the statute bars the mortgage, no interest or principal having been paid, at least since 2nd April, 1893.

In the absence of the evidence of either of the Nesbitts, the whole matter is left largely to conjecture.

The question of merger is one of intention, and I am of opinion, upon such inferences as can fairly be drawn fron what was done as well as from what appears from the documents, that it was not the intention of the parties that the conveyance from R. H. Nesbitt to J. A. Nesbitt should operate as a merger of the mortgage. For some reason not apparent, J. A. Nesbitt had kept the fact that he was the assignee of the mortgage from coming to the knowledge of R. H. Nesbitt, and, at the time the latter conveyed the equity of redemption to J. A. Nesbitt, he was not aware that J. A. Nesbitt had this mortgage. The amount of it, $1,378.25, is mentioned in the deed. The fact of J. A. Nesbitt holding the assignment unregistered is significant. Again, in May, 1895, in the deed under which plaintiff claims, the same mortgage is mentioned as being on foot against the lands, and the grant is made subject to that mortgage. When R. H. Nesbitt purchased the lot, he evidently knew all about the outstanding incumbrance, as a book of his is produced with the following memorandum in his handwriting: "Toronto, February 14th, 1893. We bought a piece of land of 50 feet frontage in Parkdale, at $36 per foot, and we paid $394 down, leaving $1,406 at 6 per cent. per annum."

The rate of interest in the memorandum is incorrect, and the figures do not quite agree, unless he was including some interest upon the mortgage, which he probably was, but the entry shews he knew from the beginning of the outstanding incumbrance. . . His dealing with the property from the day he purchased down to shortly before his death was all upon the assumption of the mortgage being a valid charge upon it.

Defendant argued that the land being vacant, and no one being in physical possession, the constructive possession went with the legal estate, and was in J. A. Nesbitt, the assignee of the mortgage, from the date of its maturity, viz., April, 1893. I think that contention must prevail; and, as a result, the statute from that date was running against the

owner of the equity, instead of the assignee of the mortgage, and on 18th April, 1903, the title of R. H. Nesbitt was extinguished, and J. A. Nesbitt acquired title by posses

sion.

[Reference to Agency Co. v. Short, 13 App. Cas. 793, and Delaney v. Canadian Pacific R. W. Co., 21 O. R. 11.]

If for any reason it could be held, upon the facts of this case, that the mortgagor was in possession after default in the mortgage, then, the mortgage moneys being payable on 18th April, 1893, the right of J. A. Nesbitt upon that day to receive the money secured by the mortgage accrued, and he was in a position to discharge the mortgage had the moneys secured thereby been paid. The statute, therefore, would probably apply to prevent recovery, unless within 10 years immediately preceding 13th April, 1905 (the date of the counterclaim) "some part of the principal money or some interest thereon has been paid, or some acknowledgment of the right thereto has been given in writing, signed by the person by whom the same is payable, or his agent, to the person entitled thereto, or his agent:" R. S. O. 1897 ch. 133, sec. 23.

It is clear that no part of the principal money or interest. was ever paid subsequent to the date J. A. Nesbitt acquired the mortgage, as in 1899 he was rendering statements to R. H. Nesbitt shewing arrears from April, 1893, and the notice. of sale which he gave demands arrears of interest from 1890.

It was contended that certain letters written by plaintiff as the agent of R. H. Nesbitt operated as an acknowledgment. by him of the right of J. A. Nesbitt to receive the mortgage moneys. The first of these is dated 1st January, 1899, and, referring to the property in question, states that "imust either be sold or you take it altogether, as you now hold the mortgage-I cannot afford to lose any more, and I must have something to live on-I must have paid between $1,200 and $1,300 on it now." The second is of 27th July, 1899, and states: "I hope there will soon be a chance of selling the Maynard avenue property, as it is eating up everything the other is making, and I will soon have nothing left. I was surprised to see the mortgage was so much. I did not think it was quite $1,400, or the interest so high. I would never have had anything to do with it if I had understood it properly.

I received the statement, and was surprised to see the expense of the Maynard avenue property was so great. I thought the house would have kept it nearly clear." Plaintiff says she wrote those letters at her father's dictation, he being at that time too feeble to write. The father's name is signed to each letter, also by the plaintiff.

I think the statements in these letters clearly amount to an acknowledgment of the right of J. A. Nesbitt either to the land or to receive the mortgage moneys. .. Robertson v. Burrill, 22 A. R. 356; Banning on Limitations, 2nd ed., p. 128.

It may be contended that the acknowledgments, being given by R. H. Nesbitt, do not avail because he is not the person by whom the mortgage moneys are payable, within sec. 23 of R. S. O. 1897 ch. 133. I do not think there is any difficulty on this point. The mortgage having been executed before 1st July, 1894, Williamson is still liable upon his covenant, and, were an action brought against him upon that covenant, he could look to St. John, who agreed to indemnify him against the mortgage, and he in turn could look to R. H. Nesbitt for indemnity, and the latter, I think, would be liable to pay, notwithstanding that there was no express covenant given by him, as his conveyance alleges "the assumption of the mortgage" as being part of the consideration therefor. See Forsyth v. Bristow, 8 Ex. 716.

I think also that the acknowledgments would, by virtue of sec. 13, defeat the claim of plaintiff, and, although not written by R. H. Nesbitt, that still the position is the same, inasmuch as the principal was at that time unable to write, and they may be regarded as having been written by his amanuensis, within the authority of Dublin Corporation v. Judg, 11 L. R. Ir. 9. This gets over the difficulty presented by sec. 13, which does not provide for the giving of an acknowledgment by an agent.

In the result, the action will be dismissed, but, under the circumstances, without costs. It was stated at the trial that if the mortgage was still on foot plaintiff did not desire to redeem. There will, therefore, be a declaration that defendant Nesbitt is the owner of the lands in question freed and discharged from all claims of plaintiff. No costs of counterclaim. . . . No costs either against defendant Brann or in his favour.

MABEE, J.

TRIAL.

DECEMBER 29TH, 1905.

SMITH v. TORONTO GENERAL HOSPITAL TRUS

TEES.

Contract-Labour and Materials-Failure to Complete to Satisfaction of Defendants-Part Adoption of Work Done and Materials Furnished-Ascertainment of Amount Due -Costs-County Court Jurisdiction-Set-off.

Action for $160, a balance alleged to be payable by defendants to plaintiffs for installing a system of telephones in defendants' hospital. The contract was for $920, upon which defendants paid $460, on the terms of a receipt of 6th December, 1904.

J. M. Godfrey, for plaintiffs.

H. D. Gamble, for defendants.

MABEE, J,:-The contract is in writing, dated 7th July, 1904, and under it plaintiffs agreed that the work should be paid for upon completion to the satisfaction of the trustees, and that it should be made a perfectly satisfactory system. The trustees were to have 30 days to test its operation, that they might be able to judge of its efficiency.

Plaintiffs, therefore, before they can recover upon the contract, must establish that they have complied with its terms, and this I find they have not done. The defendants made many complaints to plaintiffs from time to time about the manner of doing the work, objected to the kind of switchboards that were being supplied, and, before the time for testing had expired, complained of the inefficiency of the system installed. At the trial they established that their complaints and objections in many respects were well founded. Defendants, however, re-let the contract, making use of most of the plant that plaintiffs had installed, so the only question that remains is whether plaintiffs have been paid for the material supplied and work done, not as a performance of the contract, but as having been adopted by defendants; having in view the costs to defendants of completing the contract.

After notice to plaintiffs, defendants on 11th August, 1905, let a contract for the removal of part of the plant installed by plaintiffs, and for supplying certain additional materials and doing certain work. Had this been simply for the completion of the work left undone by plaintiffs, and the supplying of the necessary materials to complete the kind of system they were installing, it would not be sufficient to ascertain how much, if anything, plaintiffs are entitled to. The contract of 11th August was for the removal of the switch-boards installed by plaintiffs and for the installation of certain "plug" switch-boards, a system different from that furnished by plaintiffs. Defendants kept all the telephones supplied by plaintiffs, made use of all the wires and cables, except that some of these had to be more carefully insulated.

Defendants paid $370 for the completion of this last contract, and at the trial it was said that the system is now entirely satisfactory. Plaintiffs contended that $370 was an excessive sum to be paid; that defendants had not advertised for tenders; that additional materials had been supplied; and the system changed to one more expensive to install than that which they were contracting for.

It is clear that $18 was paid for new batteries which defendants do not shew that plaintiffs were liable to make good. The contractor who did the work under the contract of 11th August says that most of his figures going to make up the $370 were for the removal of the switches supplied by plaintiffs and furnishing the "plug" switches. He says he allowed $50 as the profit upon his contract. Samples of the switch-boards were produced, and I think it apparent that those supplied under the last contract are of a more expensive kind than it was necessary for plaintiffs to have furnished to remedy any objection by defendants upon that score.

I find that plaintiffs are entitled to the $90, being the difference between the contract of 11th August and the $460 they were then claiming, the $18 for batteries, and an allowance of $30, being the sum I estimate as the difference between the switch-boards now in use by defendants and such as plaintiffs might have supplied under their contract. Upon this last point Moore, who completed the work, thought proper switches of the kind plaintiffs supplied could have been put in for "about the same sum " as those he put in. There