Page images


to his brother Duncan, asking for one half interest in the cement deposits and that he would do all in his power to Statement. sell the land for a large sum. Duncan Cumming wrote to plaintiff on the 25th May following, offering him a quarter interest, but saying: "If you think a quarter interest is too small, I may give you a half interest." By another letter of the 25th June, Duncan says to plaintiff: "I will give one half interest in the cement mine if you come west here, and take hold of the mine with me. We will put it in writing, so that it will be plain to understand."

The plaintiff came from Ontario in the latter part of July, and went to see Duncan. After doing some digging and examination of the cement deposits, the plaintiff and Duncan came to Winnipeg, went to a lawyer's office, and an agreement was drawn and executed, dated the 7th August, 1900. The agreement, after reciting that Duncan is indebted to the plaintiff in the sum of $150, and that Duncan is to secure that sum to plaintiff, goes on as fol lows: "Now this agreement witnesseth that the said party of the first part (Duncan) agrees that, so soon as he shall have completed his homestead duties on the said land and obtained a recommendation of the patent for the same he will convey to the said party of the second part (the plaintiff), an undivided half interest in all cement deposits on said property within a period of three months after such recommendation has been made."

In the summer or fall of 1902, Duncan, having completed his homestead duties, obtained a Crown patent for his land. Shortly afterwards he disposed of his whole interest in the cement deposits to parties other than the plaintiff.

T. M. Daly, K. C., and W. M. Crichton for defendants. Plaintiff's evidence has not established that any binding contract was made by defendant Duncan Cumming with plaintiff, for the sale in question. Any contract made was in relation to a homestead right to 160 acres of Dominion lands. Plaintiff's evidence establishes

1904. that he knew it was a homestead right and was told by Argument. Mr. Archibald that Duncan Cumming had no right to

deal with it, or sell it. The Dominion Lands Act as amended in 1897, c. 29, s. 5, makes null and void any agreement for sale of homestead lands. The Court will not enforce an illegal agreement: Broom's Legal Maxims, 556; Hooper v. Coombs, 5 M. R. 65; Fry, sec. 506. Addison on Contracts, 83. There is nothing in the correspondence to show a completed agreement. There was no acceptance by the plaintiff: Fulton v. U. C. Furniture Co., 9 A. R. 211; Holland v. Eyre, 2 Sim. & St. 194; Fry on Specific Performance, sec. 554; 7 A. & Eng. Encyc. of Law, 126-138. The correspondence does not comply with the fourth section of the Statute of Frauds, as it does not contain all the material points: Leake on Contracts, 142, 177, Fry, 238; Hussey v. HornePayne 4 A. C. 311; Avery v. Griffin, L. R. 6 Eq. 606, The evidence shows inadequacy of consideration; Fry, sec. 442.

C. P. Wilson and J. A. Machray for plaintiff. This case is similar to that of Abell v. McLaren, 13 M. R. 463. That decision should be taken as law, until over-ruled by the Full Court.

DUBUC, C. J.-The defendants raised the point that the agreement of the 7th August, 1900, or any verbal agreement made about that time, between the plaintiff and the defendant Duncan Cumming, about the property in question, was illegal, and therefore null and void. It is claimed to be illegal because it was made in contravention of the provisions of the Dominion Lands Act, R.S.C., c. 54, s. 42, as amended by the Dominion statutes of 1897, c. 29, s. 5. The first part of the section reads as follows: "Unless the Minister otherwise orders, every assignment or transfer of homestead or pre-emption right, or any part thereof, and every agreement to assign or transfer any homestead or pre-emption right, or any part thereof after

patent obtained, made or entered into before the issue of the patent, shall be null and void."



This is a prohibition by statute. Formerly, before the DUBUC,C.J. beginning of the last century, there seemed to be a distinction in that respect as to what was called malum in se and malum prohibitum. That distinction was applied in Faikney v. Reynous, 4 Burr. 2069. But since Aubert v. Maze, 2 B. & P. 371, decided in 1801, a different doctrine has prevailed. Meath, J., says in that case: "I do not see any sound distinction between the case of money paid in a concern which is malum in se and money paid in a concern which is malum prohibitum. The latter, as well as the former, tends to encourage a breach of the law. In Cannan v. Bryce, 3 B. & Ald. 179, Abbott, C. J., at p. 183, says: "The distinction taken in Faikney v. Reynous, 4 Burr. 2069, between malum prohibitum and malum in se was expressly disallowed in Aubert v. Maze, 2 B. & P. 371. Indeed, we think no such distinction can be allowed in a court of law; the Court is bound, in the administration of the law, to consider every act to be unlawful which the law. has prohibited to be done." In Wetherell v. Jones, 3 B. & Ad. 221, Lord Tenderden, C. J., expresses himself as follows: "Where a contract which a plaintiff seeks to enforce is expressly, or by implication, forbidden by the statute or common law, no Court will lend its assistance to give it effect." It was held in Smith v. Mawhood, 14 M. & W. 452, that, where it appears that the intention of the Legislature was to prohibit the contract itself, the contract is illegal and void, and no action can be maintained upon it.

Besides the above authorities which appear to be pretty clear on the point, we have a case in our own Court where the same doctrine was upheld: Hooper v. Coombs, 5 M.R. 65. It was argued on behalf of the plaintiff, that the illegality of the contract can only affect the Crown, and that the Crown alone can move to have the contract de


1904 clared void for illegality. But that distinction does not Judgment seem to be borne out by the authorities. In Bensley v. Bignold, 5 B. & Ald. 335, it was held that a printer cannot recover for labour or materials used in printing any work, unless he affixes his name pursuant to the 39 Geo. 3rd, c. 79, 8. 27. Holroyd, J., at p. 341, said: "Here the Act requires the printer's name to appear on the book, which is in effect the same as if it prohibited him from printing any work without affixing his name to it." Vide also Broom's Legal Maxims, 556; Fry on Specific Performance, sec.


In the present case, the point involved is not merely a penalty imposed upon an infringement of some provision of the statute, nor a mere prohibition, express or implied, without a penalty imposed on the doing of the act prohibited; the statute says positively that the act in question, viz. that every assignment or transfer of homestead right and every agreement to assign or transfer any homestead right, or any part thereof, after patent obtained "shall be null and void." The language of the statute being perfectly clear, leaving no room for a construction different from what is plainly stated, and declaring that every agreement in the nature of the one entered into in this case is null and void, I do not see how it would be possible to hold, against the provision of the statute, that such an agreement is valid and should be enforced by the Court.

The invalidity of the agreement going to the root of the whole action, I do not feel called upon to decide the other questions of law raised in the argument.

The plaintiff having failed to establish his right to recover as prayed for in his statement of claim, I think a nonsuit should be entered, without costs.

[blocks in formation]

Garnishment-Manitoba Joint Stock Companies' Act, R.S. M. 1902, c. 30, s. 68—Liability of purchaser of shares to indemnify original subscriber against future calls on slock-Kings' Bench Act, Rules 759, 761-Objection not raised at trial.

1. The purchaser of the assets of a company incorporated under The Manitoba Joint Stock Companies' Act, R. S. M. 1902, c. 30, who agrees to assume the liabilities of the company, is bound to indemnify the company against its liability for payment of future calls on shares of stock held by it in a fire insurance company which were only partly paid up at the time of the sale, although no mention of such liability was made at the time but the purchaser was aware thereof; and such liability is attachable at the suit of the fire insurance company under Rules 759 and 761 of the King's Bench Act for the purpose ot realizing on a judgment obtained for the amount of unpaid arrears of subsequent calls on the shares.

2. Per DUBUC, C. J. An objection based on section 68 of the Joint Stock Companies Act, that no company incorporated under that Act can use any of its funds in the purchase of stock in any other corporation unless expressly authorized by a by-law confirmed at a general meeting, and that there was no evidence of any such by-law having been passed, cannot be given effect to on the hearing of an appeal when it was not raised at the trial.

Proctor v. Parker, (1898) 12 M. R. 528, and Hughes v. Chambers, (1902) 14 M. R. 163, followed.

Per PERDUE, J. dissenting. Although not raised at the trial, such objection should be given effect to on this appeal. Cases cited distinguished on the ground that here the evidence all went to show that no such by-law had ever been passed and if the objection had been raised at the trial the plaintiffs could not have given any evidence to overcome it.

3. Per DU BUC, C. J. The statute does not prohibit a joint stock company from holding stock in another corporation, it provides only that its funds shall not be used for such purpose unless expressly authorized by by-law confirmed at a general meeting; and, if it were shown that such shares had been acquired otherwise than by using any of the funds of the company, the holding would be legal.

« PreviousContinue »