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tion, suggested to Riches that he had better pay his land taxes anyway. Blair produced a book of receipt forms duly printed as of the City of Moose Jaw.

Riches had personal knowledge of Blair as having been for six years the chief clerk in the Assessor's department. He handed Blair $674.31; Blair gave an interim receipt, and later in the day came back with the original demands receipted and stamped with the City's veritable “ paid ” seal. Six weeks later Riches obtained, not from Blair, but from the City Treasurer, a certificate that his land taxes were completely paid. Some official must have made book entries to allow of that certificate.

So far Citizen Riches might surely consider himself safe. But, no. In a few weeks more Blair had vanished, and the $674.31 had vanished too. Had Blair stolen this money without turning it in to the City Treasury ? Had he stolen it after turning it over to the Treasurer? Had some other person stolen it? Had it never been stolen, but simply lost track of? These questions have never been answered. Anyhow, the City Treasurer's books later showed no receipt of the $674.31, and the City demanded payment from Riches, and, on his indignant refusal to pay, put up the property for Tax sale.

The trial judge found that the City had estopped itself. It had given some of its servants the opportunity to defraud Mr. RichesBlair to possess himself of a receipt book; Blair to procure and use the official ‘ Paid’seal; and somebody to make entries so that later a clear tax certificate should be issued.

Unanimously the Appeal Court found itself in disagreement with the trial judge. On what, it asked, had Riches acted in making the payment? Only on his knowledge of Blair as an employee in the Assessor's department. A closely reasoned judgment came from the pen of Mr. Justice McKay. In such a case, it said, the tax certificate means nothing: the sealed receipts handed in by Blair afterwards were no inducement to the actual payment: The only thing we can consider is Blair's status. Blair had no business with collecting the taxes, only with assessing them. Riches should have known that. Payment to Blair was not payment to the City; and if there was any negligence by the City the cash was not extracted from Riches by that negligence. Riches had unconsciously taken his risk, and then was soothed by the City's subsequent negligence, if negligence there


That seems to leave incompletely discussed the effect that the flourishing in Riches' face of an official City receipt book had on the Tax-payer. Would not the ordinary good citizen have taken that as authority for a collection? Also what, after the payment and before the disappearance of Blair, might not the Tax-payer have done to recover his money or part of it, had not the official sealed receipts and the clear official Tax certificate come to him with such an appearance of regularity?

35C.B.R.- VOL. III.

Anyway, poor Riches, having paid $674.31, must by now have paid at least another $1,674.31 as part of an intricate civic education.

G. C. T.

MORTGAGEE AND TRUSTEE IN BANKRUPTCY ASSIGNMENT NOT REGISTERED NOTICE.—The somewhat perplexed question what searches must be made by a vendee or a mortgagee in order to protect himself from the possible effect of the provisions of The Bankruptcy Act, is to some extent answered by the Honourable Mr. Justice Fisher in Re Gadsby."

More than a year after she had made an authorized assignment, an undischarged debtor mortgaged certain property which she had not disclosed to her trustee. The property covered by the mortgage included property which the debtor had owned at the date of her bankruptcy, as well as certain after acquired property. The usual search was made by the mortgagees' solicitor in the abstract index at the Registry Office; and a search was made in the Bankruptcy index for three months prior to the date of the mortgage. As no entry of the author'sed assignment or of the name of the debtor was found, the mortgage was registered and the money advanced in good faith. Had the mortgagee's solicitor searched the Bankruptcy index for a year prior to the date of the mortgage he would have found the name of the debtor.

The debtor was unable to pay the principal when it fell due, and gave a Quit Claim Deed to the mortgagees. After the registration of the Quit Claim Deed the mortgagees' solicitor learned of the assignment. He informed the trustee, who moved to set aside the mortgage and Quit Claim Deed.

Section 11(1) of The Bankruptcy Act provides that receiving orders and authorized assignments shall not be within the operation of provincial enactments relating to the registration of documents affecting title to or liens or charges upon property, real or personal, immovable or movable; but that notice of the receiving order or assignment and of the first meeting of creditors shall be gazetted (in the Canada Gazette) by the custodian and published in a local newspaper. By section 11(5) it is enacted that the registrars and clerks of certain offices including Land Titles and Land Registration Offices, shall keep on file for public reference a copy of each issue of the Canada Gazette; and shall also keep an index book wherein they shall enter alphabetically the name of each bankrupt and authorized assignor in respect of whose estate a notice may at any time appear in the Canada Gazette.

129 0. W. N. 13.

Subsections 8, 10 and 11 of section 11 make provision for the registration of the receiving order or assignment with an accompanying affidavit giving the local description of the land affected by the bankruptcy. By subsection 17 of section 11 it is enacted that the local law as to registration and the effect of non-registration of documents affecting title to or liens upon real or immovable property shall, notwithstanding anything in the Act, apply in favour of purchasers for value without notice, to any lot of real or immovable property which has not, within three months after the making of the receiving order or authorized assignment, been identified in the manner referred to immediately above in this paragraph. Subsection 17 further provides that when the local law shall so apply, the trustee's title to or interest in such lot (vested in the trustee by the Statute—sections 6 and 9) shall be divested to the extent necessary to permit the operation of the local law.

Section 71(1) of the Ontario Registry Act (R. S. 0. 1914, c. 124) provides that every instrument affecting land shall be adjudged fraudulent and void against any subsequent purchaser or mortgagee for valuable consideration without actual notice unless such instrument is registered before the registration of the instrument under which the subsequent purchaser or mortgagee claims. Section 72 of the same Act provides that priority of registration shall prevail unless before the prior registration there has been actual notice of the prior instrument by the person claiming under the prior registration; and Section 75 provides that the registration of an instrument shall constitute notice of the instrument to all persons claiming any interest in the land subsequent to such registration.

It appeared at the hearing that notice of the authorized assignment had been duly published in the Canada Gazette, and that the Registrar as required by Section 11(4) of The Bankruptcy Act, had entered the name of the assignor in the Bankruptcy Index, but that there had been no registration as provided by section 11 (8),(11).

The decision of the learned Judge is to the effect that

(1) The indexing of the name of the debtor in the Bankruptcy index (which is a Dominion and not a Provincial book) is not a


registration within the meaning of section 75 of the Ontario Registry Act;

“(2) Such entry does not amount to more than constructive notice. The Registry Act requires 'actual notice;'

“(3) If the trustee is, as against bona fide purchasers for value without notice, to retain his title in the lands of the debtor beyond three months after the making of a receiving order or assignment, the receiving order or assignment must be registered as provided by section 11(8),(11) of The Bankruptcy Act."

This case must be distinguished from that arising when the sale or mortgage takes place within three months of the bankruptcy. In such case, semble, the trustee's title is absolute, and the provincial law does not apply. In order to protect himself the purchaser should search at the offices of the Official Receiver and of the Registrar in Bankruptcy; for obviously a search in the Bankruptcy index, which is entered up by the Registrar when he receives the Canada Gazette, is not sufficient.

L. D.


- The Editorial Board of the Canadian Bar Association does not hold

itself responsible for the opinions of Correspondents. Contributions to this department of the REVIEW will be published only over the genuine names of the writers.



In the notes published in the June number of the CANADIAN BAR REVIEW a reference is made to the liability for damages from nervous shock and to the recent case of Penman v. Winnipeg Electric Railway Co.,' and to the fact that Mathers, C.J.K.B. in that case followed the rule laid down in Victorian Railway Commissioners v. Coultason the ground that it was binding on the Canadian Courts.

I would draw your attention to the fact that in the June number of the Law Journal Reports, which was no doubt published about the same time as the June number of the CANADIAN BAR REVIEW, there is reported the case of Hambrook v. Stokes Bros., decided in the Court of Appeal in England, in which the Victorian Railway case was not followed, and the very opposite view of the law on the question of damages from nervous shock was adopted by that Court.

While your commentator states that the Courts in England and Ireland have refused to follow the Victorian Railway case it seems to me well to draw attention to the fact that in the case of Broren v. John

' (1995) 1 D.L.R 197.
? (1887) 13 A.C. 222 ; 57 L.J.P.C. 69.
94 L.J.K.B. 435.



Watson Ltd., in the House of Lords (which was not specifically mentioned by your commentator nor referred to in the Penman case), Lord Shaw used this language (at p. 314): ." But in England, in Scotland, and in Ireland alike, the authority of Victorian Railway Commissioners V. Coultas has been questioned and, to speak quite frankly, has been denied. I am humbly of the opinion that the case can no longer be treated as a decision of guiding authority." His Lordship then goes on to review with approval, cases in which it had been held that damages could be assessed for nervous shock without physical impact.

We therefore find ourselves in this anomalous position, that while the Courts of Canada have accepted as binding upon them the law as laid down by an English tribunal (the Privy Council) in the Victorian Railway case, as is evidenced in Manitoba by the Pen man case, supra, and in British Columbia by Taylor v. B.C. Electric Co., yet the English Courts themselves, from the Courts of first instance to the House of Lords, expressly refuse to follow the Victorian Railway case, and in fact expressly state that it can no longer be treated as a decision of guiding authority. It would thus appear that, in this instance, instead of coordinating the decisions of the Courts throughout the Empire, the Privy Council has accomplished the very reverse.

Yours truly,



LAW REPORTER OF SUPREME COURT.-Among the advertisements printed in this number will be found one by the Board of Civil Service Commissioners for Canada requesting applications to be sent in to the Board for the position of Law Reporter of the Supreme Court of Canada, an office from which Mr. C. H. Masters, K.C., recently retired. Mr. Masters filled the office with distinction for a long period—we think some thirty-eight years. During his incumbency he published a manual of the practice of the Court, which has assed into four editions. In 1896 he assisted in founding the Canadian Annual Digest. He has been a valued contributor to the contents of the CANADIAN Bar Review.

How LORD BUCKMASTER REGARDS THE FLAG.--" To me the British Empire does not merely mean a record of the heroism of our soldiers, or even the undefeated dominion of our fleet; these are on record on the imperishable pages of history. But the flag, to me, represents something more than that. My feeling is that wherever the flag shall fly, in the far corners of the farthest land, beyond the sunset, it is a symbol of justice and equal rights for all men, of all classes, and all creeds, without regard to wealth or birth.” In these terms, Lord Buckmaster at Montreal, on the 21st ultimo, summed up his impression of the function of the flag as typical of the enthusiasm for justice that should animate the British mind. Lord Buckmastcr was addressing the local Bench and Bar, concluding his visit to Canada.

• S3 L.J.P.C. 307.
516 B.C.R. 109.

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