Pierce v. Empey

First, the Court of Appeal was wrong in holding that, by virtue of the documents of the 8th day of January, 1934, the relation of mortgagor and mortgagee had been brought to an end and the respondent had become the owner of the property subject to an option to purchase under the terms of the letter of that date addressed by Braden & McAlister to Mr. Dancey; and,

Second, in the alternative, that the appellant was ready and willing to exercise the option and was relieved on equitable grounds from the strictness of its terms as to notice and payment by the conduct of the respondent. At the conclusion of the argument, the Court being satisfied that neither of these grounds of appeal was established, the appeal was dismissed. The parties were then informed that reasons in writing would be handed down. As regards the first ground of appeal, the deed of the 8th of January, 1934, is absolute in terms and contains this recital:

This deed was drawn by the solicitors for the mortgagee and was sent by them to the solicitor for the mortgagor for execution by him. It was duly executed and returned. The letter of the solicitors for the mortgagee forwarding the document to the solicitor for the mortgagor for execution contained this clause:

We -do not doubt that this undertaking formed part of the arrangement by which the equity of redemption was released and the mortgage debt discharged and that it was binding upon the mortgagee as part of that arrangement. These documents by themselves, the deed and the letter, evidence in the plainest way the intention of both parties that the land was to be vested in the mortgagee in fee simple in possession free from the equity of redemption, but that the mortgagor was to have an option of repurchase according to the terms set forth as quoted above. It is important to observe also that the documents passed through the hands of the solicitors of the respective parties. Some loose expressions in subsequent letters are of no importance.

In these circumstances, the attempt on the part of the mortgagor to show that the relation of mortgagor and mortgagee still subsisted would appear to have been a hopeless one. True it is, in principle, a conveyance absolute in form may be shown even by parol evidence to have been, according to the real agreement between the parties, accepted as security only and the Statute of Frauds will not prevent the proof of this by parol evidence (Flynn v. Flynn (1); Wilson v. Ward (2)); but for this purpose convincing evidence is always required, and in the circumstances mentioned it behooved the appellant to adduce evidence of the most cogent character (Barton v. Bank of New South Wales (3)).

The learned County Judge, to whom the action was referred for trial, found that such was the arrangement and granted the relief claimed in the statement of claim. His report was affirmed by Mr. Justice McFarland.

The Court of Appeal held that the true arrangement was that disclosed by the documents and in this we agree.

In the circumstances, it is at least doubtful whether the appellant was entitled to put forward his alternative claim based on the option in the Court of Appeal. Having regard to the course of the case in the courts below, it is at least incumbent upon the appellant, assuming the alternative claim to be open to him here, to show that all the available evidence is before us and that it establishes the essential facts in a convincing way.

S.C.R.]

is well settled that a plaintiff invoking the aid of the p.:C court for the enforcement of an option for the sale of land must show that the terms of the option as to time and otherwise have been strictly observed.

The owner Duff_.J. incurs no obligation to sell unless the conditions precedent are fulfilled or, as the result of his conduct, the holder of the option is on some equitable ground relieved from the strict fulfilment of them (Cushing v. Knight (1); Hughes v. Metropolitan Rly. Co. (2); Bruner v. Moore (3)).

The appellant relies upon the existence of a lease for three year's executed by the respondent while mortgagee in possession and before the date of the release of the equity of redemption and the creation of the option. Whatever the relevancy of this lease on a question of title, once an obligation to sell on the part of the mortgagee had arisen, it could not affect the conditions of the option, because until these conditions were fulfilled no -obligation to sell could arise and the relation of vendor and purchaser did not come into existence (Cushing v. Knight (1)).

Moreover, it is highly probable, in view of the terms of the lease, that, had the conditions of the option been complied with, this objection would have been removed.

The condition as to notice was not observed, but there was evidence of waiver and that condition need not be considered.

Admittedly, the condition as to payment was not fulfilled either strictly or in substance.

There was no payment and no tender.

The respondent had good reason to believe at the time the documents of the 8th of January went into effect that the appellant would be unable to get the necessary funds. She was expressly so informed by a letter from the appellant's solicitor of the 15th of December.

Another letter from the appellant's solicitor of the 15th of March was calculated to confirm the impression that the appellant was hoping for a still further postponement of the date of payment. There is no evidence that the appellant was led by the respondent to believe that such indulgence would be granted, and, as already observed, the case put forward at the trial on the part