Berlinquet v. The Queen

Berlinquet v. The Queen
Collection
Supreme Court Judgments
Date
1886-12-07
Report
(1886) 13 SCR 26
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
Berlinquet v. The Queen (1887) 13 SCR 26
Date: 1877-10-17
F. X. Berlinquet, et al, (Suppliants), Appellants
And
The Queen
Respondent
1883: Feb. 22; 1883: May 1; 1885: Dec. 9, 10, 11 & 12; 1886: Dec. 7; 1877: Oct. 17
Present—Sir W. J. Ritchie C.J., and Fournier, Henry, Taschereau and Gwynne JJ. (On the application to set down the appeal for hearing Strong J. was present.)
ON APPEAL FROM THE EXCHEQUER COURT OF CANADA.
Petition of Right—Intercolonial Railway Contract—31 V. c. 13 s. 18—Certificate of engineer a condition precedent to recover money for extra work—Forfeiture and penalty clauses—Setting down Exchequer appeal.
The suppliants agreed, by contracts under seal, dated 25th May, 1870, with the Intercolonial Railway Commissioners (authorized by 31 V. c. 13) to build, construct and complete sections three and six of the railway for a lump sum, for section three of $462,444, and for section six of $456,946.43.
The contract provided inter alia, that it should be distinctly understood, intended, and agreed that the said lump sum should be the price of, and be held to be full compensation for, all works embraced in or contemplated by the said contract, or which might be required in virtue of any of its provisions or by-laws, and the contractors should not, upon any pretext whatever, be entitled, by reason of any change, alteration or addition made in or to such works, or in the said plans or specifications, or by reason of any of the exercise of any of the powers vested in the Governor in Council by the said Act intituled, "An Act respecting the construction of the Intercolonial Railway," or in the commissioners or engineers by the said contract or by law, to claim or demand any further sum for extra work, or as damages or otherwise, the contractors thereby expressly waiving and abandoning all and every such claim or pretension, to all intents and purposes whatsoever, except as provided in the fourth section of the contract relating to alteration in the grade or line of location; and that the said contract and the said specification should be in all respects subject to the provisions of 31 Vic. ch. 13; that the works embraced in the contracts should be fully and entirely complete in every particular and given up under final certificates and to the satisfaction of the engineers on the 1st of July, 1871 (time being declared to be material and of the essence of the contract), and in default of such completion contractors should forfeit all right, claim, &c., to money due or percentage agreed to be retained, and to pay as liquidated damages $2,000 for each and every week for the time the work might remain uncompleted; that the commissioners upon giving seven clear days' notice, if the works were not progressing so as to ensure their completion within the time stipulated or in accordance with the contract, had power to take the works out of the hands of the contractors and complete the works at their expense; in such case the contractors were to forfeit all right to money due on the works and to the percentage returned.
On the 24th May, 1873, the contractors sent to the commissioners of the Intercolonial Railway a statement of claims showing there was due to them a large sum of money for extra work, and that until a satisfactory arrangement was arrived at they would be unable to proceed and complete the work.
Thereupon notices were served upon them, and the contracts were taken out of their hands and completed at the cost of the contractors by the Government.
In 1876 the contractors, by petition of right, claimed $523,000 for money bonâ fide paid, laid out and expended in and about the building and construction of said sections three and six, under the circumstances detailed in their petition.
The Crown denied the allegations of the petition, and pleaded that the suppliants were not entitled to any payment, except on the certificate of the engineer, and that the suppliants had been paid all that they obtained the engineer's certificate for, and in addition filed a counter claim for a sum of $159,982.57, as being due to the Crown under the terms of the contract, for moneys expended by the Commissioners over and above the bulk sums of the contract in completing said sections.
The case was tried in the Exchequer Court by J. T. Taschereau J., and he held that under the terms of the contract the only sums for which the suppliants might be entitled to relief were, 1st, $5,850 for interest upon and for the forbearance of divers large sums of money due and payable to them, and 2nd, $27,022.58, the value of plant and materials left with the government, but that these sums were forfeited under the terms of the clause three of the contract, and that no claim could be entered for extra work without the certificate of the engineer, and that the Crown were entitled to the sum of $159,953.51, as being the amount expended by the Crown to complete the work.
An appeal to the Supreme Court of Canada having been taken by the suppliant, it was
Held, affirming the judgment of the court below, Fournier and Henry JJ. dissenting, 1st. That by their contracts the suppliants had waived all claim for payment of extra work, 2nd. That the contractors not having previously obtained from, or been entitled to, a certificate from the Chief Engineer, as provided by 31 Vic. ch. 13 s. 18, for or on account of the money which they claimed, the petition of the suppliants was properly dismissed. 3rd. Under the terms of the contract, the work not having been completed within the time stipulated, or in accordance with the contract, the Commissioners had the power to take the contract out of the hands of the contractors and charge them with the extra cost of completing the same, but that in making up that amount the court below should have deducted the amount awarded for the value of the plant and materials taken over from the contracts by the Commissioners in June, 1873, viz: $27,022.58.
The circumstances under which this appeal was set down for hearing in 1883, although judgment in the Exchequer was delivered in 1877 appear in the judgment of Strong J. hereinafter given[1].
Appeal from the judgment of J. T. Taschereau J., in the Exchequer Court of Canada. The petition of right, the pleadings, and facts are fully set out in the judgments hereinafter given. The suppliants were represented in the Exchequer Court by M. A. Hearn, Q.C., G. Irvine, Q.C., F. Langelier Q.C., and the respondent by A. McLennan Q.C., Bell Q.C., F. X. Lemieux, A. F. McIntyre and E. Lareau.
The following is the judgment of the Exchequer Court delivered by
J. T. TASCHEREAU J.—"The petitioners, François Xavier Berlinguet, architect, and Charlotte Mailloux, his mother, associates and carrying on business under the name and firm of F. X. Berlinguet & Co., made on the 25th of May, 1870, with Her Majesty the Queen, represented by the commissioners appointed in virtue of the act of the parliament of Canada 31st Vic. ch. 13, two contracts for the building of sections Nos. 3 and 6 of the Intercolonial Railway, in consideration of the sum of $462,444 for section No. 3 and the sum of $456,946 for section No. 6. Section No. 3 is represented in the contract as having 24 miles in length or thereabout and section No. 6 as having a length of 21 miles.
"The petitioners having given up their contracts for the reasons mentioned in their petition, obtained from Her Majesty the permission to present this petition against the government of the Dominion of Canada. The indemnity they claim amounts to $523,000.
"Her Majesty, by and through her Attorney General for the Dominion of Canada, answered this demand by the pleadings which are contained in a document annexed to the present.
"The complaints of the petitioners are numerous, but they can be reduced to the following:—
"1. That there were no valid contracts between Her Majesty and the petitioners; that if ever such contracts existed, they were annihilated or modified by the fact that the petitioners had no communication of the plans and profiles nor of the bill of works; and, also, that the schedule of prices agreed upon was increased by orders in council;
"2. That the petitioners were compelled by the engineers employed by the commissioners to execute works quite different from those mentioned in the contracts, much more costly and much above the stipulations of the contracts:
"3. That the monthly estimates of progress made by the engineers were not carefully made and did not represent the quantity of work executed on the two sections, and that consequently their monthly . payments were much below the amounts, to which they were entitled;
"4. That they complained frequently to the Minister of Public Works and to the Commissioners and that in consequence of these complaints, the Minister of Public Works promised to indemnify them if they continued the works, assuring them that the abandonment of their works would be a great damage to the government as well as to the petitioners themselves;
"5. Moreover the petitioners claimed the said sum of $523,000 under the form of general indebitatus assumpsit for money advanced, materials furnished, labour supplied, &c., &c.
"In reply to the various complaints contained in the petition, Her Majesty produced the defence which has just been read and which can be reduced to a general denegation in fact and in law, with certain special allegations which I will mention later on, when I will discuss the complaints of the petitioners.
"1. The first question raised in the pleadings of the petitioners, and which I consider a very important one, is that of the existence or modification of the contracts, and also that of knowing whether without these contracts the petitioners have any right whatever against Her Majesty. I do not see any difficulty in deciding these first points.
"2. In fact, without being formally admitted by the petitioners as the basis of their petition of right, these contracts are nevertheless mentioned several times in this same petition as having been signed by them and are not actually repudiated by them, but upon the principle that they have not signed the plans which they consider as forming an essential part of these contracts. They nevertheless signed these contracts on the 25th of May, 1870, in presence of witnesses; the principal petitioner, Mr. Berlinguet, examined under oath, acknowledges his signature and that of his mother. Besides this the petitioners, in the whole course of their correspondence with the commissioners and the executive, have never repudiated these contracts nor pretended to repudiate them; they have never complained that the plans had not been signed by them and the commissioners; on the contrary, reference is constantly made to these contracts and these plans in stating that more was exacted from them than these contracts and these plans required.
"3. In the receipts which they gave upon the increase of the monthly estimates, they acknowledged that what they received should not be considered as conferring upon them a right to a final amount exceeding the price mentioned in their contract. They accepted the orders in council to that, effect, and touched the amounts without any protest or reservation whatever. All the officers, from Mr. Brydges in his capacity of one of the commissioners of the road, to the Minister of Public Works, the Hon. Mr. Langevin, Mr. Fleming, Chief Engineer, and others, agree in maintaining that it is out of the question to say that the contracts were extinguished or even modified, and that on the contrary they were always considered by themselves and by the petitioners as in full force.
"4. It is quite possible that the plans were not signed by the petitioners, or even by the commissioners. But this would not be a cause of nullity of the contracts; for it has been proved to my satisfaction by the evidence of Mr. Fleming himself, that these plans were lithographed and copied in extenso in Book B. Mr. Berlinguet himself testified that he used these lithographed copies to prepare his tender and acted accordingly. All these copies were distributed on the line deposited at the various stations and consulted by the petitioners. They (the petitioners) admit by their tender that they had seen those plans, the contracts they signed expressly mentioned that they signed them. They were bound to sign them, and if through negligence, forgetfulness or any other motive on their part, they have not done so, they have no right to allege this fact as voiding the contract.
"5. It is established that the originals of these plans were accidentally destroyed by fire in the office of the engineer-in-chief at the same time as many other public documents. By not signing the plans, the petitioners committed an act of negligence which they covered by accepting the lithographed copies of these plans, by consulting these copies and by using them not only to prepare their tenders and obtain their contracts, but also to execute the greatest part of their contracts. They formally overlooked this slight irregularity and have no interest nor right to take advantage of their own negligence. I therefore consider the contracts as in full force.
"6. If these contracts have been annulled, by what law, I ask, could the petitioners expect to succeed in the present case? The Public Works Act, 31st Vic. ch. 12, could not help the petitioners, for section 7 of this statute declares that "no deeds, contracts, documents or writings shall be deemed to be binding upon the department or shall be held to be acts of the said minister, unless signed and sealed by him or his deputy and countersigned by the secretary." The Act 31st Vic. ch. 13 secs. 16, 17 and 18 requires by a formal contract and enacts that no money shall be paid to any contractor until the chief engineer shall have certified that the work for or on account of which the same shall be claimed, has been duly executed nor until such certificate shall have been approved of by the Commissioners."
"7. The few conversations that the petitioners or their agents and bondsmen may have had with the Hon. Mr. Langevin, Minister of Public Works, cannot be interpreted as constituting new contracts or as modifying the contracts already existing, and especially as confering a right to a claim in the form of quantùm meruit. I will refer further on to these conversations with the Hon. Mr. Langevin. The circumstances that at a certain time the prices of certain works were increased by an order in council cannot be considered as a renunciation to the same modification, because this increase was only made to come temporarily to the help of the contractors and not at all with the view of changing or modifying the contracts, for it is said in this order in council dated the 28th July, 1871, that the total price of the contracts cannot be affected by this apparent increase.
"8. To give to this order in council the signification which the petitioners give to it, would be to place myself in manifest opposition to the Intercolonial Railway Act.
"And I say that the Governor in Council, even with the consent of the commissioners, could not increase the schedule of prices of the contracts and that any order in council in this direction would be illegal and unconstitutional. In fact the object of these two statutes, the Public Works Act and the Intercolonial Railway Act, is to prevent any useless expense, to protect government against any possible fraud and to prevent government from binding themselves in any other way than by the observance of certain formalities. Under such conditions only is the opening of the public chest permitted.
"In consequence, I consider that I must decide against the petitioners this first point of the annulling of the contracts or even of their mere modification.
"9. The second question to be considered is whether the contractors were victims of prejudice on the part of the engineers of their ill-will, and of the fact that these engineers exacted from them not only extra but even useless works, and much above the conditions and provisions of the contracts, and if the petitioners were retarded in their works by the refusal on the part of the government officers and engineers to furnish them the plans and specifications of certain works.
"According to the evidence given by Mr. Berlinguet himself, and of several witnesses heard on his behalf, it would at first sight appear that the petitioners have, at least in equity, great reasons for complaint if this evidence is not contradicted, and if the recourse of the petitioners is not taken away from them by the severe stipulations of the contracts and by the law which must govern these matters. I was at first so much impressed by the equitable appearance of the case of the petitioners, and by the peculiar conduct towards them of the district engineer and of several others, that I found in the conduct of the latter something shocking which required refutation and even explanation. I thought that there had been committed against the petitioners what the writers call a tortious breach of contract, even in a case where Her Majesty is interested as on a petition of right, such as refusing the plans, wilfully retarding the petitioners in the execution of the works, and exacting from them extravagant and useless works, and that was the reason why I refused to decide the case of the petitioners in as summary a manner as the defendant demanded by the motion of non suit presented to me nearly at the beginning of the case.
"10. I have not regretted the decision that I then gave, and do not regret it now. The authority which I followed in giving that decision is that which is to be found in the case of Churchward v. Queen[2], where Lord Cairns, representing Churchward in his petition of right, said: "The cause of action alleged is the "breach of the contract by refusing to employ, and is "not a mere tort, and the distinction is clear that though "for a tort, strictly so called, you cannot sue the crown, "yet for a tortious breach of contract a petition of "right may be maintained, and the cases of Tobin v. "Regina[3] and Feather v. Regina[4] are consistent "with this view. The distinction between tort and "tort founded on contract has always been kept up." To these remarks Sir Alexander Cockburn, Chief Justice, added that with the exception of all that the Attorney-Greneral might say, the court did not wish any other argument on this question. Evidently Chief Justice Cockburn acknowledged by those words a distinction to exist between the action for tort and the action for unjust execution or violation of a contract.
"11 I have now to decide the question of the unjust exaction of works and the charges brought against all the engineers, and particularly against Mr. Marcus Smith, who, from 1870 to the month of March, 1872, was district engineer for the sections No. 3 and No. 6, which are the subject of this case.
I have studied the present case with great care in its minutest details, and I confess that I had at first against Mr. Smith a strong prejudice which was equalled only by the deep sympathy which I felt for the petitioners. To-day I am happy to say that in my belief the charges of flagrant partiality, of ill-will and of personal interest brought against Mr. Smith are not founded, or rather, that these charges are greatly exaggerated.
Marcus Smith is an old engineer, having in railway building an experience of thirty years, acquired in Europe, Africa and America. He is (according to an irreproachable witness, Mr. Fleming), and according to Mr. Brydges and several others, a clever engineer, enjoying the confidence of his chiefs and incapable of giving himself up to the base and shameful acts imputed to him. All the engineers heard in this case, and even those examined on behalf of the petitioners, agree on this point. He is represented as an irascible but good hearted man. "His bark is worse than his bite," said one of the witnesses. Marcus Smith denied with an appearance of truth which I could not forget, the accusations of ill-will and partiality brought against him.
"12. He had to fulfil a duty involving an immense responsibility and on the conscientious execution of the works under his superintendence depended not only his character as an honest man and his reputation as a clever engineer, but perhaps the lives of several hundred persons, and being under this impression he probably thought it his duty to have the stipulations of the contract in question in this case carried out to the letter. He was bound to obey the orders of his chief, Mr. Fleming, with regard to the execution of all the works, and I have remarked and seen with pleasure in the voluminous correspondence which passed between him and his chief, Mr. Fleming, and his sub-engineers, the care which he took not only to foresee what work could be saved to the contractors, but also his desire to carry out the orders of his chief, Mr. Fleming, against whom, as I have already said, the petitioners have not a word of reproach. Mr. Fleming shows his appreciation of Mr. Marcus Smith, as follows: "A zealous, "faithful officer, as much so as any one in the service "of the government. I am aware he endeavored to "help the contractors as far as he legitimately could do. "His integrity is beyond question." And at page 51 D of his evidence Mr. Fleming, speaking of the difficulties between the contractors and Marcus Smith, says in substance: "He did not satisfy them, but he satisfied me. "I found no reason of complaint against him. I am "aware he endeavored to help them in many ways and "was not trying to oppress, destroy or break down the "contractors."
"13. It is established by the great majority of the engineers whether employed or not on these two sections, and by Mr. Brydges himself, that as a general rule contractors always complain that much more than what the specifications and contract require is demanded of them. There would be nothing wonderful that under the circumstances in which the contractors were placed during the first six months of their works with their expenditures exceeding their receipts, they should have thought that they were victims of the ill-will of Mr. Smith. Having no experience in such gigantic enterprises as that which they had just undertaken, they may have been blinded by fear when they began to realise their financial position and the losses they might incur on their contracts. Later on, on the 26th June, 1872, they sent to the commissioners a letter in which they completely made known their sad position I will by and by refer to this letter. "14. But as their reproaches from the commencement, were particularly directed against Mr. Smith, I must say that although it is pretty clearly established that Mr Smith had but little sympathy for the contractors, nevertheless the misunderstanding between them is not to be attributed to this lack of sympathy, but to quite another cause. My impression, or I should rather say my conviction, is that the cause of the lack of sympathy displayed by Mr. Smith towards the contractors may be attributed to the well settled opinion which he had formed of the inability of Mr. Berlinguet to execute two contracts undertaken by a man without practical experience and at a very low price. As an experienced engineer, he saw at a glance the false position occupied by Mr. Berlinguet. And as these same contracts had already been abandoned, he easily foresaw the impossibility for Mr Berlinguet to do better than his predecessors; he may have feared that in his capacity of district engineer the fault might be attributed to him Hence these frequent declarations of Mr. Smith: "The contracts will have to be re-let." If Mr. Smith exacted too much, the chief engineer and commissioners could and should have remedied this state of things.
"15. However, we see that Mr. Fleming and Mr. Brydges, who was more particularly charged with the superintendence, did not blame Mr. Smith, and agree in stating that the work was as well done as elsewhere, but is not better than on other sections; that in no way does the execution of the works by the contractors surpass what the contracts required, and Mr. Brydges states that several culverts are under what the specifications prescribed, and it is sufficient to say that the number of culverts was considerably reduced and modified, to the great profit of the contractors; to show that if Mr. Smith had wished to exercise an undue pressure on the contractors he only had to insist on the building of all these culverts. And we see in a letter of Mr. Fleming's, dated the 23rd May, 1870, and addressed to Mr. Smith, that the latter should not suppress one single culvert without having the written permission of Mr. Fleming.
"16. Mr. Fleming swears that the contractors gained $178,000 by divers reductions. These figures are eloquent and show that the engineers desired to favor the contractors. It is proved by Mr. Fleming, page 47 of his evidence, that he ordered the culverts to be built which were mentioned in the bill of works and which Mr. Smith had suppressed With regard to the culvert called "Robinson's culvert," about which there was so much trouble, Mr. Fleming insisted several times that it should not be suppressed, although the appearances were against its necessity, and in speaking of this culvert Messrs. Fleming and Smith cited a precedent nearly similar, where the suppression of a culvert was the cause of a very lamentable accident. Mr. Fleming swears that he ordered this "Robinson's culvert" after mature reflection, and would never consent to its suppression, and gave as his reason for so doing that the nature and conformation of the ground, being a gentle slope, might, as in the case above cited, absorb all the water after a heavy storm and thereby produce a ground slide to the destruction of the road and the great danger of travellers.
The opinion of Mr. Fleming is to be accepted as law in this, as in any other similar case. There can be no appeal from his decision to the detriment of Her Majesty. The contractors submitted to this condition in their contract, where it is expressed in very clear words in section No. 2 of this contract.
If Mr. Fleming acted in bad faith, there might probably be a recourse against him, and against him alone. Having by their contract accepted Mr. Fleming as their judge in the last resort, they cannot, in the present case, invoke that bad faith as against Her Majesty.
Such a stipulation in a contract may appear at first sight exorbitant, but upon consideration it becomes evident that without such a stipulation for the building of a railway of the proportions and importance of the Intercolonial, it could never be brought to a conclusion, as it would be stopped every moment by a dispute of some sort or other. The authorities found in the books, and of which a list is annexed to the present judgment, leave no doubt on this point.
"17. Mr. Smith has also been reproached with having exacted from the contractors a finish of the work in the preparation of the stone for the foundation of certain culverts and other structures, of first class instead of second class, requiring that for these structures cut stone should be used instead of hammer dressed. I confess that on this head the evidence is conflicting and may, at first sight, appear unfavorable to the engineers. But the engineers have explained and proved that stone cutters often prefer to use the chisel rather than the hammer in dressing stone for second class masonry, and, also, that certain kinds of stone for second class masonry is dressed with more facility with the chisel than with the hammer, and that these modes of dressing stone may lead to believe that first class masonry was exacted when second class masonry only should have been required. All the engineers state that this reproach is not grounded and that they never required first instead of second class masonry, and that if, now it were possible to discover the difference, it is to the stone cutters employed by the contractors and under their exclusive control that this reproach should be made and not to the engineers. Mr. Fleming and the commissioners saw these works and neither considered nor declared them to exceed the quality or class of work required by the contract—their opinion is law in this matter and must be accepted as such.
"18. Other subjects of reproach to the engineers have been their conduct in regard to the choice of the stone, the depth of the excavations necessary for the construction of arch-culverts and bridges, the inutility of break waters, the condemnation of the cement which the contractors desired to use, the building of fences, crossings and sideways; and a mass of more or less contradictory evidence is fyled in this case to prove how, in such cases, testimonial evidence can vary. On the one hand, we have seen the contractors with their friends and bondsmen supplying on these points testimony diametrically opposed to that of the engineers. A gainst the contractors, it may be said and believed that the immense interest they had in the final success of their case may have prejudiced and influenced them, while against the engineers it may be urged that they may have been influenced by the esprit de corps and the fear of being exposed to censure by their superiors. All things being equal, I must place more confidence in the testimony of educated men, having at heart the honor of their profession and, strictly speaking, no pecuniary interest at stake, than in that of the contractors and of their securities, however honorable these persons may be, for the most of them are interested, and it is well known that interest blinds the most honest and the most truthful.
"19. As regards the choice of the stone in the quarries, the depth of the excavations required for the masonry works of bridges and arch-culverts, the inutility of breakwaters, and the condemnation of the cement which the contractors desired to use. I must in preference believe the man of art, the engineer, whose noble profession has placed him in a position better to appreciate the requirements of the execution of such works as to the durability and security of the road. Now what do these engineers say? They say that all the complaints of the contractors on these heads are groundless, and, according to me, the engineers have completely justified their opinion. Moreover, the 2nd clause of the contract is there to remind us that the judgment of the commissioners and engineer-in-chief, having approved of the execution of the works, is final. It appeared to me that the choice of the stone, the depth of the excavations, the quality of hydraulic cement, the necessity for the breakwaters, are matters of the highest importance, and are subject to the exclusive control of the engineers in charge of the different sections, acting under the instructions of the chief engineer: any deviation from their instructions might be fatal to the safety of the road, give rise to accidents, considerably increase the expense of repairs and occasion injurious delays to traffic.
"20. I understand that an engineer, rather rough, relying on his superior position, would not easily condescend to a discussion in order to convince a contractor of the necessity of such or such a work mentioned in the bill of works by the engineer-in-chief; on the contrary, he would give his orders in a peremptory manner, without appeal and almost in military style; hence, most probably, arose in the minds of the contractors, the idea that Mr. Smith wished to rain them. I cannot deny that this man was overbearing and imperious in ordering even the most ordinary work, but there is a great distance between this and the guilty and well determined desire imputed to him of ruining poor contractors, and all because they were French-Canadians. There is no doubt that Mr. Smith was very hard towards the contractors as regards the building of the fences, cross-roads and avenues to the line. However, these fences, cross-roads and avenues were not beyond the specifications of the contract, since neither the engineer-in-chief nor the commissioners listened with favor to the complaints of the contractors on these points, but declared that none of the works done were in excess of the specifications, and that, on the contrary, there were culverts the backing of which was built of stone of a quality inferior to that mentioned in the specifications. It is true that on some other sections of the Intercolonial section-engineers tolerated things which Mr. Smith and his subordinates would not accept, as regards fences, cross-roads and avenues of the line; this excess of liberality may have been justified by extrinsic circumstances; they may have been blamed. Therefore it may be said that Mr. Smith had not to take for his guidance what was done elsewhere, but that having to superintend the execution of a written contract, for which he was responsible to his superiors, he was justifiable in having it executed to the letter.
"21. The contractors have laid great stress on the fact that in consequence of their complaints to the Commissioners one Mr. Schrieber was appointed to enquire into them, and that this gentleman, after visiting the line, made a report, in consequence of which an Order in Council was passed to increase the schedule of prices of certain works and an additional sum of $20,000 above the preceding estimates was paid to the contractors, who inferred from that that Mr. Schrieber had decided in their favor. But they did not then see Vr. Schrieber's report, and it was only lately, after the publication of the printed correspondence, that they discovered their error, and that Mr Schrieber explains the cause of the disappointment of the contractors with regard to the difference between the outlay they incurred and the monthly estimates to which they were entitled.
Here is an extract from Mr. Schrieber's report, which is to be found at page 110 of the printed correspondence, dated the 11th March, 1871:—
"The contractors appear to be willing to do what "they can; but I fear unless they employ a thoroughly "experienced agent to manage the details for them, and "take general charge, they will plunge themselves into "difficulty. The work in the quarries, it is only too "transparent, is being carried on at an extravagant "cost, many men who are cutting stone evidently "having never before handled a tool, whereas others "whom I know to be good for stone cutters are employed "upon granite and vice versâ. Besides this, there "are other irregularities, all tending to enhance the "cost of the work. This certainly is not an indication "of sound economical management. The certificates "of the cost of stone cutting and building masonry "upon these sections hereto attached are rather startling "documents and tend to explain in some measure "how it is the expenditure is so far in excess of the "engineers' monthly certificates. Unless all this is "changed I fear it would be vain to hope for the contracts "being carried through satisfactorily. There is "no margin in the price to allow for this management. "It is only by the most stringent economy the work "could be carried out. The contractors by stating they "can complete the work in time expose their want of "knowledge of such works, and, I think, lay themselves "open to the charge of want of experience in such "works. I, however, believe them to be thoroughly "honest in their intentions and ready to do all in their "power to complete the contracts; but, I repeat, they "need to employ a thoroughly competent honest man "as agent; one who is prepared to devote his whole "time and attention to their interest and conduct the "work with economy. It is a large piece of work, "requiring a man of considerable capacity to manage "it."
The same opinions are again expressed by Mr. Schrieber in his letter of the 23rd of March, 1871, No. 255 of the printed correspondence, where he foresees that the contractors having neglected their works and masonry, will soon be embarrassed and that years must still elapse before they can complete their contracts.
"22. As can be seen, this report explains to a great extent the losses suffered and the expenses incurred by the contractors during the short period of six months, dating from the commencement of the works. If this report was not immediately communicated to the contractors, I say that it was a very regrettable omission; but it is hardly credible that the Commissioners did not do so. However, we see that after this report the contractors received pretty considerable sums without the formality of the certificate of the chief engineer, and these sums were over and above the monthly estimates.
"23. The contractors have also reproached the engineers with having compelled them three successive times to lay deeper foundations for a considerable and costly structure destined to support an immense weight. They make this reproach as if the engineer charged with the superintendence of the building of that structure could have at first sight finally determined the necessary depth. Common sense teaches that it is only by degrees and by feeling his way that the engineer can arrive at a degree of certainty with regard to the sufficiency of the depth of the foundations. I even say that if he had at first been mistaken, and believed that he had found a sufficient foundation and ordered the building of the structure on such foundation, he had a right to set his first decision aside, order the works done to be removed and the contractors to increase the depth. The stipulations of the contract justify this view and also justify the engineers. I may even say that the engineers were obliged to act in this manner if they were convinced that the depth was not sufficient. I find nothing in the evidence to induce me to say that the engineers acted in bad faith in this case. As professional men and as engineers, they had a right to act in this way with regard to such important structures. I say the same with regard to breakwaters, the building of which at some places, is by some of the witnesses considered as to be perfectly useless, and as putting the contractors to very great expense.
"24. With regard to the cement which the contractors desired to use for their works, a long, very contradictory, and for the court, a tolerably embarrassing investigation took place. On several works, the contractors were obliged to use a great quantity of hydraulic cement, an article which fills an important place in the construction of solid foundations destined to bear an immense weight. On its good or bad quality depends the security of those structures. Section 37 of the stipulations of the contract requires that this cement shall be "fresh ground, of the best brand, and must be "delivered on the ground and kept, till used, in good "order. Before being used, satisfactory proof must be "afforded the engineer of its hydraulic properties, as "no inferior cement will be allowed." The contractors submitted to all these conditions, and according to the contracts, the opinion of the engineers was to settle all difficulties between the contractors and the government with regard to the quality of the cement and to its use. Notwithstanding the conflict of evidence, I do not see that the engineers have in this regard committed any evident injustice. On one occasion the order, or rather the advice, given by the engineer to throw into the water a great number of barrels of this cement, appeared to me rather arbitrary till I had heard the explanations of the defendant, tending to show that after trying several barrels of this cement the engineers were convinced of its bad quality and that notwithstanding the order not to use it, the contractors persisted in doing so, and that in consequence of this, in order to avoid any difficulty, it was suggested to them to throw away this cement, which was already old, having been brought to the spot by the former contractors, and that as an easy way to do it, these barrels of cement were thrown into the water by the contractors themselves. Let us remark that the cement so thrown into the water was not the property of the petitioners, but the property of their predecessors, who had given up their contract. In fact this cement might also be considered as the property of the government according to the stipulations of the contract.
The contractors desired to use this cement and purchase it at a cheap price and the government would have sold it, had it not been dangerous to use it. Strictly speaking, the petitioners did of their own accord follow the advice or order to throw away this cement. Nothing obliged them to cast it into the water; they could have put it outside of the line of neutral ground, with the right of using it later on, one way or another. By destroying it as they did, they justified the opinion which the engineers had formed of its bad quality It is proved that it is better not to use hydraulic cement at all than to use such cement of bad quality.
25 The petitioners have not forgotten to allege that they did extra works; but, besides the fact that I do not consider these extras as proved, there is against them on this point an insuperable obstacle found in sections 4 and 9 of the contract, which declare expressly that no extra shall be admitted in their favor, unless it was demanded in writing and certified and approved by the chief engineer: and there is no such certificate.
Legally they cannot claim these extras. They have expressly and unconditionally renounced them. How could I come to their rescue without placing myself in direct opposition to the law? But if the petitioners have not forgotten to put forward and claim extras, they have omitted to acknowledge the considerable reduction made in their works by the engineers, such as the suppression of culverts, the substitution of iron tubes for culverts, of wood for iron in the great masses of masonry, and it has been proved that these charges and suppressions were a cause of considerable gain to the contractors, who doubtless forgot these favorable circumstances.
The petitioners also forget to acknowledge that the few changes which they made in the height of the grades were compensated by the rock excavations which they would have been obliged to make to maintain the level of the road and that this apparent increase was evidently all to their advantage. Moreover the contract declares that to have a right to claim these extras, the petitioners must obtain, for this end, the certificate of the chief engineer; the engineer would not grant this certificate and the conclusion is that the petitioners had no right to such extras, at least legally speaking.
"26. According to the evidence given by Mr. Fleming, engineer-in-chief, the only cases in which the works required of the petitioners exceeded the quantities determined are those of the bridges on the Miramichi and Restigouche rivers; he says that every where else the quantities determined and required to be executed really exceeded what was done, and this was a great benefit for the contractors, as Mr. Fleming says page 540 of his evidence: "We wanted to err on the right side, in favor of the contractors." The petitioners complained of having been delayed in their works in consequence of the engineers not supplying them with the plans of the various constructions. But Mr. Fleming and all the other engineers state that the general plans which the petitioners had to consult, and were at liberty to consult every day, were sufficient for the generality of cases, and that the plans only of structures requiring strong and deep foundations did not exist, and that in fact these latter plans should be prepared only after the excavations have been completed and the nature of the structure well determined, and that the engineer is satisfied when the contractors have materials in sufficient quantity to commence the structure. This is strictly enforced and is well established by several engineers, and it appears to me that there is much in this pretention of the engineers.
"27. I now come to the serious reproaches made by the petitioners against Mr. Smith, of having, in a conversation with Captain Armstrong and in another with Mr. John Home, behaved himself in a most singular manner, in a way calculated to throw much discredit on his own honor and honesty. According to Captain Armstrong, Mr. Smith told him in a conversation regarding the small amount of the monthly payments received by the contractors: They got all they deserved or were entitled to." Upon Mr. Armstrong remarking to him (Smith) that it was very hard for the contractors to receive barely enough to pay their men, Smith replied: "I sent in a contract for this same section for my friends "in England, and if they had got it, they would have "had plenty of funds to carry on the business without "drawing on the government until it was finished." And Mr. Smith is said to have added: "These d——d "little Canadians are the cause of my not getting it" (the contract). Mr, Armstrong says that Mr. Smith did not mention to him the names of his friends. Mr. Armstrong asked him besides: "How could you have acted as engineer?" Smith replied: "I should have "resigned my situation and gone on with the works."
According to Mr. John Home, Mr. Smith addressed the following words to him, with regard to the advice he (Smith) gave to the petitioners of employing one Davey as superintendent: "If Davey is here, it is just "as easy for him to save you a half million dollars as 'anything at all and without any disparagement to the "government. The government will not have anything "to find fault with the road and you will get quit of the "Frenchmen that don't know anything at all about "building the road." He said "if they (Berlinguet) "want to get the credit of the work, let them go to salt "water and they would have the credit of the work, but "let them keep their tongue quiet. And he said: "I "will not sell myself to the Frenchmen."
It is only just to say that Mr. Smith denied energetically having used such words as these. It is also certain, as far as I can recollect the evidence, that no tender for these sections was sent out from England. But the accusation is serious, and it appears singular to me that Mr. Smith should have thus, deliberately, expressed such opinions, especially in presence of witnesses who were devoted friends of the contractors and employed by them.
"28. Moreover, he must have foreseen that his superiors would ask him for an explanation of his conduct and of his giving up the position of district engineer to take a contract. To suppose that this ignominious conduct on the part of Mr. Smith is possible, we must believe that he would have given up a good reputation of thirty years' standing and a lucrative situation in order to run the risk of certain ruin by such contracts. Such conduct can hardly be reconciled with the highly honorable character which the engineers, Messrs Fleming, Brydges, Grant and other witnesses have given him. "His honesty is beyond doubt," said Mr. Fleming. The idea that an engineer could gain half a million dollars out of such an enterprise seems to me rather exaggerated. Mr. Smith, it is true, may be greatly interested in denying such accusations which affect his moral character if they are well founded. On the other hand, the circumstances which I had occasion to observe in this case led me to believe that Mr. Armstrong, who is a very old man, and Mr. Home may have been completely mistaken as to the bearing of the above mentioned conversations. The repeated reading of their evidence with attention convinces me that there was misunderstanding, although the honorable character of the witnesses is acknowledged.
"29. But supposing these conversations were reported verbatim by the witnesses, what do they prove? Undoubtedly they prove that Smith had no sympathy for the contractors; that the contractors had neither the experience nor the aptitude for carrying out this enterprise; that they ruined themselves on it; that an intelligent manager like Mr. Davey could alone have rescued them from their difficulty.
In spite of his ill-will, Mr. Smith gave a good advice to the contractors, that of employing Mr. Davey as superintendent and as the only one capable of saving them from shipwreck. Such was the opinion of Mr. Schrieber, which we have read a moment ago, and of more than twenty witnesses heard in the case There is a wide difference between lack of sympathy and a fixed determination to ruin the contractors. The evidence proves that Mr. Berlinguet and Mr. Smith were on the best and most intimate terms; they travelled together, met to spend the night together, exchanged courtesies, joked and laughed pretty frequently, it is true sometimes at Mr. Berlinguet's expense in regard to his capacity and experience in building railways, which Mr. Smith denied even in the presence of Mr. Berlinguet Mr. Bertrand, Mr. Berlinguet's partner, used to join in those jokes, saying that he, Bertrand built churches and that Berlinguet built the occupants thereof, that is to say the statues of saints which were to adorn the churches.
"30. The long correspondence between Mr. Smith and the chief engineer, Mr. Fleming, and other engineers, shows a desire to favor the contractors, instead of an intention of ruining them. I say the same of Mr Bell, who, in 1872, succeeded Mr. Smith as district engineer. I sincerely believe that the accusations of ill-will for the contractors on the part of Mr. Smith is groundless, except, as I have already remarked, that he may have been prejudiced against Mr. Berlinguet on account of his (Berlinguet's) absolute want of experience and of the conviction he had of Mr. Berlinguet's inability to carry out his contract.
The proof convinces me that Mr. Smith and his colleagues conceded many things to the contractors where they could do so without injuring the road, and that they exacted "the pound of flesh," as one of the witnesses said, that is the full and integral execution of the works, where they thought this full execution necessary. Moreover, they had to superintend the execution of a detailed contract; they were under a chief and a superintendent in the person of Mr. Fleming, chief engineer, and under as many masters as there were commissioners, who were four in number. All these high and learned authorities approved the conduct of Mr. Smith, and I would not dare to say that they acted wrongly, legally speaking.
"31 The engineers have been reproached with having obliged the contractors, without necessity and at considerable cost, to macadamise the crossings and sideways of the road. This is denied by the engineers in the most positive manner. The engineer-in-chief did not blame this use of broken stone for crossings if, at all events, it is true that the contractors were compelled to macadamize those crossings, and from this I infer: either that the engineers did not require these roads to be macadamised, or that it was rendered necessary, on account of the nature of the ground, for the solidity of the road, and in this case there might be no recourse against the government, unless the work was certified by the chief engineer.
The complaints which the contractors thought proper to prefer to the commissioners have all been considered and decided by the latter, according to the evidence given by Mr. Brydges, and redress was given when the complaints were well founded. Properly speaking, it was only about the month of March, 1872, that the contractors complained with bitterness of Mr. Smith, and it was in consequence of these complaints that the commissioners thought fit to recall Mr. Smith and replace him by Mr. Bell.
Having succeeded according to their wishes in obtaining the removal of Mr. Smith as district engineer, the contractors naturally inferred from this that the commissioners were disposed to render them justice, that their complaints were well founded, and that under an engineer more favorably disposed toward them their position and finances would be much improved in the form of monthly estimates. Let us remark, with regard to the recall of Mr. Smith, that on leaving he was promoted to a higher position on the Pacific Railway, with an increase of salary, a position which was inferior only to that of Mr. Fleming, the chief engineer. Therefore, if this was intended to cast blame on Mr. Smith and to punish him for his conduct towards the petitioners, I have reason to believe that such a punishment was not very hard upon him. The Hon. Mr. Langevin said he did not understand from the Commissioners that they had any reproach to make against him.
"32. Mr. Smith having been replaced the contractors continued their works with new vigor However, three months after, that is on the 26th of June, 1872, they addressed to the Commissioners a long memorial, which is found under No. 607 of printed documents, in which they describe in lugubrious language their financial position—I might almost say their bankruptcy and incapacity of continuing their works without a grant or increase of their monthly payments These must have been heard, for over and above their monthly estimates they received for the months of August and September, 1872, on account of sections 3 and 6, a sum of $65,000.
There is under No. 640 of printed correspondence a letter from the bondsmen of the contractors, Messrs. Glover & Fry and Dunn & Home, in which they complain of the feebleness of their estimates as compared to the quantity of works which they pretended to have considerably increased. Nevertheless, Mr. Smith had left the road over three months, and in order to give an appearance of reason to the contractors regarding this new deficit, we would have to suppose that all the engineers conspired against the contractors in making false returns and diminishing their monthly estimates. In consequence of this letter and of the complaints of the petitioners, an engineer (Mr. Fitzgerald) employed by the government, after visiting the works made, on the 17th of August, 1872, a report intended to establish the quantities of work done. According to this report, in or about August, 1872, there remained only about 34 per cent. of the work to be done, and deducting in favor of the contractors the value of their materials, the work done could be estimated at 75 per cent The perusal of the evidence of Mr. Fitzgerald did not at all convince me of the exactness of his calculations. He made this report at the pressing solicitation of the government, who desired to come to the assistance of the contractors, and the consequence of this report was, 1st. An increase of his salary by the government; 2nd. The payment of a sum of $400 or $500 made to him by the contractors for his report.
"33. This engineer is thus paid not only by government who employed him, but also by the contractors, who were not obliged to pay him. There seems to be something irregular in this I think that by overhauling the accounts to date of August, 1872, and by comparing the receipts of the contractors with their estimates, it would be seen that even if there remained only 25 per cent. of the works to be executed, the contractors had already received over and above their monthly estimates. However the contractors, upon the calculations of Mr. Fitzgerald, demanded, on the 4th of September, 1872, a grant of $150,000. The government allowed them only $34,545 for section No. 3, $19,342 for section No. 6 and $42,689 for sections 9 and 10 which are not in question in the present case. These sums were granted upon the report of Mr. Fitzgerald, and despite of the fact that the government might and should have kept back $137,000 at least for the 15 per cent. mentioned in the contract. It is then impossible to admit that the contractors were ill-treated by the commissioners or by the government. On the contrary, they had all the sympathies of both, if I am to judge: 1o. By documents 97 and 98 to which I will refer in a moment and 2o. by the $160,000, which were paid to the contractors in 1871 and 1872 without the certificate of the chief engineer, Mr. Fleming, which was strictly required in virtue of the Intercolonial Railway Act.
"34. The petitioners have made an infinity of complaints against the engineers. It would be tiresome to enumerate them; there would be no end to the task. I have carefully examined these complaints, and I find that with very few exceptions, the proof of the petitioners was refuted by the proof made on the part of Her Majesty. But I state it with regret, the contract constitutes the law, the contractors submitted to all its clauses, they renounced every claim for extras, and all damages, they agreed to submit without appeal to all decisions of the commissioners and of the chief engineer, and it is my imperative duty not to make new contracts for the petitioners, but to see that those are executed which they signed, however severe their terms may be. For them as well as for me, dura lex, sed lex.
"35. I must not overlook one of the greatest grievances put forward by the petitioners, that is the reproach which they make to the government of Her Majesty with regard to the insufficiency of the quantities and the nature of the works to be executed. This grievance may be partially founded in fact, but it has no foundation in law. For if I am to believe the testimony of Mr. Fleming the quantities mentioned in the bill of works were liberally calculated and this was in the interest of contractors who were to have the benefit of the excess, and it was proved to my satisfaction that with the exception of the works at the Ristigouche and Miramichi rivers, where the works actually executed exceeded the quantities given, which was to the great benefit of the contractors. At law, the contractors cannot demand the value of this excess; they in advance renounced all claims of such a nature and nowhere in the contracts and stipulations do I find on the part of the commissioners any stipulation which would warrant such a claim; on the contrary, we find a formal denial of the right to any such extras.
I interpret these contracts as having to be executed for a block sum by the contractors, who were to benefit when the quantities should exceed the work and suffer from excess of the work without right to indemnify, should the work exceed the quantities. In order to justify this demand for indemnity on the part of the contractors, it would be necessary to find in the contract an express guarantee of the quantities. The plans, bill of works and specifications are there to attest that the government could and should guarantee no quantities, &c., &c.; they mention that the calculations are merely approximative and without guarantee. All this should have at first put the contractors on their guard. If they were mistaken they were willingly mistaken, and to them we can apply the maxim: Volenti non fit injuria.
"36 They must therefore blame themselves, and themselves alone, for the consequence arising from a surplus of quantities of the works to be executed, if such surplus did really exist, which I do not believe. Admitting, for a moment, that the contractors had to execute much more work than the bill of works mentioned and that they suffered damages on account of this, I must declare that I do not find any basis to estimate such damages. On this point the proof is vague and even of no value whatever. Supposing, moreover, that the proof was clear, all indemnity should be refused to the contractors in consequence of the clauses so onerous and so strict of the contract by which they (the contractors) renounced all damages, all extras, and even the balance due to them, if they gave up their contract or did not complete it in the time prescribed. These stipulations are excessively severe; they are the law governing the parties thereto, who submitted to them with their eyes open. Dura lex, sed Lex, as I said above. Nevertheless, in the course of my deliberations the following question often presented itself to me:—
"37. "How is it that the petitioners have suffered so great a loss as they tell us they have experienced by the execution of their contract?" and I came to the conclusion that the record of the case explains this result:
I. The petitioners had no practical experience to guide them in their tenders to obtain the contracts, and subsequently in the execution of the works. One of the petitioners is a respectable lady having not the slightest knowledge of the building of a railway; the other, Mr. F. X. Berlinguet, is undoubtedly a man of great intelligence, of physical and mental activity, altogether exceptional, indefatigable, but without theoretical or practical experience of the construction of works so much out of his ordinary line.
"38. II. Before tendering Mr. Berlinguet had never been on the line, on the spot where the railway which he tendered was to be built, and had he visited the line he would have acquired only superficial knowledge of the works, as the road was covered with snow and the time for sending in his tender was comparatively very short. Mr. Fleming, page 9 D of his evidence, clearly explains that the shortness of the time prescribed for sending in the tenders deprived the parties who made them of any hope of reasonable calculations, and as to the possibility of completing the works in the time prescribed by the contracts, he says: "I think it ought "not to have been attempted. I am not prepared to "say it was impossible to do it, but it would have "required a lavish expenditure." Wherefore it was imprudent on the part of Mr. Berlinguet to have undertaken such contracts on information so very uncertain. He, however, ran the risk, and the consequence is probably the present contestation.
"39. III. The petitioners themselves have taken the trouble to throw light on the causes of their want of success in the execution of their contract through their letter dated the 26th June, 1872 (Nos. 605, 607 of Printed Correspondence), which letter they addressed to the commissioners, and in which they attributed their losses: 1st. To an increase of wages, which in some cases amounted to 50 per cent., and this in consequence of the great demand for workmen in the United States and in Canada, which is an important item when we consider that the contractors had sometimes to employ and pay 2,500 men. 2nd. They attribute their losses, besides this increase of wages, to the inferiority of local workmen, who were inefficient and not accustomed to such works; they represent that these workmen left their work when the time for farming came round, and this at the time when the petitioners were in the greatest need of them, thereby increasing the expenditure by obliging the contractors to keep in continual employ and pay a larger number of workmen. 3rd. They attribute their losses to the fact that not finding skilful workmen in the country, they were obliged to import them at a great cost from without the province, and to pay for their passage hither; and that in many cases these workmen, whose passages they had paid, refused to work after their arrival.
IV. They attribute their losses to great expenditure incurred on account of shed building and other expenditures on which they were obliged to pay interest.
V. They attribute their great expenditure to the difficulty they had in finding quarries of good stone, for the great depth of the excavations required to lay the foundations of heavy structures.
VI. They say that they incurred a heavy loss in consequence of the failure of the crop in 1870, on the purchase of hay and grain required for their horses, which obliged them to import these articles from distances varying from 300 to 500 miles.
VII. They say that on account of the distance of the locality and want of easy communications, they were obliged to lay in a stock of provisions sometimes 3 or 8 months in advance, which involved a great loss of interest.
VIII. In this letter they acknowledge that having undertaken the contract during the winter season, they had no opportunity of examining the locality. Mr. Brydges, a man of great practical experience, says: "The works were carried on extravagantly and that "necessarily would account to a large extent for their "getting behind." Vide pages 201, 202 of his evidence. Other witnesses speak in plain words of the indolence, laziness and negligence of the foremen employed by the contractors. Walking bosses had to overlook tracts too extensive to enable them to do so efficiently, although they were competent men.
"40. We therefore have the important and irrefutable acknowledgment on the part of the petitioners that they suffered heavy losses for the reasons mentioned above and which might alone account for their want of success. It is true that the petitioners also impute their losses to the engineers and masonry inspectors, who, according to the pretentions of the former, exacted first class masonry from the contractors who were only bound to supply second class masonry. Well, we have seen that the chief engineer, the commissioners, a district and division engineers positively denied these ascertions, and I believe, gave sufficient explanation on this point. In virtue of his contract, Mr. Berlinguet was. under heavy penalties, bound to complete his works and deliver them on the 1st of July, 1871. It is proved by Mr. Fleming that it was impossible to do so within the time prescribed without incurring a lavish expenditure. By the way, let us remark that Mr. Fleming had prepared for the information of the government, as his duty required him to do, an estimate of the probable minimum and maximum cost of 3 and 6. The minimum cost was $530,000 for section No. 3 and $493,666 for section No. 6, making a total of $1,023,666, and notwithstanding this, the tenders of the petitioners for these two sections amounted in the aggregate only to $819,390, so that the amount of their tenders was by $104,000 lower than the sum for which the chief engineer believed that the work could be executed, and we also see that the maximum cost was estimated at $1,320,000. I think these figures show the imprudence of the petitioners and account to a large extent for their failure. The petitioners, having no experience, it is true, but desiring to complete their contracts, incurred extraordinary expense and this also would account for their stoppage.
It appears to me that Mr. Berlinguet showed an unlimited want of foresight or rather very great ignorance of the cost and difficulty attending the building of a railway.
"41. I notice in document 606 the fact that the contractors relied much on the good will and sympathy of the government, and I believe that there is evident proof that neither the one nor the other was withheld from them, for, as we have already seen, upon the report of Mr. Schrieber, which was not at all favorable to the contractors, they succeeded in obtaining a sum of $160,400 without the certificate of the engineer, which was strictly required by the Intercolonial Railway Act. However Mr. Brydges and Mr. Fleming state that at the time of the abandonment of their contracts, the contractors had already received much more than the value of the works which they had executed, and this, notwithstanding the fact of a reduction of $178,000 in their favor, in all the works on sections 3 and 6, less an increase, however, on some bridges and culverts at Miramich and Restigouche rivers.
Now it is time to enquire to what extent and in what manner the petitioners have proved the amount of their expenditure to the date of the abandonment of their contracts. According to statements produced with their petition of right, the contractors show an expenditure for works on section No. 3 of a sum of $609,482.51, and on section No. 6 $596,022.68, making an aggregate of $1,205,565.14 expended, over and above $88,133.11 which they claim as due to them for interest on the difference between the sums which they monthly received and those which they would have had a right to get if the monthly estimates had been sufficient. As the contracts taken together were to have brought into the petitioners only $919,300. 23, and as it has cost the government the sum of $269,082.60 to complete these contracts, it becomes interesting to know how the petitioners have proved their actual outlay.
"42. I must say that regarding the proof from a legal point of view, and without taking into consideration the respectability of the persons examined as witnesses to prove the correctness of these expenditures, the proof of these accounts would be insufficient to warrant me in accepting them as establishing the enormous amounts to which they figure up. This proof is vague and too general; the accounts for the time of workmen employed on the road are proved in block, if I may say so, without the precision required in such cases, particularly with regard to such a large amount. It appears to me that the petitioners should have brought before the court the persons who were in direct contact with the workmen in order to verify the correctness of the accounts and of the payments. The foreman should have been examined. Mr. Blumhart and Mr. Turner could not alone complete the proof. Both of them had to rely too much on the reports of sub-officers and other interested parties who, without any inclination to be dishonest, may have said in presence of Messrs. Blumhart and Turner, what they would not have dared to testify under oath before a court of justice. In a word, the proof is insufficient; legally speaking, it lacks several important connections to deserve such a degree of credibility as the law requires
"43. The question here presents itself as to whether the petitioners might not have a right against the Government of Her Majesty in consequence of the numerous promises which, they say, were made to them by the Hon. Mr. Langevin, Minister of Public Works for the Dominion of Canada, in 1871 and 1872. The contractors and their bondsmen, their endorsers and some of their friends, swore before me that in several interviews with Mr. Langevin with regard to their financial embarrassment and their intention of giving up the contracts, Mr. Langevin "had told them not to give up "their contracts; that the government did not intend "to build the Intercolonial at the expense of private "parties, and that if they carried on the contract to "completion they would be eventually indemnified for "their losses." Mr. Ross, the advancer to the contractors, swore that "Mr. Langevin told him that he could "in all security continue his advances and that he would "be refunded." Messrs Dunn and Home, bondsmen for the contractors, swore the same thing. Mr. L. H. Huot swore that Mr. Langevin told him the same thing, viz.: "To tell the contractors not to give up their contracts, "that sooner or later their claims would be settled "one way or the other by government." Mr. Langevin, examined as witness, swore the contrary and merely admitted to have told them that "it was their "interest to complete their contracts, which would have "resulted in causing no delay in the completion of the "road and would better the chances of the contractors "to have their claims favorably considered and settled "by government." He denies having used the words cited by the above witnesses. He was right; he would have gravely compromised himself as a member of the government and a public man, and he says that he could not bind the government. We therefore see the immense difference existing between the meaning of Mr. Langevin's expressions and that of the expressions of the above named witnesses In this case, as in all the cases where the witness is interested, his mind may be influenced by interest and induce him to attach to conversations a meaning far different from that which they were intended to bear by him who uttered them.
"44. But this question is quite useless at present. Mr. Langevin could not thus pledge the government, he formally declared it, and I confess that one would vainly seek in the Intercolonial Railway Act for legal means to indemnify the petitioners, although their claims might be equitable. This contradiction between the evidence of Mr. Langevin and that of the petitioners, of their advancers and bondsmen, clearly establishes what I said a moment ago about the uncertainty of the testimony of men. Here is a number of educated persons, deservedly enjoying a high reputation for respectability, swearing in a manner diametrically opposed to each other as to the result of their conversations. This can also explain the contradictions which I remark in this case with regard to what the engineer, Mr. Marcus Smith, is alleged to have said to Messrs. Berlinguet Home, Armstrong and others. We must accept with a certain degree of caution the evidence of an interested party.
"45. There is one point in the case on which the petitioners should succeed: It is that concerning the manner in which the engineers made their monthly estimates during the first four months following the beginning of the works, in 1870, as established by documents 97 and 98 produced with the official correspondence concerning the construction of the Intercolonial. According to this correspondence and the order in council of the 20th September, 1870, which settled the question, it would appear that the engineers committed errors resulting in a loss to the contractors, for interest, of $5,850.90 or thereabouts. In order to appreciate correctly the intention of the commissioners in their communication to the Privy Council (document 97) and the meaning and signification of the report of the Privy Council, I cite them verbatim, and I believe, although the chief engineer was not of the opinion of the Privy Council and of the commissioners on this point, that the engineers made grave errors in this occasion and that this sum of $5,850.90 should be credited to the petitioners in the final result of the case.
I must say that if the contractors suffered damages to this amount, which I allow them, they were well indemnified, if, as I have reason to believe, the report which I just read was followed to the letter. I also believe that in law and equity they should be credited with another sum of $27,023, representing the value of materials, (plant, &c.,) which they transferred to government when they gave up their contract in May, 1873. Deducting these sums from that of $159,988 which government paid to the contractors over and above their contract price, and as I see nothing in the proof to warrant me in believing that government deducted these $32,872.23 in making up that balance of $159,882, it follows that the real balance due to Her Majesty would be $127,110.
"46. If Her Majesty, in her answer to the petition of right, had demanded the application and the benefit of the section 3 of the contracts which stipulates a penalty of $2,000 per week, payable by the contractors from the 1st of July, 1871, to the day on which they gave up their contracts, I should condemn the petitioners to pay this penalty to Her Majesty under the form of liquidated damages, which penalty would amount to $216,000 for the 108 weeks daring which the contractors were in default."
But Her Majesty has not, by her written factum, demanded the execution of so severe a stipulation, but only a condemnation for $150,982.57 as a surplus paid by the commissioners to the contractors on their contracts and not at all under the form of penalty or damages. I think I would be adjudging ultra petita if I inflicted the penalty under the form of liquidated damages."
"On the other hand, if Her Majesty also demanded the execution of this part of the section of the contracts which stipulates that in case of giving up their contracts, the contractors would forfeit all right to any sum, percentage, or other moneys to which they would be entitled in virtue of these contracts, I should deduct these $32,872.23 which I am disposed to award them, and in this case I would give judgment in favor of Her Majesty for the sum of $159,982.54 with costs, in any event, against the petitioners."
"I shall wait for the advice of the Attorney General of Her Majesty for the dominion of Canada and for this purpose this case is adjourned to the 24th of October instant."
The formal judgment was as follows:— The twenty-fourth day of October, in the year of our Lord one thousand eight hundred and seventy-seven."
"This court having heard the evidence and the pleadings of parties by their counsel, doth declare."
"That the said F. Xavier Berlinguet and Marie Charlotte Mailloux are entitled to the sum of five thousand eight hundred and fifty dollars and ninety cents, ($5,850.90) for interest upon and for the forbearance of divers large sums of money due and payable by Her Majesty's government to them the suppliants, and further to the sum of twenty-seven thousand twenty-two dollars and thirty-five cents ($27,022.35), for the value of certain materials to them belonging, and by them left to Her Majesty's government."
"But inasmuch as by section three of the contracts, the suppliants, having abandoned their said contracts, forfeit all right and claim to these two amounts, to wit, the total sum of thirty-two thousand eight hundred and seventy-three dollars and twenty-five cents, ($32,873.25) the said sum of thirty-two thousand eight hundred and seventy-three dollars and twenty-five cents is hereby declared forfeited;"
"And this court doth further order and adjudge that the said suppliants do pay to Her Majesty's Government of the Dominion of Canada the sum of one hundred and fifty-nine thousand, nine hundred and eighty-two dollars and fifty-seven cents ($159,982.57), as money overpaid to the suppliants by Her Majesty's government at the time of their abandoning their contracts;"
"And this court doth moreover order and adjudge that the said suppliants do pay to Her Majesty's government of the Dominion of Canada the costs of the present suit.
(Signed) Napoleon Legendre
Acting Registrar Court of Exchequer."
From this judgment the suppliants appealed to the Supreme Court of Canada, but no steps were taken by either parties to bring on the appeal until February, 1883, when an application was made to the full court on behalf of the appellants for an order directing the Registrar to set down for hearing the appeal the next session of the court.
Upon this application the following judgment was delivered by Strong J. on behalf of the court, on the 1st May, 1883, Sir W. J. Ritchie C J. dissenting.
STRONG J.—This is an application for a direction to the Registrar to set down for hearing an appeal from a judgment of the Exchequer Court on a petition of right. This petition of right was a Quebec case and the judgment on it was pronounced at Quebec, where the cause was heard before Mr. Justice J. T. Taschereau on the 17th October, 1877. It has never to this day been drawn up or entered. At the time the judgment was pronounced, the exchequer rule No. 138, which requires that before an appeal can be taken from a judgment in the Exchequer Court, a motion for a new trial must be made to the judge who heard the cause and that the appeal must be from his decision on that motion, that is from the decision on the motion for a rule nisi if the judge refuses to grant the rule, or