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•^^"7^ 
 
 
 FORFEITURE 
 
 or 
 
FORFEITURE OF CHARTER 
 
 [From the Courriet de St Hyaeinthe, of Febraary 4, 1882.] 
 
 The Minister of Justice, Sir Alexander Campbell, 
 has lately given at Ottawa, a most important decision 
 upon a petition asking to prosecute a Bank, in the 
 name of Her Majesty, for forfeiture of charter. 
 
 Such a petition was not unknown in the annals of 
 the Ministry of Ju^icc, and, if we deem it proper to 
 make it kndWb- now irt a special matiher, through the 
 press, it is not that we have a hostile object in view 
 against any one, but because all the Provinces of the 
 Dominion are concerned in that petition, and all the 
 citizens as well as Parliament are highly interested in 
 knowing whether corporations may violate their 
 charter, without having to fear the hand of justice,and, 
 whether their influence over the government be great 
 enough to impair it in the falfilrtient of its« dut)l^; 
 
 The quejrtriOfV' of' right \ttiich Iktve hteix afgud^, 
 have a close! connrsxion with sotae of the printipltes 
 whidi> arl^- thfO. baiiisi of tbe( engl&lv coffetiMition', aird 
 thereby, highly concern all classes of society. If the 
 ideas emitted by the minister of justice be correct, it 
 will become a necessity to redress the existing evil, 
 and to adopt, in the parliamentary session which will 
 begin in a few days, r\ legislation able to remove the 
 defects of the law. It will become the duty of the 
 government to consider seriously which is the wisest 
 line of conduct to follow, in order that, in the future, 
 the law may reach incorporated bodies by an act of 
 parliament, in the same manner as it reaches private 
 individuals. It will also become the duty of Parlia- 
 ment to see that the scale of justice be so well regu- 
 lated as not to turn more on one side than the other, 
 'SO as to make it an impossibility for the public interest 
 to be wronged in one case more than another. 
 
s 
 
 We understand fully that we place ourselves in a 
 very unfavorable position by endeavoring to criticize 
 the honorable minister on his way of seeing things 
 and acting upon them, and we shall undoubtedly be 
 reminded of it Yet, the decision which has been- 
 given, and the strange principles invoked by Sir 
 Alexander Campbell to support it, are of so important 
 a nature, that we cannot flinch from our duiy. Hence, 
 we deem it necessary to make a statement of the 
 question, also, to draw the attention of Parliament on 
 that decision and to show its danger ; this, we shall 
 endeavor to do with the greatest moderation. 
 
 Our remarks will be as short as possible. 
 + Before entering upon our subject, let us remark that 
 Sir Campbell had not to decide whether or not the 
 Bank in question had violated its charter or infringed 
 the privileges granted to it by law. This belonged to 
 the court of Exchequer. The petition simply asked the 
 minister of justice leave to prosecute the bank, at 
 the same time, offering security for costs. 
 
 The judgement of the Hon. minister is lengthy and 
 very ably written ; we would be tempted to say that 
 it is skilfully written. In the first part, it expresses 
 the doubt whether it be within the power of a court 
 of justice to annul the charter of a corporation existr 
 ing by virtue of an act of parliament 
 
 " X find no authority, it says, of a case where am 
 " english court has assured to annul a charter oi in* 
 " corporation created by act of parliament" 
 
 It is possible that the Hon. minister did not find a 
 precedent of this nature ; buttheio is something more 
 powerful than a precedent, and that is a principle ; 
 and the conclusion arrived at by Sir Campbell, which, 
 decided him to set aside the petition, is well calcula- 
 ted to surprise, especially coming from a man who 
 possesses a long parliamentary experience, and who 
 is bound to known thoroughly the mechanism of the 
 english constitution. W c b 0I 
 V : If Sir Campbell has looked over the autliorities. 
 
which were quoted for him, and especially the famous 
 
 author, Blackstone, he must have seen that corporation 
 
 . are constituted principally in two ways, either by act 
 
 •of l*arliament, cr by royal charter, and that they may 
 
 ^Come to an end by a forfeiture legally incurred. 
 
 ** In England, says Blackstoue, the King's consent 
 
 ■ " is absolutely necessary to the erection of any cor- 
 
 <• poration, either impliedly or expressly given, and 
 
 ** that consent is given either by act of Parliament, or 
 
 «• by charter." 
 
 ♦* The King, according to the same author, has also 
 
 " the prerogative of erecting corporations, whereby a 
 
 ' " number of private persons are united and knit to- 
 
 ' "gether, and enjoy many liberties, powers and im- 
 
 ■ *• munities in their politic capacity, which they were 
 
 •• utterly incapable of in their natural." [i B. p. 497.] 
 
 " All the other methods, therefore, whereby corpo- 
 
 " rations exist, by common law, by prescription, and 
 
 ■** by act of Parliament, are of the most part reducible 
 
 ** to this of the King's letters patent, or charter of 
 
 " incorporation." [2 E p. 275.] ;; :--:—- 
 
 ;x These principles bdng laid down, Blackstone says 
 
 that the general duties of all politic bodies considered 
 
 ~ as corporations may be reduced to this only point, i.e., 
 
 - that they are bound to act in conformity with the end. 
 
 whatever it may be, for which they have been erected 
 
 or instituted by their fbunden „j ^j;, ,:,,-y ^ ,■ ^ , . 
 
 This being the case, it may happen aha it does 
 
 happen sometimes that those corporations violate their 
 
 charter and make a bad us^ of the power confered 
 
 upon themr which h not astonishing, since they are 
 
 foade up of individuals subject to human frailties, 
 
 and liable as well as private persons, to deviate from 
 
 th^ieiid of their institutioti. For this reason the law 
 
 hi^is ill^inted suitiHc peif^s to visit thefn,ta htquire 
 
 into aQd to correct aU IrrqruUuities that arise in 
 
 corporsjtio^s,- v;i:,;;: ■:;\ ;s\ _^'^^^ 
 
 ., •« J kftow It is^e^n^^Jtf, that ^il *6i^ra- 
 
 -''iiions are subject t6 noviSitatibns»bt<t merely to the 
 
 ■^* common law of the land ; and this shall be presently 
 
 -" explained. But first, as I have laid it down as a 
 
*' rule, that the founder, his heirs, or assigns, are the 
 ** visitors of all lay corporations, let us inquire what is 
 ^' meant by the/«?MW(?r,The founder of all corporations, 
 " in the strictest and original sensei is the Kingaloh^, 
 " for he only can incorporate a society ; and in civil 
 *' incorporations such as a mayor aud commonalty, 
 " etc., where there are no possession or endowments 
 ^' given to the body, there is no other founder but the 
 " King. The King being thus constituted by law 
 " visitor of all civil corporations, the law has also 
 " appointed the place wherein he shall exercise this 
 •♦* jurisdiction : which is the court of King's Bench : 
 •• where and where only, all misbehaviours of this 
 " kind of corporations are inquired into and redressed, 
 " and all their controversies decided.. And this is 
 *' what I understand to be the meaning of our lawyers 
 *' when they say that these civil corporations are 
 '" liable to no visitation ; that is that the law having 
 '*' by immemorial usage appointed them to be visited 
 " and inspected by the King, their founder, in his 
 *' majesty's court of King's bench, according to the 
 '• rules of common law, they ought not to be visited 
 *'^ elsewhere, or by any other authority." 
 
 It is then most evident from these quotations that 
 civil corporations are subject to be visited by the^r 
 founder who is the King or his delegates, and that 
 those visitations are made through the medium of 
 tribunals, upon the information of the attorney-gene- 
 ral of the King or in his name. ' 
 
 The american law is similar to the English law in 
 'imS'Fesp^ciit^,^*. '^>{-* ■'•■J ;,pp ,.,j. ..'■ - .-j-j^.-j f ,,.- ..■ .-'' ' j 
 
 " To render the charters 6rconstitutt6ns,prdrhan6^ 
 " and byr]a.wso{ corppration of pierfect obligatioh and 
 " generally to maiat^o their peace and good govei^n- 
 
 " ment, the bodies are subject to visitation; bt,\n 
 
 " other word^ to the inspejCttQn and control of Ibribti- 
 
 " nals reoogaized by^ th^ !Uws of the land. CiVtl ccir- 
 
 '** porations are visited by the Governipe^t itsellT, 
 
 J through the iitiediuQi of the. courts pfjustic^' ' 
 
 , " divil<;orppraUonsy whether^ 
 
 * * created for public use and advantage, properlj^ fall 
 
6 
 
 " under the superintendency of the sovereign power 
 ** whose duty it is to take care of the public interest,. 
 " whereas corporation whose object is the distributioi> 
 " of a private benefaction, may well find jealous guar* 
 " dians in the zeal or vanity of the founder, his heirs 
 " or appointees." (Angell & Ames s. 684.) 
 
 The principles which r^ulate this question are 
 clearly given by the most eminent legal writers, ^nd 
 contrary to the pretention ofSir Alex.Campbell,they 
 make no distinction between corporations erected by 
 letters patent, by royal charter or by act of psirlia- 
 ment Tribunals have jurisdiction over all civil corpo- 
 rations, without any regard for the authority by which 
 they were instituted. 
 
 The Hon. ifiinister of justice admits truly that the- 
 Crown, through its courts, can, for good reasons,annql 
 tii6 letters patent which it has granted, but he is in 
 ddubt whether the Crown can, through the medium 
 of these courts, annul a charter granted by att of Par- 
 liament According to the quotations we have made» 
 therei it no difference between a body incorporated 
 by letters patent andone by act of Parliament.Letters 
 patent are granted by a person authorized by act of 
 Parliament by a delegation of its powers, according 
 to the well known maxim : Qui facit pep alium facit 
 per St, And in the case of a corporation created by 
 parliament, the king, when giving his sanction, beco- 
 mes thereby its founder and obtains the right of con^ ' 
 trol given to him by comnoon law, and which he 
 exercises through the medium of tribunals. 
 
 However, as banks cannot be incorpovaved by let- < 
 tersimtent l^ virtue of the ^neral act concerning \ 
 joiiit stock companies, the minister of justice corned to 
 the conclusion that it was not tl>e intuition of Far- 
 liatnent to Relegate its powers for their mcdrpdratton, 
 and thefiby estftbtished a distinction between thecase 
 of aiotaiik ii^torporeitdd by sfjeciat act 6t Farlifttnenti 
 and that of a cbn^pany in^(^porated hy viilrue of the 
 provisions of the general act It is an unnatural con- 
 clusion drawn from a -false principle, for ^ir CaMpbelB 
 adds' Kmmedlately' after ; ** And even as to general 
 
'■ 
 
 '" patents, tke powers therein contained, when they 
 " are laid down in enabling acts of Parliaoient, only 
 " come into life by the breath of the troivn^ and the- 
 " refore I think differ eMentially from acts of parlla- 
 " ment creating corporations." 
 
 Where can Sir Campbell find that difference to 
 whicl]i he alludes ? Are not acts of parliafnen^ ^lothed, 
 by the royal sanction, with the breath af the Crpwn ) 
 
 l^esides, if Sir Caoapbell was looking for a prec^r 
 dent^ in spite of the principles given by authors, there 
 vras one in this country and one that he knew. He 
 has even made a mention of it in his judgment, when 
 he says that the National Bank of Quebec, incorpor- 
 ated by act of parliament, had been prosecuted for 
 forfeiture of charter by virtue of the jiat of the At- 
 torney General, and he adds that, in some of the 
 United States, it has been decided that, with regard 
 to this view of the case, there is no distinction to be 
 made between charters granted under the great seal 
 of the state, and those granted by legislature. 
 
 Having argued at length on this matter, and en- 
 deavoured to demonstrate the difference which exists 
 between a corporation created by letters patent and 
 that erected by act of parliament, it is strange to 
 hear the minister of justice say that there is no need 
 for him to give an opinion and that, the only reason 
 why he has emitted those, doubts, was, to show how 
 much their existence increases the responsibility of 
 the Attorney General. 
 
 It was hardly possible for him to have any doubt 
 about the matter, in presence of the authorities which 
 he had by him and oC the precedent of his predei;:es- 
 isor in the ministry of justice, the hon. Ma James Mc- 
 Donald. Besides, supposing that there \id& any ground 
 for his doubt, was he justified in giving expression to 
 it, when he had not the right to judge? It was a 
 question which could be argued before the court of 
 Exchequer, but which Sir Campbell had no r^ht to 
 decide. , ■ ? -■ • ' -- .■.-vj,. . 
 
 From all this, it is dear that, if the pretentions of 
 the hon. minister were well grounded, there would be 
 
8 
 
 
 no other control over civil corporations but that which- 
 
 • ..parliament could exercise itself. It would then be 
 
 necessary for, parliament to become A court of justice 
 
 in order to inquire Into th^ h?ture of faetn and jiro-^ 
 
 pounce vpoh thiem. Corporations would no longer 
 
 ,^ sutgect to the visi!Utf6n^ of the KiHg, which are 
 
 , ,X^c tjb^ough the n)edium <>f tribvinals ; they would 
 
 pecomc priviledged bpdies, havii'ig the faciltty to in- 
 
 . JfiQge more or tess an4 more thiin less their chatter 
 
 ,rand it woiilcl be mi6st difficult to reach them^nd 
 
 , '.Junish'tiiem.: '.Z};::'" :^^'"?:7'^ '''' ^;^'^*-'^'^'«"' • 
 
 , .^^, ^Vc may Wejl say that the ic)b^Ht)e emitted by the 
 
 .^ ^minister of justice seems to iis' contrary to the sound* 
 
 ,.vmterpretatioh whic^h shoulcl b<f g^ven of the constitu> 
 
 / ftipn by \yhich we are ruled, ah<) if there couM reially 
 
 w (.exist a 4qu^ on the rhatter.parli^ment should examine 
 
 [ -^Uie question and tmmediate1)r prepare a remedy fon 
 
 ^iiinoyances and danger^ of such a doctrine. 
 
 '-■k 
 
 h;*. 
 
 y:,i: In the second place, Sir Campbell reproaches the- 
 . ^petitioner for. not haying urged in his petition that he 
 
 had suffered by the infractions of which the Bank is. 
 
 .accused. It is a very queer reproach, and without 
 
 attaching more impor(ence than it is necessary to that 
 
 ^4<.point» we. will say that; the petitioner proves in his- 
 
 , .^petition that both, the public and himself have suffer- 
 
 V. ; ytd by the acts of which the Bank is accused. True 
 
 ^ „'.Jt is a.fact that the pI^intjflT.i^ ^shareholder in the 
 
 »'; liCapitaLstock,. but it is not ias such' that he coniplains,. 
 
 :• -'fflor is it,as.$uch tl^at he could and ha<i a fight to 
 
 • ..,. ^ompmn. , He alleges that the Bank has b<len preju- 
 
 iij<dicial to the public in generjtli by the yiolatiprt of its 
 
 charter and that he, as a private indivi'dual, has sufif- 
 
 ,, erd; by those yjol^tions. The Bank ha? chafged him 
 
 ' ;,,n jusuripws interests ; f}%h3i^. entered in competitTon with 
 
 ~ i hip) in the manufacturing and commerce of shb^s ; it 
 
 ! v^W^ uicr^ed hjs re^ponsitiiHty as shareholder, in 
 
 ' u^^impnopoli^ing the shares of |iis capital to the atnount 
 
 of $43,6cx), etc. The plairitliT was thereffore perfectly 
 
 right to complain as he has done. 
 
 V 
 
9 
 
 .If 
 
 
 Let us pass to a more important point. 
 
 in 
 
 it ■ . 
 
 In the matter before us, is the attorney general • 
 bound to grant the request made t6 him, ^|ien, by 
 the petition itself and i>y the aj^<^W/ which accompa- • 
 nies it becomes evident that there are sufficient reasons • 
 to, authorize a prosecution ^ Yes, b^use it is' a ques- 
 tion ojl^ right The only qi^cretion >vl)kh tfi^ rtittiniter ^ 
 can exercice is tb veriiy if the vlc^atioh of thfe law^ 
 alleged in the petition is uodehial>|e, ^nd h; the f^cts . 
 enumerated are sufficient in Ulw, J>rimafd(^e,t6 make 
 that vioUtion evident The attorney g^eh^nit J^^s iiot ' 
 the right to take tlie evid<?nce of witnes^s afid accor- 
 ding to a well established procedure, It is ii^u^tomary^ 
 in such cases for the Piaintiff to proceed >4^''^^ wi- 
 thout ^ving any not(ce to the adverse party, (Foster, . 
 on settle facias, p. 249.); It might be said that in suciv > 
 a request, the minister of justice acts thfe part Of a .- 
 grand jury in a criminal court ; tie exaniines Whether ' 
 there is sufficient ground for a law suit. 
 
 What says chapter 88 of the consolidated statutes : 
 of Lower Canada, sec, 9 :...... and wberteveif" "any 
 
 "corporation, public body Or fioard offends against. 
 " any of the provisions of the act or acts Creating it... 
 " or violates the provisions of any law in such a man- 
 " ner as to forfeit it-"* charter by mis-user.. .....•.<..«•« . 
 
 " it shall be the duty of Her Majesty" sattorH&^ gem- 
 " ral (or lower Canada ^heH he has g6od reason to- • 
 " believe that the same can be estdblisked by prttcf, ii$ 
 " every case of public interest and also in every such \ 
 *' case in which satisfactory security is given to indem- 
 " nify the government against a,U cost and e>cpenses ; 
 " to be incurred by such proceeding, to apply for and ; 
 " OP behalf of Her Majesty to the Superior Court, 
 
 In confonniiy wiin these 'pr<ivlsibrisdf tKi; ik-W, and • 
 according to principles recordecjt by legal authors and 
 sanctioned by practice, Hon. M. J. McDOnliid, the 
 predecessor of Sir Alex Campbell in the liifinistry of . 
 ju^tice^ allowed the prosecution of the National Bank -. 
 
I 
 
 10 
 
 ' 
 
 '/ . 
 
 of Quebec for forfeiture of its charter, upon the simple 
 petition of the plaintiff. 
 
 Did the present minister of justice endeavor to att 
 in conformity with the prescriptions of the law and 
 practice loilowed in such a matter ? 
 
 Did he consider that it was his duty^ as the clause 
 quoted above has it expressly; to grant the request ?, 
 Far from it ; he went so far as to allow the accused" 
 part" to present declarations niade by virtue of the 
 law for the suppression of voluntary oaths and even 
 the production of certificates not sworn to. By that 
 irregular procedure, he placed plaintif in a very 
 disadvantageous position. The latter could not cross 
 question the witnesses called against him nor control 
 their evidence. Besides, he had witnesses who ; 
 refused to give their evidence through fear of the . 
 Bknk, and the minister himself had not the power to 
 force these witnesses to give their evidence. The; 
 petitioner therefore could present only a part of his v 
 case, and his own witnesses said only what they wan^ 
 ted to say. 
 
 The fact of allowing a proof and a counter proof < 
 on a simple request to proscute, was simply trying 
 the case itself and interfering with functions which 
 belong to a court of justice and not to a minister of 
 
 the Crown. , ...,, ,„„ s^. . .„.. ..,.,_, ^f»r;tt^n:j'h^JiM'^;. yy u>j-.<j, • 
 
 oj jon D';/'-ifc.q 
 
 J in J 
 
 ,r.bi:ni> 
 
 \> 
 
 iii^fi 
 
 7i:inc>:tjx; 
 
 •Ji5.t j^" ^/*'Jub ',• 
 
 ^\ v;. 
 
 There is another defect in the judgement which 
 ivc criticizse and that is where the minister of justice 
 acknowledges that he is obliged to apply the laws 
 prior to the confederation but not those posterior to 
 it Here are his words : 
 
 ** I have myself examined the statute creating the 
 " ofiice w,hich \ hold. It is Act. 31 Vic, Ch., 39, and 
 " by Section Jr the attorney jg^eneral of Canada is 
 " charged wit^ the powers and duties which, by the 
 " laws of the s<^veral provinces, belonged to the of)ice 
 '' of Attorney General in each province up to the time 
 " when; the British North American Act, 1867, came 
 '* into effect, and which laws, under the provisions of 
 
 i.'Zl 
 
 -r 
 
I 
 
 -41 
 
 U 
 
 4( 
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 41 
 4< 
 41 
 <( 
 41 
 ■4< 
 
 (I 
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 11 
 
 the said act.are to be administered and carried into 
 effect by the Government of the Dominion. 
 
 " The B. N. A. Act, 1867, Sec 91, certainly confers 
 on the Dominion exclusive legislative authority 
 with respect, inter alia, to banking, the incorpora- 
 tion of banks and the issue of paper money, but I 
 can find nothing in it which imposes on the Go- 
 vernment of the Dominion the duty of adntirtisfe- 
 rtng or carrying such laws into effect ; and on me 
 the consequent duty of prosecuting a forfeiture of a 
 bank charter. 
 
 " It is the duty of the Government of the Doini- 
 nion to administer and carry in effect such laws as 
 those relating to customs and Inland Revenue and 
 Militia and so forth ; but laws relating to banks, 
 save as regards duties imposed by the Banking act 
 on the executive, or to be inferred from the laW.are 
 administered in the Province where the bank is 
 
 i 
 
 uAi: 
 
 " domiciled." ?4 ^ i^l*' Jn^^vUj i.u/oj 
 This is indeed something new, '■^^^■'•' '^'^' 
 
 What then is that act 3 1 Vict Ch. 39, spoken of fey 
 Sir Campbell ? It is a law adopted at the' begintiing 
 of confederation and creating a department of the 
 civil service called the " department of justice.** This 
 act, in its provisions which haue any relation to the 
 laws prior to confederation, was passed not to impose 
 new duties on the attorney general of Canada, but 
 really to assign to him the duties which, by virtue of 
 the laws prior to confederation.belonged to thfc attbri'' 
 ney general of each province, when rttattetife falling 
 under the control of the federal government woUld 
 con\e into question. The intention was to divide the 
 duties imposed on the attorney general and this isthi6 
 meaning of the act Is there are duties to be ftilfilM 
 by an attorney general by virtue of the old laws and" 
 if those duties concern things which belong to the 
 attributions of the federal government, they shall be 
 fulfilled by the attorney general of Canada and not bv 
 the attorney general of a province, i^^ « '«-^ pfnofj 
 
 For example, take article 997 of the cbde i/i divil 
 procedure of Lower Canada which imposes some 
 
 /'.I 
 
 Ji.f . 
 
12 
 
 duties on the attorney general of Lower Canada. 
 After the passing of the act 31 Vict Ch. 39^ those 
 duties, must ht fulfilled by the attorney general of 
 Quebec with regard to Corpbrations created for local 
 9bj«cts, jind by the attorhiey general of Ca^nada 
 with regard to corporations for general purposes of 
 the l^pminidh, such as Banks. 
 
 Moreover, the act. 31 Vv6t] ch. 39, sajrs expressly 
 tl^at "the minister of jdstfct shall eaterchle the rights 
 * arid fulfil the dutiesr iittached to the office of attbr- 
 ** niy geh^ralbf England by the laivs or usage ;" now 
 accbrding to the authors whom we have Quoted, we 
 know what is the duty of the attorney general of En- 
 gland, when the king wishes to exercise the right of 
 visttatibh vt^htch ht possesses over incorporated bodies. 
 ' Besides the principle of law as well as good sense 
 indicate that th^ government of the Dominion has 
 sufficient authority to see that the laws adopted by 
 the federal ParKariient^« earned into execution. 
 
 The minister of justice cannot forget that there is a 
 Well known prindp^? of constitutional law which goes 
 to say that the king (that is to say the Executive) is 
 charged with the execution of the laws. 
 
 By refering to the legitl authors, with whom he is 
 well acquainted, Sir Campbell would have been re- 
 minded that laws are administered by the power 
 which makes them. 
 
 Sir Campbell would haVc remembered also that the 
 government which creates a corporation can alone 
 prosecute to obtain the forfeiture of the charter 
 granted;".;;';'"'" '";;'-' '■; "••-^ -•'' f '/'iMM;, -. 
 
 Sir Caiili)bei*l Ai^^uid farffierriidre H&Vfe' fememhered 
 thiat th^ crown being, for the country's welfare, inte- 
 rested in the m^lintenarice of its own laws, it belonged 
 to it to issue the scire facias. ^^^ ^ ' ■-'^'^ mra'ix'i 
 „ Fpf the same reason, Sir Campbell cdirld have sa- 
 tisfied himself that the person whose duty it was to 
 t^ke such proceedings, was the attorney general of 
 t!he Dominion, since the charter of the accused party 
 was a charter of the Dominion. The minister of jus- 
 tice had nothing to do but to consult such authors as 
 
 
13 
 
 r 
 
 "'Foster, Angel and Ames, Brice» Fisher Albjbott's 
 
 digest^ etc. In » word w: mu^t own that we cannot 
 
 > ui^eiistand hon. Sir Campbell could say ,: . 'VNp duty 
 
 : '" imperatively devolves upon me under the language 
 
 " of the statute creating my office in respect pf such a 
 
 " proceeding as the pre^enti" ;when the la>^ makes it 
 
 -'an imperative duty ifor<hnn accori^ipgtQ ch> .^S^pf the 
 
 :' consoHdated statutes of Lower Cwfizi^^ >yhen also a 
 
 law ]prior to confederatiopvremjnds hiiyi jpiC that (^uty, 
 
 ' which is made so evident )>y the fatpous a<^t 31 Vict. 
 
 ch. to, that the ignorance of it is. npt, excusable. 
 
 tf.riw 
 
 ■'Of; X 
 
 ininister of justice has examined the several 
 allegations of the petition and reviewed certain facts 
 with which the Bank is reproached.' This in^ntion 
 was not only to see whether the arguments enumera- 
 ted proved by themselves that the law. . had , been 
 violated, but also to enter upon the very merits of the 
 case and thus encroach upon the province of the tri- 
 bunal whose right and duty it was to judge the facts. 
 We shall follow him on that ground and it will be 
 ^n easy matter for any one to convince himself that 
 the accusations were sufficiently founded to authorize 
 the attorney general to allow a prosecution for for- 
 feiture of charter. 
 
 The Bank was accusec* of having,, from the ^ 2nd of 
 January l874tothe 19th of march 1 88 r, habitually and 
 
 ° constantly violated and tran.>^gressed the fundamen- 
 tal articles of the laws by which banks are governed^ 
 and especially its charter, of having made a bad use 
 of its powers' as a corporation, of having arrogated to 
 
 ' itself functions which it was expressly forbidden to 
 exercize, and of having assumed franchises and privi- 
 leges which the law does not confer upoo it. . It had 
 been guilty of these JHegalities . in the following 
 
 ■ mannen ,>« ,, . •.,;:,,- , j.. 
 
 'f hj. By exacting constantly usurious rates of fnterest, 
 exceeding seven per cent ; that is to say a rate of 
 interest or discount of eight and nine per c^ht and 
 sometimes more. 
 
u 
 
 2. By lending money and making loans either 
 < directly or indirectly on security, and real estate 
 
 mortgages. 
 
 3. By lending money and making loans on the 
 security and pledge of the capital of the bank. 
 
 4. By lending money and making loans on the 
 security and pawn of goods, wares and merchandise, 
 in a manner different from that required by law. .a}^*- 
 
 5. By buying goods, wares and merchandize. / 
 
 6. By the selling an^l cartcrJu^g of goo<^S| wares 
 
 unci ttiCtCii3LTiOilZCi,cti7>r:jti^ti/f \f\ttfri}i<».^').-jtr\ ix^ .;;p*jru»/r«-? 
 
 7. By being engaged in operations different from 
 those which commonly belong to a banking business. 
 
 8. By acquiring arid holding real estate for purpo- 
 ses foreing to the administration of its lawful business^ 
 and by selling it in cases prohibited by law.,., * «n^.f - 
 
 9. By the buying and cartering either directly or 
 indirectly of the snares of its capital stock, as it is 
 mentioned in the petition. 
 
 Particular cases were given ,10, support of each of 
 the alcove accusations. .. ^^.i^^^^^,^^ .",,..;+ .....n ^^.^ ^,?..v, ^ 
 
 In answer to the first accusa^iion, the ^ank admits 
 having charged usurious rates of interest exceeding 
 seven per cent but alleged having done it thinking 
 that it had the right to do it. 
 
 Is the ract admitted ? Yes, „ -^ " ^ ^ n : -/ - - * ? » ' • 
 Whose duty was it to judge the excuse of the Bank? 
 It was the duty of the courts of justice. Starting 
 from this, the decision of the question should have 
 been carried before the tribunals and the minister of 
 justice. had no right to decide it, which, nevertheless, 
 he took upon himself to do, Sir Campbell has acted 
 as would have done a justice of the peace at a preli- 
 minary hearing by pronouncing the accused guilty or 
 not guilty instead of examining solely whether there 
 be cause for his trial before the court of Queen's 
 i5encn. .xoi-jifyj^jy /-^ti^ A^rA-^d r^f>70''-''j ■">'«v:"'^ •'>?..'??'s»fifK:'tF' 
 Moreover, when he says in his judgement that a 
 bank cannot incur any penalty by receiving a rate of 
 interest above seven per cent and that the forfeiture 
 of its charter would be the greatest penalty it could 
 
15 
 
 <r> 
 
 be subject to, he has given a false interpretation of 
 the law. He makes the law say what was never in 
 its intention to say. The legislator, by the clause 52 
 had in view to blot out the penalties enacted against 
 usury by former laws, and not to declare that a bank 
 by charging more than seven per cent interest, would 
 not be subject, by virtue of common. laHv, to lose its 
 rights of corporation; -^^^ ^««'^ inij^iub =;>an5..i: 
 
 We may add that this question is important under 
 every respect and that those who do any banking 
 business are exceedingly interested in knowing the 
 opinion of courts of justice on this matter. 
 
 The Bank denied the second accusation, but it was 
 proven tha,t it had opened an accouct of $ 1 8,ocx3 in 
 favor of a certain mzinu&ctunng company and that 
 it had exacted a mbrtgiage on real estates for the same 
 amount and that it had made advances to the same 
 company before the mortgage as well as after. 
 
 The obligation, signed before notary executed for 
 advances made and to be made. The accountant of the 
 bank at that time states that advances were made by 
 the bank after the date of the mortgage. 
 
 The manager of the company sta,tes also that the 
 bank did advance money after the^ date of the objliga- 
 tion, on the security of the mortgage. ^ 
 
 The bank, in an opposition made by itself Ij^lpire 
 a court of justice, states that up to the date of the 
 obligation, the company was indebted to it ipfthe 
 sum of $8,400 only; out of that sum $2,156 were 
 notes to which the company was not k party, ^^* ■'. '? -^" 
 
 If the indebtedness to the barik was only $$,4d6,- 
 what is the reason of that mortgage 6f $18,400 taken 
 as security for advances made and to^ be made^ as ike 
 act says I ^'>^y^yjf^-^^ ^iioiiuoixoic^^ii ^^nniiau >{"i*nii; 
 
 Does it n6t lekd to the presumptlpil that those 
 advances were made on the security of that mo^tg^ge? 
 
 It has also been proven before the niinister (^jus- 
 tice, that the banket i^lnother date and through inter- 
 mediate petsdni, had<4^acted a mortgage for the suni> 
 of $26,000 fi^m the shareholders of another com- 
 pany, arid then, on that security^ had made advaiw 
 
16 
 
 ces of money. The answer of the accused party was 
 tthat the socalled intermediate persons had acted for 
 themselves and not for the bank. Several declarations 
 were produced by the Plaintiff to prove the falsehood 
 of this answer. 
 
 In any case, the declarations and the authentical 
 acts establish facts which Sir A. Campbell could not 
 judge, biit which were sufficient to authorize the hea- 
 ding of the case before a court of justice, ^ nvutav 
 
 On die 3 accusation, it has been made evident that 
 on a certain date,thc shares of the bank owned by H. 
 L. were under seizure. The bank consented to advan- 
 ce him $364.77 on the endorsement of £. B. provided 
 he gave his shares as security. Then on the same day, 
 H, L. gave his note endorsed by E. B. and transferred 
 Jits shares to him as security. Immediately, on the 
 sameday, £. B. transferred the shares to the cashier 
 in trusts and H. L. got his money. 
 
 Does it not appear from those facts that a loan was 
 imade by the bank on the security and pledge of sha- 
 res of its capital stock ? 
 
 In answer to the 46 accusation, the cashier of the 
 ^ank says that in October and November 1879, the 
 bank advanced to a certain person $80 to pay the 
 «men he had employed sawing lumber. This loan was 
 made on condition that the individual would pay 
 back the amount and apply a certain portion of that 
 -wood to pay the interest which he was owing the 
 bank on a debt of $400a That person refunded the 
 $80 to the bank, $28 more in money and $284 in 
 building lumber. Three witneses prove that the lum- 
 ber was carried to the bank and retailed by it It 
 becomes therefore evident that the lumber had been 
 accepted by the bank as security of the advance of 
 the |i^iEls well as security for the interests of the 
 ■^^ood,i--'"' '■''■•■"'■.' ''':'■ ■■■"'■■■ '' '■'■-■-'' ---;..<■:.-■■:. 
 
 As for tk^ othlEH* accusations, ' it tvas proven that 
 s^lthdugh fb^idden to do ^6 by section 40 of the law 
 on banks, the bank has acquired goods, wares and 
 merchandize, to wit : the stock of A. & L, store con- 
 sisting of groceries, hardware & merchandize of all 
 sorts ; 
 
1+ fr' : 
 
 >Is 
 
 r Building lu'Biber ; q -itt Ui )inT»i!ii K-»n*.,r.«. «^4 , 
 
 A bankrupt stock consisting of carriages, toots of 
 x:arriage maker : 
 
 Another bankrupt stock consisting of leather.shoes, 
 
 tools, machines, office furniture and material for the 
 
 manufacture of shoes. tir> H-^Mw ^i-;^i nW?<fi - ^ 
 
 Besides the proof states that the Bank although 
 forbidden by the law to do so, has sold those goodX 
 
 For the same reason, the Bank has violated the 
 law and gone beyond the limits of its charter by 
 buying the bankrupt stock of a shoe company and, 
 for nearly two years, running the manufacture for 
 its own benefit by retailing shoes. The evidence in 
 the breef states that the Bank had bought new mate- 
 rial, which it sold wholesale and retail and that it 
 sent commercial travelers through the country , to 
 facilitate the sale of its products. bfii; ,v<.«^a ;<; 
 
 The accused party has also undertaken operations 
 foreign to a banking business and has made the ac- 
 quisition of credits and debts not verified by promis- 
 sory notes or negotiable goods, such as the acount 
 books of three bankrupt commercial societies. 
 
 Well, the Bank not satisfied with having bought 
 the account books of those bankrupt companies just 
 mentioned, has also sought to obtain some r ortgages 
 against one of the bankrupt partners, and lias thus 
 acquiered the mortgages owed by him to two of his 
 creditors and to a building society. 
 
 The Bank had no mortgages on those properties 
 and it was not in any of the cases mentioned by tjKe 
 law, therefore its made of ,s^cting was a yiolation of its 
 
 ■'Charter.; i^fjm".;: ?i(:-Us,'(? 3^9^'•p?>^t;^v«'vdt ;;'.r'vv,-Ar 
 II was also a yiolation of the law^ when in tnose 
 very cases» it assum^ the payment of a comproniise 
 and the unlimited obligations of two bankriip^ies. 
 
 Moreover the bank has acquired rights kQOwn 
 as litigious by buyiog the claim , of R. Si M, 
 against a railway; company and the. right to the 
 debentures which yfcn to be issued by certain nmni- 
 cipal c<Hrporations. in favor of that company* subject 
 to certain conditions to be fulfilled by that company^ 
 
18 
 
 When that acquisition was being made, those munf- 
 cipalities were unwilling to issue their debentures, 
 giving as a reason that the conditions of the regula- 
 tions had not been fulfilled, 
 
 Always contrary to law, the Bank has acquired 
 shares in its own capital stock, ^"^r'v f »^^^ ^''V ■ ; > v; 
 
 We would remark here that there is only 40 per 
 100 paid on the shares of that Bank. 
 
 Has the accusation been made good ? Yes, by the 
 list of shares transferred to the Bank, and by the 
 report made at that time to the government by the 
 cashier, stating that he was the bearer intrust for the 
 Bank of $43,600 worth of shares. 
 
 Naturally, the depositors rely on this, that they 
 can fall back on the shareholders for the recovery of 
 the balance of shares and for the doudle responsibili- 
 ty in the case of the Bank becoming insolvent When 
 a Bank lessens that security, it destroys its credit the 
 same ratio and increases the responsability of its 
 shareholders. 
 
 Here then is a dangerous trafic, forbidden by law, 
 and which was proven before the minister of justice. 
 
 We shall mention a last accusation, and it is this : 
 that this Bank had become security for a compromise 
 and thereby took upon itself the responsibility of 
 nearly $90,000, for a consideration of $14,248.61. « 
 
 The accused party admitted, with few exceptions, 
 all the facts brought against it, but it gave, as an ex- 
 planation, that those acts had taken place betv/een 
 itself and its debtors and that it had thus acted to 
 protect itself. Can such a reason alter the nature 
 of the affairs of a Bank, and annul a law whose pro- 
 visions are so peremptory ? If such were the case in 
 the usual course of things, any man who breaks the 
 law would have an excuse to prevent its execution 
 and order in society would come to an end. 
 
 In any case, looking at the proof in the brief, was 
 there ground for a law suit ? Yes, certainly, for it 
 appeared that the law had been violated. But the 
 Bank in question invoked an excuse, or gave an ex- 
 planation which was an admission of the fact brought 
 
'I 
 
 19 
 
 against it Then who was to decide whether that 
 Bank had acted in good faith when it charged usu- 
 rious rates of interest, and whether jt had, the right to 
 act with its debtors in a manner forbidden by law? 
 The court of Exchequer and not t^p minister of justice. 
 
 There was then ground for a suit against ^he accu* 
 sed party, and when Sir Alex. Campbell refused to 
 grant his yf<7/ to allow t|ie prosecution, he acted m a 
 manner detrimental to serious interests, and l^ads the 
 public to believe that henceforth, corpprations,w|U 
 be at perfect liberty , and, may according to their fancy, 
 violate their charter, without any dfeadof the visita- 
 tion of courts of justice. It is a mistake. 
 
 The granting of a prosecution could not be very 
 prejudicial to the accused party ; nothing else besides 
 the forfeiture of its charter by the courts of justice 
 was of a nature to hurt the bank seriously, but a pu- 
 blic body must not be more protected from the reach 
 of justice than private individualsAVhen these violate 
 the law, they are punished. When a corporation 
 evidently goes beyond its powers and infringes the 
 privileges granted to it by the legislator, why should 
 it be protected by those who, by their position and 
 duty, should be the safe-guards of public interests ? 
 Can a minister of justice refuse in conscience to pro- 
 tect the weak against the strong ? Is it even sound 
 policy to act in that manner ? 
 
 If such be the case, the law concerning banks must 
 be looked upon as a dead letter. True, it forbids 
 those financial institutions to charge usurious interests 
 exceeding seven per cent, to lend money directly or 
 indirectly and make advances on mortgage securities ; 
 true, it forbids them to buy and sell goods, wares and 
 merchandize, to trade in lumber, to control manufac- 
 tures and to run them for their own benefit, to assume 
 the payment of unlimitted obligations, to acquire dis- 
 puted rights, to negotiate the shares of their capital 
 stock ; yet, if a bank does all that is forbidden by 
 law, it must not be put to trouble nor stopped by a 
 prosecution from committing fresh illegalities or errors, 
 because, according to the opinion of an easy minister, 
 such a prosecution might be prejudicial to it 
 
?! 
 
 V .-' 
 
 2U 
 
 We do not beleive that parliament will be diposed 
 to sanction a doctrine so perverse, so fraught with 
 dangers and so much at variance with the sound no- 
 tions of right and justice. The emission of such a 
 proposition is f-^fficient for any well thinking man to 
 cast it a side, and there will be but one voice to dis- 
 approve the extraordinary ground taken by Sir Alex. 
 Campbell, and repudiate this way of interpreting the 
 laws which r^[ulate this matter. 
 . A country is not well governed unless there is 
 liberty of action for all, and unless all have free access 
 to the courts of justice to obtain the reform of those 
 abuses, which in their opinion, are for them a source 
 of annoyance or suflfertng. 
 
 4 
 
 . "J: 
 
 r^^