Supreme Court Judgments

Supreme Court of Canada

Benning v. Thibaudeau, (1891) 20 SCR 110

Date: 1891-11-17

JAMES BENNING, et at. (PLAINTIFFS)

And

JAMES CRADOCK SIMPSON, et al, es-qual, par reprise d'instance

Appellant;

And

THE HONOURABLET J. R. THIBAU‑DEAU es-qual. (DEFENDANT)

Respondent.

1890: May 13; 1891: Feb 24; 1891: Nov 17

PRESENT:—Sir W. J. Ritchie C.J., and Strong, Fournier, Taschereau Gwynne and Patterson JJ.

ON APPEAL FROM THE COURT OF QUEEN'S BENCH FOR LOWER CANADA (APPEAL SIDE).

Insolvency—Claim against insolvent—Notes held as collateral security— Pledge—Collocation—Joint and several

Held, affirming the judgment of the court below, that a creditor who by way of security for his debt holds a portion of the assets of his debtor, consisting of certain goods and promissory notes endorsed over to him for the purpose of effecting a pledge of the securities is not entitled to be collocated upon the estate of such debtor in liquidation under a voluntary assignment for the full amount of his claim, but is obliged to deduct any sums of money he may have received from other parties liable upon such notes or which he may have realized upon the goods.

Fournier J. dissenting, on the ground that the notes having been endorsed over to the creditor, as additional security, all the parties thereto became jointly and severally liable and that under the common law the creditor of joint and several debtors is entitled to rank on the estate of each of the co-debtors for the full amount of his claim until he has been paid in full without being obliged to deduct therefrom any sum received from the estates of the co-debtors jointly and severally liable therefor.

Gwynne J. dissenting, on the ground that there being no insolvency law in force, the respondent was bound upon the construction of the agreement between the parties, viz;, the voluntary assignment, to collocate the appellants upon the whole of their claim as secured by the deed.

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APPEAL from the judgment of the Court of Queen's Bench for Lower Canada (appeal side) ([1]), reversing the judgment of the Court of Review ([2]).

The following special case was agreed upon for the decision of the appeal to the Supreme Court of Canada:

On the 13th February, 1882, Alphonse Marcotte of the city of Montreal merchant being insolvent, made an assignment of his estate, property and effects to the respondent, one of his creditors, for the benefit of the whole of his creditors

On the 22nd of April, 1882, appellants, creditors of said Marcotte, filed their claim duly attested upon oath for an amount of $19,139.83 in the hands of the respondent, and the latter after having realized portion of Marcottes property assigned as above prepared and advertised a dividend sheet at the rate of 12½ cents in the dollar, payable on the 13th July following.

Appellants were collocated on said dividend sheet for a sum of $2,392.99, but when they demanded payment of the same on the 13th of July, 1882, the payment thereof was refused. Hence the present action by appellants against respondent demanding payment of said sum of $2,392.49.

To this action respondent pleaded that appellants had no claim against Marcotte; that before his insolvency Marcotte had transferred to appellants promissory notes and merchandise for a large amount; and that, in crediting Marcotte with the sums paid out of the promissory notes and merchandise transferred as above and of the amounts realized therefrom, appellants claim was paid in full.

By their answer to this plea appellants admitted having realized subsequently to the filing of their claim, out of the promissory notes and merchandise to them transferred as collateral security by Marcotte,

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certain sums of money very much inferior to the amount of their claim, but they claimed the right to rank for the original amount of their claim until paid in full

Appelants made advances to Marcotte up to the amount of their claim on his promissory note for a like amount taking as further security a transfer from Marcotte of the notes and goods hereinafter mentioned or referred to.

The collateral securities so transferred by Marcotte to appellants, consisted of promissory notes endorsed by Marcotte and of a certain quantity of merchandise, the amount of said promissory notes being $23,436.00 signed almost all of them by one Moodie, to the order of Marcotte and endorsed by him.

Moodie had also become an insolvent and appellants realized out of his estate in virtue of said promissory notes $9,616.24; of which $8,363.76 was received in May 1882, subsequent to the filing of their claim but previous to the 13th July. 1882, when the dividend was made payable, $911.57 in May, June and July 1882; and $248.91 in April, 1883.

Appellants also realized out of the goods and merchandise transferred to them by Marcotte a further sum of $490.00, making with that of $9,676.24 a total sum of $10,166.24.

The parties are agreed to submit to this honorable court for its decision as they have done in the court below, the following question, to wit:

"Are appellants entitled to a dividend on the full amount of their claim as filed to wit on $19,139.83, or only on the balance of said claim after deduction in whole or in part of the $10,166.24 by them realized out of said promissory notes and goods and merchandise."

In the Supreme Court of Canada the case was first argued on the 13th May, 1890, the Honourable Mr.

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Justice Taschereau being absent, but by order of the court the case was set down for a rehearing before the full court at the February sessions 1891.

Beïque Q. C. for appellants, and Geoffrion Q. C. for respondent.

In addition to the points of argument and authorities cited by counsel in the courts below and which are fully given in the reports of the case in the courts below ([3]); Beïque Q.C. counsel for appellant, on the 1st point: Is the present case one of joint and several obligation? cited Laurent ([4]); Marcadé ([5]); Demolombe ([6]); and Art 1105 0 C.; on the 2nd point: If it is not a case of joint and several obligation proper is it not at least one of joint and several debtors? Marcadé ([7]) and Daniel on negotiable instruments ([8]); and on the 3rd point: Is the bearer of a joint and several obligation, or the creditor of joint and several debtors by way of suretyship or otherwise entitled to rank on the estate of each of the co-debtors for the full amount of his claim until he has been paid in full without being obliged to deduct therefrom the amount received from one or the other, by way of dividend, after the filing of the claim? Laurent ([9]); Benning v. Thibaudeau ([10]) Judgment of Mr. Justice Jetté and cases cited by him. Dalloz Vo. Distribution par contribution ([11]) and Arts. 1117, 1156, 1157 0.0.

Geoffrion Q.C. for respondent cited and relied on Arts. 1573, 1578, 1969 and 2288 0.0. Arts. 605 741 C.P.G., and Troplong, Gage ([12]); Ontario Bank v.Chaplin ([13]) and other cases there cited.

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Sir W. J. Ritchie C.J.— For the reasons given by the Court of Queen's Bench for Lower Canada (appeal side) ([14]), lam of opinion that the appeal should be dismissed with costs.

Strong J.— I am of opinion that this appeal must be dismissed. In the joint statement of facts submitted by the parties it is admitted that t the appellants made advances to Marcotte up to the amount of " their claim on his promissory note for a like amount " taking as further security a transfer from Marcotte the notes and goods hereinafter mentioned. The "collateral securities so transferred by Marcotte to the "appellants consisted of promissory notes endorsed " by Marcotte and of a certain quantity of merchandise, the promissory notes being signed almost all of " them by one Moodie, to the order of Marcotte and " endorsed by him."

From this state of facts it appears that the promissory notes, out of which the appellants obtained the greater part of the partial payment of their debt which has given rise to this controversy, were held by them by way of pledge, and not absolutely. Therefore as the pledged notes exceeded in amount the original debt due from Marcotte to the appellants, the appellants if they had collected the full amount of these notes would have been liable to account to Marcotte's estate for the balance remaining after the satisfaction of their own claim. Under these circumstances it is impossible to say that as between Marcotte and the appellants any new debt was created or liability incurred by Marcotte's endorsement of Moodie's notes. There was but one single debt due from Marcotte to the appellants represented by his promissory note in their favour and not a new joint and several debt for an

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amount never really die to them from Marcotte. It is always competent as between the immediate parties to securities such as bills and notes transferred by endorsement to show that the endorsement was made with the intention and for the sole purpose of effecting a pledge of the securities, which was the fact in the present case. Nouguier ([15]),Alauzet, Droit Commercial ([16]).

There was therefore no joint and several liability on the part of Marcotte, and the question principally argued and which does call for an adjudication in the case of the Ontario Bank v. Chaplin ([17]) does not arise at all in the present case.

The only question therefore, is whether the moneys realized by the appellants in respect of the pledged notes and property are to be treated as payments pro tanto of the appellants' debt. Of this there can be little doubt at least as regards the proceeds of the notes which were placed by the debtor in the hands of his creditor for this very purpose. It is true that the amount arising from the notes was not received by the appellants, until after they had filed their claim, but this can make no difference since the only question can be, what was the amount due to the appellants at the time they were entitled to judgment? The rule of English bankruptcy procedure, which does not oblige a creditor, who has proved his debt, to give credit for payments received by him from another party after the date of the proof, is a purely arbitrary rule of procedure and can have no application to a case like the present. The administration and winding-up of the insolvent's estate was not under any statute, but under a voluntary creditors' deed, and no law says that any difference shall be made between payments received

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before and those received after the filing of the claim. I repeat the only question can be, what was due at the time the action was taken or the judgment rendered, and the assignee is on ordinary principles entitled to credit for all payments made anterior to that date.

Further, I do not see any reason why any difference should be made between the credit to be given for the amount of the notes collected and the $490 produced by the sale of the goods. The sale of the goods is not in any way impeached, and must be assumed to have been authorised or acquiesced in by Marcotte; then the price ought, it would seem, to be credited just as is the money arising from the notes. The Court of Queen's Bench have, however, made a distinction founded upon the fact that the $490 was not received until after the preparation of the dividend sheet. With great deference, I am unable to see any ground for this distinction. The appellants were only entitled to judgment for the amount actually rémaining due to them deducting all payments. I should, therefore, if it had been open to us to do so have been prepared to have affirmed Mr. Justice Mathieu's judgment in its integrity. There has, however, been no cross appeal, and the judgment of the Court of Queen's Bench must consequently be affirmed with costs, subject to the correction of an obvious error in calculation pointed out in the respondent's factum which requires that the sum of $1,550.50 for which judgment has been rendered should be reduced to $1,214.06

FOURNIER J.—Les faits cidessus énoncés dans l'admission des parties ([18]) donnent lieu à la question suivante les appelants untils droit à un dividende sur le montant entier de leur reclamation telle que produite

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savoir sur $19,399.33 on seulement sur la balance de cette reclamation, après deduction en tout ou en partie de la somme de $10,166.44 qu'ils ont réalisés sur les billets promissoires et les marchandises oui leur avaient été transportés par M arcotte?

Les appelants prétendent que les billets de Moodie qui leur avaient été transportés par endossement comme garantie de la dette de Marcotte étaient devenus autant de créances solidaires contre le failli et les signataires ou endosseurs de ces billets, et qu'en vertu des règles de la solidarité ils ont droit de réclamer Ia totalité de chaque créance de chacun des débiteurs solidaires jusqu'au parfait paiement Qu'en consequence de la faillite de Marcotte, ils ont droit pour arriver au paiement integral de leur créance, de réclamer de l'intimé, son syndic, sur le chiffre nominal de leur créance, au moment de la faillite, sans deduction des sommes reçues subséquemment des autres débiteurs des créances transportées.

L'intimé pretend au contraire que lés billets et marchandises transportés par Marcotte aux appelants n'étant en leur possession qu'à litre de gage, la réalisation de ce gage, à quelque moment qu'elle se produise, a pour résultat nécessaire l'extinction pro TANTO de leur créance. En conséquence, l'intimé pretend que la question de solidarité ne se présente pas et qu'il n'y a pas lieu den appliquer les principes.

La cour de première instance a donné gain de cause à l'intimé en décidant que les règles de gage devaient s'appliquer dans le cas actuel, et que les appelants n'avaient le droit de concourir avec les autres créanciers du failli que sous la deduction des sommes reçues de la vente des marchandises et de la perception des billets transportes.

La cour de Revision pour le district de Montréal a modifié ce jugement en déclarant que le produit des

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merchandises devatt être imputé comme un paiement sur la reclamation des appelants mais que ceuxci avaient le droit de concourir avec les autres créanciers sur le montant de leur reclamation, $19,139.33, sous la deduction seulement de la somme de $490.00 provenant de la vente des marchandises.

La cour du Banc de la Reine appelée plus tard à se prononcer sur ces questions, a confirmé le jugement de la cour de premire instance et décidé que les appelants n'avaient le droit de concourir avec les autres créanciers que sous la deduction de tout ce qu'ils avaient reçu de Marcotte, taut des billets promissoires que des marchandises transportées.

Par l'appel à cette cour la même question nous est présentement soumise.

La position des appelants estelle véritablement celle de créanciers solidaires du failli Marcotte et des signataires et endosseurs des billets par lui transportés aux dits appelants?

C'est un principe incontestable que le faiseur dun billet promissoire s'oblige directement envers toutes les parties qui peuvent ensuite en devenir porteurs et que ces derniers ne se représentent pas les uns les autres mais sont tous créanciers du faiseur en vertu de leurs propres droits. Massé, Droit Commercial ([19]).

Les appelanes sont devenus les créanciers directs de Moodie par le transport que Marcotte leur a fait des billets que Moodie avait souscrits en sa faveur. Ces billets transportés pour assurer le paiement de la dette de Marcotte et faits payables à son ordre ont par l'effet de l'endossement de Marcotte rendu le faiseur, Moodie, et l'endosseur Marcotte, débiteurs conjointement et solidairement des appelants.

Par 'admission de faits des parties on voit que les billets et les marchandises out été transportés aux

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appelants comme sûreté collatérale, as further security, pour assurer le paiement de leur reclamation. C'est sur ce caractère de sûreté collatérale donné au transport des billets et marchandises que l'intimé se fonde pour soutenir qu'il ne s'agit pas ici de solidarité, mais simplement de gage. Cette prétention est évidemment erronée quant aux billets car ils out été endossés et les appelants en sont devenus propriétaires sans conditions restrictives et out acquis la qualité de créanciers solidaires contre Marcotte et tous les signataires on endosseurs de ces billets. La solidarité étant établie par la loi entre eux il aurait fallu une condition spéciale dans le transport pour y déroger.

Le fait que ces billets ont été transportés comme garantie collatérale, memo s'il avait l'effet de constituer un gage ne détruirait aucunement l'effet de la solidarité. Les solidaires de Marcotte n'en seraient pas moins responsables envers les porteurs. La signification que l'intimé donne aux mots 'garantie collatérale" n'est pas celle qu'ils out en loi i elle n'a pas l'effet de diminuer les obligations légales découlant de la sùreté transportee mais elle est an contraire une garantie additionnelle.

L'article 1103 du Code Civil declare qu'il v a solidarite de la part des débiteurs, lorsqu'ils sont obliges à une même chose de manière que chacun d'eux puisse être séparément Contraint à l'exécution de l'obligation entière et que lexécution par l'une libère los autres envers le créancier.

Dans le cas actuel les appelants n'avaient qu'une réclamation et deux débiteurs dont chacun d'eux était oblige an paiement de toute la dette, et dont le paiement par l'un avait l'effet d'opérer la décharge des deux vis-à-vis des appelants.

Laurent dit ([20]):—

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Il y a deux éléments dans l'obligation solidaire, on ne peut les expliquer que par un double principe. D'une part, ii y a plusieurs codébiteurs, ce qui implique autant de liens qu'il y a de personnes obligées. D'autre part la dette est unique puisque tous les codébiteurs doivent une seule et même chose et la doivent pour le tout. Il y a donc tout ensemble un lien multiple et unité de la dette.

Il y a un lien multiple parce qu'il y a plusieurs codébiteurs, mais ce lien ne se divise pas entre eux: chaque codébiteur est tenu de toute la dette comme s'il v était seul oblige.

Marcadé dit ([21]):—

La solidarité pourrait exister entre deux personnes qui se sont obligées avec intervalle et par des actes séparés. li suffirait pour cela que Pierre eût déclaré d'avance consentir à s'engager solidairement avec Paul, on que le premier obligé vint, après que Paul s'est soumis à la solidarité, déclarer qu'il entend s'y soumettre avec lui. En un mot, il y aura obligation solidaire proprement dite toutes les fois que les volontés des divers obligés se sont réunies pour se soumettre à la solidarité d'un commun accord.

Demolombe dit ([22]):—

L'obligation solidaire est une. à la vérité, par rapport à la chose qui en fait l'objet: mais elle est composée d'autant de liens qu'il y a de personnes différentes qui l'ont contractée, et ces personnes étant différentes entre elles, les liens qui les obligent sont autant de liens différents, qui peuvent, par consequent, avoir des qualités différentes.

Et plus loin ([23]):—

Renoncer au bénéfice de division et de discussion c'est en effet de la part des débiteurs qui s'obligent conjointement, s'obliger solidairement.

Pas de division !

Done, chacun d'eux pourra être contraint pour le tout.

Pas de discussion !

Done, chacun d'eux pourra être poursuivi principalement, comme s'il en était seul débiteur envers le créancier

La solidarité n'est pas autre chose.

Les auteurs sont d'accord que l'obligaiion solidaire implique un mandat donné et reçu par chacun des Codébiteurs de se représenter l'un l'autre ([24]).

Dans le cas actuel le mandat résulte de ce que la dette

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est créée par des billets négociables et que dans ce cas, le mandat de toutes les parties responsables du paiement de la dette est toujours présumé.

Code Civil art. 1105:—

La solidarité ne se presume pas; il faut qu'elle soit expressément stipulée.

Cette régle cesse dans les cas ou la solidarité a lieu de plein droit en vertu d'une disposition de la loi.

Elle ne s'applique pas non plus aux affaires de commerce dans lesquelles l'obligation est présumée solidaire, excepté dans les cas réglés différemment par des lois spéciales.

Cavanagh, Law of money security ([25]).

The literal meaning of collateral is "additional" or parallel; it does not mean ancillary " or secondary" unless shown by other circumstances. Where securities are intended to rank in successive order they should contain (express clauses to that effect; thus when two perperties are mortgaged there should be a proviso that one shall be the primary, the other the secondary security if it be so intended.

Il y a sans doute une difference à faire entre le transport des marchandises et le transport des billets. Quant aux premiers, je crois qu'il y a lieu de leur faire application des règles qui concernent le gage. Quant aux seconds, je crois que ce sont les principes de la solidarité qui doivent régler les droits des parties.

Sous l'opération des lois de faillite de 1869 et 1875, cette question s'est présentée dans les causes de Bessette v. La Banque du Peuple ([26]), et Rochette v. Louis ([27]).

La loi de 1875 contenait cette disposition.

Art. 89. Le m          ontant dû à un créancier sur chaque item séparé de sa reclamation au temps de l'exécution d'un acte de cession ou de l'émission d'un bref de saisieartêt, selon le cas, et qui restera dû à l'époque où cette reclamation sera prouvée formera partie du montant pour lequel il prendra rang sur lea biens du failli, jusqu'à ce que cet item de sa reclamation soit pavé en entier.

Dans la cause de Rochette v. Louis le juge en chef Meredith, décida que les créanciers MM. Louis et Cie.,

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n'étaient pas tenus de déduire de leur reclamation contre la faillite de Rochette le dividende qu'ils avaient reçu, depuis cetre réclamation, de Samson leur oblige solidaire avec Rochette. Mais cette disposition a disparu avec la loi de faillite Be sorte Qu'il faut rechercher quelle était avant la loi de faillite la régle de notre droit sur la question soumise.

L'hon. juge en chef Meredith a fait cette étude dans la cause de Rochette v. Louis ([28]), en même temps qu'une revue de la loi française, anglaise et écossaise, sur cette question, que nous citons ciaprés.

The rule according to the law of England appears to be that if at the time of proving the creditor has received a part of his claim he can then only prove for so much as remains due and when a dividend has been declared under another commission under which the holder has already proved his bill, though the dividend has not been received, yet the amount of it must be deducted from the bill before it can be proved ([29]).

La loi écossaise, telleque nous la trouvons consignée dans Bell's Commentaries ([30]) est tout-à-fait différente.

He who holds several bound to him is entitled to demand the whole from each, to the effect of being paid his debt and no more, or,. if the co-obligants are bankrupts, a dividend from each corresponding to the whole but so as not to derive more than payment of the debt from the amount of the several dividends, and that a payment from a part from any one will pro tanto extinguish the claim against that estate, only leaving the security available to its full extent against the others.

Après avoir ainsi exposé la loi d'Angleterre et celle d'Ecosse, l'hon. juge dit que depuis 1775, la jurisprudence en France était conforme à la loi écossaise dont le principe fut adopté par l'art. 542 du code de commerce qui se lit comme suit:

Le créancier porteur instruments endossés, ou garantis solidairement par le failli et d'autres co-obligés qui sont en faillite, participera

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aux distributions dans toutes les masses et y figurera pour la valeur nominale de son litre jusqu'à parfait paiement.

L'hon. juge fait suivre cet exposé de l'observation suivante:—

The doctrine of the French code and of the Scotch law is favourable to commercial credit and it seems to me the most reasonable that can be adopted • but it is not in accordance with our common law, and is not sanctioned by our statute Jaw respecting insolvency. As to our common law Pothier says: 'Si tous ceux qui sont débiteurs de la lettre de change, tant i'accepteur que le tireur et les endosseurs, avaient fait banqueroute, le propriétaire de la lettre qui est créancier de chacun d'eux du total, peut se faire colloquer dans la distribution des biens de chacun d'eux comme réancier du total; mais aussitôt que par la distribution qui aura été la premiere terminée, il aura été payé d'une partie de sa créance, puta, du quart, ii ne pourra plus rester dans les distributions des autres débiteurs qui restent à faire, que pour le surplus de ce qui lui est dû. (Contrat d'échange No. 160).' Renouard refers to the opinion of Pothier as being in accordanee with that of Duputy de la Serra, Bournier, Boutarie and Jousse (Renouard, vol. 2 p. 223), and speaks of the doctrine, for which they contended as an improvement upon that maintained by Savary, and as being not the same but a step towards the modern law of France. It is thought by some persons whose opinions are well deserving of respect that as to the matter under consideration there is no difference between the old law and the modern law of France. But a comparison of the above extract from Pothier with the article 542 of the French code is sufficient to show that opinion to be erroneous; and Bédarride, Traité des Faillites, No. 853, expressly says: 'L'article 542 contient donc une derogation au droit commun.'

L'honorable juge en chef Meredith est d'avis one le principe adopté par l'article 542 du code commercial français n'est pas notre droit. C'est aussi l'opinion de l'honorable juge Mondelet qui disait dans la cause de Bessette v. La Banque du Peuple ([31]):

The new or present jurisprudence of France is of no application to the present case The Scotch law whatever its wisdom may be cannot be our rule.

L'honorable juge Jetté tout en exprimant son respect pour l'opinion le ces savants magistrats declare que ces opinions ne lui paraissent pas concluantes:

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En effcet, until, elles ne se posent crue sur une appreciation comparative de certains textes de législation formelle des divers pays mentionnés, ce qui pouvait suffire, dans les circonstancess, puisque nous avions alors une loi positive sur la matière. Mais aujourd'hui que cette loi est disparue de notre droit, la quesiion doit être examinée à un autre point de vue et c'est au développement de la science théorique du droit Que nous devons en demander la solution

Ii resume ensuite les observations de Demolombe sur les consequences de la solidarité entre débiteurs:

Trois systèmes se sont successivement produits en France au sujet du secours accordé aux créanciers de plusieurs débiteurs en état de faillite

D'après le premier système le créancier avait le droit de se présenter à l'une des masses en liquidation de ses divers débiteurs, la plus avantageuse, sil le voulait, mais une fois son choix fait ii ne pouvait plus réclamer des autres masess qui se trouvaient absolument libérées à son égard. C'était le système de Savary, le principal rédacteur de l'ordonnance de 1673

Inutile d'apprécier ce système si contraire aux principes qui prévalent aujourd'hui dans notre droit.

Le second système permettait an créancier de se presenter successivement aux faillites de ses divers débiteurs solidaires mais à la condition de déduire, dans les dernilres, ce qu'il avait reçu dans les premieres.

C'était le système de Dupuy de la Serra, Boutaric, Jousse et Pothier comme nous l'avons vu toutàl'heure par la citation des notes du juge en chef Meredith et c'est celui que virtuellement le défendeur veut appliquer aux demandeurs dans l'espŁce.

Le troisième système paraît avoir été le résultat de deux arrêts rcnduseen 1776, l'un par le parlement de Paris, l'autre par le parlement d'Aix.

Le parlement de Paris avait juge, en principe que le créancier de divers débiteurs solidaires peut se presenter successivement dans toutes les faillites, pour la valeur nominale de son titre, sans aucune dIduction des dividendes par lui déjà reçus.

Le parlement d'Aix avait jugé au contraire mais sa décision fut cassée par arrêt du conseil, le 24 Cvrier 1778, qui fut luimême confirmé par un second arrêt du 23 octobre 1781, portant rejet de Ia requête en opposition, dirigée contre le premier.

Depuis lors, la jurisprudence fut fixée et lorsque les rédacteurs du code de commerce eurent à exprimer la loi sur ce point ils le firent dans le sens de cette jurisprudence par l'article 542 du code de com-

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merce, dont j'ai cité plus haut la rédaction primitive et qui est aujour-d'hui dans les termes suivants:

Le créancier porteur d'engagements souscrits, endossés ou garantis solidairement par le failli et d'autres co-obligés qui sont en faillite, participera aux distributions dans toutes les masses et v figurera pour la valeur nominale de son titre jusqu'à parfait paiement.

Telle est incontestablement la loi française actuelle. Mais diration, cette loi n'est pas la nôtre et ii est évident que cet article du code de commerce ne peut être invoqué ici. Il est vrai que la disposition formelle édictée par cet article 542, ne se trouve pas dans nos codes, mais la règle qu'il consacre estelle étrangère à notre legislation?

Bédarride, cite par M. le juge Meredith., dit bien que cet article 542 est une derogation au droit commun. Mais le sentiment de ces auteurs me paralt victorieuse-combattu par ceux qui soutiennent au contraire que l'article 542 du code de commerce n'est que l'expression du droit commun et ne comporte que l'application du principe de la solidarité dont le but est d'assurer au créancier son paiement integral.

C'est en effet la doctrine qui, aprés de longues controverses a finalement triomphé et a formé la jurisprudence en France sur cette question avant l'adoption de l'article 542 du code de commerce. L'honorable juge Meredith, fait erreur en disant que le principe de la loi écossaise a été adooté par l'article 542 du code de commerce. Cette question faisait depuis longtemps le sujet dune division d'opinion parmi les jurisconsultes, comme on le verra par l'autorité citée ciaorès de Dalloz dans laquelle ii fait l'historique de la question. Non seulement les jurisconsultes étaient divisés, mais les parlements l'étaient aussi ceux d'Aix et de Paris décidant en sens Inverse. La question fut réglée longtemps avant l'adoption du code de commerce par deux arrêts du Roi en conseil qui reconnasssent au créancier solidaire le droit de se porter réclamant pour la totalité de

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sa créance dans toutes les masses de ses co-débiteurs solidaires. Ces arrêts sont la base de Ia jurisprudence qui a existé jusqu'au code de commerce qui en a adopté le principe dans l'article qui fut d'abord l'article 534 et qui est maintenant l'article 542. Les auteurs qui soutiennent que cet article constitue une innovation sont évidemment dans l'erreur puisque le principe était déjà depuis longtemps reconnu par la plus haute autorité judiciaire de France l'arrêt du Roi en son conseil ainsi qu'on peut le voir par la citation suivante d'Emérigon, Traité des Assurances ([32]):

La même question était alors agitée au parlement de Paris, au sujet de certaines lettres de change tirées par M et endossées par L. Ils avaient fait faillite et obtenu une remise de la part de leurs créanciers respectifs.

Par un événement singulier le parlement de Paris rendit le même jour 18 juin 1776 in arrét diamétralement opposé à celui du parlement d'.A.ix Il fat déclaré que le porteur du billet avait droit de figurer dans chaque direction, pour la totalité du titre jusqu'à extinction de créance

Bellon se pourvut au conseil, et obtint du roi un arrêt dont voici la teneur "Ouï le rapport du sieur Moreau de Beaumont conseiller ordinaire, et an Conseil royal de commerce, le roi étant en son conseil, ayant égard à la dite requête, a cassé et casse le dit arrêt du parlement d'Aix, du dit jour, 18 juin 1776, et tout ce qui s'en est ensuivi; ce faisant, a évoqé et évoque les demandes et contestations sur lesquelles le dit arrêt est intervenu, circonstances et dépendances s a ordonné et ordonne que les parties procéderont en son conseil sur leurs demandes et contestations, en la forme portée par le règlement, pour être statué ainsi qu'il appartiendra. Fait au Conseil d'état du roi tenu à Versailles, le 24 février 1778. Signé Huguet de Montaran.

Autre arrêt du Conseil renda le 23 octobre 1781 qui déboute Zacherie B. et consorts de la requête qu'ils avaient présentée en opposition.

Voilà donc la question préjugée en faveur du porteur du papier. Les débiteurs corrés doivent chacun Ia même somme. Le titre est indivisible vis-à-vis de chacun d'eux: Promittentes singuli in solidum tenentw; in utraque enim obligatione una res vertitur. Inst. de duobus reis. La faillite des débiteurs corrés n'altére en ríen l'individualité de la

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créance, qui ne cesse d'être la même dans chaque direction, et qui conserve sa force jusqu'il, ce qu'elle soit éteinte par un entier paiement.

CONFÉRENCE.

LIV. Le code de commerce a mis fin à ces longues controverses des auteurs, sur la question présentée. " Le créancier porteur d'engagements solidaires entre le failli et d'autres co-obligés qui sont en faillite, participera aux distributions dans toutes les masses, jusqu'à son parfait et entier paiement." (Art. 534).

Ces principes dérivent de celui de la solidarité, car il y a solidarité de la part des débiteurs, lorsqu'ils sont obligés de manière que chacun puisse être contraint pour la totalité. Le titre est indivisible à l'égard de chacun d'eux. (Voyez d'ailleurs les art. 1200, 1201, 1202 et 1204 du Code civil et l'ait. 140 du Code de commerce; voyez notre Traité des faillites, torn. 2 chapitre I, section 13, No. 279.)

Ces arrêts, quoi qu'ils n'aient pas pour nous l'autorité legislative, ni l'autorité judiciaire de nos tribunaux n'en ont pas moins réglé définitivement une question soulevée sur les effets du principe de la solidarité qui était exprimé dans la loi française alors, comme ii l'était dans notre propre droit. Il en résulte nécessairement que les arrêts en conseil doivent valoir an moins pour nous comme raison écrite, et faire autorité dans nos cours an même litre que les decisions de la cour de Cassation, lorsqu'elles portent sur un texte qui est semblable dans le code français et dans le nôtre.

Ainsi comme le dit d'Emérigon, voilà done la question préjugée en faveur du porteur du papier. Les débiteurs corréis doivent chacun la méme somme. Le titre est indivisible vis-à-vis de chaoun d'eux.

Les autorités suivantes établissent toutes que les principes sur lesquels sont bases les arrêts sont derivés de celui de la solidarité et ne forment pas une innovation dans le droit français.

Larombière sur l'article 1204 du Code an No. 5 ([33]) parlant des articles 542 et 544 du Code de Commerce dit:

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Ces sagés dispositions, expression du drolt commun, doivent étre appliquées en matière civile. ElLes ne sont, eu effet, que laconséquence de ce principe que chaque co-obligé solidaire est tenu de la totalité. Si le créancier ne figurait pas dans chaque distribution pour la valeur nominale de son titre et si sa créance Était diminuée successivement du montant de chaque dividende alloué il en résulteait que le créancier perdrait dans tous les cas, une partie dc sa créance, puisque dans la dernière distribution, si avantageuse qu'elle fat, ii n'arriverait jamais à un paiement intégral et serait ainsi prive des garanties que lui donne la solidarité. Car si chaque débiteur est réputé seul et unique débiteur du total ce n'est évidemment que pour mieux assurer l'intégralité de son paiement au moyen de cette responsabilité réciprooue et mutuelle de, insolvabilités de la part des co-débiteurs entre eux.

Massé—Droit Commercial ([34]), dit:

On s'est demandé si l'article 542 du Code de commerce ne fait que formuler une application des principes sur la solidarité et les effets du paiement par dividendes qui sont les mêmes en matière civile et en matière commerciale. Les conséquences de ces principes ne tiennent pas à l'organisation spéciale des faillites; elles en sont indépendautes et par consequent elles trouvent leur place dans la déconfiture qui n'est autre chose qu'une faillite civile, bien que sa liquidation ne soit soumise à aucune forme et à aucune organisation particulière.

Locré ([35]) dit:

Toutes ces dispositions puisées dans les principes Élémentaires et immuables du droit civil s'appliciquent à toutes les matières et à tous les cas.

Au sujet de l'article 542 Code de Commerce, Dalloz, Rep. ([36]), dit:

On n'a jamais contesté aux eréanciers qui avaient plusieurs débiteurs solidaires la faculté des'adresser à chacun deux indistinctement soit pour le montant total de la dette, soit pour parfaire le paiement qui n'avait été effectué qu'en partie. Mais on a débattu longtemps la question de savoir si, après que le créancier avait réclame son paiement dans la faillite de l'un des co-débireurs solidaires, il pouvait encore s'adresser aux autres co-débiteurs pour tout cc qu'il n'avait pas effectivement reçus s Comme l'ordonnance de 1673 ne contenait aucune disposition à cet égard, les anciens auteurs n'étaient pas d'accord sur la solution de la question. Ainsi Savary, soutenait, paragraphes 13 et

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48, 5me question, que lorsque le créancier s'était présenté à la faillite de l'un des co-débiteurs, son opposition était faite et que l'acceptation d'un dividende éteignait la dette an regard de tous les obligés. '

Dupuy de la Serra s'appuyant sur des avis des avocats Perrin, Pomercy et Chappé combattait cette opinion. Dans le chapitre 16 de son livre, sur l'article des lettres de change, il établissait ainsi le droit de solidarité:

En cas de faillite de tous les obligés à la lettre de change adoptée et protestée faute de paiement, comme le porteur a une action solidaire contre tous, il a droit d'entrer dans chaque direction et contribution sans pouvoir être oblige d'en choisir ou opter une et abandonner les autres Le porteur qui signe le contrat d'un des premiers obliges, sans avoir un consentement des derniers obliges, que c'est sans préjudice à son action, se rend non-recevable contre eux, faute de leur pou voir céder l'action entière ..... Le porteur qui est entré dans quelque contribution, ne peut entrer dans les suivantes que successivement pour ce qui lui est dû en reste. Un arrêt du parlement de Paris, du 18 mai 1706, consacre ce système que Boutarie, Jousse, en l'art. 33 de l'ordonnance, et Pothier, du Contrat de change, No. 179, apporovèrent également. Quoique plus favorable au créancier que l'opinion de Savary, la théorie dc Dupuys de la Serra le soumettait cependant, en fin de compte, à une perte, puisqu'elle ne I'autorisait à venir dans la dernière faillite que sous la déduction des dividendes par lui reçus dans les autres, et que la dernière faillite ne payait qu'un dividende du reliquat. Un arrêt du parlement de Paris, du 18 juin 1776, accordant tous les effets de la solidarité, décida que le créancier avait droit de figurer dans chaque faillite pour la totalité du titre, jusqu'à ce qu'il eût reçu son entier paiement, et in arrêt du Conseil, rendu le 24 févreir 1778, cassa une décision que le parlement d'Aix avait rendu en sens contraire à celui du parlement de Paris, par arrêt du 18 juin 1766, sur la plaidoierie d'Emérigon (Contrats à la grosse, ch. 10, sec. 3.)

Sur l'opposition formée contre l'arrêt du conseil, un second arrêt, du 23 octobre 1781 maintint sa jurisprudence. Le code du commerce fut rédigé pendant que la jurisprudence était dans cette situation, et son art. 534 fut écrit dans le sens des arrêts rendus par le conseil en 1778 et 1781. Aussi malgré l'ambiguité de cet article, qui était ainsi conçu: Le créancier porteur d'engagements solidaires entre le failli et d'autres co-obligés solidaires qui sent en faillite participe aux distributions dans toutes les masses jusqu'à parfait et entier paiement. MM. Vincens, T. 4, p. 521; Pardessus, No. 1211; Locré, T. 7, p. 33 et suivant; Boulay Paty, Nos. 381 et 382: et nous mêmes, T. 8, p. 196, avions considéré le créancier comme ayant le droit de se présenter dans chaque masse pour le total de sa créance, quels que fussent les

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dividendes partiels qu'il eût précédemment obtenus, et cela jasqu'à parfait payement. Par application de cet article, il avait été jugé ainsi que le porteur d'effets de commerce, qui avait été payé, en partie, par l'un des débiteurs solidaires de ces effets, pouvait s'adresser à la faillite de l'autre pour la totalité de sa créance, mais de manière cependant qu'il ne pût recevoir audelà de ce qui lui était du: que s'il avait été passé un concordat avec le failli, ii pouvait également dans les mêmes cas et sous les mêmes conditions, réclamer le dividende convenu sur la totalité de sa créance.

La Cour, attendu que l'art. 534 C. Com. spécial pour la matière, autorise le créancier porteur de lettres de change qui a plusieurs débiteuss solidaires en état de faillite, à se remplir de l'intégralité de sa créance, en se présentant pour la totalité de ce qui lui est dû dans chaque masse de ses débiteurs faillis, jusqu'à ce qu'il alt obtenu son parfait et entier paiement, et que l'arrêt attaqué (de la Cour de Douai) n'a fait que se conformer à cet article qui justifie suffisamment sa décision; rejette, (Réj. 28 janvier 1817. MM. Brisson, pr; Boyer, rap. Jourde, c. confaff. Leblond). Le nouvel article 542 a fait disparaître tout équivoque, en autorisant le créancier à venir dans chaque faillite pour la valeur nominale de son titre jusqu'à parfait paiement ([37]).

Ces autorités me paraissent suffisantes pour établir que le droit du créancier de se présenter dans toutes les faillites de ses co-débiteurs solidaires n'est qu'une consequence logique du principe de la solidarité. Mais la cour d'appel ayant été unanime dans la repudiation de ce principe je ne crois pas devoir m'en tenir à ces autorités je pourrais en ajouter beaucoup d'autres, mais je me contenterai des suivantes qui contiennent les opinions de plusieurs de nos plus savants commentateurs:

Massé Droit Com. et Droit Civil ([38]) aprés avoir dé-montré que sous l'ordonnance de 1673 les opinions étaient partagées, ayant cite les opinions de Savary, Dupuys de la Serra, Boutarie, Jousse et Pothier, ajoute '.

Aussi le commerce, préoccupé des nécessités du credit et des dangers auxquels l'exposait un système qui limitait le recours du porteur contre ses débiteurs faillis réclamatil vivement contre l'usage qui s'était introduit a la suite de la doctrine et de la jurisprudence. La

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question fut donc de nouveau vivement agitée entre des commerçants et des jurisconsultes; et de cette discussion dont on retrouve les traces dans le recueil de Nicodéme, ii resulta que la faillite des divers co-obligés ne pouvait paralyser les effets de la solidarité et que le porteurd'une lettre de change, dont les divers signataires étaient en état de faillite, avait le droit de figurer successivement dans toutes les masses, sans deduction des dividendes qu'il avait perçus, et jusqu'à parfait paiement.

Entraîné par ce revirement dans la pratique, le parlement de Paris revint sur son ancienne jurisprudence, et par arrêt du 18 juin 1776 il décida que le porteur d'engagements solidaires avait le droit de figurer dans toutes les faillites des co-obligés pour la valeur intégrale du titre jusqu'a parfait paiement.

Par une concidence singulière, le parlement d'Aix rendait le même jour, 18 juin 1776, sur la plaidoierie d'Emérigon, qui nous en a conservé le souvenir, un arrêt en sens contraire, jugeant que le porteur qui était entré dans le concordat de l'un des co-obliges, ne pouvait entrer dans les autres que successivement et pour ce qui lui restait dû. Mais, sur le pourvoi du porteur, cet arrêt fut cassé par un arrêt du conseil du 24 février 1778, qui fut luimême confirmé par un second arrêt du 23 octobre 1731, portant rejet de la requête en opposition dirigée contre le premier.

C'est cette jurisprudence qui a été sagement maintenue par le Code de Commerce.

Plus loin ([39]):

C'est à cette conclusion que je crois devoir m'arrêter, parce que c'est la seule qui se trouve d'accord avec les principes sur la solidarité, qui veulent que les co-obligés soient toujours tenus, quand ii reste dû quelque chose, et les effets du paiement sous forme de dividende qui si le dividende n'était calculé que sur ce qui reste dû aprls le paiement dun premier dividence, ne pourrait jamais constituer un paiement intégral.

Et au No. 2023, il dit:

On s'est demandé si l'article 542 du Code de Commerce ne fait que formuler une application des principes sur la solidarité et les effets du payement par dividendes, qui sont les mêmes en matière civile et en matière commerciale. Les conséquences de ces principes ne tiennent pas a 1 organisation spéciale des faillites elles en sont indépendantes et par consequent elles trouvent leur place dans la déconfiture qui n'est autre chose qu'une faillite civile, bien que sa liquidation ne soit soumise à aucune forme et à aucune organisation particulière.

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Sirey, Recueil général ([40]).

L'article 542 Cod. Comm.; aux termes duquel le créancier porteur d'engagements souscrits, endossés on garantis solidairement par un failli et d'autres co-obligés également en faillite, participe aux distributions dans les masses, et y figure pour ha valeur nominale de son titre jusqu'à parfait payement, est applicable alors même que tous les co-obligés solidaires ne sont pas en faillite. Il suffit qu'un ou plusieurs d'enrre eux s'y trouvent

Le créancier porteur d'engagements solidaires entre un failli et d'autres co-obligés qui ne sont pas en faillite, et qui, depuis la faillite, a reçu un àcompte des obliges, doit être compris dans les distributions pour la valeur nominale de son titre, sans qu'il y ait lieu de faire deduction de cet acompte; ici ne s'applique pas ha disposition de l'article 544 Cod. Comm relativement à la deduction des acomptes pavés avant ha faillite.

Et à la page 297.

Le créancier qui, depuis la faillite, a reçu de ha caution, la portion de créance garantie par celleci, doit néanmoins, dans ha repatition des dividendes fixes par le concordat, étre compris pour la valeur de sa créance entière telle qu'elle a été admise au passif de la faillite.

Démolombe ([41]):

Dès he moment où chacune des faillites est déclarée he créancier acquiert he droit a la somme quelle pourra payer, aprés laccomplissement des formalités de ha liquidation dès ce moment les droits de chacun sont irrévocablement fixes

C'est un principe bien établi que la declaration due dividende est l'équivalent d'un jugement. Dalloz ([42]):

Jugé que le règlement définitif est une décision judiciaire, un véritable jugement contre lequel est ouverte ha voie de l'appel dans les délais ordinaires. (Paris, 20 juillet 1844.)

Voir aussi Dalloz ([43]).

Les jugements ne sont que déclaratifs et nuhlement constitutifs des droits qu'ils reconnaissent. (Cass. 14 Dec. 1840). Par consequent, ils ont un effet rétroactif au jour de la demande Cass 25 août 1868 Dalloz, 1868, 1, 397.

Ces auteurs font voir contrairement à l'opinion de

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l'honorable juge Meredith, qu'en dehors de toute loi de faillite, les demandeurs sont fondés à invoquer les lois de la solidarité et les consequences nécessaires qui en découlent C'est par le droit commun que la soli darité est établie et qu'elle donne à chacun des créanciers le droit de poursuivre le débiteur pour le tout, comme elle impose à chacun des débiteurs l'obiigation de satisfaire le créancier pour le tout. Puisque l'obligation solidaire a pour but d'assurer le paiement intégral de la créance, et que le créancier conserve la totalité de sa crésnce contre tous les co-obligés ii s'en suit inévitablement que si ceuxci tombent ensuite en faillite, il a droit de se presenter dans leur faillite pour la valeur nominale de son titre jusqu'à parfait paiement. S'il en était autrement si le créancier devait déduire le dividende reçu dans la faillite d'un co-oblige pour venir à contribution. il ne pourrait jamais arriver an parfait paiement. L'obligation solidaire manquerait alors son but qui est d'assurer le paiement integral de l'obligation. Ce droit de venir à contribution dans toutes lés masses en faillite de ses co-obligés a bien été reconnu par l'art. 542 du Code du Commerce, mais il existait de droit commun avant cela, ainsi que l'a reconnu l'arrêt du parlement de Paris de 1776. L'art. 542 n'a fait qu'adopter cette jurisprudence comme n'étant qu'une des conséquences logiques découlant nécessairement du "principe de la solidarité. Il n'est pas nécessaire pour nous de s'appuyer sur cet article, bien qu'il ne fasse que consacrer l'ancien droit français sur cette question ii nous suffit de se fonder sur les principes de la solidarité d'où découle ce droit du créaucier de se presenter pour la totalité de sa créance dans chaque masse de ses co-débiteurs, jusqu'à ce qu'il ait reçu son paiement entier ([44]).

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J'adopte l'opinion si savamment développée par l'honorable juge Jetté dont j'ai cite une grande partie des notes sur cette cause.

L'honorable juge a encore cite un arrêt du 9 décembre 1880 in re Bunyard ([45]) où la Cour de Chancellerie a fait l'application des principes qu'il soutient dans une cause identique à celle-ci. Voici comment s'exprimait Lord Justice Cotton en rendant ce jugement:—

Each of these appeals (il y avait trois causes réunies) raised the same question, namely, whether the holder of a bill of exchange taken from the drawer as security for a sum less than the amount of the bill is entitled as against the estate of the bankrupt, who had accepted it for the accommodation of the drawer to prove only for the amount due to him (the holder) or for the amount of the bill, with a restriction that he shall not receive dividends on his proof to an amount exceeding the sum due to him on his security. It was conceded that, if the bill had been accepted for value the holder would have been entitled to prove for the larger amount. But it was urged on behalf of the respondent that the fact of the acceptance being for the accommodation of the drawer makes a difference It was said and truly, that a man who has taken a bill from the drawer as security only will hold for the drawer any sum recovered from the acceptor beyond the amount due on his security and that when the bill has been accepted for the accommodation of the drawer he the drawer would be liable to repay to the acceptor any part of the sum recovered from him, which may be handed to the drawer by the holder of the bill But the acceptor has put it in the power of the drawer to make the bill in the hands of a holder for value available against the acceptor for its full amount, and although the holder may have taken it as security for a sum less than the amount of the bill we are of opinion that such a holder is entitled to make the bill available against the acceptor in the way which will best produce the sum due to him and that in the event of bankruptcy he is entitled to prove against the acceptor's estate for the full amount of the bill.

D'après tout ce qui précède je conclus que les appelants créanciers solidaires de Marcotte et des signataires des billets qu'ils avaient reçus de lui en garantie collatérale ont droit d'être colloqués sur le chiffre nominal de leur créance sans deduction des sommes reçues sur

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les billets transportés, depuis la production de leur reclamation.

Il n'en est pas de même de la somme de $490, produite de la vente des marchandises données comme gage aux appelants. Cette somme devra être déduite du montant de leur reclamation car cela constitue un paiement sur leur créance.

L'appel devrait être alloué.

TaschereAu J.—I am of opinion that the appeal should be dismissed for the reasons given by the court of Queen's Bench for Lower Canada (appeal side).

GWYNEE J.—Some time prior to the month of February, 1882, the plaintiffs made advances to one Alphonse Marcotte, then a merchant trading in the city of Montreal, taking as security for the repayment of such advances Marcotte's own promissory note for the amount, and, by way of collateral security, divers promissory notes made by certain persons who were debtors of Marcotte, of whom one Moodie was one, for several amounts payable to Marcotte or order, and endorsed by Marcotte to the plaintiff; and, also, some goods and merchandise belonging to Marcotte and delivered by him to the plaintiffs. In the month of February, 1882, Marcotte, by a voluntary deed executed by him bearing date the 13th of that month, conveyed and transferred to the defendant Thibaudeau, one of his creditors, all his estate and effects upon trust for the benefit of the whole of his creditors. The plaintiffs as creditors of Marcotte claimed the benefit of this trust deed, and upon the 22nd April, 1882, brought in and filed with the trustee their claim for $19139.83, which was accepted and recognized by the trustee as being, and which is admitted to have been, the amount then due to them by Marcotte, and for which they

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were then entitled to rank as creditors entitled to the benefit of the said trust deed. The trustee having subsequeutly realized from the trust estate an amount which enabled him to pay to the plaintiffs and the other creditors of Marcotte the sum of 12½ cents in the dollar upon the amounts due to them respectively at the time of their claims having been presented to the trustee, prepared and advertised a dividend sheet upon which the plaintiffs were entered and declared to be entitled to receive the sum of $2,392.49, which sum the trustee promised to pay them upon the 13th day of July then next following such advertisement, that is to say, upon the 13th of July, 1882. Between the 22nd of April, 1882, and this 18th of July the plaintiffs received from Moodie in respect of the notes made by him to Marcotte and endorsed by the latter to the plaintiffs as such collateral security as aforesaid the sums as is admitted in the case, of $8,363.66 and $911.57, making together the sum of $9,275.33; and in April 1883, the further sum of $248.91. The plaintiffs also received subsequently to the 22nd April, 1882, but when in particular is not stated, the sum of $490 as proceeds of the merchandie left in their hands. There seems to me to be some confusion in the printed case which does not appear to have been noticed; what the case says is: " Moodie had, also, become an insolvent and appellants realized out of his estate in virtue of such promissory notes $9,676.24, viz., $8,363.66 in May, 1882, subsequently to the filing of their claim, but previous to the 13th July, 1882, when the dividend was made payable, $911.57 in May, June and July, 1882, and $248.71 in April, 1883. Appellants, also, realized out of the goods and merchandise transferred to them by Marcotte a further sum of $490 making with that of $9,076.24 a total sum of $10,166.24."

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In the argument before us it was admitted that the above statement that "Moodie had also become insolvent" is erroneous and that in point of fact the amount realized from him was realized under an execution issued upon a judgment recovered against him in the province of Manitoba, so that the case before us is not that of a créditer having a claim against two insolvent estates for the main debt, but simply of a creditor holding collateral security for his debt claiming under a voluntary deed of assignment made by his debtor in trust for his creditors

Now as to the above sum of $490 it has been regarded by the Court of Queen's Bench at Montreal in appeal as having been received subsequently to the 13th July 188'2 and for that reason they have held that it cannot be deducted from the amount in respect of which the plaintiffs are entitled to receive a dividend of 12½ cents in the dollar under the trust deed '. while in the Superior Court and in the Court of Review it seems to have been regarded as having been received prior to that date, although the learned judge who pronounced judgment in the Superior Court does not seem to have been of opinion that it made any difference whether at was received before or after the 13th July, 1882 for he has included the $248.91 admitted to have been received in April, 1883, in the same category as the sums received by the plaintiffs between the 22nd April and the 13th July, 1882. In an action brought by the plaintiffs against the trustee of the trust deed of February, 1882, to recover the. sum of $2,392.49, declared by him to be in his hands and payable to the plaintiffs and which he promised to pay to them upon the 13th July,, 1882, as their equal share or dividend upon the amount of the plaintiffs' claim as secured, and as recognized by him as being secured under the trust deed, the learned judge of the Superior Court

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held that the plaintifs had no right to recover from the trustee the said amount of $2,392.49 so declared to be in his hands and payable to them as aforesaid, and that they could recover only the sum of $1,121.99 for which sum he gave judgment in their favour. This sum of $1,121.99 was ascertained by calculating 12½ cents in the dollar upon the sum of $8,963.59, being the amount which he found to be due by Marcotte to the plaintiffs after deducting from the $19,139.33 due to them in April, 1882, the above sum of $10,166.44, and which sum of $8,933.59 the learned judge held to be the only sum for which the plaintiffs were entitled to rank as creditors under the said trust deed. The Court of Review set aside the judgment of the Superior Court holding that the plaintiffs were entitled to rank as creditors upon the trust estate for the sum of $18,649.83 being the amount of plaintiffs' claim as it stood in April 1882 less the sum of $490 realized out of the merchandise, and they rendered judgment for the plaintiffs in the action for the sum of $2,331.33 with interest thereon from the 13th July 1882.

The Court of Queen's Bench in appeal holding the $490 to have been received subsequently to the 13th July, 1882, adjudged that this sum could not be deducted from the amount upon which the plaintiffs were entitled to a dividend under the trust deed and that they were entitled to rank on the trust deed as creditors only for the sum of $9,722.00. This plainly ought to have been $9,716500 for the judgment declares it to be arrived at by deducting from the $19,139.33 due in April, 1882, the sum of $9,423.33, which the court held to be the amount realized from the Moodie notes. How this latter sum was arrived at is not clear for the only sums admitted to have been received by the plaintiffs from the Moodie notes appear to have been the three sums of $8,363.76, $911.57 and $248 91,

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amounting together to $9,524.44, and as the $248.91 was not received until April, 1883, the Court of Queen's Bench must have excluded that sum for the same reason as they excluded the $490, namely, that money received after the 13th February, 1882, could not be deducted from the amount upon which the plaintiffs were entitled to a dividend; if then the $248911 be deducted from the $9,524.24 there remained only $9,275.33 to be deducted instead of the $9,423333.

The plaintiffs alone have appealed from this judgment and the learned counsel for the respondent admitted that not having presented a cross appeal the respondents cannot now object to the deduction of the $490, although he contended that in making that deduction the court erred and he admitted, therefore that the appeal before us is to be determined wholly upon the question as to the correctness of the judgment as to the deduction in respect of the amount received upon the Moodie notes prior to the 18th July 1882. That is the sole question before us and in determining it we can, I think with great deference, arrive at a sound conclusion without inquiring whether Moodie, by reason of the plaintiffs having been the holders of his notes payable to Marcotte and endorsed by the latter to them as collateral security for Marcotte' debt was bound solidairement with Marcotte for that debt, and without inquiring either what was the law of France prevailing in Canada at the time of its cession to the British Crown in relation to the distribution of the estate and effects of insolvent debtors.

The case in my judgment depends simply upon the true construction of the deed of the 13th of February 1882, construing that deed by the light of the surrounding circumstances the plaintiffs being entitled to the benefit of its provisions to the fullest extent of its terms without prejudice to rights then already held by

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him, which are not professed to be interfered with by the deed; and the defendant in like manner being hound to execute the trust in favour of the plaintiffs to the fullest extent of the terms of the deed without any diminution or variation whatever.

In 1864 the legislature of the late province of Canada passed an act respecting insolvency wherein provision was made for the distribution of the estate and effects of insolvent debtors whether under a voluntary deed of assignment executed by the debtor or under proceedings in compulsory liquidation. In that act provision was made for the case of a creditor holding collateral security, prescribing the manner in which, and the extent to which such creditor should rank on the insolvent estate; that act was amended by the 29 Vic. ch. 18, and in the same session of the legislature the statute 29 Vic. ch. 41 was passed which carried into effect the object of the statute 20. Vic. ch. 43 by codifying the laws in force in that part of the then province of Canada previously forming the province of Lower Canada in relation to civil matters into one code designated " The civil code of Lower Canada." This code contains no provision upon the subject of the distribution of the estates of insolvent debtors for the reason, no doubt, that the legislature was of opinion that the Insolvent Act of 1844 as amended by 29 Vic. ch. 18 was sufficient for the purpose. This act of 1864 so amended constituted the sole law in force throughout the province of Canada, regulating the distribution of the estates of insolvent debtors at the time of the passing of the B. N. A. Act in March, 1867. In the new constitution given by that act to the Dominion of Canada and to the several provinces of which it was composed all matters relating to bankruptcy and insolvency, including, therefore, the distribution of the estate and effects of insolvent

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debtors among their creditors, whether having, or not having, collateral securities for their respective claims, and the manner in which and the extent to which all such creditors respectively should rank on the insolvent estate, were placed under the exclusive jurisdiction and control of the Dominion Parliament for the purpose, no doubt, of insuring uniformity throughout the Dominion in the law upon these subjects. In the exercise of this jurisdiction the Dominion Parliament passed the act 32 & 33 Vie. ch. 16 making one uniform provision throughout the Dominion of Canada for the distribution of the estates of insolvent debtors whether under voluntary deeds of assignment or in compulsory liquidation, and prescribing the manner in which, and the extent to which, creditors having collateral securities should rank on the insolvent estates. This act while repealing the act of 1864 which had abrogated, annulled and repealed the old French law relating to the distribution of the estates of insolvents in that part of the late province of Canada which now constitutes the province of Quebec where alone it had ever any force enacted in substitution there for another law relating to the matter, which continued to be the sole law in force upon the subject throughout the Dominion until 1875 when it was repealed and the Dominion statute 38 Vie. ch. 16 substituted therefor; this latter act as amended by the Dominion statutes 39 Vic. ch. 30 and 40 Vic. ch. 41 continued in force as the sole law upon the subject in the Dominion until 1880 when the statute 43 Vic. ch. 1 repealing the said three last mentioned statutes was passed.

Now on the 13th February 1882 Marcotte executed to the defendant one of his creditors accepting the trust deed upon the construction of which alone in my opinion, depends the solution of the question before us on this appeal.

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By that deed Marcotte after reciting that he was indebted to several persons and firms his creditors, which indebtedness he was unable to pay in full and that he had agreed with his creditors to transfer and assign to the defendant the whole of his property movable and immovable estate and effects for the profit and benefit of his said creditors assigned transferred and made over to the defendant, accepting thereof as assignee for himself and assigns and for and on be half and for the sole profit and benefit of said creditors " all and every," &c., &c, enumerating specific pro-perties and concluding thus: " and all assets generally whatsoever without exception or reserve upon trust and to and for the uses, &c., hereinafter mentioned, that is to say:

" 1st. To pay all costs attending the execution of the trust purposes of the deed: "

2 2nd. All rent and privileged claims," and

"3rd. To divide from time to time and as said assignee shall deem proper the whole rest and residue of said estate pro rata among said creditors according to their several and respective claims as filed by them with the party of the second part " (The Trustee) "the amounts of which appear and are shown opposite the creditors' respective names set out in the annexed list approved and signed ne varielur by parties and notaries hereto "

Now, as it appears to me; Marcotte by this deed himself determined the precise time ne varietur when each creditor should become entitled to receive a dividend upon his claim and the respective amounts of such claims, namely upon each creditor signifying his acceptance of the benefit of the deed as expressed therein by filing his claim with the trustee, such claim being that stated in the list annexed to the deed ne varietur It is to be observed that there is no provision in the

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deed to the effect that the claim of any creditor having collateral security shall be diminished or altered in any respect in case, after the filing of his claim and the acceptance thereof by the trustee, he should realize anything from the collaterals held by him; no provision that from time ti time as anything should be realized from collaterals, the amount upon which such creditor would be entitled to be collocated for dividend should be reduced by the amount realized from the collaterals. Every creditor, whether holding collateral security or not, was by the terms of the deed to receive out of the estate and effects which the grantor had power to appropriate for the benefit of all creditors alike an equal ratable dividend proportionate to the amount of his claim as it existed when filed with the trustee, those holding collateal securities until, with such dividends and any sums to be realized from collaterals, they should be paid in full, when what should remain of the collaterals held by them should first come under the operation of the trust deed and for the benefit of all the other creditors not paid in full.

This, as it appears to me, is the true construction of the trust deed. A contrary construction cannot, in my opinion, be given to it without the insertion of a wholly new clause never apparently contemplated by the grantor, and which could not be inserted without detracting in a most essential manner from the rights which had then already been vested by the grantor in such of his creditors as were then holders of collateral securities; without, in fact, completely altering the trust purposes of the deed.

Prior to the execution of the trust deed the above plaintiffs had the right to sue Marcotte and to recover judgment against him to the full amount of his debt, admitted to have been $19199.83 and they had the right at the same time to

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sue and recover judgment against Moodie to the full amount of his notes which the plaintiffs held as collateral security, and they had the right to enforce these judgments by executions levied both on the property of Marcotte and on that of Moodie from time to time, until the plaintiffs, by moneys realized either wholly from the property of one of them or partly from the property of one of them and partly from that of the other should be paid in full Marcotte s debt to them. When, then, Marcotte executed the trust deed he had no power of disposition whatever over the Moodie notes which had been transferred to the plaintiffs as collateral security, which he could exercise to the prejudice of the plaintiffs; and, indeed, he does not in the deed claim to have, or assume to exercise, any such power. So far as those notes were concerned Marcotte's interest in and his power of disposition over, them was limited to so much of the amount thereof as should remain after the plaintiffs should be paid in full Marcotte's debt to them; and that was the sole interest in those notes which passed by the trust deed to the defendant. The trust deed had no operation whatever upon those notes, unless or until the plaintiffs should be paid in full Marcottes debt, but upon the residue of the property of Marcotte the trust deed had immediate operation, and it is plain that out of the proceeds of that property the plaintiffs by the deed, which is recited as being executed in pursuance of an agreement between Marcotte and his creditors, are declared to be entitled to receive an equal dividend with all the other creditors of Marcotte upon the full amount of Marcotte's debt to the plaintiffs which is admitted to have then been $19-139.83, without in any manner detracting from the plaintiffs' rights in the collaterals held by them until they should be paid in full and the trust which the

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defendant accepted and undertook to execute, in so far as the plaintiffs were concerned was to pay to them upon the above amount as constituting their claim an equal share or dividend ratably with Marcotte's other creditors, out of the moneys to be realized by the trustee from the property so transferred to him in trust. It is a portion of this property which has been sold and the trustee, in accordance with the express provisions of the deed, the trusts of which he assumed and undertook to discharge, has collocated the plaintiffs as entitled to receive the sum of $2,392.49, being their equal share or dividend at the rate of 12— cents in the dollar upon the above sum for which they were, as is admitted, entitled to rank when the trust deed was executed and on the 22nd April 1882 when they filed their claim with the trustee and thereby signified their acceptance of the benefits of the trust deed For this sum of $2,392499 the plaintiffs were, in my judgment, entitled to judgment in the Superior Court with interest thereon from the 13th "February, 1882. The only law affecting the present case is, in my opinion, that prevailing in the Province of Quebec in relation to the construction of contracts, and to the obligation imposed upon a trustee to execuse the trusts of a deed which he accepts and undertakes to execute. In the absence of an Insolvent Act passed by the Parliament of Canada qualifying the rights of creditors of an insolvent debtor as expressed in a voluntary deed executed by the debtor, and detracting from such rights in the case of a creditor holding' collateral securities, there does not, in my opinion, exist in the Dominion any law which can have the effect of depriving the plaintiffs of the benefit of the provisions of the trust deed in his favour as above construed or of relieving the defendant from the obligation of executing the trusts of the deed as

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accepted by him according to the precise terms and provisions of the deed.

The case in my judgment is simply resolved into this:— The Insolvent Act passed in 1864 by the legislature of the late province of Canada abrogated, annulled and repealed, within that part of the province which formerly constituted Lower Canada the old French law, whatever it was, in relation to insolvency and the distribution of the estates of insolvents. The act of 1864 assumed control over and provided the law relating to that subject. This act of 1864 was the sole law in force in Canada upon the subject at the time of the passing of the B.N. A. Act which act withdrew the subject from provincial jurisdiction and placed it under the exclusive jurisdiction and control of the Dominion Parliament. That Parliament by the act of 1869, when repealing the act of 1864 enacted a law upon the subject having uniform force and effect throughout the whole Dominion. The act of 1875 which repealed the act of 1869 re-enacted ¿mother law upon the subject, having in like manner uniform force and effect throughout the Dominion The act 43 Vic ch.1 repealed the act of 1875 and two other acts which had been passed in amendment of it. Now what was the effect of this repeal? Not, in my opinion, as has been contended to revive the old French law in relation to insolvency and the distribution of the estate of insolvents within the province of Quebec, so in effect leaving the province of Quebec with an insolvent law while all the other provinces of the Dominion were without one. The Dominion Interpretation Act enacts that the repeal of any act shall not revive any act or provision of law repealed by such act. As well might it he contended that 43 Vic. oh. 1 had the effect of reviving the repealed act of 1864 as of reviving the old provision of law which the act of 1864 abrogated, an-

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nulled and repealed. The effect of 43 Vic ch 1 in my opinion, was simply to leave all the provinces of the Dominion alike in the same condition that is to say without any law relating to insolvency unless and until one should be enacted by the sole power having jurisdiction over the subject. As to this case now before us, all we have to do as it appears to me is to construe the agreement between the parties as expressed in the deed of February, 1882, the trusts of which the defendant assumed the duty of dischargion, and in accordance with the provisions whereof he collocated, in my opinion correctly, the plaintiffs as entitled to receive as their dividend upon their claim as secured by the deed the sum of $2 392.44 for which sum with interest from the 13th July, 1882, they are, in my opinion, Entitled to judgment, and the appeal therefore should be allowed with costs and judgment be ordered to be entered accordingly in the Superior Court with costs.

PATTERSON J—Marcotte being insolvent assigned his effects to the respondent who is defendant in the action, for the benefit of the whole of his creditors on the 13th of February, 1882. The appellants had made him advances on his promissory note, and he had given them collateral security, to an amount larger than his debt, by pledging some goods and by endorsing to them promissory notes made by one Moodie. It is not stated in the case agreed on by the parties that Marcotte made himself, or became, personally liable to the appellants as endorser of these notes. The notes may have been endorsed merely for the purpose of transferring them, the power to do which is explained in Denton v, Peters ([46]), or it may be that Marcotte was not notified of the dishonour of the notes so as to fix

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him with liability for the payment of them. It was not a necessary part of the transaction that he should, in addition to his liability on his own note, become also liable on these Moodie notes. We are not even informed, nor is it necessary that we should know, whether the notes fell due before the assignment or not till afterwards. We have simply the facts that Marcotte was debtor to the appellants, and that, by way of security for the debt, they held a portion of the assets of their debtor and had the right which is recognized by article 1969 of the Civil Code to be paid from those assets by privilege or preference before other creditors. The debt due by Marcotte to the appellants and the debt due by Moodie to Marcotte were entirely distinct debts The nature of the latter was not changed by the accident of the endorsement over of the notes by Marcotte which made Moodie directly liable to the appellants not for the debt which they had proved against Marcotte's estate, but for the several promissory notes.

To constitute a joint and several liability as defined by article 1103 of the Civil Code three things must concur. The co-debtors must be obliged to the same thing: In such manner that each of them singly may be compelled to the performance of the whole obligation: And that the performance by one discharges the others towards the creditor. These tests are in my apprehension, fatal to the recognition of a joint and several liability in the present instance. Moodie's obligation is to pay his notes; Marcotte is to pay his debt to the appellants, which is a different thing. To hold Marcotte compellable, as endorser of the notes, to perform the same obligation as Moodie would be, as we have seen to assume facts that are not before us. Besides, that is not the obligation on which the claim before the assignee is founded. That claim is made

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under an obligation to which Moodie is no party. Performance by Marcotte of his obligation by the payment of his debt would not discharge Moodie. He would still have to pay his notes. And performance by Moodie discharges Marcotte only as a realization of so much of the security held by Marcotte's creditor.

In this particular I do not see my way to follow the learned and instructive judgment delivered by Mr. Justice Jetté in the Court of Review ([47]).

I do not think it necessary to discuss or to form a definite opinion as to the effect of Marcotte's being liable as endorser on Moodie's notes, if he had been shown or admitted to be so liable. Two questions would arise. The first which might not be difficult to answer in the affirmative in view of articles 1103, 1104, 1105 and 2310 would be: Was there a joint and several obligation? And the second which would involve more difficulty, would be the conclusion that a joint and several obligation would carry with it the right of the creditor to rank upon the estate of each co-debtor for the whole original amount of his claim until paid in full without his being bound to reduce his claim on one estate by crediting payments received from the other estate. On this question there are strongly conflicting opinions, as is evident from contrasting the views of Mr. Justice Jetté in this case, which is reported as Benning v. Thibaudeau (l),with others commented on by him, particularly those of Chief Justice Meredith expressed in Rochette v. St. Louis ([48]) and with the later opinion of Mr. Justice Andrews in Chinic v. Raltray ([49]).

The debt for which on the 22nd of April. 1882, the appellants filed their claim was $19,1139.83.

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Moodie was unable to pay in full and the amount realized from the collateral security was considerably less than this debt of $19,139.83.

The court of appeal sustained the respondent's contention that the sums so realized were payment pro tanto of the debt out of the property of Marcotte and that the appellants are entitled to share in the fund in the hands of the assignee in respect only of what remains unpaid.

In my opinion that conclusion should be affirmed on the grounds stated in the judgment of the court.

With regard to the amounts, I cannot make the details given in the case bring out the results there given, nor can I find in the case exactly the same figures on which the calculations in the judgment of the Queen's Bench are made.

In the court of first instance the computation is made on the gross amounts stated in the case and, as far as I can perceive, that computation is correct. The figures thus used are as follows:—

	Total debt proved	$19,13983
"	amount realized from col- laterals	10,16624
	Balance for which to rank	$ 8,973 59
	12½ cents per $ on $8,973.59	$ 1,121 69

Part of the amount realized was received after the declaration of the dividend on 13th July 1882 In the Queen's Bench it was held that that part was not to be deducted from the claim proved and the amount deducted by the judgment of the Queen's Bench was therefore $9427333 or $678911 less than the amount deducted at the trial, leaving $9,712.50 for which to rank. 12- per cent on this amount would be $1214.66 and not $1,550.50 as erroneously stated in the judgment.

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This correction ought, at all events, to be made, as asked by the respondent at the end of his factum; but I do not understand why the whole amount received from the collaterals should not be deducted. I think the proper correction to be made would be to restore the judgment to the amount of $1,121.69, for which it was first rendered and with this correction I would dismiss the appeal with costs.

Apple dismissed with costs.

Solicitors for appellants : Berque, Lafontaine & Turgeon.

Solicitors for respondent : Geoffrion, Dorion & Allan.