It is provided by the Registry Act, R.S.O. 1914, c. 124, s. 71, as follows:

71.-(1) After the grant from the Crown of land, and letters patent issued therefor, every instrument affecting the land or any part thereof shall be adjudged fraudulent and void against any subsequent purchaser or mortgagee for valuable consideration without actual notice, unless such instrument is registered before the registration of the instrument under which the subsequent purchaser or mortgagee claims.

(2) This section shall not extend to a lease for a term not exceeding seven years where the actual possession goes along with the lease, but it shall extend to every lease for a longer term than seven years.

8 G. 5, c. 20, s. 70, it was also provided that the council of any municipality, having a • population of 200,000 or more, might by by-law provide that a tax net exceeding one-tenth of one per centum upon the sum of money occured by each instrument by way of mortgage or charge, registered in a registry or land titles office upon lands within the municipality should be paid by the party registering the same

(e) See chapter 31, Sale under Power of Sale, Sec. 339.

(f) See chapter 19, Discharge or Reconveyance, Sec. Sec. 183, 184.

Sub-s. 1 re-enacts in principle a provision of the original statute of 1795 (g). That statute, however, made no exception in the case of the party claiming under the subsequent registered instrument having actual notice of the prior instrument, and it was only in 1873 that the corresponding section of the statute of 1868 (h), was amended by the insertion of the words "without actual notice" after the word "consideration" (i). The purpose of the amendment (j) was to make the section accord with the predecessor of s. 72 of the present statute which contains an explicit statement of the general principle that priority of registration shall prevail unless the person claiming by virtue of prior registration takes with actual notice of a prior instrument (k).

Generally speaking constructive notice (I) of an earlier instrument will not affect a person claiming by virtue of prior registration, but the doctrine of constructive notice is preserved in one instance under the Registry Act, namely, under sub-s. 2 of s. 71 quoted above (m).

(g) 35 G. 3, c. 5; cf. C.S.U.C. 1859, c. 89, ss. 44, 53; Bondy v. Fox, 1869, 29 U.C.R. 64, at p. 71.

(h) 31 V. c. 20, s. 64.

(i) 36 V. c. 17, s. 7.

(j) Peebles v. Hyslop, 1914, 30 O.L.R. 511, at p. 514, 19 D.L.R. 654, at p. 656. In equity it was already established that a person taking under a registered instrument with actual notice of an earlier instrument was, on the ground of fraud, not entitled to the protection of the statute. Millar v. Smith, 1873, 23 U.C.C.P. 47, at pp. 53, 55.

(k) See Sec. 74, infra. As to the same principle in New Brunswick and Nova Scotia, see New Brunswick Ry. Co. v. Kelly, 1896, 26 Can. S.C.R. 341, affirming 33 N.B.R. 310; Tom Gung v. Fong Lee, 1915, 48 N.S.R. 317, 22 D.L.R. 809.

(l) As to the equitable doctrine of constructive notice, see chapter 7, Equitable Principles governing Priorities, Sec. 66, and infra, Sec. Sec. 75 and 77.

(m) The provision as to registration of leases in its present form dates from 1865: 29 V. c. 24, s. 67. Prior to that date there was a similar provision as to leases not exceeding twenty-one years; C.S. U.C. 1859, c. 89, s. 45.

If a lease is for a term not exceeding seven years and the actual possession goes along with the lease, a subsequent purchaser or mortgagee is put upon enquiry by the possession of the, tenant and is affected with constructive notice of such tenant 's rights. If the lease is for seven years or longer, or if the possession does not go along with the lease (n), and if the lease is not registered, a person claiming under a subsequent registered instrument without actual notice of the lease, takes free from it.

Where a lease made for a term less than seven years contains a covenant for renewal for a further term which, added to the original term, makes a period exceeding seven years, in that case, if the lessee is in possession, the lease does not require registration in order to be valid as against a mortgage of the land which was registered during the original term (0).

But where a lessee during the currency of a lease for five years obtained a lease for a further term of four years to commence on the termination of the first lease, it was held that the second lease being unregistered could not prevail against a mortgage registered after the second lease was made but before possession under it began. In order to obtain the protection of the statute there must be not only a present lease but possession under it (p).

The exception made by sub-s. 2 of s. 71 in favour of lessees in certain circumstances would no doubt protect the assignee of a lease for a term not exceeding seven years if the actual possession is in accordance with the lease and assignment, because the possession of the assignee would put a subsequent purchaser or mortgagee of the land upon enquiry. The exception would not, however, protect, as against a purchaser or mortgagee of the land, a person claiming under an assignment from the lessor of the right to receive the rents and profits or any other rights of the lessor relating to the land. Such an assignment from the lessor would be an instrument "affecting land" within s. 2, which might be registered under s. 33, of the Registry Act (q), and would therefore fall within sub-s. 1 of s. 71.

(n) Kinnear v. Aspden, 1892, 19 O.A.R. 468, at p. 471.

(0) Latch v. Bright, 1869, 16 Gr. 653.

(p) Davidson v. McKay, 1867, 26 U.C.R. 306.

An unregistered instrument is not by s. 71 rendered void for all purposes. It is valid as between the parties to it (r), and is void only as against a person taking for valuable consideration (s) and without notice under a subsequent registered instrument (t).

A grantee for value, who takes without notice of an earlier conveyance from the same grantor and who registers his conveyance before the registration of the earlier conveyance, may maintain an action to have the conveyance in his favour declared entitled to priority over the earlier conveyance, but he is not entitled to have the earlier conveyance cancelled or to have the registration of it vacated (u).

(q) See Sec. 71, supra. As to what is included in a conveyance of land, see s. 15 of the Conveyancing and Law of Property Act quoted in chapter 1, Introductory, Sec. 5.

(r) One Sootheran, having obtained a conveyance of land from one of the defendants and registered it, executed, more than ten years before action, a reconveyance to both defendants, endorsing thereon a forged certificate of registration, and later, within ten years before action, mortgaged the land to the plaintiffs, who had no notice of the reconveyance. It was held that the reconveyance was void as against the plaintiffs, and that the defendants were not protected by the Limitations Act, because the reconveyance was valid between the parties thereto and no action could have been brought against the defendants before the date of the plaintiffs' mortgage. McVity v. Tranouth, [1908] A.C. 60, reversing 36 Can. S.C.R. 455, 9 O.L.R. 105.

(s) Miller v. Halifax Power Co., 1915, 48 N.S.R. 370, 24 D.L.R. 29; Barber v. McKay, 1890, 19 O.R. 46; Leech v. Leech, 1865, 24 U.C.R. 321; Fraser v. Sutherland, 1851, 2 Gr. 442.

(t) An assignee for the benefit of creditors is not a subsequent purchaser for valuable consideration within the meaning of the statute. Craig v. McKay, 1906, 12 O.L.R. 121.

The effect of an award under the Ditches and Watercourses Act, R.S.O. 1914, c. 260, is to subject the lands affected by it to an easement, and the award is therefore an "instrument affecting the land" within the meaning of ss. 2 and 71 of the Registry Act. Therefore, if the award is not registered it is void as against a subsequent purchaser without notice of one of the parcels of land affected thereby (v).

An easement or other legal right or interest arising by implication but not expressed in an instrument which can be registered may be good as against a subsequent purchaser or mortgagee without notice claiming under a registered instrument; because it is only an unregistered instrument, not an unregistered right or interest, that is made void by s. 71 in certain circumstances (w).