creditor's remedy was therefore only against the estate that passed by the mortgage out of the mortgagor, why should the enforcement of the remedy be a matter beyond the power of the court, or involve more difficulty than the realization of the interest of a debtor in any chattel of which he is only part owner?

But, as I have said, the facts of this case make it unnecessary to pursue the inquiry further at present. Each case as it arises must be dealt with on its own facts.

I may repeat that the right of the creditor to realise by some process, and for our present purpose it does not matter what process may be appropriate, whatever interest is conveyed by a preferential mortgage, to the extent to which it is required for the satisfaction of his debt, seems to me to follow from holding, as we are bound to hold, that a mortgage is a conveyance or transfer within the meaning of chapter 118. Every argument to the contrary is to my mind an argument against the application of the statute to mortgages, and that cannot be listened to.

For these reasons I am satisfied that we ought to affirm the judgment of the court below so far as it is expressed in the second paragraph of the formal entry which reads thus:

"2. This Court doth declare that the chattel mortgage made by the defendant Cox in favor of the defendants D. McCall & Co., and bearing date the 22nd day of March, A. D. 1884, was and is fraudulent and void as against the plaintiffs and such other of the creditors of the defendant Cox as may contribute to the expenses of this suit, and doth order and adjudge the same accordingly."

This is, as I have before remarked, the extent of the relief asked in the statement of complaint, and it is the extent to which we have any aid from the opinion expressed by the learned judge,

I have shewn why in my judgment the fund ought not to be handed over to the defendant Ferguson, who is a stranger in title to it and is not an officer of the court, notwithstanding that the plaintiffs may desire to have it so handed over, and that the defendants may not object to

that disposition of it if they are not allowed to keep it under their mortgage.

The question remains, what order ought to be made?

I do not see my way to make any further order than that contained in the second paragraph of the judgment.

It is to the effect indicated in the reports of Reese River Mining Co. v. Atwell, L. R. 7 Eq. 352, and in Longeway v. Mitchell, 17 Gr. 194, and I have not seen any authority to satisfy me that we should go further, while the tenor of what authority I have seen seems to me to be in the opposite direction.

What I understand to be urged is that the money in court should be distributed amongst all the creditors of Cox in the same way as in an administration suit.

The proposal is no doubt attractive from its apparent consonance with the familiar principle that "equality is equity," and if I could satisfy myself that we could adopt it without an extension of jurisdiction that savoured of legislation, I should not hesitate to adopt it.

When the action was commenced the defendants McCall & Co. were in possession of the goods lawfully as against all the world but the creditors of Cox. The creditors, who were not then entitled to seize the goods, and who had no lien upon them, asked for an injunction to prevent their sale to innocent purchasers. They did not ask and could not then have obtained from the court any more extensive relief. To entitle them to the relief they did ask, having regard to the fact that their debts were not due, they were carrying the doctrine of Longeway v. Mitchell possibly a step beyond the direct force, though I do not say farther than was warranted by the principle, of that decision.

In Reese River Mining Co. v. Atwell, Lord Romilly, dealing with the objection that no lien had been acquired, said: "I have little doubt that what was passing in Mr. Jessel's mind was the rule that the court will not give equitable execution until the creditor has put himself in a position to obtain execution at law, in which case there is no question of the statute at all. But as soon as the court finds that a deed has been executed for the pur

pose of delaying, hindering or defrauding creditors, and that it comes within the statute, it sets the deed aside, but it goes no farther; and the plaintiffs must take some independent proceedings if they wish to have execution against the property in this deed." And Strong, V. C., referring to the argument used in the Reese River Co.'s Case, that a plaintiff was not entitled to a decree where he was in a position only to obtain a declaration which might be barren, made these remarks, 17 Gr. p. 190, "But Lord Romilly, drawing the line between merely setting aside the deed as fraudulent against creditors and the consequential relief of equitable execution, decreed the former but refused the latter relief, thus determining that whilst any creditor is entitled to have a deed which an Act of Parliament has enacted shall be deemed fraudulent as against all creditors, without distinction of priority, set aside, no creditor is entitled to resort to a court of equity to have execution for his debt, unless he has first perfected his title at law; a distinction which is very obvious and one which certainly commends itself to common sense."

These remarks certainly do not lose force from the circumstance, which would seem to have escaped the attention of the learned Vice-Chancellor, that in the case before Lord Romilly there was no question of legal execution, the plaintiffs having a judgment of the Court of Chancery, and the objection being to the absence of a charging order.

In Bank of Upper Canada v. Thomas, 9 Gr. 321, 2 E. & A. 502, the plaintiffs had executions against the lands of their debtor, who had made a deed which was impeached. under the statute 13 Eliz. ch. 5. The deed was declared fraudulent by VanKoughnet, C., and the decree directed the usual reference as to incumbrances, account of amounts due, and sale in default of payment within one month after report, being in this respect, if I understand it correctly, the same decree which, about the same time, was said by Spragge, V.C., in Mallock v. Plunkett, 9 Gr. 556, to be the proper decree for a plaintiff to obtain in place of selling at law with an evident cloud upon the title and purchasing at an undervalue.

Instances of sales under execution, followed by actions

of ejectment upon the sheriff's deed in which the validity of the obstructing conveyance was the subject of the contest, will readily occur to those whose recollection of our courts goes back for thirty years or more, and will prove the value of the rule acted on in these cases of The Bank of Upper Canada v. Thomas and Mallock v. Plunkett; but when the court of equity, in such circumstances, undertook the sale it did not disturb the order of priority among the judgment creditors, nor did it ever assume, so far as I am aware, to treat the money produced by the sale of the land as standing on any other footing than the land itself.

The judgment of VanKoughnet, C., in the case of The Bank v. Thomas, was varied in appeal with respect to the right of the fraudulent grantee to enforce a judgment against the lands covered by the deed which was declared fraudulent, but his direction that the land should be sold by the court and not under the fi. fa. at law was affirmed. I shall read some observations which he made in the Court of Error and Appeal, as containing a statement of principles which I take to be indisputable, and not to have been disapproved of by the other members of the court. from whom he differed as to their application to the circumstances of the case. I read from p. 513 of the report: "Equity in these cases gives no higher or other rights than the law does. Lord Hardwicke says in Huggins v. The York Buildings Company, (2 Atk. 107) "I do not know in the case of fraudulent conveyances, that this court have ever done anything more than remove such fraudulent conveyances out of the way but equity follows the law, and leaves them to their remedy by elegit, without interfering one way or the other,' the rule being as I understand Lord Hardwicke, and as I understand the law of the court to be, that no person affected by, concerned or interested in removing out of the way of creditors a fraudulent conveyance, acquires thereby any higher or other right in this court than he held at law. This court may allow the parties to proceed upon their executions at law, as did Lord Hardwicke in the case cited; or according to the modern practice, it will itself

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sell the property, or procure money to be raised on or out of it to pay off the creditors; but in so dealing with the estate it never has, in any instance that I am aware of, created or acknowledged any other rights than those which the parties might have enforced at law; or interfered with the order of those rights, unless it be to enforce some equitable claim which this court would itself have directed against the land had it remained in the hands of the fraudulent grantor."

This doctrine is to my mind entirely in accord with what is laid down in Longeway v. Mitchell; it is not opposed to any authority to which my attention has been directed, and it is needless to say that it is consistent with the application of the equitable principle of equal distribution to such assets as can only be reached by the hand of the court of equity or for access to which the creditor resorts to that court rather than to a court of law. VanKoughnet, C., alludes to assets of these classes in the passage I have read, and we have examples of them in cases that have been in discussion in the present appeal, as e. g. Huggins v. York Buildings Co., 2 Atk. 107; Taylor v. Jones, 2 Atk. 600; Goldsmith v. Russell, 5 D. M. & G. 547.

In obedience to the injunction, if one had been issued as prayed by the plaintiff's, the goods would have remained in the hands of the fraudulent grantee, liable to be taken by creditors in the order in which their executions came.

This might turn out an unprofitable or inconvenient condition of things in case the executions were delayed, as they would necessarily be in the case of these creditors whose debts were not due; and it might appear that the Longeway v. Mitchell doctrine, while very useful and workable in the case of lands, required to be supplemented when applied to perishable goods. That, I apprehend, would be a work of legislation, the existing right being to have the goods retained unsold, or sold only with notice.

Now when, in view of the inevitable loss which the retention of the goods would entail, it was arranged for the benefit of all concerned that the goods should be converted into money, I have been unable to see what ground we 79–VOL XII A.R.