1900.

Statement.

STOBART V. FORBES.

Before DUBUC, J.

Corporation-Assignment of chose in action-Trading corporation acting as trustee — Assignments Act, R. S. M., c. 7, s. 3 — Objection by debtor to assignment.

A trading corporation created by Letters Patent under The Manitoba Joint Stock Companies Act has power to take an assignment of a chose in action and hold and collect it by suit for the benefit of the assignor: In re Rockwood, &c., Agricultural Society, (1899) 12 M.R. 655; The Queen v. Reed, (1880) 5 Q.B.D. 483, and Ashbury Railway Carriage Co. v. Riche, (1875) L.R. 7 H.L. 653, distinguished.

A debtor, who has no interest in an assignment of the claim against him and is in no way prejudiced by it, cannot raise any objection to the competency of the assignee to take the assignment and to sue upon the claim: Walker v. Bradford Old Bank, (1884) 12 Q.B.D. 511, followed.

ARGUED 25th September, 1900.

DECIDED: 23rd October, 1900.

PLAINTIFFS sued to recover an amount due by defendant for goods supplied by plaintiffs, Peck & Co. and Codville & Co.; the claims of the latter firms having been assigned to the plaintiffs to avoid bringing two other actions.

Two points were raised by the defence: (1) That the claims of Peck & Co. and Codville & Co. were held merely in trust and that the plaintiffs were not beneficially entitled thereto or interested therein; (2) that the plaintiffs being a corporation under the Joint Stock Companies Act, were incapable of so holding the claims and bringing suit thereon.

The plain

H. E. Crawford, Q. C., for defendant. tiffs were incorporated under the Manitoba Joint Stock Companies Act, R. S. M., c. 25, to carry on a wholesale business. As to the claim of Peck & Co. and Codville &

Co., the plaintiffs are incapable of acting as trustees or 1900. assignees, or of suing as such for the claims in question. Argument. The constitution of a company is settled by its charter: Palmer on Company Precedents, vol. I, 268; AttorneyGeneral v. Great Eastern Ry. Co., 5 A. C. 473; Queen v. Reed, 5 Q. B. D. 483.

H. M. Howell, Q. C., and E. L. Howell for plaintiffs. The plaintiffs' charter empowers them to conduct a wholesale business and all other business incidental to or arising out of that business. They can-in case of a merchant failing take notes and collect them, although there is no mention of it in their charter. Any debt may be assigned to any person, and by the Manitoba Interpretation Act, R. S. M., c. 78, s. 8, s-s (m) "person" includes any body corporate. Defendant was no party to the assignments: Walker v. Bradford Old Bank, 12 Q. B. D. 511.

DUBUC, J.-As to the first point, it seems to have been settled by Mussen v. The Great N. W. Central Ry. Co., 12 M. R. 576, that under our Assignments Act, R. S. M., c. 7, s. 3, the assignee of debts and choses in action may bring an action thereon in his own name, although they have been transferred only for the purpose of joining a number of claims in one suit, and the assignee has no beneficial interest in them.

As to the second point, it is contended on behalf of the defence that the plaintiffs are really acting as trustees for Peck & Co. and Codville & Co., to collect their respective claims against the defendant, and that they are not authorized by their charter to act in such capacity.

In re The Rockwood Electoral Division Agricultural Society, 12 M. R. 655, cited in support of that contention, it was held that an Agricultural Society incorporated under The Agricultural Societies Act, has no implied power to borrow money or to mortgage real estate

1900.

belonging to it. The same doctrine had been held in Judgment. The Queen v. Reed, 5 Q. B. D. 483. But it must be obDUBUC, J. served that the society in the first of these cases and the school board in the other were semi-public or quasimunicipal corporations, and these are usually restricted to the special powers conferred on them by their charters somewhat more strictly than ordinary trading corporations.

The plaintiffs herein are a trading corporation. They are authorized by their charter to carry on the business of wholesale merchants in dry goods, clothing, furnishings and fabrics of every nature and kind, and all other business incidental to or arising out of that business. It is clear that they could not operate a railway or a saw mill, as such operations would be entirely foreign to the purpose for which they were incorporated. They would not be authorized to open a bank and carry on regular banking transactions; they could, however, in the course of their business, receive cheques, drafts and other negotiable instruments, and advance goods or money on the same, although such transactions are not mentioned in their charter. They are not authorized to act as official assignees; but they could certainly receive from their insolvent debtors assignments of their stocks and book debts and deal with them as an assignee could do. These transactions would, of course, be considered as incidental to or arising out of their business. If they are authorized to act in such capacity with merchants who may happen to be indebted to them, why could they not do it for other merchants who are in the same line of business and who choose to make an absolute assignment of their claims to them, with no prejudice or detriment whatever to the party whose debt is thus assigned?

In Ashbury Railway Carriage Co. v. Riche, L. R. 7 H. L. 653, it was ruled that a company created a corporation under the Companies' Act, 1862, is not thereby

created a corporation with inherent common law rights,

1900.

and that a contract made by the directors of such a cor- Judgment. poration upon a matter not included in the memorandum DUBUC, J. of association is ultra vires of the directors and is not

binding on the company.

In Attorney-General v. The Great Eastern Ry. Co., 5 A. C. 473, it was held that the doctrine of ultra vires, as explained in Ashbury v. Riche, is to be maintained, but is to be applied reasonably, so that whatever is fairly incidental to those things which the Legislature has authorized by an Act of Parliament ought not (unless expressly prohibited) to be held ultra vires.

Lindley on the Law of Companies, p. 165, says:— "Whatever may fairly be regarded as incidental to, or consequential upon, those things which the Legislature has authorized, ought not, unless expressly prohibited, to be held by judicial construction to be ultra vires."

It seems that, under the above authorities, to hold that the plaintiffs herein were incapable of receiving the assignments in question, would be to put a rather narrow construction on the Companies Act and on the plaintiffs' charter of incorporation.

But there is, I think, a stronger ground why the point raised by the defence should not be maintained. The defendant has no interest whatever in the assignments mentioned and is in no way prejudiced by them. In Walker v. The Bradford Old Bank (Limited), 12 Q. B. D. 511, by a deed of assignment all moneys then or thereafter to be standing to the credit of the assignor at a bank were assigned to a trustee, in trust for the assignor for his life, and after his death, on other trusts. At the date of the assignment the assignor's balance at the bank was £48; at his death it was £217. Notice of the as

signment was not given to the bank until after the assignor's death. In an action by the trustees against the bank to recover the balance of £217, the plaintiff was

1900. held entitled to recover. Smith, J., said at p. 515: Judgment." The assignment was executed on 1st March, 1881. The DUBUC, J. assignor died on 12th December, 1882. No person

claiming under the assignment, and no person claiming under the assignor, and, indeed, no person having any interest whatever in the assignment, has ever taken any step to impugn it, and up to the present time it stands valid and unimpeached. I am of opinion that, this being so, it is not competent for a mere stranger to the assignment to successfully raise any point as to whether a Court of Equity would or would not enforce it, and I am of opinion, even if the point now taken by the defendant as to what a Court of Equity, under the circumstances of this case, would or would not do be correct, that it is not open to the defendants, being mere debtors to the estate of the deceased assignor, or to his assignees, now to attempt to impeach the settlement."

The defendant herein is in the same position as the bank in the above case; he must be considered as a mere stranger to the assignment and not competent to raise the point in question.

Under all the circumstances of this case, I think the plaintiffs are entitled to recover, and as the parties agree as to the amount claimed, judgment should be entered for $3,261.32 and interest from the 20th July, 1900. $50.53, making altogether $3,311.85.

Judgment for plaintiffs.