*

been entitled to hold his tongue throughout. So again, if a statement has been made which is true at the time, but which during the course of the negotiations becomes untrue, then the person who knows that it has become untrue is under an obligation to disclose to the other the change of circumstances. I do think that the contract of suretyship is, as expressed by Lord Westbury, in Williams v. Bayley, one which should be based upon the free and voluntary agency of the individual who enters into it'. * * It is one, furthermore, in which I think. that every thing like pressure used by the intending creditor will have a very serious effect on the validity of the contract; and the case is stronger where that pressure is the result of maintaining a false conclusion in the mind of the person pressed."

Williams v. Bayley, referred to by Fry, J., L. R. 1 H. L. 200, was, like Davies v. London and Provincial Ins. Co., a case in which security was in fact obtained by threats or pressure of criminal proceedings for felony.

Cranworth, C., says, p. 209: "It is not pressure in the sense in which a Court of Equity sets aside transactions on account of pressure, if the pressure is merely this: 'If you do not do such and such an act, I shall reserve all my legal rights, whether against yourself or against your son.' If it had only been, if you do not take on yourself the debt of your son, we must sue you for it,' I cannot think that that amounts to pressure where parties are at arms' length."

The judgment of Pollock, C. B., in North British Ins. Co. v. Lloyd, 10 Ex. 523, reviews the authorities, and also condemns the uberrima fidei argument.

This case is noticed in Lee v. Jones, 17 C. B. N. S. 482, in Error. Blackburn, J., says, p. 507: "It is not essential to constitute fraud that there should be any misleading by express words. It is sufficient if it appears that the plaintiffs knowingly assisted in inducing the defendant to enter into the contract by leading him to believe that which the plaintiffs knew to be false, the plaintiffs

knowing that, if he had not been thus misled, he would not have entered into the contract."

The cases are very numerous.

The general law is fully stated in Brandt on Suretyship, secs. 365, 6, 7; Baylies on Sureties, 214, et seq. Municipal Corporation of East Zorra v. Douglas, 17 Gr. 466, reviews a number of the authorities. See also Peers v. Oxford, Ib., 472; County of Frontenac v. Breden, Ib.,

645.

I see very serious objections to allowing defendant to raise the question as to the invalidity of the bond at the time and in the manner he has chosen to select.

He had the fullest knowledge of all the facts connected with his defence, and could have urged it as readily at the first trial as at the second. After hearing all the evidence (including that of the reeve, Mr. Taylor, his chief witness on this head) he applies to re-open the case and obtain another trial, still in no way suggesting such a defence as this.

There is no evidence that any mistake was made by his legal adviser, or otherwise, as to why such a defence, if it existed, was not urged at the proper time.

If he had urged it at the usual time, the Court would have considered and pronounced judgment on it, and if in his favour, no second trial would have been required.

But he allows a new trial to be granted on the general question of the accounts, with costs to abide the event, and now raises this previously neglected defence, going to the root of the claim.

This seems to me to be exceedingly unfair to the plaintiffs, after all the very heavy expense previously incurred in a very small matter, as the result of the last verdict shews this to be.

I quite agree that if from accident or wrong advice an important matter of defence had not been urged at the proper time, and an estate or some large interest were involved, the Court would endeavour to open the defence, and allow a new trial on such terms as to costs as would

properly protect the plaintiff; but in a small matter like this, involving some $250, I cannot see why such utter looseness of proceeding should be tolerated.

If the defence now urged had, in due course, been presented, one trial would have sufficed for its decision. The carelessness of defendant has rendered the first trial useless. All could have been decided as it is now, and I do not see why plaintiffs should not be reimbursed by defendant to the extent of the useless expense they have been put to.

I have not seen any direct decision as to the effect of the creditor in perfect good faith stating that the principal debtor was not in default, or was "ahead" in his accounts, as here stated.

I think we should not add another to the already too numerous methods of defeating a contract like the present.

The position of the treasurer of a municipality is such that individual members of the council may very honestly believe his accounts are quite correct and that he is not in any default, and next day one or more items or transactions may appear shewing that such belief was unfounded.

But it is suggested that even if such mistaken statement may not wholly relieve the surety, yet that there is a quasi estoppel on the creditor from afterwards asserting a different state of facts.

The bearing of this argument in the present case would amount to this, that if he must be taken at the time the surety bond was given to have been not in default, all payments subsequently made by him to the plaintiffs must go in discharge of his liability for moneys thereafter received by him as treasurer.

There was no fraud whatever, in the ordinary sense of the term, practised upon him.

Taylor, the reeve, said that when he was asked to become surety, "I satisfied him, as I was satisfied myself, that Jesse was all right in the books.

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He objected. He did not appear to have confidence in hin.

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I told

him and felt justified in telling him that he could put confi

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dence in his son, if any body could, and that if he did not go his surety he would have to lose his position: at the same time I advised him to give him some bank accommodation."

At that time defendant did sign an accommodation note for $1,500.

Taylor says that as he and Mr. Butler made it out with the auditors' report for 1878, and taking the debit and credit side of his cash book, the book shewed a balance in favour of the treasurer of somewhere in the neighbourhood of $260.

He says the whole Council thought as he did: that he told defendant they had gone over the books, and the way they found things, and everything was done in good faith.

The defendant's evidence is not very clear. I understand when his going security was first spoken of, it was said that Jesse was behind, and he at first declined to be bound, and said he must consult a lawyer: that afterwards he met the council, and Taylor told him they had been through the books, and there was some $250 or $260 in his favour; this was the day the bond was given; and that he would not have signed the bond if he had not been told that. That soon after he had signed the bond he found there was something wrong, that Jesse was breaking out, and doing what was wrong again. He says that he wrote a letter to the council saying that he would not be responsible: this was sometime in the fall of 1879; and he retracted it, "because he came and felt so bad about it that I let him go on again."

On being called on by the Council, defendant said he would pay whatever deficiency had occurred since he signed the bond, if there was any: "if they would make up their books I would pay it."

Jesse (the treasurer) was examined. He says that at the date of the execution of the bond he was insolvent. He made an assignment two or three months after the bond was given.

Mr. Butler, deputy reeve, says he did not know the treasurer was short in his accounts till the auditors for 1879 reported that was in June, 1880 that treasurers usually put out half yearly statements of the money to the credit of the corporation.

Notes from time to time were discounted at the bank agency on the credit of the corporation or individual members, the treasurer receiving the proceeds and having to account therefor; for instance, one on 31st May, 1879, for $12.

I am of opinion, that what took place at the execution of the bond ought not in any way to relieve the defendant from liability.

Let us understand what took place.

The councillors say to defendant, that according to the books kept by his son, the treasurer, he was not in default, but ahead.

There is no suggestion that this was not true.

The treasurer kept the books, entered what he pleased on the debtor and creditor side of the account. This was in the middle of the year, and these accounts would not be audited or verified till after the close of 1879.

We must assume that defendant knew as well as the members of the council that his son kept books as treasurer, and had the control of the entries therein. They then appeared with a balance in his favour.

By subsequent investigations this is shewn to be erroneous; in other words, that his books did not correctly shew his true position.

The alleged representation was not an absolute assertion of his being in arrear or in advance, but merely that they had gone over the books, and by them he appeared to be in advance.

I cannot understand on what principle a bond given under such circumstances can be avoided.

The utmost defendant can urge is, that he was induced to become surety on the representation that the books shewed the treasurer to be in advance, not in arrear. This was true as to the books.