Lord THANKERTON:—The present action was brought by the respondent on October 29, 1929, for the recovery of municipal and school taxes imposed upon the immovables of the appellant situated within the municipality of the respondent for the years 1926, 1927 and 1928. The taxes imposed for the years 1926 and 1927 were levied upon an assessed value of $25,000 placed upon "!poteaux, fils, cables et tout le système”; for the year 1928 the assessed value was increased to $45,000. It is agreed that the increase was due to the inclusion of the value placed upon a switchboard, with its associated plant, which the appellant had brought from another area, and had placed in premises of which the appellant was not the owner, but only a tenant under a lease, and which had been put into service on April 7, 1928.
While in the defence as filed the appellant disputed liability for any of the taxes claimed, the appellant subsequently filed a pleading, confessing to Judgment for all the taxes claimed except those levied in 1928 upon the increased value of $20,000 in respect of the switchboard. The confession of judgment was refused by the respondent. Accordingly the only question left in issue is in relation to the switchboard. On this point the appellant succeeded succeeded before the Circuit Court, but, on appeal to the Court of King’s Bench (Appeal Side), the respondent was successful.
The power of the respondent to levy the municipal taxes is derived from sec. 521 of the Cities and Towns Act, R.S.Q. 1925, eh. 102, which provides in part as follows:
" " 521. The council may impose and levy, annually, on every immoveable in the municipality, a tax of not more than two per cent. of the real value as shown on the valuation roll.’’
The school taxes are levied, under the authority of sec. 249 of the Education Act, R.S.Q., 1925, ch. 1933, upon “ “ all taxable property in the school municipality,’’ which is identified with the subjects taxable in respect of the municipal taxes.
It has been decided by this Board in Montreal Light, Heat and Power Consolidated v. City of Outremont [1932] A.C. 423, 459, that the word "‘immoveable’’ in sec. 521 of the Cities and Towns f Act must bear the meaning given to it by the Quebec Civil Code, the material articles of which are as follows: (Articles 374, 375, 376, 377, 378, 379, 380, 381, 382.)
The switchboard in question is of the manual type known as N. 1-92 Jack. It is made up of seven sections, each of which consists of a cabinet containing an assembly of wires and electrical apparatus for connecting the telephone circuits of the subscribers either with one another or with trunk lines. It has certain ancillary equipment, such as a distributing frame, but this equipment affords no additional or separate argument. Apart from the actual physical connecting up of the cables and wires, which are led on to the premises, with the switchboard and its equipment, the latter are not in any way attached, but merely rest on the floor of the premises. On detachment of the physical connection with the cables and wires, the switchboard and its equipment are easily removable, without injury to the premises. As already stated, the appellant is only a tenant of the premises.
Accordingly, the respondent’s claim is rested solely on art. 376 of the Code, and on the view that the switchboard is an integral part of that which is admittedly immovable—namely, the poles, wires and cables of the appellant.
The learned trial judge, on a review of the authorities, held that the only test was incorporation in the soil, and that the fact that the switchboard formed part of the telephone system of the appellant was not sufficient to make it become immovable by nature under art. 376 of the Code.
In the Court of King’s Bench, the following paragraphs of the judgment express succinctly the reasons for the contrary view taken by that Court:
" " Considérant que dans l’espèce, le tableau téléphonique susdit ne fait pas partie de la bâtisse dans laquelle il est érigé, et qu'il n’est pas placé là pour la compléter, mais qu’il y est pour compléter le système téléphonique, lequel est immeuble; qu’il est nécessaire pour les opérations du système, étant relié aux cables placés dans le sol, lesquels câbles sont la propriété de la compagnie de téléphone ;
"Considérant que ledit tableau est une partie intégrante et essentielle du système de la compagnie défenderesse, que sans lui, il n’existerait que des poteaux et des câbles sans utilité, et que pour constituer le système, il faut nécessairement et essentiellement ledit tableau les poteaux et les câbles.” The basis of this conclusion is expressed in the leading opinion, which was delivered by Bernier J., who states that it must now be taken as settled that the whole system—telephonic, telegraphic or similar systems of power transmission—constitutes an immovable. The learned judge cites, as authority for that proposition, three decisions to which their Lordships will shortly refer.
It appears to their Lordships that the above proposition clearly involves, as distinct from consideration of the physical nature of the attachment and whether it amounts to incorporation in the soil, consideration of the purpose which the attachment serves. It is agreed, and indeed it is stated in the first paragraph above quoted, that the physical attachment of the switchboard to the premises is insufficient to make it immovable by nature.
The earliest of the three decisions is Montreal Light, Heat and Power Consolidated v. City of Westmount [1926] S.C.R. 919. The only property owned by the appellant in that case within the municipality consisted of gas mains, located in the public streets, a system of electric poles, wires and transformers, almost entirely upon the public streets, and meters placed in the houses of the consumers in the municipality. The Supreme Court of Canada held that the gas mains, poles, wires and transformers were immovable, but that the gas meters were not. In delivering the leading judgment, Anglin, C.J. stated at p. 520:
"‘The sole question with regard to the statutory power to impose the taxes sued for—municipal and school alike—is whether the subjects of taxation in this instance are immovables within the meaning of that term as used in art. 5730 of the R.S.Q., 1909. That question formed the principal matter of discussion at bar; but, while not free from difficulty, it would seem to be concluded adversely to the appellant by the decision of this court in Bélair v. Ste. Rose (1922) 63 S.C.R. 526 as to the gas mains and electric poles and wires, which, for the reasons there stated, must be regarded as ‘buildings’ (bâtiments) within the meaning of art. 376 C.C. and, therefore, ‘immovable by their nature’. In that case three things were distinctly held: (a) that the scope of the word ‘immovable’ in art. 5730, R.S.Q., 1909, is to be ascertained by reference to the provisions of the Civil Code, arts. 376 et seq;
(b) that the word ‘buildings’ (bâtiments) in art. 376 C.C. is used in the sense of ‘constructions’; (c) that it is immaterial to its taxability under art. 5730 that a construction is erected on land which does not belong to the person who owns the construction. There is no distinction in principle which would. justify the taxation of the bridge in that case under art. 5730 as an immovable and warrant the exemption of the appellant’s gas mains, and electric poles and wires in the present case as movables. The materials of which the structures—bridge and distribution systems alike—were comprised were all movables before being placed in situ and made part of such structures. Once incorporated in the structures, however, the materials lost that character; and the structures themselves took on the character of immovables.
‘ " Nor does it appear to matter for the present purpose whether the immobilisation of the pipes, poles and wires be attributed to their physical connection with the land in or upon which they are placed, or with the buildings from which they radiate as parts of a distribution system. In either view they are immovables actually (in the sense of physically) situated in the municipality and thus ‘come within the letter of the law’ which confers the power to tax. Partington 9 s case (Partington v. Attorney-General (1869) L.R. 4 H.L. 100). The immobilisation of the transformers may not be so clear. But they are usually attached to the company’s poles and form an integral part of the system quite as much as the wires strung on the poles to carry the current.”
It may be noted that the transformers so referred to ‘were firmly tied by wires and metal braces to the posts supporting the electric wires.
The proposition expressed by Bernier, J. in the present case appears to have been derived from the second paragraph above quoted, but, in their Lordships’ opinion, the language of Anglin, C.J. does not warrant such inference. He clearly predicates that the materials must be physically incorporated as part of the structure which is itself incorporated in the soil. He clearly held that the wires and transformers were physically incorporated with the poles. The poles were in fact embedded in the soil, but the learned Chief Justice was also ready to regard the whole physical system of pipes, poles and wires as one incorporated physical structure. The element of commercial usefulness of that structure with or without any of its component parts is not referred to by him at all. In their Lordships’ opinion, that case gives no warrant for the proposition laid down by the King’s Bench Court in the present case.
The second decision is Lower St. Lawrence Power Co. v. L f Immeuble Landry, Ltée. [1926] S.C.R. 655, in which, following the above decision, it was held that the pipes, poles, wires and transformers of an electric lighting system, erected in, and on, the public streets of a municipality were immovables; it was further held that the fact that they had been sold separately from the original generators, for the purpose of being later connected to generators belonging to the buyer did not cause them to lose the character of immovables. The opinion of the majority of the Court, which included Anglin, C.J., was delivered in a very able judgment by Rinfret, J. in which he reviews at length the judicial decision and also the opinions of well-known jurists, from which he derives the following propositions at pp. 668, 670 :
"‘La très grande majorité des commentateurs enseigne qu’il n'est pas nécessaire que la construction, pour être considérée comme immeuble par nature, soit fixée au sol à perpétuelle demeure. I] suffit que l’incorporation ne soit pas purement passagère et accidentelle. C’est le fait de l’attachement au sol que la loi considère. La condition de rigueur est que ‘la construction, quelle qu ’elle soit, fasse corps avec le sol ’ ; qu ’elle y soit ‘cohérente’, suivant l’expression de Pothier, ou ‘adhérente’, suivant celle de Laurent. C’est toujours la règle: Quod solo inaedificatur, solo cedit . . . De même, les bâtiments ou autres ouvrages unis au sol sont immeubles par leur nature, qu'ils aient été construits par le propriétaire du fonds ou par un tiers possesseur ; et ce, dans le cas même où le tiers constructeur se serait réservé la faculté de les démolir lors de la cessation de sa jouissance . . . Ce réseau, d’après l’opinion la plus générale, est un immeuble par lui-même, en tant que construction adhérente au sol, et non pas seulement comme faisant partie intégrante de l’usine génératrice de l’électricité.”
These passages, with which their Lordships are in accord, do not support the proposition of the Court of King’s Bench.
The third decision referred to by Bernier, J. is the decision of this Board in Montreal Light, Heat and Power Consolidated v. City of Outremont [1932] A.C. 423, in which the decision of the Supreme Court in the City of Westmount case [1926] S.C.R. 515, so far as relating to gas mains laid in the public streets, was challenged, but was approved of by this Board. The reasoning of the majority of the Supreme Court contained in the Judgment of Anglin, C.J. was held to be well founded, and Lord Tomlin, in delivering the judgment of the Board, said (at p. 436) : ‘What then is an ‘immovable’ under the Civil Code? A gas main laid in the earth is an ‘immoveable’ in the sense that it is physically a construction fixed in the earth, though the individual pipes of which it is made up were moveable before they came to form part of the construction . . . The vas mains were never moveables, though constructed out of things which were moveables. ‘ ‘ This’ case likewise affords no support to the proposition .of the Court of King’s Bench.
In their Lordships’ opinion, the existence of a building which is immovable by its nature under art. 376 involves two things —namely, that you have a structure and that such structure is incorporated with, or adherent to, the soil. In the present case, the switchboard with its equipment, admittedly, is not itself incorporated with, or adherent to, the soil. Is it then part of a structure which is so incorporated or adherent? As shown by the cases cited, it must be physically incorporated as part of the structure. The question whether the structure of which it is claimed to be part, is commercially able to operate without its assistance is irrelevant, in the opinion of their Lordships, and, apart from that suggestion, it is clearly incorrect to say that the switchboard is physically incorporated in the structure composed of poles, wires and cables belonging to the appellant’s undertaking.
Their Lordships agree with the reasoning of the Trial Judge, and they are of opinion that the judgment of the Court of King’s Bench should be reversed and that of the Trial Judge restored, the appeal being allowed with costs to the appellant throughout. Their Lordships will humbly advise His Majesty accordingly.
Appeal allowed.