York v. Krause

was of opinion, in view of all that took place, that they should be taken to include the $200 deposit and the $2,500 K .

paid at the time of the execution of the agreement, making - $2,700 in all, but nothing more.

THE LONDON LOAN AND SAVINGS

*March4.

COMPANY OF CANADA

(DEFEND- APPELLANT; *April

(EED

*A p ri 10

N T ) . . . . . . . . . . . . . . . . . . . . . . . . . . . ... .

AND

ROBERT K. MEAGHER, LIQUIDATOR

THE ESTATE AND EFFECTS TRANS- RESPONDENT. CANADA

THEATRES

LIMITED

(PLAIN- TIFF)

...............................

ON APPEAL FROM THE APPELLATE DIVISION THE SUPREME OF ONTARIO

Mortgage-Agreed bonus to mortgagee-Right to bonus-Interest Act, R.S.C., 1927, c. es. 6 to 9.

Appellant agreed to loan to T. Co., on mortgage of real estate, $30,000, at 71% interest, but stipulated that, in consideration of making the loan, it should receive a bonus of $3,000, to which T. Co. agreed. The mortgage on its face was one for bearing interest half-yearly at 71% per annum, and containing no reference to the bonus. Appellant issued its cheque to T. Co. for $28,505.55, being the $30,000 less deductions for taxes, insurance premiums and solicitors' costs, and took a cheque from T. Co. for the $3,000 bonus.

Some payments were made, but T. Co. became insolvent, and, the mortgage being in arrear, appellant advertised the property for sale, and the liquidator paid off the amount owing, on the basis of the full face amount of the mortgage, without knowledge of the bonus. He sued to recover the $3,000, with interest paid thereon, invoking ss. 6 to 9 of the Interest Act, RS.C., 1927, c. 102.

Held, that he could not recover. The agreement for the bonus was legal and enforceable.

The $3,000 bonus could have been recovered by appellant as a debt, not under the mortgage, but under the agreement for the loan, and the full $30,000 was advanced, whether the bonus be taken as paid by the mortgagor's cheque or by retention *PRESENT:-Anglin CJ.C. and Duff, Lamont, Smith and Cannon JJ.