SUPREME COURT OF CANADA
Beaudoin-Daigneault v. Richard, 1984 CanLII 15 (SCC), [1984] 1 SCR 2
Date: 1984-02-02
Mme Beaudoin-Daigneault Appellant;
and
Paul-Eugène Richard Respondent;
and
Registrar of Registry Division of Compton at Cookshire Mis en cause.
File No.: 16952.
1983: March 15; 1984: February 2.
Present: Dickson, Beetz, Estey, McIntyre, Chouinard, Lamer and Wilson JJ.
ON APPEAL FROM THE COURT OF APPEAL FOR QUEBEC
Partnership — Tacit partnership — Concubinaries — Purchase and operation of a farm — Pro socio action — Civil Code, arts. 1830 et seq.
Courts — Appeal — Court of Appeal intervening in the findings and conclusions of fact of the trial judge — No error by the trial judge — Principles governing a second appellate court's intervention with respect to the findings of fact of a first appellate court — Principles governing a second appellate court’s intervention with respect to the findings of fact at trial.
After two years of cohabitation, both parties decided to buy a farm. They both signed an offer to purchase the farm but respondent alone signed the contract of sale. During five years, appellant worked and financially contributed to the improvement and operation of the farm. She also took care of the household chores. The parties eventually separated. Appellant then brought a pro socio action in the Superior Court. The trial judge allowed the action finding that a partnership existed for the purchase and operation of a farm and ordered its partition. The Court of Appeal set aside the judgment holding that no partnership had ever existed between the parties. According to the Court of Appeal, the evidence did not disclose that the parties had intented to buy the farm together since respondent alone signed the deed of sale.
Held: The appeal should be allowed.
The rule followed by this Court with respect to findings of fact by an appellate court is to the effect that this Court must be clearly satisfied that the judgment of the appellate court is erroneous, either with regard to its grounds for intervention or its interpretation of the evidence on the record.
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With regard to findings based on the credibility of witnesses, an appellate court should not intervene unless it is certain that its difference of opinion with the trial judge is the result of an error by the latter. As he had the benefit of seeing and hearing the witnesses, such certainty will only be possible if the appellate court can identify the reason for this difference of opinion, in order to be certain that it results from an error and not from his privileged position as the trier of fact. If the appellate court cannot thus identify the critical error it must refrain from intervening, unless of course the finding of fact cannot be attributed to this advantage enjoyed by the trial judge, because nothing could have justified the judge's conclusion whatever he saw or heard; this latter category will be identified by the unreasonableness of the trial judge's finding.
In the case at bar, even though the contract of sale was signed by respondent alone, the trial judge's finding that the parties had acquired the farm together was attributable to his believing appellant's testimony, contrary to the Court of Appeal. This finding of fact which was supported by the evidence as a whole—including the appellant's signature of the purchase offer—was not unreasonable. As the Court of Appeal did not find any error on the part of the trial judge, it was an error for the Court of Appeal to intervene by substituting its opinion for that of the trier of fact on this question and to hold that there was no partnership between the parties.
In view of the error of the Court of Appeal, this Court was justified to intervene. This Court will only vary a conclusion of the trial judge if it can with certainty identify a determinative error. Furthermore, having regard to the evidence taken as a whole, that is, whether there was a preponderance of proof or not, this Court has always refrained from reconsidering the evidence and substituting its opinion for that of the trial judge, unless his conclusion is unreasonable. This Court did not find here any determinative error or unreasonable finding. The judgment at trial is therefore restored.
Symington v. Symington, (1875) L.R. 2 H.L. Sc. 415; Demers v. Montreal Steam Laundry Co. (1897), 1897 CanLII 57 (SCC), 27 S.C.R. 537; Pelletier v. Shykofsky, 1957 CanLII 65 (SCC), [1957] S.C.R. 635; Dorval v. Bouvier, 1968 CanLII 3 (CSC), [1968] S.C.R. 288; Schreiber Brothers Ltd. v. Currie Products Ltd., 1980 CanLII 11 (SCC), [1980] 2 S.C.R. 78; Métivier v. Cadorette, 1975 CanLII 2 (SCC), [1977] 1 S.C.R, 371; Latour v. Grenier, 1945 CanLII 39 (SCC), [1945] S.C.R. 749; Workmen's Compensation Board v. Greer, 1973 CanLII 189 (SCC), [1975] 1 S.C.R. 347, applied; Stein v. The Ship "Kathy K", 1975 CanLII 146 (SCC), [1976] 2 S.C.R. 802; Lewis v. Todd and McClure, 1980 CanLII 20 (SCC), [1980] 2 S.C.R. 694; Jaegli Enterprises Ltd. v. Taylor, 1981 CanLII 26 (SCC), [1981] 2 S.C.R. 2; Rubis v. Gray Rocks Inn Ltd., 1982 CanLII 17 (SCC), [1982] 1 S.C.R. 452;
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Doerner v. Bliss & Laughlin Industries Inc., 1980 CanLII 50 (SCC), [1980] 2 S.C.R. 865; Wire Rope Industries of Canada (1966) Ltd. v. B.C. Marine Shipbuilders Ltd., 1981 CanLII 182 (SCC), [1981] 1 S.C.R. 363; Liverpool & London & Globe Ins. Co. v. Canadian General Electric Co., 1981 CanLII 50 (SCC), [1981] 1 S.C.R. 600, referred to.
APPEAL from a judgment of the Quebec Court of Appeal, [1982] C.A. 66, dismissing a judgment of the Superior Court, [1979] C.S. 406. Appeal allowed.
Martin Gauthier, for the appellant. André Morissette, for the respondent.
English version of the judgment of the Court delivered by
LAMER J.—Appellant Aline Beaudoin-Daigneault was rejected by her concubinary Paul-Eugène Richard after seven years of cohabitation, the last five of which were on a farm at Martinville; she successfully brought a pro socio action in the Superior Court, [1979] C.S. 406, (accompanied by conclusions based on unjust enrichment), and was found to be a partner with her concubinary in the purchase and operation of the farm and the co-proprietor of the land and [TRANSLATION] "all things pertaining to the farm such as animals, agricultural implements, a truck and so on"; and she obtained an order for partition.
The Court of Appeal for Quebec, [1982] C.A. 66, allowed the appeal of Mr. Richard and held unanimously that no partnership had ever existed between the parties, and by a majority, Paré J.A. dissenting, that an action de in rem verso could not succeed as there was no absence of just cause. Monet J.A. also considered that the rule pertaining to alternative recourses had not been observed.
As I am of the opinion that the pro socio action must succeed, there is no need to deal with the action de in rem verso.
The facts as found by the trial judge are as follows:
[TRANSLATION] Throughout the period of cohabitation, each of the parties was employed. Plaintiff worked in a factory and she provided for the needs of her two
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children. Defendant was a construction worker: he worked for about six months and received unemployment insurance benefits for the rest of the year. In the winter of 1972-73, the parties both decided they would move to a farm. They looked for one together and found it at Martinville, owned by one Little. They negotiated the purchase of this farm together, and on February 14, 1973 they both signed an offer to purchase the farm. This offer was accepted by Little.
The contract of sale was signed on February 28, 1973. Defendant alone was named as the purchaser. The purchase price was $16,000: defendant borrowed $3,000 from his mother and obtained a loan for $13,500, guaranteed by a first mortgage on the farm, from the Caisse d'établissement de l'Estrie (interest at 97/8% per annum, a monthly payment of $142.42, including capital and interest).
The parties moved to the farm in the spring of 1973, and plaintiff brought her furniture with her. It should be noted that until that time the parties had lived in plaintiff's apartment.
The farm was in rather poor condition. Before anything could be grown on it, it had to be cleared of stones. Plaintiff with the aid of her two children and defendant worked on clearing the stones for several years. Trees were also felled, both parties sharing the work as they were able. Plaintiff planted a garden in which she grew vegetables for the house. Later, animals were purchased and both parties shared the cost. They began rearing beef cattle. The work was shared: in the summer, when defendant worked in construction, it was plaintiff who took care of the animals, except on weekends. In the winter, when defendant was unemployed, he took care of the animals. Plaintiff made a substantial financial contribution to the cost of feed. She also contributed in a more modest degree to the purchase of certain equipment.
Plaintiff also worked in the sugarhouse and in haymaking. When the parties hired someone to seed crops in the summer, it was plaintiff who remained at home to supervise, and lost her day's pay: her salary was less than defendant's, and the loss was smaller.
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Work had to be done on the house: an electric heating system was installed and the house was insulated. The cost of this was shared by both parties. Plaintiff bought paint, wallpaper, rugs and linoleum. She paid certain bills such as electricity and insurance.
As regards payment of the mortgage, it was plaintiff who made the payment to the Caisse d'établissement de l’Estrie to enable defendant to join and borrow from it. The payments were subsequently made from an account of defendant at the Caisse populaire St-Joseph, but plaintiff also deposited certain amounts in that account, which she estimated at about $3,000. Part of the mortgage was paid from the selling price of animals raised on the farm. Part of this cost was paid from defendant's account, and another part from an account opened in the name of plaintiff's son. A transfer was subsequently made to defendant's account, from which payments on the mortgage continued to be made. The wood from the farm was sold in plaintiff's name, so that she was the one who received the "wood producers bonus".
It is hardly necessary to add that it was plaintiff who was responsible for housework, and that she paid for the groceries.
Relying on his view of the facts proven, the trial judge then concluded as follows:
[TRANSLATION] By signing this purchase offer together, the parties clearly indicated their intention to purchase the farm together.
and his finding on the sufficiency of evidence was as follows:
[TRANSLATION] The Court concludes from the foregoing that a partnership existed between the parties relating to the farm, which besides serving as their dwelling-place was a business in addition to their respective employments.
The joint signature on the offer to purchase the farm, all the facts related above, the behaviour of the parties in relation to the farm and its operation constitute ample evidence, in the judgment of the Court, to support a conclusion that a partnership contract existed.
When defendant signed the notarial deed to purchase the farm, he can be considered as having been the mandatary of the partnership.
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Court of Appeal
Paré J.A. of the Court of Appeal (with the concurrence of Lajoie J.A.) reviewed the facts as found by the trial judge.
He properly noted that there was no written partnership contract, that the evidence disclosed [TRANSLATION] "no express verbal agreement", and that "the partnership accordingly would exist only as the result of a tacit agreement, to be found in the facts referred to by the trial judge".
He then indicated the importance which he placed on two facts, the signature by Mrs. Daigneault of the purchase offer, and in addition, the absence of her signature on the contract of sale.
[TRANSLATION] The most important of these facts is undoubtedly the signature of purchase offer P-3 by respondent (J.R. 148). However, I find it hard to consider this offer without at the same time considering the deed of sale on which only appellant's name appears as purchaser. Nonetheless, respondent was present in the notary's office and the explanation she gave for not signing as a joint purchaser seems to me quite insufficient to preclude the consequences resulting from Exhibit P-l in favour of appellant.
Either respondent never intended to assume the obligations of an owner, or if she did so intend at the time of the purchase offer she was no longer willing to incur the risks when contract P-l was signed. I find it hard to believe that respondent did not know that her refusal to be a party to the purchase indicated that she intended to let appellant become the sole owner of the farm. However, the trial judge sought to base on these facts the existence of a tacit mandate by respondent in favour of appellant. With respect for the learned judge, I cannot accept this conclusion, which seems to me to be merely a presumption.
(Emphasis added.)
At the hearing in this Court counsel for the appellant raised a ground in addition to those already pleaded in his written submission: that the Court of Appeal based its decision on certain findings of fact which it wrongly substituted for those of the trial judge.
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The rule followed by this Court in respect of findings of fact by an appellate court has been stated several times, first by the House of Lords in Symington v. Symington, (1875) L.R. 2 H.L. Sc. 415, adopted by this Court in Deniers v. Montreal Steam Laundry Co. (1897), 1897 CanLII 57 (SCC), 27 S.C.R. 537 at p. 538, restated in Pelletier v. Shykofsky, 1957 CanLII 65 (SCC), [1957] S.C.R. 635 at p. 638, and again cited in Dorval v. Bouvier, 1968 CanLII 3 (CSC), [1968] S.C.R. 288 at p. 294:
[TRANSLATION] The principle that a second court of appeal must follow when it is required to review the judgment of a first court of appeal is also long established. It is expressed in Demers v. The Montreal Steam Laundry Company:
... it is settled law upon which we have often acted here, that where a judgment upon facts has been rendered by a court of first instance, and a first court of appeal has reversed that judgment, a second court of appeal should interfere with the judgment of the first appeal, only if clearly satisfied that it is erroneous; Symington v. Symington L.R. 2 H.L. Sc. 415.
This is the rule followed in this Court and recently applied again in Pelletier v. Shykofsky.’ Thus, to intervene in this case, the Court would have to be clearly satisfied that the judgment of the Court of Appeal is erroneous, either with regard to its grounds for intervention or its interpretation of the evidence in the record. After giving the matter serious consideration, I cannot form such an opinion.
So far as the rules for intervention by a first court of appeal in the findings of fact of a trial judge are concerned, in my opinion, whatever the uncertainty of the rule regarding some of our decisions in recent years (Schreiber Brothers Ltd. v. Currie Products Ltd., 1980 CanLII 11 (SCC), [1980] 2 S.C.R. 78; Stein v. The Ship "Kathy K", 1975 CanLII 146 (SCC), [1976] 2 S.C.R. 802; Lewis v. Todd and McClure, 1980 CanLII 20 (SCC), [1980] 2 S.C.R. 694; Jaegli Enterprises Ltd. v. Taylor, 1981 CanLII 26 (SCC), [1981] 2 S.C.R. 2; Rubis v. Gray Rocks Inn Ltd., 1982 CanLII 17 (SCC), [1982] 1 S.C.R. 452; Doerner v. Bliss & Laughlin Industries Inc., 1980 CanLII 50 (SCC), [1980] 2 S.C.R. 865; Wire Rope Industries of Canada (1966) Ltd. v. B. C. Marine Shipbuilders Ltd., 1981 CanLII 182 (SCC), [1981] 1 S.C.R. 363; Liverpool & London & Globe Ins. Co. v. Canadian General Electric Co., 1981 CanLII 50 (SCC), [1981] 1 S.C.R. 600), the rule is clear with regard to findings based on the credibility of witnesses: an
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appellate court should not intervene unless it is certain that its difference of opinion with the trial judge is the result of an error by the latter. As he had the benefit of seeing and hearing the witnesses, such certainty will only be possible if the appellate court can identify the reason for this difference of opinion, in order to be certain that it results from an error and not from his privileged position as the trier of fact. If the appellate court cannot thus identify the critical error it must refrain from intervening, unless of course the finding of fact cannot be attributed to this advantage enjoyed by the trial judge, because nothing could have justified the judge's conclusion whatever he saw or heard; this latter category will be identified by the unreasonableness of the trial judge's finding (Métivier v. Cadorette, 1975 CanLII 2 (SCC), [1977] 1 S.C.R. 371; Latour v. Grenier, 1945 CanLII 39 (SCC), [1945] S.C.R. 749; Workmen’s Compensation Board v. Greer, 1973 CanLII 189 (SCC), [1975] 1 S.C.R. 347; Schreiber Brothers Ltd. v. Currie Products Ltd., supra).
In the case at bar, this Court may intervene in the findings of fact of the Court of Appeal because I consider, with respect, that Paré J.A. erroneously intervened in the findings and conclusions of fact of the trial judge.
The facts that must be taken into consideration in determining whether there was a partnership, and if so, what it covered and when it commenced, are primarily the following: the signature of the purchase offer by Mrs. Daigneault, the absence of her signature on the deed of sale, and finally, the respective contributions for the purchase and subsequently the operation of the farm.
Tôth J. concluded, based on the parties’ past conduct, daily behaviour and actions, and after reviewing these facts, that a partnership was created just before the farm was purchased and that it was still in existence at the time of the purchase: this explains his conclusion that Mr. Richard signed the deed of sale as the mandatary of the partnership.
He came to this conclusion despite the fact that only Mr. Richard’s signature appeared on the deed of sale. He did so, inter alia, because he believed
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Mrs. Daigneault when she explained why her signature was not on the deed of sale, and she said that she had not refused to sign or be a party to the purchase.
Paré J.A., on the other hand, concluded, on the basis of the fact that Mrs. Daigneault had not signed the deed of sale, that she had refused to be a party to the purchase. His conclusion was based on the same facts in the record. Indeed, Paré J.A. himself (with the concurrence of Lajoie J.A.) cites in his opinion the only evidence in the record on this point. It consists of passages from the testimony of the two parties:
[TRANSLATION]
Dame Aline Daigneault:
Q. So after that, was a purchase contract signed?
A. There was a contract signed before the notary Genest, and I did not sign the mortgage; the notary asked me if I was willing to help out, because it was not always easy to have land and keep it up, and I said yes, but in my opinion I did not need to sign the mortgage in order to be an owner as he was.
Q. If I understand correctly, the signature of the purchase offer was sufficient so far as you were concerned?
A. It was sufficient to make me an owner.
Q. When you decided to buy the farm you signed the document known as a purchase offer, and you said a moment ago that when the time came to sign the contract the notary asked you if you wanted to sign and you refused?
A. No, I did not say I refused to sign.
Q. What happened, then?
A. The notary simply asked me to see if I was willing to help, to assist him in his task, and I simply said yes.
Q. Was there any question at that time of your signing a contract?
A. No, in my opinion I did not need to sign, I had signed the purchase offer, I trusted him, I did not need any other papers, any other evidence besides that.
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Q. Had there been any previous discussion between the two (2) of you in any way about the farm being bought for both of you?
A. Naturally, we never discussed it because it was mine as much as his.
P. E. Richard:
Q. Was there any question at that time with Mrs. Daigneault that the purchase would be co-proprietorship or that she would have any share in it whatever?
A. No, never.
Q. It was never mentioned? A. Never.
In order to conclude that Mrs. Daigneault did not intend to be a party to the purchase, Paré J.A. would have had to disregard her testimony because he did not believe it.
The trial judge was entitled to believe Mrs. Daigneault, the conclusion. that she did not refuse to be a party to the purchase of the farm is not unreasonable, is based on the evidence, and the Court of Appeal did not indicate on what error it was relying in order to substitute its opinion — that she had refused to be a party to the purchase — for that of the trier of fact. This is sufficient to justify the intervention of this Court. The trial judge having believed Mrs. Daigneault, the conclusion that they purchased the farm together must be restored by this Court on the facts on record, before proceeding to consider the judge's other conclusions.
It is worth recalling here the approach taken by this Court when, justified in intervening because of an error by the Court of Appeal, it reviews the findings of fact of a trial judge or considers the evidence as a whole. This Court will only vary a conclusion of the trial judge if it can with certainty identify a determinative error. Furthermore, having regard to the evidence taken as a whole, that is, whether there is a preponderance of proof or not, this court has always refrained from reconsidering the evidence and substituting its opinion for that of the trial judge, unless his conclusion is unreasonable.
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The appellate judges did not find that Tôth J. made any specific error of law, as to his understanding of what is a tacit partnership, except, for all practical purposes, to say that they felt that the weight of evidence was not in favour of its existence. The appellate judges were of the view that plaintiff was not able to discharge the burden of proof placed upon her. This I feel is understandable, for I consider, as did Paré J.A., that a refusal by appellant to be a party to the purchase of the farm would be crucial in determining whether the latter was done as part of a partnership, and such a refusal is a significant negative factor in identifying the affectio societatis which should exist between the partners. Had it not been for the Court of Appeal's error in substituting its conclusion for that of the trial judge, to the effect that appellant refused to be a party to the purchase of the farm, I would have been of the opinion that this Court should refrain from intervening in the overall view taken of the evidence by the Court of Appeal, although I consider that an appellate court should only do so in exceptional circumstances.
In his submission respondent challenged two points in the reasons of Tôth J.:
[TRANSLATION] We submit that the trial judge exaggerated the facts and attributed to the parties intentions which they never had, and that the evidence did not disclose at all that a de facto partnership was created between the parties.
The three judges of the Quebec Court of Appeal properly held that the facts presented in evidence, taken individually and as a whole, did not disclose any intention by the parties to create a partnership within the meaning of the Civil Code, with all its consequences.
These arguments were further clarified later in his submission:
[TRANSLATION] I think that we should not confuse mutual assistance between the parties and a partnership between them: for, if we followed the reasoning of appellant and of the trial judge, anyone helping another person in any kind of work whatever would become that person's partner and could share in whatever the work produced.
If the Court admits, as readily as did the trial judge, that a partnership can exist between two parties who cohabit, it risks creating grave uncertainty in the minds of the public, who will no longer know where they stand
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and whom the constant threat of having to share property they own with a third person will make very insecure. [sic]
He went on to say:
[TRANSLATION] In our opinion, if the parties really wanted to create a partnership, these facts should appear explicitly and expressly and the demonstration of this intent should be unequivocal and consistent with what really occurred, and was represented by the parties, which is definitely not the case here.
Tôth J. was well aware of the risk of concluding that a partnership existed merely because there had been cohabitation. At the very beginning of his opinion, the judge said:
[TRANSLATION] The mere fact of cohabitation does not ipso facto create an ownership right in property acquired by the other concubinary during the cohabitation. Mayrand J.A. recently observed (Lebrun v. Rodier, [1978] C.A. 380, 381):
In the present state of the law, the labour of two spouses may enrich only one of them, without a proportionate compensation for the other. This is the foreseeable risk which spouses separate as to property assume, and which only a legislative amendment or an agreement between the spouses could remove.
This observation by Mayrand J.A. applies a fortiori to persons living together.
On this point it is worth citing the remarks of Bernard Demain, La liquidation des biens des concubins, L.G.D.J., Paris, 1968, at p. 29:
[TRANSLATION] ... cohabitation cannot of itself give rise to a partnership: independently of such cohabitation, the conditions of a contract of partnership must be met in themselves, for in its present form cohabitation cannot have any legal effects peculiar to itself; as Nast observes: "concubinage itself, which may have been accompanied by a common household, does not itself create a community of property, even a de facto community, any more than a brother and sister, or two friends living together, does". Thus, the mere fact of concubinage and the resulting pooling of property does not suffice to create a de facto partnership between the parties concerned, for while the property so confused can be regarded as contributions, it definitely does not follow that the concubinaries intended to make a profit; moreover, the confusion of this same property could equally be regarded as constituting a simple co-proprietorship, loan or gift. Conversely, however, the fact of concubinage does not prevent the two lovers in
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some cases from having a less immediate purpose in mind and seeking a future gain.
Each case must therefore be examined with great care; if it is found to contain the ingredients of a partnership contract, there is no reason to deny the concubinaries, who remain subject to the ordinary law, what is given to all other persons: as noted above, the law disregards concubinage, whether as the source of positive effects or of a civil disability. It is therefore superfluous, and even dangerous, to use the existence of extra-marital relations between the partners to justify the existence of a partnership, for such relations are beside the point: the cohabitation must be disregarded and a decision based on the acts of the persons concerned as if they were the acts of persons not cohabiting.
One should note that while there are facts in the statement of the facts of the trial judge that are not relevant to the determination of whether a partnership existed or not, his twofold conclusion indicates that he was well aware of it:
[TRANSLATION] From the foregoing the Court concludes that a partnership existed between the parties relating to the farm, which besides serving as their dwelling-place was a business in addition to their respective employments.
(Emphasis added.)
The other objection to the reasons of Tôth J. is equally without foundation. He had to decide whether the weight of evidence was against the existence of a partnership between the two parties. In Quebec the existence of a partnership is not subject to any formal requirement: this was not true in France, where the creation of a partnership was long subject to a rigid formalism. It is for this reason that de facto partnerships were created in France, in particular partnerships described as "created de facto", which were not legal partnerships although they had legal effects.
In France, an express verbal partnership was a partnership created de facto, as was a tacit partnership. In Quebec — and this was already the case when the Code came into effect — any form of express partnership, written or verbal, or even a tacit partnership, is legal. Thus, Tôth J. properly (unlike some of his brother judges in other decisions dealing with partnerships) did not make any use of the expression "de facto partnership" or, as
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is sometimes the case, "sui generis partnership". The legal partnership constituted by a tacit partnership, including that which may arise between concubinaries, is governed by arts. 1830 et seq. of the Civil Code, like any other form of partnership.
Because tacit, the partnership can only be revealed by a factual situation, a retrospect of the partners' behaviour. From retrospection the trial judge must be satisfied, first, that each partner has made contributions to the common fund either in money or property, or by his work. It is also clear that, in the case of concubinaries, what is put in must not simply be the contribution to the common household, such as pooling of furniture or running the household.
Secondly, their past conduct must also disclose how losses and gains were distributed. In the case of a partnership between concubinaries, this division is usually by the use of earnings for the support of the partners. Similarly, each concubinary contributes to losses to the extent that these affect the household's standard of living.
Finally, by their actions the two partners must have shown that they were motivated by the affectio societatis, the mental factor which Pic and Kréher (Des sociétés commerciales, t. 1, 3rd ed., 1940, Nos. 72 et seq.) described as follows, at p. 38:
[TRANSLATION] ... when the actions of the partners are such that they indicate the existence of an active and deliberate mutual effort—which distinguishes a partnership from a co-proprietorship—on an equal footing—which distinguishes a partnership contract from a work contract—for a particular purpose, namely the division of earnings.
(For a more complete analysis of the point, reference may also be made to Bernard Demain, supra, or inter alia to Henri Temple, Les sociétés de fait, L.G.D.J., Paris, 1975.)
This is where the unassailable conclusion of the trial judge regarding the lack of a signature by the woman on the sale contract becomes important.
As only the signature by Mr. Richard appears on the contract of sale, and in view of the testimony by Mrs. Daigneault attempting to explain this,
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it was incumbent upon the trial judge to consider all the other facts, including Mrs. Daigneault’s signature on the purchase offer, as a Lyons court did in a decision mentioned by Joseph Hémard (Théorie et pratique des nullités de sociétés et des sociétés de fait, 2nd ed., Paris, 1926, No. 161), where the business was in the name of the male concubinary only, and the Court held that, to determine whether there was an affectio societatis, it had to establish whether from the facts it could be said that there was [TRANSLATION] "a collection of presumptions precluding any serious objection, even though each one of them taken separately might give rise to some doubt".
Respondent invited the Court to consider the aspects of the evidence that might negate the affectio societatis, but did not in so doing establish that they were ignored by the trial judge.
Among other facts, respondent in speaking of the contributions emphasized what he considered to be their flagrant inequality. Respondent properly did not argue that the contribution should be equal or almost equal. And I agree with respondent that if the contribution of one partner is out of proportion to that of the other, the trial judge must take it into account and consider that this fact weighs greatly against the existence of the affectio societatis. Article 1848 of the Civil Code of Lower Canada states that:
- [When there is no agreement concerning the shares of the partners in the profits and losses of the partnership, they share equally.]
It is of the essence of a tacit partnership that the partners made absolutely no provision as to what each partner’s share would be. It follows that, in determining whether their past behaviour supports a conclusion that a partnership existed, each one’s contribution becomes all the more important since the partition will always be made equally.
There is no basis in the record for saying that Tôth J. disregarded the evidence mentioned by respondent, to then say, as says respondent, [TRANSLATION] "that no comparison was possible between the amounts contributed" by each partner.
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Bearing in mind the law as to partition and the evidence presented before him, unless we are shown the contrary, the trial judge's conclusion as to the existence of a partnership assumes that he found that there was not such a disparity between the contribution made by one party and that made by the other as to constitute a bar to interpreting the history of the couple as a tacit partnership.
The only suggested proof of an error consists in saying to us that he must to some extent have been in error, since, on the evidence, he should have reached another conclusion.
Where the conclusion is not unreasonable, this Court does not intervene, and the conclusion reached by the trial judge regarding the contributions made is not unreasonable.
Finally, I feel it is appropriate to issue a caution against the danger of concluding too readily to the existence of tacit partnerships, for the admittedly admirable purpose of compensating for the injustice resulting from the situation in which concubines are often placed.
A review of pre-1946 French cases shows clearly that it is easy to be too liberal and to distort the rules governing the formation of contracts. Thus, as Demain properly observed (op. cit., p. 36), [TRANSLATION] "cohabitation should not make the proof of a partnership contract easier, so that a concubinary when he wishes to plead legal authority must be subject to the ordinary law".
In the case at bar, it seems clear to me from reading the trial judgment that Tôth J. was fully aware of the legal principles applicable to the matter, and that he avoided the temptation of relaxing the law in a moment of compassion. I saw no indication that his conclusion resulted from an error. I would allow the appeal and, of his conclusions, restore the following:
[TRANSLATION] The Court FINDS that a partnership existed between the parties for the purchase and operation of the farm known as:
Lot No. NINETEEN "B" in the plan and book of reference for range TWO (Rg. II) of EATON TOWNSHIP;
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The said lot measuring fourteen (14) chains, fifty (50) links wide by seventy-four (74) chains long, containing a surface area of one hundred and seven and one-quarter acres English measure, more or less;
Subject to a passive servitude in favour of the Stanstead Electricity Cooperative, registered on February 21, 1961, as No. 75318;
Further subject to an active servitude for spring rights over lot 19 "A", range TWO (Rg. II) for EATON TOWNSHIP, according to Rg. B Vol.
The whole with buildings and appurtenances constructed thereon.
the property of the said partnership to include all things pertaining to the farm, such as animals, agricultural implements, a truck and so on;
APPROVES the dissolution of the said partnership by the parties;
EXEMPTS plaintiff from the need to render an account.
I would also declare the seizure of movables and immovables as ordered at first instance to be valid; order partition and, should the parties not agree as to its terms, order that a liquidator be appointed by Tôth J.
The whole with costs against respondent throughout.
Appeal allowed with costs.
Solicitors for the appellant: Bessette & Gauthier, Sherbrooke.
Solicitors for the respondent: Morissette, Laroche & Associés, Sherbrooke.
