evidence of the two to having the debt, and I do not know that I am at liberty to disregard it upon the ground merely of the improbability of some of the circumstances, and the relationship that may be existing between the parties. I think I must take it that there was a debt established due from Thomas to these two brothers John and Patrick, and that the money, consequently, that was advanced to the insolvent was the money of the brothers.

There is also the suspicious circumstance that the mortgage was taken to John alone; but I do not think that is of very much weight. John says, that he is a trustee for himself and Patrick, and I apprehend that Patrick can always get the benefit of that if he chooses to enforce it. There is also the evidence too that Patrick did assent to

this arrangement, and that he approved of it, and that he sanctioned the mortgage being taken in that way. I think Thomas swore to that, and it is not disproved.

Then supposing this money to have been advanced by John and Patrick-people who were not creditors of the insolvent-bona fide for the purpose of enabling the insolvent either to carry on his business or to pay off his debts, I do not think that there is anything shewn here sufficient to deprive him of the right of reeovering this money. I do not think that the security is void in their hands.

I think that the plaintiff's bill as to both of the points must fail. The fact of whether John had notice or not seems to be of very little importance, because even if he had notice still I think that the plaintiff could only set aside the security upon repaying the money advanced. He does not offer this by his bill, and not offering to do it I do not see that there is any relief that can be given to him.

I think upon the whole case, but after a great deal of hesitation-I must say a great deal of hesitation, probably caused by one side or the other not calling Patrick, and the uncertain way in which the books have been kept-I think upon the whole that the evidence does establish the existence of a debt from Thomas to John and Patrick, and that

these people are entitled to hold their security; and therefore that the bill must be dismissed, without costs though, because I think the circumstances are suspicious enough to have justified the filing of the bill by the assignee, and to justify inquiry in a Court where he himself would not be the Judge.

The plaintiff appealed.

The case was argued on the 27th of January, 1880 (a). W. Cassels and Gregory Cox for the appellant.

James Maclennan, Q.C., for the respondents.

The following cases were cited for the appellant: Nelles v. Paul, 4 App. R. 1; Evans v. Ross, 30 C. P. 121; Rice v. Bryant, 4 App. R. 542; Merchants' Bank v. Clarke, 18 Gr. 594. dast two cares unfurland

March 2, 1880. Moss, C. J. A.—The defendant Thomas Nihan was an endorser upon a promissory note for $2,000, made by John Titterington, of whose estate the plaintiff is assignee in insolvency. He is called an accommodation endorser, but this perhaps does not describe his position with entire accuracy, for he procured the note to be discounted at his own bank, and the proceeds having been passed to his credit, he paid the amount to King, the partner of Titterington. I infer from the evidence that the latter was not aware, until shortly before the transactions now in question, of Thomas Nihan's connection with this note. But, however this may be, it is certain that on the 30th of May, 1878, the note was lying at the defendant's bank, and was to become due on the 11th of June. Whether or not both the defendants were aware of the fact a question to which I shall refer presently—it is, I think, beyond doubt that Titterington was on the 30th May hopelessly insolvent. He had been speculating largely in the Chicago produce market with the usual result, and although he may have cherished a visionary hope that

(a) Present.-Moss, C.J. A., PATTERSON and MORRISON, JJ. A., BLAKE, V.C.

and

fortune's wheel might yet turn in his favour, his real prospects were worse than those of a gambler making his last throw. The learned Vice-Chancellor did not find whether the defendants had notice of the insolvency. He was of opinion that it was not very important to determine whether John had notice. In my judgment the evidence leaves it beyond reasonable doubt that Thomas had full notice, and as he was the real actor in the transaction, John having taken scarcely any part in it personally, and being represented throughout by his brother, this notice might probably be imputed to John. But as will presently appear, I concur in the opinion that the question of notice is not very material, at least beyond the extent to which it may furnish an index to the motives of the defendants. This being the position of affairs, we find that on the 30th of May, Titterington gave John Nihan a mortgage upon freehold property purporting to secure repayment of two thousand dollars and interest. The plaintiff's contenwas the result of a

tion is that this instrument fraudulent scheme devised by Thomas Nihan to extricate himself from liability upon the promissory note, and that John Nihan's name was used to divert suspicion. The defendants on the other hand assert that the money was advanced to Titterington, and that it belonged to John and Patrick Nihan jointly, and that Thomas had no interest in it or the mortgage. In his answer Thomas states that the insolvent applied to him to advance the $2,000 on the security of a mortgage on the lands in question to enable him to pay the note, but that he refused to comply with this request, and offered to endeavour to procure an advance for him for that purpose. As the money which was used to retire the note was actually furnished by Thomas, there is no obvious reason for this rejection of Titterington's proposal, if Thomas's professions of confidence in his solvency are well-founded. Both the defendants expressly allege that the money was advanced to Titterington. The defendant John Nihan has introduced into his statement, which strikes me as very suggestive, 4-VOL. V APP. R.

answer a

that he was not aware that his brother had endorsed the promissory note, or that the money was to be applied in paying it, or in payment of any claim against Titterington for which Thomas was in any way liable.

There need be no difficulty in accepting this as literally true, if we believe that John knew little or nothing of any part of the transaction, and was a mere instrument in the hands of his brother, but upon any other theory it seems to make large demands upon our credulity. Titterington never saw John or spoke to him with reference to the matter; and all the information that John got confessedly came from his brother. Not one farthing of the money was allowed to reach the hands of Titterington. Thomas gave a cheque for the amount to John, who drew the money in bank notes, and handed it to the solicitor of Thomas, by whom it was used to retire the note at once without waiting until it became due, or asking any rebate of interest. If it were proper to view the transaction in the light of these facts only, its complexion would not be doubtful. No man of plain understanding would hesitate to pronounce it a transparent and somewhat clumsy contrivance for giving Thomas, who was really, if not technically, a creditor, a preference over other creditors. But the defendants seek to avoid this consequence by setting up that Thomas was indebted to John and Patrick in a sum exceeding $2,000, and that the money was advanced by them on their own account. The learned Judge thought that he must take it that there was a debt established to be due from Thomas to his brothers, and that the money that was advanced was consequently that of the brothers. He is reported to have made the following observations in delivering judgment:

There is also the fact that these are all relatives-all brothers; but, in opposition to all that, there is the sworn evidence of the two brothers of the existence of this debt. There are many circumstances which might have been displaced by the plaintiff had he chosen to do so, or were the facts such as to warrant him in shewing that that evidence

was incorrect.

If there had been no arbitration-had there been no sum due from the Government-had the money not been paid Patrick, or Patrick not paid it to Thomas-all these circumstances would have gone to shew the incorrectness of the evidence given to-day. But none of them have been touched, and the only, and I must admit it is a very suspicious circumstance, is, that the defendants have not chosen to call Patrick, and I think that one side or the other ought to have called him, because it places me in very great uncertainty as to what conclusion ought to be arrived at; but I cannot say that the onus in that case was upon the defendants. They have proved by two witnesses the existence of a debt, and if the plaintiff hoped by the examination of Patrick to shew that there was no such debt, then he might have called him; but there is the evidence of the two to having the debt, and I do not know that I am at liberty to disregard it upon the ground merely of the improbabliity of some of the circumstances, and the relationship that may be existing between the parties."

I have cited this passage at length, because it seems to be the foundation of the decree against which this appeal is brought. It is unnecessary for me to say that I have the sincerest respect for any opinion which the learned Vice-Chancellor may pronounce, but I am quite unable to concur in this mode of treating the question. I cannot entertain a doubt that the onus was wholly upon the defendants. It was under the circumstances incumbent upon them to establish with such certainty as to satisfy the judicial mind, not only that a debt existed, but that money received by them in payment thereof, had been honestly advanced to Titterington upon the security of the impeached mortgage. The circumstances to which I have already directed attention were quite sufficient to have imposed upon the defendants the burden of making out the case, but it is easy to add others of equal weight and significance. We all think that it is quite certain that the transaction would never have been put in its pre