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1914 Supreme(SC) 66
Privy Council
Sir Joshua Williams, Sir Charles Fitzpatrick , Lord Sumner, Lord Moulton, Justice Viscount Haldane L.C., JJ.
John Deere Plow Company Limited -Appellant
Versus
Theodore F. Wharton -Resopndent
On Appeal from the Supreme Court of British Columbia
Decided On : 02-11-1914
Brown, Addison , Linklater, Lawrence Jones and Co., Lau fleur, Raymond Asquith, Newcombe , F.W. Wegenast
A provincial legislature cannot enact laws that interfere with the corporate status or capacity of a company incorporated under Dominion law, although such companies must still comply with provincial laws of general application.
Headnote:(A) British North America Act - Sections 91 and 92 - Companies Act of the Dominion - Provincial Companies Act - Distribution of legislative powers between Dominion and Provincial governments - Power to incorporate companies - A province cannot legislate to deprive a company incorporated under Dominion law of its status and powers conferred by the Dominion Parliament.
(B) Property and Civil Rights - Section 92(13) - The expression "civil rights in the Province" must be construed consistently with other powers and cannot be interpreted so broadly as to allow a province to interfere with the corporate capacity of a Dominion company.
(C) Regulation of Trade and Commerce - Section 91(2) - The Dominion Parliament has the power to prescribe the extent to which the powers of companies with objects extending to the entire Dominion should be exercisable.
(D) Provincial Laws of General Application - A Dominion company remains subject to provincial laws of general application, such as taxation, laws relating to Mortmain, and general regulation of contracts, provided such laws do not strike at the company's corporate status.
Facts of the case:
A company incorporated under the laws of the Dominion was restrained by a lower court from carrying on business in a province and was barred from suing in provincial courts for contracts made within the province because it had failed to obtain a license under the provincial Companies Act. The provincial registrar had refused the license on the grounds that another company was already registered under a similar name.
Findings of Court:
The provincial legislation requiring a license as a condition for exercising corporate powers, including the power to sue, is inoperative against a company incorporated under Dominion law.
Issues: Whether a provincial legislature is competent to enact laws that interfere with the status and corporate capacity of a company incorporated by the Dominion Parliament, specifically by requiring a provincial license to carry on business or sue in provincial courts.
Ratio Decidendi: The power of a province to incorporate companies is limited to companies with provincial objects. The creation and regulation of companies with objects extending across the Dominion fall under the exclusive jurisdiction of the Dominion Parliament. While a Dominion company must comply with provincial laws of general application, a province cannot legislate to destroy the status and powers of such a company or make its corporate capacity dependent on a provincial license.
Result: Appeal allowed.
Legal Category Hierarchy
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constitutional law
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division of powers
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dominion powers
- trade and commerce
- peace, order, and good government
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provincial powers
- property and civil rights
- incorporation of companies
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dominion powers
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division of powers
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company law
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corporate capacity
- extra-provincial companies
- dominion companies
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corporate capacity
Viscount Haldane:—
These are consolidated appeals from judgments of the Supreme Court of British Columbia. The Attorney-General for the Dominions and the Attorney-General for the Province have intervened.
By the first of the judgments the appellant company was restrained at the suit of the respondent Wharton from carrying on business in the Province until the company should have become licensed under Part VI of the British Columbia Companies Act . By the second judgment the appellants' action against the respondent Duck for goods sold and delivered was dismissed. The real question in both cases is one of importance. It concerns the distribution between the Dominion and the Provincial Legislatures of powers as regards incorporated companies.
The appellants are a company incorporated in 1907 by Letters Patent issued by the Secretary of State for Canada under the Companies Act of the Dominion . The Letters Patent purported to authorize it to carry on throughout Canada the business of a dealer in agricultural implements. It has been held by the Court below that certain provisions of the British Columbia Companies Act have been validly enacted by the Provincial Legislature. These provisions prohibit companies which have not been incorporated under the law of the provinces from taking proceedings in the Courts of the Province in respect of contracts made within the province in the course of their business, unless licensed under the Provincial Companies Act. They also impose penalties on a company and its agents if, not having obtained a license, it or they carry on the company's business in the Province. The appellant was refused a license by the Registrar. It was said that there was already a company registered in the Province under the same name, and Section 18 of the provincial statute prohibits the grant of a license in such a case. The question which has to be determined is whether the legislation of the Province which imposed these prohibitions was valid under the British North America Act .
The Companies Act of the Dominion provides by Section 5 that the Secretary of State may, by Letters Patent, grant a charter to any number of persons not less than five, constituting them and others who have become subscribers to a memorandum of agreement a body corporate and politic for any of the purposes or objects to which the legislative authority of the Parliament of Canada extends with certain exceptions which do not affect the present case. The Interpretation Act of 1906 , by Section 30 , provides, among other things, that words making any association or number of persons a corporation shall vest in such corporation power to sue and be sued to contract by their corporate name, and to acquire and hold personal property for the purposes for which the corporation is created, and shall exempt individual members of the corporation from personal liability for its debts, obligations, or acts, if they do not violate the provisions of the Act incorporating them.
Section 10 of the Companies Act makes it a condition of the issue of the Letters Patent that the applicants shall satisfy the Secretary of State that the proposed name of the company is not the name of any other known incorporated or unincorporated company, or one likely to be confounded with any such name; and Section 12 gives him large powers of interference as regards the corporate name. Section 29 provides that on incorporation the company is to be vested with, among other things, all the powers, privileges and immunities requisite or incidental to the carrying on of its undertaking, as if it were incorporated by Act of Parliament. Section 30 enacts that the company shall have an office in the city or town in which its chief place of business in Canada is situate, which shall be the legal domicile of the company in Canada; and that the Company may establish such other offices and agencies elsewhere as it deems expedient. By Section 32 it is provided that the contract of an agent of
