ONTARIO

APPEAL REPORTS.

BELL V. FRASER.

Loss by agent-Payment into court-Defence--Conditional payment-Satisfaction-Order XXVI. O. J. A.

The plaintiff, as assignee of an insolvent estate, claimed from the defendant, a creditor of the estate, an account as to his dealings with timber limits assigned to him as security, and payment of any balance. Part of the timber had been placed in the hands of K. & Co. for sale. Held, upon the facts stated-affirming the decision of FERGUSON, J.]— that the defendant was not liable for a loss occasioned by K. & Co.'s failure to pay over part of the price of the timber sold by them. The defendant stated in his defence that in case the Court should be of opinion that he was liable for the payment of the balance, &c., he, the defendant, brought into Court the sum of $4,300, saying that the same was sufficient to pay in full all claims of the plaintiff in respect of the balance, &c.; and paid into Court under his defence the said sum of $4,300, which was withdrawn by the plaintiff after issue and before trial.

FERGUSON, J., although he held that the plaintiff was not entitled to recover, refused to order him to refund the $4,300.

An appeal from such refusal was dismissed with costs, as the result of a division of opinion.

Per HAGARTY, C. J. O., and OSLER, J. A.-There was only one way in which this money could have been paid into Court, unless under a special order, viz., under Order XXVI. O. J. A.; the money was not paid in conditionally, but absolutely in satisfaction and as an alternative defence; and therefore it was properly withdrawn by the plaintiff. Per BURTON and PATTERSON, JJ.A.-The defence of payment into Court set up, was not strictly pleadable, but was a notice to the plaintiff that the money was in Court to answer his demand, if he established it. Money paid into Court under a defence is not inevitably to be regarded as paid in under Order XXVI. O. J. A. The inference that payment into Court is made for immediate satisfaction, must yield to a direct notice, that it is not made for that purpose; and such notice sufficiently appearing from the pleading, the money was improperly withdrawn by the plaintiff.

AN appeal by the defendant from a portion of the judgment of Ferguson, J., refusing the defendant's application to compel the plaintiff to repay into Court the sum

1-VOL. XII A.R.

of $4,300 withdrawn by him; and a cross-appeal by the plaintiff from such portion of the same judgment as dismissed the plaintiff's action, with costs.

The action was brought by the plaintiff, who was the assignee in insolvency of McDougall Brothers, against the defendant, a large creditor of the estate, who held valuable properties as security for his claim, for an account and payment to the plaintiff of the balance (if any) in defendant's hands, after payment of his own claim.

The sum of $4,300 above mentioned was paid into Court by the defendant under a direction procured upon the following præcipe:

Required direction for the bank to receive from Alexander Fraser, the defendant herein, or his solicitor, $4,300, payable into Court to the credit of the plaintiff and the accountant of the High Court of Justice.

"Under (Rule 216) the defendant's statemennt of defence herein, dated 6th April, 1882."

The words (Rule 216) were inserted in the accountant's office.

That part of the statement of defence which related to the payment into Court was as follows:

9. In case this Honourable Court should be of opinion that the defendant is still liable for the payment of the balance of the money mentioned in the next preceding paragraph, the defendant now brings into Court ready to be given to the plaintiff the sum of $4,300, and states that the same is sufficient to pay in full all claims of the plaintiff in respect of the balance, &c., and of all interest thereon, and of all damages for non-payment thereof, or for omission to credit the same on the defendant's claim, pursuant to the deed set out in the 7th paragraph of the plaintiff's statement of claim."

The plaintiff took the money out of Court, notwithstanding the language of the defence quoted, and Ferguson, J., although he held that the plaintiff was entitled to nothing, yet felt bound to refuse to order the plaintiff to re-pay the $4,300.

The other facts of the case are fully set out, and the authorities are referred to in the present judgments.

The appeal was heard on the 14th day of May, 1885.*

McCarthy, Q. C., for the appellant.

Gormully, for the respondent and cross-appellant.

September 15, 1885. HAGARTY, C. J. O.-Two questions are presented for our decision. The Court below decided against plaintiff's claim, in effect that there was no cause of action.

But it was also held that a sum of $4,300, paid into Court by defendant, as he says, to abide the determination of the suit, or the opinion of the Court, and which the plaintiff took out of Court, could not be refunded to defendant, although the judgment was that the plaintiff was entitled to nothing.

The defendant appeals against this latter view. The plaintiff cross-appeals that the Court below was wrong on the merits as to this sum, and that, apart from the payment into Court, the plaintiff was, entitled to a decree therefor.

If the cross-appeal be successful, it will be unnecessary to discuss the subject matter of defendant's appeal, except on the question of costs.

McDougall & Brother became insolvent in October, 1877. In the May of that year a deed was executed between the insolvents and the defendant Fraser.

It recited that a large quantity of timber had been got out by the McDougalls on limits, jointly owned by J. L. McDougall and defendant.

That defendant, for their accommodation, had accepted large drafts, and they desired to secure him, &c.

And that he agreed to advance money to get the timber to Quebec.

They then assign the timber to him absolutely, but on trust to sell and dispose of it at Quebec, either for cash or

*Present.-HAGARTY, C. J. O., BURTON, PATTERSON, and OSLER, JJ. A.

credit, during the year 1877, as may reasonably seem bestto him, and out of proceeds to pay all charges, wages, and expenses, and to pay all the drafts and renewals, and to retain to himself all his advances, commission, &c.; balance,. if any, to the McDougalls.

They agree to send the timber to Quebec at their own expense, and to place it in St. Lawrence docks, &c.

The timber was taken to Quebec, but, as is alleged, from the state of the market, lay there for several years unsold. It was placed in the hands of Messrs. Knight & Co., as brokers or agents for sale.

In July, 1881, a deed was executed between the plaintiff as assignee, and the defendant, which is treated by all parties as a final arrangement of their accounts.

It was agreed that the limits should be sold at a reserved price of $100,000.

Defendant was to receive the purchase money on certain trusts to pay himself one-half the total price.

Out of the other half to deduct $58,003.08, the amount of his claim provable against the insolvent's estate, and the balance to plaintiff, as assignee.

Certain items of defendant's account were to be verified by vouchers.

The account sales of the timber by A. F. A. Knight & Co.,. to be verified at expense of estate, if required.

The balance of timber in the hands of Knight & Co., belonging to the estate, is shewn in above account sales as 48,030 feet 4-12 inches. On this Mr. Fraser has a lien for his claim, as aforesaid. If this shall be sold before the sale of the limits, the amount realized therefrom shall be deducted from the amount of Mr. Fraser's claim, as aforesaid. Mr. Knight's and other proper charges to be first deducted.

The limits were sold, and the whole question on this head is, whether a loss occasioned by Knight's failure to pay out of the sales of timber made by him a sum of about $4,300 is to fall on defendant or on the estate.