.
APPELLANTS;. '- (PLAINTIFFS) ....................
*June 5. *June 26. AND
RACHEL
TRANOUTH
AND
TVIL- RESPONDENTS. LIAM TRANOUTH (DEFENDANTS)
ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO. Limitation of actions - Unregistered deed - Subsequent registered R. T. in being about to marry W. T. and wishing to convey to him an interest in her land, executed a deed of the same to a solicitor who then conveyed it to her and W. T. in The solicitor registered the deed to himself but not the other, forging on the same a certificate of registry, and he, in mortgaged the land and the mortgage was duly registered. R. T. and W. T. were in possession of the land all the time from and only discovered the fraud practised against them In the mortgagee brought action to enforce his mortgage.
Held, affirming the judgment of the Court of Appeal Ont. L.R. Davies and Nesbitt JJ. dissenting, that the legal title being in the solicitor from the time of the execution of the to him the Statute Limitations began to run against him then and the right of action against the parties in possession was barred in
APPEAL from a decision of the Court of Appeal for Ontario(1) reversing the judgment at the trial in favour of the plaintiffs.
On the 19th of June, 1891, the defendant Rachel Tranouth, then Rachel Maxfield, was the owner in fee simple and in possession of 100 acres of land in the Township of Cavan, and on that day, being about to *PRESENT:-Sir Elz4ar Taschereau C.J. and Sedgewick, Davies, Nesbitt and Idington JJ.
(1) Ont. L.R.
marry her co-defendant, desired to convey to him an undivided one-half share thereof, so that they might become tenants in common in fee.
She therefore requested one George Sootheran, a conveyancer, to prepare the necessary instruments for that purpose, which he undertook to do.
The instruments which he prepared, and which were duly executed in duplicate, were a conveyance from the lady to himself, Sootheran, and a re-conveyance to the two defendants as tenants in common in fee.
The deeds were left with Sootheran for registration and safe keeping, and on the 29th of September afterwards, he duly registered the conveyance to himself, but fraudulently omitted to register the re-conveyance, and indorsed upon one of the parts a certificate of registration, to which he forged the signature of the registrar.
Afterwards, on one or more occasions, Sootheran, without the knowledge of the defendants, fraudulently borrowed money for his own use, by mortgage of the land thus appearing to stand in his name in the registry office; and on the 30th day of August, 1895, he applied to Mr. Seth S. Smith, a solicitor, for another loan wherewith to pay off the mortgage or mortgages which he had previously made. Mr. Smith, acting for the plaintiffs, agreed to advance the money, $2,000, out of the funds of the plaintiffs in his hands upon receiving a certificate of the sufficiency of the security. For this purpose Sootheran forged a certificate purporting to be signed by the assessor of the township, expressing that the land was worth $4,000, and that the defendants were in possession thereof under a lease for seven years, of which only three years had expired. Upon the faith of this certificate the loan was completed upon a mortgage of the defendants' lands, dated the 30th day of August, 1895, executed McvrrY by Sootheran to the plaintiffs, and which was duly registered on the following day.
Some time in the year 1902 the defendants learned accidentally of the registration against their land of the mortgage or mortgages thus made by Sootheran, and began to make inquiries, upon hearing of which Sootheran absconded.
The present action was commenced on the 12th of May, 1903, against the defendants, who had been in continuous possession and occupation of the land from and after the 19th of June, 1891, and is for possession and sale of the land, in default of payment of the mortgage made to them by Sootheran under the circumstances above related.
Two defences were set up to the action, first, notice of the fraud which had been committed by Sootheran, or such absence of inquiry as was equivalent to notice, and secondly, the Real Property Limitation Act.
The learned Chancellor held against the defendants on both grounds of defence, and granted a judgment for redemption and sale and for immediate possession which the Court of Appeal reversed.
H. J. Scott K.O. for the appellants cited Murray v. East India Co.(1).
Watson, K.C. and Ruddy for the respondents referred to Ross v. Hunter (2) ; Stephens v. Simpson (3). THE CHIEF JUSTICE.-This case has given me much trouble. The fact that the Court. of Appeal reversed the judgment of the Chancellor and that my brothers Sedgewick and Idington are unhesitatingly of opinion that the Court of Appeal was clearly right, whilst my brothers Davies and Nesbitt, with no less hesitation, say that it was clearly wrong, is, by itself, cogent evidence that the point in controversy, though reduced to a narrow compass, is not of an easy solution.
After great hesitation I have come to the conclusion, with my brothers Sedgewick and Idington, that the appeal should be dismissed.
In doing so, I am forced to confess that my best reason for it is that to doubt is to confirm.
concurred with Idington J.
(dissenting).-I am of opinion that the true construction of the Registry Act of Ontario, 87th section of chapter 136, Revised Statutes, is simply to give a registered conveyance affecting lands priority over an unregistered conveyance of the same lands, although the latter was first executed.
The section does not avoid previous unregistered instruments absolutely, but only as against subsequent purchasers or incumbrancees for value without actual notice, whose conveyances are registered. For all other intents and purposes the unregistered conveyance is good. In this case the parties, plaintiffs and defendants, were the innocent victims of the wilful fraud of one Sootheran.
The plaintiffs claimed the land in question as the registered mortgagees of the same under a conveyance from Sootheran.
Sootheran -had previously conveyed to the defendants. The deed was not registered, the defendants .being deceived into the belief that it was by a certificate of registry forged upon it by Sootheran.