Standard Trusts Co. v. La Valley, [1931] SCR 595

Supreme Court of Canada

Standard Trusts Co. v. La Valley, [1931] S.C.R. 595

Date: 1931-06-12

The Standard Trusts Company (Plaintiff) Appellant;

and

Peter La Valley (Defendant) Respondent

1931: February 5; 1931: June 12.

Present:—Duff, Newcombe, Rinfret, Lamont and Cannon JJ.

ON APPEAL FROM THE APPELLATE DIVISION OF THE SUPREME COURT OF ALBERTA

Bills of exchange—Agreement to pay sum of money—Payment by rendering services—Promissory note—Mortgage—Transfer—Applicability of sections 101, 102 and 103 of the Land Titles Act, Alta. S. [1922] c. 133.

[Page 595]

If under the terms of a written promise to pay a sum of money the obligation may be discharged in part or in full by "allowing credit (to the debtor) for any land sales commissions", such promise is not an unconditional one to pay a sum certain; and, therefore, the document is not a promissory note.

Sections 101, 102 and 103 of the Alberta Land Titles Act, relative to transfer of mortgages, have no application where the mortgagor's interest in the land has disappeared before transfer and there remains nothing but the personal responsibility of the mortgagor arising under covenant or otherwise.

APPEAL from the decision of the Appellate Division of the Supreme Court of Alberta[1], reversing the judgment of the trial judge, Tweedie J. and dismissing the appellant's action with costs.

The appellant's claim is against the respondent as the maker of a certain promissory note dated the 1st day of December, 1925, to the order of the Standard Trusts Company of Winnipeg in the sum of $1,641.70 payable on or before the 1st day of December, 1928, together with interest thereon at the rate of 7% per annum. The defence inter alia denies the making of the promissory note. On the argument before the Appellate Division, for the first time, objection was taken that the note sued on was not a promissory note and that, therefore, the appellant could not succeed on its statement of claim. The document sued upon is:

[Page 596]

"A5019

On or before Dec. 1st 1928 after date, for value received, I promise to pay to the order of

THE STANDARD TRUSTS COMPANY, at Winnipeg, Sixteen hundred and forty-one 70/100 Dollars. Together with interest thereon at 7 per cent. per Annum

from Date Hereof

Until Paid. With the Privilege of allowing credit for any

land sales commission.

Witness

The material facts of the case are stated by Harvey, C.J.A., as follows:—

In 1909 the defendant bought some land from the O. W. Kerr Co., an American company. Later payment of the unpaid balance of purchase price was arranged by the plaintiff advancing $6,600 on a first mortgage from the defendant and the O. W. Kerr Company taking a second mortgage for the balance. Nothing was ever paid on the second mortgage. Owing to failure of crops the plaintiff's mortgage fell into arrears and foreclosure proceedings were taken resulting in the foreclosure of the second mortgage and the defendant's equity and a vesting order issued to the plaintiffs in December, 1915. The defendant then leased the land and in 1916 he had a valuable crop and in December, 1916, he entered into an agreement with the plaintiff to purchase the land for $8,000. The purchase price was all paid before the end of 1917. After he had paid all the money, but before he had received a transfer, the plaintiff's manager, informed him that the plaintiff had purchased the O. W. Kerr Co. second mortgage and asked him for a mortgage on the land to secure the amount due under it. The upshot was that a note for $2,000 was given dated 1st November, 1917, payable on 1st December, 1918, with interest at 7%. The document sued on represents the amount of that $2,000 and interest remaining unsatisfied on December 1, 1925.

H. R. Milner, K.C., for the appellant.

A. M. Sinclair, K.C., for the respondent.

The judgment of the Court was delivered by

DUFF J.—There is no ground upon which the decision of the Appellate Division that the document sued is not a promissory note, can successfully be impugned.

(After discussing the proceedings the learned judge added.)

There will be a new trial. The costs of all appeals as well as of the abortive trial will abide the result of the new trial; and all parties will have full liberty to amend and the

[Page 597]

right to discovery in respect of the amended pleadings, subject of course to the directions of the Supreme Court of Alberta. It seems convenient to express now our view that sections 101, 102 and 103 of the Land Titles Act have no application where the mortgagor's interest in the land has disappeared before transfer, and there remains nothing but the personal responsibility of the mortgagor arising under covenant or otherwise.

Appeal allowed, new trial ordered.