JUDGMENT CREDITOR'S RIGHTS AGAINST LAND-DEBTOR'S INTEREST IN UNPAID PURCHASE MONEY.

Some of the difficulties in the law relating to a judgment creditor's rights against the land of his debtor are referred to in a former article (p. 31, supra). But even in those jurisdictions in which it may be considered to be settled that it is only the beneficial and not the merely legal and formal-interest of the debtor that can be charged in favour of a judgment creditor, there are other difficulties which seem to have been brought forward rather prominently in Canada. Both in Australia and Canada the whole subject of judgments in connection with registered land is a difficult one, and has given rise to considerable litigation. It is proposed in the present article to say something on the question of the interest of an unpaid vendor of land, where the vendor is the registered owner and execution (or judgment) debtor.

Although the difficulty is more acute with regard to registered land-as evidenced by recent cases in the Courts of several provinces-much of the discussion on this subject is relevant, even when the land is not on a "Torrens" register. In Ontario, Manitoba and British Columbia, for instance, the legislation making land capable of being seized and sold under a judgment or execution is contained in statutes of general application and refers both to registered and unregistered land. In one of the cases to be cited and relied on that from Ontario-the land does not appear to have been under the Land Titles Act. It will be convenient, however, to deal here only with registered land.

There are two branches of this particular question relating to an unpaid vendor's interest: (1) Whether such an interest is available at all for satis

1 Ontario-Execution Act (R. S. 1914, c. 80), ss. 10, 11; Manitoba Judgments Act (R. S. 1913, c. 107), ss. 3, 5; British ColumbiaExecution Act (R. S. 1911, c. 79), s. 27.

faction of a judgment creditor's claim; (2) Whether, if it is available, the recording of the judgment or execution at the land registry binds the vendor's interest at once by way of charge or quasi-charge.

On the first branch of the question there is a fair preponderance of authority in favour of the view that such an interest is so available. The second branch is more difficult to deal with, and so far as authority goes cannot be said to admit of any precise and satisfactory conclusion being arrived at.

In Alberta the question of the unpaid vendor's interest being available is for the future set at rest by an amendment of s. 77 of the Land Titles Act. As amended by s. 40 of the Statute Law Amendment Act, 1917, s. 77 now provides that upon the registrar receiving the copy writ of execution "all lands and interests in lands, whether such interests be legal or equitable, and any interest of an unpaid vendor of land, shall be bound by such execution." Alberta cases are still of interest in endeavouring to come to a conclusion as to how the law should be laid down in other jurisdictions.

Until recently an Ontario case of long standing seems to have been accepted as authority for the position that an unpaid vendor's interest could not be taken in execution at all as an interest in land. Partly owing to changes in the form of the relevant statutory enactments, it has now been held in Ontario that Peake v. Riley is not now authoritative on this point, and that an unpaid vendor's interest is exigible under a registered execution. So in Saskatchewan, where Robinson v. Moffatt was approved, though in the actual decision the Court did not find it necessary to hold that the vendor's interest before them could be seized and sold under the execution. It was laid down in this

2 Peake v. Riley (1866), 3 E. & A. 215. This case of course has nothing to do with registration of title; it has been followed in Manitoba: Bank of Montreal v. Condon (1896), 11 Man. 366, 369.

Robinson v. Moffatt (1916), 27 O. L. R. 52; the land seems not to have been under the Land Titles Act.

4

Weidman v. McClary Manuf. Co., [1917] 2 W. W. R. 210.

case that "a vendor who has agreed to sell, but retains the legal title has, until full payment has been made, a beneficial interest in the land which, coupled with the legal title, may be seized and sold under execution." In Alberta it has been expressly decided that an unpaid vendor's interest can be seized and sold under execution, as being an interest in the land; in this case Jellett v. Wilkie was relied on and the following passage quoted: . the appellant could have made his execution a charge on and have sold for the satisfaction of his judgment just what beneficial interest the execution debtor had in these lands and nothing more.

Against this view that the unpaid vendor's interest can be taken in execution are two Alberta cases and one in Manitoba'. Two of these-Leay v. Sommerville Hardware Co. and Bain v. Pitfield-may be disposed of for the present purpose by saying that the execution debtor was not the registered owner in either case. In Traunweiser v. Johnson the point was quite definitely raised, but doubts were expressed as to the scope of local legislation on the whole subject, and it was held, while admitting the vendor's interest to be an interest in land, that "there is no legislation which gives the right to seize such an interest under a common law fi, fa."

Turning now to the second branch of the question, the only cases already cited that are relevant are those in which the vendor's interest was held to be an interest in the land that could be affected by the registered judgment or execution; of these there are three only-one in each of the Provinces of Ontario, Saskatchewan and Alberta. The point to be discussed is whether, on the assumption that the vendor's interest is affected by the registered judgment or execution, the recording of this judgment or execution operates

5 Adanao Oil Co. v. Stocks (1916), 33 W. L. R. 864.
(1896) 26 Can. S. C. R. 282, 290.

* Traunweiser v. Johnson (1915), 31 W. L. R. 712; Leay v. Sommerville Hardware Co., [1917] 1 W. W. R. 14-97; Bain v. Pitfield (1916), 33 W. L. R. 681 (Man.).

in such a way as at once to give notice to the purchaser and so make any further payments by. him to the judgment debtor invalid as against the judgment creditor. Another way of putting this is: "What rights has an execution creditor over subsequent instalments of purchase money due under a prior agreement of sale?" The law in Alberta, so far as this point is concerned, will be the same as in the other provinces referred to.

Of the three cases just referred to, Adanac Oil Co. v. Stocks (Alberta), is the only one directly in favour of the view that on the recording of the execution or judgment further payments by the purchaser to the vendor (execution debtor) are invalid. In Weidman v. McClary Manuf. Co. (Saskatchewan), the decision was to the contrary effect-that the purchaser was unaffected by the registration of the execution. In Robinson v. Moffatt (Ontario), the purchaser was held entitled to have the execution discharged before completion, as being an incumbrance, and this case therefore stands with the Alberta as against the Saskatchewan case. With respect to notice, in the Alberta and Ontario cases the purchaser had notice of the regis tered execution, and after receiving notice made no further payment to the vendor; in the Saskatchewan case he had no notice and did make payments after registration of the execution. These cases, therefore, decide nothing as to what would have been the result of the purchaser continuing to pay instalments of purchase money to his vendor in face of notice of the registered execution; it would seem clear that, on one ground or another, such payments would be held invalid. The real difficulty is to come to a conclusion as to payments made by the purchaser to the vendor after registration, but before notice, of the execution or judgment.

The two cases above referred to-in Saskatchewan and Alberta respectively-are in sharp contrast with

Weidman v. McClary Manuf. Co., supra, at p. 218.

respect to their ratio decidendi. In the Alberta case the vendor's interest is treated purely as an interest in the land, and as bound by the registered charge (the execution); in the Saskatchewan case stress is rather laid upon the vendor's right to the money payments, whilst the judgment creditor's possible right to these moneys and his rights under a "charge" which is merely equitable are contrasted with each other. Seeing that the judgment creditor's rights under the charge effected by the registered execution consist solely in his right to the money, it may be that the reasoning in Adanac Oil Co. v. Stocks (Alberta), is preferable to that in Weidman v. McClary Manuf. Co. (Saskatchewan); if so the right conclusion would be that any payments made by the purchaser to the vendor after registration of the execution are invalid as against the judgment creditor.

On the other hand it may be that a satisfactory conclusion can be reached by relying on another principle altogether, and treating the registered execution (even though equivalent to an equitable charge) as in the nature of a caveat, which in some circumstances does not ipso facto operate as notice to the person claiming against it, but merely affords the means of conveying notice-not always effectually.

Pending further judicial decision it does not seem practicable to reach any more definite conclusion at present upon this point.

See, for instance, Grace v. Kuebler, [1917] 3 W. W. R. 953 Sup. Ct. Can.) JAMES EDWARD HOGG.

Lincoln's Inn, London.