New Brunswick Ry. Co. v. Kelly, (1896) 26 SCR 341

Supreme Court of Canada

The New Brunswick Railway Company v. Kelly (1896) 26 SCR 341

Date: 1896-05-18

THE NEW BRUNSWICK RAILWAY COMPANY AND DAVID BROWN (Plaintiffs)

Appellants;

and

MARGARET ELIZA KELLY (Defendant)

Respondent.

1896: May 18

Present:—Sir Henry Strong C.J. and Taschereau, Sedgewick, King and Girouard JJ.

ON APPEAL FROM THE SUPREME COURT OF NEW BRUNSWICK.

Registry laws—Registered deed—Priority over earlier grantee—Postponement—Notice.

To postpone a deed which has acquired priority over an earlier conveyance by registration, actual notice, sufficient to make the conduct of the subsequent purchaser in taking and registering his conveyance fraudulent, is indispensable.

APPEAL from a decision of the Supreme Court of New Brunswick[1], reversing the judgment at the hearing in favour of the plaintiffs.

In 1868 one Nason conveyed a parcel of land at Fredericton Junction, N.B., to the European and North American Railway Co., the predecessors in title of the New Brunswick Railway Co., and in 1872 he conveyed to the defendant, Mrs. Kelly, land which the plaintiffs allege was comprised in their deed. The deed to the railway company was not registered, and the action was brought for a decree postponing the conveyance to the defendant, who had registered her deed, to that of the plaintiffs. The evidence relied upon to prove notice to defendant of the prior deed was that of two witnesses named Bailey, who swore that defendant, in conversations with them, had admitted knowledge of

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the land having been previously conveyed to the company. At the hearing the decree asked for was made but was set aside by the full court.

Blair Q.C., Attorney General of New Brunswick, for the appellant.

Duffy for the respondent.

The judgment of the court was delivered by:

THE CHIEF JUSTICE.—This was a suit in equity instituted by the New Brunswick Railway Company for the purpose of postponing a conveyance dated 23rd April, 1872, which the defendant had obtained of a certain parcel of land from one Jeremiah Nason, and had registered prior to a conveyance which the European and North American Railway Company had obtained dated 29th August, 1868, from the same grantor, but had omitted to register.

The appellants, the New Brunswick Railway Company, are the successors in title of the European and North American Railway Company. It was alleged that the defendant had had notice of the conveyance of August, 1868, at the time she took her deed from Nason.

The cause was originally heard before Mr. Justice Fraser who made a decree postponing the defendant's deed to the plaintiffs. On appeal to the Supreme Court of New Brunswick, in banc, this decree was reversed and the suit was dismissed with costs. From this last judgment the present appeal has been taken.

The law as to postponing subsequent purchasers who may have acquired priority over earlier grantees by first registering their conveyance is clear. Actual notice is requisite, such notice as will make the conduct of the subsequent purchaser in taking and registering his conveyance fraudulent, being indispensable. The law on this subject is laid down in the following

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authorities: Wyatt v. Barwell[2]; Agra Bank v. Barry[3]; Lee v. Clutton[4]; Ross v. Hunter[5]; Russell v. Cashell (an Irish case decided by Lord Chancellor Brewster in Trinity Term, 1867); Chadwick v. Turner[6]; Hollywood v. Waters[7]; Rose v. Peterkin[8]. These are conclusive authorities that constructive notice is insufficient to postpone a deed which has acquired priority over an earlier conveyance by registration.

That possession under the prior registry deed, either by the grantee in that conveyance or by his successors in title, does not amount to actual notice, appears from many cases quoted in Madden on the Registry Laws, p. 217.

A perusal of the depositions will convince anyone that it is out of the question to say there was actual notice or anything like actual notice proved in the present case. The evidence relied on to establish notice was that of Charles J. Bailey and Benjamin S. Bailey, and this consisted of mere loose conversation with the defendant, in which it is pretended she made admissions which showed that she had notice. These men had no connection with the property in any way, and therefore their evidence is open to the objection that such conversations are not sufficient to establish even constructive notice as was held in the case of Barnhart v. Greenshields[9]. But even if we give entire credit to the evidence of these witnesses, what they say as regards admissions made by the defendant would not show that at the time she took her conveyance she had any notice of the prior deed of sale by Jeremiah Nason to the European and North American Railway Company.

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I do not propose to enter upon a critical examination of the evidence for it has been fully discussed in the judgments delivered in the court below by Mr. Justice Tuck and Mr. Justice Barker, whose observations entirely commend themselves to my judgment and whose conclusions I am prepared to and do adopt.

The appeal must be dismissed with costs.

Appeal dismissed with costs.

Solicitor for the appellants: Wesley Van Wart.

Solicitor for the respondent: C. E. Duffy.