1863, and that the Debenture-holders had no means of obtaining A motion was made on notice before Mr. Justice Wilmot, one of the Judges of the Supreme Court, for an injunction in terms of the prayer of the bill, who refused the application. From the order refusing the injunction, an appeal was brought to the full Court, and on the 22nd of October, 1864, the judgment of that Court was delivered by Chief-Justice Carter, dismissing the appeal with costs. The grounds of the judgment were, first, that the Judgment creditors, whose judgments were duly registered, had no notice of the debentures; and, secondly, that the Debentureholders' claim, that the Bonds amounted to a Mortgage of the proceeds of the lands, and that they were in the position of equitable mortgagees of the land itself, could not be sustained, as there was no analogy in the circumstances to an equitable mortgage. The learned Chief-Justice then proceeded :-“ At the time when the judgments were recovered the land became legally charged and liable to be sold as personal estate to satisfy these judgments. It can only be sold for that purpose, under executions issued on these judgments, and when so sold the proceeds must be applied as the law authorizing the sale directs, and equity cannot, in our opinion, in this case stop such sale and so prevent a party having a charge by Statute from making available such lien in the manner pointed out by the enactment, binding the land, for the simple reason that the party asking the intervention has no right, or title to, or charge on the land, and so no interest therein. Nor can equity declare the Judgment creditors, or the Sheriff, after such a sale, trustees for the Deben ture-holders and decree either of them to hold the proceeds of such sale (not for the Judgment creditors for whose sole benefit the law gives the charge and authorizes the sale, but) for the benefit of parties setting out a claim directly antagonistic. To do so would be to destroy the legal charge of the one party, and give to the other a charge which by their agreements they expressly stipulated they were not to have. Can it be said that in competition with the Judgment creditors who have perfected their title by registry, execution, levy, and sale, the Debenture-holders have an equal equity, they have acquired no right, legal or equitable, to the land itself, though very possibly a right to proceed against their debtors in personam upon a sale by them. We would not, however, by any means be understood as saying that a Judgment creditor may take any property whatever without regard to equitable interests. If the title of an equitable mortgagee is complete, and so constitutes a lien or charge on the land, it may be fairly open to argument, that, notwithstanding our Registry Acts, though the judgments operated as a charge, they must be taken as a charge subsequent to the lien or charge before created by a perfected equitable mortgage. In the view we have taken of this case the question does not arise, and we express no opinion on it. But to allow parties to hold lands unencumbered on the records of the county in which they lie, and thus enable them to obtain credit on the strength of owning such unincumbered lands, and after judgments obtained and registered, to permit such judgments to be cut down by secret bonds of the extraordinary character now put forward, and which expressly reserve the lands free from charge, would, in our opinion, be not only at variance with the whole policy of our legislation on this subject, but with every principle of justice and equity." The present appeal was brought from this order. Sir Hugh Cairns, Q.C., and Mr. Swanston, for the Appellants First, we submit that the Debentures held by the Appellants constituted a Mortgage on all the property of the Company. As the Debentures give the holders an absolute mortgage over all the property of the Company, the Company could not give their Judgment creditors any greater interest in the property than they had J. C. 1865 WICKHAM V. THE NEW BRUNSWICK AND CANADA RAILWAY CO. J. C. 1865 WICKHAM V. THE NEW AND CANADA themselves at the date of the judgments, at which time the Company had no interest in its property except subject to the debentures, and the Judgment creditors can only take what the Company had the power to charge. The true construction of the clause in BRUNSWICK the debentures which provides that nothing therein contained RAILWAY CO. should be held to limit the power of sale or appropriation by the Company of any of the lands of the Company is plain; it was introduced for the sole purpose of enabling the Company, as a land company, to effect sales of lands whenever they judged it expedient so to do, without the concurrence of the Debenture-holders being required to perfect the title of the purchaser, the right of the Debenture-holders attaching to the proceeds of the sale in the place of the land sold. It cannot be doubted that the true effect of the Debentures is to give the Debenture-holders an absolute mortgage over all the property of the Company, and this is not made less absolute by the condition that the Company might exchange land for money whenever it chose. The Debentures amount to an agreement that the Company should hold their lands in trust to sell them, when and as they should think expedient, and apply the proceeds of the sale in payment of the Debentureholders; neither the Company nor any Act of Parliament regulating the right of Judgment creditors can override this agreement. Under the Col. Stat., tit. xxx c. 113, s. 10, nothing could be sold by the sheriff but the interest of the debtor, and the interest of the company is an interest subject to the agreement with the Debentureholders. In Beavan v. The Earl of Oxford (1), it was held that a Judgment creditor was not a purchaser within the meaning of the Statute, 27 Eliz. c. 4, and had no title to set aside a voluntary deed. Whitworth v. Gaugain (2) was a suit by an equitable Mortgagee against a Judgment creditor of the Mortgagor, who had obtained possession of the mortgaged estates under elegits, and the Court held that the Plaintiff acquired a special lien on the property, and that a judgment had relation to the time it was entered up, and did not affect any bona fide conveyance made before that time. Assuming then that the judgments were properly registered, as required by the registration laws of New Brunswick, they would only affect (1) 6 D. G. M. & G. 507. (2) 1 Ph. 728; S. C. 3 Hare, 416; Cr. & Ph. 325. property which the debtor was lawfully possessed of at the date of the judgment, and could not displace a previous equitable mortgagee: Benham v. Keane (1); Eyre v. M'Dowell (2); where the authorities on this point are all collected. Even if the interest of the company in the lands was sold under the Colonial Statute, tit. xxx c. 113, s. 6, such interest could only be sold as personal estate, for, according to the law of New Brunswick, freehold lands of a debtor are saleable under a fieri facias; and as soon as the lands are converted into personalty, the right of the Debenture-holders, even if they had none to the land, when in specie attaches. Under section 10 of the same Statute nothing can be sold but the interest of the debtor, and the interest of the Company in these lands, was an interest subject to the agreement with the Debenture-holders. If the Debenture-holders have no charge on the lands, neither have the Judgment creditors; for they also could only call on the Sheriffs to sell the interest of the debtors in land as personal estate. The position, therefore, of the parties is that the Debenture-holder has an agreement with the Company, by which the Company is trustee of the land with power to sell it, and must hold the proceeds as trustee for the Debenture-holder, while the Judgment creditor has a right subsequently acquired, to have the interest in the company in the lands sold, and the proceeds paid to him. Each party is, therefore, entitled only to receive the proceeds, and the Debenture-holder being prior in time has the priority in right. Secondly. There was no necessity to register these debentures as against a Judgment creditor. A judgment can only affect the interest which the debtor has in land: Rose v. Watson (3). Section 4 of the Revised Statutes of New Brunswick, tit. xxx. c. 112, provides that all conveyances, memorials of judgments, or other instruments by which any lands may be affected, shall be registered; and if not so registered, shall be fraudulent and void against subsequent purchasers for valuable consideration whose conveyances are previously registered, and by tit. xli. c. 161, s. 7, a conveyance is defined to mean any instrument by which any freehold, leasehold estate or interest in real estate may be transferred or affected. Here registration is not required, for a Judgment creditor is not a (1) 1 J. & H. 685. (2) 9 H. L. C. 619. (3) 10 H. L. C. 672. J. C. 1865 WICKHAM v. purchaser. Notice does not affect a Judgment creditor claiming interest in land by contract. The Attorney-General (Sir R. Palmer), and Mr. Wickens, for the THE NEW Respondents:— BRUNSWICK AND CANADA RAILWAY Co. These debentures, or mortgage bonds, as they are called, create no charge on the lands advertised for sale by the Sheriffs. The question as to what interest the Debenture-holders take in a great measure depends upon the construction of the agreement, the Statute, 21 & 22 Vict. c. 154, carrying out that agreement and the language of the Debentures. By that Statute the "undertaking of St. Andrew's & Quebec Railway Company was transferred to the New Brunswick & Canada Railway & Land Company. The word "undertaking" is a general expression, and its meaning must be ascertained from the intention manifested in the agreement and Statute. All that the Debentures affect to transfer to the Debenture-holders is the "undertaking" of the Company, and the money to arise from the sale of the land, tolls, &c.; but these words do not give the Debenture-holders or confer on them any legal title to restrain the sale of the lands in the hands of the Sheriff for the Judgment creditors; neither does the proviso authorizing them to enter upon the undertaking and into the receipt of the proceeds of the sales, give them a charge upon the lands. The case of Doe dem Wyatt v. The St. Helens & Runcorn Gap Railway Company (1) is on all fours with the present case. That was an action of ejectment brought by a mortgagee of the "undertaking," and, as in this case, turned upon the meaning of that word, and the Court of Queen's Bench held that the word "undertaking" did not give to the mortgagee such an interest as would enable him to maintain ejectment. Land of a Railway company is not included in a Mortgage by the Company under such a term, and cannot pass: Russell v. The East Anglian Railway Company (2); Fripp v. The Chard Railway Company (3). In equity a covenant to settle on A. lands of a certain yearly value without mentioning any lands certain, will not create a specific lien: Fremoult v. Dedire (4); Berrington v. Evans (5). Even if the deben (1) 2 Q. B. Rep. 364. (2) 3 Mac. & Gor. 125. (3) 11 Hare, 241. (4) 1 P. Wms. 429. (5) 3 Y. & C. 384. |