trial before MATHERS, C.J.K.B., on the 11th July, 1910, and on the opening of the case, counsel for the plaintiff asked to amend his statement of claim so as to make the suit one on behalf of himself and of all other creditors of the judgment debtor, which amendment was granted.

MATHERS, C.J., held, at the conclusion of the trial, following Ferguson v. Bryans, 15 Man. L R. 170, that the amendment made at the trial not being made within 60 days after the execution of the alleged fraudulent document, the plaintiffs could not claim the benefit of the legal presumption in sec. 40 of the Assignments Act. R. S. M. 1902 ch. 8, and he entered a verdict for the defendants.

The plaintiffs appealed.

The appeal was heard by HOWELL, C.J.A., RICHARDS, PERDUE, and CAMERON, JJ.A.

W. L. Garland, for the plaintiffs.

F. M Burbidge, for the defendants.

The judgment of the Court was delivered by

HOWELL, C.J.A.:-On the hearing before the learned. Chief Justice, there was no attempt to distinguish this case from Ferguson v. Bryans, and it was not pointed out to the learned trial Judge that in that case the action was brought by a simple contract creditor who had no charge upon the lands, and that the principles laid down in that case might not be applicable to this case.

It is a well-known and well-settled principle of law that, before the recent amendments to the Assignments Act, an action of this nature was properly constituted by making the fraudulent grantee only a party; the grantor was not a necessary or proper party to such a suit, because, as he had conveyed away the land, he had no interest whatever in it and was absolutely bound by the conveyance. I know it was the practice while I was at the Bar to get over this difficulty by alleging, amongst other things, that the fraudulent grantee was really a trustee for the judgment debtor, and held the land under a secret trust, and thereby the judg ment debtor could be made a party and made subject to examination and discovery. There is no such allegation in this case, and I can see no reason why the judgment debtor was made a party to this suit.

Before the recent amendments to the Assignments Act, a simple contract creditor could file a statement of claim asking to have a fraudulent conveyance set aside and to have the grantee restrained from dealing with the land until the plaintiff in the ordinary course could get a judgment, and perhaps now, owing to the recent amendments of the King's Bench Act, where so many different actions can be joined together, the plaintiff might, quite aside from the Assignments Act, launch a suit against a fraudulent grantee of real estate and against the debtor, making them both parties, and ask to have the grantee restrained from conveying, and ask for a judgment against the debtor, and, in the event of that issue being decided in his favour, to have the fraudulent conveyance set aside. I say perhaps that could be done, aside from the Assignments Act.

Ever since Longeway v. Mitchell, 17 Gr. 190, which followed a then recent English case, it has been held that such an action must be brought by the plaintiff as well for himself as on behalf of all other creditors of the debtor, and the reason for this is apparent, because the same right which the plaintiff had every other creditor had. It will be seen, then, that up to the recent amendments of the Assignments Act, a judgment creditor who had a claim on the debtor's land could file a bill on his own behalf, but any other creditor not having such a claim must sue on behalf of all.

In this state of the law amendments were made in the Assignments Act. Section 8 of that Act declared that assignments should take preference over all executions and registered judgments, thus giving the assignee the power to deprive a judgment or execution creditor of the priority which he had secured by such judgment or execution. This was naturally followed by sec. 48 of the Act, which declares that the assignee shall have a sole right to bring an action to set aside a fraudulent conveyance, subject to an exception, that, where the assignee refused or neglected to proceed with such a suit, a creditor might do so for his own benefit. The Act goes on to provide for what shall be done when there is no assignment. It provides, by sub sec. (b) of sec. 48, that one or more creditors may sue on behalf of all the creditors to set aside a fraudulent conveyance; and in the same suit the whole matter will be administered, the liability of the debtor will be declared, and the land will be sold and divided amongst the persons entitled; thereby making a distinct

advance on the old method of having two suits, and apparently providing for the judgment debtor and the fraudulent grantee to be both proper parties in the suit. And subsec. (c) provides still further for the administration of this property. The language of sub-sec. (b), in my view of the law, has not taken away the right which the judgment creditor formerly had; and I think that sub-sec (d) was passed in order to permit such a suit to be proceeded with, by providing that, in such a suit, whatever is realised by the judg ment creditor shall be divided amongst the creditors just as the Sheriff now does when he recovers money under an execution.

I have not overlooked the case of Gibbons v. Darvill, 12 P. R. 478, where Mr. Justice Rose held that, since the Judicature Act, where an action was brought by a simple contract creditor to set aside a fraudulent conveyance, the grantor was a proper party in order that all the rights of the various parties, as he said in his judgment, might be worked out in one suit. It may be that the Ontario Judicature Act was then wide enough to permit two such suits to be brought together, and to make the fraudulent grantor a party to a suit in which he has no interest, as to the alleged fraudulent conveyance, and the grantee a party to a suit to recover a claim against the grantor in which he has no interest.

As I above remarked, it may be that such actions can now be joined in Manitoba under the King's Bench Act without the assistance of the Assignments Act, but this is a mere speculation that I need not follow further.

Section 40 of the Assignments Act requires consideration. It declares that, if there is a preference or a document which has the effect of giving a preference over creditors, or over one or more of them, it "shall, in and with regard to any action or proceeding which within 60 days thereafter is brought, had, or taken to impeach or set aside such transaction, be utterly void as against the creditor or creditors injured, delay, prejudiced, or postponed."

It will be seen that this clause does not say that the action shall be brought by all creditors or on behalf of all; and, it seems to me, its language fortifies the conclusion I have arrived at, as to the question of parties. The plaintiffs, creditors, have brought an action within 60 days after the execution of the impeached document, and, in my view of the law, they are entitled to the full benefit of sec. 40; and, if

the learned trial Judge had come to this conclusion, I should think from his judgment that the result might have been quite different.

It would be well, perhaps, to express my views to a certain extent as to the evidence in this case. The plaintiffs called the defendants as witnesses under the recent amendment to Rule 460, which provides that this can be done, and the plaintiffs still may contradict that evidence. The effect of this kind of evidence, and the extent to which the plaintiffs may be bound by it, is, to my mind, not free from doubt, but I do not think it necessary to decide the question in this

cause.

The alleged fraudulent conveyance was drawn up by the solicitor of both parties. He knew that the plaintiffs' statement of claim against the judgment debtor to recover the judgment had been served, and the time to put in a defence was fast approaching. The two defendants were personal friends, and, according to their testimony, had transactions covering a long period of time, and I come to the conclusion that the grantee of the fraudulent conveyance knew intimately his co-defendant's position. The grantee's solicitor knew that a statement of claim had been served on the grantor, and he must have known that there was no defence to it, and I think it is safe to say that he knew that the debtor was insolvent. Apparently, the conveyance covered all the property that the debtor had, and I have no doubt from the evidence that the debtor intended to execute a fraudulent conveyance or a fraudulent preference. The question of whether the fraudulent grantee is charged with notice of the facts which his solicitor had, arises in this case. It has been said that this notice is only a presumption, which may be me by direct testimony, and in this case the solicitor and grantee both swore that this knowledge of the solicitor was not divulged to the grantee. The solicitor must have known that taking that conveyance would in all probability subject his client, the grantee, to a law-suit, and it was his duty to have divulged it. There is no suggestion that the presumption that he did not tell his client because of the rule of law laid down in Cave v. Cave, 15 Ch. D. 639, should apply to this case. I am glad to find the law laid down that, where it was the duty of the solicitor to divulge a fact as to a title, this raised an irrebuttable presumption that he gave his client notice of that fact: Rolland v. Hart, L. R. 6 Ch. 678;

Real Estate Investment Co. v. Metropolitan Building Society, 3 O. R. 476, 490. The grantee, therefore, knew that a judgment would in a few days, in the ordinary course, be entered against the grantor, which could at once be made a charge upon this land, and his ordinary common sense must have told him that the debtor was insolvent. Applying the principle laid down by the late Chief Justice Killam in Schwartz v. Winkler, 13 Man. L. R. at p. 505, I have no hesitation in holding that the grantee had notice of the grantor's insolvency, although, perhaps, as suggested in that case, it is not necessary in Manitoba to prove notice of insolvency.

Both defendants swear that the purchase-price was paid by allowing a debt due by the vendor of $600, by a promissory note for $250, which, by a strange coincidence, was paid the very day the statement of claim was filed in this suit, and by the balance in cash at the time of the conveyance; and this leads to a consideration of sec. 44 of the Act, which protests all bona fide conveyances "made in consideration of any present actual bona fide payment in money." If I were untrammelled by authority, I think I should hold that where a party deliberately purchased property of and took a conveyance from a debtor whom he knew to be then insolvent, and paid the purchase-price, and he knew the debtor intended. to defraud his creditors by not properly applying the money, the purchase and payment were not bona fide within this. section.

I think, however, the contrary is the law. The case of Campbell v. Patterson, 21 S. C. R. 645, as explained by Mr. Justice Sedgewick in Burns v. Wilson, 28 S. C. R. 216, shews that, under a statute similar to ours, although the purchaser has knowledge of the insolvency and of the debtor's fraudulent intent, if he actually paid the money, the sale must stand.

In this view of the law I am supported by Mr. Justice Anglin in Langley v. Beardsley, 18 O. L. R. 67. In that case, under an Act similar to ours, it was clearly proved that all the purchase-price had been paid in money, and that out of that money a sum was returned to the purchaser to the extent of a claim which she had against the insolvent. The conveyance was supported, but the purchaser was compelled to repay to the assignee the amount of her claim.