In cases where actual notice is brought home to the person whose title is impeached or to his agent (v), the courts will probably continue to find evidence of fraud, wherever that is possible on the facts, and it is doubtful whether cases of actual notice not involving fraud in the view of courts of equity are likely to occur, but Scott's construction has the theoretical advantage that it avoids the complete reading out of the statutes the words regarding actual or direct notice (w).

(r) Article in 29 L.Q.R. 434-441 (Oct. 1913).

(s) [1913] A.C. 491.

(t) Torrens System Mortgages, pp. 250-1, 254-5. See also Thom, Canadian Torrens System, pp. 161 ff., 171 ff., for a discussion of the cases down to 1912.

(u) Battison v. Hobson, [1896] 2 Ch. 403.

(v) Assets Co. v. Mere Roihi, [1905] A.C. 176.

(w) The case of In re Monolithic Building Co., Tacon v. The Company, [1915] 1 Ch. 643, is worthy of special note. The Court of Appeal held that s. 93 of the Companies (Consolidation) Act, 1908, object of the land titles system, namely, to secure the inde-feasibility of a title or interest obtained in good faith by transfer or other disposition on the part of the registered owner. As against the persons creating them equitable and unregistered interests are valid and enforceable because the recognition of such interests to this extent does not interfere with the main object of the land titles system (a). A registerable instrument under the Manitoba statute is, until registered, deemed to confer upon the person intended to take thereunder, or upon persons claiming under or through him, a right or claim to the registration of the instrument (b).

The Canadian decisions do not clearly define the relation between actual notice and fraud. In some cases, in which the registered owner has been held to take subject to unregistered claims, the decisions have been based on distinct evidence of fraud (x); in others there does not appear to have been evidence of fraud apart from the fact that the registered owner took with actual notice (y), and it would appear that taking with actual notice is, practically, regarded as equivalent to taking fraudently.

Notwithstanding the terms of some of the foregoing provisions which seem to indicate an intention to disregard trusts and other unregistered interests so far as the land titles system is concerned and notwithstanding the general lack in these provisions of express recognition of the validity of such interests, it seems to be well settled that equitable and unregistered interests may be created and will be enforced by the courts (z) so far as their enforcement is not inconsistent with the main renders void an unregistered mortgage as against a subsequent registered encumberancer even though the subsequent encumbrancer had express notice of the prior mortgage at the time when he took his own security.

(x) Annable v. Coventry, 1912, 46 Can. S.C.R. 573, 5 D.L.R. 661, affirming 4 S.L.R. 425; Robinson v. Ford, 1914, 7 S.L.R. 443, 14 D.L.R. 360.

(y) Syndicat Lyonnais du Klondyke v. McGrade, 1905, 36 Can. S.C.R. 251; Independent Lumber Co. v. Gardiner, 1910, 3 S.L.R. 140; Sydie v. Saskatchewan and Battle River Land and Development Co., 1913, 6 A.L.R. 388, 14 D.L.R. 51. In Shaw v. Bailey, 1907, 17 M.R. 97, the evidence of notice was doubtful. In Cooper v. Anderson, 1912, 22 M.R. 428, 5 D.L.R. 218, the notice was received after the making of the contract but before completion, and it was held that the notice did not affect the purchaser. Cf. Grace v. Kuebler and Brunner, 1917, 56 Can. S.C.R. 1, at p.14, 39 D.L.R. 39, at p. 48, affirming 11 A.L.R. 295, 33 D.L.R. 1; Boulter-Waugh v. Phillips, 1918, 42 D.L.R. 548 (Sask.).

(z) J. E. Hogg in an article in 29 L.Q.R. 434, at p. 436, (Oct. 1913), remarks that the efforts of the legislatures to insist that no interest shall pass otherwise than by registration have practically failed of success.

Thus, claims under unregisterable documents, for instance. a contract of sale, and those based upon instruments in statutory form but in fact unregistered, create alike equitable rights which may be enforced except as against transferees in good faith from the registered owner (c).

Substantially the same result appears to be reached under the Ontario statute, which expressly permits the creation of unregistered interests (d):

68.- (1) No person other than the registered owner thereof shall be entitled to transfer or charge registered freehold or leasehold land by a registered disposition.

(a) The analogy between unregistered interests (as contrasted with the registered estate) and equitable interests (as contrasted with the legal estate) is striking. An equitable interest is merely a right in personam as contrasted with the right in rem represented by the legal estate (see chapter 7, Equitable Principles governing Priorities, Sec. 67), and under the land titles system the same distinction is in effect made between unregistered interests and the registered estate.

(b) Man. s. 98. Cf. Ont. s. 69.

(c) Jellett v. Wilkie, 1896, 26 Can. S.C.R. 282, affirming 2 N.W.T. L.R. 133 (as to this case, cf. Sec. 95, on the question of the priority of executions and mortgages inter se); Tucker v. Armour, 1906, 6 N.W.T. L.R. 388; Shore v. Green, 1890, 6 M.R. 322; McEllister v. Biggs, 1883, 8 App. Cas. 314; Thorn, The Canadian Torrens System, 178-181, 126 ff.

(d) R.S.O. 1914, c. 126, ss. 68, 80.

(2) Subject to the maintenance of the estate and right of such owner, any person having a sufficient estate or interest in the land may create estates, rights, interests and equities in the same manner as he might do if the land were not registered.

(3) Any person entitled to or interested in any unregistered estates, rights, interests or equities in registered land may protect the same from being impaired by any act of the registered owner by entering on the register such notices, cautions, inhibitions or other restrictions as are authorized by this Act.