C.P.R. v. Turta

C.P.R. v. Turta
Collection
Supreme Court Judgments
Date
1954-05-19
Report
[1954] SCR 427
Judges
Rinfret, Thibaudeau; Kerwin, Patrick; Taschereau, Robert; Rand, Ivan Cleveland; Kellock, Roy Lindsay; Estey, James Wilfred; Locke, Charles Holland; Cartwright, John Robert; Fauteux, Joseph Honoré Gérald
On appeal from
Alberta
Subjects
Property law
Decision Content
Supreme Court of Canada
C.P.R. v. Turta, [1954] S.C.R. 427
Date: 1954-05-19
Canadian Pacific Railway Co. Ltd. and Imperial Oil Limited (Defendants) Appellants
and
Anton Turta (Plaintiff) Respondent;
and
William Sereda, Montreal Trust Co. and Nick Turta (Third Parties) Respondents.
1954: January 26, 27, 28, 29, February 1, 2, 3; 1954: May 19.
Present: Rinfret C.J. and Kerwin, Taschereau, Rand, Kellock, Estey, Locke, Cartwright and Fauteux JJ.
ON APPEAL FROM THE APPELLATE DIVISION OF THE SUPREME COURT OF ALBERTA.
Real Property—Land Titles—Omission by error of reservation of petroleum in transfer—Issue of certificate of title to transferee—Unauthorized addition by registrar of "and petroleum" to reservation—Right to petroleum by subsequent purchasers for value—"Wrong description" —"Misdescription"—"Prior certificate of title"—The Land Titles Act, 1906, (Alta.) c. 24.
In 1903 the C.P.R., the owner of a tract of land in what is now the province of Alberta, registered it under The Land Titles Act of the Northwest Territories and obtained a certificate of title, No. 424, certifying it to be the owner thereof in fee simple. By virtue of the Alberta Act, 1905 (Can.) c. 3, the certificate continued in effect under the Alberta Land Titles Act of 1906, c. 24. In 1908 the C.P.R. transferred from out of the tract the quarter section now in suit to P reserving the coal and petroleum. The registrar of land titles however in issuing a certificate of title to P reserved only the coal and endorsed on certificate No. 424 a memorandum to the effect that it was cancelled as to P's quarter section. In 1910 P transferred the east half to S and in 1911 the west half to the respondent Anton Turta. In 1918 S transferred the east half to Turta and the registrar issued a new certificate to the latter covering the entire quarter section. In all of these transfers and certificates only coal was reserved to the C.P.R. In 1910 certificate 424, because of the many endorsements on it, was, with the consent of the C.P.R., cancelled and a new certificate, as well as a duplicate, issued covering the lands which then remained uncancelled on No. 424. In 1943 the errors were detected by officials in the land titles office and entries were made on the cancelled certificate No. 424 as well as on the duplicate by adding the words "except coal and petroleum" to the memorandum of cancellation originally made, and by adding the words "and petroleum" to the reservations in Turta's certificate and the duplicate then in the office. In 1944 Turta transferred to the respondent Nick Turta the east half of the quarter section and in 1945 the west half to Metro Turta. The new certificates contained a reservation of coal and petroleum to the C.P.R. In 1946 the latter gave an option to lease all petroleum and natural gas underlying the quarter section to Imperial Oil which the latter exercised in 1951. In 1950 the respondents, Montreal Trust Co. and Sereda, entered into an agreement with Anton Turta relative to the petroleum rights and appear as caveators upon the title.
In an action to determine title to the petroleum rights:
Held: (Rinfret C.J., Locke and Cartwright JJ. dissenting) that: 1. The omission to insert the reservation of petroleum in the certificate of title granted Anton Turta did not constitute a misdescription within the meaning of s. 104(e) of The Land Titles Act.
2. Since certificate of title No. 424 was cancelled prior to any relevant date, there never was a contemporaneous existence of two certificates of title within the meaning of s. 104(f).
3. The purported corrections made by the registrar could not be made without prejudicing the rights conferred for value on Anton Turta, and therefore were not authorized by the Act and were of no effect.
4. The action was not barred by the Limitation of Actions Act, R.S.A. 1942, c. 133.
Per: Rinfret C.J., dissenting. The omission by the registrar to reserve the petroleum in granting the certificate of title to P was made contrary to the Act and was ultra vires. The certificate was a complete nullity and could never become the root of title to subsequent transferees and since the cancellation of certificate No. 424 was the consequence of the issuance of the certificate to P. it must be set aside for the same reasons. There was misdescription within the meaning of s. 62 of the Act as the property transferred to P was described so as to make it include other land, that is to say the petroleum which falls within the definition of land under s. 2 (a).
Per: Locke J., dissenting: To include in the lands described in the certificate of title issued to P the petroleum rights was a misdescription of the lands conveyed by the transfer from the C.P.R. within the meaning of that expression in ss. 44, 104 and elsewhere in the Act. The general statements as to the interpretation of the Victoria Transfer of Land Statute of 1866 in Gibbs v. Messer [1891] A.C. 248 at 254, and by Sir Louis Davies C.J. as to The Land Titles Act, 1917, of Saskatchewan in Union Bank of Canada v. Boulter Waugh Ltd., 58 Can. S.C.R. 385, cannot be applied without qualification to the Alberta statute. The rights of those deprived of their property by misdescription of land are expressly reserved to them by the latter statute and it cannot be construed to defeat such rights. The rights to the petroleum were adequately excepted from the operation of the transfer to P.
Per: Cartwright J., dissenting: Ss. 25, 42 and 135, if read alone would seem to make the certificate of title of a purchaser in goood faith for value conclusive, but they must be construed with ss. 44, 104 (e) and 106 and the last mentioned group must be read with them. When so read, the C.P.R.'s claim falls with s. 104 (e) and no other provision of the Act requires a restriction or modification of the ordinary meaning of the words used in such clause. APPEAL by defendants from a judgment of the Supreme Court of Alberta, Appellate Division 1, affirming, C. J. Ford J.A., dissenting, the judgment of Egbert J.2, declaring plaintiffs' right to petroleum in certain land.
C. F. H. Carson, Q.C., S. J. Helman, Q.C., I. D. Sinclair and Allan Findlay for C.P.R.
H. G. Nolan, Q.C. and J. H. Laycraft for Imperial Oil.
G. H. Steer, Q.C. and G. A. C. Steer for Anton Turta and Montreal Trust Co.
M. E. Manning for Nick Turta.
The Chief Justice (dissenting): This case calls for the application of The Alberta Land Titles Act of 1906. If the contentions of the respondents were to prevail, as they were upheld by the learned trial judge and the majority of the Appellate Division of the Supreme Court of Alberta, I may say, with respect, that in my opinion, it would create an intolerable situation. Interpreted as suggested by the respondents, the statute would do away with all traditional principles of law and equity. Indeed, I am not sure that it does not boast of such intention, for, in section 135, the very words are used by the legislator whereby it is stated:—
Except in the case of fraud no person contracting or dealing with or taking or proposing to take a transfer, mortgage, encumbrance or lease, from the owner of any land for which a certificate of title has been granted shall be bound or concerned to inquire into or ascertain the circumstances in or the consideration for which the owner or any previous owner of the land is or was registered or to see to the application of the purchase money or of any part thereof, nor shall he be affected by notice direct, implied or constructive, of any trust or unregistered interest in the land, ANY RULE OF LAW OR EQUITY TO THE CONTRARY NOTWITHSTANDING …". (The capitals are my own).
And, if it were so, I confess that the statute in question would not fill me with enthusiasm.
But, fortunately, I fully share the dissenting opinion of Mr. Justice Clinton J. Ford in the Appellate Division 3. After a most anxious study of the case, like Clinton Ford J.A., I would allow the appeal and dismiss the action and give to the appellant, The Imperial Oil Co. Ltd., the remedy asked for in its counter-claim, and to the appellant, The Canadian Pacific Railway Company, the remedy sought in its third party notice, with costs against the respondents and the third parties who fought the issues.
Let us face the facts:—On the 19th June, 1908, the Canadian Pacific Railway Co. transferred to one Podgorny the land in issue "reserving all coal and petroleum which may be found to exist within, upon, or under the said land". Upon that transfer the Registrar of Land Titles purported to grant to Podgorny certificate of title No. 182-N-8 to the land described as the "north-west quarter of section 17, township 50, range 26, west of the 4th Meridian, in the said province, containing 160 acres more or less, reserving to the Canadian Pacific Railway Co. all coal on, or under the said land". The reservation so limited is the more extraordinary, because the Registrar evidently relied upon the transfer to specify that the coal was reserved to the Canadian Pacific Rly. Co.; and, for no reason that can be imagined, he did not mention in the certificate of title the petroleum specified in the same reservation.
All courts and all parties in the case have had to admit that the omission of the petroleum was undoubtedly what they call an error, and if it is only an error, it borders on stupidity. In fact, it is stupidity of the most glaring character. I do not call it a simple error. I think either the granting of the certificate to Podgorny cannot be taken as having included the petroleum, or, at all events, if it must be understood to include it, it was done by the stupidity of the Registrar without power, or authority, derived from The Land Titles Act. The omission, in my view—if it is to be treated only as an omission—was made contrary to the Act and was ultra vires. On the other hand, Podgorny, who took and accepted such a certificate, if he was really under the impression that it gave him title to the petroleum, acted fraudulently. An attempt was made to excuse him on the ground that he was ignorant, but, of course, that can never excuse him if such ignorance is understood to mean that he did not know the law. I am not inquiring whether he had the mens rea, which would have branded him as a criminal, but his action in taking possession of the certificate, under the circumstances, was certainly a fraud according to the civil law, because, whether he ignored the law or not, he could not ignore the reservation of petroleum in the transfer made to him by the Canadian Pacific Railway Co. Assuming that he understood the certificate of title to give him the ownership of the petroleum, to which he had absolutely no right, he then proceeded further to transfer the land, without the reservation of petroleum to The Canadian Pacific Railway Company, in part to one Sitko and in another part to the respondent Anton Turta. In the transfer to Sitko no exception of coal was made, but the certificate issued to the latter reserved unto The Canadian Pacific Railway Co. all coal on or under the said land. In the transfer to Turta even the coal was not excepted, but the certificate of title issued to him contained the reservation "unto the Canadian Pacific Railway Co. all coal on or under the said land". Later the respondent, Anton Turta, acquired land which Podgorny had transferred to Sitko and the reservation of the coal was mentioned in the transfer to him. Then Turta requested that his titles to the east and west halves of the quarter section be consolidated and his application for consolidation described himself as the owner of the east half and the west half of the quarter section without any exception. However, the certificate of title issued to him for the consolidated halves of the quarter section did show Turta "reserving unto The Canadian Pacific Railway Co. all coal".
On January 16, 1943, corrections were made in the Land Titles Office to certain certificates of the quarter section held by Podgorny, Sitko and the respondent Anton Turta. These corrections were made by one, H. T. Logan, a solicitor, who was acting Deputy Registrar at the time. By these corrections petroleum was excepted from the land described in the certificates of Podgorny, Sitko and Anton Turta; and since petroleum had been excepted and reserved to The Canadian Pacific Railway Co. in its original transfer of the quarter section to Podgorny, the corrections brought these certificates into accord with that original transfer. On April 17, 1944, Anton Turta transferred to Nick Turta, his son, and one of the third party respondents, the east half of the north-west quarter of section 17, "reserving unto The Canadian Pacific Railway Co. all coal and petroleum"; and the certificate of title issued as a consequence to Nick Turta showed him to be the owner of the east half in question "reserving unto The Canadian Pacific Railway Co. all coal and petroleum".
Anton Turta, on the 30th December, 1944, transferred to his son, Metro Turta, and his daughter-in-law, Bessie Turta, the west half of the north-west quarter of section 17, "reserving unto The Canadian Pacific Railway Co. all coal and petroleum". Accordingly, the certificate of title issued to Metro and Bessie Turta showed them to be the owners of the west half of the quarter section "reserving unto The Canadian Pacific Railway Co. all coal and petroleum".
By an encumbrance dated December 30, 1944, Metro and Bessie Turta, describing themselves as the registered owners of the west half of the quarter section "reserving unto The Canadian Pacific Railway Co. all coal and petroleum", encumbered the land as security for the performance by them of the terms of an agreement between them and Anton Turta of the same date. The agreement attached to the encumbrance states that it was executed by Anton Turta, as well as by Metro and Bessie Turta, and in the said agreement the fact that there was "reserved to the Canadian Pacific Railway Co. from the land all coal and petroleum" appears eight times.
By the amended Statement of Claim, Anton Turta claimed a declaration that he is entitled to be registered as owner of all the petroleum in, upon and under the quarter section, and that the substitutions and alterations made to various documents to show the contrary were wrongful.
The learned trial judge held that Anton Turta was entitled to the declaration claimed and found it unnecessary to deal with the claim for title by prescription, which Turta had inserted in his statement of claim. It is significant that the learned trial judge, having found that Anton Turta could not understand English, held as a fact that he acquired the quarter section involved in this action for a farm and that he knew nothing about minerals at the time and did not discuss them with either Podgorny or Sitko and placed no value on them. He also found that all the corrections of the certificates of title made on January 16, 1943, were a complete nullity. In the learned trial judge's view the Registrar had power, by s. 174 of The Land Titles Act, merely to correct clerical errors as between parties to the transaction and did not have power to make the alterations of the instruments in question, thereby prejudicing rights conferred for value. He also held that s. 174 was governed by s. 159 so that if Anton Turta was a bona fide purchaser for value, and there was no misdescription, s. 174 did not confer powers on the Registrar to deprive him of his land. The learned trial judge found that Anton Turta gave valuable consideration for everything comprised in his vendors' certificates, including petroleum, and that he dealt "upon the faith of the register" in the sense that he transacted on the "basis" of the register, although he never saw it. Accordingly, he held that Anton Turta was a bona fide purchaser for valuable consideration; and, by virtue of s. 106 of the 1906 Act, his title was indefeasible unless there was a prior certificate of title or there had been misdescription. He was of the opinion that for the exception of prior certificate the Act contemplates two contemperaneous certificates of title for the same land and that in this case there was never more than one certificate. As to misdescription, His Lordship considered that there must be "other land" to bring the case within s. 104, and that here there was only one parcel involved. He thought that "misdescription" is a narrower term than "error", as used in s. 106, and that this is a case of error.
The Appellate Division 4 affirmed the judgment of the trial judge, Mr. Justice C. J. Ford dissenting. The Chief Justice of Alberta, although he concurred in the judgment of the majority, stated that he did so reluctantly, because, in his opinion, the result of the decision is to take from The Canadian Pacific Railway Co. without its consent and without consideration what may prove to be valuable oil rights and give them to the respondent who never expected to get them. Parlee J.A., with whom Frank Ford and Macdonald JJA. concurred, found that Anton Turta bought the quarter section as a farm and was not interested in any minerals or aware of any reservation until after the discovery of petroleum in Leduc in 1947. He found that, although the Registrar was in error in granting the certificate to Podgorny, there was no error by the Registrar when certificates were granted to Anton Turta. As to the contention of The Canadian Pacific Railway Co. that it had a prior certificate of title, he held that the certificate of the latter, No. 424, was effectively cancelled and the Act requires two contemporaneous certificates, and that, in any event, such a contention disregards the plain language of s. 106 of the 1906 Act. As to misdescription, he held that since there was involved only one parcel of land throughout, it was a case, not of misdescription, but of error in the Registrar's office. Dealing with the alterations subsequently made in the Registrar's office, Parlee J.A. held there was a nullity; and, in his view, the Registrar had no authority to make corrections which prejudiced rights conferred for value.
As for Mr. Justice C. J. Ford, who dissented, he was of opinion that the Registrar had registered Podgorny as the owner of petroleum under his land, contrary to The Land Titles Act of 1906, and, therefore, such title was void. The creation of an unauthorized title did not cancel an existing title and, in his opinion, the purported cancellation of certificate C.P.R. 424 was a nullity. He held, therefore, that The Canadian Pacific Railway Co. has a title prior to Anton Turta's, with the right to recover possession. He also held that Anton Turta's claim for title by prescription, based on actual or constructive possession of minerals under colour of title, failed because the Canadian Pacific Railway Co. had a separate estate in minerals, which could not be defeated by mere non-user. He found it unnecessary to deal with the points raised by The Canadian Pacific Railway Co. and Imperial Oil Co. Ltd. as to The Limitation of Actions Act and whether Anton Turta acquiesced in the corrections. He would, therefore, have dismissed the action and have allowed the remedies sought by The Canadian Pacific Railway Co. With great respect, I am of opinion that sufficient attention has not been given in the Courts below to the definition of the word "land" in section 2(a) of the 1906 Act. That section (as re-enacted in 1945, c. 58. s. 1) reads as follows:—
2. In this Act, unless the context otherwise requires,—
(1) "Land" or "Lands" means lands, messuages, tenements and hereditaments, corporeal and incorporeal, or every nature and description, and every estate of interest therein, whether such estate or interest is legal or equitable, together with paths, passages, ways, watercourses, liberties, privileges and easements appertaining thereto and trees and timber thereon, and mines, minerals and quarries thereon or thereunder lying or being, unless any such are specially excepted.
It is common ground that petroleum is a mineral, and it is also clear that under the above definition, minerals are "land". In the transfer from The Canadian Pacific Railway Co. to Podgorny, it may be repeated, coal and petroleum were specifically excepted and reserved to The Canadian Pacific Railway Co. The dissenting judge in the Appellate Division refers to the dicta of Blackburne C.J., in McDonnell v. McKinty 5:—
The excepting of the quarries in the deed of 1738 severed them both as to estate and possession from the estate in possession of the lands ; in both respects they became thereon separate and distinct; the grantor's estate and possession of the quarries remained unaffected; and he retained them as he had them; they were never out of him. Cardigan v. Armitage 6.
The learned judge also referred to Farquharson v. Barnard Argue Roth Stearns Oil & Gas Co.7, where Boyd C. expressed a similar view, stating that the possession of the surface owner is not adverse to or inconsistent with the possession in law of the subjacent proprietor, and referred to Hodgkinson v. Fletcher 8
The judgment of Blackburne C.J. was approved by the Privy Council in Agency Co. v. Short 9, in which Lord Macnaghten said:—
We entirely concur in the judgment of Blackburne C.J., in McDonnell v. McKinty, 10 and the principle on which it is founded.
According to these authorities, therefore, the coal and petroleum excepted and reserved in the transfer to Podgorny were severed from the estate transferred to the latter and they became separate and distinct from the estate. This would seem to indicate that as a result of such a transaction and from then on there should have been in the Registry Office separate records for the land and for the coal and petroleum. As a consequence, at all events, the coal and petroleum could no longer be regarded as being part of the land itself for registration purposes; and it would be arguable that when the certificate of title was issued to Podgorny without mention of petroleum it did not transfer the petroleum to Podgorny, since it was not specifically included and petroleum was correctly treated as being a separate land. I must confess, however, that the judgments below gave no attention to such an argument and they treated the certificate issued to Podgorny as including the petroleum, because the latter was not excepted and reserved in that certificate. But, on that ground, it follows that the issuance of the certificate to Podgorny, if it is to be regarded as having transferred the petroleum to him, was not a mere error, but really a certificate of ownership to a land (petroleum), to which he had no right whatever, to which he was in no way entitled, which was contrary to his transfer from The Canadian Pacific Railway Co., and, therefore, a certificate made not in accordance with The Land Titles Act, altogether outside the power and authority of the Registrar and ultra vires.
It is very well to say that the certificate of title is the whole thing under The Land Titles Act, or, if you wish, under the so-called Torrens System; but it must necessarily be a certificate which the Registrar has power to issue. The title may be indefeasible, although it admittedly contains errors made by the Registrar; but, in order to receive the protection of the Act, the certificate must have been issued in accordance with that Act. The Act does not protect a certificate issued without power, or authority. It is already bad enough that this Registrar, after having created the mess in which the parties in this case found themselves, is not made responsible for his errors. I would venture to say that he is the only man on earth who is not held responsible under the law for his errors. Indeed, he is invited to make errors, since he is told by the law that that will entail no responsibility on his part. He is invited to be negligent. However, he can only escape responsibility when he is acting within his powers and, in this case, he was not acting within them1 when he issued the certificate which is claimed to have covered the petroleum. So far as it may be held that it did, I respectfully am of opinion that it was a complete nullity and could never become the root of a title to subsequent transferees.
The Court is asked to decide that notwithstanding the erroneous and illegal actions of the Registrar in delivering the certificate of title to Podgorny, all those objections are not available to The Canadian Pacific Railway Co. because Podgorny fraudulently transferred the estate, as it appeared in his certificate of title, to Anton Turta and Sitko, on the reasoning that they were bona fide purchasers for valuable consideration. The evidence of Anton Turta discloses that he bought the property to farm and that he put no value on any minerals in his transfer, or his title. In fact, he did not know whether Podgorny's title covered any minerals and in the amount which he paid Podgorny not a single dollar was intended to cover the value of the petroleum. Podgorny did not intend to sell or transfer petroleum and Sitko and Anton Turta did not intend to buy petroleum. As a matter of fact, they did not even suspect the existence of any petroleum. We are now asked to say that under those circumstances they gave valuable consideration for that mineral. I cannot bring myself to believe that someone may be held to have given valuable consideration for a thing he does not intend to buy and the existence of which he does not even suspect.
I also fail to see how a purchaser can be held to have acquired in good faith something which he never intended to purchase and which, as far as he was aware, was non-existent.
Of course, if the reference in so many reported cases to acquiring land "on the faith of the register" was to be applied in the present appeal and considered as meaning that the purchaser should at least consult the register, we have it in the present case that neither Sitko, nor Turta, took the trouble of consulting it. Now it is contended that under this registration system the certificate of title is the whole thing and nothing else should be considered. On that ground it is claimed that Podgorny's certificate of title, although admittedly erroneous, must stand and is valid under The Land Titles Act. If that be so, I cannot understand why a different interpretation is given to the certificate of title which the third parties got from the Registrar and in which the coal and petroleum were excepted and stated to be reserved for The Canadian Pacific Railway Co. If the initial error made when the certificate to Podgorny was issued is of no account, then why should not the so-called error by the Registrar in making corrections to the title and in issuing certificates of title to third parties be equally considered as decisive? In the case of these third parties, the certificates of title which they received from the Registrar excepted and reserved the coal and petroleum for The Canadian Pacific Railway Co. I cannot understand how under the same statute the initial certificate to Podgorny must be reverently regarded as sacred, notwithstanding the admitted error, and the certificates of the third parties, on the contrary, should be held to contain illegal corrections. There are provisions in the statute authorizing the Registrar to make corrections and the only objections that were made were that they did not follow the procedure outlined in the statute itself. In those cases, I would consider that the corrections were mere irregularities, while the issue to Podgorny of a certificate covering, as is contended, the petroleum was an action which the Registrar had absolutely no power to make. The third parties accepted the certificates which they got and which included the exceptions and reservations in favour of The Canadian Pacific Railway Co. I would not think that they should now be permitted to say that those insertions by the Registrar were inoperative. Anton Turta brought his action after the corrections had been made and after the certificates of title to the third parties had been issued with the exceptions and reservations in favour of The Canadian Pacific Railway Co. His interest in bringing an action of the character which we have before us could very well be disputed, as he had parted with the property. He is apparently bringing the action so as to make good the title which his transferees have accepted. They, and not Anton Turta, would get the benefit of the decisions of the Courts on that point. The corrections made in 1943 in the Register have at least the value of admissions by the keeper of the register that errors had been made when the certificate was issued to Podgorny.
There are several other questions which were raised in this case and which were not decided adversely to the appellants in the judgments appealed from. If I thought that a decision on those questions was necessary for the conclusion at which I have arrived, I would adopt the reasoning of the dissenting judge in the Appellate Division with regard to them.
Only one word should be added in respect to the cancellation of certificate No. 424 of The Canadian Pacific Railway Co., because it seems to me to follow that if the Registrar had no authority to issue a certificate to Podgorny covering the petroleum, equally he lacked authority to cancel certificate No. 424 in full as he did. That cancellation was the consequence of the issue of the certificate to Podgorny and must be set aside for the same reasons for which, in my opinion, the certificate of title itself should be held to be ultra vires. I am unable to read the statute so as to make it validate all that has been done by the Registrar in this matter. I have no doubt The Canadian Pacific Railway Co. could ask the Court for permission to raise those questions against the respondent Anton Turta and the respondent third parties, even though they were held to be bona fide purchasers for valuable consideration, which, as I said above, I do not consider them to be. If, according to the definition of "land" in the statute, the petroleum was a land by itself, separate from the rest of the estate, then this at least is a case of misdescription as required by the statute to enable The Canadian Pacific Railway Co. to dispute the title of the respondents. This case would constitute misdescription within the meaning of s. 62 of The Land Titles Act. It is argued that in order to have a case of misdescription there must be "other land involved", but there is other land involved in the premises. The petroleum coming under the definition of land by force of the statute and the insertion of the petroleum in the description of the property in the certificate of Podgorny does involve other land, and I do not see how, in that respect, the decision in Hamilton v. Iredale 11 can be distinguished. It is cited in the reasons for judgment of Parlee JA. and a portion of the head note reads as follows :
Wrong description is where an applicant intending to describe Blackacre describes Whiteacre, or so describes Blackacre as to make it include Whiteacre. It is not wrong description where the applicant correctly describes the land he is applying for, though the land is not his. It is then a case of no title …
In the present case the property transferred to Podgorny was described so as to make it include another land, that is to say, the petroleum belonging to The Canadian Pacific Railway Co., and such misdescription opens the way to The Canadian Pacific Railway Co. to urge the claim that it now makes.
On the whole, as stated at the beginning of this judgment, and for the above reasons I would allow the appeal, dismiss the action and give the appellants the remedies prayed for by them, with costs throughout.
The judgment of Kerwin, Taschereau, Estey and Fauteux JJ. was delivered by:
Estey J.:—The respondent Anton Turta has been, both by the learned trial judge and the majority of the learned judges in the Appellate Division 12, declared to be the owner of the petroleum in the N.W. ¼ of Section 17, Township 50, Range 26, W. of the 4th Meridian, Province of Alberta, on the basis that he is an owner thereof to whom a certificate of title was granted March 12, 1918, reserving only the coal to the Canadian Pacific Railway Company. The appellant Canadian Pacific Railway Company contends that, having received this quarter section in a grant from the Crown in 1901 and never having transferred the petroleum, it was and still remains the owner thereof, notwithstanding the issue of the certificate of title to Anton Turta, a purchaser bona fide for valuable consideration.
The C.P.R. acquired the quarter section as part of a grant dated July 13, 1901, brought it under The Land Titles Act of the Northwest Territories on March 9, 1903, and as of the same date was granted certificate of title No. 424. By virtue of s. 16 of the Alberta Act (4 & 5 Edw. VII, c. 3) that statute and the certificate of title No. 424 continued in effect after Alberta became a province.
On June 19, 1908, the C.P.R. transferred this N.W. ¼ of 17 to Mike Podgorny, reserving coal and petroleum. When this transfer was registered in the land titles office on July 13, 1908, the registrar, in preparing Mike Podgorny's certificate of title, reserved only the coal to the C.P.R. At the same time the registrar indorsed a memorandum on certificate of title No. 424 to the effect that it was cancelled so far as it affected this N.W. ¼ of 17. These errors were not detected at the time, nor, indeed, until 1943, some time after Podgorny had disposed» of the quarter section.
On February 2, 1910, Podgorny transferred all his estate and interest in the E. ½ of this ¼ section to Andrew Sitko, when a new certificate of title was issued to the latter, reserving the coal, but not the petroleum, to the C.P.R.
On September 2, 1910, apparently because certificate of title No. 424 contained so many indorsements, that certificate was cancelled and a new certificate No. 2687 was issued to the C.P.R. The registrar, at that time, placed an indorsement on certificate No, 424 to the effect that it was cancelled in full.
On November 10, 1911, Podgorny transferred the W. ½ of the N.W. ¼ to Anton Turta without any reservation, but on May 2, 1912, when this transfer was registered, the registrar, again apparently relying upon the certificate already issued to Podgorny, reserved only the coal to the C.P.R. On February 23, 1918, Sitko transferred the E. ½ to Anton Turta, reserving coal, and on March 12, 1918, this transfer was registered and, at Turta's request, the registrar issued to him one certificate of title covering the entire quarter section, reserving the coal to the C.P.R.
In 1943, in the course of an investigation by the officials in the land titles office, these errors were detected and corrections made upon the original certificate issued to Podgorny and all subsequent certificates of title relative to this quarter section. These corrections, if valid, reserved the petroleum to the C.P.R.—in other words, so far as this quarter section was concerned, corrected the error made by the registrar in July, 1908, and showed both coal and petroleum reserved to the C.P.R.
Anton Turta transferred the E. ½ of this ¼ section to Nick Turta, to whom certificate of title was issued as of May 21, 1944. Anton Turta also transferred the W. ½ of this ¼ section to Metro Turta and the latter's wife Bessie Turta, to whom certificate of title was issued under date of January 3, 1945. In both of these latter certificates the coal was reserved and, by virtue of the corrections made in January, 1943, and above referred to, the petroleum was also reserved to the C.P.R.
The C.P.R., as of August 2, 1946, gave an option to Imperial Oil Limited to lease all petroleum and natural gas underlying this N.W. ¼ of 17. Imperial Oil Limited exercised this option and under date of March 6, 1951, became the lessee of the petroleum. The Montreal Trust Company and William Sereda entered into an agreement with Anton Turta relative to the petroleum rights and appear as caveators upon the title.
The immediately preceding paragraphs explain the presence of the parties hereto other than the C.P.R. and Anton Turta. The main issues, however, arise between the C.P.R. and Anton Turta and must be determined upon a consideration of the C.P.R.'s transfer to Podgorny, the effect of the error in the land titles office in granting a certificate of title to Podgorny, the subsequent cancellation thereof and the issue of a new certificate of title to Anton Turta, a purchaser bona fide for valuable consideration.
Anton Turta's certificate of title dated March 12, 1918, was granted under The Land Titles Act (S. of Alta. 1906, c. 24) which continued in that province the Torrens system of land registration adopted in the Northwest Territories when in 1886 Parliament enacted the Territories Real Property Act (S. of C. 1886, c. 26). As the main issues must here be largely determined upon a construction of certain sections of the 1906 Land Titles Act, it will be of assistance, while giving full effect to the language thereof, to keep in mind the intent and purpose of the Legislature in continuing this system. In the preamble to The Territories Real Property Act of 1886 this intent and purpose is expressed as follows:
Whereas it is expedient to give certainty to the title to estates in land in the Territories and to facilitate the proof thereof, and also to render dealings with land more simple and less expensive:
In this Court Sir Louis Davies C.J., in Union Bank of Canada and Phillips v. Boulter Waugh Ltd., 13, in referring to the Saskatchewan statute, which is similar to that of Alberta, quoted from a New Zealand case at 387:
The cardinal principle of the statute is that the register is everything and that, except in cases of actual fraud on the part of the person dealing with the registered proprietor, such person, upon registration of the title under which he takes from the registered proprietor, has an indefeasible title against all the world. Fels v. Knowles 14.
Chief Justice Harvey of Alberta gave expression to a similar view:
The principle of the Act is that a person may ascertain the state of the title by a reference to the records of the land titles office and the person who is the registered owner has the right by transfer duly registered to convey a good title to a bona fide purchaser subject only to what appears on the register and the reservations and exceptions of Sec. 58 (i.e. Sec. 44 of the 1906 Act). It is registration that gives and extinguishes title … Dobek v. Jennings 15.
Lord Watson in Gibbs v. Messer 16, a case from Australia, stated at p. 254:
The object is to save persons dealing with registered proprietors from the trouble and expense of going behind the register, in order to investigate the history of their author's title, and to satisfy themselves of its validity. That end is accomplished by providing that every one who purchases, in bona fide and for value, from a registered proprietor, and enters his deed of transfer or mortgage on the register, shall thereby acquire an indefeasible right, notwithstanding the infirmity of his author's title.
The foregoing preamble and quotations, as well as others to similar effect, emphasize that the Torrens system is intended "to give certainty to the title" as it appears in the land titles office. That one who is named as owner in an uncancelled certificate of title possesses an "indefeasible