1896. Rail. & Banking Co. v. Mitchell, 11 Jur. N. S. 258, the Judgment. Court was asked to protect a fund, the proceeds of a sale of TAYLOR, C.J. the assets of a Steamship Company in the United States, which had, by an express agreement among the shareholders, been remitted to England for the purpose of being divided there. The Court was there dealing with a fund remitted to and in the hands of a firm in Liverpool. The plea was not to the jurisdiction on the ground that the subject matter of the suit was abroad, but simply that the fund was not invested in any government or public stock in England. Ewing v. Orr-Ewing, 22 Ch. D. 456; 9 App. Cas. 34, was also a case for the administration of an estate, some of the executors living in England, and some in Scotland; but the latter, having been served there, had appeared without objection and submitted to the jurisdiction.

In Smith v. Henderson, 17 Gr. 6, the Court acting in personam as against a defendant within the jurisdiction decreed a trust of lands abroad. In Grant v. Eddy, 21 Gr. 45, the estate assigned for the benefit of creditors was in Quebec, and the assignor lived there, but the plaintiff and the trustees were resident in Ontario, and the assignment provided for the trust funds being, when collected, paid into a bank in Ottawa.

These were all cases in which the Courts professed to act, and did act, upon persons within the jurisdiction, in personam. A foreclosure decree being a decree in personam depriving the mortgagor of his personal right to redeem, the Court may, where the parties are within the jurisdiction, make a decree foreclosing a mortgage upon lands abroad, as was done in Paget v. Ede, L. R. 18 Eq. 118; but it is different where the relief sought is a sale of the land. That is a proceeding against the land directly. And as was said by the Master of the Rolls in Lord Cranstown v. Johnston, 3 Ves. 170, "Bills are often filed upon mortgages in the West Indies. The only distinction is that this Court cannot act upon the land directly, but acts upon the conscience of the person living here." So in Carteret v. Petty,

2 Sw. 323 n., the Court made a decree for an account of 1896. waste committed in Ireland, but refused to order partition, Judgment. for that was a proceeding in rem. A decree for the sale of TAYLOR,C.J. mortgaged lands seems to be a proceeding in rem; for, although there is a money demand on which the Court first adjudicates, it proceeds to act upon the property directly and decrees a sale of it in satisfaction of the demand. That

a decree for sale is a proceeding in rem seems to have been held by Boyd, C., in Strange v. Radford, 15 O. R. 145. In all the modern cases where it has been sought to affect, not the parties in personam, but to affect directly lands abroad the Courts have disclaimed jurisdiction.

In Norris v. Chambres, 29 Beav. 246, a bill was filed by an administrator to recover money alleged to have been advanced by the intestate towards purchase of a mine in Prussia, and claiming a lien on the mine for the amount. Lord Romilly said: "It is a suit by a plaintiff residing in England against defendants also residing here to enforce a lien on immovable property of the defendants situate out of the jurisdiction of this Court. The bare statement of such a proposition requires that some special state of circumstances should exist in order to enable the Court to give any relief of this description." And again he said: "If the owner of an estate in Prussia mortgage that estate to an Englishman, it is new to me that the Courts of Equity in this country will administer as between those persons, the law obtaining in England with relation to mortgages and foreclosure, or direct a sale of the Prussian estate, if payment be not made of the amount due."

In Ontario there have been several cases in which this question has been considered. One of these relied on by the plaintiffs was Robertson v. Robertson, 22 Gr. 449. But there was in that case no sale of land, or direct dealing with land. There, there was a sale and, following that, a vesting order vesting in the purchaser certain bounty land warrants, which seem to have given the bearer of them a personal right to locate and obtain from the Crown so many acres of unascertained lands in Manitoba, and the

1896.

question disposed of by Proudfoot, V. C., was that, infants Judgment. being like adults bound by proceedings in a suit in which they are plaintiffs, the decree and proceedings would be an answer and bind them and'estop them from disturbing any title acquired under the sale of the warrants.

TAYLOR, C.J.

Strange v. Radford, 15 O. R. 145, was an action against a defendant living in Ontario, upon a mortgage of land in Manitoba, for sale, delivery of possession and relief under the covenant for payment, and the relief prayed was refused by Boyd, C., who, while he held the plaintiff might have an order of foreclosure which operates only as an extinction of the mortgagor's personal right of redemption, said, “to carry out a sale it is essential that the Court should have territorial jurisdiction over the land." In Burns v. Davidson, 21 O. R. 547, the Court was asked, all parties living in Ontario, to set aside as fraudulent a conveyance made by a debtor of land in a foreign country, and a demurrer to the statement of claim was allowed. Boyd, C., after speaking of the earlier cases found in the books went on to say, "But these cases, if ever safe guides, (which is much to be doubted,) do not justify a Provincial Court intermeddling with territorial rights acquired or subsisting in a foreign country." He said further that, as against the general expressions used in earlier cases, he preferred to follow the more guarded lines of jurisdiction which obtain in recent decisions, of which one of the most important was Harrison v. Harrison, L. R. 8 Ch. 346. In that case a decree of the Master of the Rolls made in an administration suit and holding Scotch real estates liable to the payment of debts, as between the heir and the pecuniary legatees, was reversed by Lord Selborne and Lord Justice Mellish, the former saying, "As against the real estate in Scotland the Courts of England have no jurisdiction at all."

In Ross v. Ross, 23 O. R. 43, Street, J., held that the Court could not entertain an action for determining the title to land in the Northwest Territories even though the parties were resident within the jurisdiction.

The next case was Henderson v. Bank of Hamilton, 23 1896. O.R. 327; 20 A.R. 646; 23 S.C.R. 716, in which, all parties Judgment. being domiciled in Ontario, the defendants having a mort-TAYLOR, C.J. gage against lands in Manitoba, the plaintiff had obtained and registered there a judgment against the mortgagor and brought an action to redeem the mortgaged lands. At the trial, Armour, C. J., dismissed the action; but, on a motion in the Divisional Court, Falconbridge and Street, JJ., set aside his judgment and gave the relief asked. The case was then taken to the Court of Appeal where the judgment of the Divisional Court was reversed, and in the Supreme Court the judgment of the Court of Appeal was upheld. The present learned Chief Justice of the Supreme Court said, "The tendency of modern decisions has been to decline jurisdiction with reference to foreign land, and when we consider that if the arguments invoked for the present appellant are to prevail we might be asked to uphold the judgment of a Quebec Court in an hypothecary action respecting land in Ontario, or vice versa a judgment in an action in the Ontario Courts directing a sale of hypothecated immovables in the Province of Quebec, the convenience, good sense and sound jurisprudence laid down in the later English authorities become at once

apparent."

The most recent case is Companhia de Mocambique v. British South Africa Co. [1892] 2 Q. B. 358; [1893] A. C. 602. The learned Chief Justice of the Supreme Court said that the rules laid down in the later English authorities. have now culminated in the decision of the House of Lords in that case, and it does seem to be conclusive on the subject. It was an action in which the plaintiffs, alleging that they were owners of mines in South Africa, claimed against defendants within the jurisdiction a declaration of title to the lands, an injunction and damages in respect of trespasses on the lands. The Divisional Court held that the Court would not entertain an action for directly determining the title to land in a foreign country. In the Court

1896.

of Appeal it was held that the Court had jurisdiction, but Judgment. Lord Esher dissented holding that, the cause of action being TAYLOR, C. J. a wrongful entry upon lands abroad, the Court could not entertain the cause at all; it could not make a declaration as to the title; it could not issue an injunction; and it could not award damages. In the House of Lords this dissenting judgment of Lord Esher was sustained and the judgment of the majority of the Court of Appeal reversed. The judgments of Lord Herschell and Lord Halsbury are exceedingly instructive.

In my opinion the Court cannot consistently with the authorities make a decree for the sale of land over which it has not territorial jurisdiction. While the 180 miles forming the first division of the railway may be a section capable of being sold under the Railway Act, there is nothing to warrant a sale as a section of that part which lies within the Province. As then the Court cannot sell the whole because part lies outside the jurisdiction, it follows that no decree for sale can be made at all.

It was argued that if this Court cannot order a sale there is no other Court that can do so, and that seems to have weighed with the learned judge at the original hearing in coming to the conclusion he did. That argument was most effectually disposed of by Lord Esher in the case last referred to, when he said, "As to the contention that the Courts of a country can assume jurisdiction in respect of extra territorial acts, over which they have otherwise no jurisdiction, on the mere ground that, if they do not, the plaintiff has no remedy anywhere, I am of opinion that it does not bear examination. It is claiming too ambitious a province. It was a noble ambition, but it is without recognition or authority."

There still remains the question of the working expenses of the railway. Are the working expenses of the entire railway entitled to priority in order of payment over the bonds, or only the working expenses of the 180 miles or first division upon which payment of the bonds has been. secured.