The Toronto General Trusts Corporation (Defendant) Appellant;
and
His Majesty the King (Plaintiff) Respondent
1917: May 9; 1917: October 9.
Present:—Sir Charle Fitzpatrick C.J. and Davies, Idington Duff and Anglin JJ.
ON APPEAL FROM THE APPELLATE DIVISION OF THE SUPREME COURT OF ALBERTA.
Taxation—Succession duties—Property in province—Mortgage—Foreign mortgagee.
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The debt secured by a mortgage on lands in Alberta, registered under the provisions of "The Land Titles Act," is property in the province" within the meaning of section seven of "The Succession Duties Act" (5 Geo. 5 c. 5 [Alta.]), though the domicile of the mortgagee is out of the province and the debt is a specialty debt. Anglin J. dissenting.
By the Act the mortgage after registration, is to remain in possession of the Registrar of Titles. The mortgage in this case was executed in duplicate the registrar and the mortgagee each retaining one. That retained by the mortgagee was in his possession when he died at Ottawa, Ont.
Held, Anglin J. dissenting, that such possession by the mortgagee did not make the mortgage "property out of the province."
Per Davies J.—The duplicate retained by the registrar is the original mortgage.
Per Anglin J.—The mortgage executed under the seal of the mortgagor is the evidence of the debt independently of registration and is conspicuous at the domicile of the mortgagee.
Though a seal is not essential to the validity of a mortgage in Alberta, if it is executed under seal the debt is a specialty. Idington J. dubitante.
Held, per Duff J.—In the sense of international law a mortgage on land is an immovable.
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APPEAL from a decision of the Appellate Division of the Supreme Court of Alberta, affirming the judgment at the trial, in favour of the respondent.
This appeal raises a question of law which is indicated in the above head-note. One Grigg a resident of Ottawa held a mortgage on land in Alberta and when he died the Provinces of Ontario and Alberta each claimed the right to succession duties on the value of this mortgage. An action was brought by the Alberta Government against the appellant as administrator cum testamento annexo of Grigg for the amount of such duties and a special case was submitted to the Supreme Court of the province. It was heard before Mr. Justice Hyndman who held that the duties could be collected and his judgment was affirmed by the Appellate Division.
Hogg K.C. and Ford K.C. for the appellant. Unless affected by the registration provisions of the "Land Titles Act" this case is settled by authority in favour of Ontario. See Commissioner of Stamps v. Hope; In re Muir Estate.
The debt and security on the land are created apart from and independently of the registration, Jellett v. Wilkie.
Lafleur K.C. for the respondent referred to Ivey v. Commissioners of Taxation, and Purdom v. Pavey & Co..
THE CHIEF JUSTICE.—This case does not, I think, present any difficulty and if I entertained any doubt about the correctness of the judgment appealed from the question is concluded by the authority of the Privy
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Council, notably in the decision in Payne v. The King. The facts of that case are practically identical with those in the present appeal. The testator resided in Victoria and had a mortgage of lands in New South Wales. The instrument of mortgage was in the form authorized by the "Real Property Act" of New South Wales (26 Vict. No. 9) and was not under seal; it was in Victoria at the date of the testator's death. The debtor as well as the testator resided in Victoria. It was held that
the debt though a specialty debt in New South Wales was a simple contract debt in Victoria and recoverable under a Victorian probate.
That was all that was necessary to decide in the case but in their Lordships' judgment it was added,
it may well be that in order to discharge the mortgage probate duty would also have to be paid in New South Wales.
For material purposes I think the "Real Property Act" of New South Wales and the "Land Titles Act" of the Province of Alberta are alike. For this and the reasons given by the trial judge I think it impossible to contend that the mortgage was not a specialty debt in the Province of Alberta and I do not know that it would matter if t were considered to be also a specialty debt in the Province of Ontario.
The property was an asset of the testator in the Province of Alberta and it was not disputed that if it were such it was property within the interpretation in section 3 of the "Succession Duties Act" and subject to the duties thereby imposed.
It is well established that the name under which duties are imposed is immaterial if the intention of the legislature is clear. It is only in cases of ambiguity that comparison can be made with probate, succession
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or other duties for the purposes of endeavouring to ascertain what may be supposed to have been the intention of the legislature in using words which have acquired a particular meaning in other well known statutes. Rex v. Lovitt.
The appeal will be dismissed.
DAVIES J.—I entertain no doubt that the mortgage in question in this case of lands situate in the Province of Alberta and the debt secured thereby were taxable by the Province of Alberta and came within the provisions of the "Succession Duties Act" of that province, unless it can be held that at the time of the death of the mortgagee who was domiciled and resident in the Province of Ontario and in whose possession at such time a duplicate copy of such mortgage was found, the rule in Commissioner of Stamps v. Hope, operated to make this specialty debt "conspicuous" in that province.
After giving the facts of the case and the arguments at bar much consideration, I have reached the conclusion that the judgment of Mr. Justice Hyndman, the trial judge, confirmed by the Appeal Court of Alberta, was correct and that the artificial judicial rule as to the situs of the debt laid down in Hope's Case , does not apply in this case, because of the provisions of the "Land Titles Act."
The reasons for his judgment given by the trial judge commend themselves to me. I agree with him that the real security for the payment of the debt in question is the mortgage registered and held in the Land Titles Office, just as the certificate of title entered and kept in the register is the essential evidence of title, and that "the mortgage upon which the
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deceased would have had to rely for the enforcement of his security would be the instrument registered with and retained by the registrar."
I think section 23 of the "Lands Titles Act" clearly operates to overcome the artificial rule laid down in Hope's Case as to the situs of the mortgage and as to where it was "conspicuous" at mortgagee's death.
It reads as follows:—
Instruments registered in respect of or affecting the same land shall be entitled to priority the one over the other according to the time of registration and not according to the date of execution; and the registrar, upon registration thereof, shall retain the same in his office, and so soon as registered every instrument shall become operative according to the tenor and intent thereof, and shall thereupon create, transfer, surrender, charge or discharge, as the case may be, the land or the estate or interest therein mentioned in the instrument.
So soon as registered, every instrument shall become operative according to its intent. The Registrar is required to "retain the registered-instrument in his office." The fact that a mortgagee may have his mortgage executed under seal and in duplicate and may retain and keep in his possession such duplicate copy, cannot in my judgment avail to defeat this statutory requirement that the registered mortgage be retained by the registrar in his office.
The mortgage specialty debt, therefore, in my judgment, would be conspicuous in the province where the mortgage security is required to be registered and kept, and the duplicate copy which the mortgagee may, for convenience or other reasons, take with him abroad to his residence, cannot have the effect contended for of making the debt "conspicuous" at such residence in another province.
The legislature having full power and authority
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in the subject matter has so legislated as to make the mortgage when registered and retained in the registrar's office the statutory and official mortgage and the situs of the specialty debt should be held to be the place where the statute has declared the registered mortgage shall be retained.
I would therefore dismiss the appeal and answer the question submitted in the special case in the affirmative.
IDINGTON J.—Since this appeal was argued counsel in response to an inquiry from the bench during the argument have submitted the following admission:—
The parties admit that at the date of the execution of the mortgages referred to in the stated case, the mortgagors were resident in the Province of Alberta, and that the place of payment of the debt was in each case in the Province of Alberta.
This I take it is to be read as part of the admissions of fact upon which the case is asked to be decided.
The statute in question is the "Succession Duties Act" of Alberta, assented to 22nd October, 1914, of which section 7 provides as follows:—
7. Save as otherwise provided, all property of any person, situate within the province, and passing on his death, shall be subject to succession duties, at the rate or rates set forth in the following table, the percentage payable on the share of any person or beneficiary being fixed by the following or by some one or more of the following considerations as the case may be:—
(a) Net value of the property of deceased;
(b) Place of residence of person or beneficiary;
(c) Value of property taken, wherever situate;
(d) Degree of kinship or absence of kinship to the deceased.
The determination of the question submitted must turn upon the words
all property of any person, situate within the province, and passing on his death
in their plain ordinary meaning having due regard to the general purview of the statute in which the section is found and the specific provisions therein illuminating
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what is intended to be expressed by the words "passing on his death," but subject always to the limitations of the taxing power of the province as expressed in the "British North America Act," section 92, item 2.
The property attempted to be taxed is a number of mortgages which can only derive their efficacy from and by virtue of the statutes of Alberta having exclusive legislative jurisdiction over property and civil rights in the province.
The "Land Titles Act" of that province declares, by section 60 thereof, how a mortgage may be constituted, and by section 61 thereof, what it is to be, and cannot be, and by other sections how it may be registered.
No seal is required any more than under our English law to a will. Yet some one, doubtless through ignorance, has been known to affix a seal to such a will; and it is admitted seals were needlessly used in the execution of the mortgages in question herein.
Does that sort of error constitute a will a specialty? Or does the affixing of a seal to an Alberta mortgage constitute it any greater security on the land than the "Land Titles Act" declares it to be?
And if the mortgagee desires to enforce it as against the land he can only go to the courts of Alberta and rely upon the laws of Alberta to realize the security out of the land.
Personal remedies he may have elsewhere for the debt but even that is admitted to be payable in each of the cases herein involved in Alberta, and prima facie only recoverable there.
How can such a debt and such a security be held to be situate elsewhere than in Alberta? We are told because, probably by accident, someone affixed a seal and constituted the debt a specialty, and therefore
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because in certain circumstances in English law a presumption exists that the property in that specialty is situate where the mortgagee was domiciled, hence that is the meaning which we must attribute to this Alberta statute.
Is it conceivable that such a highly technical meaning was present to the mind of the Alberta Legislature?
Suppose the mortgage had contained no covenant but the mortgagee had, after its registration, taken a bond under seal for payment of the same debt which it secured and kept it with him till his death, would the mortgage, thus freed from such questions as rest upon the covenant being therein, be situate in Alberta or Ontario? How fine can the distinctions be drawn and yet supply the reasoning by which the mortgage can cease to be property situate in Alberta? Some one might tell us that the debt merged in the sealed bond and hence must be situate where the bond is found. However all that may be surely that is not the kind of process of reasoning by which we will be best able to determine what the Legislature of Alberta had in view.
Is it not plain and palpable that the legislature, if we regard the general purview of the "Succession Duties Act" and its manifold provisions, had determined to reach out with all its taxing power to tax the security and the debt due by one of its own citizens as property situate in and taxable by it in the event of death necessitating that such property should pass to someone else and could only pass by virtue of Alberta laws to someone else?
Such is my reading of the statute; and of the power to enact it I have no manner of doubt. And if I had
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a doubt of the meaning of the language used the obvious consideration that the power was intended to be fully exercised would weigh much with me in arriving at the meaning of the words "situate within the province."
I can conceive of the case where the security had become nil and the debtor had become resident elsewhere than in Alberta at the time of his death, yet perfectly solvent and the debt recoverable from him, in such case that the doctrines resting upon the nature of a specialty debt might well be looked to for guidance in relation to the right of taxation by some other province than Alberta. Then in such case it might be hard to argue that the property at the death was situate in Alberta unless, as admitted herein, the debt was payable there.
It was pressed upon us in argument that Ontario was making a claim to duties in relation to these same mortgages. I pass no opinion upon the question of whether or not it can maintain such a claim, or upon the much wider questions either of the economic wisdom or justice of either claim.
Yet it may not be impertinent to suggest that, where a man's money has been invested and enjoyed the protection of the laws of that place, an enforced contribution, called taxation, to the maintenance thereof, cannot be held to fall beyond the limits of direct taxation.
The trouble is, however, that direct taxation may, as well as any other form of taxation, carry in it an element of injustice. With that we have (paradoxical as it may sound) nothing to do.
So long as the struggle over these succession duties is fought out upon the lines of highly technical reasoning, perfectly sound where relevant, instead of measur-
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ing the meaning of legislation by the plain ordinary sense of the language used and then clearly operative within the taxing power of the legislature, will the day be postponed for an adjustment of the respective rights and duties of the provincial legislatures.
The problems involved are by no means easy of solution on a just basis. And double taxation may in law be inevitable, so it seems to me, if legislatures fail to observe justice. Perhaps wise men investing in the west will avoid needless seals and watch the Statute of Limitations.
I think the appeal must be dismissed and I am glad to see the parties concerned have by agreement relieved us of deciding the question of cost.
DUFF J.—It will be convenient, first, to consider whether the securities in question were at the death of the testator taxable subjects in Alberta, that is to say, subjects within the power of Alberta to levy taxation upon. They are mortgages constituted under the "Alberta Land Titles Act" as mortgages; that is to say, as affecting the lands mortgaged they are operative by virtue of the provisions of the statute in consequence of registration pursuant to section 60 of that Act. By section 62 the usual remedies for the enforcement of the rights of a mortgagee are given to. the holder of the mortgage. By section 62 a power to enter in default of payment of interest or principal, power of sale upon notice and authority to the Registrar of Titles to grant an order for foreclosure on certain conditions are all given. By the provisions of the Act the security may be released by an entry on the certificate of title made by the registrar under the prescribed conditions and may be assigned by a registered transfer in the prescribed form, and the Act
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provides that upon registration of such a transfer not only the transferee's interest in the land and all his rights, powers and privileges pertaining to the land, but also the right to recover the mortgage debt shall pass to and become vested in the transferee. The case of the absence of the mortgagee from the province is dealt with by a provision which enables the mortgagor by leave of the judge to pay the amount of the mortgage debt into a bank and to procure the release of the mortgage by the registration of a memorandum prescribed by the statute.
I have no difficulty in the conclusion that these registered instruments create interests in land which are assets in Alberta. The point, indeed, is concluded by a decision of the Judicial Committee of the Privy Council in Walsh v. The Queen. I quote from the judgment of the Board, delivered by Lord Watson, at page 148:—
Though resting partly upon personal obligation the debts are all charged upon real and personal estate which the appellant himself alleges to be "in Queensland." Although the debt is not yet due and payable, so that the creditor has no occasion to resort to his security, it is in vain to suggest that a debt covered by security is in the same position with one depending on personal obligation only. The market value of assets of that kind is, in most cases, so greatly enhanced by what the appellant represents as an immaterial and accessory right, that they are generally known and dealt in as securities. It is unnecessary to attempt a precise definition of the relation in which a mortgagee or other incumbrancer who has not taken possession stands to the subjects of his security. It is sufficient for the purposes of this case to say that he has, not merely a jus ad rem, but a present interest in and affecting these subjects, which is preferable to the interest of the mortgagor. Is such an interest in property admittedly situated in Queensland an asset in Queensland within the meaning of the Act? That is the sole question arising for decision in this appeal, and its merits lie within a very narrow compass.
The appellant's counsel did not dispute that the debtor's interest in the subjects which he assigned in security was an asset in Queensland; and they went so far as to admit that the creditor's interest would also be so, if he enforced his security by entering into possession. Independ-
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ently of any concession in argument, neither of these propositions appears to be attended with doubt. Laying aside, as plaintly untenable, the theory that, until he has attained possession, the creditor's right consists in the bare personal obligation of his debtor, it would be difficult to find any good reason for holding that it includes no interest in the subjects of the security which is capable of valuation. The personal obligation to pay may not be an asset in Queensland; but it does not follow that the debt due, so far as it is charged upon an estate within the colony, and gives the creditor a real and preferable interest in that estate, is not an asset in the colony. Such an interest is certainly property of the company, and property in the colony, because it affects the estate which is admittedly situated there.
See also Henty v. The Queen, at page 574.
The appellant company relies upon section 61 of the Act, which is as follows:—
A mortgage or incumbrance under this Act shall have effect and security but shall not operate as a transfer of the land thereby charged.
The corresponding section of the Manitoba statute was considered in Yockney v. Thompson, in which it was unanimously held by this court that this last mentioned section which goes further than section 61 had not the effect now contended for. The enactment in the Manitoba Act provides (sec. 100) that the mortgage shall not operate as a transfer of the land thereby charged "or of any estate or interest therein." It was nevertheless held that an agreement to execute a mortgage was sufficient to constitute a foundation for a caveat under section 130 of that statute, on the ground that the beneficiary of the agreement (the vendee) desiring to file a caveat to protect his rights under the agreement was a person claiming an "estate or interest in land" within the meaning of section 130. My view of these sections is expressed in my judgment in that case, in these words:—
The effect of section 100 was fully considered in Smith v. The National Trust Co. It was there pointed out that., as regards land
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registered under the new system, title is consummated by registration and that the effect of section 100 is that the holder of a "mortgage or incumbrance" registered under the Act has not vested in him, in whole or in part, the registered title. The execution and registration of the mortgage, in a word, does not immediately effect any dismemberment of the mortgagor's registered title. In that sense the mortgagee has no estate or interest in the land.
I entirely agree, however, with the learned trial judge that it is something very much like a contradiction in terms to say that a mortgagee, having the powers of sale and foreclosure vested in him by the statute, together with other rights as to the possession of the land which the statute gives him, has not, in the broader sense of the words, an interest in the mortgaged land. I do not think section 130 can properly be limited to those cases in which the claim is a claim to be registered as possessor in whole or in part of the registered title. In other words, I do not think it can be properly limited to those cases in which an "interest is claimed" in the restricted sense in which "interest" is used in section 100.
That there was an interest, and a taxable interest in the sense above mentioned, in these lands at the time of the death of the testator seems therefore clear.
As Lord Watson pointed out, however, in Walsh v. The Queen., the question whether or not the mortgage debt could properly be the subject of taxation in Alberta is not necessarily the same question. But the answer, I think, to that question must be in the affirmative.
The instrument, as we gather from the stated case, was in the statutory form with some additional covenants, and, further, was executed in duplicate under the seal of the mortgagor in every instance, a formality not contemplated by the form. One duplicate was in possession of the testator at the time of his death, in Ontario, where he was domiciled, and the other remained in the proper registry office in Alberta. I do not find it necessary to consider the point raised as to whether the statute requires that the mortgage or the duplicate of the mortgage should be left in the
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registry where it is registered. The fact is, that in each case this was done and that in doing this the parties acted in accordance with the usual practice.
The mortgage debt was in the sense of international law an immovable. That, I think, results from the decision of the Court of Appeal and especially from the judgment of the Master of the Rolls in Re Hoyles. I quote from pages 183 and 184:—
I think a mortgage debt secured by land is to be regarded, not as a movable but as an immovable. The authority of text-writers is strongly in favour of this view. Story, s. 447, expressly includes "charges on lands, as mortgages," as in the sense of the law immovables and governed by the lex rei sitæ; and Dicey states that "immovable property includes all rights over things which cannot be moved, whatever be the nature of such rights or interests" (Dicey, 2nd ed. p. 76; see also p. 496). Thus a Scotch heritable bond has always been treated by our law as immovable although there is a personal obligation to pay: Jerningham v. Herbert; In re Fitzgerald, But apart from authority, I should have arrived at the same conclusion from considering the nature and extent of the rights of a mortgagee of freehold land. If he sues on the covenant to pay he must reconvey the land on payment. If he has parted with the land, otherwise than in exercise of a power of sale, he would be restrained from suing on the covenant: Lockhart v. Hardy; Palmer v. Hendrie; Kinnaird v. Trollope. The result is that a mortgagee cannot assign the mortgage debt effectually without also transferring the security upon the land.
Every word of this is applicable to the securities now under consideration. It follows from the fact that they are immovables that the law governing their assignment, their discharge and their devolution is the law of Alberta.
Moreover, they can only be effectively assigned, that is to say, assigned in such a way as to protect the rights of the assignee, by something done in Alberta. They can only be effectively discharged, that is to say, discharged in such a way as to protect the interests of the mortgagor by something done in Alberta. They
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can only be effectively enforced in Alberta because of the debtor being resident in Alberta and the common rule requiring the debtor to seek out his creditor and pay him being abrogated by the provision that I have mentioned; in other words, the debt being in substance a debt being payable in Alberta, the mortgagee could not even effectively sue upon the debt in Ontario. The circumstance that one duplicate of the instrument executed by the mortgagor was in the mortgagee's possession in Ontario strictly can have no bearing because if it be said that for that reason the debt had its situs in Ontario, precisely the same reasoning leads to the conclusion that the debt had also its situs in Alberta. Whether you take these instruments as constituting together one instrument, or as constituting separate instruments, the result is the same for the purposes of this appeal. If they are one instrument, then the instrument was just as much in Alberta as in Ontario; if two separate instruments, it is equally obvious that neither can be considered, exclusively of the other, to determine the locality of the debt.
But does the statute in question effectively cover these securities? On that point I can entertain no doubt whatever. The word "property" is so broad as to admit of no escape from it. What I have said already will sufficiently indicate the reason why, in my opinion, Commissioner of Stamps v. Hope, has no application. And it may be added that probate in Ontario would neither be necessary nor sufficient to enable the executors to enforce their mortgage debt. Westlake, pages 115 and 116; Whyte v. Rose, while probate in Alberta would be both necessary and sufficient, ibid.
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But there is a consideration which I should like to emphasize in addition to what I have already said and it is this: As Lord Macnaghten said, speaking for the Judicial Committee in Payne v. The King, if an attempt were made by the appellant company to enforce these mortgages in Ontario and if, by some accident (the present debtors, for example, being in Ontario), it succeeded in obtaining judgement, the company would not be permitted to enforce the judgments against the debtors in person without first providing for the discharge of the mortgages. That could only be done effectively by registration on the books of the registry office in Alberta and I can conceive no manner of reason for doubting the power of the Province of Alberta to require as a condition of the registration of such discharges the payment of duties such as those imposed by the Act in question. The same remark applies to a transfer. In other words, in normal circumstances, the executors cannot effectively realize on these securities either by enforcing the covenants for payment or by a sale of them without resort to the registration machinery provided by the "Land Titles Act."
In view of these considerations, it would seem an extraordinary conclusion that for the purposes of taxation these debts are deemed by construction of law to have locality in Ontario and not to have locality in Alberta.
ANGLIN J. (dissenting)—It is the common case of both parties to this litigation that the property on which the Province of Alberta seeks to levy succession duties is a debt secured by mortgage on lands in that province —that this debt, which the mortgagor has covenanted
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under seal to pay, is a specialty debt—and that its artificial situs for purposes of taxation is where the specialty was "conspicuous" at the date of the mortgagor's death. That there may be no room for doubt as to the position taken by the respondent on these points, I quote from his factum the propositions numbered 2 and 3.
2. The locality of a simple contract debt is at the domicile of the debtor and that of a specialty debt where the specialty is found at the time of the creditor's death.
3. The mortgage in the present case being a deed under seal constitutes a specialty debt.
The parties differ only in their views as to what was the situs of the specialty—as to where it was "conspicuous"—the appellant administrator asserting that it was at the City of Ottawa, Ontario, where the mortgagee resided and where an original of the mortgage (which had been executed in duplicate) was found amongst his effects; the respondent claiming that it was at the registry office in Alberta where the other original of the mortgage had been deposited for registration in conformity with the requirements of the "Alberta Land Titles Act."
No doubt what passed or devolved on the death of the mortgagee was the debt owing to him. Incidentally, but only as an accessory. (Lawson v. Commissioners of Inland Revenue), the security and the contingent right to enforce it also passed. But no estate in the Alberta land devolved, because under the "Land Titles Act" of that province (s. 61) a mortgage or incumbrance does not "operate as a transfer of the land thereby charged." The case in this aspect is more favourable to the appellant than it would have been had the subject of devolution been a debt secured by a common law mortgage, the de-
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volution of which would have carried with it an interest in land in Alberta.
The debt existed as a specialty debt enforceable by virtue of the mortgagor's covenant apart from, and independently of, registration of the instrument evidencing it. When the "Land Titles Act" by section 25 (so much made of by the respondent) provides that instruments shall have priority according to the time of registration and that
so soon as registered every instrument shall become operative according to the tenor and intent thereof and shall thereupon create, transfer, surrender, charge or discharge as the case may be, the land or the estate or interest therein mentioned in the instrument,
it is obviously only the operation and effect upon the land, or the estate or interest therein, to be transferred or charged that is dealt with. The operation and effect of an instrument as creating or evidencing a debt or other obligation independent of the security for its payment or fulfilment is not in contemplation and is in nowise affected. The mortgagee might enforce the mortgagor's covenant although the mortgage were never registered; and, if it should be registered, proof of that fact would be wholly irrelevant in an action on the covenant in which the plaintiff's claim would be established by production of the duplicate original in his possession.
The duly appointed personal representative of the mortgagee in the jurisdiction where the debt has its legal locality is the person entitled to collect it and to enforce payment of it from the debtor, and, upon his default, by resorting to the securities taken to provide against that event. That, for purposes of identification or to obtain a status in the local courts in order to enforce the security, he might require to obtain ancillary probate or administration from the State or province in which the security was situate does not
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affect the situs of the debt itself or his right to collect it. Payne v. The King.
If for an entire single debt security were taken by a mortgage (containing a covenant for its payment) upon two parcels of real estate, one in Quebec and the other in Alberta, the mortgagee residing in Ontario and there holding an original of the instrument containing the covenant, could it be successfully or even plausibly contended that the situs of the specialty debt was other than Ontario? Would it be in Quebec, or would it be in Alberta? Anything that could be said for a situs in Alberta would obviously have equal force as an argument in favour of the situs being in Quebec. There is only one debt and it can have but one legal locality, and that, according to English law, must be where the specialty is "conspicuous." Highly artificial as this rule of law undoubtedly is, it is too long and too firmly established to permit of question. If the bond or covenant for payment were contained in one document and the mortgage security in another, as was formerly customary, the fact that a duplicate of the latter was deposited for the purpose of registration where the land charged was situate could not affect the situs of the debt evidenced by the bond or covenant for payment, which would depend solely upon where that document was found. The fact that the two instruments, the bond or covenant and the mortgage, are now for reasons of convenience or economy usually embodied in a single document does not alter their distinct legal characteristics. The duplicate original of the debtor's covenant in the Alberta registry office at the time of the mortgagee's death was there only because the parties had incorporated it in the mortgage instead of executing a
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separate bond. The instrument held by the creditor as evidence of the debt due him and upon which he would undoubtedly have proceeded in any action brought to enforce the debtor's personal obligation was the document held by him in Ottawa. There is nothing in the record to shew that the personal obligation of the debtor is not perfectly good or that the debt will not be paid at maturity on demand; and the presumption is that it will. It may never be necessary to resort to the accessory security. Its actual value to the estate may be little or nothing.
It does not appear from the reports of Hope's Case, whether a duplicate original mortgage had been similarly deposited in the registry office in New South Wales. I rather think that must have been the case. Hogg on Australian Torrens Titles, pp. 104 (s. 36), 88, col. 1 line 3, 761. Although not so stated in the report I have little doubt that there was also a duplicate original mortgage deposited in the Michigan registry office in the case of Treasurer of Ontario v. Paitin. Such a fact would not have escaped the attention of the learned counsel and judges concerned in those two cases. In each the situs of the specialty debt was held to be at the residence of the mortgagee amongst whose effects the instrument evidencing it was found.
The decision In the estate of Sir William Clark, is instructive and closely in point.
Ivey v. Commissioners of Taxation, much relied on by the respondent, is distinguishable in that the question there at issue was not the situs o property but the source of an income. In so far as the court may have held that the effect of registration was to give to the specialty debt a situs at the place of regis-
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tration of the mortgage, regardless of the place where the instrument creating the specialty should afterwards be found, it would seem to have ignored or disregarded the decision in Hope's Case. No doubt for the purpose of making title to the land the duplicate original on deposit in the registry office, or rather the copy thereof made in the register itself, may be deemed the sole original and the copy in the mortgagee's possession "really a duplicate of that which forms the effective instrument." Ivey's Case. But that is not the case where the question is one not of title to the land charged as security but of the existence and nature of the debt secured. See Re McLachlin.
The question before us is not as to the constitutional power of the Province of Alberta to provide for the taxation of securities held by decedents, wherever domiciled, upon real property in that province, or to impose fees, based on the amounts of the debts secured, for the granting of letters probate or of administration sought to enable foreign executors or administrators to realize by enforcing securities on Alberta real estate. Within the restrictions imposed by section 92 of the "B.N.A. Act," I should not question the power of the province to impose such taxation. The duty demanded in the case at bar, however, is not based on the value of the security in Alberta either intrinsic or to the estate. It is based upon the whole mortgage debt regardless of the value of the security, and would be the same if the value of the personal obligation of the debtor were unquestionable or if the mortgagee had also held other security of indubitable value on property situate
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elsewhere. The claim made is that by virtue of the provisions of the "Alberta Land Titles Act" and registration pursuant thereto the situs of the mortgage debt itself is in Alberta and that that debt is therefore subject to duty under section 7 of the " Alberta Succession Duties Act" as "property * * * situate within the province."
For the reasons above stated I am, with respect, of the opinion that it was not so situate. I would therefore allow this appeal and answer the question proposed by the special case in the negative.
Appeal dismissed with costs.
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