2013 QCCQ 4282, 2013 QCCQ 4282

Stollmeyer c. Maji Water Inc. 2013 QCCQ 4282 COURT OF QUEBEC CANADA PROVINCE OF QUEBEC DISTRICT OF MONTRÉAL TOWN OF MONTRÉAL Civil Division No: 500-22-197118-121 DATE: May 2, 2013 ______________________________________________________________________ BY THE HONOURABLE SUZANNE HANDMAN, J.C.Q. ______________________________________________________________________ SCOTT STOLLMEYER Plaintiff v.

MAJI WATER INC. -and- GUY MWAKU FUTI Defendants ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] Scott Stollmeyer is claiming $18,000 plus interest from Maji Water inc. and Guy Mwaku Futi, pursuant to a promissory note, plus a $7 fee charged for a returned cheque. Defendants invoke their lack of consent and the absence of a lien de droit . [ 2 ] Maji Water inc. failed to file an appearance in Court. The action against the company therefore proceeded by default to appear.

THE QUESTIONS IN LITIGATION: [ 3 ] The issues to be determined are whether the promissory note signed by the parties is valid or whether, as Defendants allege, Defendants’ consent was vitiated and there is no lien de droit. THE EVIDENCE: [ 4 ] In 2003 or 2004, Mr. Stollmeyer met Mr. Futi, who was part of an extended circle of friends. Mr. Futi owned a company, Maji Water inc. (“Maji”), which specialized in the sale and distribution of bottled water. [ 5 ] Maji had a new business opportunity but was short of cash. Mr. Stollmeyer loaned Maji $3,000 for an inventory purchase, to be repaid in instalments. [ 6 ] Mr.

Stollmeyer became interested in being involved in business with Mr. Futi. On April 16, 2012, he provided $15,000 to Maji for investment purposes. He signed a shareholders agreement but never received any shares. [ 7 ] Mr. Stollmeyer then learned that Maji’s earning estimations, bank balances and inventory levels were very different from the figures Mr. Futi had given him. On April 23, 2012, Mr. Stollmeyer received an e-mail from a friend alleging Mr. Futi’s questionable business dealings and warning Mr. Stollmeyer not to trust Mr. Futi. [ 8 ] As well, Mr. Stollmeyer learned that Mr.

Futi had a shareholders dispute with his former partners in another company, Maji Water North America inc., whose assets were frozen.

[ 9 ] Mr. Stollmeyer wanted proof of Maji’s assets in order to assure his investment was secure and insisted the shareholders dispute in Maji Water North America inc. be resolved. He then found out that no settlement was reached. [ 10 ] At the end of May 2012, given that the terms required to continue a business relationship had not been met and following constant delays with respect the information requested, Mr. Stollmeyer demanded that his funds be returned. [ 11 ] Mr. Futi testified that he was trying to generate revenues for Maji and claimed he had discussed Maji’s various needs with Mr.

Stollmeyer, including attendance at trade shows, developing new material and web sites. [ 12 ] He did however agree to return Mr. Stollmeyer’s money but in June 2012, he said he needed more time to obtain the funds from his bank. He then stopped returning Mr. Stollmeyer’s phone calls and e-mails. [ 13 ] In August 2012, Mr. Futi advised Mr. Stollmeyer he had a million dollar contract and would be able to repay his debt. He hoped to receive the expected funds from Maji’s new client in a timely manner. Mr. Futi also indicated he was willing to sign a promissory note. He pointed to Mr.

Stollmeyer’s continual e-mails, demanding to be repaid in full, but there was no money in the company’s account. [ 14 ] On August 10, 2012, the two met at a coffee shop. Mr. Stollmeyer presented Mr. Futi with a promissory note to be signed by Maji as well by him personally. The note provided that $18,000 be remitted in two instalments, one of $12,000 plus interest payable on August 31, 2012 and the other of $6,000 plus interest payable on December 7, 2012. In the advent of default, Mr. Stollmeyer could recall the entire loan. [ 15 ] Mr. Stollmeyer estimated the meeting lasted an hour and he was assured by Mr.

Futi he understood the terms of the promissory note. Mr. Futi now contends he did not sign the promissory note freely. He signed it since he had no option but to do so; Mr Stollmeyer threatened to go public with his version of the events. For Mr. Futi, his reputation and all his (business) efforts would be jeopardized. [ 16 ] Mr. Futi testified that he was willing to sign the promissory note but with different conditions, namely making monthly payments. Mr.

Stollmeyer, on the other hand, claimed the question of instalment payments was never raised. [ 17 ] After signing the promissory note, which provided that the accrued interest was payable by August 31, 2012, Defendants defaulted on the first interest payment. [ 18 ] Mr. Futi wrote, saying he had sent a wire transfer, but Mr. Stollmeyer never received the funds and Mr. Futi’s bank was unaware of such a request. Mr. Futi subseqently sent a cheque for $610.18 to Mr. Stollmeyer which could not be cashed because of insufficient funds. There was then no further contact between the parties.

ANALYSIS: [ 19 ] Defendants contend they did not consent to the terms of the promissory note and signed it against their will and under moral duress. They maintain Mr. Stollmeyer harassed them to sign the note, threatening to ruin their reputation, if they did not do so. Fearing such a threat would be carried out, they signed the note. [ 20 ] Does Mr. Stollmeyer’s statement, namely to go public with his version of the facts, constitute a threat that vitiated Mr. Futi’s consent?

Given the evidence, the Court does not consider it to be a threat within the meaning of the Civil Code . [ 21 ] The person who claims to be the victim of threats must not only allege this fact but must also prove the elements [1] that render applicable

article 1402 of the Civil code of Quebec . [ 22 ] The Civil code foresees that a contract is formed by the exchange of consent between two people, capable of contracting.

Article 1402 C.C.Q. stipulates that fear of serious injury to a person or property vitiates the consent given by that party “where the fear is induced by violence or threats exerted or made by … the other party” . [ 23 ] Jean-Louis Baudouin and Pierre-Gabriel Jobin [2] in their text, Les Obligations, explain that fear differs from the situation of error, in that fear affects the willingness to contract. The contracting party has not erred with respect to the contract.

While he is aware of its extent and consequences, he did not sign it of his free will; rather he was forced to do so in order to avoid a situation that was worse, because of physical or moral threats that were made. [ 24 ] However, to constitute a threat that provokes fear and which will vitiate the contracting party’s consent, the threat must be illegal or illegitimate [3] . Jean-Louis Baudouin in Les Obligations [4] states: Il n’est pas contraire à l’ordre public contractuel d’utiliser, en vue de forcer une

partie à contracter, une contrainte juridique ou d’user d’une certaine violence morale dans l’exercice de ses droits. C’est ce principe que le code civil illustre indirectement à l’

article 1403 C.c.Q. La contrainte légale est la crainte causée, dans l’esprit du cocontractant, par la menace de l’exercice légitime d’un droit (menace de saisie si le débiteur ne paie pas, par exemple). Il est normal que le détenteur d’un droit puis se utiliser ce moyen de pression pour faire valoir celui-ci ou obtenir un règlement favorable… [ 25 ] The fear that can affect the validity of a transaction must be fear of serious prejudice since contracts are not to be annulled

because of mere pressure. Therefore, the prejudice with which the contracting party is threatened must have certain gravity [5] . [ 26 ] In the present case, the parties attempted to resolve their differences over a period of many months. Defendants had agreed to repay Mr. Stollmeyer the $18,000 he had provided to Maji. [ 27 ] While it is true that Mr. Stollmeyer sent numerous e-mails to Mr. Futi pointing out that he still had not received his funds and demanding full repayment, his correspondence indicates his frustration and his threats are those of a legal nature.

The following are examples of such e-mails: [ 28 ] On May 24 th 2012, Mr. Stollmeyer wrote: Effective immediately, I require full reimbursement of the funds transferred from myself to Maji Inc…You will have until Friday June 8 th to provide me with these funds. Simple, no interest, no capital gains, just make it whole and we part ways. Now, in the event that you chose to miss this deadline, the funds will be converted to a floating rate at Canadian Business Prime plus 4… [ 29 ] On June 21, Mr. Stollmeyer sent another e-mail which reads as follows: Tomorrow I will do two things.

One I will get my lawyers involved to demand payment. Two, I will accrue interest back to the day that the 15K was handed over to you… [ 30 ] In a further e-mail the same day, Mr. Stollmeyer writes: Call your bank and set an appointment for tomorrow. You have until 5 pm tomorrow to avoid legal getting involved (sic). [ 31 ] The e-mails sent by Mr. Stollmeyer do not contain threats of a physical or moral violence. Moreover, Mr. Futi indicates his intention of repaying the money, in his August 3 rd e-mail: “…the fact that I lack an immediate resolution will most likely anger you further.

All I can confirm is that I am working on returning the investment you put into MAJI WATER INC. and that a lead that I’m following is taking longer than possible. All I can say is that I’m working on it and I’m willing to sign a promissory note of some sort or anything along those lines or perhaps start scheduling good faith payments.” (all the above underlined phrases are ours) [ 32 ] Following this e-mail, Mr.

Futi signed the promissory note in question, in which, as owner of Maji, he acknowledges two separate debts owed by Maji to Scott Stollmeyer and he agrees to be a personal guarantor of the funds. [ 33 ] There is no subsequent correspondence indicating that Mr. Futi signed, on behalf of Maji and on his own behalf, under moral duress, under threats of defamation or that he had not consented to the terms of the promissory note. On the contrary, Mr. Futi shows his intention to remit the funds. [ 34 ] At the end of August 2012, Mr. Futi advises Mr. Stollmeyer a payment was wired into Mr.

Stollmeyer’s bank account and he intends to honour his commitment: “I do plan to keep honouring our engagement and look forward to a cordial and amicable resolve.’’ [ 35 ] When the wire is not received, Mr. Futi apologizes for the delay and on September 7, 2012 he writes: “In the future I can provided (sic) post dated cheques.” [ 36 ] He sent a cheque for interest dated September 12, 2012, the object being “debt payment 1” . However, the cheque was returned NSF. Other than a subsequent cheque for $71, Mr.

Stollmeyer never received payment of the amounts owed. [ 37 ] In sum, not only did Defendants fail to denounce the existence of undue pressure or illicit threats on the part of Mr. Stollmeyer but they also attempted to make payments, which confirm the validity of the agreement reached. [ 38 ] Defendants, having alleged that their consent was vitiated, have the burden of proof. In light of the evidence, they have not satisfied the Court that this allegation is well founded. [ 39 ] As for the defence alleging the absence of a lien de droit , no evidence was presented in this regard.

FOR THESE REASONS, THE COURT: GRANTS the Motion to institute proceedings;

CONDEMNS Maji Water inc. and Guy Mwaku Futi solidarily to pay Scott Stollmeyer $3,000 plus interest at the rate of 8% from March 13, 2012; CONDEMNS Maji Water inc. and Guy Mwaku Futi solidarily to pay Scott Stollmeyer $15,000 plus interest at the rate of 8% from April 16, 2012; CONDEMNS Maji Water inc. and Guy Mwaku Futi solidarily to pay Scott Stollmeyer $7.00 representing the returned item notice fees, with interest at the legal rate from September 19, 2012; THE WHOLE , with costs. __________________________________ SUZANNE HANDMAN, J.C.Q.

Me Nick Bouzouita Pinsky Zelman Segal Santillo Attorney for Plaintiff Guy Mwaku Futi personally and for Maji Water inc. Personal appearance Date of hearing: April 13, 2013