considered nearly all the principal cases on the subject, comes to the conclusion that the depositions of the defendant, taken upon his own behalf upon a reference, were admissible in evidence, notwithstanding that he had died pending an adjournment of the reference prior to cross-examination, so that the plaintiff has been deprived of the opportunity to crossexamine him. It would be needless to cite specially any one of those cases, and I think it better simply to refer any one interested in the question to the judgment of Mr. Justice Rose.

I am of opinion, therefore, that this affidavit should be admitted, to be worth what it may, and to be considered "quantum valeat" at the trial.

Costs of the motion to be costs in the cause.

MANITOBA.

ROBSON, J.

APRIL 17TH, 1911.

TRIAL.

SCHWARTZ v. BIELSCHOWSKY.

Covenant-Joint Obligation of two Persons for Purchasemoney of Land-Acceptance of Joint Promissory NotePart Payment at Maturity-Acceptance of Note of one Debtor for Balance-Retention of Joint Note-Reservation of Rights-Suretyship-Novation-Notice-Release -Destruction of Joint Note-Indemnity-Vendor's Lien.

The plaintiff sued the two defendants to recover a balance of a sum of $4,000 which (among other moneys), in an agreement (under seal) for the sale and purchase of land, they, as purchasers, covenanted to pay to the plaintiff, as vendor, on the 1st June, 1909. When the payment became due, the defendant B. asked the plaintiff to take the joint promissory note of the two defendants for the amount; the plaintiff agreed, and a joint note for $4.951.94 was signed by the two defendants and delivered to the plaintiff. This was solely for the convenience of the defendants; the plaintiff had no intention of waiving any of his rights under the agreement. At the maturity of the note, the defendant McD. was ready to pay his share of one-half. but B. was not in funds. The whole amount was raised by means of the discount of a note of B. to McD. for the former's accommodation, and was intrusted to B. for the purpose of paying the note, which had been placed by the plaintiff in a banker's hands. B. proposed to the banker to pay $3,500, and give his own note for the

balance. The banker telegraphed the plaintiff, who replied that he would renew, but would not give up McD.'s name. The $3,500 was paid, and B.'s note for the balance ($1,750) was taken, the bank retaining the joint note. McD. knew nothing of these transactions until payment was demanded of him on B.'s default; he made no inquiry as to the joint note or where it was. The defendants asserted that the plaintiff accepted the joint note in satisfaction of the debt due under the deed, and that the joint note was satisfied by the payment on account and the personal note of B. The defendant McD. also set up the joint interest of the defendants, and that McD. was merely a surety for B.'s portion of the liability, and that the plaintiff had, by binding agreement, given time to B., whereby McD. had been prejudiced :

Held, that, as between the defendants and the plaintiff, each defendant was, in the first place, directly liable to the plaintiff for the whole amount of the instalment. The contention of McD. that, having furnished his share of the money, his position as to -the balance became merely that of surety for B., could not affect the plaintiff unless it was shewn that he knew of the facts. There was no evidence upon which the plaintiff could be charged with notice of the dealings between the two defendants: the circumstance that B. asked the plaintiff to take his own note for $1,750 would not justify such an inference; B.'s request to the plaintiff not to trouble McD. about the matter, if such a request was made, would not necessarily raise a suspicion of the facts. And the contention as to the release of McD. was answered by the explicit reservation of the plaintiff's remedies against McD. The acceptance of the sole obligation of B. did not, in the circumstances, constitute a novation, whereby the joint obligation of the two was discharged.

Review of the authorities.

Bedford v. Deakin, 2 B. & Ald. 210, specially referred to.

The joint note was destroyed in a fire which consumed the bank premises. The plaintiff had paid the bank:

Held, that the original covenant, upon which the action was brought, remained unimpaired; but, if either of the defendants wished it, indemnity as to the joint note should be given.

If the land had been conveyed, the plaintiff was entitled to a vendor's lien.

Action to recover moneys due under a covenant, and to enforce a lien.

A. E. Hoskin, K.C., and P. J. Montague, for the plaintiff. A. J. Andrews, K.C., F. M. Burbidge, and H. M. Hannesson, for the defendants.

ROBSON, J.-An agreement, under seal, for sale of land, dated the 27th May, 1908, between the plaintiff as vendor and the defendants as purchasers, contains a covenant by the defendants to pay to the plaintiff, among other moneys, the sum of $4,000, on the 1st June, 1909. It is to recover a balance of this sum from the defendants that this action is brought. A lien on the land for the amount is also asserted.

When the payment referred to became due, the defendant Bielschowsky asked the plaintiff to take the joint note of the defendants for the amount. The plaintiff agreed, and Bielschowsky subsequently delivered to the plaintiff the

defendants' joint note for $4,951.94, payable on the 18th August, 1909, and the note of Bielschowsky alone for $249.05. The latter note does not now come into question. The joint note bore interest at a rate greater than that provided for in the agreement. This was so that the plaintiff might discount the note without loss. This operation was solely for the convenience of the defendants. The plaintiff had no intention of thereby waiving any of his rights under the superior obligation.

At the maturity of the joint note, McDermott was ready to pay his share of one-half, but Bielschowsky was not in funds. By the discount of a note of Bielschowsky to McDermott for the former's accommodation, the amount necessary to retire the note was raised. The money was intrusted by McDermott to Bielschowsky for the purpose of paying the note. The note was in the hands of the Bank of Montreal at Altona, the plaintiff's residence. Bielschowsky went to Altona. The plaintiff was not at home. Bielschowsky saw the bank's representative and proposed to pay $3,500, and give his own note for the balance. The banker telegraphed the plaintiff, who replied that he would renew the balance for two months, but would not give up McDermott's name. The $3,500 was paid, and Bielschowsky's note for the balance was taken, the bank retaining the joint note. Bielschowsky's note was renewed several times. The joint note remained with the bank till destroyed as mentioned later. McDermott knew nothing of these transactions until payment was demanded of him on Bielschowsky's default. He made no inquiry as to the facts regarding the joint note nor as to its whereabouts.

Bielschowsky and McDermott both defend the action, and assert that the plaintiff accepted the joint note in satisfaction of the debt under the deed, and that the joint note was satisfied by the payment on account and the personal note of Bielschowsky for the balance.

The defendant McDermott also sets up the joint interest of the defendants, and that McDermott was merely a surety for Bielschowsky's portion of the liability, and that the plaintiff had, by binding agreement, given time to Bielschowsky, whereby McDermott has been prejudiced.

It is obvious from the facts as above narrated that, as between the defendants and the plaintiff, each defendant was, in the first place, directly liable to the plaintiff for the whole amount of the instalment.

The contention of McDermott, in effect, is, that, having furnished his share of the money, his position as to the balance became merely that of surety for Bielschowsky.

For this to affect the plaintiff, it must be shewn that he knew of the facts: see Rouse v. Bradford Banking Co., [1894] 2 Ch. 32, and [1894] A. C. 587, particularly in the latter report, per Lord Watson at p. 598.

There is no evidence upon which the plaintiff can be charged with notice of the dealings between the two defendants. The mere circumstance of Bielschowsky's asking the plaintiff to take his own note for the $1,750 would not justify such an inference. The request not to trouble McDermott about the matter, even if made, would not necessarily raise a suspicion of the facts.

The contention as to the release of McDermott is further and completely answered by the explicit reservation of the plaintiff's remedies against McDermott.

In my view, this case depends upon the bare question whether or not the acceptance of the sole obligation of the one defendant, under the circumstances, constituted a novation, whereby the joint obligation of the two was discharged.

As already stated, it was made clear that there was no intention on the plaintiff's part to release McDermott. In the absence of such an intention, there would not be a novation, and therefore no release of the original joint liability: Bresse v. Griffith, 24 O. R. 492; Cluff v. Norris, 19 O. L. R. 457.

In Swire v. Redman and Holt, 1 Q. B. D. 536, the defendant Redman contended that he had been released from the debt of the two, because of renewal acceptances taken from Holt alone. The Court, consisting of Cockburn, C.J., and Blackburn, J., in disposing of that defence, said: "For we think it clear law that a creditor who has two principal debtors may bind himself to one of them (in any way short of an absolute release) to give time, or even not to sue him, without in the least prejudicing his right of recourse against the other."

A certain phase of the decision in Swire v. Redman was criticised in Bailey v. Griffith, 40 U. C. R. 418, and ultimately overruled in Rouse v. Bradford Banking Co., supra. But the words quoted above from Swire v. Redman stand unquestioned.

Contentions similar to those raised here, and which may be similarly disposed of, were considered in Bedford v.

Deakin, Bickley, and Hickman, 2 B. & Ald. 210, where the facts were, that the defendant Bickley, after a dissolution of the defendants' partnership, undertook by deed to pay a particular partnership debt on two bills of exchange, and that was communicated to the plaintiff, who consented to take the separate notes of Bickley for the amount, strictly reserving his right against all three and retaining possession of the original bills. The separate notes having proved unproductive, it was held that the plaintiff might still resort to his remedy against the other partners, and that the taking, under these circumstances, the separate notes of Bickley, and even afterwards renewing them several times, successively, did not amount to satisfaction of the joint debt. In that case it was contended on behalf of Deakin that the renewal of the notes operated as a discharge of the original liability, inasmuch as the plaintiff had no right to do that without Deakin's knowledge, it being a detriment to him by preventing him from having recourse to his remedy against Bickley on the agreement. Abbott, C.J., after remarking on the absence of evidence as to Deakin's knowledge of the fact, says: "But undoubtedly he had legal knowledge of it, for he knew that the original bills had not been delivered up by the plaintiff, and that, till that happened, he remained liable upon them. It was, therefore, his duty to have made the necessary inquiries." And Bayley, J., says, that, if Deakin was, by the successive renewals of the bills, lulled into security, it was his own fault, for, being a joint debtor with Bickley, it was his duty for his own. security to see that the debt was paid. And the test of that was easy, for, if Bickley had paid the debt, he must have had the original bills to produce; and Deakin, therefore, if Bickley did not produce them, ought to have concluded that the debt had not been paid.

I have considered the various authorities cited on behalf of the defendants, but can only conclude that the defendants are, as to the plaintiff, directly liable for the amount claimed; and I adjudge accordingly.

The plaintiff has paid the bank, and there is no question as to his right of action. It appears that the joint note was destroyed in a fire which consumed the bank premises. The action is brought on the original covenant, which, in my view, remains unimpaired; but, if either defendant wishes it, there will be a condition that judgment be not entered until