The answer may be applicable to the province of Quebec-about that I can express no opinion-but I would say that the term "personal property" in all the other provinces does not merely mean ordinary chattels, visible chattels, furniture, and that sort of thing; it includes every species of property which is not land or a freehold interest in land. For instance, a leasesold right in any of the English speaking provinces is personal property. Stock, shares, bonds, all that character of property is personal property. There is no use of anyone representing the department to say they interpret "personal property" as meaning goods on the shelves in the store, or something like that. You cannot limit the meaning in that way. The law is definite and until the act is changed there can be no such limitation. The department may not be enforcing the law but it will not be obeying the law it has called into being if it does not enforce it. Now as to the difference between real and personal property, the minister proposes to enact by this paragraph that the lien shall not have priority over any sale or pledge of personal property made to a bona fide purchaser or pledgee for value without notice of any unpaid assessment of the vendor or pledgor. Suppose it is real estate. It is not a very common thing, perhaps, in the eastern provinces, but in the western provinces it is an extremely common thing to have an agreement for sale. Suppose such an agreement has been entered into. Is it intended that whilst an agreement to sell personal property shall be taken out of the lien, if the agreement relates to real estate the lien shall attach even if there is equal ignorance, equal lack of knowledge, and equal lack of notification? Surely it was never intended to make a distinction of that character. I cannot see why they should not be on the same basis; cannot see that when a person honestly but ignorantly and without possibility of knowledge contracts to buy a piece of real estate we should penalize him and give better treatment to the man who undertakes to buy a piece of furniture. It does not seem 192
reasonable, I do not think such could be intended.
has the certificate. But I am trying to get him to sie that subsection 3 applies to a case where he has not got it. The subsection reads "the lien hereby created", and it is created after mailing a notice of assessment to a taxpayer. That lien, as created by the mailing of a notice, is not to have priority over a sale of personal property made under what circumstances? To a bona fide purchaser for value without notice at all. There is no need of getting a certificate there. If, for instance, there is an assessment against a big dry goods firm, a wholesale dry goods firm and you mail the notice. That dry goods firm is there and I go in and buy several thousand dollars worth of goods, several bales of woollens, we will say. Just because I do not know anything about it and just because I have bought in good faith without notice and for value, the law very properly, I think, says that that lien shall not affect the goods that I have bought. If it were to do so, you would not be able to carry on business. Where is the moral distinction between that case and the case of a man who, with equal amount of knowledge, with equal honesty, with equal good faith, has for value bought the right to have a bit of real estate at a future date? Why is he left open to this lien and the man who buys the dry goods is safe?
sees a vast difference between a piece of immovable property and movable goods which are transferred into half a dozen hands sometimes in as many days? In the matter of immovable property, it remains there for all time. No person thinks of dealing in immovable property until he has a certificate of search made of the property. As I understand the matter now, a certificate must be obtained from the department as to whether the tax has been paid or not. If that were to be extended to movable property, you could not do business for five minutes in this country.
immovable property! I cannot see how my hon. friend does not see the distinction, or how it does not suggest itself to him at the moment. When you buy immovable property, your very first act is to send the transaction to your notary, your lawyer, in order to get a certificate of search of the property. You do not buy it without knowing whether there is an encumbrance on it or not. The very first act is to investigate in order to find out whether there is any charge against the immovable property. How can you find out whether there is any charge against movable property? You cannot do that on account of its very nature.
our law. We can find what liens are on movables just the same as on immovables. They have to be registered under our act. Apart from that my hon. friend is wrong when he says that everyone who buys a piece of real estate goes to a lawyer. Many do not. When a man bona fide pays money, should he lose it because he pays his money bona fide in buying an agreement of sale for a piece of property?
should do is to investigate whether the man who sells really owns the property or not. That is what the question really is. There is a very well known case of a confidence man ivho sold a stranger in Chicago the Masonic Temple for a few thousand dollars. He showed the man the building and the man bought it. That is what my hon. friend evidently has in mind when he says that people buy property bona fide without investigating whether the person who sells it has the right to sell it.
up to is this, that under our system if a man has a little bit of a mortgage or a lease that is running for more than three years, if he has anything that practically invades the dominion of the real estate, he has at his peril to put that on record, or otherwise he may lose his right. The law requires the individual to do that and the penalty is the possible loss of his rights. Instead of
having a system that is bound to bring about conflict, confusion and hardship, would it not be much easier to have a very simple registration provision by which, if the department thinks it necessary or wise to have a lien, it should file some record of that lien in the ordinary registration offices of the country? I am referring to the Englishspeaking provinces. The man searching his title would then find it all right, and if through neglect he did not search the title he would have to put up with the consequences.
provision, or does he intend to make any provision for a case such as I am going to .suggest to him in which a farmer has had a serious loss in his farming operations for possibly two or three years and then has a good crop which renders him liable to assessment for income tax? He has become heavily indebted during those poor crop years, and on selling his crop and turning the proceeds over to the bank, he is later assessed by the Income Tax department for his operations of the previous year. When he goes to the bank for money to pay his income tax, he is refused the money by the bank, although the bank has received the total proceeds of his crop, and the farmer then is pressed by the Income Tax department for payment of the tax. I have known at least one case to occur such as I have suggested to the minister, and I believe there have been a good many such cases. I think the minister might make some provision in the act whereby the farmer could give a lien to the department on a portion of his crop before he has to sell it and turn the proceeds over to the bank. The bank very often holds a claim upon the farmer which really forces him to turn the proceeds over to it. Has the minister considered that? Is he willing to make any change in the act to protect that man?
further changes in the act from what have been already presented to parliament. My
Income War Tax Act
hon. friend brought this matter to my attention before, and it is fair to say that there is room for consideration of the points which he has outlined. This does not affect farmers any more than it affects the general business community of the country. Boards of trade have made the same representations to us on behalf of business interests as have been made by my hon. friend. This is a matter that we shall have to consider when taking up the tax question during the year.
had his horses seized by the department for income tax and he had become liable under just such circumstances as I outlined to the minister. The minister says that farmers are in exactly the same position as business men.
consider the question carefully he will see that the farmer is in a worse position because he is dependent upon nature for the quantity of crop he will receive. Very often it is beyond his ability to ward off the poor crop which nature gives him. He is always speculating with the weather, and no matter how good a farmer he is he will have a poor crop some years and a good one in others. Some effort should be made by the department to deal with t'he farmer's case. Certainly it is a hardship in those cases where the farmers have had their goods seized for income tax.