C A N A D A
Province de Québec
Greffe de Québec
No: 200 - 09‑000606‑860
Le 22 mars 1989
CORAM : Juges Bisson, Gendreau et Hannan (ad hoc)
Trust général du Canada
LA COUR statuant sur le pourvoi contre un jugement rendu 1e 16 juillet 1986 par la Cour supérieure, district de Québec (L'Hon. Vincent Masson) accueillant l'action en réclamation de l'intimée, déclarant l'appelante endettée envers l'intimée pour la somme de 16 796,98 $ et condamnant l'appelante à lui payer ladite somme de 16 796,98 $ plus 6 744,76 $, en dollars américains convertis en fonds canadiens au taux de change en vigueur lors dudit jugement;
Après étude du dossier, audition et délibéré;
Pour les motifs exposés dans l'opinion écrite de Monsieur le juge Hannan, déposée avec le présent arrêt, et auxquels souscrivent Messieurs les juges Bisson et Gendreau;
REJETTE l'appel, avec dépens;
Et pour rendre exécutoire le jugement de la Cour supérieure, prononce le jugement que ladite Cour aurait dû prononcer:
MAINTIENT l'action de la demanderesse,
DECLARE la défenderesse endettée envers le demandeur es qualité de légataire fiduciaire et d'exécuteur testamentaire pour la somme de 16 796,98 $.
CONDAMNE la défenderesse à payer au Trust General du Canada à titre de légataire et d'exécuteur testamentaire de la succession de feu Roméo Drolet la somme de 16 796,98 $ plus 9 193,10 $.
Le tout avec intérêts et dépens. J.C.A.
OPINION OF JUDGE HANNAN
During his lifetime Roméo Drolet was an inn-keeper in the City of Lévis, Quebec. He died in the State Florida U.S.A., on February 25, 1980.
For the last 15 years or more of his life Roméo Drolet spent the winter months in Florida, but, according to the record, he never stayed there more than 180 days in any one year.
On February 8, 1980 Roméo Drolet prepared, in Florida, a last will, in the form derived from the laws of England. (Art. 842 C.C.B.-C.).
This will was duly probated by the Superior Court, District of Quebec.
The will made certain specific bequests, which are not in issue here.
The residue of the estate is left to:
"mon fils Normand Drolet gui doit être placé en fiducie à un trust...
Je nomme le Trust General du Canada qui devra exécuter mes volontés." (The trustee is ordered to allow 50 % of the trust sums to be withdrawn by the son Normand, 3 years after the death of the testator and to allow the balance to be withdrawn 6 years after death).
At the time of his death Roméo Drolet and Pierrette Drolet (Appellant) had been issued a "fixed rate, fixed term savings certificate" dated February 8, 1979 by the First Federal Savings and Loan Association of Broward County (Florida), a deposit-taking institution in the style of a bank. ("the Bank") The certificate fixed a rate of interest payable to the holder, based on U.S. government treasury bills, as long as the amount deposited remained egual to, or above, the opening balance.
The opening balance of the certificate was 12 000 $ (U.S.). At the time of Roméo Drolet's death, the amount of the principal on deposit in Bank was 12 534,29 $. (U.S.)
The "account holder(s)" were inscribed on the certificate as being:
"Mr Roméo Drolet and Mrs Pierrette Drolet".
After the death of Roméo Dro1et, Pierrette Drolet withdrew the money deposited in the Bank and, despite all demands for its return to the Respondent, has steadfastly maintained that the money is her property.
The judgment of the Superior Court appealed from here, ordered Appellant to reimburse to the Respondent, in its quality as testamentary executor, the proceeds of the certificate previously issued by the Bank. The amount ordered to be paid is controverted for reasons of uncertainty as to accumulated interest, after conversation from U.S. to Canadian currency, and as to legal interest on the total amount. This issue will be considered later.
It is common ground that the deposited money had been in the hands of Roméo Drolet for some time. From at least 1968 it was held in an account opened in the names of Roméo Drolet, Madame Roméo Drolet (his wife) and Normand Drolet (the son). When Madame Drolet died, in 1974, the account was put in the names of Roméo Drolet, Lucien Drolet (his brother) and, again, Normand. When Lucien Drolet died, and after some family squabble between Roméo and his son, Normand, the present Certificate was issued in February 1979. The account was thus opened in the name of Roméo Drolet and of the widow of his late brother, Lucien, Mme Pierrette Drolet, who is the Appellant.
There is not much doubt the source of the deposited money was the operation of the inn in Lévis. The witness Magella Aubin sometime accountant and friend of Roméo Drolet believed:
"... selon toute probabilité pour ne pas dire toute certitude c'était de l'argent qui était gagné ou payé mais qui était transféré là-bas.
De l'argent qui n'était pas déclaré à l'impôt". A.F. p. 67
It is also not in doubt that the deposited money was managed at all times by Roméo Drolet. St was he alone who wrote cheques on the account containing the deposited funds to withdraw interest that was credited from time to time. Appellant made no deposits or uithdrawals.
It may also be accepted as proven that, prior to the preparation of the will (17 days before his death), Roméo Drolet had let it be known to Appellant and others, that the deposited money was to be the property of Appellant. The witness Aubin, as independent a witness as any, said this, p. 68 A.F.:
"Monsieur Drolet a dit: "Ce compte-là, c'est Pierrette qui va l'avoir. C'est à elle que j'y donne. Elle mérite ça. Depuis le temps qu'elle me rend service, je ne l'ai jamais payée. C'est à elle que ça va aller cet argent-là."
Appellant testified thus, p. 59 A.F.:
"... Il m'a dit que "quand moi je partirai cet argent-là va revenir à toi..."
And her daughter Doris confirmed this testimony, p. 64 A.F.:
"... il dit quand je ne serai plus là, ça va être à toi pour tout ce que tu as fait pour moi puis... comme compensation".
The trial Court examined the respective claims of the parties in the light of Quebec law, and in light of the laws of Florida, as they were proven before the Court. It concluded that, whichever law was applicable, in these circunstances, Respondent was entitled to the deposited money, which formed part of the estate of the testator.
I would agree with this conclusion, but, with respect, would approach the matter somewhat differently.
It may be divided into 2 separate questions: the contractual element and the property or successoral element.
The contractual element
Perrault Traité de Droit Commercial, Vol. 2, p. 386 ff. writes that the exact nature of the relations of joint account holders with the bank, must be distinguished from the relations of the depositors to one another.
It is proved that the applicable law of Florida governing the contract between the Bank and its deposit certificate holders is contained in Article 658.56 , of the "Banks and Trust Companies Act", produced by the expert witness, Florida lawyer Larry Behar:
"658.56 Deposits accounts in two or more names; presumption as to vesting on death
(1) Unless otherwise expressly provided in the signature contract card or other similar instrument delivered to and accepted by a bank in connection with the opening or maintenance of an account, including a certificate of deposit, in the names of two or more persons, whether minor or adult, payable to or on the order of one or more of them or the surviving account holder or holders, all such persons and each person depositing funds in any such account shall be presumed to have intended that upon the death of any such person all rights, title, interest, and claim in, to, and in respect of such deposits and account and the additions thereto, and the obligation of the bank created thereby, less all proper setoffs and charges in favor of the bank, shall vest in the surviving account holder or holders.
(2) The presumption herein created may be overcome only by proof of fraud or undue influence or clear and convincing proof of a contrary intent. In the absence of such proof, all rights, title, interest, and claims in, to, and in respect of such deposits and account and the additions thereto, and the obligation of the bank created thereby, less all proper setoffs and charges in favor of the bank against any one or more of such persons, shall, upon the death oE any such person, vest in the surviving account holder or holders, notwithstanding the absence of proof of any donative intent or delivery, possession, dominion, control, or acceptance on the part of any person and notwithstanding that the provisions hereof may constitute or cause a vesting or disposition of property or rights or interests therein, testamentary in nature, which, except for the provisions of this section, would or might othervise be void or voidable.
(3) Nothing herein contained shall abridge, impair, or affect the validity, effectiveness, or operation of any of the provisions of ss.
658.55 and 674.405 or the rights of banks to make payments as therein provided."
With respect to this legislation, the expert witness stated that it was adopted with a view to regulating the relationship between the Bank and its depositors at p. 46 A.F.:
"Q. Est-ce que vous iriez jusqu'à dire que c'est un statut qui gouverne les relations des parties vis-à-vis la Broward... vis-à-vis la Banque d'autre part ? C'est ça que ça concerne ?
R. Ca concerne les relations contractuelles entre les dépositaires et la Banque et l'Etat.
Q. Point et à la ligne ?
R. Point à la ligne."
It may be accepted that pursuant to Quebec law, Art. 8 C.C.B.-C., ("Deeds are construed according to the laus of the country where they were passed...), (1) that the dispositions of Section 658.56 would lead to the conclusion the Bank can give the deposited funds in the joint account to the surviving account holder, without having to determine if she owns the funds. There is no conflict between Quebec and Florida law to the effect that Appellant was entitled, as regards the Bank, to withdraw the deposited funds.
(1) A signature card provided by the Bank was apparently signed by Appellant after having been sent to her in Quebec by Roméo Drolet. No proof is to be found in the record as to the contents of this card, and no presumptions arise from the existence of this card, in the absence of other proof.
The property element
This element relates to the ownership of the deposited funds that were in the joint bank account. This is a matter of successions. Here the laws of Quebec and of Florida differ. It is accepted that the deposited funds are moveable property.
Florida law creates a presumption of ownership in favor of the surviving account holder. This presumption is rebuttable.
Quebec law, which holds that successions of moveables are governed by the law of the domicile of the decedent (2 ) does not contain any such presumption. (Niles v. Lake 1947 S.C.R. 291; In Re: Estate Hannah Mailman 1941 S.C.R. 368.) Perrault, (op cit) wrote at Vol. Il p. 387:
"Pour déterminer les droits des déposants entre eux, il faut rechercher la convention originaire, l'entente intervenue lors de l'ouverture de ce compte-joint. Ont-ils eu l'intention de faire de la somme d'argent ainsi déposée une propriété indivise ? L'un a-t-il eu l'intention de constituer l'autre déposant son agent ou son mandataire, à titre onéreux ou à titre gratuit ? A-t-il voulu consentir une donation ? Il faut, dans chaque cas, rechercher l'intention des parties, appliquer les principes généraux du droit civil concernant soit le mandat, soit la donation, soit la stipulation pour autrui."
In this jurisdiction, generally property is not divisible into the common law components of legal title and equitable title. (3) (See Tancelin - Des Obligations, contrat et responsabilité 4e ed. 1988 (W.
& L.) p. 529 ff.) However, by the provision of Art 981 (a) ff.
C.C.B.-C. property may be disposed of by gift or by will to trustees for the benefit of persons in whose favor gifts or legacies can De made.
This exception apart (and others not relevant here) where, as, in this case, the proof indicates the property belonged to one person (Roméo Dro1et) the transfer of ownership to another person by gift requires proof of donation in conformity with the law relating to gifts or of the law relating to wills. Further the transfer is of the entire property, connoting that a gift of moveables must be accompanied by delivery, to be perfected. (Arts 776, 755, 758 C.C.B.-C.) Here the proof is constant that Roméo Drolet did intend to make a gift of the deposited funds but only upon his death.
(2) Notions élémentaires de droit international privé québécois, Jeffrey Talpis, 1977 R. du N. p. 115, 139; Droit International privé québécois, J.G. Castel 1980 Butterworth) p. 375 ff; Groffier, Précis de droit international privé, 1984 (W. &. L.) P. 116, a. 197.
(3) Ownership remains indivisible in Quebec Law: Royal Trust v. Tucker (1982) 1 S.C.R. 250 , 261.
Art. 758 C.C.B.-C. provides:
"Every gift made so as to take effect only after death, which is not valid as a will, or as permitted in a contract of marriage, is void." The deposited money was not accompanied by delivery to AppelIant according to the proof. She had never exercised any control over the deposited money during the lifetime of Roméo Drolet; he was the sole administrator of it. The deposited money was not transferred to Appellant by gift, perfected by delivery.
The deposited money was not validly transferred to Appellant by will, to take effect upon death. Roméo Drolet preferred not to mention these funds in the particular legacies set out in his will.
As it had not been disposed of by gift or otherwise at the time the will was made, and as there was no intervening valid disposition before death, the deposited money formed part of the estate disposed of to the Respondent trustee in accordance with Art. 981 (a), ff., of the Code.
Thus if the law of the domicile of the decedent which applies to this case is the law of Quebec, the claim of Appellant to the deposited money must fail.
It is necessary in the circumstances to establish the domicile of Roméo Drolet, to determine whether the law of Quebec applies to his succession. The trial Court did not consider that establishing the domicile of the decedent was necessary. The record demonstrates that Roméo Drolet never abandoned residing in the region of Quebec for a period of at least one half of each year, even in the later years of his life. His yearly sojourns in Florida uhere he purchased a mobile home, never surpassed 5 to 5 1/2 months in any year. (R.F. p. 80) The judgment of probate of the will was made, without challenge, in the Superior Court, District of Quebec, the decedent's address being "1645 de Lery, a Quebec". The deed of sale of the inn, November 27, 1978, 1 1/4 years before death, refers to the same address as domicile of Roméo Drolet. His drivers licence, to expire Feb. 11, 1981, refers to this address, as did social insurance and medical insurance cards held by him. A number of other items showing a continuing residence in Quebec were introduced into proof.
Prior to 1964 there could have been little doubt that the decedent was domiciled in Quebec. Those who wished to establish that there had been a change of domicile had the burden of proving such change.
(Robinson v. Montreal Trust 1971 C.A. 876 , 878) This burden has not been discharged in the present case, in my view.
As the domicile of the decedent is found in Quebec, and as it is established that the laws of the domicile apply to the succession, it follows that the proposed gift of the deposited money being one in contemplation of death, is void, as between Appellant and Respondent.
(Art. 758, supra).
The deposited funds recuperated from the Bank by Appellant are not her property. They form part of the succession duly transferred to Respondent as trustee, for the benefit of the legatees mentioned in the will of Roméo Drolet.
The judgment a quo condemned Appellant to pay the capital sum of 16 796,98 $, being the Canadian-dollar value of the deposited funds on the date of judgment. The trial Court condemned Appellant to pay the further interest of "6 744,76 $ U.S. convertis en fonds canadiens au taux de change en vigueur lors du présent jugement, le tout avec intérêts et dépens."
By motion dated June 23, 1987, Respondent sought and obtained permission from this Court to prove the value of the accumulated interest of 6 744,76 $ (U.S.), in Canadian dollars (Art. 523 C.P.). This amount of interest earned to the time the judgment a quo was pronounced, that is from the institution of the action to June 16, 1986, converted to Canadian dollar values was settled by admission, as 9 193,10 $ (p. 37 R.F.).
By another motion dated July 22, 1987, referred to the Bench, Respondent sought permission, pursuant to Arts 509 and 523 C.P., to amend its declaration to claim, as capital, the further commercial interest accrued since the judgment, as permitted by Art. 1078 (2) C.C.B.-C.
Respondent had claimed interest pursuant to this article in its conclusions, (A.F. 32). The judgment only granted: "Le tout avec intérêts,..." which permits interest at the legal rate from the date of judgment. No incidental appeal was taken from this finding. As the judgment of the Superior Court, in regard to the interest granted was not appealed, there is no ground to grant the motion seeking the interest allowed by Art. 1078 (2).
Interest at the legal rate should apply to the interest earned on capital, as determined by the judgment.
For these reasons, I would dismiss the appeal, and the motion to amend, with costs against Appellant and Respondent respectively, and for greater certainty I would vary the judgment of the Superior Court so that it would provide as follows:
"Maintient l'action de la demanderesse,
Déclare la défenderesse endettée envers le demandeur es qualité de légataire fiduciaire et d'exécuteur testamentaire pour la somme de 16 796,98 $.
Condamne la défenderesse à payer au Trust General du Canada à titre de légataire et d'exécuteur testamentaire de la succession de feu Roméo Drolet la somme de 16 796,98 $ plus 9 193,10 $.
Le tout avec intérêts et dépens." J.C.A. ad hoc.
(C.S. Québec 200-05-002897-812)