March 18, 1915

CON

Charles Joseph Doherty (Minister of Justice and Attorney General of Canada)

Conservative (1867-1942)

Air. DOHERTY:

I would welcome it.

Topic:   WAYS AND MEANS-THE TARIFF.
Subtopic:   CRIMINAL CODE AMENDMENT.
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LIB

Frank Broadstreet Carvell

Liberal

Mr. CARVELL:

In many cases lands of this kind are purchased by corporations and companies. They have to pay officers, agents and commission; and certain expenses connected with the business, and the company is perhaps doing a good business. The land is being sold fairly rapidly and they have reasonable grounds to believe that they will be able to set aside enough to pay these owners; they then declare a reasonable dividend upon the shares of the company, even before the property is entirely paid for-and then things would go

bad as they have done in the West and in many places in the East. Would that be a lawful excuse? You will notice that the wording of the section is very strong:

And if he receives the purchase money or any part thereof and, without lawful excuse, does not apply the money so received.

That means if they do not apply the last $5 of that money towards either paying for the title or providing for the encumbrances, they come within the purview of the statute. My hon. friend beside me says they might have to pay taxes. I think anybody will admit that as a lawful excuse. But if they paid commissions or dealt even generously with themselves in paying dividends, what would the minister think about that?

Topic:   WAYS AND MEANS-THE TARIFF.
Subtopic:   CRIMINAL CODE AMENDMENT.
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CON

Charles Joseph Doherty (Minister of Justice and Attorney General of Canada)

Conservative (1867-1942)

Mr. DOHERTY:

It always comes back to this, whether they have retained sufficient money to meet these obligations. I do not take it to mean that we are going to follow the particular bills they get to see what they 'do with them, they might pay dividends if they had enough money at the time to meet their obligations. Then I think they would be perfectly justined in paying dividends and that would be a lawful excuse; that having made the profits they paid the dividends, always retaining enough to meet these obligations when they would be called upon to do so. But again I say I would welcome any suggestion that would enable us to make this law applicable to the dishonest handler of real estate and protect the honest one. While I have a sort of shared responsiblity, this particular clause is the child of the hon. member for Saskatoon (Mr. McCraney), and he succeeded in impressing it upon the special committee. This Bill carries out the idea of the Bill he introduced.

Topic:   WAYS AND MEANS-THE TARIFF.
Subtopic:   CRIMINAL CODE AMENDMENT.
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CON

Robert Francis Green

Conservative (1867-1942)

Mr. GREEN:

Not being a lawyer, I am somewhat diffident about entering into this particular discussion. It seems to me that the object -sought to be attained is to protect, shall I say the fool or the man who does not apply ordinary business principles to his transactions? This amendment, it seems to me, would do away with dealings in agreements of sale. You take an agreement that has passed through one, two, three or four hands, must each individual see that the money has been applied to the purpose of paying off somebody ahead of him? If any man would apply ordinary business methods and ordinary business sense in a transaction of this kind he would not find himself in a position such as is

sought to be covered here, that he cannot get title after he has paid the money, i ou cannot protect people who will not pay the ordinary reasonable attention to the business they are attempting to transact. I think myself this particular clause should be withdrawn from the Bill.

Topic:   WAYS AND MEANS-THE TARIFF.
Subtopic:   CRIMINAL CODE AMENDMENT.
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LIB

Charles Avila Wilson

Liberal

Mr. C. A. WILSON:

It seems to me one part of this Bill contradicts the other. Section 3 says:

Any person who sells or agrees to sell land or any Interest in land to which he knows he has not a good title free from encumbrance,-

That is perfectly clear. It must be a perfect title. A little further on it says:

-or in reduction or discharge of encumbrances against the said land.

I would like some explanation of the expression "good title." Can a title be good that is not free from encumbrances? I am inclined to think that we should not call that in French a bon titre.

Topic:   WAYS AND MEANS-THE TARIFF.
Subtopic:   CRIMINAL CODE AMENDMENT.
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CON

Charles Joseph Doherty (Minister of Justice and Attorney General of Canada)

Conservative (1867-1942)

Mr. DOHERTY:

What the section says is, not the man who has a good title free from encumbrance, but the man who has not a good title free from encumbrance. The Bill provides that when -a man has not a good title free from encumbrance the money must be applied to clearing off those encumbrances.

Topic:   WAYS AND MEANS-THE TARIFF.
Subtopic:   CRIMINAL CODE AMENDMENT.
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LIB

Alexander Kenneth Maclean

Liberal

Mr. A. K. MACLEAN:

Supposing there was only a sale of equity in the property, and that it was never intended that the encumbrances should be discharged. Surely it would not be expected that -the vendor should apply all the money he receives towards reducing an encumbrance which he was never intended to release.

Topic:   WAYS AND MEANS-THE TARIFF.
Subtopic:   CRIMINAL CODE AMENDMENT.
Permalink
CON

Charles Joseph Doherty (Minister of Justice and Attorney General of Canada)

Conservative (1867-1942)

Mr. DOHERTY:

The section provides for the case of a person who sells or agrees to sell land; that is one case; and secondly, it provides for the case of a person who sells or agrees to sell any interest in land. That would cover the case of a man who sold the equity in land to which he knew he had not a good title when something remains to be done to perfect the title, and of course the man has no title at all. Fraud may be committed by a man without any title at all.

Topic:   WAYS AND MEANS-THE TARIFF.
Subtopic:   CRIMINAL CODE AMENDMENT.
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LIB

Charles Avila Wilson

Liberal

Mr. C. A. WILSON:

A man may sell his neighbour's property.

Topic:   WAYS AND MEANS-THE TARIFF.
Subtopic:   CRIMINAL CODE AMENDMENT.
Permalink
CON

Charles Joseph Doherty (Minister of Justice and Attorney General of Canada)

Conservative (1867-1942)

Mr. DOHERTY:

Such things have happened.

Topic:   WAYS AND MEANS-THE TARIFF.
Subtopic:   CRIMINAL CODE AMENDMENT.
Permalink
LIB

Edward Mortimer Macdonald

Liberal

Mr. E. M. MACDONALD:

I think the Bill

is intended to cover a number of cases that

developed in the recent land boom in the West. I submit that to put legislation of this character on the statute book at this time would result in the blackmailing of many an honest man in the eastern provinces who has sold property in good faith. Take the conditions that exist in my own province. Under the system of registration of titles that we have down there, property frequently passes from one man to another without any searching of title. When a farmer sells some property to another farmer he passes the property by

10 p.m. deed and gets a conveyancer, not a lawyer, to do the work. He does not bother to go to the registration office in a great many cases. Suppose that it developed afterwards that some old encumbrance had been against the property seventeen or eighteen years before, and that no claim had ever been put forward in respect to it. The man who originally held the encumbrance might have died suddenly and his heirs or executors turn up and assert these encumbrances. There are various questions of equity and rights that might arise between the parties, and irrespective altogether of whether you could show a crime within this Act, look at the possibility of so many honest men being liable to be pilloried and brought before a criminal court in order to show that they had transferred the property in good faith. In my province, where I am actually engaged in the practice of the law, I could cite numerous cases to the minister where hardship would be done if you made it possible to bring before a criminal court every one of our honest people down there who have transferred property.

Topic:   WAYS AND MEANS-THE TARIFF.
Subtopic:   CRIMINAL CODE AMENDMENT.
Permalink
LIB

Frank Broadstreet Carvell

Liberal

Mr. CARVELL:

This is only against the man who .sells it knowingly.

Topic:   WAYS AND MEANS-THE TARIFF.
Subtopic:   CRIMINAL CODE AMENDMENT.
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LIB

Edward Mortimer Macdonald

Liberal

Mr. MACDONALD:

That is not the question. We know that an honest man can defend himself and get justice from the jury if he goes into court; but the question is, should he be made liable to the danger of prosecution ? As I said, nine-tenths of the property transfers in our part of the country are made without any search of title. Titles are searched only by close business men, companies, and people generally engaged in business; but in the ordinary conveyance from man to man the title is not searched. In answer to my hon. friend from Carleton (Mr. Carvell), my objection is this: That you are putting it into, the hands of a purchaser to pillory a perfectly honest man and bring him before

a jury to prove that he did not know there was an encumbrance against the property he sold. Further, this legislation is simply locking the door after the steed is stolen, for the land boom in the West is over, and nowadays any man who buys property sees that he gets the goods before paying his money.

Topic:   WAYS AND MEANS-THE TARIFF.
Subtopic:   CRIMINAL CODE AMENDMENT.
Permalink
CON

George Henry Barnard

Conservative (1867-1942)

Mr. BARNARD:

I agree with my hon. friend from Kootenay that this clause should be struck out. I do not believe in legislation of this character. I think the law as it stands to-day in most of the provinces, sufficiently protects purchasers. There is no reason why a person who wishes to buy a piece of property cannot find out exactly what encumbrances are against it, and protect himself before making his payments. I do not think this amendment to the code has received the consideration it should have received. I think that the Bill might very well stand over until next session. I do not say that it is altogether desirable, but undoubtedly a practice does prevail in different provinces throughout the country of dealing in agreements for sale of land. I think if this amendment to the code were carried it would be going very much farther than anybody in this House has any conception of, and for these reasons I am opposed to it.

Topic:   WAYS AND MEANS-THE TARIFF.
Subtopic:   CRIMINAL CODE AMENDMENT.
Permalink
LIB

George Ewan McCraney

Liberal

Mr. G. E. McCRANEY (Saskatoon):

I think if my hon. friend from Victoria looks into the matter, he will find that the law of the provinces does not provide an adequate remedy for purchasers. He will 9ee that there is absolutely no protection ait all against a vendor who has no financial responsibility. This Bill was introduced by me because of numerous cases which have come to my attention as a practising lawyer in my own province. My hon. friend, who is a lawyer, knows the remedies as well as I do. I will give a case that has come to my attention in which there is not element of fraud, and my hon. friend will see the necessity of making some provision in the law which will compel a vendor to apply the moneys that he has received the discharge of encumbrances. .

Topic:   WAYS AND MEANS-THE TARIFF.
Subtopic:   CRIMINAL CODE AMENDMENT.
Permalink
LIB

Charles Marcil

Liberal

Mr. MARCIL:

Could you not do that by provincial legislation?

Topic:   WAYS AND MEANS-THE TARIFF.
Subtopic:   CRIMINAL CODE AMENDMENT.
Permalink
LIB

George Ewan McCraney

Liberal

Mr. McCRANEY:

Under the law as it is at present, a man having paid for his land, or nearly paid for it, or who is ready to make his last payment, is entitled to sue for specific performance. In default of

specific performance he is entitled to a judgment for damages. He cannot get specific performance, and a judgment for damages is absolutely of no use to him. The provincial legislature cannot legislate any further than the voiding of the contract. It can impose no penalties which in future will be any terror to a man, or make him deal fairly, or prevent a repetition of what has already occurred. Here is a model case, and it is one of the best cases I have in mind: a party purchases 6,400 acres, or ten sections, of land. He sells a quarter-section at a considerable profit. He receives most of his money; the balance, I think in this particular case, was some $800. He came to me and said: I want you to see that I get title. When I came to go into the matter, I found that there were encumbrances to the extent of several thousand dol'ars against the 6,400 acres of which this 160 acres was only a small part, and that the money that had been paid in by my client had not been applied to the discharging of these encumbrances or to taking care of the title, hut had been used for other purposes altogether. I said there was no fraud as far as I knew.

Topic:   WAYS AND MEANS-THE TARIFF.
Subtopic:   CRIMINAL CODE AMENDMENT.
Permalink
CON

George Henry Barnard

Conservative (1867-1942)

Mr. BARNARD:

If it had come before

the court how would you have advised him?

Topic:   WAYS AND MEANS-THE TARIFF.
Subtopic:   CRIMINAL CODE AMENDMENT.
Permalink
LIB

George Ewan McCraney

Liberal

Mr. McCRANEY:

I would have advised him to give up the purchase altogether. But he did not come to me, and it is a good deal, as the hon. member for Pictou (Mr. Macdonald) points out, in our province as in his; these transactions are not conducted through solicitors. They are conducted largely between the parties themselves. While the hon. member for Pictou wants the law left in its present unsatisfactory condition because that practice prevails in his province, it is because that very practice prevails in my province that I want the law amended to protect these people. The other case which I wish to mention is that in which a school-teacher invested $1,500, which it had taken her some years to earn. She came to me too late; she cannot get her $1,500 and has no remedy, because the man who received the money spent it very foolishly. Had the law been that he should turn all the money in to clear up the land which he purported to sell, I am satisfied that he would have done it. As to the particular language of the section,

I have no choice. I wanted to get at the evil, and I drafted certain language. Perhaps my draft, in the view of, the committee, and having reference to what the minister has said, is along lines that could

have been dealt with by provincial legislation. It might be wel for the provincial legislature to declare that moneys paid by a purchaser under such circumstances should be trust moneys, but while they do that they can impose no penalties of a criminal character.

Topic:   WAYS AND MEANS-THE TARIFF.
Subtopic:   CRIMINAL CODE AMENDMENT.
Permalink
LIB

Edmond Proulx

Liberal

Mr. PROULX:

I think the law should protect the confiding and unwary. I know of cases where money has been paid by purchasers to vendors, who, having promised to discharge certain encumbrances, have not done it. If we had a provision in the Criminal Code making them liable to imprisonment, we might have more honesty in the vendors of land.

Topic:   WAYS AND MEANS-THE TARIFF.
Subtopic:   CRIMINAL CODE AMENDMENT.
Permalink

March 18, 1915