[NOTE. This Article treats the subject more particularly from the viewpoint of the practitioner in the Western Provinces.]

Unless the purchaser has precluded himself by agreeing to accept the vendor's title without objection, in respect of lands for which a certificate of title has been issued, and that practically means all lands in Alberta and Saskatchewan, and most of the land in Manitoba, the purchaser is entitled to demand the production of a certificate of title showing the vendor registered owner of an estate in fee simple to the land, the subject-matter of the contract, free from exceptions, reservations, easements, restrictive covenants, encumbrances, and, generally speaking, caveats, which the vendor is unable or unwilling to remove, or which cannot be "adjusted" between the vendor and the purchaser.

"The word lands' must be interpreted to mean everything usque ad coelum et ad inferos, except the precious metals. Even the precious metals are included where these have passed from the Crown. In re St. Eugene Mining Co., 7 B. C. R. 288." If the vendor has not a clear title, i.e., one which is not subject to encumbrances, exceptions, etc., in respect to which the vendor has not the present power of procuring invito domine the removal, the purchaser can refuse to pay the purchase money, or the first or any instalment; he can repudiate the agreement, and in effect force rescission upon vendor, and can recover not only instalments of purchase money, but also the deposit, if any, made by him. But this general right of the purchaser may have been waived by him, or the defect may be so inconsiderable, the exception so trifling, or the reservation so immaterial (as a matter of fact) that the Court may consider it the subject of compensation, or in certain cases may disregard it altogether. Under

Cf. Fry, 5th Ed., par. 1323 et seq.

Per Stuart, J., in Raymond L. & I. Co. v. Knight Sugar Co., 2 A. L. R., at page 163.

C.B.R.-VOL. II.-10

certain conditions there may be a reference as to title, and the vendor will be allowed a reasonable time to clear and complete his title.

The construction and effect of exceptions and reservations in Crown grants, agreements and conveyances by the Hudson's Bay Company, railway companies and private owners become in many instances of great importance in conveyancing practice and as between vendors and purchasers. The reservation or exception may be in the original Crown grant, or in any subsequent registered instrument, and in either case ought to be, but unfortunately too often is not, clearly set out in the certificate of title to the land.

"The difference between a reservation and an exception is that in the first case the thing reserved is not something which was in esse immediately before the conveyance, but is merely created or reserved out of the land upon the execution of the deed. An exception, on the other hand, is part of the thing in esse before the conveyance, but which is excepted from the operation of the deed." (11 Hals., p. 249).

Certainty in definition and expression is a requisite both of an exception and a reservation; but an exception operates immediately, whereas a reservation only takes effect after the estate has become vested in the grantee and then operates generally by way of regrant.

In Cooper v. Stuart (14 A. C. 286), Lord Watson says: "An exception is that by which the grantor includes some part of that which he has already given, in order that it may not pass by the grant, but may be taken out of it, and remain with himself. A valid exception operates immediately, and the subject of it does not pass to the grantee. If the exception be set down uncertainly, as if one grant a house excepting one chamber, or grant a manor excepting one acre; but doth not set forth which chamber or which acre it shall be, these exceptions are void "-that is for uncertainty. Then follows this: "However, query, for there are authorities to the contrary, namely that the exception may be available by election. Sheppard's Touchstone, 7th ed., p. 79," as cited by Buckley, J., in (Savill Bros. Ltd. v. Bethell (1902), 2 Ch. at 530). In the last mentioned case Buckley, J., holds that since a valid exception must operate immediately, it is inconsistent to suggest that it may by subsequent election be determined what is properly the subject of an exception. This view was confirmed by the Court of Appeal.

In agreements of sale and transfers by railway companies one often finds exceptions or reservations of "such strip or strips of land as the company may hereafter require for spur-tracks or right-of-way " or similar expressions. Since the land is in esse a strip of land must be the subject of an exception and not of a reservation; but

such an exception as the above would appear to be void for several reasons: (a) For uncertainty, (b) because it does not operate immediately, (c) as derogatory to the grant, (d) as contrary to the rule against perpetuities.3

The reservation in the plaintiffs' title under their agreement with the Carbon Company, which was under consideration in Barber v. Shell (1923), (19 A. L. R. 415), was (inter alia), as follows: "and also excepting and reserving to the vendor the right at any time forever to take and acquire a strip or strips of land 66 feet wide . to be used for a road or roads for an approach to the quarries, pits, etc. whenever such a road or roads for such purposes shall be located by the vendor on or over the said lands to the nearest convenient road allowance and to any railway which may hereafter be located across any of the said lands." Notwithstanding certain provisions for compensation in respect of improvements thereby affected, and for payment for the land so taken, this exception has even more objectionable features, than the exception held void in Savill v. Bethell (supra), which was this: "Except and reserving to the vendor a piece of land not less than forty feet in width commencing at the point A, marked on the plan, and terminating at the nearest road to be made by the purchaser or his assignee on the estate so as to give access to such road from " other lands of the vendor.

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This was held void being (a) in the nature of a limitation to commence in futuro, (b) as infringing the rule against perpetuities, and (c) (per Buckley, J.), for uncertainty, which was not and could not be cured by subsequent election.

If it is the intention to except mines and minerals, the exception should be stated "in apt words." The old books mention exceptis, salvo and præter as apt words. Mines and minerals are properly the subject of an exception, and "reserving" is certainly not an apt word to express an exception: it would ordinarily indicate a regrant with a right to work and win the minerals; but not an exclusive right. Thus in Douglas v. Lock (2 Ad. & El. 705) Lord Denman points out that though in general language "reservation" may include "exception "this does not make them the same in point of law." In Scotland a reservation of the "liberty of working the coal" will be taken to reserve the estate of coal with which the grantor stands vest by infeftment at the date of the conveyance: Duke of Hamilton v. Dunlop (H. L.) 10 A. C. 813.

London & S. W. Ry. v. Gomm, 20 Ch. D., 562; Savill v. Bethell (supra). It was not suggested or argued in this case that the exception was void. The judgment turned on other points.

Chetham v. Williamson, 4 East, 469; Cardigan (Earl) v. Armitage, 2 B. & C., 197: 20 Hals., pp. 550, 551.

Though this decision may be referred to 66 a technical reason in Scotland," viz.: that where a person is infeft of the whole property in the soil and the coals, and reserves a right by these words, he reserves the property in the coals-yet the remarks of Lord Selborne on the common sense of the matter seem to be of general application. "I will first make some observations which occur to me, which shall be but few, upon what I regard as the good sense and reasonable view of such a deed as the present, even if there were not authority bearing on the matter. You have words of reservation, and you have a prior title to the whole property in these coals and minerals in the person who is making this reservation in his own favor. What is reserved? If there be no limit of time, if it be to Dunlop and his heirs forever, it is perpetual reservation. What is the subject of the reservation? The right to take away the whole of those coals and minerals. A perpetual right to the whole possible profits and benefit of property is prima facie very much like the whole beneficial interest in that property; at least, when you find that the man who had it before, leaves, as a reservation, something out of his grant, and that this is the quantum of the reservation in point of matter and in point of time, the most sensible and reasonable construction, if there be no technical difficulty, is that he means to reserve, as to that subject, the property which he had before, with such superadded privileges as to the means of getting at it and enjoying it as are found in the deed."

While it is true that words designed to effect an exception will be construed in favor of the grantee and strictly against the grantor (except perhaps as against the Crown-see Cooper v. Stuart, 14 A. C. 286), it remains nevertheless "a question of construction whether in any particular case the words used amount to an exception" or not. The remarks of Lord Selborne, in Duke of Hamilton v. Dunlop, 10 A. C. 813 (quoted supra), are of such general application, on the common sense of the matter that one may venture the prediction that the Courts would strive to construe such words. as "reserving thereout and therefrom all mines and minerals" as intended to be, and therefore as constituting an exception from the grant.

But where the vendor himself has not " a prior title to the whole property in these coals and minerals," (i.e., if they are already exceptions from his registered title) obviously he cannot make a reservation of them, he has nothing to reserve. He cannot have a regrant of what he cannot himself grant.

20 Hals., p. 550; Pearce v. Watts, L. R. 20 Eq., 492, 493; Davidson's Conveyancing Practice (4th), Vol. 1, p. 96.

But whether "exception " or "reservation" either may constitute a fatal defect in title justifying rescission by the purchaser, and the importance of setting out the ipsissima verba of the exception or reservation by the vendor's solicitor in the agreement of sale is strongly emphasized by the rationale of the decisions in Fuller v. Garneau, and in Barber v. Shell.

The suggestion is sometimes made, and indeed in a recent Saskatchewan case is adopted, that exceptions and reservations contained in the original grant from the Crown cannot be objected to by the purchaser as defects in title. In the case cited objection was taken to the vendor's title on the ground that the original grant from the Crown contained the usual reservations in respect of (a) navigable waters, (b) mines and minerals with power to work and enter on the lands, etc., and (c) rights of fishery and fishing. In respect to this the learned trial Judge, Embury, J., says :10 "In this particular case the title which is given is the only title that under the law of the land can have any existence, this pursuant to public statutes, and the purchaser should not be heard to say that he is without knowledge of a public statute. How can it be contended that the vendor intended to sell, or that the purchaser intended to purchase an estate which could have no existence in law in so far as this land is concerned?"

It may be conceded that if by reason of a public statute it is impossible for any person to acquire land by a general Crown grant except subject to certain express or implied exceptions or reservations, then such express or implied reservations would not constitute a defect in title. The purchaser's right cannot perhaps be put more strongly than this: the purchaser is entitled to assume that the vendor can give him the highest possible title that a grantee of Dominion Lands could under a general grant have obtained (at any time prior to the date of the agreement of sale), unless the agreement provides to the contrary.

It cannot be contended that the purchaser when entering into the agreement for sale can be expected to know at what particular date the Crown grant was issued. Thus the Order-in-Council of 10th October, 1874,11 provided for the insertion of a special reservation respecting navigable waters in all patents to lands in Manitoba. Reservation of rights of fishing, mooring boats, irrigation, etc., are inserted in all Crown grants since the Order-in-Council of 19th

9

61 S. C. R., 450.

(1923) 2 W. W. R., 675.

Gutschenritter v. Ball (1923), 3 W. W. R., p. 619. 19 (1923) 3 W. W. R., p. 624.

"See Dominion Statutes, 1876, pp. cxii, cxiii.