Mortgage Corporation of Nova Scotia v. Allen

Courts have always set their faces against an insurance company which, having received its premiums, has sought by technical defences to avoid payment, and in like manner should they set their faces against an An effort to exact payment from an insurance company when the premiums Assus. Co.

have deliberately been left unpaid.

Je ferais droit A l'appel avec les frais de toutes les cours, Mignault j. et je n'obligerais l'appelante h indemniser 1'intim6 du juge- ment que Livesque a obtenu contre elle que sur paiement int6gral du suppl6ment de prime.

C. J. C.-The plaintiff has moved for special leave to appeal from a judgment of the Supreme Court en banc of Nova Scotia (1) affirming a judgment of Paton,

J., refusing an order for foreclosure and sale in this action in the particular terms in which it was asked. The case appears to fall within one or more of the clauses of the proviso to s. 41 of the Supreme Court Act; and, although at first disposed to regard the questions raised as purely matters of procedure, which should not be made the subject of an appeal to this Court, on further consideration it appears to us that they may affect some substantive rights and that, even if mere matters of procedure, they are of such general importance in Nova Scotia that they may properly be considered and dealt with here.

In the judgment of the Full Court the terms of the order proper, in the opinion of that Court, to cover a case such as Cfj .

this are settled and embodied. The chief complaint made against this order is that it provides for the advertisement and sale only of the interest of the mortgagor and of persons claiming under and through him, instead of, as the plaintiff desires, providing for the advertisement and sale of the lands and premises in question simpliciter.

The contention put forward on behalf of the plaintiff, in this respect, is, in our opinion, entirely wrong. It never was, and never could be, the purpose of the legislation and rules governing the matter that the court should do anything so misleading as to authorize the advertisement and sale of anything more than the interest of the mortgagor at the time the mortgage was made and any interest subsequently acquired by him and the interests of all persons claiming by, through or under him, including, of course, the plaintiff itself.

While we entirely agree with the view expressed by Chisholm, J., who dissented, that " either course " (i.e.. that directed by the Court en bane, or that urged by Mr. Whitman)

We are also fully in accord with the observation of the learned Chief Justice that

Ritchie, E. J., puts the matter very clearly in Diocesan Synod of Nova Scotia v. O'Brien (1).

Of course, as Chisholm, J., points out, the property is always sold and conveyed subject to paramount liens (if any) created by law (e.g., for taxes), whether they arose before or after the making of the mortgage, and the phrase, " the interest of the mortgagor at the time of the making of the mortgage " must be so understood. Moreover, we agree with the learned Chief Justice that " the court has full power and control * * * over the advertising (and) the form of the deed which its officer, the sheriff, is to execute

On the main ground of the plaintiff's appeal, therefore, Av.E,. we are of the opinion that the judgment below was clearly Ang right and that special leave to appeal from it should not be C.J.C. granted.

There are, however, one or two subsidiary matters, not so much pressed at bar, but in regard to which slight improvements may, we think, be made in the wording of the order as settled by the Full Court.

The first paragraph of the order so settled reads as follows:

It is ordered that the estate, interest and equity of redemption of the Mortgagor in the said lands and premises described in the said Mortgage be forever barred and foreclosed

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In this sentence we think the word "mortgagor"

an undesirable substitute for the word " defendant ", which is the word used in the English form as given in Seton's Judgments and Orders (7th Ed.), at p. 1825. An advantage of using the word " defendant " is that it makes more readily and obviously applicable the provisions of Rule S (d) of Order XVI of the Rules of the Supreme Court of Nova Scotia, which reads:

8 (d). It shall not be necessary to make beneficiaries or subsequent incumbrancers defendants, but the court or a judge may direct notice to be given to the beneficiaries or subsequent incumbrancers by mailing a notice of the order with a copy of the advertisement of the sale, and after such notice any such beneficiary or subsequent incumbrancer shall be bound by the proceedings in the same manner as if he had originally been made a party, and any person so notified may within one month thereafter apply to the court or a judge to discharge, vary or add to the said order, or for such other relief in the action as he is entitled to, and the court or a judge in addition to directing such notice to be given, may direct such proceedings as are necessary to protect the rights of the parties,* and of the statute c. 140, R.S.N.S., 1923, s. 24 (1), which is in the following terms:

(24 (1) Where by reason of any of the rules of the Supreme Court, providing that it shall not be necessary in certain cases to make incumbrancers, beneficiaries, widows, devisees, or heirs, parties to actions for foreclosure and sale of mortgaged lands, such persons are not made parties, and such lands are sold in any such action, and a deed thereof *See R.S.N.S., 4th Series, (1873), c. 95, s. 20.

-21 S.C.R.]

Prior unregistered instruments are ineffective as against a registered purchaser for valuable consideration without notice at a sale under a subsequent registered mortgage. R.S.N.S., 1923, c. 144, s. 18.

C.C.

The effect of the rule and statute quoted, when applied to an order such as that before us (the word " defendant " being substituted for the word " mortgagor "), when served as prescribed by Rule 8 (d), clearly is to debar and foreclose the interests of all persons claiming by, through or under the mortgagor as well as of the mortgagor himself, who is the actual defendant.

The order settled by the court proceeds:

Objection is taken here to the term " mortgaged premises," for which the plaintiff would substitute " the said lands and premises," i.e. " the lands and premises sought to be foreclosed herein."

Rule 12 (e) of Order XIII of the Rules of the Supreme Court of Nova Scotia, dealing with foreclosure and sale proceedings, reads as follows:

" The property " here, beyond doubt, means the interest which the mortgagor had in the lands immediately prior to the making of the mortgage sued upon, which alone could have been the subject of the mortgage-and, possibly, also any further or other interest therein subsequently acquired by him.

In his judgment the learned Chief Justice said:-" The practice to-day is what it was immediately preceding the first of October, 1884;" and he added that " so far as sales are concerned it was continued by s. 6 of the statute to which reference has been made " (c. 117, R.S.N.S. First

Series, 1851; R.S.N.S. (1884) Fifth Series, c. 123, s. 6).

On reference to Rules Nos. 11 and 12 of the Supreme

Court of Nova Scotia brought into force on the 1st of

October, 1884,* as set out in the R.S.N.S., 5th Series, 1884, at p. 833, we find that they read as follows:

These rules seem not quite to provide that the practice in mortgage actions which was prevalent immediately prior to the 1st of October, 1884, shall continue in its entirety, but rather that the plaintiff shall be entitled to a judgment

" on such evidence and in such cases as provided for by the practice immediately preceding " that date.

But, however that may be, it seems clear that, at all material times in the past, the property directed by the statute to be advertised and sold in Nova Scotia was not " the lands and premises" but " the lands mortgaged" (Vide:

R.S.N.S., 5th Series (1884), c. 123, s. 4), i.e. the interest in the lands which had been mortgaged.

By the Rule of Court presently in force, however, above set forth, viz. Rule 12 (e) of Order XIII, the word " property " appears to be substituted for the word " lands " in earlier use. In order, therefore, to conform more precisely to the terms of the present rule and at the same time clearly to restrict the subject matter of the advertisement and sale to the interests of the mortagee and of the mortgagor and those claiming by, through or under the latter, we would

S.C.R.]

suggest the substitution in the paragraph of the order as settled by the Full Court of the words " the said mortgaged property " for the words " the said mortgaged premises." Again, however, we are satisfied that this purely verbal ALEN.

change would have been sanctioned by the Full Court had it been suggested on the settlement of the minutes of the ca.c.

judgment of that Court.

Finally, the form of order as settled by the Full Court directs that the sheriff shall execute to the purchaser or purchasers thereof (i.e. of the mortgaged property) at such sale a deed or deeds conveying and which shall convey to him or them all the estate, right, title, interest, claim, property and demand of the mortgagor at the time of the making of the said mortgage foreclosed in this action, or at any time since, and of all persons claiming or entitled by from or under the mortgagor of, in and to the lands respectively purchased at such sale.

In lieu of this provision the draft order prepared by the plaintiff, which it insists should be substituted for that settled by the Full Court, reads:

And that upon payment of the purchase money the said sheriff do make a good and sufficient deed to the purchaser thereof.

i.e., presumably, of " the lands and premises sought to be foreclosed."

Order LI of the Rules of the Supreme Court of Nova Scotia, Rule 10A (1), reads as follows:

10A In an action for foreclosure and sale, if the order directs a sale in default of payment, the premises shall be sold upon such default in accordance with the advertisement of sale by the sheriff of the county in which the lands lie, or by such other person as is authorized by the court to make such sale, and such sheriff or person so authorized may execute the deed of the premises to be given to such purchaser.

The Law and Transfer of Real Property Act, c. 140 of the R.S.N.S., 1923, contains the following pertinent provisions: Section Where an order is made, whether in court or in chambers, directing any land to be sold, the same shall be sold, unless the court or a judge otherwise orders, by the sheriff of the county in which the land or part of the land lies.

Section 16: In every such case the deed shall be executed by the person authorized to make such sale, and such deed, when delivered to the purchaser, shall convey the land ordered to be sold.

Section 20: Every deed of land made by any person authorized by the court or a judge to sell the same shall be presumptive evidence of, (a) the regularity of the sale,

(b) the validity of the order under which the sale was made, and (c) the regularity of the proceedings on which such order was founded. Section 24 (1): Where by reason of any of the rules of the Supreme Court, providing that it shall not be necessary in certain cases to make incumbrancers, beneficiaries, widows, devisees, or heirs, parties to actions for foreclosure and sale of mortgaged lands, such persons are not made The effect of these several provisions is, no doubt, to make the sheriff's deed " convey(ing) the land ordered to be sold " (s. 16) operate to convey " all the estate etc." Al mentioned in the form of order as settled by the Full Court, CJ.C. and it was apparently unnecessary to do more in that order than to direct that the sheriff should execute to the purchaser or purchasers a deed or deeds conveying " the property " or " the premises " directed to be sold. Expressio eorum quae tacite insunt nihil operatur. But no possible harm or prejudice can accrue to anybody from setting forth, as is done in the settled order, that which the statutes say shall be the effect of the deed or deeds executed by the sheriff. Abundans cautela non nocet. Moreover, while the words explanatory of the estate etc. to be conveyed may be regarded as clausula inutilis in their immediate collocation, they may affect the construction of earlier clauses which order foreclosure, advertisement and sale and, occurring where they do, they seem apt to declare and confirm the title acquired by the purchaser and also to remove any doubt that might affect the mind of anybody not learned in the law. 4 Co. Rep., 73b; Littleton's Tenures, s. 331. In order to comply more precisely, however, with the terms of the rules of court and the statutes governing, we think it better that a slight modification should be made in the form of order as settled by the Full Court by inserting after the words " shall convey to him or them " the words " the mortgaged property, and which shall be effective to convey " (Vide: R.S.N.S. (1923), c. 140, s. 24 (1), and R.S.N.S., 5th Series (1884), c. 123, s. 6.)

This, again, is a change, which, we have no doubt, would have been made by the Full Court had it been specifically requested on the settlement of the minutes of judgment. On the whole, while not strictly necessary, we think it better, having regard to the doubts which have been suggested as to the prevalent practice in Nova Scotia and as to the effect of a judgment for sale in a foreclosure action, that the order should set forth, as it does in the form settled by the Full Court, subject to the modification suggested,