To this demand, the Company has pleaded, in substance, that they had paid eighty-seven and a half per cent. of the debt mentioned in the deed of the 27th of June, 1877, leaving the balance in principal now claimed by the appellant; that according to the agreement entered into by that deed, the interest on the balance due was only to be paid from the first of July, 1881, when the net revenue of the property of the Company became sufficient to pay the annual liability for interest, insurance and other charges in connection with a contemplated loan of $350,000; that this debt had been incurred by the Company for the price of the Windsor Hotel property, and that both principal and interest were paid and compensated by a larger sum which the Company had paid to the City of Montreal for taxes due on the property by the auteurs of the appellant who sold the property to the Company.

The Court below maintained the plea of compensation and dismissed the appellant's action.

The facts which gave rise to the litigation between the parties are as follows:

On the 3rd of April, 1875, David Torrance, Mary Lunn, Julia Lunn, Emma H. Lunn and Alexander H. Lunn, sold to the Company (respondent) the property on which the Windsor Hotel has since been built in the City of Montreal, for the sum of $112,212, whereof $18,702 were paid, leaving a balance of $93,510 remaining unpaid.

Alexander H. Lunn, one of the vendors, seems to have transferred to Mrs. Lane, on the 7th June, 1876, his share of the purchase money, and by deed of the 28th of June, 1877, the Company agreed to pay Mrs. Lane, representing one of the vendors, and to the other vendors $86,034.46, being 87 per cent. of their claim in principal and interest, which sum has since been paid. Mrs. Lane and the vendors David Torrance and others, excepting Alexander H. Lunn, who was not a party to the deed, agreed to assist the Company in obtaining a loan of $350,000, and to relinquish the priority of their hypothecs upon the property, and also to extend to six years the period for the payment of the balance due them, "they relinquishing and waiving

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any right to exact and require any interest upon the amount of said balance until the net revenues of the Company should be Windsor Hotel sufficient to pay the annual liabilities of the Company for interest,

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insurance, &c., in connection with the said loan of $350,000, after which they would be entitled to receive interest to the extent of 7 pc. out of the surplus of revenue, according to its sufficiency."

The secretary of the Company has testified that it was only since July, 1881, that the Company had a net surplus available to pay interest on the claim of the appellant.

Previous to the sale of the property to the Company, certain public improvements had been made in the vicinity, by the opening of Stanley Street and of Dominion Square, and the property had been assessed for a share of the cost of these improvements. The claim of the city was, however, disputed, and by the deed of sale of 3rd of April, 1875, the vendors reserved all right of action, claims and demands they might have against the Mayor, Aldermen and citizens of Montreal, for the recovery of the special assessment for the opening of Stanley Street, and for the drain in said street, paid by the vendors to the Corporation.

By two judgments rendered in 1876 and 1879, the assessment rolls by which the property sold to the Company had been charged with a proportion of the cost for opening and widening Stanley Street, and for opening Dominion Square, were set aside.

Subsequently, the city obtained from the Provincial Legislature authority to cause other assessment rolls to be made for the purpose of assessing in whole or in part the cost of the improvements already made upon all and every the pieces or parcels of land or real estate which the commissioners (to be named) should determine to have been benefitted. (Act of 1879, 42 & 43 Vict. c. 53, sec. 4, §§ 1 & 4.)

New assessment rolls were made under this Act, and the commissioners having determined that the property of the Company (respondent) was benefitted by the improvements referred to, assessed the amount to be paid by the Company at the sum of $522.90 for the opening and

widening of Stanley Street, and at the sum of $1,350 for the opening of Dominion Square.

These two sums with interest amounting in all to $1,901.70 were paid in 1882, by the Company, who was sobrogated to the rights of the city, and now claims that this liability was an unliquidated charge upon the property at the time of the sale of the property, and that the sums so paid with interest accrued since the payment is to be set off against the claim of the appellant as representing Alexander H. Lunn, one of the vendors of the property.

The questions arising under these facts and the issues raised between the parties are:

1st. Is the appellant entitled to claim the payment of interest from the 1st of July, 1877, or merely from the 1st of July, 1881, when the Company had a net surplus after paying interest and insurance in connection with the loan. of $350,000?

2nd. Is the Company (respondent) entitled to oppose to the appellant that his claim is compensated and extinguished by the sums the Company has paid to the city?

On the first question, the appellant contends that the stipulation as regards interest in the deed of the 28th of June, 1877, does not amount to an abandonment of any claim for interest until the revenues of the Company were sufficient to pay interest, but to a mere postponement of the term of payment of these interests, which were to run in the meantime as if no agreement had taken place.

We do not think this is the interpretation which ought to be given to the stipulation contained in the deed of the 28th of June, 1877. By that deed, Mrs. Lane and the other creditors agreed to extend, for a period of six years, the term of payment of the balance of the principal, and to waive their right to claim interest until the net revenues of the Company should be sufficient to pay the interest and insurance connected with the contemplated loan of $350,000. In the case of the principal, they have extended the delay for its payment, in the case of the interest, they have waived the right to claim it. If the intention had

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been merely to postpone the payment of the interest, the parties would have made use of the same expressions as Windsor Hotel they applied to the payment of the principal instead of

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waiving the right to claim it. By the agreement, the Company is only to pay interest to the extent of seven per cent. per annum, from the time the net revenues of the Company are sufficient to pay the charges connected with the loan, which necessarily implies that no interest would accrue in the meantime.

On the second question we are with the appellant.

The effect of the two judgments of 1876 and 1879, setting aside the original assessment rolls, was to free the property sold to the Company from any charge or liability for the cost of the improvements in opening Stanley Street and Dominion Square, and until the passing of the Act of 1879, the city had no power to enforce the payment of any portion of the cost of these improvements, which, but for this Act, would have remained a charge upon the general revenue of the city. The Commissioners appointed under the Act of 1879, were authorized to determine what were the properties to be benefited by the improvement, and which were especially assessed for it. (Sect. 4, §2, referring to §8 of 37 Vict. ch. 51, sect. 176). This they have done by determining that the Company, respondent, was interested in the improvement, and by assessing its property for its proportion of its cost. There is nothing in the proceedings of the Commissioners to affect the former owners of the property, and nothing in the law to give a retroactive effect to their awards and assessment rolls; nor to reserve to the actual owners of the property any recourse against those from whom they had derived their title after the improvements had been made.

The auteurs of the Company were not parties to the proceedings of the Commissioners, and could not urge any objection either to the regularity of their proceedings, or to the amount awarded. The city could not, under these assessment rolls, have collected from the auteurs of the Company, the amount for which the property of the Company was assessed, since the Company was alone men

tioned in these assessment rolls. The Company so understood it, by acquiescing in the proceedings of the Commissioners, and by paying the amount of the assessment; -the money was paid to discharge a liability of the city, and not a liability of the auteurs of the Company, which has therefore no recourse against them, there being no special warranty in the deed of sale providing for such a contingency. (Troplong de la vente, No. 465-6 & 7).

But supposing the vendors to have been, under the general warranty stipulated in the deed of sale, liable to reimburse the sums paid by the Company on the Assessment Rolls made under the Act of 1879, the appellant is not one of the vendors, nor bound to the warranty stipulated in the deed of sale. He does not sue on this deed of sale, but upon the deed of the 28th of June, 1877, by which the Company promised to pay to Mrs. Lane, whom he represents, the sum which he claims, this promise having been made by the Company after full knowledge of the existing circumstances, and after one of the original assessment rolls had been set aside.

Mrs. Lane is therefore protected from any claim on the part of the Company, respondent, by the provisions contained in Arts. 1180 and 1192 of the Civil Code, and the Company can no more retain the balance still due on her claim than it could force her to refund the eighty-seven and a half per cent. of her original claim which the Company has paid to her after the passing of the deed of the 28th of June, 1877.

The appellant is, if possible, in a still better position than his auteur, Mrs. Lane, since the Company, through P. S. Ross, its Secretary, has offered to pay him the balance coming to him, and this long after the Company had paid to the City the amount for which its property had been assessed under the new assessment rolls. This offer was made without any reference to or reserve of any claim whatsoever, as will be seen by the letter of the 7th of June, 1883, forming part of the record.

If it could be held that Mrs. Lane and the appellant, as representing Alexander H. Lunn, are the garants of the

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