Judgment. surety. And that, although it was proved that the renewal Robertson, J. was given only in consequence of C's. inability to pay, and

that no injury could accrue to A.; the surety being himself the fit judge of what is, or is not, for his own benefit."

:

Lord Chancellor Eldon, in giving judgment said at p. 279 "The creditor has no right-it is against the faith of his contract-to give time to the principal, even though manifestly for the benefit of the surety, without the consent of the surety."

And in Royal Canadian Bank v. Payne, 19 Gr. 180, the late Chancellor Spragge followed that decision, and discharged the surety. See also Lord Harberton v. Bennett, Beatty's Reports, (Ir. Ch.) 386.

A creditor who takes a bill or note from a debtor who is in default, impliedly gives him time since he cannot sue the debtor until the maturity of the bill or note: The Croydon Commercial Gas Co. v. Dickinson, 1 C. P. D. 707, affirmed in appeal, 2 C. P. D. 46. Likewise the renewal of a bill by the creditor may operate to discharge the surety, unless made with the assent of the latter: Torrance v. The Bank of British North America, L. R. 5 P. C. 246. But at the time the debt for which the original ten notes were given was contracted, the defendant Margaret Jane Adelaide Kenney had not become a surety. Nor was she such at the time the notes were given, except as to one, which was made on 1st October, 1884, for $118.76; and the question arises as to whether that does not make a difference in regard to the effect of giving time for payment for each, by taking the renewals.

Mr. Brandt in his work on Suretyship, sec. 19, says: “If creditor knew of suretyship, when he did the act complained of, this is sufficient to secure surety his rights;" and he cites in support of that proposition the following American cases : Bank of Missouri v. Matson, 26 Mo. 243; Colgrove v. Tallman, 2 Larsing (N. Y.), 97; Lauman v. Nichols, 15 Iowa, 161, and Wheat v. Kendall, 6 New Hamp. 504. But as being contra, he refers to The Bank of Upper Canada v. Thomas, 11 C. P. 515, and Pooley v. Harradine, 7 E. & B. 431.

In the last mentioned case, the agreement was made as Judgment. to the suretyship, at the time the notes were made and Robertson, J. handed over to the plaintiff, and he received them with full notice of the fact, and it was held that a plea alleging that fact, and that the plaintiff had afterwards without the consent of the surety given time to the principal debtor, but for which he might have obtained payment, was good on demurrer. But in the same case the question is raised and not answered, whether the equity would have existed if the notice had been after the taking of the notes, but before the giving of time; and in The Bank of Upper Canada v. Thomas, supra, the declaration was on a promissory note made by the defendant and endorsed by one O. T. M. to the plaintiffs. Plea, on equitable grounds, that the defendant was surety for O. T. M., and made the note for his benefit without value, of which the plaintiffs became aware after they became the holders thereof, and after notice thereof gave time to O. T. M., and thereby released defendant. On demurrer held bad. The Court (Draper, C. J., and Hagarty, J.), holding that as the plaintiffs were not aware of the true state of affairs existing between the defendant (the maker) and O. T. M., the payee and endorsee, at the time they became the holders. of the note, the defence was not allowable, and it was considered by these learned Judges, that the case of Pooley v. Harradine did not go so far as to decide that a subsequent knowledge was sufficient to enable the defendant to take advantage of the equitable doctrine relied upon in the plea, although Hagarty, J., at p. 517, said: "I gather from the language of Sir J. Coleridge, in delivering the judgment in Pooley v. Harradine, that he considers that Courts of Equity would probably relieve the surety if the creditor give time to the principal debtor, after knowledge of the existence of the relation, although he had no such knowledge at the date or the original transaction." And the learned Judge continues: "The inclination of my mind is to think that such would be the view taken. And this on the short ground that in the language of the case

Judgment. referred to, the defence does not arise by any alteration of Robertson, J. the original contract, but that the creditor cannot fairly

or equitably sue the surety when, knowing of the existence of the relation of principal and surety, he has voluntarily tied up his hands from proceeding against the principal." In Davies v. Stainbank, 6 D. M. & G. 679, it was held that a creditor who holds a floating guarantee from a surety cannot, without the surety's consent, give time to the principal debt as to any portion of the debt, without reserving the creator's rights against the surety, and yet hold the surety ble for that portion.

In order to aply these cases to the one now before me, it is necessa. to review the facts and circumstances. connected with the transaction and between the principal debtor John Henry Kenney and the plaintiffs from the beginning. The mortgage, which the plaininff is now seeking to enforce, was given as a continuing security, and so long as the equity of redemption remained in the mortgagor, the giving of time could not affect the case; but afterwards, and when the debt secured was ascertained to amount to the sum represented by the ten notes in question, and the date of their maturity fixed and agreed upon, the mortgagor conveyed, at the instance and with the advice and co-operation of the plaintiffs, the lands in the mortgage mentioned to the defendant Margaret Jane Adelaide Kenney, subject to the said mortgage. This transaction had the effect of making the grantee Margaret Jane Adelaide Kenney, a surety in respect of these lands, for the payment of these several promissory notes, but for nothing beyond that. These notes respectively matured at dates from 18th September to 18th November, 1884, and as they matured, the plaintiffs' firm at the request of the maker, James Henry Kenney, retired them in full, and renewal notes, made by the same maker, were taken in substitution, payable at dates extending the time of payment from one to several months: the original notes being cancelled by the plaintiff and handed back to the principal debtor, no consent being given by the surety,

nor were the rights of the creditors reserved against the Judgment. surety.

In my search for authorities I have not been able to find one in which the facts and circumstances are exactly the same as in this case. The nearest to it is where the surety in the first instance gave the mortgage, to secure the debt of the principal debtor. I think the same principle governs here, the moment the defendant Margaret Jane Adelaide Kenney, became the owner of the land subject to the mortgage. So that at that moment she "at the instance, and with the advice and co-operation of the plaintiff," became in respect of the land, a surety for the due payment at maturity of each of these promissory notes. If I am right in this, the difficulties presented by the decision in The Bank of Upper Canada v. Thomas are not present, and the other cases Pooley v. Harradine, Davies v. Stainbank, with a host of others referred to in these two cases, as well as the American cases, noted by me, make it clear that by the dealings and transactions in regard to these several notes between the creditor and the principal debtor, after each of them became due and payable, the surety has become discharged and released from her liability in respect of them. I am, therefore, of opinion that the second contention of the defendant (Margaret Jane Adelaide Kenney) must prevail.

As to the third contention, it is only necessary to refer to this same case in the Court of Appeal, 16 A. R. 522, where it was unanimously held that the mortgagee (the plaintiff) cannot charge against the land under his mortgage any advances made after notice of the conveyance of the land to the defendant, Margaret Jane Adelaide Kenney, of 1st September, 1884. But the plaintiff in answer says: In another action of this defendant Ferguson against these defendants the Kenneys, in which Tait, Burch & Co., judgment creditors of John Henry Kenney, had been made parties plaintiffs, the Court of Appeal (16 A. R. 276), declared that as against creditors this conveyance was fraudulent and void, and that although

Robertson, J.

Judgment. the Court dismissed the action as regards Ferguson, Robertson, J. the assignee, on the ground that he, as assignee, of

James Henry Kenney, looking at the date of the deed and the date of the assignment, the deed having been made before the Act respecting assignments, &c., by insolvent persons (R. S. O. ch. 124) came in force, it was manifest that the transaction was one which could not have been attacked by the assignee; they, however, dismissed the appeal against the creditors Tait, Burch & Co., holding that the creditors are entitled to avoid the deed under the statute of Elizabeth; and that inasmuch as the plaintiffs' firm D. McCall & Co. are creditors of the grantor, they now contend that they have the same right as other creditors to take advantage of this judgment of the Court of Appeal; and they, as ordinary creditors, have proved this claim before the Referee, so that if their security under the mortgage is gone, they still have the right to claim pro rata with other creditors, the proceeds of the sale of the land when made by the assignee.

Apart from the objection also taken by the defendant Margaret Jane Adelaide Kenney, as to whether there was any evidence before the Referee in this action, to establish the alleged fact, that the deed of 21st September, 1884, was fraudulent and void as against creditors, and which I will deal with hereafter, I am of opinion that the plaintiffs' firm cannot, as simple creditors, claim against the lands in that deed described. I cannot see how they can. be in a better position as simple creditors, than they were as mortgagees; in fact it was as simple creditors or for whatever sum was due to them, on their running account against the defendant John Henry Kenney, after the date of the deed, that the question came before the Court of Appeal; and the language of Hagarty, C. J. O., at p. 525, in that case is, "I think it impossible to hold that as against this plaintiff the deed can be held fraudulent and void, merely because he was a creditor at the time of its execution. It purports on its face to be for a consideration of $4,000, and it was executed at the instance and