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1905 crossed through the outer two miles. Defendant then knew that it was on the outer two miles, and he had been aware of that fact since prior to 1882.

Statement.

On the 2nd April, 1885, the defendant wrote to plaintiff's general manager:

"The M. S. W. Ry. will forward you a discharge of their right of way and the proceeds as I signed their deed last week."

On the 5th May, 1885, defendant wrote to Mr. Nixon the railway company's right of way agent:

"I notified the loan company that you would send them. discharge of mortgage," and proceeds, "I heard from Toronto lately that they had not heard from you. attend to it."

Please

On the 14th July, 1885, defendant again wrote to the plaintiffs' general manager:

"I have been in the city twice to see Mr. Nixon re right of way and have only now his answer. He has been out of town. They have made a mistake in the office and should pay $10 per acre and have agreed to rectify it and write you."

The plaintiffs, pursuant to the implied request by defendant as above, executed the release of the right of way that was sent to them and received and applied on the mortgage the purchase money paid by the railway for the right of way. The release described the land that it discharged as being:

Those portions of the outer two miles of Parish lots numbers nineteen and twenty in the Parish of Headingly," &c. &c.

During the above negotiations with Mr. Nixon and plaintiffs as to the right of way, the defendant never suggested that a discharge from the mortgage was not required to make a good title to the railway, or that the mortgage did not include the outer two miles.

In October, 1888, a payment was made to plaintiffs of

$200 and in November, 1895, one of $50. It was not 1904 shown by whom these payments were made, though the Argument. probability was strong that defendant made them. There was no evidence whatever of appropriation of these payments by their maker. The plaintiffs applied part of them in payment of costs incurred under the herein before mentioned 18th clause of the mortgage, leaving a balance over. They held that balance in a suspense account (or disbursement account) in a separate ledger from that in which the mortgage account was kept, and gave no credit for it on either principal or interest of the mortgage, but subsequently applied it in settlement of costs afterwards incurred under clause 18.

Plaintiffs claimed that it was intended by both parties that the mortgage should include the outer two miles and that the outer lots were omitted by mutual mistake. They asked in this action for rectification of the mortgage to make it include the outer two miles of both lots and for payment and, in default, for foreclosure.

The defendant denied the above intention, and set up that if there was a mistake the plaintiffs knew of it and that plaintiffs are barred by acquiescence from seeking rectification. He also claimed that the plaintiffs were barred by the Real Property Limitation Act from all claims to the lands.

A. Haggart, K. C., and W. Redford Mulock, K. C., for plaintiffs. As to mistake and rectification of contract: Clarke v. Joselin, 16 O. R. 78; Mortimer v. Shortall, 2 Dr. & W. 371; Atty. Gen. v. Drummond, 1 Dr. & W. 368. Defendant was an educated man: he does not plead fraud in the getting of the application signed by him. The application for the loan shows separately the cultivated and the uncultivated areas. The land was valued by defendant at $16,000, i. e. $40 an acre for 400 acres. Defendant had previously mortgaged the outer two miles of each of these lots. The deeds to defendant of lots 19

1904

and 20 both convey the hay privilege. Defendant Argument exercised ownership on both the outer 2 miles by cutting hay. The total acreage stated in the patents is 421.22 acres. Defendant consented to plaintiffs giving discharges to the railways. A description will be construed in favor of the grantee: A & E. Ency. of Law, vol. 4, p. 801; vol. 21, pp. 1106, 1108, 1114. When the language of a contract is ambiguous, the practical interpretation of it by the parties is entitled to great, if not controlling influence: Topliff v. Topliff, 122 U. S. R. 131; Columbia v. Gallagher, 124 U.S.R. 510; Atty. Gen. v. Parker, 1 Ves. Sen. 43; Waterpark v. Fennell, 7 H. L. C. 684; Wadley v. Bayliss, 5 Taunt. 752; Atty. Gen. v. Boston, 1 De. G. & S. 527; Cavazos v. Trevino, 73 U. S. R. 784. Possession goes with the legal title: Bucknam v. Stewart, 11 M. R. 625. Defendant stood by and let plaintiffs pay taxes on the outer two miles, though, by his contention, he had not mortgaged them to plaintiffs. As to the admissibility of books and letters offered as evidence by plaintiffs Rawlins v. Rickards, 28 Beav. 370; Reg. v. Birmingham, 1 B. & S. 663; Commercial Bank v. G.W.R., 22 U. C. R. 268; Turner v. Dewan, 41 U. C. R. 361; Smith v. Blakey, L. R. 2 Q. B. 331.

C. P. Wilson and R. G. Affleck for defendant. As to the principle on which rectification is granted: Campbell v. Edwards, 24 Gr. 171. Parties must show that neither intended deed to be as expressed. It must be equally clear that there was another agreement; i. e. that sought to be substituted. That such agreement continued till the execution of the document. Parties must show precisely the form to which the deed should be brought by the proposed rectification. There was no contract till the mortgage was executed and the money advanced: McKenzie v. Coulson, L. R. 8 Eq. 375. A mistake must be mutual or there will be no rectification: Kerr on Frauds, 461. Fowler v. Scottish Equitable, 28 L. J. Ch.

225. Where was the mutual mistake here? As to the 1904

Statute of Limitations.

and those in possession till the fall of 1895.

The possession of the defendant Argument. with his approval continued up Tomlinson's letter to Carruthers

in 1895 says no payments had been made on principal or interest since 1885, when the C.P.R. money was received which was applied on interest falling due in 1884, since which nothing had been paid. If the payments from the railway companies of $200 and $50 were applied on costs and not on principal or interest they would not prevent the statute from running. The plaintiffs never appropriated to principal or interest any part of the $200 or of the $50. The remedy on the mortgage is barred because of the lapse of upwards of 10 years after 1888, (both foreclosure and the personal remedy). This action was not brought till 1902. The remedy by foreclosure as well as the personal remedy is barred by chapter 100, R. S. M. 1902, see sections 23, 24. The present proceeding really is one to realize the money on the mortgage. It is one only to so realize because, as a foreign corporation, they must realize on their security within a limited time. and dispose of the land. They cannot hold it indefinitely. If plaintiffs' claim was for the outer two miles they should, within the 20 years that elapsed between taking the mortgage and this action, have claimed rectification. They did not even notify defendant.

Mulock, K. C., in reply. As to the Statute of Limitations. On 7th August, 1885, defendant wrote to plaintiffs' general manager re the mortgage, and promised to pay all the interest. That is a fixed point to start from. There was nothing against which the plaintiffs had the right to appropriate the $118.47 surplus (left of the $200 after paying $81.53) except interest. Everything but principal and arrears of interest was paid by the appropriation of the $81.53 to payment of costs. Therefore, it follows under McGregor v. Gaulin, 4 U. C. R. 386,

1904

RICHARDS, J.

that the $118.47 must be treated as paid on interest, no Judgment. matter what bookkeeping entries the plaintiffs made with regard to it. Defendant abandoned possession in 1892. Plaintiffs took possession in 1894. Within 10 years from the acknowledgment of 7th August, 1885, there occurred (1) Payment of $200 on 25th October, 1888; (2) Payment of $50 on 12th July, 1889; (3) Abandonment by defendant in 1892; (4) Leasing by plaintiffs of hay privilege in July, 1894; (5) Payment of taxes by the owners of the legal estate, the plaintiffs; (6) Then there was the formal leasing in 1896. This is not a mere change in the plaintiffs' favor, like a Torrens mortgage. The plaintiffs have the legal estate. The positions of the two styles of mortgages are very different.

RICHARDS, J. On the question whether the parties intended to include the outer two miles in the mortgage there are many items of circumstantial evidence in the application for the loan, in the plaintiffs' agent's report with the loan, and in other ways. Some of these bear in

favor, and some against, the plaintiffs' contention. They are too numerous to deal with in detail, and many of them bear but slightly on the point.

Two matters however are of special importance.

First. The mortgage says that the land contains "four hundred and eighteen acres be the same more or less".

The two lots in their inner 2 miles contain only 223.65 acres. It has not been suggested that the above quoted words were written into the mortgage after its execution, and I have no doubt that they were there when it was executed. The defendant must be presumed to have seen them when executing. He is a man of intelligence and education and such a man as would be fairly certain to read a document before signing it. He doubtless knew about what the acreage was of his own lots. On seeing that the description purported to cover 418 acres he would

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