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THE plaintiff had, since prior to 1891, carried on busi- 1904 ness at Winnipeg as a land broker and real estate agent Statement. under the name of Rutherford & Co. Her husband Peter

Rutherford acted for her in all the matters in question,

it being a question whether the business was not really

his.

The defendant W. J. Mitchell, since prior to 1891, had lived away from Winnipeg, but had been interested in business in Winnipeg and had dealt in the buying and selling of Manitoba real estate. Such business and dealings had been managed for him at Winnipeg by his brother, the defendant Howard E. Mitchell. On 6th January, 1891, Peter Rutherford borrowed from Howard E. Mitchell $200, and gave him on the same day Rutherford & Co.'s note for that amount, payable 2 months after date, with interest at the rate of one per cent per month

To secure to Howard E. Mitchell repayment of the loan, Peter Rutherford caused to be transferred to him the title to S.E. † 9, & W. 1 S.W. 10, 6, 3 East, which the plaintiff really owned and the title to which was under the Real Property Act. Howard E. Mitchell registered the transfer and received a certificate under the Act dated 10th January, 1891, vesting the title in him in fee simple.

Peter Rutherford paid no taxes on the land after the conveyance to Howard E. Mitchell and had never paid anything on principal or interest of the debt. The matter was let lie till 6th October, 1902. On that date, Peter Rutherford who had asked Howard E. Mitchell for a statement of his claim against the plaintiff, received from Howard E. Mitchell a memorandum signed by the latter, shewing amongst other things the amount claimed to be due on the note. That statement also shewed payment by plaintiff to Howard E. Mitchell, in 1892, of small sums amounting in all to $60, but showed that they were applied on other liabilities of plaintiff to Howard E.

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Statement.

Mitchell, and not on the principal or interest of the $200 above mentioned. The plaintiff had no recollection of these payments and the trial Judge held that they were not paid on the loan secured by the note and transfer.

In making the loan, Howard E. Mitchell used and lent, as his own moneys, $200 of W. J. Mitchell's money, which the evidence shewed he was at liberty to use. He charged himself with that sum in W. J. Mitchell's books. He had never repaid that sum to W. J. Mitchell or paid him interest on it.

In 1893, Howard E. Mitchell discovered that the land had been sold to Mr. A. J. Andrews for taxes in June, 1892. By representing to Mr. Andrews that he, or W. J. Mitchell was interested in the land, he got him to transfer the tax sale certificate to W. J. Mitchell about 30th May, 1893. He paid Mr. Andrews for the transfer $50 which was about ten dollars more than the amount for which he could have redeemed from the sale. He had since then paid the taxes on the land. In paying Mr. Andrews and in paying such taxes he used moneys of W. J. Mitchell.

In 1898, Howard E. Mitchell procured a tax deed to be issued to W. J. Mitchell in pursuance of the tax sale and caused to be filed in the Land Titles' Office an application in the name of and signed by W. J. Mitchell for transmission of the title to W. J. Mitchell by virtue of the tax deed. That application did not disclose plaintiff's interest in the land. Notice of the application was served

How

on Howard E. Mitchell, but not on the plaintiff.
ard E. Mitchell did not oppose the application or dis-
close the plaintiff's interest to the District Registrar or
inform plaintiff of the application. As a result the Dis-
trict Registrar issued in W. J. Mitchell's favour a certi-
ficate of title in fee simple to the lands.

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On 1st December, 1902, the plaintiff began this action against Howard E. Mitchell and W. J. Mitchell to have Statement. it declared that W. J. Mitchell held the lands as a bare trustee for Howard E. Mitchell. She claimed that the latter was indebted to her in respect of other dealings in lands and asked to be allowed to redeem the land so vested in W. J. Mitchell.

For the defence it was claimed that Howard E. Mitchell was not indebted to plaintiff, and that the purchase of the tax sale certificate was made for W. J. Mitchell's own benefit as an investment. Howard E. Mitchell claimed the benefit of the Statute of Limitations and both defendants set up that the plaintiff had become disentitled through laches.

The plaintiff's claims, other than for redemption, were in respect of an alleged right to share in the profits made by Howard E. Mitchell in the purchase and sale of 720 acres of land, other than that in respect of which redemption was sought. They arose a considerable time after the $200 note became overdue and were disallowed by the judgment.

G. A. Elliott and B. L. Deacon for plaintiff. The land was taken by Howard E. Mitchell as a security only. Does a tax sale transaction take away the right to redeem? W. J. Mitchell was used simply as a cloak, by Howard E. Mitchell. The $200 was borrowed and charged to H. E. Mitchell and the land set down opposite to it. W. J. Mitchell admitted he went over his book with H. E. Mitchell afterwards, and H. E. Mitchell says he went over it with W. J. Mitchell. Therefore, W. J. Mitchell must have known then and again after the tax purchase (when he again went over the book) that H. E. Mitchell was a mortgagee only of the land. There is nothing on the book, either before or after the tax sale certificate purchase, to show that any part of it was in any way charged to anyone other than H. E. Mitchell. On its face, the whole.

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transaction down to the last item of taxes paid, seems to Argument. be charged to H. E. Mitchell only. It was not till five years after the tax certificate was purchased that H. E. Mitchell took out the tax deed. He waited until the lands had become a good security before he treated the property as abandoned by Rutherford, or purported to cut himself out. Though he had waited so long and could have waited till W. J. Mitchell came to Winnipeg, he hastened to send the application to W. J. Mitchell in Toronto, to be executed in haste. The Act then in force

was R.S.M. 1892, c. 133, s. 28. In any event, W. J. Mitchell cannot rely on the certificate because it was obtained by the fraud of his agent in suppressing the fact that the plaintiff owned the land. See s. 49 of c. 133, R.S.M. 1892. Par. 5 of the application is the form specially intended to advise the L.T.O. of interests not disclosed by the records. H. E. Mitchell himself could not have made the statement in par. 5, or the affidavit of verification. H. E. Mitchell bought the tax certificate in 1893 without notice to Rutherford and while on, apparently, cordial terms with the latter. He never asked for repayment or told Rutherford of the taxes or made any claim on Rutherford as to it. Why would Rutherford ask for a statement from H. E. Mitchell unless to get a settlement. II. E. Mitchell admitted he rendered an account because of a request. As it refers to the first $200 the presumption is that Rutherford asked that to be included. If so, why did not H. E. Mitchell say to Rutherford that the land was gone, if he really thought it was. As to the Statute of Limitations, up to 1898 W. J. Mitchell had no title on which he could found a commencement of the running of the statute. The ren dering of the account was a waiver of any right of H. EMitchell. A demand of payment of principal and interest is a recognition of the mortgage: Richardson v. Younge, L.R. 10 Eq. 275; Coote, 7th ed. 770. As to being

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able to go behind the Torrens certificate: Re Massey and Gibson, 7 M.R. 173; Ontario Bank v. McMicken, 7 M.R. Argument. 203; Re Buchanan, 12 M.R. 612; Merchants Bank v. McKenzie, 13 M.R. 19. If a mortgagee uses his position to enable him to purchase, as shown by Andrews in this case, he cannot claim to be other than a mortgagee.

C. P. Wilson for defendant, W. J. Mitchell. The regularity of the tax proceedings is in effect admitted by the pleadings. The statement of claim also admits the issue of the certificate of title in the name of W. J. Mitchell. Under the act this certificate is conclusive evidence of the title of W. J. Mitchell, unless there is evidence of fraud in which he participated. The evidence shows that at the time of the tax sale, and for several years thereafter, the land was not worth redemption by Rutherford. His conduct shows that he had intended to abandon, and it was only when the property had greatly increased in value that Rutherford thought of gaining an advantage by claiming to be mortgagor. In any event, plaintiff's claim is barred by the Real Property Limitations Act.

G. A. Stewart Potts for defendant Howard E. Mitchell. Under R.S.M. c. 100, s. 20, the statement of account, Exhibit 6, given by H. E. Mitchell is not a sufficient acknowledgement of title, or of the right to redeem. It was not a document of which plaintiff can avail herself, because under s. 20 of c. 100, R.S.M.1892, Howard E. Mitchell had been for all purposes in possession since 6th January, 1891, and the ten years under the statute would run from that day, and after the ten years the acknowledgment would be of no avail: Coote, 771. See judgment in Richardson v. Younge, L.R. 10 Eq. 279, which shows that an acknowledgment is of no value where the original mortgagee making it had not still the legal estate. Exhibit 6 in itself is not an acknowledgment. It does not treat the mortgagor as entitled to redeem. It only shows $200 accumulation and does not account as to the taxes or the

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