and all the debentures which shall be issued under this act, so far as relates to the interest payable thereupon, shall have a privilege of priority of lien upon the tolls and other moneys which shall come into the possession and shall be at the disposal of the said trustees, in preference to the interest payable upon all debentures which shall have been issued under the provincial guarantee, and also to all other claims for the reimbursement of any sums of money advanced or to be advanced to the said trustees by the Receiver General of this province, and the said debentures as respects the payment of the principal and interest thereof, shall rank after those issued under the act passed during the last session of the parliament of the province and hereinbefore cited.
"A further sum of £40,000 was by the tenth section of the same act authorized to be raised by way of a loan subject to the conditions in the seventh section for the construction and repairing of the roads on the south shore of the St. Lawrence.
"These different loans were made by the issuing of debentures, and the moneys raised thereby were employed by the trustees to pay for the works and improvements specified in the said act.
[Page 61
"Unfortunately for the suppliants the revenues derived from these new roads, as well as from those derived from the roads first made by the trustees, and which constituted the special fund created by 4 Vic., ch. 17, were found insufficient to pay even the interest on the amounts so borrowed. The result has been that the suppliants have not received any interest since 1872, nor have the legislature taken any steps to remedy the present state of affairs by making provision for the repayment of the loans, which matured in part on 2nd March, 1869, and in part on 1st December, 1874.
"In answer to this petition Her Majesty avers that all the debentures guaranteed by the ordinance of 1841 were redeemed in 1853, and that since no debentures have been issued guaranteed by the province, but that on the contrary by 12 Vic., ch. 115, 14 & 15 Vic., ch. 132, 16 Vic., ch. 235 and 20 Vic., ch. 125 it was enacted 'that no guarantee for the said debentures should be given by the said late province of Canada, that no money of the said province should be advanced for paying the interest or the principal of the said debentures.'
"The facts in issue between the parties to this petition have been settled by a special admission of facts which are sufficient for the determination of the question submitted for decision. It only remains for the court to decide whether the Government of Canada prior to the passing of the British North America Act, was responsible for the repayment of the loans in question.
"Before taking this question into consideration, I must acknowledge that I do not do so without great hesitation. In determining this point I have not had the advantage of referring to previous decisions. The learned counsel for the suppliants as well as for respondent, in answer to a question 1 made on the argument, said that, notwithstanding exhaustive researches on their part, they had been unable to find a decision applicable to this question. I have since searched for authorities on this subject, but I must confess with no better success. It is therefore by examining our statutes and comparing them with those passed in England on the same subject-matter, that we will be able to arrive at a solution of this question.
"The extracts I have just given of the principal provisions of the ordinance of 1841, and of the subsequent statutes, when compared with the provisions contained in the imperial statutes relating to 'turnpike trusts,' show that there are such essential differences in these institutions in both countries as will justify me in drawing certain inferences useful to the determination of this suit.
"Before stating the peculiar provisions of the organization of turnpike trusts in England, I will cite a short passage on their origin: 'A turnpike road is a road across which turnpike gates are erected and tolls taken, and such roads existed previous to the passing of the 13 Geo. III, ch. 84, and independently of that statute altogether. A turnpike road means a road having toll gates or bars on it, which were originally called "turns," and were first constructed about the middle of the last century. Certain individuals, with a view to the repairs of particular roads, subscribed amongst themselves for that purpose and erected gates upon the roads, taking tolls from those who passed through them. These were violently opposed at first, and petitions addressed to parliament against them; and acts were in consequence passed for their regulation. This was the origin of turnpike roads.'
"If turnpike trusts in England, in their origin, resemble ours by the opposition which was made to their establishment, they differ essentially by the fundamental principle of their constitution.
"The above quotation shows that they Were established by certain persons associated together and subscribing between themselves the amount necessary for repairing certain roads. There were quite a number of turnpike trusts in existence at the time of the passing of the 13 Geo. III, ch. 84, but the statutes which established these trusts were private statutes, and are not to be found in the collection of the imperial statutes. It is easy, however, to ascertain their character by referring to the act of 3 Geo. IV, ch. 126, passed for the purpose of legislating on this subject in a general manner for the whole country. After the 1st January, 1823, the provisions of that act were made applicable to all private acts, before, or which might be hereafter, passed, relating to the construction, repair and maintenance of turnpike roads.
"I will now refer to those provisions in the English statute which will obviously show the difference that exists between the laws in force in England and those which are under consideration in this case.
"Section 60 of the act enacts: 'that the right, interest and property of and in all the toll gates and toll houses weighing machines and other erections and buildings, lamps, bars, toll boards, direction boards, mile stones, posts, rails, fences and other things, which shall have been or shall be erected and provided in pursuance of any act of parliament for making turnpike roads, with the several conveniences and appurtenances thereunto respectively belonging, and the materials of which the same shall consist, and all materials, tools and implements which shall be provided for repairing the said roads, shall be vested in the trustees or commissioners acting in pursuance of such act for the time being, and they are hereby authorized and empowered to apply and dispose of the same as they shall think fit, and to bring or cause to be brought any action or actions, &c,, &c.' "Sec. 43 gives power to the trustees to increase or diminish the tolls in accordance to the provisions of the section.
"The 62nd section provides that the trustees shall be qualified in real estate to the amount of £100 and shall take an oath of office.
"The 66th section, which has reference to the mode of appointing trustees, enacts that in case of death, insolvency or incapacity of acting, those surviving or remaining in office can elect trustees in their stead in the manner prescribed by that section.
"72. The proceedings and decisions of the trustees shall be entered in a book kept open to the inspection of the trustees and the creditors of the trust.
"73. Account books shall be kept and be opened to the inspection of the trustees and of the creditors. The eighty-first section empowers the trustees to borrow money and to give a mortgage, in the form given, as a security for the sum borrowed.
"86. When a new road has been opened and completed, the trustees can sell the old road, (sec. 89) but giving to the original proprietor or the adjoining proprietors the right of preemption. Section 135 provides for the mode of recovering a sum of money due by the trustees and enacts 'that satisfaction shall and may be levied and recovered by distress and sale of the goods and chattels vested in the said trustees or commissioners.'
"The above provisions taken in the English statute compared with those I have before cited taken from our own statute clearly show that the legislatures have given an essentially different character to the trusts in both countries.
"By the English statute the trusts are established by private enterprise and he property of the roads, tolls, &c., is vested in the commission or body of trustees charged with the duty of administering it in the common interest, whilst by our statute, the trusts were created by the government and the property of the trust is declared to be the property of Her Majesty for the public use of the province.
"The appointment of the trustees belongs to the governor, who appoints by letters patent, under the great seal of the province, persons who shall discharge the duties of their office gratuitously, and without deriving any benefit or profit out of the revenue of the roads they manage. On the contrary, in England, the trustees appoint others to any vacancy, and choose persons who, like themselves, have a personal interest in the revenues of the roads under their control. They have the extraordinary power of increasing or diminishing the tolls. Here the same power could only be exercised by the Governor-in-Council, or by the parliament. The necessary funds to construct and complete the roads were raised here by the sale of debentures issued by trustees under the authority of the law; whilst in England the commissioners or trustees secure the amount by the private subscriptions of persons associated together for that purpose, and who therefore become, not merely creditors, but proprietors of the 'trust.'
"The English act enacts that the trustees must keep books of their orders and proceedings, and also cause to be kept, books of accounts open to their inspection and liable to be audited in their interest. None of these privileges were granted by our statutes to the holders of the debentures of our turnpike roads. The accounts to be kept of the moneys expended, which are said to be public moneys, are to be rendered to Her Majesty, her heirs and successors, through the Lords High Commissioners of the Treasury of Her Majesty for the time being. "Under the English statute any goods or property vested in the trustees may be levied against, for the purpose of paying off any liabilities; here they are declared to be the goods and property of the crown, and as such inalienable even for debt. See Anderson v. The Quebec North Shore Turnpike Trust[2].
"From all these differences it is clear to my mind, that under the English law turnpike trusts are nothing more than private corporations, whilst in this country they are public corporations, acting as the organs of the state in effecting a great public improvement. The principal features of the organization of the 'trusts' under our system of laws are precisely the characteristic features which constitute a public corporation, as shown by the following text writer[3].
"'But where a corporation is composed exclusively of officers of the government, having no personal interest in it, or with its concerns, and only acting as the organs of the state in effecting a great public improvement, it is a public corporation.' Layne vs. North-Western T. Co.[4]. Then the trustees of the university of Alabama were held to be a public corporation, because the state had the whole interest in the institution without being under any obligation of contract with any one[5].
'"The commission includes all the elements which are essential to a public corporation. It is composed exclusively of officers appointed by the crown, having no personal interest in administering the things under their control, and only acting as the organs of the state, effecting a great public improvement.'
This last expression applied to our turnpike roads may appear exaggerated at the present day, when the country is covered over with a large system of railways and canals, but when we bear in mind that at the time these turnpike roads were contemplated, there were in the province of Quebec only a few miles of railroads and two canals of a few miles in length; that the bad state of roads was one of the great drawbacks to the opening of the country; and if we recollect, not only the indifference, but the opposition of the public to make the slightest sacrifice in order to repair the roads, it will be better understood why the construction of turnpike roads was considered a great public improvement. And that in order to effect it, it was found necessary that a public law should be passed by an irresponsible legislature, and at the time only such a body could have enacted such a law and have it put into force in all its details. If this institution was able to surmount all obstacles at first and has since been able to aggrandize itself, it is solely because nothing was left, in organizing it, to private enterprise, and because its character was such as to make it a public body, empowered by the government to effect loans of money in order to execute for the government certain improvements with which it had been charged.
"If one of the peculiar features in the constitution of a public corporate body is that its members are entirely without any personal interest, on the other hand one of the essential elements of a private corporate body is, that its members have a personal interest in the institution. Whatever authority or power is given to the members of a corporate body, or however general may be its object, if the members of the corporation receive a consideration or an emolument to perform the duties imposed upon them, then that corporate body is considered to be a private corporation.
"But the most numerous, and in a secular and commercial point of view, the most important class of private civil corporations, and which are very often called "companies," consist at the present day of banking, insurance, manufacture and extensive trading corporations; and likewise of turnpike, bridge, canal and railroad corporations. The latter kind have a concern with some of the extensive duties of the state; the trouble and charge of which are undertaken and defrayed by them in consideration of an emolument allowed to their members; and in cases of this sort there are the most unquestionable features of a contract, and manifestly a quid pro quo[6].
"This authority, if applied to 'trusts' as constituted in England, shows that they are private corporations, but the authority I first cited, proves evidently that our turnpike trusts are public corporations. The conclusion I draw from what I have stated is, that the 'trustees' in this case were the agents of the crown, authorized to put into force a public law relating to turnpike roads. This is really what has been decided already in the case of Anderson v. The Quebec North Shore Turnpike Trustees, viz:—'That the Quebec turnpike trustees are the agents of the crown.' It follows, then, that when the trustees, acting within the scope of their authority, enter into a contract, it is the government, who, having delegated their power, are liable, and not the trustees. 'It is clear, also, that a servant of the crown, contracting in his official capacity, is not personally liable on the contracts so entered into[7].
"The government would therefore be liable in this case, unless it is shown that the trustees have not acted within the scope of their authority in issuing these debentures, or unless there can be found in 16 Vic., ch. 235, or in some other act, a positive enactment leaving no doubt that the government is exempted of all responsibility. It was not contended that the trustees had exceeded the limits of their authority. The defence in this case consists simply in averring that the crown s not responsible to the holders of the bonds, and the statement of defence is as follows: 'Not only was no provincial guarantee given or provided for in favour of the bonds issued by the said trust, from the said year, 1853, but it was especially provided in by several statutes passed by the parliament of the said province of Canada, and, amongst others, by the act 12 Vic., ch. 115, by the act 14 and 15 Vic., ch. 132, by the act 16 Vic., ch. 235, by the act 20 Vic., ch. 125, that no guarantee for the said debentures should be given by the said late province of Canada, that no money of the said province should be advanced for paying the interest or principal of the sums borrowed by the issue of the said debentures.'
"By referring to the statutes mentioned in that paragraph of the defence, it will be seen that what is there alleged cannot be sustained.
"In 12 Vic., ch. 115, there is no mention of any provincial guarantee. What is there stated is: 'No moneys shall be advanced out of the provincial funds for the payment of the said interest.' It is different from the 4 Vic., ch. 17, which had provided the means of paying any arrears of interest on the loan authorized by that act, by allowing the Receiver General to advance out of the provincial funds to the trustees the necessary amount for that purpose. But I cannot find in that section anything which limited the responsibility of the government as to the payment of the capital except by declaring that the loan is made subject to the conditions contained in the ordinance of 4 Vic., ch. 17. This provision is also found to be inserted in the act 14 and 15 Vic., ch. 235. In the extract I have before given of sec. 7 of this act, there is no question of any provincial guarantee having been given or refused. All we find is, as in 12 Vic., ch. 115, and in 14 and 15 Vic., ch. 132, that 'no moneys shall be advanced out of the provincial funds for the payment of said interest;' as respects the principal, it only enacts that: 'As respects the payment of principal and interest thereof,' the debentures shall rank after those issued under the act passed during the last session of parliament of the province, and hereinbefore cited.' In this lengthy provision, no word or expression can be found which would authorize me in coming to the conclusion that there was any repudiation of, or even that it was intended to repudiate, all responsibility with respect to that loan. If the inevitable consequence of that act was not to make the province responsible, why take the trouble of limiting their responsibility as regards interest only by stating, 'no moneys shall be advanced for the payment of the interest on the debentures.' If the intention of the government had been to exempt the province from all liability, why not make the same enactment with respect to the capital as they did with respect to the interest? The absence of such a declaration is a strong argument that the government did not intend to exempt themselves from the liability of paying at least the principal of the loan. This section, in my opinion, instead of supporting the contention made by the respondent, that the crown is not responsible, on the contrary supposes the obligation of reimbursing, necessarily arising out of the loan.
"It was also argued, on behalf of the respondent, that the loan effected under the authority of 16 Vic., ch. 235, was subjected to the provisions contained in the ordinance of 4 Vic., ch. 17, and therefore that the principal cannot be paid out of or chargeable against the general revenue of this province. The inference which is sought to be drawn, is that the Crown had incurred no responsibility for the reimbursement of the loan made under the authority of that ordinance, and consequently the loan made under 16 Vic., ch, 235 is in the same position. Nevertheless, we find that the legislature paid the first loan, and the reason no doubt was, because they admitted the obligation to pay was a consequence of the provisions of the law. The law being the same in both cases, the same obligation to pay the amount of the loan for which the present petition was brought certainly remains.
"The enactment that the general revenue shall not be held liable for the moneys borrowed, is explained, first, because the tolls levied by the trustees were declared to form a special fund for the purpose of paying off these bonds, then also for this other self-evident reason, because the ordinary expenditure of the government was the first charge upon the general revenue it was not intended to adopt a mode of payment which at that time might have created disorder in the financial arrangements of the year. Moreover, does not the fact of the legislature only stating in the act in question that the general revenue shall not be charged with this debt virtually declare that the legislature shall provide other means to pay with than with the general revenue, which is exempted? The government having still other means of providing for the reimbursement of this loan, thereby contracted the obligation of providing these means, viz: either by increasing the revenues of the special fund, by increasing the tolls, or by creating another fund. This seems necessarily to have-been the intention of the legislature, for it would be impossible to explain their act otherwise than by supposing that they gave the power to the government to borrow money in the name of Her Majesty, at the same time dispensing with the obligation of reimbursing the amount. Such an interpretation of the act being contrary to the dignity and honor of the crown, cannot be entertained for a single moment. "To say that the provisions of the law contained an obligation to raise a special fund is a much more consistent interpretation, inasmuch as at the time this loan was effected, the government were in the habit of creating special funds. We find that there was the common schools fund, superior education fund, the clergy reserves, the court houses fund, the seigniorial fund, &c., &c. It was no doubt on the establishment of such a fund that the legislature relied to reimburse the principal.
"Because the intention has not been carried into effect, is not a reason why there should be any alteration in the legal obligation to reimburse the capital, an obligation arising out of the very terms of the law. It is certainly a matter of indifference to the bondholders to know what mode will be adopted to procure the money.
"But if as a matter of fact the statute in so many words enacted, that the government were exempt from all responsibility, then what I have before said would be of no avail. Fortunately for the suppliants this is not the case. For nowhere do I find in the quotations which I have given from 4 Vic. ch. 17, 12 Vic. ch. 115, 14 and 15 Vic. ch. 137 and 16 Vic. ch. 235, the statement put forward in respondent's defence 'that not only was no provincial guarantee given in favor of the bonds issued by. the trust under the authority of 16 Vic. ch. 235, in 1853, but that it was especially provided in and by several statutes that no guarantee should be given for the said debentures by the said late province of Canada; that no money of the said province should be advanced for paying the interest of, or the principal of the sums borrowed by the issue of said debentures.'
"The learned counsel were certainly in error when they formulated that general and sweeping proposition, for it cannot be sustained by any of the acts I have just cited. It may be correct in so far as it relates to 20 Vic. ch. 125, for there we find, for the first time, an enactment stating that the provincial government shall not be held responsible for the payment of the principal and interest of the debentures issued under that act.
"It was also by this act that the legislature divided the turnpike trust into two different trusts, one for the north shore and the other for the south shore of the St. Lawrence. Sections 8, 9, 11 and 12 authorized these trusts to effect new loans, and it is with respect to these new loans that the following proviso was enacted: 'Provided always that the province shall not guarantee or be liable for the principal or interest of any debentures issued under this act, nor shall any money be advanced or paid therefor out of the provincial funds.'
"If this proviso was to be found in 16 Vic. ch. 235 or in the 4 Vic. ch. 17, which is declared by the eighth section to form part of the act, I would not hesitate for a moment and would dismiss the petition on the ground that the government cannot be held liable either for the principal or for the interest of the debentures issued. But as I have already stated, such a provision is not to be found in the previous acts, and it is enacted for the first time in 20 Vic. ch. 125. This must necessarily have been effected in consequence of a change of policy on the part of the government of the day, with respect to turnpike roads, a change which is there enacted for the first time.
"I know of no rule of law which would allow me to interpret this provision as being applicable to the previous acts. In order to do so it would be necessary for me to find in the text of the law (what I have not found) a positive declaration stating that such a provision must be considered as forming part of the previous acts. In my opinion, far from helping the respondents' contention, this declaration in this last act seems to me to furnish a strong argument in favor of the suppliants. The only reasonable conclusion to draw seems to me to be that if the legislature had intended in the previous acts to repudiate all guarantee or liability as regards the principal and interest, they would in those previous acts have made use of the same language in order to express the same thing. This provision may be even considered as an interpretation given by the law itself, and declaring that as the government had, up till that time, been liable, henceforth it would cease to be liable for any new loan. This interpretation does not extinguish the obligation previously contracted. The contract entered into legally by the trustees, acting within the scope of their authority, by borrowing the moneys, necessarily implies the obligation to pay back the same. And as the loans were effected by the government through its agents (the trustees) the payment of the same devolves on the government and not on the trustees, who entered into no obligation, as may be seen by the form of debenture which was issued, viz:
"NORTH SHORE ROAD LOAN UNDER PROVINCIAL STATUTE OF 1853.
£250 Cy.
"Certifícate No. 257. Quebec, 24th March, 1856.
"We certify that, under the authority of an Act of the Parliament of Canada, passed in the session held in the 16th year of Her Majesty's reign, intituled 'An act to authorize the trustees of the Quebec turnpike road to issue debentures to a certain amount and to place certain roads under their control', there has been borrowed and received from Charles Gethings, Esquire, two hundred and fifty pounds, currency, bearing interest from the date hereof, at the rate of six per cent. per annum, payable half yearly, on the first day of July and on the first day of January, which sum is reimbursable to the said Charles Gethings or bearer hereof, on the twenty-fourth day of March, in the year of our Lord 1871, and is part of the sum to be raised under the said statute to make and complete the roads thereby authorized to be made on the north shore of the St. Lawrence.
Registered by J. Porter, Secretary.
Trustees.—H. Gowen, L. G. Nault, L. T. Macpherson, A. C. Buchanan, John Rowley, Daniel McCallum, Jas. Gibb. "I am therefore of opinion that the government of Canada became legally indebted to the suppliants, and that under the 111th section of the British North America Act, the Dominion of Canada was made liable for the principal of the debentures issued under the authority of 16 Vic. ch. 235. This interpretation seems to be in accordance with the letter and the intent of the act in virtue of which this loan was effected as well as with the provisions of 4 Vic. ch. 17, incorporated in ch. 235.
"The suppliants, however, did not rely so much on the reasons on which I have arrived at a favorable conclusion to them, as upon their argument based on the fact that changes were effected by the legislature in the laws relating to these trusts; such changes, they contend, having virtually destroyed the special fund which was created by means of the levy of tolls, and which was affected to the reimbursement of this loan, are sufficient to render the government generally liable instead of leaving them as theretofore liable only for a limited amount. If this view of the law could prevail the suppliants would, no doubt, benefit by it very much as the government would then be obliged to pay the interest as well as the principal of these debentures.
"I will now examine if this contention can be sustained. The act of 16 Vic. ch. 235 did not create any additional revenue in order to pay the interest which would become due on the loan of £30,000 authorized to be made for the Quebec north shore roads, but tolls were to be collected on the south shore roads, for the improvement of which the act also authorized a further loan of £40,000, which sum was expended on the said roads.
"Subsequently, four years after, the Quebec turnpike trust was divided into two trusts under the authority of the act I have just mentioned, 20 Vic. ch. 125, viz.; the Quebec north shore turnpike roads trustees and the Quebec south shore turnpike roads trustees, charged respectively with the management of the roads on each shore. By section five of the said act, all debts and liabilities made before the said division, were charged against the trustees of the north shore roads, as follows: 'The north shore trustees shall be liable for the principal and interest of all debentures issued by the "trustees of the Quebec turnpike roads," and for all debts and liabilities of the said trustees, contracted before the day to be appointed as aforesaid for the separation of the trusts.' There is a proviso which declares that should the trustees of the south shore roads have a balance in hand from the roads under their control, they shall, after having paid all expenses, pay over said balance in the hands of the north shore trustees, in order to aid them to pay the principal and interest on the debentures issued prior to the passing of said act.
"Amongst the debts and liabilities for which the north shore trustees were declared to be liable was a loan of £40,000, borrowed and expended for the construction of roads on the south shore of the St. Lawrence. "It is also proved by the admission of facts filed in this suit, that since the separation of the trusts, no moneys levied and collected by the trustees of the south shore were ever employed to pay either the interest or the capital on the said sum of £40,000, and that payments of interest made on account of said sum were so made by means of tolls levied on the north shore roads.
"The effect of this legislation has been very disastrous to the bondholders of these two last mentioned sums. By the separation of the trusts they were first deprived of a part of the special fund which was created for the purpose of paying their loans, to wit, the tolls to be collected on the south shore, and then the north shore trust, being constituted in lieu of the old trust, was declared to be liable for the loan of £10,000, which were expended for the construction of the south shore roads and in the interest of the south shore trust.
"It cannot be denied, that such legislation has caused great loss to the suppliants. The admission of facts filed in this suit proves it.
"But can damages or losses resulting from a law enunciated in clear, precise and unambiguous language be claimed by suppliants? Certainly not. And it is no doubt for this reason that the suppliants have not sought relief on this ground. Their contention is that the legislature, by abolishing, without their consent, a part of the special fund affected to the payment of their bonds, and by declaring to their detriment, that the north shore trust should pay £40,000 expended on the south shore roads, have substituted the government to the first commission, and have thereby contracted a promissory obligation to pay the total amount due. Thus we find the suppliants relying on a contract alleged to be implied from change of legislation, and not on a 'tort,' which can never arise from the passing of a law, nor consequently give a right of action for damages. I think it correct to say that the legislature, by passing this act, have virtually taken upon themselves to dispose of the turnpike trust as being their property, the trust being in reality the property of Her Majesty, as I trust I have before shown it. Had it been the property of the trustees, and not of Her Majesty, the government could not have disposed of it without violating a well known principle of legislation.
"The public benefit is deemed a sufficient consideration of a grant of corporate privileges; and hence, when a grant of such privileges is made (being in the nature of an executed contract) it cannot, in case of a private corporation which involves private rights, be revoked[8]. "This act no doubt passed because the government considered itself, for the reasons I have before given, liable for the debt created by 16 Vic. ch. 235. If such was the case, the government has not changed its position. Then also, the provision contained in the fifth section above cited, for the reasons I have given, can be invoked in support of the contention that the province was responsible for the principal, but there is nothing in that section to show that it was the intention of the legislature to contract a new obligation, viz: the obligation to pay the interest, which they were previously exempted from paying. To gather such an intention, it would be necessary to find words which are not there. Such an interpretation would be in violation of the well known rule of law 'that nothing is to be added or taken from a statute' when you construe it. The change in this legislation cannot therefore be said to have implied a contract to pay the interest, as the statute itself contains an express provision as to interest, as I will show. By separating the 'old trust' into two commissions the 20 Vic. ch. 125 enacted that the previous acts applicable to turnpike roads would remain in force. The third section is as follows: 'And all the provisions of the ordinance and acts hereinbefore mentioned shall apply as they now do, except in so far as they are altered by or may be inconsistent with this act.'
"I cannot find anywhere that the following provision with respect to interest, which is contained in the seventh section of ch. 235, 16 Vic., has been revoked, altered or modified: 'and no moneys shall be advanced out of the provincial funds for the payment of the said interest.'
"It is utterly impossible, with such clear and precise words before you, to contend that the government can be made liable for the interest. There is no room for construction in such a case as this. "When the language is free from doubt it best declares, without more, the intention of the law-giver, and is decisive of it. The legislature, in such a case, must be intended to mean what it has plainly expressed, and consequently there is no room for construction.
"The result of this legislation is, in my opinion, that the bondholders' position as to interest since the passing of 20 Vic., ch 125, remains exactly what it was after the passing of 16 Vic., ch. 235, sec. 7, to wit: they cannot in law render the government liable for the interest. Nevertheless it cannot be denied, as I have before said, that the guarantee and sureties which these bondholders had on the tolls to be levied on the south shore roads have virtually been taken away, and that in this respect this legislation has interfered with their vested rights.
"However serious may be the pecuniary losses the bondholders will have to sustain in consequence of this legislation, it is quite out of my power to give them any relief. The law not being uncertain, my only duty is to administer it such as I find it. This point is so clear that it ought not to be necessary to cite any authorities, but as it will not add much to this already lengthy judgment, I will quote two or three of them.
"'Though vested rights are divested, and acts which were perfectly lawful when done are subsequently made unlawful by a statute, those who have to interpret the law must give effect to it. And they are bound to do this even when they suspect or conjecture that the language does not faithfully express what was the real intention of the legislature when it passed the act, or would have been its intention if the specific case had been proposed to it'[9].
"Sedgwick[10] argues that the judiciary have no right whatever to set aside, to avoid, or nullify a law passed in relation to a subject within the scope of legislative authority on the ground that it conflicts with the notions of natural right, abstract justice, or sound morality.
"And Kent[11]—where it is said that if a statute is contrary to natural equity or reason, or repugnant, or impossible to be performed, the cases are understood to mean that the court is to give them a reasonable construction. They will not, out of respect and duty to the lawgiver, presume that every unjust or absurd consequence was within the contemplation of the law, but if it should be too palpable to meet with but one construction, there is no doubt in the English law of the efficacy of the statute.
"Blackstone—'If the parliament will positively enact a thing to be done which is unreasonable, I know of no power in the ordinary forms of the constitution that is vested with authority to contest it, and the examples usually alleged in support of this sense of the rule, do none of them prove that where the main object of a statute is unreasonable, the judges are at liberty to reject it for that reason, for that were to assert the judicial power above that of the legislature.'
"For these reasons I am forced to reject the proposition propounded that the effect of the legislation of 20 Vic., ch. 125, was to create an obligation on the part of the government to pay any arrears of interest of the debentures issued under the authority of 16 Vic., ch. 235.
"In conclusion, I am of opinion that 'the Quebec turnpike trust,' as it was constituted at the time of the passing of the act 16 Vic., ch. 235, was a public corporation charged with the execution, in the interest of the public, of great works of improvement.
"That the trustees of that trust, acting within the scope of their authority, did not incur any personal liabilities, but were the agents of the Crown. "That the roads, bridges and other property put under their control, were not vested in them as their property and were not liable to be levied against, because by the ordnance 4 Vic. ch. 17, they were declared to be the property of Her Majesty.
"That the said trustees in issuing, in conformity with the provisions of the act 16 Vic. ch. 235, debentures for the various loans therein mentioned, loans effected for the purpose of ameliorating properties declared to be vested in Her Majesty, and the proceeds of which were in fact employed in said improvements, were in law the agents of the government who thereby become liable.
"That independently of the obligation contracted as above by the trustees, under the special provisions contained in the above acts, viz.: 4 Vic ch. 17, 14 and 15 Vic. ch. 115, and 16 Vic. ch. 235, the government of Canada can be held liable for the repayment of the principal of the debentures, which amount is claimed by the present petition.
"That the suppliants have suffered losses by the alterations made in the law by 20 Vic. ch. 125, but that the liability of the government remains what it was and cannot be increased in consequence of said alterations, and therefore under the section seven the government should be declared free from all liability as to interest:
"That as the loans in question, at the time of the passing of the British North America Act, formed part of the liabilities of the late province of Canada, they have become, by virtue of the 111th section of said act, a debt and liability of the Dominion of Canada.
"And lastly, that the suppliants are entitled to the relief sought by their petition of right, to the amount of principal, without interest, but with costs of said petition." A motion was made on behalf of Her Majesty for an order calling upon the suppliants to show cause why a new trial should not be granted, or a rehearing or a review of the cause directed, or why the judgment for the suppliants herein should not be set aside and a judgment entered for Her Majesty upon the evidence adduced at the trial upon the following grounds:—
1. Because it had not been proved that the late province of Canada was ever liable for the amount awarded the suppliants by the judgment in this cause.
2. Because the said judgment was based upon the ground that the trustees of the Quebec North Shore Turnpike Trust, when issuing the debentures, the amount whereof is claimed by the suppliants, were acting as agents of the government, and that the said late province of Canada was then liable for their acts.
3. Because the said trustees never were agents of the government of the said late province of Canada.
4. Because the said trustees never had any authority to pledge the credit of the said late province of Canada to the payment either of the principal or of the interest of the said debentures.
5. Because the judgment rendered in this case on the 24th December, 1879, should have dismissed the petition herein of the suppliants.
6. Because the said judgment was contrary to the evidence adduced.
The court rejected the motion, and thereupon an appeal was taken to the Supreme Court of Canada.
The case was argued in the Supreme Court by Mr. Church, Q. C, and Mr. Langelier, Q. C., on behalf of the crown, and by Mr. Irvine, Q.C., and Mr. Dalton McCarthy, Q. C., on behalf of the respondents.
The arguments, authorities and statutes relied upon are fully reviewed in the judgments of the court. RITCHIE, C. J.:
So far back as the year 1796, an act, 86 Geo. 3, ch. 9, was passed in the then province of Lower Canada for making, repairing and altering the highways and bridges within that province. By this act it was provided that all the King's highways and public bridges should be made and repaired and kept up under the directions of the grand voyer of each and every district within the province, or his deputy: and the act provides that the occupiers of lands, whether proprietors or farmers, adjoining the King's highways called front roads, should make and keep in good repair the said highways and ditches upon the breadth of their said lands respectively, and also the bridges which are not declared by the proces verbaux of the grand voyers, or their deputies, to be such as ought to be kept in repair at the public expense. The act contained many provisions and regulations, but all were of a purely local character, and power was given to the justices, in their general quarter sessions of the peace, to hear, examine and determine matters and things relating to proces verbaux, that should be made in their districts; the subject of the care, management and regulation of highways being dealt with throughout the act as matter of local and municipal concern, the regulations as to the cities and parishes of Quebec and Montreal being dealt with in a different manner from the districts under the care of the grand voyer, but still as of a local and municipal character. This continued until the year 1841, when the governor of Lower Canada and special council, the then legislative authority of the province, under stat. 1 & 2 Vic., chap. 9, and 2 & 3 Vic., chap. 53, passed a certain ordinance, entitled "An ordinance to provide for the improvement of certain roads in the neighborhood of and leading to the city of Quebec and to raise a fund for that purpose."
That ordinance proceeded to enact that all powers, authorities, jurisdiction and control over or with regard to the roads therein mentioned, or any of them, which then vested in any magistrate, grand voyer, overseer of roads, or road surveyor or other road officer, by the said act passed in the thirty-sixth year of the reign of His said late Majesty George the Third, hereinbefore mentioned, or by any other act or ordinance or law whatever, or in any district council, should cease and determine from and after the time when the trustees authorized to be named by the said ordinance should assume the management, charge and control of the said roads; and further, that it should be lawful for the governor of the said province of Lower Canada, by letters patent, under the great seal of the province, at any time after the passing of the said ordinance, to appoint not less than five nor more than nine persons to be trustees for the purpose of opening, making and keeping in repair the roads in the said ordinance specified, and for acquiring property and estate, moveable and immoveable, which being so acquired, should vest in her Majesty for the public use of the province.
Suppliants allege in section 23 of their petition, that by 16 Vic., chap. 285, of province of Canada, the provisions of this ordinance of 1841 were extended to certain other roads, specifying them.
And by section 25, that the sum of £30,000 was authorized to be raised by way of loan, for which loan trustees issued debentures in the form prescribed by ordinance of 1841.
And by section 31, that the debentures so issued bore date between 22nd March, 1854, and 1st December, 1859, and fell due between the 2nd March, 1869, and 1st December, 1874. And by section 32, that by said 16 Vic, chap. 235, the provisions of the ordinance of 1841 were further extended to certain enumerated roads on the south shore of the St. Lawrence.
Section 33, that a further sum of £40,000 was by the said last mentioned act authorized to be raised for making, etc., these last mentioned roads on the south side, and trustees were empowered to issue debentures in the form prescribed by the ordinance of 1841.
And by section 34, allege that debentures were issued for £40,000, bearing date between 8th June, 1854, and 9th October, 1858. and fell due between 8th June, 1869, and 9th October, 1873.
Section 45, suppliants represent that they are bond fide holders of debentures issued for loan of £30,000, to the amount of £9,708 = $38,832 currency; and by section 46, that they are likewise bonâ fide holders of debentures issued for loan of £40,000, to the amount of £7,810 = $31,240 currency.
And by section 47 they further allege that these debentures having fallen due, no part of principal has been paid and the whole remains due, together with interest from 1st July, 1872.
And by section 48 suppliants allege that there was never any fund created for the payment at maturity of the said bonds and debentures, nor did there exist at any time in the hands of the said trustees (to wit the trustees of the Quebec turnpike roads, the Quebec north shore turnpike trustees and the Quebec south shore turnpike trustees) any fund whatever for the payment of the said bonds and debentures, nor does there exist now in the hands of the present trustees any fund or funds whatever for the payment of the same.
That the said bonds and debentures were debts and liabilities of the late province of Canada, at the time "The British North America Act 1867" came into force and the dominion of Canada came into existence.
That it is enacted by "The British North America Act 1867," as follows:
"Section 111.—Canada shall be liable for the debts and liabilities of each province existing at the union:'' that all debts and liabilities of the province of Canada existing at the union, whether due in connection with the turnpike trust, or from any and every other cause, were thus imposed on her Majesty's government of Canada for payment, and the imperial legislation which nullified the legal and political existence of the suppliants' debtor, the province of Canada, created in their favor a new debtor in her Majesty's government of Canada; which sums, amounting to $70,072, they now seek to recover in this proceeding.
The trustees appointed under this ordinance were, in my opinion, constituted a quasi-municipal corporation, not to represent the crown or the province, nor to act as agents for either, but to discharge municipal functions in the improvement and care of certain local roads: and to enable them to accomplish this were clothed with power to raise money by means of debentures on a certain specified security, and so to perform duties which up to the time of their incorporation had been discharged by the grand voyer with funds or means raised directly from the inhabitants of the districts through which the roads passed; and though these trustees may be consideded in the light of a public corporation, it by no means follows that the holders of such debentures have therefore a claim on the crown or on the general revenues of the country for payment of either principal or interest on their debentures. Though a public corporation, these trustees can act only within the scope of their legislative authority; they can bind neither the crown, the legislature, nor the public revenues, nor any person or fund beyond what the statute permits. To the contracts, as contained in the debentures and in the statutes authorizing their issue, must we look to discover the liabilities created and the fund or means which the legislature has provided for meeting such liabilities.
The question is not, have these suppliants in a moral or a political point of view a just and equitable claim on the province of Quebec, which should induce its legislature to make provision for indemnifying them for the money advanced, either by imposing the whole burthen on the whole province by granting the money from the general revenues of the province, or by authorizing a local assessment on the inhabitants of the districts more immediately benefited by the expenditure, and upon whom before the passing of the ordinance the legal burthen and liability rested, for the reparation and maintenance of the roads passing through their respective districts, either on the ground that the province or a part of it has practically received the benefit of the expenditure of the money so advanced, or on the ground that by subsequent legislation the security on which the loan was made was impaired, or on any other equitable ground which in foro conscientiœ ought to induce the legislature to protect or indemnify the suppliants, if the suppliants can make it appear that any such ground exists.
But the question we have to determine is simply and purely a legal one. Did these suppliants advance their money on the credit of the acts, and on the security of the tolls and means provided by the acts under the authority of which the debentures were issued, and rely on the funds and means so provided for their reimbursement? or was there in addition thereto a statutory contract or obligation (for there certainly was no other duty when the money was advanced) between the debenture holders and the crown or government of the province of Quebec, that the government would guarantee the sufficiency and proper management and distribution of the funds and means provided by the act, and in the event of such funds and means proving inadequate, or by reason of mismanagement or dereliction of duty on the part of the trustees insufficient, that the crown or government would provide the money to make good any such deficiency? For the. liability of the crown must, if the suppliants' contention is correct, be not only a liability to pay in the event of the tolls and revenues being themselves inadequate, but also should there be a misapplication of the tolls and revenues when collected, or a deficiency from a neglect to collect the tolls, or a loss of tolls by exemptions from payment of tolls contrary to express legislative provisions, or from other reasons; because, in this case, it appears there was a misapplication of some of the money and a neglect to enforce the payment of tolls by granting exemptions in direct defiance of legislation to the contrary, and neglect to collect from proprietors the amounts due and payable as provided by law; for we see that while by the ordinance the proprietors are required to commute by means of an annual sum, the book put in, to be used as evidence, states that it does not appear that this provision has ever been put into execution by the trustees. And again, by the 23 Vic. ch. 69, all exemptions are abolished, except funerals, but this same book says that the trustees have not acted on this statute, but have always acted as if this act had not been passed. By the same book £404 appears to have been misappropriated by the secretary of the trustees, and though judgment was obtained the book says no execution was ever issued or proceedings taken against his sureties. In other words, then, did the crown or government agree, in the event of the debentures not being paid at maturity by the trustees, to pay and discharge them? Did the legislature pledge the crown or the general province for the liquidation of these debentures? Or did the legislature create a fund to which alone the debenture holders were to look for payment of their interest and ultimately for the repayment of the principal sums advanced?
To ascertain this we must in the first instance look to 1 and 2 Vic. ch. 9, and 2 and 3 Vic. ch 53, for the authority of the Governor in Council, and to the ordinance of 4 Vic. ch. 17. By these acts it is provided, in 1 and 2 Vic. ch. 9, section 3, that it shall not be lawful by any such law or ordinance to impose any tax, duty, rate or impost, save only in so far as any tax, duty, rate or impost which at the passing of this act is payable within the province may be thereby continued.
By section 3 of the 2 and 3 Vic. ch. 53, so much of the 1 and 2 Vic. ch. 9 as provides that it shall not be lawful by any such law or ordinance as therein mentioned to impose any tax, duty, rate or impost, save only in so far as any tax, duty, rate or impost which at the passing of that act was payable within the said province of Lower Canada, or might be continued, shall be and the same is hereby repealed: Provided always, that it shall not be lawful for the said governor, with such advice and consent as aforesaid, to make any law or ordinance imposing or authorizing the imposition of any new tax, duty, rate or impost, except for carrying into effect local improvements within the said province of Lower Canada, or any district or other local division thereof, or for the establishment or maintenance of police or other objects of municipal government within any city, or town, or district, or other local division of the said province; provided also, that in every law or ordinance imposing or authorizing the imposition of any such new tax, duty, rate or impost, provision shall be made for the levying, receipt and appropriation thereof by such person or persons as shall be thereby appointed or designated for that purpose, but that no such new tax, rate, duty or impost shall be levied by, or made payable to the receiver-general, or any other public officer employed in the receipt of Her Majesty's ordinary revenue in the said province, nor shall any such law or ordinance as aforesaid provide for the appropriation of any such new tax, duty, rate or impost by the said governor, either with or without the advice of the executive council of the said province, or by the commissioners of Her Majesty's treasury, or by any other officer of the crown employed in the receipt of Her Majesty's ordinary revenue.
Here, then, we have the governor and council strictly limited to the imposition of charges for local and municipal purposes.
By the ordinance 4 Vic., ch. 17, the governor was, as has been stated, authorized by letters patent to appoint not less than five nor more than nine persons, who, and their successors, should be trustees for the purpose of making and keeping in repair the roads thereinafter specified.
Section 3 provides that these trustees might sue and be sued by a certain name and take and hold property and estate.
By section 9 the roads to and over which the provisions of the ordinance and the powers of the trustees should extend are specified.
Section 10 provides for the trustees exacting and receiving tolls. Sections 13, 15 and 16 provide for certain exemptions from payment of tolls, and authorize trustees to commute.
Section 17 authorizes tolls to be let by auction.
Section 18 provides that the roads are to be under the exclusive control of the trustees; and the powers of grand voyer, magistrates and road officers to cease, and that the tolls shall be applied exclusively to the purposes of the ordinance.
By section 19, parties bound by law to perform any labor on any of the said roads must commute by payment of an annual sum, with a proviso lor compelling commutation; and then we have section 21, authorizing the trustees to raise money by loan. That section is in these words:—
And be it further ordained, etc., that it shall be lawful for the said trustees, as soon after the passing of this ordinance as may be expedient, to raise by way of loan, on the credit and security of the tolls hereby authorized to be imposed, and of other monies which may come into the possession and be at the disposal of the said trustees under and by virtue of this ordinance, and not to be paid out of or be chargeable against the general revenue of this province, any sum or sums of money not exceeding in the whole twenty-five thousand pounds currency; and out of the monies so raised, as well as out of the monies which shall come into their hands, and which are not hereby directed to be applied solely to one special purpose, it shall be lawful for the said trustees to defray any expenses they are authorized to incur for the purposes of this ordinance.
And next sections 22 and 23 provide for the issue of debentures in these words:—
Section 22.—And be it further ordained, etc., that it shall be lawful for the said trustees to cause to be made out for such sum or sums of money as they may raise by loan as aforesaid, debentures in. the form contained in the schedule A., to this ordinance annexed, redeemable at such time or times (subject to the provisions herein made) as the said trustees shall think most safe and convenient; which said debentures shall be signed in the manner above provided for in the written acts relating to the said trust and shall be transferable by delivery.
Section 23—And be it further ordained, etc., that such debentures shall respectively bear interest at the rate therein mentioned; and such interest shall be made payable semi-annually, and may, at the discretion of the trustees, and with the express approval and sanction of the governor of this province, and not otherwise, exceed the rate of six per centum per annum, any law to the contrary notwithstanding, and shall be the lowest rate at which the said sum or sums to be loaned on any such debentures, shall be offered or can be obtained by the said trustees; such interest to be paid out of the tolls upon the said roads, or out of any other monies at the disposal of the trustees for the purposes of this ordinance.
The form given of the debenture is as follows:—
Certificate No
Currency. Quebec, 18
Certificate No.
Currency
We certify, that under the authority of the provincial ordinance of Lower Canada, passed in the fourth year of Her Majesty's reign, and intituled "An ordinance to provide for the improvement of certain roads in the neighborhood of and leading to the city of Quebec, and to raise a fund for that purpose," there has been borrowed and received from the sum of pounds currency, bearing interest from the date hereof at the rate of per cent.
Interest at per cent. 18
Interest on this certificate paid
Jan. 18 Receipt No.
July
per annum, payable half-yearly on the day of and on the day of which sum is reimbursable to the said or bearer hereof on the day of in the manner provided for by the provincial ordinance aforesaid.
Registered by ............................
............................ Trustees.
............................
Jan. 18
July
Jan. 18
July
Jan. 18
July
Jan. 18
It is difficult to understand how any lender or holder of debentures issued under the authority of this ordinance could be in any doubt as to the credit and security on which he loaned his money, or as to the fund to which he was to look for re-imbursement of principal and interest; still less could he have any doubt that he was not to be paid out of, or that his loan was not to be chargeable against, the general revenues of the province, but that his money was to be re-imbursable to him, or to the bearer of his debentures, in the manner provided for by the said ordinance; and these provisions but carry out the intention of the legislature as expressed in the preamble, which recites that:
Whereas the state of the roads hereinafter mentioned, in the neighborhood of and leading to the city of Quebec is such as to render their improvement an object of immediate and urgent necessity, and it is therefore expedient to provide means for effecting such improvement, and to create a fund for defraying the expense thereof and the expenses necessary for keeping the said roads in permanent repair.
And sections 26 and 27 seem to me to show very conclusively that the province was in no way involved in the transaction either as the principal, or as a surety, or guarantor, but that the legislature deals with the province as it would with an outsider wholly unconnected with the trustees, and in a manner wholly inconsistent with the relation of principal and agent which it is now put forward existed between the province and the trustees, wholly inconsistent with the idea of the government of the province being the borrower and liable for the repayment of the debentures. The sections are as follows:
Section 26.__And be it further ordained and enacted, that it shall be lawful for the governor for the time being, if he shall deem it expedient, at any time within three years from the passing of this ordinance, and not afterwards, to purchase for the public uses of this province, and from the said trustees, debentures to an amount not exceeding ten thousand pounds currency, and by warrant under his hand to authorize the receiver-general to pay to the said trustees, out of any unappropriated public monies in his hands, the sum secured by such debentures; the interest and principal of and on which shall be paid to the receiver-general by the said trustees, in the same manner and under the same provisions as are provided with regard to such payments to any lawful holder of such debentures, and being so paid, shall remain in the hands of the receiver-general, at the disposal of the legislative authority of the province for the time being.
Section 27 —And be it further ordained, &c., that if at any time it shall happen that the monies then in the hands of the said trustees shall be insufficient to enable the trustees to make any payment required or authorized to be made by this ordinance, all arrears of interest due on any debentures issued under the authority of this ordinance shall be paid by the said trustees before any part of the principal sum then due upon and secured by any such debenture shall be so paid; and if the deficiency be such that the funds then at the disposal of the trustees shall not be sufficient to pay such arrears of interest, it shall then be lawful for the governor for the time being, by warrant under his hand, to authorize the receiver-general to advance to the said trustees, out of any unappropriated monies in his hands, such sum of money as may, with the funds then at the disposal of the trustees, etc., be sufficient to pay such arrears of interest as aforesaid, and the amount so advanced shall be repaid by the said trustees to the receiver-general out of the sums to be commuted, levied and collected as aforesaid, and being so repaid, shall remain in the hands of the receiver-general at the disposal of the legislative authority of the province.
And sections 25 and 28 likewise show, I think, that the redemption of the debentures was to be by the trustees from the funds collected by them, and not by the government, nor from the provincial revenues.
These sections are as follows:
Section 25.—And be it further ordained, etc., that nothing herein contained shall prevent the said trustees from voluntarily redeeming any debentures, with the consent of the lawful holder thereof, at any time before such debentures shall be made redeemable, if the state of the funds of the said trustees shall be such as to warrant such redemption, and if the said trustees shall obtain the approval of the governor to such redemption.
Section 28.—And be it further ordained, etc., that over and above the sums which the said trustees are authorized by the preceding sections of this ordinance to raise by way of loan, it shall be lawful for the said trustees at any time, and as often as occasion may require, to raise in like manner such further sum or sums as may be necessary to enable them to pay. off the principal of any loan which they have bound themselves to repay at any certain time, and which the funds in their hands, or which will probably be in their hands, at such time and applicable to such repayment, shall appear insufficient to enable them to repay: Provided always, that any sum or sums raised under the authority of this section shall be applied solely to the purpose herein mentioned; that no such sum shall be borrowed without the approval of the governor of this province, and that the whole sum due by the said trustees under the debentures then unredeemed and issued under the authority of this ordinance shall in no case exceed thirty-five thousand pounds currency; and all the provisions of this ordinance touching the terms on which any shall be borrowed under the authority thereof by the trustees, the rate of interest payable thereon, the payment of such interest, the advance by the receiver-general of the sums necessary to enable the trustees to pay such interest, and the repayment of the sum so advanced, shall be extended to any sum or sums borrowed under the authority of this section.
I think nothing can be much more apparent than that the money to be raised under this ordinance was to be solely on the credit and security of the tolls and monies which might come into the possession and be at the disposal of the trustees by virtue of the ordinance, and not