Robert George Barnhart, - Appellant; James Blackwood Greenshields, William Henry Patterson, Lewis Moffatt, and Robert Beekman, - Respondents
| Jurisdiction | UK Non-devolved |
| Judgment Date | 05 December 1853 |
| Date | 05 December 1853 |
| Court | Privy Council |
English Reports Citation: 14 E.R. 204
ON APPEAL FROM THE COURT OF ERROR AND APPEAL FOR WEST CANADA.
Mews' Dig. tit. Colony, II. Particular Colonies, 4. British North America, Canada-Mortgage of Absolute Assignment; tit. Deed and Bond, A. Validity and Operation, 1. General Principles-Receipt for Purchase Money; tit. Mortgage, B. Particular Mortgages and Incumbrances, 7. Of Colonial Estates, c. Canada; tit. Notice, 4. By Tenancy, When Purchaser bound. On point as to form of mortgage, see Bell v. Carter, 1853, 17 Beav. 11; Douglas v. Culverwell, 1862, 4 De G.F. and J. 20. On point as to sufficiency of notice, followed in Hunt v. Luck (1901), 1 Ch. 45, and see Natal Land Co. v. Good. 1868, L.R. 2 P.C. 129; 5 Moo. P.C. (N.S.) 132.
IX MOOEE, 18 BARNHART V. GREEN8HIELDS [1853] [18J ON APPEAL FROM THE COURT Ob' ERROR AND APPEAL FOR WEST CANADA. ROBERT GEORGE BARNHART,-Appellant; JAMES BLACKWOOD GREEN-SHIELDS, WILLIAM HENKY PATTERSON, LEWIS MOFFATT, and ROBERT BEEKMAN,-Respondents * [Dec. 5, 1853]. Where a tenant is in possession of land, a purchaser is bound by all the equities which the tenant could enforce against the vendor. This equity of the tenant extends not only to interests connected with his tenancy, but also to interests under collateral agreements. The principle is the same in both classes of cases, that the possession of the tenant is notice that he has some interest in the land, and a purchaser having notice of that fact is bound to inquire what that interest is [9 Moo. P.C. 32, 33]. But, a purchaser is not bound to attend to vague rumours, or to statements by mere strangers. A notice to be binding must proceed from some person interested in the property [9 Moo. P.C. 36]. B., the owner of land in West Canada, under a contract of sale from the Chancellor and scholars of King's College, being indebted to T. and Co., induced P. to assume the debt, and to secure him from any loss in consequence of such assumption, by deed poll endorsed on his original contract of sale, absolutely assigned the land to P. Up to the time of this assignment, B. himself had never been in the actual possession of the land, his father having managed the same as his agent. P. afterwards, in satisfaction of certain debts due by him, assigned the land conveyed to him by B., with other property, to G. This assignment was also endorsed on the original contract of sale. Prior to the execution of this assignment, G. made some inquiries about the ownership of the property, but it did not appear that he received any information that B. was the owner. In a suit by B. against P. and G. for redemption,-Held, upon appeal (affirming the decree of the Court of Error and Appeal in Canada),- First. That, under the circumstances, the transaction between B. and P., although in form an absolute assignment and sale, was in effect a mortgage only. Second. That as G. had acted with proper bona fides, taking the assignment from a party who had the original contract of sale in his possession, and who had taken an absolute assignment of that contract, he had no notice, actual or constructive, of B.'s title [9 Moo. P.C. 38]. Semble. Where the receipt of the consideration-money is acknowledged in the body of the deed, it is not the custom in Canada to have an additional acknowledgment endorsed on the deed [9 Moo. P.C. 38, 39]. This was a suit instituted by the Appellant for the redemption of an estate in Upper Canada, assigned by [19] him, as he alleged, by way of mortgage to the Respondent, Patterson, who had, however, treated such assignment as an absolute conveyance, and had himself, without notice to the Appellant, assigned the same to the Respondent, Greenshields. The suit arose under these circumstances: - In the year 1830, the Appellant contracted with the Chancellor, President, and Scholars of King's College, at York, in Upper Canada, for the purchase from them, in fee-simple, of the land in question, for £250, payable by instalments. This agreement for the purchase was duly carried into effect by a contract in writing, executed by both parties, on the 2nd of October, 1830. In the month of April, 1834, the Appellant, being indebted to the firm of Fisher, Hunter, and Co., of * Present: The Right Hon. Mr. Baron. Parke, the Right Hon. T. Pemberton Leigh, the Right Hon. Sir Edward Ryan, Knt., and the Right Hon. Sir John Patteson, Knt. 201 BARNHART V. GREENSHIELDS [1853] IX MOORE, 20 Montreal, in the sum of £296 Os. 3d., applied to the Eespondent, Patterson, his brother-in-law, to assume the debt for him, to which Patterson assented; and to secure him against any loss, the Appellant, by a deed-poll under his hand and seal, dated the 4th of April, 1834, and endorsed on the contract of the 2nd of October, 1830, absolutely assigned to Patterson, his heirs, executors, administrators, and assigns, in consideration of the sum of £400, therein expressed to be [20] paid by Patterson, as well the therein within-written deed and land therein mentioned, as also all the Appellant's right of action on the covenant therein. It was alleged, that this assignment was made solely with a view of securing Patterson from loss by assuming the debt of the Appellant to Fisher, Hunter and Co., and that it was understood between the parties that the contract should be re-assigned to the Appellant, as soon as he should repay Patterson the debt of £296 Os. 3d., and interest up to the date of payment, together with all such sums of money as Patterson should in the interim pay to the Chancellor, etc., of King's College, under the contract above-mentioned. No money was paid by Patterson to the Appellant upon the execution of this assignment, nor was there any receipt endorsed on the contract for the purchase-inoney, although it was acknowledged in the assignment. Patterson afterwards became indebted to the firm of Gillespie, Moffatt, Jamieson and Co., of Montreal, in Lower Canada, to a large amount; and the Respondent, Greenshields, who was the agent of the firm, requiring from Patterson security for the same, Patterson, to secure the payment of such debt, as well as of any further advances which the firm might make to him, executed, on the llth of December, 1839, an assignment to Greenshields, of the contract of the 2nd of October, 1830, which was also endorsed thereon. This assignment purported to be an absolute assignment; though it was, in fact, made only to secure the debt then due to Gillespie, Moffatt, Jamieson and Co. from Patterson, and such further advances as they might thereafter make to him. [21] Prior to the execution of this last assignment, Greenshields made some casual inquiries as to the land proposed to be conveyed, and in the course of those inquiries was informed that the same was not the property of Patterson, but of the Appellant, or of the Appellant's father, John Barnhart, who in fact was acting as the Appellant's agent in the management thereof. It appeared that John Baruhart had been in possession, however, under a lease from the College, prior to the contract of purchase by the Appellant, and that he had never made any payment to the Appellant, or accounted to him for the rent; and Greenshields took it for granted that Patterson was in possession of the land, inasmuch as he had in his possession the contract of the 2nd of October, 1830. Neither the Appellant nor his father, nor Mr. Freedie, the tenant then in actual possession of the land, were privy to the assignment, Greenshields paid the remaining instalments due under the contract of the 2nd of October, 1830, to the Chancellor, President, and Scholars of King's College, and took from them a conveyance to himself in fee, of the land in question. On the 12th of October, 1841, the Appellant filed a Bill in the Court of Chancery in Upper Canada, against the Respondents, Patterson and Greenshields, stating, amongst other things, the...
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