1900.

The lien arises by virtue of the supply of the materials, Judgment. unless there is an express agreement to the contrary. NoKILLAM,C J. tice of the fact of indebtedness for materials would seem to be prima facie notice of the lien. Such notice appears to be beyond mere knowledge of building operations being in progress considered in some cases not to constitute notice of a lien. There was here specific notice of an indebtedness for materials, and the portions of the application which can be relied on to rebut the inference of lien do not appear, under the circumstances, to do so. It seems to me that the written notice need be only such as, in view of the circumstances of the case, will bring home to the mind of the mortgagee reading it prima facie notice of the existence of a lien.

But Bowen claims to be subrogated to the position of Peters' vendor in respect of the portion of the purchase money advanced by him. The deed of conveyance to Peters in fee was delivered to Bowen on payment of this amount. It is now produced as coming from the custody of The Western Co-operative Co., which claims a lien upon the document. When Bowen advanced the amount he had, as I find, notice of Stewart's lien. I cannot find that he then had actual notice of the plaintiff's lien, but I think that he must be held to have then had constructive notice of it. He admits that his clerk, who visited the property with reference to the loan, told him that the plaintiff was fixing the furnace. Bowen puts this as in September, and says that he knew nothing of the plaintiff's claim until this time, and that this was the first notice he had of Robock's claim. Constructive notice is merely notice of such facts as should put a party upon inquiry which would lead to actual notice. I take Bowen's evidence as really admitting notice to that extent.

In Brown v. McLean, 18 O. R. 533, and Abell v. Mor rison, 19 O. R. 672, subsequent incumbrancers advancing moneys to pay off prior incumbrancers were protected by

being given priority over intermediate incumbrances to 1900. the extent of these advances. But while the intermedi- Judgment. ate incumbrances were registered, it was decided that KILLAM,C.J. this, being wholly unknown to the subsequent incumbrancers, should not be treated as notice in such a case.

But Parry v. Wright, 1 Sim. & St. 369, 5 Russ. 142, seems to be a distinct authority against any such claim when the third incumbrancer makes the advance with notice of the intermediate one and does not keep the first one on foot for his protection. And upon equitable principles it would seem that constructive notice would be sufficient. It is a question of a purely equitable doctrine, altogether apart from The Registry Act. The Ontario cases did not proceed upon any distinction between actual and constructive notice, but upon the idea that the third incumbrancers had no actual knowledge of any fact constituting notice.

I cannot give Bowen priority over either lienholder for the purpose of this advance.

The payments made to Stewart should, I think, be ap plied on the earlier items of the account. He must be charged with the sum said to have been agreed to be applied upon insurance. It appears to have been first paid. so as to discharge the lien pro tanto, and the subsequent arrangement could not revive the lien for the amount. know of no authority for adding to a lien an amount paid by the holder for insurance of the property.

I

Strang and Drewry, of course, are entitled to charge the premium paid by them under the covenant in their mortgage. While I would not find, upon the evidence, that they had notice of the liens before registration of their mortgage, the liens must have priority upon the grounds already stated.

The result is that there must be a decree for enforcing the liens. The plaintiff and Stewart stand first pro

1900. rata, Stewart to the amount only of the goods supplied Judgment. prior to 5th August, deducting all payments. Then will KILLAM, C.J. Come The Western Co-operative Co., then Bowen to the

amount of $300, and interest, less the claim of the company; then Stewart for the goods supplied on and after 5th August and before the 3rd October; then Bowen for the company's claim; then Stewart for the balance of his account; then Bowen for his last advance and interest; then Drewry and Strang; then Whitworth.

The mortgagees should be allowed to add their taxable costs to their respective claims, Bowen's to go with his first charge. The plaintiff and Stewart cannot together recover for costs a larger sum than one-fourth their aggregate claims in addition to taxable disbursements. If they cannot agree upon a division of the amount, they may apply to me.

[Subsequently the question as to whether counsel fees were to be included among "actual disbursements" under section 37 of The Mechanics' and Wage Earners' Lien Act, 1898, was argued before Killam, C. J., who decided that, where such fees were shown to have been actually paid, they were to be treated as "actual disbursements" whether the counsel should be a solicitor or partner of a solicitor in the cause or another barrister. The Chief Justice referred to Magurn v. Magurn, 10 P. R. 570, as supporting this view.-Ed.]

1900.

FRASER V. SWEET.

Before KILLAM, C.J., BAIN and RICHARDS, JJ.

Partnership-Liability for goods bought by partner-Ratification.

Where one of two partners, without the knowledge of the other, purchases goods in his own name or in the name of a firm which he expects to form afterwards in partnership with some other person, intending to exclude the other partner from the contract, the latter cannot be made liable upon the contract by ratification afterwards, although the old partnership is continued and the goods are subsequently taken into stock and disposed of for the benefit of the firm.

A man cannot be made a party to a contract unless he who assumes to contract does so on behalf of that man; and no ratification can be effectual unless the Act has been done by the agent on behalf of the party who ratifies, or, in other words, there can be no binding ratification by a person not contemplated by the agent as his principal at the time of entering into the contract.

Watson v. Swann, (1862) 11 C. B. N. S. 771; and Vere v. Ashby, (1829) 10 B. & C. 288, followed.

Durant v. Roberts, [1900] 1 Q. B. 629, distinguished.

ARGUED: 7th May, 1900.

DECIDED: 2nd June, 1900.

THIS was an action brought in a County Court against Statement. O. J. Sweet and W. Smith, trading as Sweet & Smith, to recover the price of goods claimed to have been sold and delivered by the plaintiff to the defendants.

In and previous to the year 1899 the defendants were carrying on a trading business in co-partnership, under the name of Sweet & Smith, at Rabbit Point, on Lake Winnipeg. In doing this they made purchases of goods at different times from the plaintiff, who carried on business in the City of Winnipeg. The orders were given by the defendant Sweet.

1900.

In 1899 some differences arose between the partners, Statement, and there was a talk of dissolution. Smith made his partner an offer for the purpose, which Sweet accepted. But this was objected to by a creditor, and was not carried out.

In June of that year Sweet came to Winnipeg, without the knowledge of his partner, and purchased the goods in question. By Sweet's instructions the goods were consigned and charged to O. J. Sweet & Co., and a promissory note was given for them in that name. The goods were put up in boxes, addressed to O. J. Sweet & Co., and sent to Selkirk, where they were transhipped to a boat, which carried them to Rabbit Point.

At Selkirk Sweet met his partner Smith, and both went home on the boat which carried the goods. Smith saw the boxes and the address, and stated that he supposed Sweet had bought the goods on his own account. Other boxes of goods addressed to Sweet & Smith were carried on the same boat. Smith helped to take all off the boat and all were placed in the firm's store. Sweet stated that he told Smith, at Selkirk, that he had bought $500 worth of goods in Winnipeg, and Smith made no objection; also, that about the time of the arrival at Rabbit Point he said to Smith that they had these goods now, and would have to work together to the best advantage to pay for them. Part of the goods received from plaintiff were sold to Indians by Sweet and part were seized under execution against the firm.

At Selkirk, after Sweet had made the purchases in Winnipeg, Smith told him of the creditor's refusal to allow the dissolution. Sweet stated that when he came to Winnipeg he expected to dissolve, that he made the change to O. J. Sweet & Co. "with the expectation of there being a change in the firm name or otherwise," and that he expected this name would hold any one who was in the firm, as they were too far away to make any change.