MAcDONALD, C.J.B.C.:—The action is brought to recover the amount of certain revenue stamps which it is claimed the defendant wrongfully omitted to affix to stocks and bonds sold by him as a broker. Part VII of the Special War Revenue Act, R.S.C. 1927, ce. 179, is relied upon to fix liability on the broker for the failure to affix the stamps. Sec. 58 of said Part VII reads:
" ‘58. No person shall sell or transfer the stock or shares of any association, company or corporation, or any bond other than a bond of the Dominion of Canada or of any province of Canada by
“ (a) agreement for sale;
"‘(b) entry on the books of the association, company or corporation ;
“(c) delivery of share certificates or share warrants or bond endorsed in blank or payable to bearer; or
“(d) any other method whatsoever ;
unless in respect of such sale or transfer there is affixed to or impressed upon the document evidencing the ownership of such stock or shares or bond, or a document showing the transfer or agreement for the transfer thereof, an adhesive stamp, or a stamp impressed thereon by means of a die, of the value of three cents for every one hundred dollars or fraction thereof of the par value of the stock or shares or bond sold or transferred. ‘ ‘
The defendant negotiated the sale of the securities in question as agent or broker only. He had himself no interest in them and resists inter alia payment on this ground. By sec. 59 it is provided that, ‘‘In case where the evidence of sale or transfer is shown only by the books of the company the stamp shall be placed or impressed upon such books’’.
Sec. 63 provides a penalty of $500 for the violation of the provisions of this Part. But this is not a proceeding for penalties, nor for damages for not affixing the stamps. Sec. 108 makes all taxes or sums payable under this Act recoverable by His Majesty as a debt; also the penalties. By sec. 108(3) every penalty imposed by this Act for which no provision for recovery thereof is by the Act provided may be sued for.
Do these provisions of the Act render the broker liable to be sued by His Majesty The King in debt for his failure to affix stamps? It is my opinion that they do not, and this is the only question I need consider in this case.
The opening words of sec. 58 are wide enough standing alone to include a broker but a broker is not the seller or transferor in the legal sense. He brings about the sale or transfer, but his principal is the seller or transferor. There is nothing in the Act making the broker liable as principal. There are indications to the contrary as where the entry of sale is to be made on the books of a company the stamps are to be affixed to the book. Then again the general law does not render the agent liable on a sale of his principal’s property. The act of the broker or agent is in law the act of the principal and to render the agent liable for the debt of the principal there must be special warrant for it in the Act which is absent here.
See. 59(3) is significant. It provides that where the transfer is by delivery of the certificate or bond in blank or payable to bearer ‘‘there shall be made and delivered by the seller to the buyer a bill or memorandum of such sale or transfer to which the stamp shall be affixed or impressed’’. This to my mind indicates that the broker is not to be considered as the seller but merely the agent for bringing about the sale.
See Charles H. Meyer’s Law of Stock Brokers and Stock Exchanges, 1932 Supplement, p. 13, where he cites Connelly v. Glenny (1931) 233 N.Y. App. Div. 198 at p. 199:
"The relation which existed between plaintiff [customer] and defendants [brokers] was that of principal and agent, and not of buyer and seller. Defendants were not selling their own stock; they were acting as brokers for the plaintiff.’’
Additional American authorities are cited there but I need not quote them. The law of our own country is plain that an agent acts only for his principal not for himself.
In my opinion, therefore, the agent is not liable in this action for the failure to affix the stamps and this appeal must be dismissed. It is not necessary to refer to the other questions argued.
Martin, J.A.:—This is an action to recover "‘as a debt due to His Majesty’’, under sec. 108 of the Special War Revenue Act, the sum of $499.48, being the amount of stamps which it is alleged that the defendant, a stockbroker, should, pursuant to sec. 58, have affixed to, or had impressed upon, certain shares and stocks at the time he, as agent for the owner thereof, sold them on the floor of the Vancouver Stock Exchange to various purchasers: that section declares, relevantly, that "‘No person shall sell or transfer the stock or shares of any association, company or corporation . . . unless in respect of such sale or transfer there is affixed to or impressed upon the document evidencing the ownership of such stock or shares . . . an adhesive stamp, or a stamp impressed thereon by means of a die, of the value of three cents for every one hundred dollars or fraction thereof of the par value of the stock or shares or bond sold or transferred.’’
This section does not declare that any tax or sum is payable by any person or party to the sale or transfer, whether vendor, or purchaser, or corporation making the transfer in its " 4 books” (cf. secs. 59, 60), nor does it declare who shall affix or impress the stamps, but simply prohibits the selling or transferring of unstamped stocks and shares, and the penalty for violation of this prohibition is to be found in sec. 63, viz., "‘Any person who violates any of the provisions of this Part shall be liable to a penalty not exceeding five hundred dollars’’. Then subsecs. 2 and 3 of see. 108 provide for the recovery, by nominated civil process, of " ‘ every penalty incurred for any violation of the provisions of this Act’’, and it was not disputed that said civil proceedings could be brought to recover the amount of any penalty that had been duly inflicted upon anyone who had violated said prohibition, and it is beyond question, to my mind, that if there were no more in the Act, said sections would conclude the matter in favour of the defendant-respondent.
But the appellant invokes the first subsection of said sec. 108 and submits that the failure to comply with the said prohibition is covered by the opening words thereof, viz., 4 ‘All taxes or sums payable under this Act shall be recoverable . . . as a debt due to . . . His Majesty’’, but, with every respect, I am unable to understand how, in the absence of any direction that a tax shall be paid by a nominated person, anyone can be fastened with the necessary legal liability to pay it to anybody, and still less can I understand how the breach of a duty not to sell or transfer property "‘unless’’ (see. 58) in the manner directed can be converted into ‘‘taxes or sums payable’’ to the Crown, in the absence of express language bringing about such an incongruous result.
Therefore, whatever questions may otherwise be involved, in my view the statute as it originally stood as applicable to this case, and quite apart from any inference to be derived from later amendments, does not authorize the bringing of the present action, and so the judgment below dismissing it should be affirmed and this appeal dismissed.
I note the cited case of The King v. Walker & King Ltd. (1921) 61 D.L.R. 283, only to say that the language of the statute there in question differs substantially from that before us and therefore I do not rely upon it, though in its general reasoning it affords some support to the respondent.
MCPHILLIPS, J.A. (dissenting) :—In my opinion the statute law is definite and precise that the stamp tax is payable on sales or transfers of stock, bonds, etc. (sec. 58, Special War Revenue Act). Here admittedly the respondent did effect sales of stock and failed to affix the stamps thereon as called for by the statute. The contention is that being a broker only he is not answerable therefor. I cannot follow the submission made that the broker is not a "‘person’’ within the purview of the Act (see. 58, quoted supra).
The broker (the respondent) made the sales and in his examination at the trial the following questions were put and the following answers made :—
"‘Q. Did you make sales on which the stamp tax under the Act, mentioned in the pleadings would have been $499.48 if they were sales—if they were sales within the meaning of the Act? A. I would say I did yes. If they were sales. Q. And those sales were made on the floor of the Vancouver Stock Exchange? A. Vancouver Stock Exchange, yes, because I could not make them anywhere else Mr. Dixon, or I would be fined. Q. On the records of the Stock Exchange there would be nothing to show that they were different from any other sale, I take it? A. I don’t suppose so, no. Q. But you did not pay on those sales which you say you made as agent for Miller Court & Co.? A. No, sir. Q. Do you remember receiving any demands for payments of these taxes from the Department?
A. Yes, I do. Q. Have you got those letters? A. No. Q. Did Miller Court give you any protection by way of a letter? A. Yes, I said, I just told you I had a letter from Miller Court.
Q. You have a letter from Miller Court protecting you for the amount of stamp tax which you might be liable to pay? A. Yes. Q. On transactions made for them? A. That the Government might hold me liable for. Q. That the Government might hold you liable for? A. Yes. Q. In connection with those transactions? A. Yes. Q. So then it all boils down to this: that you admit you made sales? A. I acted as Miller’s agent, yes, that is what I did. Q. You acted as Miller’s agent, and at least you will go that far as to say that you made sales as Miller’s agent? A. That is right. Q. And that the sum of $499.48 would be owing if you had been acting as a broker for yourself? A. Well, I imagine that is right, yes.”
In my opinion upon this evidence and the application of sec. 108 of the Act the money value of the stamps constituted a debt due by the respondent to His Majesty and the action was rightly brought and maintainable against the broker. Sec. 108 in part reads as follows:
“108. All taxes or sums payable under this Act shall be recoverable at any time after the same ought to have been accounted for and paid, and all such taxes and sums shall be recoverable, and all rights of His Majesty hereunder enforced, with full costs of suit, as a debt due to or as a right enforceable by His Majesty, in the Exchequer Court or in any other Court of competent jurisdiction. . . .’’
It is pressed that because the Parliament of Canada substituted by an amendment in 1930 (c. 43, sec. 1) a new section and repealed sec. 58 as in the principal Act it demonstrates that sec. 58 as originally enacted was ineffective. With this view I cannot agree—judgment must go on the then existent statute law and I consider that it was in its terms effective and covers the present case. No doubt amendments at times are made out of abundance of caution but they cannot be considered by the Courts. Every case must stand or fall upon the existent statute law. There is no merit in this appeal—the broker was aware of the liability and took steps to protect himself—he contravened the law.
I am unable, with great respect to the learned trial Judge, His Honour Judge Ellis, to arrive at any other conclusion than that the case of the Crown was fully made out and I would therefore allow the appeal.
MACDONALD, J.A.:—I would dismiss the appeal.
Appeal dismissed.