Supreme Court Judgments

Supreme Court of Canada

Jones v. Tucker, (1916) 53 S.C.R. 431

Date: 1916-06-19

William W. Jones (Defendant) Appellant;

and

Henry C. Tucker (Plaintiff) Respondent

1916: May 9; 1916: June 19.

Present: Sir Charles Fitzpatrick C.J. and Davies, Idington, Anglin and Brodeur JJ.

ON APPEAL FROM THE SUPREME COURT OF SASKATCHEWAN.

Contract—Foreign lands—Sale of lands—Exchange—Specific performance—Jurisdiction of courts of equity—Mutuality of remedy—Relief in personam — Discretionary order — Appeal — Jurisdiction —"Final judgment"—"Supreme Court Act," R.S.C. 1906 c. 139, s. 38(c):

T., resident in the State of Iowa, U.S.A., brought suit in Saskatchewan for specific performance of a contract by which J., resident in Saskatchewan, agreed to sell him lands in Saskatchewan, part of the price being the conveyance to J. of lands in Iowa by T. The trial judge decreed specific performance of the contract by J., and, on appeal, the full court varied the judgment by ordering that there should be a reference for inquiry and report upon T.'s title to the lands in Iowa, and that, upon the filing of such report, either party should be at liberty to apply for such judgment as he might be entitled to (8 Sask. L.R. 387). On the appeal to the Supreme Court of Canada the material questions were whether or not the fact that the lands to be exchanged were situated outside the province precluded the courts of Saskatchewan from decreeing specific performance for want of mutality of relief, and whether or not there was error in making the order of reference, which, in effect, gave the plaintiff a second opportunity of proving his title.

Held, Idington J. dissenting, that the courts of Saskatchewan, as courts of equity acting in personam, have jurisdiction to decree specific performance of contracts for the sale of lands situate within the province where the person against whom relief is sought resides within their jurisdiction; that, in the suit instituted by the foreign plaintiff in Saskatchewan, mutuality of relief existed between the parties, and that the discretion of the court appealed from in ordering the reference before the entry of the formal decree ought not to be interfered with on the appeal.

The jurisdiction of the Supreme Court of Canada to entertain the appeal was questioned by the Chief Justice and Idington J. on the ground that the judgment appealed from was

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not a "final judgment." Davies J. was of opinion that, as the suit was "in the nature of a suit or proceeding in equity," an appeal lay to the Supreme Court of Canada in virtue of subsec. (c) of sec. 38 of the "Supreme Court Act," R.S.C., 1906, ch. 139. Anglin J. thought that, as a matter of discretion, the court might decline to hear such an appeal. Judgment appealed from (8 Sask. L.R. 387) affirmed, Idington J. dissenting.

APPEAL from, the judgment of the Supreme Court of Saskatchewan[1], which varied the judgment of Newlands J. at the trial, whereby specific performance was decreed, by directing that there should be a reference for inquiry and report on the plaintiff's title to foreign lands and, on the filing of such report, that either party should be at liberty to apply for such judgment as he might be entitled to.

The circumstances of the case are stated in the head-note.

Haydon for the appellant.

G. F. Henderson K.C. for the respondent.

The Chief Justice.—I entertain grave doubts whether this appeal ought to be entertained by this court. There is no judgment in the action; the decree directing a reference to the local registrar does not order that on the respondent proving title the appellant is to make a conveyance of his lands in Saskatchewan, but, on the contrary, orders that, on the report being filed, either party is to be at liberty to apply for such judgment as he may be entitled to.

I am, with much diffidence, of opinion that the appeal must fail on the merits. There seems to me nothing in the first point taken by the appellant that, the respondent not having proved his title at the trial

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a reference should not have been directed. The plaintiff, in bringing his action for specific performance, was not obliged to prove his title. The rule, as I understand it, is that the defendant is entitled to ask for a reference on the title, which the court will grant as a condition of extending its assistance to the plaintiff.

As to the second point, the appellant claims that there was no mutuality of remedy, but that is, I think, unfounded. It would have been open to the appellant to go, for specific performance, to the courts in whose jurisdiction the lands were situate precisely as the respondent has done. The question of mutuality depends upon each of the parties having their remedy, not upon the particular court in which it is to be sought. I think it makes no difference that the lands are in a foreign country rather than in another province of the Dominion. If they had been situate in Ontario, it might have been necessary for the appellant to go to the Ontario courts for a decree for specific performance, but he would none the less have had his remedy equally with the respondent.

The present is not in the least like reported cases in which the courts have refused specific performance on the ground of want of mutuality. These all assume that, if the court in which the action is brought cannot give a remedy, the defendant has none. In the case of Flight v. Bolland[2], an infant having brought suit for specific performance, the bill was dismissed because, of course, the defendant could have brought no such suit against the plaintiff, and, therefore, the remedy was not mutual.

There might, perhaps, be cases where the courts of

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the foreign country would not afford relief, though the present is, doubtless, not one of them. It must, however, lie on the party claiming that there is no mutuality in the contract, because he is without remedy to shew that this is so. The respondent went into the foreign country and made his contract for the purchase, by exchange, of lands in that country, and there should certainly be no presumption that he cannot enforce his contract in the same way that the respondent can do in this country.

Davies J.—This was an appeal from a judgment of the Supreme Court of Saskatchewan varying the judgment of the trial judge, Which judgment had decreed specific performance of an agreement made between the parties for the sale of a piece of land in Saskatchewan from defendant, appellant, to plaintiff, and also directing a reference on other points.

The decree of the appellate court now appealed from and under consideration merely directed that there should be a reference as to the plaintiff's title to the piece of land in Iowa which the plaintiff was to convey to the defendant in exchange for the Saskatchewan lands and for a report upon such title, and that, upon such report being filed, either party should be at liberty to apply to the trial judge "for such judgment as he would be entitled to." The appellant's contentions were that the respondent, plaintiff, had failed at the trial to prove his title to the Iowa lands, and that no reference should have been made as directed; and, secondly, that the plaintiff being a non-resident, the court could not enforce the contract as against him, and had, therefore, no jurisdiction.

As to the latter point, I agree with the judgment appealed from that, as the decree sought for by the

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plaintiff is for specific performance of the contract respecting the Saskatchewan lands, the court has jurisdiction to make a decree, and that the reference directed to be made as to the title of the Iowa lands to be exchanged for the Saskatchewan lands is a matter of procedure and practice. The fact of the plaintiff being a non-resident could not, in my opinion, take away the jurisdiction they would otherwise possess; nor could the fact that the consideration for the sale of the Saskatchewan lands to the plaintiff was the conveyance to the defendant of certain lands in Iowa have that effect.

The appellate court had jurisdiction to deal with the matter before it, namely, the contractual obligation of the defendant to convey the Saskatchewan lands to the plaintiff, and I approve of the disposition they made of the appeal. It may be argued with much force that, being a matter of procedure and practice and the exercise of a judicial discretion, this court would not interfere with the judgment appealed from on that ground. It must be remembered, however, that this judgment is "in the nature of a suit or proceeding in equity," and that our jurisdiction is governed by sub-section c of section 38. It is not necessary that a judgment under this section, to be appealable, should be a "final judgment."

In dismissing the appeal, I desire, in view of the broad language of sub-section c of section 38, to base my judgment upon the ground that the court below had jurisdiction to deal with the appeal before them, and that the disposition they made of the appeal was a proper one under the circumstances.

Idington J. (dissenting).—These litigants entered into a contract in writing, in the United States, where

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respondent resided and still resides, whereby the appellant agreed to sell to him a section of land in Saskatchewan at the agreed consideration of $22,800, and, in consideration thereof, the respondent agreed to sell and convey to appellant real estate situate in Iowa same being put in at an agreed consideration of $16,000.

The respondent agreed thereby to execute a mortgage to the appellant on the Canadian lands for $6,800.

It was well understood by the parties, at the time of the making of the contract, that appellant only owned the half of the section of land he professed to be selling, but he said he had the authority of his brother, who owned the other half of the section, to deal with the whole, as they express it.

It turned out that the brother, though assenting in general terms to appellant's desire to sell and dispose of the whole section, never intended to assent to an exchange, and, perhaps, never had heard, till the contract was made, of the exchange proposal now in question, and, when told of it, at once refused to have anything to do with such a transaction.

The respondent sued both brothers for specific performance. At the trial the action was dismissed as against the one who had not signed the contract.

Evidence was given shewing that the north half-section, belonging to the brother thus dismissed, was worth $30 an acre, and the south half, belonging to appellant, which was improved, and had buildings on it, was worth $40 an acre.

The price fixed, for the whole section, by the contract, works out about $35.66 per acre for the whole.

The respondent, upon failing as against the brother of appellant, offered in court to accept the south half-section

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belonging to the appellant, and give in exchange the Iowa property.

This the learned trial judge assented to and gave judgment accordingly. There was evidence given professing to prove the title of the respondent to the Iowa property. The attorney giving that evidence stated, in doing so, the conclusion which should have been left to the court to draw from legal facts laying the foundation for the court to do so.

Because of there being no evidence otherwise enabling the learned trial judge to act upon such a transgression of the rule in such cases, the court below set the judgment aside, and directed evidence to be taken by the registrar as to the title and to report thereon, and that either party should then be at liberty to apply to the learned trial judge for such judgment as he might be entitled to.

The appellant contends this was not the judgment the court of appeal should have given, but one dismissing the action on the grounds that the respondent had failed in his proof of title, and that, in any event, the production of such proof and determination thereof involved exactly such questions as would have arisen had the appellant been seeking specific performance of the contract to convey Iowa lands, which the court could not grant under the existent facts.

In other words, he says there never existed that mutuality of contract

which might, at the time it was entered into, have been enforced by either of the parties against the other.

I quote the pith of the first sentence of the chapter on "want of mutuality in the contract" in Sir Edward Fry's work on Specific Performance.

I felt disposed, during the argument, to think the point of view presented by Mr. Justice Elwood possibly

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maintainable by looking at the land in the foreign country as simply the consideration, and all needed herein was to find if that was ascertainable and ready to be delivered as any other price where specific performance might be ordered. But, upon reflection and an examination of the authorities, it seems to me clear such a proposition is more plausible than sound in law, and is untenable.

The contract, as amended by the court, is simply one of exchange of two parcels of land respectively situated in different countries.

In one way of looking at the matter, this is a claim by the purchaser to have a contract for the purchase of land in Canada specifically enforced. In the other way of looking at it, this is simply a claim by the vendor to have a contract for the sale of land in the United States specifically enforced by the recovery of the consideration therefor.

If we look at the new contract made by the court and to be enforced, the question is reduced to that simple form, if we strip the matter of mere forms and verbiage, and have due regard to that which has become the substance of all that is involved.

I have been unable to find any case in which exactly the like case to this has been decided. But there are many cases in which the principle has been affirmed that the courts must refuse to entertain any claim as enforceable against the lands in a foreign jurisdiction. Where the party against whom relief is sought, it may be in relation to lands abroad, has been found resident within the jurisdiction of the court, it has exercised jurisdiction in a variety of ways, as illustrated in the case of Penn v. Lord Baltimore[3] and in White and

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Tudor's Leading Cases, vol. 2, p. 1047, and in 1 Eq. Cas. Abrgd. 133, there are to be found a number of cases cited which must be considered, if one would-be seized of the principle involved.

The elaborate judgment of Lord Chancellor Herschell in the case of The British South Africa Company v. The Companhia de Moçambique[4], has a most instructive review of the foundation upon which such a jurisdiction rests, and, at page 626, contains the following concise statement of what I take to be the law:—

Whilst courts of equity have never claimed to act directly upon lands situate abroad, they have purported to act upon the conscience of persons living there. In Lord Cranstown v. Johnston[5], Sir R. P. Arden, Master of the Rolls, said: "Archer v. Preston[6], Lord Arglasse v. Muschamp[7], and Lord Kildare v. Eustace[8], clearly shew that, with regard to any contract made, or equity between persons in this country, respecting lands in a foreign country, particularly in the British dominions, this court will hold the same jurisdiction as if they were situate in England."

The distinction made throughout in all the leading cases is between remedies in personam and in rem.

Apply the principles involved to the facts herein, and we are met by two or three outstanding facts which would seem to render a suit by the appellant against the respondent for specific performance as hopeless as one can conceive.

The contract was entered into in the foreign state. The land is there. And the respondent, the vendor of that land, resides there, and, so far as we know, never was in Canada before the proceedings herein, except to inspect this land offered in exchange, and he then had fifteen days to elect whether he should proceed with or abandon the contract. His presence at the trial as a witness could certainly make no safe foundation

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for applying the rule as laid down in Fry's work or above quotation from Lord Herschell's judgment.

How, then, can we find that mutuality the law requires?

The case does not fall within any of the numerous exceptions to the rule. Surely there is quite as much want of mutuality as in the case of an infant as exemplified in the case of Flight v. Bolland[9], where specific performance was sought by an infant and refused expressly on the ground that such relief could not be obtained by the defendant against him.

There is an article by the late Professor Ames, of Harvard, to be found in a posthumous publication of his Lectures on Legal History, etc., criticizing the statement of the law by Sir Edward Fry in the chapter I have above quoted from, in which he questions the accuracy of the definition which I am for the present accepting. The exigencies of this case do not require me to re-examine Sir Edward Fry's proposition, but, nevertheless, the article is well worth reading and consideration by those who would understand the doctrine of mutuality of contract in question.

It is to be observed that the fundamental rule of the game resting on mutuality is, perhaps, obscured by the numerous exceptions and subsidiary rules, yet the former seems firmly established, even if the masters of the law disagree in regard to the form of its expression.

There is another point taken against the judgment in the appellant's factum. It is submitted that the cy-près doctrine invoked in dealing with the agreement and compensation made in the way I have mentioned does not apply to this case.

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The reason assigned in the factum seems merely a repetition of want of mutuality, but, on examining the evidence, there is, to my mind, a much graver objection. It is this:—The appellant never pretended he owned any but half of the section, and merely pretended he had authority from his brother to deal with his half thereof brought in question.

When a man has, in error, made a contract for sale of more than he has, and the parties he is dealing with know it, or should from the nature of the transaction have known it, the court does not permit of abatement of price by way of compensation to a purchaser, or, in other words, attempt to make a new equitable bargain for the parties.

See the cases of Castle v. Wilkinson[10]; Avery v. Griffin[11]; Cahill v. Cahill[12]; Rudd v. Lascelles[13], and the case of Mortlock v. Buller[14], where the principle is stated upon which the court acts.

I cannot conceive the doctrine of compensation applicable when, as here, the parties knew the appellant had, in fact, no title, and depended on his assurance of authority as an agent.

In that case I think all the respondent can claim is the expense he incurred or was put to by reason of the failure of the agent in warranting his authority when he had none, or at least none which would cover the contract entered into.

I would be disposed to say, in order to end, if possible, this litigation, that if the respondent assents to the abandonment of such claim for damages, the action should be dismissed without costs, otherwise the appeal should be allowed with costs throughout.

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Since writing the foregoing, my Lord the Chief Justice calls my attention to the case of Montgomery v. Ruppensburg[15], which I cannot follow, especially as, I respectfully submit, the cases relied upon do not touch the principle involved. One of the cases apparently in point goes upon the exceptional case of the contract being unilateral, or, at all events, so as regards the Statute of Frauds. That class of cases and many other exceptions are dealt with both by Sir Edward Fry, affirming the principle I rely upon, and by the late Professor Ames in the work I have referred to above.

Since writing above, the decision of this court, in St. John Lumber Co. v. Roy[16], renders it doubtful if this case is appealable. My reasons in support of my dissent in that case may suggest grounds for distinguishing. And, if we have jurisdiction, I abide by my reasons herein expressed as above.

But if the judgment appealed from should be treated merely as an exercise of discretion, the case of The Union Bank of Halifax v. Dickie[17] would apply.

Anglin J.—By an agreement in writing, dated the 12th day of December, 1913, the defendant William W. Jones agreed to sell to the plaintiff the whole of section 17, in township 4 and range 3, west of the second meridian, in the Province of Saskatchewan, in consideration of the sum of $22,800, payable, as to $16,000 thereof, by the conveyance to him of certain property in the town of Jefferson, in the State of Iowa, U.S.A., and, as to the balance of $6,800, by the delivery of a mortgage for the said sum, upon terms

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therein set out, to be made by the plaintiff in favour of the defendant.

The plaintiff sues for specific performance of this agreement. At the trial it developed that the defendant, Wm. W. Jones, could not make title to the north half of the section, which was owned by his co-defendant, John R. Jones, who was not a party to the agreement. The action was dismissed as against John R. Jones. Upon the defendant, Wm. W. Jones, objecting that a decree could not be made against him under the agreement sued upon involving payment by him of $3,200, the difference in value between the land owned by him and the Jefferson property, the respondent, through his counsel, offered to take the defendant's half-section in exchange for his Jefferson property without any cash compensation or difference in price. This adjustment must have been agreed to by the defendant if the court should be of opinion that the facts that the plaintiff is a foreigner and that the property which he had agreed to convey in exchange is foreign land did not disentitle him to the relief of specific performance, and if his title to the Jefferson property were sufficiently proved. I say "must have been agreed to," because the learned trial judge, in his reasons for judgment, says:—

I am of the opinion that the plaintiff is entitled to specific performance under the terms agreed to in court,

and, in the defendant's appeal to the court en banc from the judgment entered for specific performance, it was not urged that such an agreement had not in fact been made at the trial. The defendant's inability to convey part of the property which he had undertaken to give in exchange cannot avail him as a defence to the plaintiff's action for specific performance of the

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contract, so far as he can carry it out, on the basis of an even exchange, the plaintiff relinquishing all claim to payment of the difference between the value of the Jefferson property and the half-section of the Saskatchewan land which the defendant is able to convey: Fry on Specific Performance (5th ed.), pp. 599 et seq. Moreover, in view of what occurred at the trial, it is, in my opinion, now too late to urge any such defence.

The decree of the learned trial judge declared the right to specific performance, referred a matter of adjustment of insurance to the local registrar, and ordered the defendant to convey his Saskatchewan land upon the plaintiff executing and delivering to him a good and sufficient deed of the Jefferson property.

On appeal to the court en banc, as appears from the judgment of Elwood J., only two objections were urged against this judgment. That learned judge says:—

The defendant appeals and contends that the plaintiff has not made out a good title to the Iowa property, and also that the court will not decree specific performance because the claim depends on title to land in a foreign country.

The appellate court was of the opinion that, although the fact that the land to be conveyed by the plaintiff was situated abroad did not preclude specific performance being decreed, the plaintiff had not proved his title to it. Instead of dismissing the action, however, the court, in the exercise of its discretion, referred it to the local registrar to inquire into and report upon the plaintiff's title, and ordered that, upon such report being filed, either party should be at liberty to apply to the trial judge for such judgment as he may be entitled to. The defendant now appeals asking that this action be dismissed on two grounds, in addition

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to that with which I have already dealt, namely, (a) that the fact that the plaintiffs property is foreign land prevents the court decreeing specific performance; (b) that the plaintiff should not have been given a second opportunity to prove his title.

As I understand the position of the action, and as counsel for the plaintiff conceded, except perhaps the futility of the defence based on the defendant's inability to convey the north half of the section in question, no substantive right of either party has been determined. The judgment of the provincial appellate court is not final under section 2(e) of the "Supreme Court Act," as amended by 3 & 4 Geo. V., ch. 51, sec. 1, While it may strictly be appealable under section 38 of the "Supreme Court Act" as a judgment in an equitable action (see also sec. 45), having regard to the purely discretionary character of the order made and to the fact that it determines nothing against the appellant, there would seem to be grave grounds of objection to this appeal being entertained at all. Moreover, although, there being no cross-appeal, we should assume that the evidence of title adduced by the plaintiff and accepted by the learned trial judge as sufficient was, in fact, insufficient, it would require a very strong and very clear case indeed to justify our interfering with the discretion exercised in giving the plaintiff another opportunity to prove his title, and dismissing his action solely on the ground that he had had his day in court.

It is perhaps better, however, that we should express our view upon the other ground of appeal, because, if it should be well taken, the reference directed as to title and proceedings consequent thereon would be useless, and the action should have been, and should now be, dismissed.

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This question was determined favourably to the plaintiff by Sir Wm. Meredith C.J.O., when Chief Justice of the Common Pleas, in Montgomery v. Ruppensburg[18]. The defendant's objection is really twofold—because the property to be conveyed by the plaintiff is foreign land, he maintains that there is an absence of the mutuality essential to the remedy of specific performance, and that the court lacks jurisdiction to entertain this action.

That there is mutuality of obligation under the contract before us is unquestionable, and on that ground the many cases in which courts of equity have refused specific performance of contracts voidable because of incapacity of one of the parties to the contract, e.g., infancy or coverture, are distinguishable. There is in the present case also mutuality of remedy in the sense that the defendant presumably could have had, in the courts of Iowa, relief similar to that which the plaintiff is seeking in Saskatchewan. The closest analogy seems to be presented by a case in which the Statute of Frauds would have afforded a defence to the plaintiff had he been sued for specific performance by the defendant. The plaintiff renders the remedy mutual by bringing the action, and on that ground is allowed to maintain it: Fry on Specific Performance, (5th ed.), par. 470-1. Unilateral contracts afford other instances.

If the position of the parties were reversed—that is, if the defendant, resident within Saskatchewan, were the owner of the foreign land and the plaintiff, resident abroad, the owner of the land in Saskatchewan—I could understand the objection taken to the jurisdiction of the court, although I would consider it

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equally untenable. What is sought in this action is to enforce the conveyance by the defendant, a resident of Saskatchewan, of property in that province in exchange for other property (whether within or without the province is immaterial), which the plaintiff is ready and willing to transfer to him.

The jurisdiction of courts of equity, which act in personam, to decree specific performance of a contract for the sale of foreign land, where the person against whom relief is sought, and whose conscience is bound by the agreement, resides within the jurisdiction, is well established: Penn v. Lord Baltimore[19]; British South Africa Co. v. Companhia de Mocambique[20]; Duder v. Amsterdamsch Trustees Kantoor[21]; Ex p. Pollard[22] ; Lord Portarlington v. Soulby[23]; Archer v. Preston[24]. Where the parties were domiciled and the property was situate abroad, it was held, in Davis v. Park[25], that, notwithstanding that the plaintiff and one of the two defendants had come within the jurisdiction, the Vice-Chancellor had exercised a proper discretion in discharging an order made in an action for specific performance giving leave to serve the defendant, who was without the jurisdiction. Moreover, since the jurisdiction rests upon some contract or equity between the parties which presents a case for its exercise in personam (Norris v. Chambres[26]; Re Hawthorne[27]), courts of equity will not entertain actions to determine other rights or questions of title

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in regard to immoveable property situate abroad (Deschamps v. Miller[28]), or claims which must be enforced directly against the foreign land: Black Point Syndicate v. Eastern Concessions Ltd.[29]; Grey v. Manitoba and North-Western Rly. Co[30]. But no such difficulty presents itself in this case. By bringing his action in the Supreme Court of Saskatchewan, the plaintiff has submitted himself to that court's jurisdiction in personam. He has waived whatever right he had to be sued upon his contract in the forum of his domicile, and has made the remedy in the Saskatchewan court mutual: Martin v. Mitchell[31]. It is in the power of that court to provide, as was provided in the decree pronounced by the learned trial judge, that the defendant shall be required to convey only upon the plaintiff making title and conveying his foreign property, which he has offered to do. Indeed, if it be thought advisable for the protection of the defendant, the court may require that the conveyance of his property to the plaintiff shall remain in the hands of its officer, and shall not be delivered to the plaintiff until his conveyance of the Iowa property has been duly recorded and the officer is satisfied that a clear and satisfactory title to it has been vested in the defendant. The plaintiff seeking relief must submit to whatever terms the court, in the interests of justice, may impose as a condition of granting it. He who seeks equity must do equity. The plaintiff, suing in the court of Saskatchewan, has also submitted to its jurisdiction to decree rescission of the entire contract should he be unable, or for any reason fail, to carry out his obligations under it or to fulfil whatever terms or conditions the court may impose upon him.

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But, as I have said, I cannot appreciate the ground of the objection made to the jurisdiction. I am unable to find any satisfactory ground of distinction between foreign land and money or chattels as the consideration for and upon receipt of which the defendant is to be required to convey his property.

I would, for these reasons, affirm the judgment of the Supreme Court of Saskatchewan, and dismiss this appeal with costs.

Bkodeur J.—This appeal should be dismissed. The appellant, Jones, practically obtained from the court of appeal all he required to protect his rights. The objections which he now raises might and will be more properly dealt with when the trial judge is moved to render the judgment which either party might be entitled to.

Appeal dismissed, with costs.

Solicitors for the appellant: Allan, Gordon & Gordon.

Solicitors for the respondent: Mackenzie, Brown & Co.