Inns (Syndic) v. (Gabriel Lucas Limit~e
et Dame MacDonald, mise en cause 1
Arthur M. Sanft *
Facts and Issues
In March 1961, Mrs. MacDonald, wife of a high-ranking executive,
went to Gabriel Lucas Limited with pictures of a brooch and a pair
of earrings which she desired the jeweller to duplicate. Lucas
subsequently sent her photographs of how the completed jewellery
would appear and Mrs. MacDonald signed a confirmation of the
order, acknowledging that the cost would be $10,409. The date
of delivery was fixed at June 26, 1961.
On the appointed day, Mrs. MacDonald appeared with a cheque
for $1000, which Lucas accepted in exchange for the jewellery,
the balance to be paid the next day by Mr. MacDonald. After
the cheque came back N.S.F. and no word had been received, Lucas
telephoned Mr. MacDonald who informed him that his wife was ill
and presently on vacation.
The matter was turned over to their respective lawyers but
a stalemate ensued. On Sept. 11th Mrs. MacDonald went into
bankruptcy and Inns, who was appointed trustee, refused to return
the jewellery to Lucas. The Superior Court decided the issue in
favour of Lucas on the grounds that the delivery had been obtained
fraudulently.2
The issues of the appeal are twofold:
(1)
In a case such as this, where there is a mixed contract, both
of creation (entreprise) and sale of an object, what criterion
can we establish to determine the rules to be applied to the
transaction ?
(2) If, according to the chosen criterion the rules of the sale
of a future indeterminate thing are to apply, when then did
the sale take place ?
Of the Junior Board of Editors, McGill Law Journal; Second year law
student.
1 [1963J K.B. 500.
2 Unreported judgment of the Superior .Court, C.S. 164/1961, Bankruptcy;
Ferland, J.
No. 2]
CASE AND COMMENT
A) when it was delivered, in which case fraud in obtaining
transfer of possession would void the sale, or
B) at the time when the object became certain and deter-
minate and was accepted as such.
Ratio Decidendi
The majority, per Rivard, J. (Bissonnette and Taschereau, J.J.
concurring), felt that since Lucas was called upon to sell an object
non-existent at the time, there can be no doubt that the case con-
cerns a contract of enterprise as well as sale.
Rivard, J. then examined the doctrine to discover what the au-
thors had to say on the subject. Planiol and Ripert offer the fol-
lowing point of view:
Dans la vente d’une chose future qui doit 6tre fabriqu~e par le vendeur, ce
dernier, s’il fournit la mati~re en mme temps que le travail, est propri~taire
de I’objet pendant la fabrication. Le transfert de l~roprit6… est retard6
jusqu’a la livraison faite au client. 3
He next examined Mignault 4 and a study by Frangois Gor6 5
who both offer similar viewpoints.
On the basis of these authorities he declared that in the instance
where both contracts of sale and enterprise exist, a contract sui
generis is created. The rules of this new entity are different from
either of the orginal components and require delivery for owner-
ship to pass. Applying his ratio to the case he concluded that the
sale was only completed upon delivery on June 26, 1961. Since at
that time the delivery was fraudulently obtained through both an
N.S.F. cheque and the misrepresentation of how the balance of
payment would be made, the sale must be annulled. For these rea-
cens the appeal was dismissed and Lucas ietained ownership of the
je-vellery which had been awarded him in the lower court.
There is, however, a strong dissent in the case voiced by Trem-
blay, C.J. (Owen, J. concurring). He begins by evolving a criterion
for deciding how to proceed when faced with a mixed contract of
sale and enterprise. Rejecting Rivard, J.’s idea of a contract sui
generis, he posits, along with Frangois Gor6, that we must examine
the relative value of the end product and the craftmanship involved
in its creation. If the former has a higher pecuniary value then the
” Traiti Pratique de Droit Civil FraizCais, 2e 6d., t. 3 (1952), n. 622, p. 631.
4Droit Civil Caradien, t. 5 (1901), p. 267.
5 Lc moment du transfert de propri !ti das Ics ventes 6 livrer, Revue Trimes-
trielle de Droit Civil, 1947, at p. 164.
182
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[Vol. 11
rules of sale apply: if vice versa then we conduct ourselves as
though confronted with a contrat d’entreprise.
He then turns to none other than Planiol and Ripert, who we
must bear in mind apparently supported the majority view, to
strengthen his own hypothesis:
Dans les ventes dites A livrer, c’est-A-dire les ventes dans lesquelles un indus-
triel s’engage A livrer une chose qu’il construira avec des mat~riaux fournis
par lui, l’op~ration est consid~r~e comme une vente de choses futures. II
n’en serait autrement que si la valeur de travail dtait tr~s sup~rieure A Ia
valeur des choses livries.6
Applying the criterion he has just established, he assumes there
would be no objection to concluding that the value of the jewels
certainly surpassed that of the labour involved. Consequently we
have a contract for the sale of a future and indeterminate thing,
rather than a contract sui generis as the majority suggested.
Furthermore, he explains that it is pointless to look among the
French doctrine and jurisprudence on this subject as Quebec law
is substantially different. Our codifiers, when drawing up Art. 1026
C.C., specifically stated that they wished to clarify the ambiguity
of Art. 1138, the corresponding article of the Code Napoleon. 7
Art. 1026 C.C. states:
If the thing to be delivered be uncertain or indeterminate, the creditor does
not become the owner of it until it is made certain and determinate, and he
has been legally notified that it is so.
There is no mention in this article of the necessity for delivery
to perfect the contract, and consequently none should be made in
the case. On the ninth of May, 1961, when the sketches were ap-
proved and the order was confirmed, the object became certain and
determinate. The contract was thus perfected and ownership trans-
ferred on that day. It is undoubtedly true that possession of the
jewels was obtained through fraud but this did not affect the sale
being subsequent to it.
Critique
After a careful analysis of the legal reasoning involved, one
cannot come to any other conclusion than to support the dissenting
justices. With all due respect the author humbly submits that the
majority have either failed to realize or chosen to disregard the
fact that when Planiol and Ripert, as well as Frangois Gor6, pro-
pounded the view that the manufacture and sale of a future and
6 Traiti Pratique de Droit Civil Franqai8, 2e 6d., t. 10 (1956), n. 5, p. 7.
7 Premier Rapport des Codificateurs (1865), p. 14.
No. 2″)
CASE AND COMMENT
indeterminate object is only complete upon delivery, they do not
mean that a contract sui generis is created necessitating delivery
for perfection. They have merely applied their “relative value” cri-
terion, as cited by Tremblay, C.J., and as a result have chosen to
consider the contract as one of sale. According to the French law,
a sale of this type, i.e. of a future and indeterminate object, is gen-
erally considered incomplete without delivery. Hence their state-
ment, while a true exposition of the French law, is not applicable
to Quebec law where consent alone transfers ownership.
Thus Rivard, J. reasons:
1) The authors say that delivery is necessary in a mixed con-
tract of sale and enterprise.
2) Therefore a new type of contract sui generis is created in
which delivery is an integral part.
Whereas Tremblay, C.J. reasons:
1) The authors say that delivery is necessary in a mixed con-
tract of sale and enterprise.
2) They apply the criterion of adopting the rules of the contract
with the higher pecuniary value, which almost always is sale.
3) It is true that under French law delivery is necessary for
sale, but this is not so in Quebec.
4) Therefore we do not have a contract sui generis but rather
one of sale in which, according to Quebec law, delivery is not neces-
sary.
This reasoning on behalf of the dissent is justified in view of
Art. 1026 and Art. 1472 of the Civil Code as well as the jurisprudence 8
and doctrine. Mignault says, “Vous deviendrez propri~taire lorsque
la chose vendue se trouvera individuglis6e par la tradition qui vous
sera faite, ou par une convention ult6rieure qui d6terminera l’individu
qui devra vous 6tre livr6.” 9
It does not logically follow for Rivard, J. to quote this passage.
The last clause unequivocably states delivery is not necessary pro-
vided the object is individualized by “une convention ult~rieure”.
Migirault thus adds support to the dissent. Faribault, as well, voices
his agreement with this position. 10
8 Anclair v. Dame Gamefort [19483 C.S. 298; Naud v. Dolbec [1959] C.S. 120;
Donegani v. Molinelli (1869) 14 L.C.J. 106; Morgan v. Turnbull (1888) 14 Q.L.R.
121;Reid v. Leclaire (1896) 5 B.R. 32.
9 Droit Civil Canadien, t. 5 (1901), p. 267.
10 Traiti de Droit Civil du Quebec, vl. 12 at p. 416.
McGILL LAW JOURNAL
[Vol. 11
Thus it is respectfully submitted that we must accept the cri-
terion Tremblay, C.J. has established, namely that the rules of the
contract with the higher pecuniary value shall prevail. This is
suggested by the doctrine quoted by both litigants as well as the
jurisprudence, and indeed is the only logical one to be found.
Once this is applied to the present case, we conclude that the
contract is to be considered as one of sale wherein the Civil Code and
doctrine show us that delivery is not a requirement. As a result,
fraud in obtaining possession cannot viciate the sale.
Lucas had retained an N.S.F. cheque long enough to allow his
right of revendication under art. 1998 C.C. to elapse before he took
positive measures to remedy the situation. He was aware that Mr.
MacDonald was a prominent business executive, and on this sup-
position, Lucas gambled that he (MacDonald) would make good
his wife’s debt. It is of the very essence of commerce that an en-
trepreneur undertakes risks, calculating that they will bear fruit in
the future. Unfortunately Mr. MacDonald’s unusual ploy was more
than Lucas had been able io foresee.
As the decision now stands, other creditors in the bankruptcy
who may have been more prudent in their affairs than Lucas, have
been made to suffer for his negligence by depriving them of a size-
able portion of the estate. Therefore it is suggested that the decision
should have been reversed, the jewels returned to Inns and Lucas
placed in the position of nothing more than an ordinary creditor in
the bankruptcy.
