Recent Cases
–
–
INSURANCE
MATERIALITY OF MISREPRESENTATIONS
THE
REASONABLE INSURER TEST – WHETHER EVIDENCE OF PRACTICES
OF DEFENDANT INSURER SUFFICIENT. Henwood v. Prudential In-
surance Co. of America, (1967), 64 D.L.R. (2d) 715.
In the contract of insurance, misrepresentation in the absence
of fraud must be material in order to be a cause of nullity.’ The
question of what criteria are to be applied to determine this materiality
has recently come before the Supreme Court of Canada in the case
of Henwood v. Prudential Insurance Co. of America.2
Briefly, the facts of the case are as follows: the insured, a young
lady who had made several visits to a psychiatrist and other physicians
following a period of depression caused by a broken engagement,
failed to disclose that she had been attended by a “physician or
other practitioner within the past five years” in answer to a question
to that effect in an application for a life insurance policy; as well
she answered in the negative a question asking if she had been
“treated for any nervous or mental disorder” in the same application.
A little more than one year later, the insured was killed in a motor
vehicle accident; it was not disputed that the answers she had given
in the application had no bearing whatsoever on the circumstances
of her death, but the insurance company attacked the policy’s validity
because of the non-disclosure which they claimed was material to the
insurance in the sense of S. 149(1) of the Insurance Act.3 The
‘Articles 2485 and 2487 C.C.; Fire Statutory Condition (1), Insurance Act,
715
R.S.Q. 1964, c. 295, s. 240; Insurance Act, R.S.O. 1960, c. 190, s. 149(1).
(2d)
2 (1967), 64 D.L.R.
(S.C.C.). Although the case
is probable that the Quebec rules in
is governed
by the law of Ontario, it
this area of
materiality are the same. The question is admittedly the subject of some debate
ever since the decision of the Quebec Court of Appeal in Alliance Insurance Co.
v. Laurentian Colonies and Hotels Ltd., [1953] B.R. 241, where it was held
(per S. McDougall, J., at p. 255) that the scope of materiality under Article 2487
C.C. is narrower than that of the common law. Other judgments prior to this
date, however, both in the Court of Appeal and in the Supreme Court followed
the common law rules (Bertrand v. Compagnie Frangaise du Phenix, [1946]
B.R. 82; Gauvremont v. The Prudential Insurance Company of America,
[19411 S.C.R. 139). See also the criticism of the Alliance decision in S. Taviss,
A Re-examination of the Test of Materiality in Quebec Insurance Law, (1955-56),
2 McGill L.J. 148; A.J. Campbell, Claims under Fire Insurance Policies, The
W.C.J. Meredith Memorial Lectures, 1963 Series, (Montreal, 1963), 40 at
p. 43.
3 R.S.O. 1960, c. 190.
McGILL LAW JOURNAL
[Vol. 14
Supreme Court held (per Ritchie, J.; Cartwright, Martland and
Judson, JJ., concurring) that these untrue answers respecting the
medical advisers consulted by the insured were material to the risk,
and that the policy was therefore void. Mr. Justice Spence dissented.
The question of materiality is one of fact in each case and the
onus of establishing it rests upon the insurer.4 What evidence, then,
was available to the court to enable it to justify its conclusion that
the medical condition of the insured was sufficiently serious so that
non-disclosure thereof was material to the risk?
Of the medical advisors who actually treated the girl, Dr. Valadka,
her family physician, testified that he
had the impression she’s like the normal average, teen-age girl at that age
when they usually start to have some problems, discussions at home,
arguments with parents, or especially father due to some disagreement
about the dates and things like that, but nothing unusual.5
Dr. Murray, the psychiatrist,6 stated in an answer to the trial judge’s
question that if things had been better with her boyfriend she
would have recovered rapidly.”
The majority, however, seems to have paid more attention to
the testimony of Dr. Roadhouse, the company doctor, who was not
a psychiatrist and who had never examined the insured. Together
with another officer of the company, Dr. Roadhouse testified that
if they had had access to the information in question, the policy
would not have contained any accidental death benefit provisions5 –
that is to say, that in the opinion of the respondent insurance com-
pany, knowledge of the insured’s medical history would have affected
the risk.
In weighing this evidence, the test of materiality which the
Supreme Court applied was the generally accepted one of the
reasonable insurer.9 The majority found, however, that the respondent
insurance company was acting as such an insurer on the basis of
4 Ontario Metal Products Co. v. Mutual Life Insurance Co., [19241 S.C.R. 35
[1924] 1 D.L.R. 127; affirmed on appeal in the Judicial Committee, sub. -nom.
Mutual Life Insurance Co. of New York v. Ontario Metal Products Co., [1925]
A.C. 344, [1925] 1 D.L.R. 583.
G At p. 724.
6 One other psychiatrist had examined the girl, but he had died prior to the
institution of proceedings.
7At p. 728.
8Ibid., p. 719.
9MacGillivray on Insurance Law, 5th ed., by Denis Browne, vol. 1, (London,
1961), para. 827; Mutual Life Insurance Co. of New York v. Ontario Metal
Products Co., [1925] A.C. 344.
No. 1]
RECENT CASES
its particular practice alone. 10 There was no evidence of expert
witnesses as to whether or not other insurance companies would
have considered such a misrepresentation as material; officers of
the respondent company testified that they had no knowledge of
the policies of other companies in this regard. Once the insurer has
established its own practice, the majority holds, the burden then
shifts to the insured to prove that such a practice is unreasonable.
In the words of Ritchie, J.:
it
I do not think that when no evidence whatever has been adduced to suggest
that the respondent’s practice is anything but reasonable,
is seized
with the burden of proving the practice of other insurers.11
Mr. Justice Spence, in his dissenting judgment, refuses to accept
the evidence given by the officers of the company as a discharge
of the insurer’s onus under the reasonable insurer test. He points
out that to hold as the majority does is tantamount to saying that
the respondent insurer, in reciting its policy, automatically recites
the policy of a reasonable insurer; any idiosyncracy of an individual
company expressed in its policy, therefore, would bind the court to
hold that non-disclosure of facts which were not in accordance with
that idiosyncracy was automatically material. 12 He goes on to
emphasize that the reasonable insurer test is only concerned with
representations and that
if a company wishes to take the position that any non-disclosure is material
to it no matter what the view of reasonable insurers, then it should put
the answers of the questionnaire by the insured in the position of conditions
or warranties.13
The judgment of the Supreme Court in the Henwood case would
appear to have severely emasculated the test of the reasonable insurer,
if it has not completely destroyed it. For it would now appear relevant
to ask only whether the misrepresentation would have influenced
the particular insurer in the case at bar; the burden of showing
that such a practice is unreasonable falls on the insured.
D.H.T.
10 One might raise the point, en passant, in the light of the actual medical
history of the insured, that by concluding that the respondent insurer (for
whom such a medical history would have affected the risk) was not acting
unreasonably, the majority of the Supreme Court would appear to be regarding
psychiatric treatment per se as indicative of emotional instability and mental
illness.
11 At pp. 720-721.
12 Ibid., p. 731.
13 Ibid.
McGILL LAW JOURNAL
[Vol. 14
LAW REVIEW OF STATE UNIVERSITY AS PUBLIC
CONSTITUTIONAL LAW (United States) –
FREEDOM OF SPEECH
RIGHT OF LAW REVIEW TO REFUSE TO PUBLISH ARTICLE SUB-
MITTED –
IN-
STRUMENTALITY. Avins v. Rutgers, State University of New
Jersey, (1967), 385 F. 2d 151.
The plaintiff brought suit in the District Court for the District
of New Jersey against the defendant state-supported University,
the publisher of the Rutgers Law Review, for declaratory and
injunctive relief. He alleged that the editors of that Review had
failed to publish an article which he had submitted because of a
discriminatory policy they had adopted “of accepting only articles
reflecting a ‘liberal’ jurisprudential outlook in constitutional law”;
the article reviewed the legislative history of the Civil Rights Act
of 18751 as it pertained to the question of school desegregation and
concluded that, in the light of the Congressional debates, the Supreme
Court of the United States had erred in the leading decision in
the field, Brown v. Board of Education.2 The plaintiff contended that
his article, which admittedly espoused the conservative approach to
the problem, was refused solely because of its tenor and that the
rejection, on that account, violated his constitutional right to freedom
of speech. In fact, the student articles editor had stated in his
letter of rejection “that approaching the problem from the point
of view of legislative history alone is insufficient.” The District
Court entered summary judgment for defendant and plaintiff
appealed to the United States Court of Appeals, Third Circuit.
The basic argument advanced by the plaintiff in appeal, that
a law review published by a state-supported university was “a
public instrumentality in the columns of which all must be allowed
to present their ideas, the editors being without discretion to reject
an article because in their judgment its nature or ideological approach
is not suitable for publication” was not accepted by the court. Mars,
J., speaking for the court, noted that the plaintiff did not assert that
the modus operandi of the editors or the nature of their work
differed in any way from that generally followed by privately-
run law reviews and the court appeared to be content to treat both
publicly and privately produced student law reviews in the same
fashion. The court cited with approval the following statement of
the trial judge:
(T) he Editorial Board must be selective in what it publishes, and a selective
process requires the exercise of opinion as
to what particular subject
‘ March 1, 1875, c. 114, 18 Stat. 335.
2 (1954), 347 U.S. 483, 74 S. Ct. 686, 98 L. Ed. 873.
90.11]
RECENT CASES
matter of the law will at a given time be of educational value, not only
to the student body, but also to the subscribers. 3
The court found that the article was one “which it would not be
unreasonable for any editorial review board of a law review to
reject” and they refused to allow the judgment of the author as to
the acceptability of the article for publication to intrude upon that
of the board.
Although there was no case on all fours with this one, the court
had little trouble in disposing of the -contention that the decision
of the editors had involved a violation of the protection accorded to
freedom of speech by the First and Fourteenth Amendments. The
validity of restraints upon freedom of speech depends, in each instance,
upon the particular circumstances. 4 The right to freedom of speech
does not open every avenue to any person desiring to use that particu-
lar outlet.5 Nor, it has been held, does “freedom of speech… compre-
hend the right to speak on any subject at any time.”
True, if a man is to speak or preach he must have some place from which
to do it. This does not mean, however, that he may seize a particular radio
station for his forum. 7
Or, as Mr. Justice Frankfurter stated in National Broadcasting Co.
V. United States :8
Freedom of utterance is abridged to many who wish to use the limited
facilities of radio. Unlike other modes of expression, radio inherently is
not available to all.
The Federal Court of Appeals in the Avins case wholly subscribed
to this point of view:
(The author) does not have
to
commandeer the press and columns of the Rutgers Law Review for the
publication of his article, at the expense of the subscribers to the Review
and the New Jersey taxpayers, to the exclusion of other articles deemed
by the editors to be more suitable for publication.0
the right, constitutional or otherwise,
The court held the other contention of the plaintiff, that the student
editors had been so indoctrinated in a liberal ideology by the faculty
of the law school as to be unable to evaluate the article objectively,
to be so frivolous as not to require any discussion.
R.I.C.
3 At p. 153.
4 Speiser v. Randall, (1958), 357 U.S. 513 at p. 521, 78 S. Ct. 1332, 2 L. Ed.
2d 1460.
5 Joseph Burstyn, Inc. v. Wilson, (1952), 343 U.S. 495 at pp. 502-503, 72 S. Ct.
777, 96 L. Ed. 1.098.
6American Communications Assn. v. Douds, (1950), 339 U.S. 382 at p. 394,
70 S. Ct. 674, 94 L. Ed. 925 at p. 941.
7 McIntire v. Win. Penn Broadcasting Co. of Philadelphia, (1945), 151 F.
2d 597 (3d Cir.).
8 (1943), 319 U.S. 190 at p. 226, 87 L. Ed. 1344 at p. 1368.
9 At p. 153.
McGILL LAW JOURNAL
[Vol. 14
TEST OF “REASONABLENESS”
–
–
LEASE AND HIRE OF SERVICES –
LENGTH OF DISMISSAL NOTICE
REQUIRED
APPLICABILITY OF
THE PROVISIONS OF ARTICLE 1668 (3) C.C. – Columbia Builders
Supplies Co. v. Bartlett, [1967] B.R. 111.
Appellant company hired respondent in a managerial capacity
(sales and production organization) at $12,000 per annum for an
indeterminate period of time. Four months later Bartlett was fired
without cause and with little or no notice given to him. The important
question in this appeal concerned the length of notice, or the amount
of payment in lieu thereof, to which he was entitled. Was it one
week, as appellant contended, the three months which respondent
claimed or some entirely different alternative?
In a unanimous decision, the Court of Queen’s Bench confirmed
the judgment of first instance 1 and awarded Bartlett three months’
notice. Mr. Justice Rinfret, who wrote the principal notes for the
majority,2 placed particular emphasis on article 1668 (3) C.C. to state
that this new legislation 3 created a fresh basis for calculating the
length of notice in the case where a contract for the lease of
personal services is terminated. After citing the text of the article,
Rinfret, J., concluded that, from now on, “la base du calcul est…
la dur6e de l’engagement” and that length of the contract is the
basis not only for the specific classes of persons named by the Code
(domestics, servants, journeymen and labourers) but “6galement
pour toutes les autres”. 4
1C.S.M. 617,201 (unreported), Mr. Justice F.R. Hannen.
2 Hyde, Taschereau and Montgomery, JJ., concurred in the judgment. Owen, J.,
also concurring, wrote separate notes.
3 Paragraph 3 of art. 1668, enacted in 1949 (13 Geo. VI, S.Q. 1949, c. 69, s. 3),
reads as follows:
In the case of a domestic, servant, journeyman or labourer hired by the
week, the month or the year, but for an indefinite period of time, his con-
tract may be terminated by a notice given by one of the parties to the other,
of a week, if the contract is by the week; of two weeks if the contract is
by the month; of a month if the contract is by the year.
4 At pp. 118-119. Rinfret, J., disagrees with the opinion of L. Faribault on
the interpretation to be given to the legislation passed in 1949; he stated, in
1951, that:
Comme cet alinda de notre article ne concerne que certaines classes de
salarids, les r~gles pos6es jusque-l par nos tribunaux quant au d6lai de
l’avis de cong6 doivent continuer h recevoir leur application dans teus les
autres cas, au moins jusqu’h nouvel ordre, car je crois bien qu’avant long-
temps, cette nouvelle r6gle de l’article 1668 sera appliqu~e h tous les avis
de cong6 requis pour mettre fin i un louage de services d’une dur~e ind6-
termin~e. (TraitM de droit civil du Qudbec, (Montrdal, 1951), t. 12, p. 321).
No. 1]
RECENT CASES
The second important criterion in the determination of the
length of notice to be given to the employee is laid down by Rin-
fret, J., whose argument is based on the statement of Planiol and
Ripert that those who hold more important positions in the employ-
ment hierarchy are normally entitled to longer notice. He concluded,
largely for the reason that it would be inconceivable to award a
month’s notice to a labourer and only one week to someone in a
managerial capacity when both are hired by the year,6 that Mr.
Bartlett should have received three months’ notice that his services
were no longer required.
Summing up the new standard of the length/duration of the
contract and the reasoning of Planiol and Ripert, Rinfret, J., stated:
Dans cette nouvelle perspective, je ne crois pas qu’il soit hors d’ordre
pour les tribunaux ayant h ddcider de cas “de ceux qui occupent un rang
dans la hiirarchie des employ~s” de considdrer les circonstances de 1’enga-
gement, la nature et l’importance du travail, le fait que l’employ6 a quittd
un emploi certain et rdmundrateur, l’intention des parties, la difficult6 pour
l’une et l’autre des parties de trouver soit un remplagant satisfaisant, soit
une autre position d’6gale importance et, au regard de ces consid6rations,
de fixer pour l’avis de cong6 un ddlai raisonnable.7
The Court of Queen’s Bench has thus taken a firm position on
the long-standing controversy as to which criteria should be adopted
in determining the length of cancellation notice in employment con-
tracts, opting for the test of “reasonableness” rather than either
that of the “pay period” or the “rate of pay”.8 In reaching his con-
clusion Mr. Justice Rinfret referred with approval to the Superior
Court jugment in Dubois v. J.-Ren6 Ouimet Ltge,9 where Caron, J.,
held that three months’ notice was not unreasonable in the circum-
stances of the case. The plaintiif, Dubois, had been hired as a sales
manager at $8,500 per annum, his salary being payable weekly.
Approximately six months later, Dubois, who had left a good job
5 Trait6 pratique de droit civil frangais. 2e 6d., (Paris, 1951), t. 11, pp. 103-104.
6 One week had been the length of notice allowed to a truckdriver paid by the
week in Concrete Column Clamps Ltd. v. Pipin, [1949] B.R. 838, cited by Mr.
Justice Rinfret at p. 118.
7 At pp. 119-120.
8 The “pay period” school had seemed to be the one gaining favour in the
jurisprudence around 1950. See, for example, Concrete Column Clamps Ltd. v.
P6pin, [1949] B.R. 838 and Leclerc v. Cartier Construction Ltd., [1952] C.S. 103
(Batshaw, J.). Contra: Dorion v. Commissaires du Havre de Qudbec, (1937), 62
B.R. 92 and the opinion of Walter S. Johnson in Note, (1950), 28 Can. Bar Rev.
465, supporting the “rate of pay” theory. For an exposition of both points of
view, see Donald J. Johnston, Dismissal Notice in Employment Contracts, (1963),
9 McGill L.J. 138; note that Johnston, at p. 149, predicted that “‘reasonable’
notice will emerge as the simple answer to an equally simple problem”.
9 [1959] C.S. 573.
McGILL LAW JOURNAL
[Vol. 14
to join respondent company, was dismissed without cause and given
the equivalent of five weeks’ salary. Mr. Justice Caron, after holding
that the contract was one for an indeterminate period of time, made
the following statement regarding the length of cancellation notice:
Ni la compagnie ni le demandeur n’avaient l’intention de faire un contrat
auquel l’une des parties aurait pu mettre fin h une semaine d’avis. La
nature du travail et l’importance de l’emploi s’y opposent de mme qu’on
ne peut supposer qu’un g6rant laisserait une compagnie renomm6e pour
laquelle il travaille depuis des ann~es et avec laquelle tout va bien pour
s’engager ailleurs pour une semaine. On ne peut imaginer non plus qu’un
gdrant g~n6ral des ventes pay6 A plus de $8,000 par annbe puisse, une fois
cong6di6, se trouver un emploi semblable avec une semaine d’avis.10
On the basis of the foregoing two passages from the Bartlett
and Dubois decisions, one might conclude that the courts will hence-
forth ask what a reasonable length of notice would be according
to the circumstances of each case. In doing so they will pay attention
to such factors as: 1) the circumstances under which the contract
was entered into, including the type of employment previously en-
joyed by the proposed employee and the general intention of the
parties in effecting this particular agreement; 2) the nature and
importance of the work; and 3) the degree of difficulty which an
employer would have to find another man for the position left
vacant and which the employee would have in finding comparable
employment.
These conclusions follow from both cases but in each there is
another criterion set forth. Dubois relies on article 1657 C.C., which
relates essentially to contracts of the lease and hire of things, as
setting out “une r~gle qui peut servir de guide”. 1 The criterion, the
authority for which is found by Caron, J., in the Supreme Court
decision in Asbestos Corporation Limited V. Cook,12 is abandoned
by Rinfret, J., in Bartlett as unnecessary since the 1949 amendment;
one need no longer speculate as to whether the “rate of pay” school
was right in relying on a literal interpretation of arts. 1642 and
1657 C.C. or whether the “pay period” people were correct in using
article 1657 as a guide. The legislator has specifically stated that
employment contracts are to be regulated, regarding termination,
according to “la dur~e de l’engagement”.
The test of art. 1668(3) C.C. has rarely been used in relation to
employees other than those specifically mentioned in that provision
o Ibid., at p. 576, quoted by Rinfret, J., at p. 120 of Bartlett.
“1 Ibid., at p. 577.
12 [1933] S.C.R. 86.
No. 1]
RECENT CASES
of law.’ 3 Presumably it is used by Rinfret, J., as a means of local-
izing a basic legislative attitude towards termination notices, name-
ly, that their length depends upon the duration of the employment
contract. Once it is admitted or proved that the contract is of
indeterminate duration one need only ask which period of notice
would appropriately correspond, in the circumstances, to this par-
ticular lease of services which, although of undefined length, is,
for example, “by the year”.
R.L.
13 The only clear case of this which the writer has found is the decision of the
Magistrates’ Court in Monette v. Sambo Curb Service Inc., [1955] R.L. 284,
where Dupuis, J., applied article 1668 to the case of a night manager without
explaining why he chose this as a test for length of notice. Monette v. Sambo
Curb Service Inc. is referred to as an authority in MacKean v. Preston, [1958]
C.S. 355 at p. 358, but it is not apparent whether the judgment of Collins, J.,
is based on the “rate of pay” theory or on article 1668, particularly since the
learned Justice also refers to the opinion of Faribault (see footnote 4, supra)
which is unequivocal on this point. In Cooney v. Drew, [1956] R.L. 96 (C.S.)
(Marchand, J.) the article was invoked to apply to a “serveuse de comptoir” and
(Tr~panier, J.) art. 1668
in Beaumont v. Weiser Ltd., [1961] R.L. 551 (C.S.)
was held applicable to a “commis de magasin”, although Justice Trdpanier ac-
knowledged that there was contrary opinion to the effect that 1668 does not
cover such employees (at p. 552, referring to Faribault, op. cit., t. 12, at p. 321).
It is noteworthy that Mr. Justice Hannen, in the trial judgment of the Bartlett
case, did not refer to article 1668 but expressly decided the issue on the basis of
art. 1657. He stated: “I follow the decision of my brother Caron in Dubois v. J.-
Ren6 Ouimet Lt6e… who referred to court’s discretion based on C.C. 1657.”
McGILL LAW JOURNAL
[Vol. 14
PRESCRIPTION – WHETHER INTERRUPTED BY BANKRUPTCY –
In re
C6t: Marmette v. Derouin, [1967] B.R. 833. ADMISSIBILITY OF
PAROLE EVIDENCE TO PROVE PARTIAL PAYMENTS WHICH INTERRUPT
PRESCRIPTION. La Compagnie Lgar6 Ltde. v. Fafard, [1967]
R.P. 315 (C.S.).
Two aspects of the law relating to the interruption of prescription
have recently been interpreted by Quebec courts.
In In Re Ct4: Marmette V. Derouin,’ the Court of Appeal was
faced with the question of whether an assignment in bankruptcy ipso
facto interrupts or at least suspends prescription. In other words, can a
creditor, by the mere fact that his debtor has gone into bankruptcy,
enjoy the benefit of an interruption or suspension of prescription
without presenting his claim or doing some other positive act? Those
who would answer in the negative2 argue that, since a creditor
must be absolutely incapable of acting in order to stop the running
of prescription a bankruptcy does not by itself put the creditor into
such a position. Although section 40(1) of the Bankruptcy Act 4
may well produce this incapacity in law, they continue, the word
“acting” or “agir” means more than the mere taking of an action;
for there are many other types of activity, such as the presentation
of a claim, for example, which the creditor can undertake, the
effect of which will be to interrupt or suspend prescription. The
jurisprudence0
in this province taken as a whole, however, by
implicitly interpreting the word “acting” to be synonomous with
“taking an action” has regarded as decisive
the
the rule of
1 [1967] B.R. 833.
2 Rodys, Trait6 de droit civil du Qu6bec, t. 15,
(Montrdal, 1958) pp. 165
et seq.; Gagn6, La faillite et la prescription extinctive, (1942), 2 R. du B. 55;
Lacroix, J., in Banque Canadienne Nationale v. Tanguay, [1962] C.S. 379 at
p. 381.
3Art. 2232 C.C. and the maxim Contra non valentem agere nulla currit
praescriptio. See Rodys, op. cit., pp. 190 et seq.
4″Upon the filing of a proposal made by an insolvent person or upon the
bankruptcy of any debtor, no creditor with a claim proveable in bankruptcy
shall have any remedy against the debtor or his property or shall commence
or continue any action, execution or other proceedings for the recovery of a
claim proveable in bankruptcy until the trustee has been discharged or until
the proposal has been refused, unless with the leave of the court and on such
terms as the court may impose.” R.S.C. 1952, c. 14.
5 Gagn6, loc. cit., p. 59.
6 See, for example, Piloquin V. Brodeur et Bigras, (1936), 17 C.B.R. 236;
Massd v. Bonnier et Banque Canadienne Nationale, (1937-38), 19 C.B.R. 173;
Houle v. Emery et Fortin, (1941), 44 R.P. 137; Provincial Bank of Canada
v. Friedman, (1937), 75 C.S. 515.
No. 1]
RECENT CASES
Bankruptcy Act that no action may be taken against a bankrupt.1
The Court of Appeal in C6t has chosen to follow the jurisprudence,
dismissing the only decision to the contrary, Banque Canadienne
Nationale v. Tanguay, as “une opinion isol~e”.9 Tremblay, C.J.,
quoting with approval the previous Court of Appeal decision in
Pants Limited v. Jarjour,10 says that “l’arr~t 6nonce clairement
que c’est la cession et non la production de la r6clamation qui suspend
le cours de la prescription”.” It would therefore, appear to be settled
that prescription ceases to run from the time of the assignment
or the receiving order in bankruptcy. It should be pointed out that
there is an interesting related question which the Court of Appeal
raised but found unnecessary to answer in C6t6,12 namely, whether
bankruptcy interrupts or merely suspends prescription. 13
A second decision, La Compagnie Lggar6 Lt6e v. Fafard,14 is
concerned with the question of the type of proof required for
partial payments which, because they are acknowledgments which
the debtor makes of the right of, the person against whom the
prescription runs,15 interrupt prescription.’0
It would seem at first
glance that, in commercial matters over fifty dollars, if he is to
prove that the partial payment was ever made, the creditor is required
by article 1235(1) C.C. to produce a writing signed by the debtor,
a rather difficult task since receipts inevitably remain in the hands
of the debtor. 17 The issue then is whether a partial payment is an
“acknowledgment” or “promise” within the meaning of article
1235(1) C.C. Although there has been much comment on this
question,’ there can be little doubt that the great weight of authority,
especially in the case law, supports the view that article 1235(1)
is not applicable and that these payments can be proved by testimony;
7S. 40(1).
8 [1962] C.S. 379.
9 At p. 836, footnote 7.
10 [1947] B.R. 630.
” At p. 836.
12 Ibid.
13 See Gagn6, loc. cit., at pp. 55 et seq.
14 [1967] R.P. 315.
15 Nolan, Testimony in Commercial Matters. (1957), 17 R. du B. 445 at p. 460.
16 Art. 2227 C.C.
17 Weber, Interruption of Prescription and Proof of Partial Payments, (1965),
25 R. du B. S69 at p. 374.
18An excellent review of the authorities can be found in Weber, loc. cit.
See also Nolan, loc. cit., at pp. 459 et seq.; Crestohl, On the Admissibility of
Parole Testimony of Partial Payments in Commercial Matters for the Purpose
of Interrupting Prescription, (1931-32), 10 R. du D. 227.
McGILL LAW JOURNAL
[Vol. 14
after a thorough review of the cases on this point in his article,
Weber finds only one judgment “9 which does n’ot follow what he
regards as the leading case on the subject, the decision of the Court
of Appeal in Bouthillier v. Sabourin,20 which allowed the parole
evidence.21 Mr. Justice Crate in the L~gar6 case, however, refused
to allow testimony to prove the payments on account. He gives no
authority for this view, but merely states that :22
Dans ropinion du tribunal l’article 1235(1) C.C. regoit ici son application
et la preuve testimoniale offerte par la demanderesse ou la cr6anci6re, est
inadmissible, puisqu’elle tend h 6tablir une “reconnaissance h l’effet de
soustraire une dette aux dispositions de la loi relatives it la prescription
des actions”.23
The decision in L~garg, together with the one in Banque Canadienne
Nationale v. Tanguay, 24 which also runs contrary to a large number
of cases including a judgment of the Court of Appeal,2
5 emphasizes
the confused state of this area of the law.
D.H.T.
19Banque Canadienne Nationale v. Tanguay, [1962] C.S. 379. Tremblay,
C.J.’s reference to this case as “une opinion isolde” (see supra) was only with
respect to the other point in the case.
20 (1927), 42 B.R. 18.
21 Weber, loc. cit., at p. 374.
22At p. 316.
23 I.e. the text of 1235 C.C.
24 [1962] C.S. 379.
25Bouthillier v. Sabourin, (1927), 42 B.R. 18; followed in Hbert v. Auger,
(1940), 46 R.L. n.s. 400 (C.S.); Lefebvre v. South, (1943) C.S. 172; Doyon
v. La Cie de til~phone de St-Louis-de-Gonzague, [1947] C.S. 424; Royal Bank
of Canada v. Woocock [1953] R.P. 275 (C.S.).
