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THE OTTAWA

COFFEE HOUSE

'. ■ ^ SCANDAL.

For the Shareholders.

' • r

Ottawa Temperance Coffee jiouse Company

(Limited.)

EXTRACT FROM THE Report of RicHARf) Tohn VVicksteed,
President and Solicitor of the Company, presented at
THE Annual General Meeting of the SharcHolders held '
AT Ottawa on Monday, 6Th I^fbruary, 1888.

ONTARIO.

f iret S)iv(0ion Courtt

County of Carleton.

Ottawa, loth December, 1887.

Masson (i.e. McCulloch or Code) vs. Wicksteed.

Cheque of the President of an Ih€orporated Coffipany. His liability.

The Defendant held personally liable for cheque, although signed
by him in his .quality of President of Coffee House Company, becajise
the corporate name of the Company was not included in the body of
the cheque, or properly attached to it.

This was an action brought by McCulloch, — Masson being a bor-
rowed name, — to recover the value of a dishonored cheque drawn by the
Defendant as President of the Coffee House Company, in his the
Plaintiff's favor, for wages due by the Company to him as Manager.

The cheque read as follows: —

"Charge to account of I'emperance Coffee House Company.

"Ottawa, 30th April, 1887.
"To the Bank of Montreal, Ottawa, Pay to W. T. 'McCulloch, or

i»rder,,tbe sum of Fifty Dollars.

Endorsed " W. T. McCulloch."

"R. J. Wicksteed,

" Pres. O. T. C. H. Co.

'^'

Dr. R.J. Wichtced. ~V\\V!> cheque v/as issued and post-dated in
obedience to the following resolution passed by the Board of Directors,
on the 4th of March, 1887: —

" Resolved that a cheque be issued for $50.00, dated 30th of April,
Mr. McCulloch."

The Defendant signed cheque, as president, according to custom.
'J'he cheque was discounted bv Masson, but dishonored on presentment,
there being "no funds." No one was deceived, all the parties. Drawer,
Payee, Endorser, Bank, considered they were dealing with the Com-
pany's cheque. It was given for work done for the Company, and was
not paic^ owing to the misfortune of the Company alone. The Company
shoiild have been sued. The cheque was manufactured out of an
ordinary blank form issued by the Bank of Montreal, and was a fac-
simile of that issued by the presidents of other local companies, notably
that of 'The Ottawa Gas Company," who used an ordinary blank,
Stamped "The Ottawa Gas Co." across one end of the face, and had it
signed "F C , Managing Director, The Ottawa Gas Co."

The question of personal liability of the President, could not be
raised, inasmuch as all the parties were fully acquainted with the circum-
stances under which it was issued: until dishonored, all were agreed that
it was the Company's cheque. But even if any person had been deceived
as to whose security he |X)ssessed, surrounding facts must determine -the
liability of the Drawer. "Whether he is so liable depends upon the
" terms of the particular contract construed in connection with the sur-
" rounding circumstances, and the relative situations of the parties, at
" the time the contract was entered into." (Addison on Contracts, 7th
Ed., p. 61.)

" When the Directors are expressly authorized to accept bills or
" issue promissory notes on behalf of the company, the company will be
" bound if the authority is substantially acted upon. It need not be
"exercised in the very terms in which it is given, or be strictly or tech-
" nically accurate in point of form." — (Ibid. 979.)

See also the following American cases : — "When individuals sub-
" scribe their proper names to a promissory xvoXq^ prima facie they are
" personally liable, though they add a description of "ihe character in
" which the note is given, but such presumption of liability may be re-
" butted by proof that the note was, in fact, given by the makers as
" agents, for a debt of the principal due to the payee, with the payee's
"knowledge. — (17 Wend. Rep. 40.)

" Where a party dealing with an agent, takes his promissory note,
" with a knowledge of his agency, and of the liability of the principal
" for the debt for which the note is given, hie, thereby, charges the prin-
"cipal.** — (10 Mete. B-ep. Mass. 160.)

. "^ In commercial Cases, in furtherance of the public policy of en-
" couraging trade, if it can, upon ^he whole instrument be collected, that
" the true object and intent were to bind the principal, and not merely

** the agent, couns of justire will adopt that construction of it, however
"informally it may be expressed— (22 Wend. Rep., N. Y., 324.)

In the present case, however, there has never been any difficulty as
to the liability of the company. The debt has always been acknow-
ledged to be th£.t of the company, but the company has never been asked
to pay. On the 28th September, 1887," it was moved by Mr. Feather-
ston and secjnded by Mr. Hope, and resolved : —

'*^hat the directors hereby acknowledge that the check issued by
the president in favor of W. T. McCuUoch, is a liability of the company,
and has always been such."

Dr. VVicksteed concluded by citing the judgmen* in "The Bank of
Ottawa vs. Hamilton," (U. C. P. reports, voi. 28, p. 488) as the corre'^t
judgment in an almost identical [X)sition.

W.J. Code., contra, pleaded that the name of the company was not
properly attached to the cheque, citing in sup[)o.t the following cases : —
Bank of Montreal vs. Depatre, 5 Q. B. ; Foster vs. Geddes, 14 Q. B. :
Robertson vs. Glass, 20 C. P.; Haggarty vs. Squier, 42 U. C. R. ; Brown
vs. Howland, 9 Ontario reports.

LyoH^ C. J. — Judgment for plaintiff. The name of the Coffee
House Company should have been introduced into the body of the
cheque. The cheque as it stands is an order to the bank cashier to pay
the amount of fifty dollars to McCulloch out of the private account of
the Defendant.

The above case was heard on the 2nd December, 1887.

The first inkling of such a suit having been determined on by Mr.
Code was a letter from him 10 Defendant in June,

Your president, the Defendant, often brought up the matter at the
Board of Directors and was always met with a smile, and the remark,
" that's your cheque Doctor."

Thmking it was a good natured attempt at bluff on the part of his
co-directors to coax him to pay the debt, and confident that the
directors would come forward before the case was argued and pay their
shares, your president did not press them further.

But when the case was heard on 2nd December, before Judge
Lyon, the Defendant's witnesses proved false and traitorous. Mr. Mc-^
Culloch swearing to statements the opposite to those he had made in the
same box in August, and Messrs. Hope and Featherston were reticent,
shuffling and evasive, doing all the damage to your presidents' position
they could.

The president's eyes then began to open to the fact that these
witnesses were prepared to injure the company provided they could only
annoy him.

He therefore wrote to Dr. J. A. Macpherson, the late manager, (a
man, #ho although unfortunate in his management, is a man of refine-
ment, honor and probity,) as follows : — >

i
4

5
6

Ottawa, 5th December, 1887.
Prof. J. A. Mrtcpiiersoti, .

Late Manager (). i'. C H.,
Sib, — Tlie cheiiue for $50, which, acconling to resolution, I made as President of
O. T. C. Co'y in favor of W. T. McC'iilloch was not paid owing to want of funds.
Suit has been brought against ine a;, the nviker. I am defending, of course, as the
cheque is the company's cheque for company's work.

I am lead to believe that the suit has been instigated by Hope and Featherston to
|xiv rne otf for some imagined slight 10 them. They have behaved very meanly
throughout, and now want to raise the silly (juibble that the cheque is my personal
che(|ue because it did not issue first from the tt-easurer (Mr. James Ilojje).

With a knowle Ige of the foregoing, please write me a full account of all that
transpired respecting the cheque, and answering the following queries: —

r Di'l Mr. lIo|)e authorize you lo ask me to sign cheque when you did?
Why did you or McCulloch not get it signed by Mr. Hope?
What did McCulloch say when you gave it him?
Did Masson ever talk to you about it?

Would the bank have cashed che(|ue with my signature alone?
Were any che(|ues ever cashe<l without Hope's signc ure? "
DicPany of directors ever repudiate cheque and say it was mine?
8 Are Hope and Featherston capable of doing the dirt; act I have mentioned?
I have defended your conduct stoutly, and expect you to answer at once the above
interrogatives boldly, honestly and fully.

Yours truly,

R. J. WiCKSTEED.

This brought the following rv;ply: —

December 12th, 1887.
Dr. R. J. Wicksteed,

Ottawa,
Dear Doctok, — 1 am 'o-day in receipt of yours dated 6lh insl.
Excuse writing for I have a most abominable pert, and am also on the sick list
and too nervous to v/ rite much.

I will answer your queries seiiatim.

1. The checpu- for McCulloch was voted and d'awn out by me and signed by you
in the interim of Ashfteld's resignation and Hope's positive acceptanc r of office. When
I asked Hope for checiue he said that he had hot ihe cheque l>ook, but as it was in my^
p<iSsession I was to gel you to sign it.

2. This is answered in first.

3. McCulloch stated that he should have to pay dearly for it as the date was so long.

4. No.

5" ^^^'t the bank did, I believe, cash two cheques signed by you alone.

6. Yes; as above, I believe several.

7. They never repudiated the cheque at any of the formal meetings. No mention
of anything of the kind is in the minute book. It was accepted as the company's
cheque by McCulloch's solicitor at the special meeting when the affair was settled.
The solicitor if an honest man, and not Featherston's tool, can vouch for that.

Ho))e is a man of expediency and capable of anything to save his own pocket —
hence his getting Baily to cash with company's money one of his own cheques, during
my absence.

Featherston's conceit of his own legal knowledge frequently leads him astray; and,
as* a rule, acts with Hope under all circumstances where he thinks he can annoy you.
I consider they have both acted very ungentlemanly towards you in many instances.
Baily will forward any letters to me you entrust him with.
I will write you another letter when I am better.
Believe me, dear Doctor,

Yours respectfully,

J. A. MacPherson, L,L.D., &c.

'•*

At your President's request, Dr. Macpherson made a solemn
declaration as to the above facts before H. B. M. Consul, at Boston,
U. S. A. Your president can corroborate most of the facts alleged to
be true by Dr. Macpherson, and couUl have proved them at the trial
had he not considered his non-liability to be almost self-evident.

The Jndge decided that he was liable.

Had tne case admitted pf appeal, into appeal it would have gone,
and of course judgment would have been reversed. Not being i)ermitted
this indulgence, your President must be allowed to give as follows in
writing what he would have done orally before a higher tribunal.

C«J-^-HARDENED JUDGES.

The judgment rendered in the Division Court case reported above
presents a humorous aspect as showing how the whole machinery of the
law may be diverted for several days, employing two County Court
judges and two barristers; and detaining a whole host of fretting
attorneys and witnesses, in order to decide judicially but wrongfully
what any business man of fair intelligence and experience would have
decided practically but righteously in a few minutes. This judgment,
really rendered by two County Court judges of Ontaric, residing in
Ottawa, because their views thereon* are known to coincide, furnishes
also a melancholy example of che evils resulting from a long familiarity
with technicalities rather than piinciples. Evils springing from want of
a sound professional training in the law; a training which wonld en-
courage reflexion and give the power, and confer the habit of thinking
and judging for oneself, and not relying blindly on the judgment of
others. An edi.cation which would teach the fact that cases in law
when decided only establish principles and not iron rules. Legal train-
ing in Ontario now-a-days is apt to produce students of narrow views,
practitioners of quirks, quibbles jmd subterfuges, and rase-ho.xdenQd.
judges. Revenons a nos moutons or to the case of Masson (rather Mc-
Culloch or Code), vs Wicksteed, as decided lately by Judge Lyon, in the
Division Court of Ottawa.

The Defendant, president of an incorporated company, in obedience
to a resolution of the Directors, draws a cheque in the form and manner
usual t) most companies, in favour of McCulloch, a former servant of
the company, and post-dates it. Masson discounts the cheque ; but
when it is presented at the t)ank, the answer "no funds" is returned.
Masson is paid cash by McCulloch, and the cheque is returned to Mc-
Culiorh. McCulloch by his solicitor, Mr. Code, should then have sued
the c; I tany on the cheque or for wDrk and labor done, etc., because,
irresi) < ' ^ - of the manner in which the cheque was drawn out, the
chc;(| 1. : I been accepted all through as being that of the company, by
McCuUn !., Code, Masson, the Bank and the Directors of the Company.

i ' i 'lie Company was virtually insolvent, and the President was a
better hi!d to pluck. So McCulloch, Code, and the Directors, through

whose bad management the Company had been beggared, in order tb
save their own pockets and to indulge their jealous spite, went to work
to find out how a cheque which had been acknowledged by all tjie par-
tics, up to the time of its dishonor, to be that of the Company in fact
and form, could be made to appear to be the personal chetjue of the
Drawer, to the eyes of the County Judges.

The farcical argument advanced in Court and in Chambers was as
follows: — "Several eases decide that a post-dated cheque is an Inland
Bill of Exchange: several cases declare that Bills of Exchange drawn by
a company should have a particular usual form : this particular ()ost-
dated checjue has not that particular usual form ; therefore it cannot be
the Company's cheque ; therefore it must be the Drawer's personal
cheque."

'rh(j two Carletoh Colinty J'jdges agreed as to the correctness of
this extraordinary argument : anc? one of them rendered judgment in
accordance with the conclusions of the foregoing syllogism; whose
premises are founded on decisions taken from various cases A^ithout any
regard being paid to the difference exis.ing between the facts disclosed
in those cases and those proved in this particular case. The judgment
is so ridiculous in its results that I cannot help thinking that the Judges
combined in an attempt to take a playful "rise" out of Dr. Wicksteed,
who although a barrister is not now a regular practioner — but in this
case appeared in his own defence.

Let us consider the reason why cheques or bills of exchange are
asnally signed in a certain way on behalf of a company. It is this :
" Cheques must be properly signed by a firm keeping account at a
banker's, as it is part of the implied contract of the banker, that only
cheque*, so cigned shall be paid." (Bouvier's Dictionary). In case of
promissory notes or bills they must be signed in such a way as not to
deceive the parties negotiating them. These parties must not be led tb
think that they have a rich company as security for the payment, when
they have in reality only a poor individual. In the case before us the
cheque was the ur,ual and acknowledged cheque of the Company; no
one was deceived or in ignorance of the mcts; but then the individual
defendant was comparatively rich, and the Company absolutely poor.
So ihat in order to have the former condemned to pay, judghiehts which
niay have been correct when taken in connection with the cases in which
they were rendered, were unscrupulously applied to this case, to which
they had no relation. In this way a case which ought to have been
decided, following the rule of non-appealable courts, according to equity
and good conscience, was decided without regard to common ciistoiri or
reason.

Had the judgi received a good grounding in ie^al logic iie woiild
have said, after hearing the argument of Mr. Code, " There are three
maxims of Civil I^w which apf)ly here : /. Consensus toUit errortm. 2.
Modus et conventio vincunt legem, and j. CessanPi ratione legis, cessat

i^sa lex. Mr. Wicksteed signed this cheque as an authorized person on
behalf of the company, and was such to the knowledge of all parties to
the cheque. It is the company's chetjue." Action dispiissed with costs
and a little advice to the Plaintiff's Attorney, to stud^ Roman 'aw-^r;.
which .'s written reason.

Judge Lyon says in effect by his judgment, everybody knows this to
be the company's cheque, the company never repudiated it and is will-
ing to pay it when called on, but I won't allow the company to be asked
to pay. You are all wrong in thinking that to be what you know />, for
T see that several decisions, — in cases, to be sure, very different from this
one, but then they are derisions^ — say that the Defendant is personally
liable. This I hold to be good law, though, when I reflect on it, it does
look even to my <rai"^-hardened mind to be contrary to fact^ cu.stcm,
reason, equity, and good conscience.

Blackstone foresaw the evils which would result from a case of
apprenticeship and study in England, similar to what is now adopted in
th^ Province of Ontario. He thus writes, at page 32 of his celebrated
commentaries : —

"'Making therefore due allowance for one or two shining exceptions,
experience may teach us to foretell that the lawyer educated for the bar
in subservience to attorneys and solicitors will find that he has begun at
the wrong end. If practice be the whole he is taught, practice must
als'. je the whole he will ever know; if he be uninstructed in the ele-
ments and first principles upon which the rule*" of practice should be
founded, the least variation from established pr-- edents will totally dis-
tract and bewilder him, Ita lex scripta esl, is the utmost his know-
ledge viil arrive at ; he must never aspire to form, and seldonj expect to
comprehend, any arguments drav/n, a priori^ from the spirit of the
laws, and the natural foundations of justice."

The only method of arriving at this" happy consummation so de-
voutly to be wished, in Ontario, namely that all barristers and judges
shall be able to form and comprehend arguments drawn from the spirit
of the laws and the natural foundations of justice, and for judges to give
derisions in cases in conformity with such arguments, is, I think to
insist upon a full course and examination in the principles of law when
studying for the profession.

Radical Ontario is in this respect, far behind Conservative Eng-
land. Utility of a knowledge of Roman Law, as law, is undeniable,
forming as it does the basis of the laws of all Latin nations. Even the
Common Law of England is greatly indebted for its vigour and philo-
sophic accuracy to Justinian's Code.

In England the examination which must be passed before a law
st.udent can be "called" is divided in two parts — the first being the
Roman law and the second in English law. He may take both at the
same time, or he may take the Roman law first but he cannot take t, ;e
English law before the Roman. He may take the Roman law any

LJSI

•]■ ■ ■'-

^ime after he has kept foL- terms, but cannot take the Engh'sh until he
has kept at least nme tern... This is the only remedy for the p esen^
conditmn. of affairs in the matter of the Jegal , Jfession 1^ (So"
V,th the examp e of such a judgment as the one given by Judge I von
before then,, the Law Society of Upper Canada shoiild take"^ 'ml^re
•steps to place Roman Law in the Law Student's Curriculum """-"^'^^^

" R. J. WICKSTEED.

Note. --The above is only an Extract from the Renort of the
President and Solicitor of the Coffee House Company ^
will rr'^i'"^^ and money permit the full report w^^ll be printed It

m crtT:;^:t^r^ ^^ ^-^-^^^ P-f, want of Sum?^^

' OTTAWA i ,^

I'RINTfcD AT T«E OFFICE OF MaSON & ReV

OLDS, 45 Elgin St.,

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