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Supreme Court of Canada

Actions—Prescription—Insurance—Automobile—Action by insurer against person responsible for accident—Sums disbursed under insurance policy—Recursory action—Subrogatory action—Start of prescription—Civil Code, art. 2224, 2225, 2226, 2261(2), 2262(2).

The plaintiff company instituted an action against the son of its insured, a minor, responsible for a motor vehicle accident, claiming the sums disbursed on behalf of its insured under an insurance policy held by him. These sums were disbursed when the plaintiff settled out of court with subrogation an action by a third party for bodily injuries as well as an action for damages caused to the insured’s car. The defendant pleaded that the action was prescribed, having been instituted some five months after the settlement and close to two years after the accident. The trial Court considered that the plea of prescription was well‑founded as far as the claim for bodily injuries but not as far as damages to the automobile. The Court of Appeal found that this being a recursory action, the prescription began to run from the date of the payment, and it maintained the action. The defendant appealed to this Court.

Held: The appeal should be dismissed.

Whether it be a recursory action or subrogatory action, it was not prescribed. The prescription of an action cannot begin to run before the right to institute it originates. The right of the plaintiff company to resort to it could not originate before the date of the payments which it made pursuant to the insurance policy and because of the fault of the insured’s son. The defendant admits this as to the action for recovery. If it was a subrogatory action, the interruption of prescription under art. 2224 of the Civil Code continued until the date of the pay-

[Page 562]

ment with subrogation. The prescription began to run at that date. It follows that the rights which the plaintiff company acquired by these payments accompanied by subrogation were not prescribed rights.

APPEAL from a judgment of the Court of Queen’s Bench, Appeal Side, province of Quebec[1], modifying a judgment of Mitchell J. Appeal dismissed.

Jean Rouillard, for the defendant, appellant.

Jacques Pagé, for the plaintiff, respondent.

The judgment of the Court was delivered by

FAUTEUX J.—Gilles Morin, heretofore, legally represented in Superior Court and in the Court of Appeal by his father and tutor, Florian Morin, is appealing from a unanimous judgment of the Court of Queen’s Bench (Appeal Side) of the Province of Quebec1. This judgment of the Court of Appeal varied the judgment of the Superior Court which had upheld respondent’s action against appellant for a sum of $485 and increased the amount to $10,485.

This appeal, as agreed by the parties, raises but one question of law, that of prescription. The facts and circumstances, in the context of which the matter arises, are admitted by the parties. Let us summarize.

On October 28, 1961, Gilles Morin, then a minor and inapt at driving an automobile, took his father’s car to move it from where it was parked on Denault Street, in the City of Sherbrooke. Having put the car in motion, he lost control of it, and pressed on the accelerator pedal instead of on the brake pedal. The car struck violently a certain Alphonse Trudeau, then busy loading the rear of his automobile parked in front of Florian Morin’s. Trudeau was seriously hurt and Morin’s automobile was damaged.

Hence, two actions for damages. Alphonse Trudeau took proceedings against Florian Morin personally as well as in his capacity of tutor to

[Page 563]

his son, Gilles, for bodily injuries and served the action upon them within a year of the accident, that is on October 10, 1962. For his part, Florian Morin took an action for damages to his car against respondent company, with which he had an insurance policy covering all risks relating to his automobile, and served it within two years of the accident, that is on October 25, 1962.

Respondent company settled these actions out of court. Later, on August 9, 1963, it initiated the present action against Florian Morin, as tutor to his son, Gilles, claiming the sums disbursed for the purposes of this settlement. In this action, respondent company alleges the above-mentioned facts and adds that because of the above insurance policy, in force at the time of the accident, and because of Gilles Morin’s fault, it paid, in settling Trudeau’s action, on March 13, 1963, to Trudeau personally, $8,912 and, on his behalf, on March 19, 1963, $1,088 to Hospital Insurance. In settling Florian Morin’s action, respondent company paid the latter $485 on June 4, 1963. Respondent company alleges moreover that at the same time it made these payments, it was subrogated to all the rights which those who benefited therefrom could have against Gilles Morin, responsible for this accident.

Florian Morin, acting for his son, contested this action. On the day appointed for proof and hearing of the case, he stated that he admitted all the facts above-mentioned and wished only to plead in defence that the action of respondent company for all the amounts claimed was prescribed.

The Superior Court considered that the personal claim of Florian Morin for material damages to his automobile, being subject to the prescription provided by art. 2261(2) C.C., would have been prescribed on October 28, 1963, and that respondent company, subrogated in the rights of Florian Morin, having instituted the present action against F. Morin, acting for his son, before this date, that is on August 9, 1963, the plea of prescription was unfounded, as far as this item of $485 was concerned. On the other hand, the

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Court considered that the claim of Alphonse Trudeau for bodily injuries, subject to the one year prescription provided by art. 2262(2) C.C., was prescribed on October 28, 1962, and that since the claim of respondent company as well as the settlements and subrogations alleged in the declaration were subsequent to this date, the plea of prescription was well founded as far as the claim for $10,000, made up of the amounts $8,912 and $1,088, was concerned. In the result, respondent company’s action against appellant, acting for his son, was upheld for only $485. Hence, also, respondent company’s subsequent appeal to the Court of Appeal against this partial rejection of its claim.

The Court of Appeal, composed of Owen, Rivard and Salvas JJ.A, allowed this appeal. In his reasons for judgment, which were concurred in by his colleagues, Salvas J. states that the trial judge was mistaken as to the nature of the action of respondent company. The latter, he explains, does not take an action which comes from Alphonse Trudeau and it does not claim “damages for bodily injuries” but it is taking an action which it has personally, against the person whose fault changed its contractual obligation as insurer of Florian Morin into an actual obligation towards its insured and having executed this obligation, by paying Trudeau and his hospital costs, on behalf of its insured, it has an action for recovery against the one who obliged it to make these payments; and, the learned judge declares, the right to this action for recovery having originated only on the date of these payments, when the quasi‑offense of Gilles Morin became prejudicial to respondent company, it is only from this date that prescription could begin to run. Hence the conclusion that the action for recovery, instituted five months after these payments, was not prescribed. For these reasons, the Court allowed the appeal with costs, varied the judgment of the Superior Court and, ruling anew, maintained the action and condemned appellant, as tutor to his son Gilles, to pay respondent company the sum of $10,485 with interest and costs.

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At the hearing of the appeal in this Court, appellant submitted that we had to determine the nature of respondent company’s action and that, depending whether it was in the nature of a recursory action or in the nature of a subrogatory action, it was or it was not prescribed.

I do not believe it necessary to consider and determine the nature of this action. In both hypotheses, in my opinion, respondent company’s action is not prescribed, in this case.

Obviously the prescription of an action cannot begin to run before the right to institute it originates. In the case at bar, whether it be an action for recovery or a subrogatory action, the right of respondent company to resort to it could not originate before the date of the payments which it made pursuant to the insurance policy and because of Gilles Morin’s fault.

If it is an action for recovery, as the Court of Appeal decided, the prescription began to run from the date of the payments made by respondent company. This, the appellant admits.

If, on the other hand, it is a subrogatory action, the reasoning made by appellant to come to the conclusion that it is prescribed is as follows: respondent company, having paid with subrogation, should have, in order to preserve the rights resulting therefrom, continued Trudeau’s action in his name or by continuance of suit. But instead of so doing, it allowed the filing of a settlement out of court and thus allowed Trudeau’s action to become completely extinct. When respondent company instituted the present action against Florian Morin, as tutor to his son Gilles, basing its action on the quasi-delict of the latter and on the payment made with subrogation, it recommenced proceedings and the suspension of prescription, resulting from the service of Trudeau’s action against Florian Morin, both personally and as tutor to his son Gilles, became inoperative and non-existent. Therefore, the prescription of the present action of respondent company began to run from the date of the accident and not from the date of the payments. So that this action was prescribed when it was initiated.

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This reasoning seems to me to be ill-founded. Article 2224 C.C., appearing in the chapter concerning the causes of interruption or suspension of prescription, provides that:

2224. A judicial demand in proper form, served upon the person whose prescription it is sought to hinder…creates a civil interruption.

Such interruption shall continue until final judgment and shall be effective for any right and recourse arising from the same source as the demand.

That is the rule. The rule is explained in Planiol et Ripert 2e éd., 1954, vol. 7, p. 781, and this explanation is reproduced and commented upon with approval by Mr. Justice Robert Taschereau, as he then was, in Marquis v. Lussier[2]:

[TRANSLATION] The effects of the interruption are brought about firstly for the past: the time run previously is lost in the calculation of the delay of prescription. They also operate for the future, in that they determine a new point of departure for the prescription which again begins to run. It varies according to the duration of the cause of interruption; the latter ends immediately in case of a command or an acknowledgement, while it is extended in case of seizure or of summons, because each act of procedure renews it. As long as the process lasts, the interruption stands, except that it disappears completely if the judgment dismisses the demand, or if there is discontinuance or peremption. If the judgment is favourable to the plaintiff, the prescription will begin anew on the day of the pronouncement.

The rule, as set in art. 2224 C.C., allows for exceptional cases, mentioned in art. 2225 and 2226. The case at bar is not one of those covered by these articles. Surely, the settlement out of court of Trudeau’s action does not constitute and is not equivalent to a discontinuance within the meaning of art. 2226 C.C. The rights which, in the hypothesis of a subrogatory action, respondent company acquired from Trudeau by these payments accompanied by subrogation, were not prescribed rights. So that, even if the action of respondent company must be held to be in the nature of a subrogatory action, one could not conclude, in the circumstances of this case, that this action is prescribed.

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Being respectfully in agreement with the conclusion reached in the Court of Appeal, I would dismiss this appeal with costs.

Appeal dismissed with costs.

Solicitors for the defendant, appellant: Fortin, Rouillard, Gobeil & Coulombe, Sherbrooke.

Solicitor for the plaintiff, respondent: J. Pagé, Sherbrooke.

[1] [1969] Que. Q.B. 704.

[2] [1960] S.C.R. 442 at 448.





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