2015 QCCQ 9562, 2015 QCCQ 9562

Cayo c. Second Or enr. 2015 QCCQ 9562 COURT OF QUEBEC Small Claims Division CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL Civil Division No: 500-32-132155-120 DATE: July 30, 2015 ______________________________________________________________________ PRESIDED BY THE HONOURABLE DAVID L. CAMERON, J.C.Q. ______________________________________________________________________ MARIO ALBERTO CAYO […] Montréal-Nord (Québec) […] Plaintiff v.

SECOND OR ENR. 954, de Maisonneuve Est Montréal (Québec) H2L 1Z1 Defendant ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] The Plaintiff, Mr Mario Alberto Cayo sues the Defendant Second Or Enr. ("Second Or") who operates a pawn shop, for the value of gold items pawned for two loans contracted in 2008. [ 2 ] The first transaction, a loan of $ 315 made on April 24, 2008 payable May 25, 2008 with interest at 54% per annum, is evidenced by a document entitled "contrat de prêt".

It bears the serial number 47180 AA. [ 3 ] It is a pre-printed form with the information typed in. It describes the property pledged as 1 chaine, 1 médaille and sets quality of the gold and weight at 18 KT 27.1 grams. The contract is set up as a one-month agreement, with interest of $ 14.20, but, since there is an interest rate stipulated, it follows that interest will compound if the loan is not paid back on the due date. [ 4 ] The second transaction, evidence by the same form of contract, serial number 47838 CC is dated June 4, 2008. It is a loan of $ 1,000 payable July 4, 2008 at 35% per annum interest.

The first month of interest is set at $ 29.20. [ 5 ] It provides for an interest payment of $ 29.20 for the first month. The item pawned is described as 1 bracelet 22K 58.7 grams. [ 6 ] The litigious aspect of this file turns on the question as to who is entitled to recover the pawed property upon satisfaction of the debt. [ 7 ] For both transactions, Mr Cayo's name is typed into the contract form as "CAYO MARIA".

On the white copy of the "contrat de prêt" remitted to Mr Cayo for each transaction (P-2, P-3), there is no other name mentioned. [ 8 ] But on the yellow copy retained by Second Or for each transaction (D-3) there is another name, "Chauca Washington" written in pen beside the typed inscription "CAYO MARIA".

Only Mr Cayo's signature and that of a representative of Second Or are found on the signature lines of the contract forms. [ 9 ] Second Or takes the position that this additional name was added into the contracts in the presence of Mr Cayo and Chauca Washington to evidence the agreement that either of the two could recover the gold when the capital and interest was paid in full. Second Or states that it was its policy at the time to work like this, with the second person's name written on the yellow copy retained. According to Second Or, Mr Cayo knew this procedure, because he had dealt with them before.

They give as examples transactions where Mr Cayo was acting with his sister who paid off the loan and received the property back when Mr Cayo was not present. His sister's name, Edita Cayo Valdez, was written into Second Or's yellow copy of the contract dated July 17, 2009 (D-4), but not on the white copy given to Mr

Cayo where only his name appeared. [ 10 ] Mr Cayo remembers the transaction, and testifies that he gave permission in writing specifically in that case at his sister’s request.

Second Or denies having received such a document, having acted on the general authority given verbally at the time the contract was formed. [ 11 ] In the present case, Mr Cayo does not deny that Mr Washington was present with him, and that he has a contractual relationship with Mr Washington but denies any agreement that this other individual had the right unilaterally to recover the property upon satisfaction of the debt. [ 12 ] The case is further complicated by the implication of Irma Herlinda Nunez de la Torra Romero. She did not know Mr Cayo, but received a call from him several years after the events.

She testifies that Mr Cayo was blaming her for having committed a fraud by signing the events something. [ 13 ] She states that in 2012 she went with Domingo Washinton Chauca Seferino, a friend of hers that she knows under the nickname "Pocholo", to Second Or to recover the gold that had been pawned, that she understood belonged to him, as he was unable to pay the amount of the debt. Interest was running. She paid Second Or the amount of the debt with her credit card. She considers that this payment constituted a loan to Mr Chauca.

She and Mr Chauca were told to come back two days later, and the gold items were recovered for Mr Chauca's benefit. [ 14 ] Apparently, the use of a prêt-nom was necessary in all of these transactions because Chauca did not have proper identity papers. [ 15 ] The parties could not bring Mr Chauca as a witness because he is not within the jurisdiction. [ 16 ] Chauca was supposed to pay Mrs Nunez de la Torre back the amount she had paid on her credit card, but could not do so and he asked her to return with him so that the gold could be pawned again. [ 17 ] The two of them returned to Second Or together on February 16, 2012.

The gold mentioned in the two previous contracts (P-2, P-3) was again deposited, this time for a loan of $ 1,150. [ 18 ] She produced as evidence a similar "Contrat de Prêt". (D-5) It is stapled to a cover sheet that summarises the transaction bearing the title "RENOUVELLEMENT".

The contract is in the name of Mrs Nunez de la Torre, without any mention of Chauca. [ 19 ] Mrs Nunez de la Torre states that she did not use the money lent to her to reimburse what she had lent to Mr Chauca to recover the gold the first time, but, rather she gave the amount of the loan to members of the family of Mr Chauca who were in financial need. [ 20 ] Mrs Nunez de la Torre attempted on several occasions to pay the interest on the loan to prevent the gold from being taken by Second Or in payment of the debt. [ 21 ] The gold is still on deposit with Second Or who has agreed to suspend interest until the matter of Mr Cayo's claim is resolved.

Second Or is willing to return the items to Mrs Nunez de la Torre, upon payment of the total owed, with interest suspended as of the date of her first expression of willingness to pay, May 21, 2013. [ 22 ] Second Or did not want to return the items fearing that Mr Cayo would obtain an order of the Court preventing it from doing this. [ 23 ] It is proper that Second Or suspended interest, because in the absence of any claim against it for the return of the gold, the present action being a claim of a strictly monetary nature, it has no reason not to return the property to Mrs Nunez de la Torre. [ 24 ] As to the value of the gold items, Mr Cayo did not produce any evidence for his assertion that it has a value of $ 1,938.41 for the 18 karat item and $ 3,427.40 for the 22 karat item. [ 25 ] The only evidence the Court has as to the value of the property is that admitted to by Second Or on the basis of current trades by dealers of scrap gold at the date of the hearing posted on a web site of kitco.com. [ 26 ] These unit prices were lower than those proposed by Mr Cayo, and gave values of $ 2,001.78 for the 22 karat items and $ 756.09 for the 18 karat items.

Analysis [ 27 ] The outcome of the case depends on whether the contracts include the stipulation that either Mr Cayo or Mr Chauca can obtain the return of the property deposited, without the consent of the other, upon the payment of the debt. [ 28 ] The written contract form contains no stipulation to that effect. The document, as signed by Mr Cayo does not set out the name of Mr Chauca, at least not in the copy delivered to Mr Cayo.

He sues on the basis of the contract he has on hand, the one that he can rely upon as evidence. [ 29 ] The question then becomes whether Second Or has proved an oral agreement, to the effect that the rights of Mr Cayo to retrieve the property is solidary with an identical right for Mr Chauca, so that either can assert the right of ownership independently of the other. [ 30 ] This is an extraordinary type of stipulation, because, normally, two borrowers depositing property as a pledge, if acting together, would both be required to consent for the return of the property.

They are not parties that carry out an enterprise, so that solidarity is not presumed. [ 31 ] The evidence that the name of Chauca was written onto the contract, even if this was done so in the presence of the two, is not sufficient to establish solidarity.

[ 32 ] Is the testimonial evidence permitted of the conversation that took place, or of a practice or a custom between the parties because of past dealings? [ 33 ] In the Court's view such evidence is not permitted, because of the rule prohibiting evidence of juridical acts through testimony when the amount in issue is greater than $ 1,500 ( art. 2862 Civil Code of Quebec ). [ 34 ] There is an exception to that rule, when there is a commencement of proof.

In a case such as this one, a commencement of proof would be either an incomplete writing emanating from Mr Cayo, or a partial admission through testimony, or even evasive testimony on his part. [ 35 ] There is nothing in writing from Mr Cayo.

His testimony is not marred by any sign of hesitation or any attempt to evade a question or give an ambiguous answer that would make the fact asserted by Second Or seem plausible. [ 36 ] Therefore, on the whole of the evidence, there is not a commencement of proof that would permit Second Or to give testimonial evidence of a verbal contract to treat either Mr Cayo or Mr Chauca as the person entitled to the return of the pawned property, each without the consent of the other. [ 37 ] It follows then that Mr Cayo is entitled to the monetary value of the property that was not returned to him, as the person named in the contract as having deposited the property. [ 38 ] He is not entitled to the property itself, because he chose to exercise a right to a monetary claim exclusively.

FOR THESE REASONS, THE COURT: Condemns the Defendant to pay the Plaintiff the sum of $ 2,757.87, together with interest at the legal rate and the additional indemnity provided for in

section 1619 of the Civil Code of Québec , calculated from January 6, 2012, as well as costs for the judicial stamp in the amount of $ 163. __________________________________ DAVID L. CAMERON, J.C.Q. Date of hearing: September 10, 2014 and May 11, 2015