t UNIVERSITY OF CALIFORNIA LOS ANGELES SCHOOL OF LAW LIBRARY I Car SWELL Co, Limited; > ' BooklStiiKlcrs, j iLlwLrols, A TORONTO j 5 Publishers etc. VJ ONT. ! TORRENS SYSTEM MORTGAGES With chapters on Notice, Fraud and Caveats By WALTER S. SCOTT, LL D. (Dub) Of Lincoln's Inn, London, and the Bar of Alberta. TORONTO : THE CARSWELL l O., Limited 1918. LONnoN : SWEET & MaXWKLL, LIMITICD. T Coptbight: Canada, 1918, by the Caeswell Co., Limited. ■i-5 4 S2>.A ^Y'H INTRODUCTION Though it is quite apparent that the time for a definitive work on Torrens System Mortgages has not yet arrived, it is equally apparent that there has long existed a necessity for a work which would crystallize the great number of decisions which have been given on the subject in Canada and Australia. An attempt has been made in this book to deal with all the law peculiarly applicable to Torrens System Mortgages, and at the same time, without any sacrifice of the primary aim of the book, to give such a presentation of general mortgage law as will suffice for the needs of the practitioner under all but the most extraordinary circum- stances. In making this attempt the author has care- fully gone through all Canadian cases dealing with mortgage problems, and such Australian cases as seemed likely to throw light upon their solution. The author has availed himself, to a large extent, of the labours of his predecessors, and would here acknowledge his deep indebtedness to them. Chief among them is Mr. J. E. Hogg, whose work on the Australian Torrens System has been found invaluable. Use has also been made of Mr. Thom's Canadian Torrens System; if t»he author seldom mentions the latter, except to disagree with his conclusions, that must be attributed to the IV INTRODUCTION. nature of the work, and not to any lack of respect and gratitude. Other works which have been found of help, are Mr. Power's work on the '' Real Property Acts " of Queensland ; Mr. Canaway's work on the Real Property Act, 1900 (N.S.W.)'; Messrs. Duffy and Eagieson's work on the Transfer of Land Act, 1890 (Victoria), and Mr. David Hutchen's work on the Land Transfer Act, 1908 (New Zealand). To Mr. A. U. G. Bury and Mr. Geo. Steer (Barristers) thanks are due for help readily given in the preparation of the work for the press. In the hope that the book will to some extent fill the real want, the perception of which gave it birth, the author ventures to claim an indulgent reception for it on the part of the legal profession. Walter S. Scott. 31 Gariepy Block, Edmonton. TABLE OF CASES PAGE Aberdeen v. Chitty, 3 T. & C. 379 131 Acme Company r. Huxley, 18 W. L. R. 534; 20 W. L. R. 134; 1 W. W. R. 681 12,17 Agency Co. v. Short, 13 A. C. 793 ; 58 L. J. P. C. 4 218 Alarie, Re, 5 W. W. R. 257 43, 101, 103 Alison, In re, 11 C. D. 284 115, 213 Allan r. McTavish, 2 0. A. R. 278 221 Allen and Sims, Re, 71 Ch. 575; 76 L. J. Ch. 362; [1904] 204 Allen, Re, 22 V. L. R. 24 226, 228 American Abell Engine and Thresher Co. and Noble, Re, 3 W. L. R. 324 ; 6 Terr. L. R. 359 38 Anderton, i?e, 8 W. L. R. 319 226 Antrim Land Co. r. Stewart, 1904, 2 T. R. 357 56 Arbuthnot v. Bunsilall, 62 L. T. R. 234 237, 239 Archbold v. Building & Loan Association, 15 0. R. 237; 16 O. A. R. 1 83 Arnold v. Garner, 2 Ph. 231 132 Arnold v. National Trust Co., 3 W. W. R. 183 8, 96 Arnold r, Walworth, 20 N. S. W. 368 247 Arnot r. Peterson, 2 W. W. R. 1 20 Ashworth v. Lord, 36 C. D. 545 138 Assets Co. V. Mere Roihi, 74 L. J. P. C. 49, [1905] A. C. 176.. 279 Assiniboia Land Co. v. Acres, 10 W. W. R. 355 3o Ashbury v. Ashbury, [1898] 2 CTi. Ill 225 Astwood r. Cobbold, [1894] A. C. 150 77 Atkinson and Horsell's Contract, Re, 81 L. J. Ch. 588 229 Atlantic Realty Co. Ltd., Bonneau r. Jackson, 5 W. W. R. 535. 291 Attorney-General v. Walters, 17 N. S. W. Eq. 105 11 Australian D.eposit & Bank, Re, 1907 V. L. R. 348 223 Bailey v. Cribb & McDonald, 2 Q. L. J. 42 278 Baker v. Wind, 1 Ves. Sen. 160 138 Balge V. Lord, 2 D. & War. 480 98 Bank of Hamilton r. Leslie, 7 Terr. L. R. 303 136 Bank of N. S. W. v. O'Connor, 14 A. C. 273; 58 L. J. P. C. 82; 87, 90, 230 Bank of N. S. W. v. Palmer, 2 N. S. W. L. R. 125 55 Bank of Toronto r. Irwin, 28 Gr. 397 Ill Barclay v. Owen, 60 L. T. 220 21o Barclay & Co. Ltd. r. Poole, 76 L. J. Ch. 488; 11907] 2 Ch. 284. 256 Barfield v. Lough boro, 8 Ch. 1; 42 L. J. Ch. 179 230 Barker's Claim, [1894] 3 Ch. 290; 63 L. J. Ch. 741 82 Barnes v. Baird, 15 Man. L. R. 162 101 Barnes v. Glenton. [1899] 1 Q. B. 885; 68 L. J. Q. B. 502 220 Barnes v. James, 27 V, L. R. 749 290, 299 ^^ TABLE OF CASES. PAGE Barns v. Queensland National Bank, Ltd., 3 C. L. R. 925 61 Barrett v. Birmingham, 4 L. Eq. R. 537 222 Barry v. Heider, 19 C. L. R. 197 19, 306 Barton, In re, 27 V. L. R. 441 47 Barwick v. Barwick, 21 Gr. 39 214 Batchelor v. Middleton, 6 H. 75 217 Battison r. Hobson, [1896] 2 Ch. 403; 65 L. J. Ch. 695.. 255 Beatty r. O'Connor, 5 0. R. 747 139 Beavan v. Dobson, 26 N. Z. L. R. 69 243 Beckett r. The District Land Registrar, 28 N. Z. L. R. 788 14 Beddall t-. Maitland, 17 C. D. 174; 50 L. J. Ch. 401 59 Bell V. Beckman, 10 N. S. W. Eq. 251 246 Bell r. Carter, 17 B. 11 84 Bell V. Rowe, 26 V. L. R. 511 210 Bellamy v. Brickenden, 2 J. & H. 137 131, 181 Bennett r. Robins, 5 Car. & P. 379 160 Benwell Tower, The, 8 Asp. M. L. C. 15 ; 72 L. T. 664 133, 198 Berard v. Bruneau, 8 W. W. R. 635 59 Bernard v. Faulkner, 7 W. W. R. 162 32, 104, 124 Berney r, Sewell, 1 T. & W. 647 128 Bettyes v. Maynard, 31 W. R. 461; 49 L. T. 389 76 Bielfleld, In re, 12 N. Z. R. 596 287 Biggs V. Hoddinott, [1898] 2 Ch. 307; 67 L. J. Ch. 540 94, 133 Biggs V. McEilister, 14 S. A. R. 86 246 Biggs V. Waterhouse, 12 S. A. R. 75 287 Bird V. Gaudy, 2 Eq. Cas. Abr. 251 (4) 137 Bishop r. Cburch, 2 V. Sen. 371 87 Bishop of Winchester v. Paine, 11 V. 194 100 Black r. Williams, [1895] 1 Ch. 408; 65 L. J. Ch. 137 256 Blackford v. Davis, 4 Ch. 304 129 Blaiberg, Ex parte, 23 C. D. 254; 52 L. J. Ch. 461 276 Bloyes Trust, Re, 1 M. & G. 488 78 Blumberg v. Life Interests Corporation, [1897] 1 Ch. 171; 66 L. J. Ch. 127; [1898] 1 Ch. 27; 67 L. J. Ch. 118 86 Blunt V. Marsh, 1 Terr. L. R, 126 8, 122 Bokstal, Re, 17 P. R. 201 .' 65 Bolding r. Lane, 1 De G. J. & S. 122 225 Bolton V. Salmon, [1891] 2 Ch. 48; 60 L. J. Ch. 239 90 Bonham v. Newcomb, 1 Vern. 232 97 Boulton V. Rowland, 4 O. R. 720 139 Bovill V. Endle, [1896] 1 Ch. 248; 65 L. J. Ch. 542 58 Bowes, Re Ex parte Jackson, 14 C. D. 725 140 Boyce v. Edbrooke, [1903] 1 Ch. 836 Note at end Bradford Banking Co. v. Briggs, 12 A. C. 36; 56 L. J. Ch. 364. 1:^7 Bradley v. Carritt, 72 L. J. 471; [1903] A. C. 253 93 Bradshaw v. Patterson, 18 W. L. R. 402 2?6 Bradshaw t-. Widdington, [1902] 2 Ch. 430; 71 L. J. Ch. 627... 221 Brandon r. Brandon, 31 L. J. Ch. 47; 9 W. R. 825 240 Brandon v. Brandon, 10 W. R. 287 139 Breithaupt v. Marr, 20 O. A. R. 689 66 TABLE OF CASES. vii PAGE British and Australasian Trust Co. v. Johnston, 3 Q. L. J. 162. 15 British South African Co. r. DeBeers, [1910] 1 Ch. 354; [1910] 2 Ch. 502; [1912] A. C. 52 95 Broad v. Selfe, 11 W. R. 1036 133 Broadfoot r. Foxwell, 7 Q. L. J. 4 287 Brooksbank r. Bum, 15 W. L. R. 661 ., 297 Broughton v. Smallpiece, 25 Gr. 290 194 Brown v. Broughton, 8 W. W. R. 889 281 Brown r. Brown, [1893] 2 Ch. 300 215 Brown v. Cole, 14 Sim. 427 58, 83, 86 Bro^\^^ v. Peto, [190O] 2 Q. B. 653; 69 L. J. 2 Q. B. 869 52 Brown v. The Metropolitan Counties L. A. Society (1859), 28 L. J. Q. B. 236 157 Browne v. Lockhart, 10 Sim. 424 83 Bryman, Re, 9 Q. L. J. (N.C.) 93 228 Bryson v. Huntington, 25 Gr. 265 138 Bucknall i'. Reid, 10 S. A. R. 188 5, 17 Bucknam r. Stewart, 11 Man. L. R. 625 218 Bucknell r. Vickery, 64 L. T. R. 701 P. C 132 Burgh V. Langton, 5 Bro. P. C. 213 Ill Burrell v. Egremont, 7 B. 205 242 Burrowes r. Molloy, 2 T. & L. 521 99 Butler r. Saddle Hill Y. M. Co., 2 N. Z. S. C. 296 288 Cadogan r. Lyric Theatre, [1894] 3 Ch. 338; 63 L. J. Ch. 775. 128 Cameron v. Mcllroy, 1 Man. L. R. 242 131 Cameron v. Rutledge, 2 W. L. R. 473 85, 104 Cameron r. Walker, 19 0. R. 212 214 Campbell, Re, 11 Gaz. L. R. 760 212 Campbell r. Bank of N. S. Wales, 16 N. S. W. L. R. 285; 11 A. C. 192 118, 119 Campbell t-. Canadian Co-operative Investment Co., 16 Man. L. R. 464 ; 5 W. L. R. 153 182 Campbell r. Commercial Bank, 2 N. S. W. L. R. 375, 389. .47, 62, 70 Campbell v. District Land Registrar, 29 N. Z. L. R. 332 228 Campbell r. Holyland, 7 C. D. 166; 47 L. J. Ch. 145 112, 122 Campbell r. Hooper, 1 Jur. N. S. 670 36 Campbell v. Imperial Loan Co., 8 W. L. R. 502 81, 218 Campbell IJ. Lloyds Bank, [1891] 1 Ch. 136 n 127 Campion r. Palmer, 1896, 2 I. R. 445 56 Canada Life Assurance Co. r. Vance, 12 W. L. R. 231 78 Canada Permanent Mortgage Co. v. Jesse, 11 W. L. R. 295.. 76, 81 Canada Trust Co. v. Layton, 10 W. W. R. 580 190 Canadian Mortgage Investment Co. v. Baird, 10 W. W. R. 1195; 1 1917] 2 W. W. R. 18 134, 233, 235 Canadian Mortgage Investment Co. v. Cameron, 10 W. W. R. 959; [1917] 3 W. W. R. 395 233, 239 Cape V. Savings Bank Trustees, 14 N. S. W. Eq. 204 5 Cape r. Trustees of Savings Bank, 14 N. S. W. Eq. 204 84 Capital & Counties Bank v. Rhodes, [1903] 1 Ch. 631; 72 L. J. Ch. 336 240 viu TABLE OF CASES. PAGE Oarruthers v. Hamilton, 12 Man. L. R. 60 77 Carter v. Wake, 4 C. D. 605; 46 L. J. Ch. 841 97, 105 Oastellain v. Preston, 8 Q. B. D. 613; 11 Q. B. D. 380 179 Chalmers and Freedman, Re, 10 W. L. R. 434 146 Chambers r. Goldwin, 9 Ves. 254 90 Champion v. World Building, Ltd., 10 W. W. R. 470 195 Chapman v. Andrews (Seton, 7th ed., 1830) 110 Charles v. Jones, 33 C. D. 80; 56 L. J. Ch. 161 136 Charter I'. Watson, [1899] 1 Ch. 175; 68 L. J. Ch. 1 221 Chatfield v. Cunningham, 23 0. R. 153 123 Chinnery v .Evans, 11 H. L. C. llo 215 Clark, Ex parte, 17 V. L. R. 82 287 Clark V. Adie, 46 L. J. Ch. 598 174 Clarkson v .Henderson, 14 C. D. 348; 49 L. J. Ch. 289 230 Clissold V. Bellomi, 10 N. S. W. Eq. 87 287 C. N. R. V. Peterson, 6 W. W. R. 1194 291 Coast Lumber Co. v. McLeod, 7 W. W. R. 113 306 Cocks V. Gray, 1 Giff. 77 139 Cockshutt Plow Co. v. Gray, 12 W. L. R. 435 135 Co-covenantors & Merger, Re, 1917, 1 W. W. R. 1084 (Sask.).. 70 Codrington v. Parker, 16 V. 469 128 Colonial Bank v. Rabbage, 5 V. L. R. (L.) 462 55, 60 Colonial Bank v. Ridell, 19 V. L. R. 280 14 Colonial Investment Co. r. Borland, 2 W. W. R. 960 233 Colonial Investment Co. ;;. King, 5 Terr. L. R. 371 104, 116 Colonial Investment & Loan v. Foisie, 19 W. L. R. 748; 1 W. W. R. 397 35 Colonial Investment Co. v. Weise, 7 W. W. R. 672 78 Confederation Life Assn. v. Leier, 8 W. L. R. 343 137 Cook i: Belshaw, 23 0. R. 545 192, 193 Cook f. Fowler, 7 H. L. 27; 43 L. J. Ch. 855 237 Cook V. Whellock, 24 Q. B. D."658; 59 L. J. Q. B. 329 164 Cooke V. Union Bank, 14 N. S. W. Eq. 280 247, 264 Coleman r. De Lissa, 6 N. S. W. Eq. 104 92 Colling V. Stinson, 4 W. W. R. 597 194 Collinson v. Jeffery, [1896] 1 Ch. 64; 65 L. J. Ch. 375 84 Colson r. Williams, 58 L. J. Ch. 539; 16 L. T. 71 77 Colyer v. Finch, 5 H. L. C. 905 99 Commercial Bank r. Breen, 15 V. L. R. 572 54 Commercial Bank v. McGaskill, 23 V. L. R. 10 55', 60 Connolly r. Noone, 1912, S. R. (Q.) 70 306 Cooper r. Anderson, 20 W. L. R. 347; 1 W. W. R. 848 , 260 Cottrell r. Finney, 9 Ch. 541; 43 L. J. Ch. 562 136 County of Gloucester Bank r. Rudry Merthyr Colliery Co., [1895] 1 Ch. 629; 64 L. J. Ch. 451 58, 127 Cowderoy v. Kirby, 2 W. W. R. 723 217, 219 Cowdry v. Day, 1 Giff. 316 95 Cowell r. Stacey, 13 V. L. R. 80 74, 261 Cox V. Bourne, B. C. R., 1st April, 1897 10 Cox r. Leigh, L. R. 9 Q. B. 333; 43 L. J. Q. B. 123 150 TABLE OF CASES. ix PAGE Cox r. Toole, 20 B. 145 98 C. P. R. V. Mang, 8 W. L. R. 774 104 Creamer r. Gooderham, 3 W. W. R. 949; 6 W. W. R. 250 218 Credit Foncier v. Schultz, 1 Man. L. R. 158 79 Credit Foncier r. Schultz, 9 Man. L. R. 70 \. 237 Cronin r. Rogers, Cab. & El. 348 64 Crosbie-Hill r. Sayer [1908] 1 Ch. 866; 77 L. J. Ch. 466 241 Crosskill i: Bower, 32 B. 86 230 Crotty V. Taylor, 8 Man. L. R. 188 82 Crown Life Insurance Co. r. Clarke, 9 W. W. R. 333 81 Curtis V. National Bank of Wales, 5 T. L. R. 338 26 CuthbertBon v. Swan, 11 S. A. R. 102 257 Dakota Lumber Co. i-. Rinderknecht, 1 W. L. R. 481 82 Dancer v. Hastings, 4 Bing. 2 160, 164 Daniell v. Sinclair, 6 A. C. 181; 50 L. J. P. C. 50 230 D'Augigney v. Brunswick Balke Collender Co., 1917, 1 W. W. R. 1331 199, 205 Davenport v. James, 7 H. 249 100 Davis r. Earl of Strathmore, 16 V. 419 272 Davis r. Wekey, 30 R. 1 246 Dawkins r. Penrhyn, 4 A. C. 51; 48 L. J. Ch. 304 215 Dawson v. Moffatt, 11 O. R. 484 65 De Beck v. Canada Permanent Mortgage Co., 4 W. L. R. 91 81 Delaney r. C. P. R. 21 O. R. 11 218 Deschamps r. Miller, [1908] 1 Ch. 857; 77 L. J. Ch. 416 99 Dingle r. Coppen [1899] 1 Ch. 726; 68 L. J. Ch. 337 224 Dixon r. Clarke, 5 C. B. 365 88 Dixon r. Winch, [1900] 1 Ch. 736; 69 L. J. Ch. 465 98 Dobson r. Land, 8 H. 216 131, 181 Dodd V. Acklom, 6 Man. & G. 679 154 Dodds r. Thompson, 1 C. P. 133 ; 35 L. J. C. P. 97 175 Doe d. Baddeley v. Massey, 17 Q. B. 373 214 Doe V. Day, 2 Q. B. 147 54 Doe r. Lightfoot, 8 M. & W. 553 54 Doe d. Palmer r. Eyre, 17 Q. B. 366 214 Doe r. Williams, 5 Ad. & E. 291 221 Dominion of Canada, &c. v. Carstens, 1917, 3 W. W. R. 153 33 Dominion of Canada, &c. Co. r. Gelhorn, 1917, 3 W. W. R. 231. 33 Dominion Trust Co. r. Bower, 3 W. L. R. 157 80 Doody, Re, [1893] 1 Ch. 129; 62 L. J. Ch. 14 132 Douglas V. Patrick, 31 T. R. 682 86 Downs r. Grazebrook, 3 Mer. 200 77 Drake r. Templeton, 1913, V. L. R. 537 24 Drax, Jn re, [1903] 1 Ch. 781; 72 L. J. Ch. 505 222 Dugdale r. Vize, 5 T. L. R. 568 222 Dunlop's Case, [1915] A. C. 79 236 Duty of Registrar in Mortgage Proceedings, Re, 1917. 1 W. W. R. 331 (Sask.) 69 Du Vigier r. Lee, 2 H. 326 224 Dyson v. Morris, 1 H. 413 99 X TABLE OF CASES. PAGE Ebbing, Re, 2 Sask. L. R. 167 28 Ebbing, iJe, 2 S. L. R. 170 41 Economic Life Ass. Co. v. Osborne, [1902] A. C. 47; 71 L. J. Cb. 34 131,237 Edmonds v. The Hajnilton Provident Society, 18 0. A. R. 347. 145 Edmondson r. Ck>pland, [1911] 2 Cb. 301 58 Edmonton Mortgage Co. r. Gross, 18 W. L. R. 385 65 Edmunds r. Waugh, 1 Eq. 418 225 Edwards v. Cimliffe, 1 Mad. 287 84 Edwards v. Edwards, 2 C. D. 291 268, 2)0, 272, 273 Edwards v. Martin, 25 L. J. Ch. 284 , 99 Edwick V. Hawkes, 18 C. D. 199; 50 L. J. Ch. 577 59 Elliott, In re, 7 N. S. W. L. R. 271 14 Ellis V. Fenton, (Tas.) May 22, 1895 212 Ellis r. Glover & Hobson, [1908] 1 K. B. 388; 77 L. J. K. B. 251 199, 200, 205 Elsey V. Lutyens, 8 H. 159 261 Empire Brewing & Malting Co., 8 Man. L. R. 424 193 England, Re, [1895] 2 Ch. 820; 65 L. J. Ch. 21 221 Equity Trustees Co. v. Ayrey, 26 V. L. R. 625 54 European Central Rwy. Co., Re, 4 C. D. 33; 46 L. J. Ch. 57.237, 239 Evans V. Angel, 5 C. D. 634 241 Evans r. Ashcroft, 8 W. W. R. 899 33 Evans r. Elliott, 9 A. & E. 342 148 Evans v. Postice, 3 Alta. L. R. 141 306 Ewart V. General Finance, etc., Soc. of Australasia, 15 V. L. R. 625 63 Excelsior Life v. Prestniak, 1 Sask. L. R. 215 79 Ex parte Hsjmmon, 3 S. C. R. (N.S.W.) 317 23 Ex parte Hassall, 10 S. C. R. N. S. W. 292 40 Eyre v. Hanson, 2 B. 478 84 Eyre r. Hughes, 2 P. D. 148; 45 L. J. Ch. 395 129, 130 Fairclough r. Swan Brewery Co. Ltd., [1912] A. C. 565 94 Falkner v. Equitable Reversionary Soc, 4 Drew. 352 77 Farquhar r. Morris, 7 T. R. 124 235 Farrar r. Farrars Ltd., 40 C. D. 395; 58 L. J. Ch. 185 76 Farrer v. Lacy, Hartland and Co., 31 C. D. 42; 55 L. J. Ch. 149 99 Farrington v. Smith, 20 V. L. R. 90 5, 54 Faulkner v. Lowe, 2 Ex. 595 307 Fearnside v. Flint, 22 C. D. 579; 52 L. J. Ch. 479 221 Fergusson v. Fyfe, 8 CI. & F. 121 230 Fewings, Ex parte, 25 C. D. 38; 53 L. J. Ch. 545 237, 239 Fewings, Ex parte, 25 C. D. 338; 53 L. J. Ch. 545 130 Flack V. Jeffery, 10 Man. L. R. 514 193 Flanagan r. Bladen, 1 A. L. R. 62 211 Fleetwood r. Jansen, 2 Atk. 467 112 Fletcher r. Nokes, [1897] 1 Ch. 271; 66 L. J. Ch. 177 63i Flalkowski v. Fialkowski, 1. W. W. R. 216; 19 W. L. R. 644., 12 TABLE OF CASES. Xl PAGE Field V. Hopkins, 44 C. D. 524 , 95 Fink V. Robertson, 4 C. L. R. 864 123 Finn v. London Bank of Australia, 19 N. S. W. L. R. 364 53 Finn r. Miller, 10 C. L. T. 23 193 Finnoran r. Weir, 5 N. Z S. C. 280 246 Finucane v. The Registrar of Titles, (1902) S. R. Q. 75 21 First National Bank v. Cadmore, 1917, 2 W. W. R. 479 154, 174 Fitzgerald's Trustee r. Mellersh, [1892] 1 Ch. 385 83 Forbes v. Moffat, 18 V. 384 241, 242 Ford V. Allen, 15 Gr. 566 225 Ford V. Wastell, 6 H. 229; 2 Ph. 591 84, 111, 112 Forrest v. Shore, 32 W. R. 356 84 Forster r. Patterson, 17 C. D. 132; 50 L. J. Ch. 603 225 Forsythe v. Bristowe, 8 Ex. 716 225 Fox V. Hunter, 12 W. L. R. 87 77 Franklin v. Ind, 17 S. A. R. 159 246 Freehold Loan Co. v. McLean, 9 Man. L. R, 15 130 Freehold Loan Co. v. McLean, 8 Man. L. R. 116 237 Freeman v. Edwards, 2 Ex. 732 174 Frisby, Re, 43 C. D. 106 ; 59 L. J. Ch. 94 221 Furber v. Cobb, 18 Q. B. D. 494 26, 132 Gaar-Scott r. Giguere, 2 Sask. L. R. 674 Z8 Garfit r. Allen, 57 L. J. Ch. 420; 37 C. D. 48 56 Garforth r. Bradley, 2 Ves. Sen. 675 87 Gedye r. Matson, 25 Beav. 310 100 General Finance Co. v. Liberator Building Society, 10 C. D. 15. 56 General Finance Co. v. Perpetual Executors, 27 V. L. R. 739.. 287 George v. A. M. P. Society, 4 N. Z. S. C. 165 74, 261 Gerard and Beacham's Contract, Re, [1894] 3 Ch. 295; 63 L. J. Ch. 695 175 Gibbon, Re, [1909] 1 Ch. 367; 78 L. J. Ch. 264 242 Gibbs V. Messer, 60 L. J. P. C. 20; [1891] A. C. 248 119, 278, 280 Gibson r. Wise, 35 W. R. 409 218 Gifford r. Fitzhardinge, [1899] 2 Ch. 32; 68 L. J. Ch. 529 242 Gilbert r. Bourne, 6 Q. L. J. p. 270 20, 246 Gilbert v. Ullerich, 16 W. L. R. 490; 17 W. L. R. 157; 4 S. L. R. 97 11.66 Gilroy r. Proe, 8 W. L. R. 777 104 Godfrey r, Watson, 3 Atk. 517 130 Goldstron r. Tallerman, 18 Q. B. D. 1; 56 L. J. Q. B. 22 237 Gore r. Stacpoole, 1 Dow. 18, H. L Ill Gorely, Ex parte, 4 De G. J. and Sim. 477 183 Gough V. Wood and Co., 63 L. J. Q. B. 564; [1894] 1 Q. B. 713 199.201 Graham i-. Ross, 6 O. R. 154 138, 189 Grant, Re, 7 M. R. 468 116 Great West Lumber Co. r. Murrin & Gray, 9 W. W. R. 1451 . . 33 Great West Lumber Co. r. Murrin & Gray, [1917] 1 W. W. R. 945 22 ill TABLE OF CASES. PAGE Great West Permanent Loan Co. v. Jones, 7 W. W. R. 767 58 Great West Saddlery Co. Ltd. v. Griesbach, 9 W. W. R. 528 . . 148 Greaves v. Tofle'.d, 14 C. D. 563 266, 270, 272, 273 Gregory r. Doidge, 3 Bing. 474 165 Gregory v. Pilkington, 8 De G. M. & G. 616 236 Green r. Marsh, 11892] 2 Q. B. 385; 61 L. J. Q. B. 442 170 Greenshie:ds, Re, 2 W. L. R. 421; 6 Terr. L. R. 208 38 Greenwood r. Sutcliffe, [1892] 1 Ch. 1; 61 L. J. 8 Ch. 59 86 Gregory v. Alger, 19 V. L. R. 565 246 Greig v. Watson, 7 V. L. R. 79 44, 90, 104, 184 Griesbach v. Hogan, 8 W. W. R. 356 82 Guillemard v. Silverthorne, 99 L. T. 584 64 Gunn i: Land Mortgage Bank of Victoria, 12 A. L. T. 49 73 Gyles V. Hall, 2 P. W. 378 88 Haddington Island Quarry Co. r. Huson, [1911] A. C. 722 76 Hall V. Heward, 32 C. D. 430; 55 L. J. Ch. 604 138 Hall V. Registrar of the Yorkton Land Registration District, 16 W. L. R. 568 39 Hall V. Welman, 5 W. W. R. 6 147 Hiatt r. Hillman, 19 W. R. 694 80 Hamilton v. Bank of New Zealand, 24 N. Z. L. R. 371 67 Hammond r. Strong, 6 W. L. R. 694; 8 W. L. R. 362 85, 136 Hanan v. Power, 8 T. L. R. 505 222 Harlock v. Asbberry, 19 C. D. 539; 51 L. J. Ch. 394 215 Harmer v. Priestly, 16 B. 569 87 Harris v. Beauchamp, 63 L. J. Q. B. 4§0; [1894] 1 Q. B. 801.. 125 Harris r. Keith, 16 W. L. R. 433 226 Harrison v. Carberry Elevator Co., 7 W. L. R. 535 138 Harrison i\ Jackson, 7 T. R. 207 36 Harrj-nian r. Collins, 18 B. 11 181 Harvey v. Tebiitt, 1 J. & W. 197 Ill Hass.all, Ex parte, 10 S. C. R. (N.S.W.) 292 75 Hawthorne, Re, 23 C. D. 743 99 Hayes r. Wilson, 6 A. L. T. 249 211 Haynes r. Haynes, 3 Jur. N. S. 504 105 Haywood r. Gregg, 24 W. R. 157 98 Heath v. Chinn, 98 L. T. R. 855 138 Heath r. Pugh, 50 L. J. Q. B. 473; 6 Q. B. D. 345; 7 A. C. 235. 97 Henderson v. Astwood, [1894] A. C. 150 133 Henry r. Chisholm, 19 N. S. R. 497 Ill Hervey r. Wynn, 22 T. L. R. 93 222 High River Trading Co. r. Anderson, 10 W. L. R. 127 195 Hiles V. Moore, 15 B. 175 128 Hill V. Handy, 6 W. W. R. 244 Ill Hine v. Dodd, 2 Atk. 275 261 Hitchman r. Walton, 4 M. & W. 409, at p. 413; 8 L. J. Ex. 31. 157 Hitchcock, In re, 17 W. N. N. S. W. 62 287 Hobart r. Abbott, 2 P. Wms. 643 90 Hobbs 1-. Ontario Loan & Debenture Co., 18 S. C. R. 483.141, 145, 157 TABLE OF CASES. xiii PAGE Hobson V. Gorringe, [1897] 1 Ch. 182; 66 L. J. Ch. 114 204 Hodges V. Croydon Canal Co., 3 B. 86; 88, 136, 220 Hodson V. Deanes, [1903] 2 Ch. 647; 72 L. J. Ch. 751 78 Holford V. Yate, 1 K. & J. 677 Ill Holland r. Clarke, 1 Y. & C. Ch. 151 225 Holies V. Wise, 2 Vem. 289 236 Home Investment Assn. r. Middleditch, 7 W. W. R. 1202 35 Honeybone v. National Bank of New Zealand, 9 N. Z. L. R. 102 . 10 Hopkinson v. Rolt, 9 H. L. C. 514 197 Horlock r. Smith, 1 Coll. 287 130 Homsey Local Board v. Monarch Building Society, 24 Q. B. D. 1; 59 L. J. Q. B. 105 222 Hoskin, Re, [1911] V. L. R. 357 24 Howard r. H. R. Trading Co., 4 Terr. L. R. 109 66 Howell V. Union Bank, 6 N. Z. R. 567 287 Hughes V. Britannia Benefit Society, [1906] 2 Ch. 607; 75 L. J. Ch. 739 186 Hughes V. Morris, 2 De G. M. & G. 349 256 Hugill V. Wilkinson, 57 L. J. Ch. 1019; 38 C. D. 480 108 Hunter r. Nockolds, 1 M. & G. 640 224 Hyde v. Chapin, 9 W. W. R. 1142 5, 156, 148, 174 Hynes r. Smith, 27 Gr. 160 193 Isherwood, Ex parte, 52 L. J. Ch. 370; 22 C. D. 384 143 Inman v. Inman, 15 Eq. 260 36 Inman r. Wearing, 3 De G. & S. 29 100 Ingham r. Sutherland, 63 L. T. 614 Ill Imperial Elevator Co. v. Olive, 6 W. W. R. 1562 29 Imperial Bank of Canada r. Twyford, 1 W. L. R. 157 125 Independent Lumber Co. r. Gardiner, 13 W. L. R. 548; 3 S. L. R. 140 251 Independent Lumber Co. r. David, 1 W. W. R. 134; 19 W. L. R. 387 141 Independent Lumber Co. r. Bocz, 16 W. L. R. 316 193 Idington r. The Trusts and Guarantee Co., [1917] 2 W. W. R. 154 84 Jackson, ex parte, 14 C. D. 725 141, 168 Jacob V. Down, [1900] 2 Ch. 156; 69 L. J. Ch. 493 64 James v. James, 16 Eq. 153; 21 W. R. 522; 42 L. J. (Ch.) 386. . 15 Jones r. Kerr,-40 C. D. 449; 58 L. J. Ch. 355 95. 133 Jellicoe r. Wellington Loan Company, 4 N. Z. L. R. S. C. 330. 148, 153, 156 Jenkins r. Jones, 2 Giff. 99 76 Jennings v. Jordan, 6 A. C. 698; 51 L. J. Ch. 129 186 J. I. Case Co. v. Preston, 12 W. L. R. 12 79 J. I. Case Threshing & Machine Co., Re, 19 W. L. R. 701; 1 W. W. R. 129 (Id John Brothers Co. v. Holmes, [1900] 1 Ch. 188; 69 L. J. (Ch.) 148 M -"^iv TABLE OF CASES. PAGE Johnson v. Shippen, 2 Lord Raymond, 982 83 Jolly r. Arbuthnot, 4 De G. & J. 224 145, 158, 159, 162, 177 Jones r. Arthur, 8 Dowl. P. C. 442 86 Jones t'. Bailey, 17 B. 582 38 Jones V. Creswicke, 9 Sim. 304 Ill, 113 Jones r. Sellick, 6 S. A. L. R. 13 74 Jortln V. S. E. Railway Co., 6 De G. M. & G. 270 222 Joseph V. Mulder, 72 L. J. P. C. 50 7 Kaihn Valley Railway Co., & Owen, In re, 8 N. Z. L. R. 522.. 41 Kearsley v. Philip (1883), 11 Q. B. D. 621; 52 L. J. Q. B. 581. 142, 157, 162, 163 Kelly & Colonial Investment Loan Co., Re, 3 W. L. R. 62 24 Kelly V. Fuller, 1 S. A. L. R. 15 21I Kelly V. Fuller, 1867, 1 S. A. R. 14 21 Kelly V. Macklem, 14 Gr. 29 Il5 Kennedy r. De Traford, [1897] A. C. 18Q; 66 L. J. Ch. 413 . .76, 78 Kensington v. Bouverie, 7 De G. M. & G. 134 I39 Kerr's Policy, Re, 8 Eq. 331 230, 235 Kershaw v. Kalow, 1 Jur. N. S. 974 77 Kibble v. Fairthorne, [18951 1 Ch, 219; 64 L. J. Ch. 184.. 213, 215 Kickham v. The Queen, 8 V. L. R. (Eq.) 1, 250 75 King V. Smith, 6 H. 473 212 Kinnoul r. Money, 3 Swan. 202 n 79 Kinsman r. Rouse, 17 C. D. 104; 50 L. J. Ch. 486 59, 225 Kinnaird & Trollope, 42 C. D. 610 88, 136, 230 Klnnaird v. Trollope, 39 C. D. 636; 57 L. J. Ch. 905 89, 111 Kirk r. Burgess, 15 O. R. 608 125 Kirkn^-all r. Flight, 3 W. R. 529 36 Kirkwood r. Thompson, 2 De G. J. & Sm. 613 78 Kissick V. Black, 10 N. Z. R. 519 246 Kissling v. Mitchelson, 3 N. Z. C. A. 261 288 Knapp V. Bower, 17 Gr. 695 87, 88 Krezlinger v. New Patagonia Meat and Cold Storage Co., 83 L. J. Ch. p. 79 91, 93, 109, 172 Lacon v. Mertlns, 3 Atk. 1 130 Laing v. Ontario Loan & Savings Co., 40 U. C. Q. B. 114 138 Lake v. Biggar, 11 U. C. C. P. 170 86 Lake f. Jones, 15 V. L. R. 728 246, 247, 254, 255 Land Registry Act and Shaw, Re 8 W. W. R. 1270 41 Lange v. Ruwoldt, 78. A. L. R. 15 256 Latouche v. Lord Dunsany, 1 Sch. & Lef. 137 198 Law V. Philby, 56 L. T. 230 99 Lear. Thursby, [1904] 2 Ch. 57; 73 L. J. Ch. 518 240 Leeds v. Broadbent, [1898] 1 Ch. 343 189 Lees V. Whitely, 2 Eq. 143 ; 35 L. J. Ch. 412 181 Le Neve v. Le Neve, 3 Atk. 646; Amb. 436 259, 264. 265, 268, 271, 273, 274 Lewry v. Williams, 1895, 1 I. R. 274 237 TABLE OF CASES. xv PAGE Le Targe r. De Tuyll, 3 Gr. 595 138 Lewis r. Webber, 1876, W. N. 178 86 Lewin v. Wilson, 11 A. C. 639; 55 L. J. P. C. 75 215 Lincoln c. Wright, 4 De G. & J. 16 9 LInstead r. Hamilton Provident and Loan Soc, 11 Man. L. R. 199 146 Liquidation Estates Co. v. Willoughby, [1898] A. C. 321; 67 L. J. Ch. 251 242 Lister v. Turner, 5 H. 281 80 Little i: Dardier, 1891, 12 N. S. W. Eq. 319 17 Livingston v. Wood, 27 Gr. 515 138 Lockhart r. Hardy, 9 B. 349 Ill Locher v. Howlett. 13 N. Z. R. 584 246 Locke V. Locke, 32 C. L. J. 332 193 Lockhart r. Yorkshire Guarantee and Securities Cor. Ltd., 9 W. L. R. 182 81 Lockhart v. Yorkshire Guarantee and Securities Corporation, Ltd., 14 B. C. R. 28 76 Lloyd's Bank Ltd. r. Colston, [1912] W. N. 6 79 Lloyd V. Jones, 12 Sim. 491 138 Lloyd V. Mansell, 2 P. Wms. 73 Ill Lloyd, Re [1903] 1 Ch. 385; 72 L. J. Ch. 78 129, 225 Loke Yew v. Port Swettenham Rubber Co., 82 L. J. P. C, 89; [1913] A. C. 491 227, 247 Long V. Long, 17 Gr. 251 86 Long v. Town, 10 N. S. W. L. R. Eq. 253 44 London Chartered Bank of Australasia v. Hayes, 2 V. R. (Eq.) 104 75 London Charter Bank v. Hayes, 2 V. R. (Eq.) 104 14 London & Midland Bank r. Mitchell, [1899] 2 Ch. 161; 68 L. J. Ch. 568 221 London v. Morrison, 14 N. Z. R. 245 246 Lord Advocate r. Lord Lovett, 5 A. C. 217 219 Lonquet v. Scarven, 1 V. (Sen.) 402 98 Long V. Tour, 10 N. S. W. (Eq.) 253 104 Low Moor Co. v. Stanley Coal Co., 34 L. T. 186, C. A 59 Ludbrook v. Ludbrook, [1901] 2 K. B. 96; 70 L. J. K. B. 552.. 214 Lyon V. Reed, 13 M. & W. 306 154 McConaghy r. Denmark, 4 S. C. R. 609 218 McCullough v. Graham, 21 W. L. R. 349 286 McDermott v. Eraser, 8 W. W. R. 196 148 McDonald v. Elliott, 12 0. R. 98 221 Macdonald v. Macdonald, 11 0. R. 187 221 MacDonald i-. Rowe, 3 A. J. R. 90 and 4 A. J. R. 134 62, 74, 261 McEachem v. Colton, [1902] A. C. 104 287 McEllister v. Biggs, 8 A. C. 314 18 McGregor t'. Hemstreet, 20 W. L. R. 642; 2 W. W. R. 284 190 McGregor v. Peterson, 10 W. W. R. 349 85 McKay v. Grant, 30 C. L. T. 70 141 xvi TABLE OF CASES. PAGE MacKenzie r. Robinson, 3 Atk. 559 79 McKillop r. Benjafield, 45 S. C. R. 551 290, 297 McLaren r. Miller, 20 Gr. 637 230 McMaster r. Hector, 8 C. L. J. 284 230 McMicking r. Gibbons, 24 O. A. R. 586 r . . . 224 McNaniara r. Kirkland, 2, 18 O. A. R. 71 193 McVean v. Tiffin, 13 0. A. R. 1 193 Mahoney r. Hoskin, 14 C. L. R. 379 24 Mainland v. Upjohn, 41 C. D. 126; 58 L. J. Ch. 361 131, 132 Makins v. Percy Ibotson & Sons, 1891, 1 Ch. 133 ; 60 L. J. Ch. 164 127 Maloney v. Campbell, 28 S. C. R. 228 31 Manitoba Lumber Co. Ltd. r. Emerson, 2 W. W. R. 419 133 Manitoba Lumber Co. r. Emerson, 6 W. W. R. 1450 133 Manitoba & N. W. Loan Co. v. Harker, 8 Man. L. R. 296 237 Manning v. The Commissioner of Titles, 15 A. C. 195; 59 L. J. P. C. 59 41 Manx v. Whitely, [1911] 2 Ch. 448; [1912] 1 Ch. 735; [1914] A. C. 132; 81 L. J. Ch. 457; 83 L. J. Ch. 349 241, 242 Marshall r. Cave, 3 L J. (O.S.) Ch. 57 139 Marshall v. Shrewsbury, L. R. 10 Ch. 250; 44 L. J. Ch. 302... 100 Martin, In re, 1900, S. A. R. 69 . : 287 Martin r. Gale, 4 C. D. 428 36 Martindale v. Smith, 1 Q. B. 389 90 Martinson v. Clowes, 21 C. D. 857; 51 L. J. Ch. 594 78 Marwick r. Hardingham, 15 C. D. 339 217 Mason v. Westoby, 32 C. D. 206; 55 L. J. Ch. 507 127 Massey, Re, 2 Terr. L. R. 84 66 Mathieson v. Mercantile Finance & Agency Co., Ltd., 17 V. L. R. 271 18, 20, 63 Matthew v. McLean, 11 W. L. R. 630 104, 137 Matthews r. Usher, [1900] 2 Q. B. 535; 69 L. J. Q. B. 856 64 Matton V. Lipscomb, 16 N. S. W. L. R. Eq. 142 119, 121 Mayer i'. Murray, 8 C. D. 424 139 Melland v. Gray, 2 Y. & C. Ch. 199 132 Mellor V. Lees, 2 Atk. 494 95 Mercantile Building Co. v. Murphy, 1888, 4 "W. N. N. S. W. 105 20 Merrie r. MacKay, 16 N. Z. R. 124 246 Messer v. Boyle, 21 B. 559 98 Meux V. Jacob, 44 L. J. Ch. 481; L. R. 7 H. L. 481 203 Miles V. Hussey, 28 N, Z. L. R. 382 62 Miller v. Brown, 3 0. R. 210 138 Miller v. Cook, 10 Eq. 641 80 Miller v. Howard, 7 W. W. R. 627; 84 L. J. P. C. 49 18 Miller v. Imperial Loan and Investment Co., 11 Man. L. R. 247 145 Miller r. McCuaig, 6 Man. L. R. 539 115 MilHngton r. Thompson, 3 I. Ch. R. 236 222 Mills V. United Counties Bank, [1912] 1 Ch. 231 32 Milton V. Edgworth, 5 Bro. P. C. 313 236 Minter r. Carr. [1894] 3 Ch. 498; 63 L. J. Ch. 705 186 TABLE OF CASES. XTu PAGE Mitchell V. Rutherford, 12 W. L. R. 55 77 Monolithic Building Co, Re, [1915] 1 Ch. 659; 84 L. J. Ch. 441, 261 Montreal Trust Co. v. Boggs & Beresford. 8 W. W. R. 1200.. 33 Moodle V. Bannister, 4 Drew. 432 225 Moore v. Painter, 6 Jur. 903 139 Morgan v. Hart, 83 L. J. K. B. 782 125 Morgan v. Jeffreys, [1910] 1 Ch. 620; 79 L. J. Ch. 360 94 Morice v. Kerighan, 9 W. L. R. 307 35 Morley v. Morley, 25 B. 253 98 Morrison, Re, 83 L. J. Ch. 129 204 Morton v. Woods, L. R. 4 Q. B; 293; 9 B. & S. 632.... 144, 151, 160, 162, 164 Moss, Re, 31 C. D. 90 ; 55 L. J. Ch. 87 83 Muller, In re. Ex parte Ballarat L. M. & A. Co. Ltd., 17 A. L. T. 43 ; 1 A. L. R. 58, at 84 9 Munro v. Adams, 17 V. L. R. 703 18 Munsen v. Hauss, 22 Gr. 279 Ill, 116 Mutual Assurance Society v. Registrar-General, 1 Q. L. J. 177. 41 Nash V. Eades, 25 Sol. Jo. 95 76 Nanny r. Edwards, 4 Rus. 124 84 Nathan, Re, 1 S. A. L. R. 166 14 National Bank of Australasia r. United Hand-in-Hand Co., 4 A. C. 391 62, 75,77 National Bank of Australia v. United Hand-in-Hand and Band of Hope Co., 4 A. C. 391 91, 87, 94 National Bank v. National Mortgage Co., 3 N. Z. S. C. 257.246, 253 National Bank of New Zealand r. Barclay, 17 N. Z. L. R. 819. . 64 National Bank v. United Hand-in-Hand Co., 4 A. C. 391 17, 230 National Provincial Bank of England v. Games, 31 C. D. 582; 55 L. J. Ch. 576 130 National Trust Co. r. Battell, 9 W. W. R. 1265 194 National Trust Co. v. Campbell, 17 Man. L. R. 587; 7 W. L. R. 754 189, 190 Naumburg i'. Albertson, 3 Q. L. J. 125 19 Nelson v. Booth, 3 De G. & J. 119 138 Nicholls V. Atherstone, 10 Q. B. 946 154 Nicholls V. Maquard, 3 Atk. 519 236 Nichols V. Skedanuk, 4 W. W. R. 587 23, 27 Nloa V. Bell, 27 V. L. R. 82 92, 98, 209 Noakes & Co. (•. Rice, 71 L. J. Ch. 139; [1902] A. C. 24 93 Noble,?'. Campbell, 21 Man. L. ;R. -597; 18 W. L. R. 591.... Ill, 121 North British Insurance Co. v. London Globe Insurance Co., 5 Ch. D. 569, 583; 46 L. J. Ch. 537 179 North of Scotland Mortgage Co. r. Udell, 46 V. C. Q. B. 511 116 North-West Construction Co. r. Valle, 4 W. L. R. 37 298 North-West Telephone Co., 12 W. L. R. 300 26 Noyes v. Pollock, 32 C. D. 53; 55 L. J. Ch. 513 139 Nutt V. Easton, [1899] 1 Ch. 873 76, 78 Nutt V. Easton, [1900] 1 Ch. 29 76 T.s.M. — h xvili TABLE OF CASES. PAGE O'Brien r. Pearson, 20 W. L. R. 510; 1 W. W. R. 1026 298 Ocean Accident & Guarantee Corporation v. Telford Gas Co., 74 L. J. K. B. 799; [1905] 2 K. B. 493 .....56, 57 Oelkers v. Merry, 2 Q. S. C. R. 193 56, 58 Oertel v. Hordem, 2 S. R. Eq. (N.S.W.) 37 247, 250, 254, 287 Ogden, Re, 1 RTont. & A. 494 37 Ogle V. Aedy, 13 V. L. R. 461 246 Oland V. McNeil, 32 S. C. R. 23 8 Oldham i: Stringer, 51 L. T. 895; 33 W. R. 251 15 Ollon V. Montgomery, 1917, 3 W. W. R. 757 Note at end Ord r. Smith, Cas. Temp. King, 9 112 Orme v. Wright, 3 Jur. 19 78 Orser r. Colonial Investment Co., 1917, 3 AV. W. R. 513 124 Ostads) Caveat,' Re z»5 Otago Board v. Spedding, 4 N. Z. S. C. R. 272 18 Otter V. Lord Vaux, 2 K. & J. 650; 6 De G. M. & G. 638 242 Owen, Re, [1894] 3 Ch. 220; 63 L. J. Ch. 749 104, 172, 214 Owen V. Crouch, 5 W. R. 545 130 Paget V. Ede, 18 Eq. 118 ; 43 L. J. Ch. 571 99 Palmer t;. Carlisle, 1 Sim. & St. 423 100 Palmer v. Hendrie, 27 B. 349; 28 B. 340 Ill Pambrun and Short, Re, 6 W. W. R. 68 5 84 Pannell r. City of London Brewery Co., [1900] 1 Ch. 496; 69 L. J. Ch. 244 64 Parbola, Ltd., In re, [1909] 2 Ch. 437; ,78 L. J. Ch. 782.... 84, 89 Parkinson & Hanbury, 2 H. L. 1 , 138 Parr r. Applebee, 24 L. J. Ch. 767 198 Partridge r. Bere (1822), 5 B. & Aid. 604 156 Patch V. Ward, 3 Ch. 203 Ill Patchell r. Maunsell, 7 V. L. R. Eq. 6 14, 287 Patrick v. Walbourne, 27 0. R. 221 194 Payne v. Rex, 26 V. L. R. 705 211 Pears v. Laing, 12 Eq. 41 222 Pearson v. Benson, 28 B. 598 8 Peers v. Allen, 19 Gr. 98 86 Pegg V. Independent Order of Foresters, 1 0. L. R. 97 146 Pelley t'. Bascombe, 11 W. R. 706 ; 13 W. R. 306 129 Perpetual Executors and Trustees Assn. of Australia Ltd. v. Hoskin, 14 C. L. R. 286 24 Perry v. Barker, 8 V. 527; 13 V. 198 Ill Perry v. Walker, 24 L. J. Ch. 319 139 Phillips, Re, 16 C. D. 104; 50 L. J. Ch. 231 138 Phillips V. Guttridge, 4 De G. & J. 531 241 Phillips V. Pratt, 12 Man. • L. R. 143 132 Pierce v. Canada Loan & Savings Co., 25 O. R. 671^ 196 Piggott V. Middlesex County Council, [1909] 1 Ch. 134; 77 L. J. Ch. 813 64 Pigott V. Jefferson, 12 Sim. 26 221 Pitt r. Pitt, 22 B. 294 242 TABLE OF CASES. nx PAGE Pitt V. Snowden, 3 Atk. 750 160 Piatt V. Ashbridge, 12 Gr. 105 Ill, 122 Plumptoix V. Plumpton, 11 V. L. R. 733 13, 15 Polglass V. Oliver, 2 C. & J. 15 86 Pooley's Trustee r. Whetham, 33 C. D. Ill; 5.5 L. J. Ch. 899, 76, 81 Popplen-. Sylvester, 22 C. D. 98; 52 L. J. Ch. 54 237, 239 Pott r. District Land Registrar, 26 N. Z. L. R. 141. 188 Potter V. Edwards, 26 L. J. Ch. 468 132 Poulett V. Hill, [1893] 1 Ch. 277 ; 62 L. J. Ch. 466 99 Powell v. Broadhurst, [1901] 2 Ch. 160; 70 L. J. Ch. 587 130 Powell V. Peck, 15 O. A. R. 138 237 Powell v. Trotter, 1 Dr. & Sim. 388 138 Power and Carton's Contract, Re, 25 L. R. Jr. 458 112 Powers, Re, 30 C. D. 291 221 Powney v. Blomberg, 8 Jur, 746 86 Premier Permanent Association, In re, 25 V. L. R. 77 119 Prosser v. Edmonds, 1 Y. & C. 481 31 Protector Endowment Co. v. Grice, 5 Q. B. D. 592 189 Prytherch, In re, 42 C. D. 590; 59 L. J. Ch. 79 58, 127 Public Trustee r. Arthur, 25 S. A. R. 59 74, 261 Public Trustee r. Morrison, 12 N. Z. L. R. 423 47, 62, 70 Pugh r. Heath, 7 A. C. 235 213, 215 Punnet, Ex parte, 16 C. D. 226; 50 L. J. Ch. 212 143, 161, 164, 169, 170, 176 Purmal Brick r. Gen. Electric Co., 7 W. W. R. 143 261, 288 Quarrell v. Beckford, 13 V. 377 128 Quarrell r. Beckford, 14 V. 177 129 Quarrell r. Beckford, 1 Madd. 269 230 Qi-8beo Bank v. Royal Bank, 10 W. W. R. 218 16 Queensland Trustee r. Registrar-General, 5 Q. L. J. 46. .196, 288, 294 Quickes Trusts, In re, [1908] 1 Ch. 887 183 R. V. Bourne, Ex parte Dare, B. C. R., 17th Feb., 1897 10 R. r. Toronto Gen. Trusts Corporation, 1917, 3 W. W. R. 633 Note at end R. V. Registrar-General, 1 S. C. R. (Q.) 201 40 Radcliffe, In re, 22 B. 201 '. 132 Ramsden r. Langley, 8 Bern. 536 131 Reeves v. Konschur, 10 W. L. R. 680; 2 Sask. L. R. 125. .8, 197, 242 Reeves v. Lisle, [1902] A. C. 461 ; 71 L. J. Ch. 768 94 Registrar-General, In re, 21 N. S. W. L. R. 225 41 Reilly r. Garnett, I. R. 7 Eq. 1 261 Reinhart r. Shutt, 15 0. R. 325 193 Richards r. Jenkins, 18 Q. B. D. 451; 56 L. J. Q. B. 293 164 Richards v. Jones, 1 S. A. L. R. 167 14 Richards r. Morgan, 4 Y. & C. 570 139 Richards v. Thompson, 18 W. L. R. 179 88 Richardson v. Younge, 6 Ch. 478; 40 L. J. Ch. 338 217, 218 Richmond Local Board v. Victorian Permanent Benefit Soc, 16 V. L. R. 845 11 XX TABLE OF CASES. PAQE Roach V. McLachlan, 19 0. A. R. 486 66 Robock V. Peters, 13 Man. L. R. 139 •. 193 Roddam v. Morley, 1 De G. & J. 1 222 Roberts, Re, 14 C. D. 49 237 Robertson v. Fink (1906). V. L. R. p. 554 120 Robertson v. Keith, 1 V. R. 11 247, 254 Robertson v. Norris, 1 Giff. 421 77 Robison Coal Cliff Co., 12 N. S. W. Eq. 293 257 Robinson v. Ford, 25 W. L. R. 569; 5 W. W. R. 542; 7 W. W. R. 747 197, 250, 251 Rogers v. Humphreys, 4 A. & E. 299 148 Rogers v. Mutton, 7 H. & N. 733 81 Rollefson v. Olson and The Mutual Life Assurance Co., 8 W. W. R. 481 47, 48, 57, 153 Ross V. Victorian Permanent Building Society, 8 V. L. R. 254 73, 261 Round V. Bell, 31 L. J. Ch. 127 224 Rounsevell v. Ryan, 1910', S. A. R. 67 250, 253, 254 Royal Bank of Canada i'. Banque d'Hochelaga, 7 W. W. R. 817. 22 Royal Bank of Canada v. La Banque d'Hochelaga, 7 W. W. R. 817 288, 295 Rudge V. Richens, 8 C. P. 358 82 Rumley Co., Re, 17 W. L. R. 160 26 Rumley Co. v. Registrar, Saskatoon, Re, L. R. D 48 Rutherford v. Mitchell, 15 Man. L. R. 390 8 Sachs V. Ashby & Co., 88 L. T. R. 393 131 Sadler v. Worley, 63 L. J. Ch. 551, [1894] 2 Ch. 170 105, 172 Saffery v. Elgood, 1 A. & E. 191 175 Sale of Mortgaged Lands by Private Contract, Re, 5 W. W. R. 1328 70 Saltman r. McColl, 19 Man. L. R. 456; 12 W. L. R. 146 87 Sampson v. Pattlson, 1 H. 533 97 Samuel v. Jarrah Timber & Wood Corporation, [1904] A. C. 323 ; 73 L. J. Ch. 526 93 Sander v. Twigg, 13 V. L. R. 765 8, 11 Sanders v. Sanders, 19 C. D. 373; 51 L. J. Ch. 276 213, 217 Sandon v. Hooper, 6 B. 246 129, 133 Sanguinetti v. Stuckey's Banking Co., [1896] 1 Ch. o02 : 65 L. J. Ch. 340 135 Santley v. Wilde, [1899] 2 Ch. 474; 68 L. J. Ch. 681 1, 93 Sask. Security Lumber Co. r. Duplat, 10 W. W. R. 1270 194 Saskatchewan General Trust Corpn. v. Thompson, 10 W. W. R. 661 184 Saunders v. Cabot, 4 N. Z. C. A. 19 246 Sawyer and Massey Co. v. Waddell, 6 Terr. L. R. 45 11 Savile r. Drax, [1903] 1 Ch. 781; 72 L. J. Ch. 505 235 Scanlan, In re, 3 Q. L. J. 43 288 Scholefield v. Lockwood, 11 W. R. 555 129, 131 Seaton v. Twyford, 11 Eq. 591 ; 40 L. J. Ch. 122 99 Selwyn v. Garfitt,( 38 C. D. 273; 57 L. J. Ch. 609 78 TABLE OF CASES. xxi PAGE Sentance v. Porter, 7 H. 426 86 Serle, Re, [1898] 1 Ch. 652, 67 L. J. Ch. 344 63 Shaff V. Holdaway, Dan. Ch. Pr. 1443 160 Sharp V. Rickards, [1909] 1 Ch. 109; 78 L. J. Ch. 29 186 Shaw V. Crompton, [1910] 2 K. B. 370; 80 L. J. K. B. 52 221 Sheerin v. Sheerin. 5 Gaz. L. R. (N.Z.) 421 261 Shepard v. Jones, 21 C. D 469 130, 133 Sherwin v. Shakespear, 5 De G. M. & G. 517 139 Shirley v. Tapper, 23 N. Z. L. R. 849 212, 228 Shore v. Webber, 24 W. L. R. 343 29 Short V. Graham, 7 W. L. R. 787 30 Sinim V. Anglo-American Telegraph Co., 5 Q. B. D. 188; 49 L. J. Q. B. 392 165 Slmmins v. Shirley, 6 C. D. 173 58 Sinclair v. Gumpertz, 15 W. N. (N.S.W.) 125 21 Sinclair v. Gumpertz, 15 W. N. N. S. W. 125 21, 211 S. Johnson & Sons v. Brock, [1907] 2 Cbi. '533; 76 L. J. Ch. 602 216 Skelton v. L. & N. W. R., 2 C. P. 631; 36 L. J. C. P. 249 182 Smith V. Davy, 2 N. Z. L. R. S. C. 398 73 Smith ('. Green, 1 Coll. 556 87 Smith V. Lloyd, 9 Ex. 562 218 Smith V. National Trust Co., 20 Man. L. R. 533; 45 S. C. R. 618; 1 W. W. R. 1122 6, 8, 42, 44, 49, 101. 104, 123, 154 Smith V. Patterson, 13 N. Z. Gaz. L. R. 99 12 Soar V. Dalby, 15 B. 156 59 Stanford, Ex parte, 55 L. J. Q. B. 341 25 Solomon & Meagher's Contract, Re, 40 C. D. 508; 68 L. J. Ch. 339 48, 80 Southampton's Estate, Re, 50 L. J. Ch. 218; 16 C. D. 178 98 Sparling r. Cunningham, 4 W. L. R. 336 236 Spencer Bell v. L. S. W. Railway Co., 33 W. R. 771 83 Spokane v. Eastern Trust Co.'s Mortgage, Re, 15 W. L. R. 637. 26 St. John V. Broughton & Sim., 219 222 St. John r. Rykert, 10 S. C. R. 278 237 Stacey v. Hansen, 20 V. L. R. 561 63 Standard Reliance Mortgage Co. v. Cowie, 1917, 3 W. W. R. 238 239 Standard Trust Co. v. Hurst, 6 W. W. R. 493 236 Stanford, Ex parte, 55 L. J. Q. B. 341 25 Stanley v. Grundy, 22 C. D. 478; 52 L. J. Ch. 248 171 Staples V. Corby, 19 N. Z. L. R. 517 14, 17, 287 Staples V. Mackay, 11 N. Z. L. R. 258 40, 95, 210, 211 Stead's Mortgaged Estates, Re, 2 C. D, 713 225 Steiglitz V. Eggington, Holt (N.P.) 141 36 Stephens v. Bannan & Gray. 5 W. W. R. 201 288, 294, 297 Sterne v. Beck, 1 De G. & S. 505 189 Stevens v. Theatres, Ltd., [1903] 1 Ch. 857; 72 L. J. Ch. 764.. 82 Stikeman v. Fummerton, 21 Man. L. R. 754; 16 W. L. R. 502,. 141 Stockton Iron Furnace Co., In re, 10 C. D. 335; 48 L. J. Ch. 417 141, 170, 175, 176, 177 Strachan v. Thomas, 12 Ad. & E. 536 224 Strong V. Carlyle Press, [1873] 1 Ch. 268; 62 L. J. Ch. 541.... 128 xxii TABLE OF CASES. PAGE Stoughill V. Anstey, 1 De G. M. & G. 635 37 Stubbs r. Standard Reliance Mortgages, [1917] 1 W. W. R. 850; [1917] 3 W. W. R. 402 234, 239 Sturgeon v. Henderson, 1917, 3 W. W. R. 56 64 Sun Life Assurance Co. & Widmer, Re, 9 W. W. R. 961. . .66, 69, 72 Sutton V. Rawlings, 3 Ex. 407 131 Sutton V. Sutton, 22 C. D. 511; 52 L. J. Ch. 333 1, 221, 224 S. W. District Bank v. Turner, 31 W. R. 113; 47 L. T. 433 79 Swabey r. Swabey, 15 Sim. 106 242 Swan's Caveat, Re, 1902, S R. (Q.) 120 305 Swan r. Wheeler, 11 W. L. R. 730 104 Sweny r. Smith, 7 Eq. 324 86 Sydie v. Sask. Land, &c. Co., 6 W. W. R. 194; 25 W. L. R. 570. 242, 250 Syllivan r. Stradling, 2 Wlls. 208 167 Syndicate Lyonnais du Klondike v. McGrade, 36 S. C. R. 251.. 253 Tadman v. Henman, [1893] 2 Q. B. 168 148, 156, 165, 167 Talbot V. Braddill, 1 Vern. 183, 394 94 Tanner, Re, 5 N. Z. S. C. 102 226 Tarn v. Turner, 39 C. D. 457 ; 57 L. J. Cli. 1085 88 Tasker v. Small, 3 My. & C. 63 89 Tattley r. Cooper, 7 N. Z. Gaz. L. R. 625; 25 N. Z. L. R. 18 19 Taylor v. The Land Mortgage Bank of Victoria, 12 V. L. R. 748 24 Taylor v. Parkinson, 81 N. Z. L. R. S. C. 354 72 Taylor v. Wolfe, 18 V. L. R. 727 210 Teevan r. Smith, 20 C. D. 724; 51 L. J. Ch. 621 89, 94 Tennant v. Trenchard, 4 Ch. 537 79, 98 Thomas v. Cameron, 8 O. R. 441 141 Thomas v. Kelly, 58 L. J. Q. B. 66; 13 A. C. 506 25 Thompson v. Berglund, 16 W. L. R. 154; 3 S. L. R. 470 65 Thompson r. Holt. 44 C. D. 492; 59 L. J. Ch. 651 62 Thompson v. Yockney, 3 W. W. R. 591; 6 W. W. R. 1397 6 Thomson v. Finlay, 5 N. Z. S. C. 203 73, 148, 246 Thorne v. Cann, [1895] A. C. 11; 64 L. J. Ch. 1 241, 242 Thome v. Heard, [1895] A. C. 495; 64 L. J. Ch. 652 214 Thornhill r. Manning, 1 Sim. (N.S.) 451 84, IIL 112 Thornton v. France, [1897] 2 Q. B. 1413; 66 L. J. Q. B. ^705.. 214 Threlfall, In re, 16 C. D. 274; 50 L. J. Ch. 318 161, 163 Thurlow V. Mackeson, L. R. 4 Q. B. 97; 38 L. J. Q. B. 57 76 Tlllet V. Nixon, 53 L. J. Ch. 199; 25 C. D. 238 127 Tipton Green Co. r. Tipton Moat Co., 7 C. D. 192; 47 L. J. Ch. 152 129, 130 Toller V. Carteret, 2 Vern. 494 99 Tolley V. Byrne, 28 V. L. R. 95 13 Toronto Dental Mfg. Co. v. McLaren, 14 P. R. 89 118 Toth V. J. I. Case Threshing Machine Co., 14 W. L. R. 704; 2 S. L. R. 270 38 Toulmin v. Steere, 3 Mer. 210 241, 242 Traders Bank of Canada v. Rutherford, 10 W. W. R. 796 154 Transfer of Land Act, In re the, Ex parte Clarke, 17 V. L. R. 82 24 TABLE OF CASES. xxui PAGE Trembath v. Carr, 23 V. L. R. 437 20 Trotter and Douglas r. Calgary Fire Insurance Co., 3 Alta L. R. 12 182 Trust and Agency Co. v. Markwell, B. C. R. 16 Man. 1874; 4 S. C. R. (Q.) 50 90, 115 Trulock V. Robey, 12 Sim. 402 218 Trust and Loan Co. r. Stevenson, 20 0. A. R. 66 214 Trust and Loan Debenture Co. v. Lawrason, 10 S. C. R. 679 ; 6 O. A. R. 286 145, 157 Turner, Re, 43 W. R. lo3 215 Turner v. Smith, [1901] 1 Ch. 213; 70 L. J. Ch. 144 98 Tylee v. Hinton, 3 0. A. R. 53 189 Union Bank r. Atkins, 10 Q. L. J. N. C. 11 15 Union Bank r. Bates, 6 W. W. R. 1170 78 Union Bank r. Lumsden Milling Co., 8 W. W. R. 1167 306 Union Bank v. McElroy, 11 W. L. R. 259 104 Union Bank of Canada v. Engen, [1917] 1 W. W. R. 271; [1917] 2 W. W. R. 395 126 Union Bank of London v. Ingram, 20 C. D. 463 79 Union Bank of Scotland v. National Bank of Scotland, 12 A. C. 53 197 Union Trust v. Duplat, 7 W. L. R. 459 137 Van Damme r. Bloxam, 9 S. A. L. R. 27 62, 74 Voisey, Ex parte, 52 L. J. Ch. 121 ; 21 C. D. 442 141, 161, 164 Vousden v. Hopper, 16 W. L. R. 294 147 Wade's Case, 5 Coke 114a, 115b 85 Wadham v. Buttle, 13 S. A. L. R. 1 228 Waitara r. McGovern, 18 N. Z. L. R. 372 18 Wales V. Carr, [1902] 1 Ch. 860; 71 L. J. Ch. 483 130 Walker v. Walker, 2 Atk. 98 9 Wallace r. Potter, 4 W. W. R. 738 226 Wallace v. Smart, 19 W. L. R. 787 8 Wallingford v. Mutual Soc, 5 A. C. 685; 50 L. J. Q. B. 49.. 49, 95, 133, 189, 236 Wanty r. Robins, 15 0. R. 474 193 Ward V. Cartar, 35 B. 171 59 Ward V. Carttar, 1 Eq. 29 217 Waring r. Ward, 1802, 7 Ves. 332 32 Wark Caveat, Re, 2 Sask. L. R. 431 28, 285 Warner v. Jacob, 20 C. D. 220; 51 L. J. Ch. 642 76 Wasson r. Harker, 3 W. W. R. 218 190 Waterloo C<). r. Holland, 1917, 3 W. W. R. 198 Note at end Waterous Engine Works v. Wells, 16 W. L. R. 274 141 Watson r. Marston. 4 De G. M. & G. 230 115 Watson )-. Royal Permanent Benefit Soc. 14 V. L. R. 283 11 Watts, In re, 22 C. D. 5; 52 L. J. Ch. 209 88, 137 Webb V. Crosse, [ 1912] 1 Cli. 323 87 Webb f. Rorke, 2 Sc. & Lef. 661 129 Wellington & Manawatu Ry. v. Hazelden, 18 N. Z. R. 278 21 Wellington Ry. v. Registrar-General, 18 N. Z. L. R. 250 17 -^Xiv TABLE OF CASES. PAGE Wells V. Kilpin, 18 Eq. 298; 44 L. J. Ch. 184 98 West V. Sinclair, 28 C. L. J. 119 193 West V. Williams, [1899] 1 Ch. 132; 68 L. J. Ch. 127 197 Western Trust Co. v. Popham, 2 W. W. R. 297 85 Westminster Fire Office ;;. Glasgow Investment Society, 13 A. C. 699 181,183 Weston V. Davidson, W. N. [1882] 28 79 Wheaton r. MacGeorge, 10 S. A. L. R. 29 14 Whitcomb r. Minchin, 5 Madd. 91 78 White V. City of London Brewery Co., 42 C. D. 237 ; 58 L. J. Ch. 855 130,139 Whitley v. Challis, [1892] 1 Ch. 64; 61 L. J. Ch. 307 127 Wildash, In re, 1 Q. L. R. Part 2, 47 14, 257, 288, 289 Wiley V. Ledyard, 10 P. R. 182 220 Wilkie v. Jellett, 2 Terr. L. R. 133; 26 S. C. R. 282 17 Wilkins v. Deans, 1888, 6 N. Z. L. R. 425 24, 184 Williams, Ex parte, 7 C. D. 138; 47 L. J. (Bey.) 26 140 Williams v. Box, 44 S. C. R. 1 122 Williams, v. Box, 14 S. C. R. 1 101, 122 Williams r. Box, 19 Man. L. R. 560 105 Williams v. Box, 5 W. W. R. 912 137 Williams v. Box, 4 W. W. R. 244 137 Williams r. Hayward, 1 E. & E. 1040 175 Williams r. Jones, 55 Sol. J. 500 139 Williams r. Morgan, [1906] 1 Ch. 804; 75 L. J. Ch. 480 215 Williams v. Papworth, 69 L. J. P. C. 129 18 Williams v. Sorrell, 4 V. 389 98 Williams r. Sun Life Assurance Co., 19 W. L. R. 564 81 Williamson v. Williamson, 7 Eq. 542 230 Willis, In re, 57 L. J. Q. B. 634, per Lindley, L.J., 21 Q. B. D. 384 140 Wilson r. Campbell, 15 P. R. 254 189 Wilson V. Mcintosh, [1894] A. C. 129; 63 L. J. Ch. 49 62, 71 Wilson V. Metcalfe, 1 Russ. 530 138 Wilson r. Queen's Club, [1891] 3 Ch. 522; 60 L. J. Ch. 698 53 Wiltse V. The Excelsior Life Insurance Co., 10 W. W. R. 90, 1166 40, 96 Withlngton v. Tate, 4 Ch. 288 98 W. London Commercial Bank r. Reliance Permanent Bldg. Soc, 29 C. D. 954 ; 54 L. J. Ch. 1081 78 Wolff V. Vanderzee, 17 W. R. 547; 20 L. T. 353 77 Woof V. Barron, 1873, W. N. 71 80 Woolley V. Drage, 2 Const. 551 131 Wrigley t'. Gill, [1905] 1 Ch. 165, 241; 74 L. J. (Ch.) 160.. 131, 138 Wrixon r. Vize, 3 Dr. and War. 104 214 Wyatt r. Barwell, 19 V. 435 259 Yates V. Hambly, 2 Atk. 237 90 Yates V. Ratledge, 5 H. & N. 249; 29 L. J. Ex. 117 150, 157, 172 Young V. English, 7 B. 10 136 Zouch r. Parsons. 3 Burr, 1794 36 TORRENS SYSTEM MORTGAGES CHAPTER I. Nature of Mortgage. The fact that in England the essential charac- teristic of a mortgage is a conveyance of or an agreement to convey land, whereas in Western Canada the same word is employed to mean the creation of a security without any conveyance of the land, renders it necessary to distinguish be- tween the two uses of the term by as accurate a definition as is possible. A mortgage, in England, is a conveyance of land, or an assignment of chattels, as a security for the payment of a debt, or the discharge of some other obligation for which it is given (per Lindley, L.J., in Santley v. Wilde, 68 L. J. Ch. 681, at 686; [1899] 2 Ch. 474). The conveyance or agreement to convey is the essential thing, while if there is no covenant and no accompanying bond, there is still the implied promise to pay, and if there is a time fixed, either by recital or otherwise, for the repayment, in many cases depending upon the construction of the in- strument, the Court will imply even a covenant to pay. " That being so, does not every mortgage contain within itself, so to speak, a personal lia- bility to repay the amount advanced?" (per Jes- sel, M.R., Suttoyi v. Sutton, 52 L. J. Ch. 333, at 335;22C. D. 511, at515). T.S.M. — 1 « TORRENS SYSTEM MORTGAGES. To such a mortgage there were incident the right of redemption, i.e., the right of the mortgagor to redeem his property upon payment of principal, interest and costs, and, for all practical purposes, the right of foreclosure, whereunder the property belongs to the mortgagee absolutely, i.e., upon its occurrence the equitable estate of the mortgagor is forfeited and transferred to the mortgagee. It is transferred as effectually as if it had been con- veyed or released {Heath v. Pugli, 50 L. J. Q. B. 473, at 478, per Lord Selborne). The foreclosure order vests a new title in the mortgagee. When the owner of land under an ordinary decree of fore- closure absolute, takes proceedings to recover pos- session of that land, he seeks possession of that which by a title newly accrued for the first time becomes his own property; and it can make no difference whether the title which he previously had was protected by the legal estate or not {Heath V. Piigh, supra). In Manitoba a Torrens System mortgage has effect as a security but does not operate as a trans- fer of the land thereby charged, or of any estate or interest therein; in Alberta and Saskatchewan a mortgage has effect as security, but does not operate as a transfer of the land thereby charged. In Manitoba the mortgagee may, upon any default in payment, enter into possession by receiving the rents and profits of the land, with a power of distraint, and may bring an action to recover the land as if the money secured by the mortgage had been secured by an assurance of the legal estate in the land (s. 114). The TORRENS SYSTEM MORTGAGES. o power of distraint appears to be confined to a first mortgagee for the time being (s. 115). Every first mortgagee for the time being has the same rights and remedies at law and in equity as he would have had if the legal estate had been actually vested in him with a right in the owner of the land of quiet enjoyment of the mortgaged land until default in payment, or breach of a mort- gage covenant, express or implied (s. 116). Upon such default continuing for a month or any longer period agreed upon in the mortgage, the mort- gagee may upon notice enter into possession, and take the rents, issues and profits thereof, make any lease of the lands or any part of them, whether in or out of possession, and may by the notice require payment of the moneys due, or observance of the covenants broken, within a period specified (s. 118). Upon default continued for one month from the service of the notice the land may be sold and transferred by the mortgagee (ss. 119-121). If default is made in payment of the principal or interest moneys secured by a mortgage and is continued for the period of six months, and the amount bid at the sale was not sufficient to pay the mortgage moneys and expenses then, after a notice of intention to apply for foreclosure has been given, an order for foreclosure may issue, unless in the interval a sufficient amount has been obtained by the sale of such land, or paid by or on behalf of such owner, mortgagor or encumbrancer or other person as aforesaid to satisfy the princi- pal and interest and other moneys secured, and all expenses occasioned by such sale proceedings. 4 TORRENS SYSTEM MORTGAGES. In Saskatchewan the provisions are similar to those of the Manitoba Act, ss. 118-121, except that the default leading up to the exercise of the power of sale must, to give rise thereto, be continued for a period of two months; an entry into possession and exercise of the power of leasing must be ' ' pur- suant to any covenant in that behalf contained in the mortgage," and an exercise of the power of sale, '' pursuant to any power of sale contained in the said mortgage." The Alberta provisions are so nearly identical with those of Saskatchewan, save as to the neces- sity for covenants in the mortgage, that for the purposes of the present comparison they need not be enumerated. When it is remembered that in every mortgage made by deed, there is, in England, implied a power of sale, and a power of leasing is vested in the mortgagor or the mortgagee, as the case may be, in possession, it will be seen that there is no such very wide difference between the English mort- gage and the Canadian statutory charge, if due regard is paid to their results, intrinsic nature and the statutory characteristics attached to each. The statutory mortgage bears a very close re- semblance to a legal mortgage by conveyance of the legal estate as vietved in equity, in that the mortgagor remains the owner of the land, and the mortgage only operates to effect a security. Further, it serves to give a legal interest which cannot be defeated, as an equitable charge could be, by changes in the ownership of the land. On this principle it must be classed as conferring TORRENS SYSTEM MORTGAGES. 5 higher rights than an equitable charge, not to men- tion what may be called a mere equitable charge. (See page 171, infra). It is difficult to see how the mere fact that the mortgagee does not take a transfer of the land, but only a charge over it, can make his security a mere equitable mortgage. When one remembers the statutory power of sale, which is exercisable without application to the Court, it will be difficult indeed to construe the various Acts as permitting an owner of land who has mortgaged it to confer on a third person rights which would derogate from the rights of the mortgagee, while the power of creating such over-riding rights is always exer- cisable by a legal owner of land who has created an equitable charge. In Australia, as far as possible, the general law relating to rights and liabilities of mortgagors or mortgagees is applied to statutory mortgagees in accordance with the principle laid down in Bucknall v. Reid, 10 S. A. R. 188 (see Farrington V. Smith, 20 Y. L. R. 92, Hogg, p. 942). This principle was, however, viewed with some disapproval by Stuart, J., when delivering the judgment of the Appellate Division of Alberta in Hyde v. Chapi7i (9 W. W. R. 1142), and has not been followed by Beck, J., in Re Pamhrun and Short, 6 W. W. R. 68, where he held that a mortgagor under the Land Titles Act (Alberta) desiring to redeem need not give six months' notice of his intention to do so, or pay six months' inter- est in lieu thereof. (See contra Cape v. Savings Bank, 14 N. S. W. Eq. 204.) <> TORRENS SYSTEM MORTGAGES. In Manitoba (s. 108 of the Real Property Act) it is provided that a mortgage or incumbrance under the new system shall have effect as a se- curity, but shall not operate as a transfer of land thereby charged, or of any estate or interest therein. In Thompson v. Yockney (3 W. W. R. 591), it was decided that the word '' interest " in section 108 was merely synonymous with the word *' estate," and upon appeal to the Supreme Court of Canada, the judgment of the Court of Appeal (6 W. W. R. 1397), was upheld. Duff, J., pointing out that the effect of section 108 had been fully considered in Smith v. National Trust Co. (1 W. W. R. 1122), where it was pointed out that title was consummated by registration, and that the effect of section 108, was that the holder of a mort- gage or incumbrance registered under the Act has not vested in him, in whole or in part, the regis- tered title. The execution and registration of the mortgage, in a word, does not immediately effect any dismemberment of the mortgagor's registered title. In that sense the mortgagee has no estate or interest in the land. It is important to note that Duff, J., is clear on the point, that a mortgage does create an interest in land. *' I entirely agree," says he, '' with the learned trial Judge (Mathers, C.J.), that it is something very much like a contradiction in terms to say that a mort- gagee, having the powers of sale and foreclosure vested in him by the statute, together with other rights as to the possession of the land, which the statute gives him, has not in the broader sense of the word, an interest in the mortgaged land. I TORRENS SYSTEM MORTGAGES. 7 do not think that section 130 (as to the right to lodge a caveat) can properly be limited to cases in which the claim is to be registered as possessor in whole, or in part, of the registered title. In other words, I do not think it can be properly lim- ited to those cases, in which an interest is claimed in the restricted sense in which interest is used, in section 100." A mortgage indeed seems to be what is de- scribed in Joseph v. Mulder (72 L. J., P. C. 50), as an inchoate and potential alienation. " The charge imposed by a mortgage," says Sir John Bonser, delivering the judgment of the Privy Coimcil in this case, on appeal from the decision of the Supreme Court of the Cap.e of Good Hope, '* can only be enforced by a judicial sale, and until such a sale has been effected, the property can- not be said to have been sold or disposed of to a stranger. ' ' o TORRENS SYSTEM MORTGAGES. CHAPTER II. Methods of Creating a Mortgage, Other Than BY A Statutory Charge. The Acts do not forbid the effecting of a mort- gage by other methods than the registration of a statutory mortgage. Thus mortgages may be made: — (1) By an out and out transfer, together with an arrangement for defeasance upon repayment. (2) By an agreement to give a mortgage, or (3) By a deposit of the certificate of title, or other document with or without a memorandum of deposit. Mortgages by Transfer Absolute in Form. In Blunt V. Marsh, 1 Terr. Law Reports 126, it was held that a transfer absolute in form might yet be held to merely amount to a mortgage. (See also Wallace v. Smart, 19 W. L. R. 787 ; Arnold & National Trust Co., 3 W. W. R. 183 ; Rutherford v. Mitchell, 15 Man. L. R. 390 ; Beeves v. Konschiir, 10 W. L. R. 680; Smith v. National Trust Co., 45 S. C. R. 670, and Sander v. Twigg, 13 V. L. R. 765). In Wallace v. Smart, supra, it was held that a power of sale will not be implied where the mort- gage is by a deed absolute in form. (See Pear- son V. Benson, 28 B. 598, Oland v. McNeil, 32 S. C. R. 23, distinguished). The general principles as to this are that an instrument which is in form an absolute convey- TORRENS SYSTEM MORTGAGES. » ance will be treated as a mortgage, notwithstand- ing the absence of any proviso for redemption, if such absence is due to fraud, mistake or some un- fair advantage taken by the mortgagee, and parol evidence is admissible, to say that a proviso for redemption was omitted. (Lincoln v. Wright, 4 DeG. & J. 16, and Walker & Walker, 2 Atk. 98). Difficult cases often arise as to whether the case is one of lending and borrowing or one of out and out sale, with a condition for repurchase and reconveyance. The tests usually are : — (1) Who paid the costs of the transaction? The practice is that the mortgagor pays them when the transaction is a mortgage. (2) Did the transferee take possession immed- iately ? (3) Did the transferee upon taking possession, if he did so, keep account of rents and profits, that being the proper course for a mortgagee in pos- session to take ? (4) Was the consideration for the transfer adequate ? Where an absolute transfer was made with a deed of defeasance, it was held that both docu- ments should be looked at to see the true nature of the transaction, which only amounted to a mort- gage ; therefore the transfer was not liable as such to payment of duty under the Stamps Acts. {In re Midler, Ex parte Ballarat L. M. & A. Co. Ltd., 17 A. L. T. 43 ; 1 A. L. R. 58, at 84). There has been, and still is, in Queensland a practice of taking as security for money lent a 10 TORRENS SYSTEM MORTGAGES. transfer in lieu of a bill of mortgage in the form prescribed by section 56, of the Queens- land Act, the object being to improve the posi- tion of the mortgagee, and particularly to avoid the necessity of complying with the requirements of the Act with respect to the exercise of the power of sale under the mortgage. The Regis- trar of Titles is, however, of opinion that such a security is contrary to the intention of the Act, and, relying, it is said, upon the dicta of Griflith, C.J., in the case of Cox v. Bourne (B. C. R. 1st April, 1897), he refuses to register any transfer which has to his knowledge been given by way of security. (Power, p. 66). ** It may now be convenient to say something about the custom of taking transfers instead of mortgages. We are told that it is a common prac- tice among money lenders when they lend money, instead of taking a mortgage, to. take a transfer. Now, the effect of such a transfer, when registered at the Real Property Office, is the same as if the owner has sold all his interest in the land, and the person who gives the transfer can only get it back by establishing a case of fraud. Well, the full Court, a month or two ago (R. v. Bourne, Ex parte Dare, B.C.R., 17th Feb., 1897), expressed the opin- ion that transactions of that kind are prima facie fraudulent, and they refused to order the Registrar to register a transfer of that kind on the ground that they would be ordering him to give effect to what was prima facie a fraud." (Per Griffith, C.J., in Cox V. Bourne, B. C. R., 1st April, 1897). See also Honeyhone v. National Bank of Netu Zea- land (9N. Z. L. R. 102). TORRENS SYSTEM MORTGAGES. H As to the nature of a right to a re-transfer of land where land has been transferred by way of mortgage, see Sander' v. Twigg, 13 V. L. R. 765; Watson V. Royal Permanent Benefit Soc, 14 V. L. R. 283 ; Eickmond Local Boar^d v. Victorian Perm- anent Benefit Soc, 16 V. L. R. 845, and Attorney- General V. Walters, 17 N. S. W. Eq. 105. Mortgage by Agreement to Execute a Formal Mortgage. In Gilbert v. Ullericli, 17 W. L. R. 157, it was held by the Supreme Court of Saskatchewan, en banc, that an agreement to deliver upon demand a mortgage on specified lands operated as an equit- able mortgage, but that the document being un- registerable and merely filed by way of caveat was, as far as the land itself was concerned, inoper- ative to put the persons claiming under it in any better position than any other simple contract creditor of the mortgagor, and that before they could have a lien against the land itself they must prosecute their claim to judgment, and either ob- tain an order of the Court making their claim a lien upon the land, or obtain judgment and execu- tion for the amount due them and file the execu- tion in the Land Titles Office. In Saivyer dc Massey Co. v. Waddell (6 Terr. L. R. 45), Newlands, J., upon an application simi- lar to that suggested in Gilbert v. Ullericli {supra), held that an agreement that vendors of machinery should have a charge and specific lien for the pur- chase money, supplemented by a charge on specific lands, amounted to an equitable mortgage, approv- 12 TORRENS SYSTEM MORTGAGES. ing of the statement in Robbins on Mortgages, that any agreement in writing and properly signed, however informal, by which any property, real or personal, is to be a security for a sum of money owing or advanced, "is a charge and amounts to an equitable mortgage. Where an agreement contains nothing more than an agreement to mortgage land for a stated consideration, and the land is under the Land Transfer Act, 1908, and the Land Act, 1908, the covenants, conditions and powers implied under section 103 of the Land Act, 1908, apply, and the agreement is to be read as an undertaking to exe- cute a mortgage containing the provisions implied by those statutes, and is not too uncertain to be enforced (Smith v. Patterson, 13 N. Z. Gaz. L. R. 99). Mortgage by Deposit of Certificate of Title or Other Document. In Fialkoivski v. FialkotvsM (1 W. W. R. 216), it was held that the deposit of a certificate of title as security for a loan constituted an equitable mortgage. In Acme Company v. Huxley (18 W. L. R. 534), it was held by Beck, J., that a deposit by a husband of a transfer from his wife to himself, given to him with the mere authority to pledge it as security for an instalment of a debt to a mort- gagee, though unaccompanied by the defendant's certificate of title, constituted an equitable mort- gage for the full amount for which it was pledged by the husband. TORRENS SYSTEM MORTGAGES. 13 Beck, J., approved of the statement in 27 Cyc. p. 988, that to constitute a good equitable mortgage, it is not necessary that the deeds deposited should show a complete title in the depositor, provided that they are material to the title, so that he could not establish a title without producing them, nor is it necessary that all the title deeds, or even all the material title deeds should be deposited. It is sufficient if the deeds deposited are material evi- dence of title, and are shown to have been depos- ited with the intention of creating a mortgage. This decision was upheld upon appeal to the Appellate Division upon an equal division, Stuart and Simmons, JJ., holding, among other things, that no title deeds of the defendant, the wife, had ever been deposited. In Tolley v. Byrne (28 V. L. R. 95), an equit- able mortgage by deposit was held to create an in- terest in land so far as, even when unprotected by caveat, to entitle the holder to compensation from the assurance fund. Hogg, p. 787, says that the better opinion is, as expressed in Plumpton v. Plumpton, 1885, 11 V. L. R. 733, that a certificate of title is not on the same footing as ordinary title deeds, and that the decision in Pliitnpton v. Plumpton, where the de- positor was not the registered proprietor, seems to imply that the land itself would not be bound by a mere deposit of the certificate of title any more than by a contract of sale. The security would become effective, as a sale and purchase transaction would also become, through the 14 TORRENS SYSTEM MORTGAGES. medium of the doctrine of notice only, whether by means of entry of a caveat, or otherwise. In Tolley v. Byrne, supra, aBeckett, J., said, '*I camiot conceive of any sound ground for saying that it is not an interest in land. It amounts to a contract between the parties, the security to be given over that land for the debt for which it was deposited. The right is specifically attached to that land just as under the contract for a sale of land an equitable interest is created in the land." The validity as equitable rights of securities created by deposit is now, apart from express en- actment in some of the statutes, firmly established by judicial decision. (Hogg, 786 ; London Charter Bank v. Hayes, 2 V. R. (Eq.) 104; Patchell v. Maunsell, 7 V. L. R. 6; Colonial Bank v. Bidell, 19 V. L. R. 280; Re Nathan, 1 S. A. L. R. 166; Be Wildash, 1 Q. L. R. Part II. 47; Wheaton v. Mc- George, 10 S. A. L. R. 29 ; Bichards v. Jo7ies, 1 S. A. L. R. 167). In In re Elliott, 7 N. S. W. R. 271, it was held the deposit of title deeds of land as a pledge for a debt confers by the law of the Dominion no inter- est in the land, and the depositee has therefore no caveating capacity by virtue of such deposit. (Beckett v. The District Land Begistrar, 28 N. Z. L. R. 788, following Staples v. Corhy, 19 N. Z. L. R. 517). It would seem to be doubtful whether an equitable mortgagee by deposit of title deeds was entitled to a sale under the Common Law Proced- ure Act, 1852, unless the deposit was accompanied by a written agreement by the depositor to execute TORRENS SYSTEM MORTGAGES. 15 a formal mortgage (Oldham v. Stringer, 51 L. T. 895; 33 W. R. 251), though he is entitled to fore- closure. (James v. James, 16 Eq. 153; 21 W. R. 522). See for form of order in case of mortgagee by deposit of certificate of title, infra. A registered owner of land executed a trans- fer in favour of A. for a nominal consideration. A. did not register the transfer but deposited it, together with the certificate of title, with a bank as security for an overdraft. It was held that the bank only acquired the right of A. against the registered owner, and was not entitled to hold the land as security against the latter. (Plumpton v. Plumpton, 11 V. L. R. 733). It is said to be a common practice in Queens- land for the mortgagee to obtain judgment in an action on the covenant to pay, issue a f,. fa. and buy in the land at the sale. There is no rule which prevents a plaintiff mortgagee who has obtained judgment on the covenant in the mortgage from bidding for the mortgaged property at a sheriff's sale under the judgment. (Union Bank v. Atkins, 10 Q. L. J. N. C. 11. See also British and Aus- tralasian Trust Co. V. Johnston, 3 Q. L. J. 162. Power, p. 83). Form of Order Nisi (Mortgage by Deposit) — 28 V. L. R., p. 252. '' This Court doth order and declare that an account be taken of what is due to the plaintiffs for principal money advanced on the security of the deposit by the defendants with the plaintiffs' 16 TORRENS SYSTEM MORTGAGES. testator of a certificate of title under the Transfer of Land Act entered in the register book, volume , folio , and the charge created by an agree- ment dated the 24th day of March, 1890, and made between the defendant and the plaintiffs' testator over the lands comprised in the said certificate of title, and also for interest thereon and for their costs of this action, to be taxed and ascertained by the taxing officer of this Coui*t. And that upon the defendant paying to the plaintiffs what shall be certified to be due to them for principal, interest and costs as aforesaid, within six calendar months after the date of the Chief Clerk's certificate, at such time and place as shall be thereby appointed, the plaintiffs do deliver up the said certificate of title. But that in default of the defendant paying to the plaintiffs what shall be so certified to be due to them for such principal, interest and costs, as aforesaid, by the time aforesaid, it is hereby or- dered and declared that the plaintiffs will be en- titled to the said lands free and clear of and from all right, title, interest and equity of redemption of, in and to the same, and to have an absolute transfer thereof accordingly. And in that case that the defendant execute such transfer thereof to the plaintiffs, such transfer to be settled by the Chief Clerk in case the parties differ. And any party is to be at liberty to apply therein to this Court as there may be occasion." For form of order where a mortgagee by de- posit subsequently took transfer by way of secu- rity and there were executions subsequent to the transfer, see Quebec Bayik v. Royal Bank, 10 W. W. R. 218. TORRENS SYSTEM MORTGAGES. 17 CHAPTER III. Effect of Mortgage Before Registration". As to the effect of a mortgage before registra- tion, it was said in Wilkie v. Jellett, 2 Terr. L. R. 133 ; 26 S. C. R. 282, that a transfer not under seal would not, apart from the Territories Real Pro- perty Act, pass any title, and it being the creature of the statute, could only become effectual form- ally to pass the estate when it was duly regis- tered, a view which was adopted by Stuart, J., in Acme Co. v. Huxley, 20 W. L. R. 133. But apart altogether from their being prescribed by statute, and apart from their being registered, statutory instruments may be just as valid as any other written instrument constituting or embodying an agreement between two contracting parties. Thus a statement or representation in an unregistered instrument may amount to a covenant by the per- son making it, that he has a good title under the system, for breach of which he may have to answer in damages {Little v. Dardier, 12 N. S. W., Eq. 323), or such a representation may amount to an estoppel (Bucknall v. Reid, 10 S. A. L. R. 188; Wellington By. v. Registrar-General, 18 N. Z. L. R. 250; Staples v. Corhy, 19 N. Z. L. R. 517. Hogg, p. 904). It seems probable also that instruments before registration confer a right to be registered, and confer equitable interests through the operation of the doctrine of specific performance. (See National Bank v. United Hand-in-Hand Co., 4 18 TORRENS SYSTEM MORTGAGES. A. C, at 407; Mathieson v. Mercantile, Finance and Agency Co. Ltd., 17 V. L. R. 271, and see as to tile nature of an estate or interest conferred by a right to specific performance Miller v. Hotvard, 7 W. W. R. 627; 84 L. J. P. C. 49), and in any event operate as a contract between the parties, so as to define their rights and liabilities iyiter se, as from their dates (Mathieson v. Mercantile Finance Co., supra, and Munro v. Adams, 17 V. L. R. 703). As to the recognition of equitable interests in general see Williams v. Papworth, 69 L. J. P. C. 129, and McEllister v. Biggs, 8 A. C. 314. It is said that no actual estate passes by the execution of a statutory instrument, and that such execution only gives a right in personam (see Otago Board v. Spedding, 4 N. Z. S. C. R. 272, and Waitara v. McGovern, 18 N. Z. L. R. 372). In this connection it seems to be sometimes forgot- ten that under English law a contract for the sale of land, though only giving a right in personam, yet would be more aptly described as giving a right in personas, i.e., against a group of persons, which may possibly be very large, i.e., all the persons claiming through or under the person executing the statutory instrument as volunteers, and without registration (heirs, devisees, personal representa- tives, donees), his creditors, and, under certain circumstances, persons acquiring his interest with notice of the unregistered instrument. A transferee, by a voidable transfer from a registered owner, produced to an intending mort- gagee the transfer and an order on the Registrar- TORRENS SYSTEM MORTGAGES. 19 General to deliver the certificate of title and in- duced him to advance money. Held, that the mortgagee was entitled as against the registered owner to a charge on the land in terms of the mortgage {Barry v. Heider, 1914, 19C. L. R., p. 197). In that case it was said that an unregistered transfer confers upon the transferee an equitable claim or right to the land comprised therein, and such claim or right is in its nature assignable by any means appropriate to the assignment of such interest. The transfer operates as a representa- tion addressed to any person into whose hands it may lawfully come without notice of an}" right in the transferor to set it aside, that the transferee has such an assignable interest. The contention that until registration no per- son can acquire any interest in land legal or equit- able, and that whatever personal liability exists can only be enforced as a chose in action against the person liable, but not against the land, is abso- lutely opposed to all notions in Australia with re- gard to the Land Transfer Act. (Isaacs, J.). The execution by a lessee of lands under the Land Transfer Act, 1885, of an instrument pur- porting to be a mortgage under the Act of his in- terest in the lands leased, is not a breach of a covenant not to mortgage, so long as the instru- ment is not registered (Tattley v. Cooper, 7 N. Z. Gaz. L. R. 625; see also Naumhurg v. Alhertson, 3 Q. L. J. 125). The covenants implied by a mortgage appar- ently do not arise until the mortgage has been 20 TORRENS SYSTEM MORTGAGES. registered, but express covenants apparently for payment may be sued upon even before the mort- gage is registered {Matliieson v. Mercantile Fin- ance Co., 1891, 17 V. L. R. 271 ; Mercantile Build- ing Co. Y. Murpliy, 1888, 4 W. N. N. S. W. 105). In Arnot v. Peterson, 2 W. W. R. 1, Beck, J., held that a Torrens transfer may be executed in blank, and authority express or implied given to the person to whom it is handed or anyone else to fill in the name of the transferee. A transfer, he says, made under the Land Titles Act, is not a deed of grant; it does not pass the title, and its practical effect is nothing more, or at all events little more, than a mere order to the Registrar, by the holder of the registered title, to transfer the title to somebody else. ''Now there is no reason in law why an instrument of that sort should not be executed in blank with authority given to the per- son to whom it is handed, or to anybody else, to fill in, under certain instructions, the name of the so-called transferee, who, in reality, is the person to whom the Registrar is to be requested to issue a new certificate of title. I do not think that the law which has been referred to with regard to al- terations in deeds of grant and other documents under seal, by which title passes, has any appli- cation to an instrument of that kind. ' ' In Australia there are dicta on this point both ways, but no actual decision (see Trenibath v. Carr, 23 V. L. R. 437, where the validity of a mortgage signed in blank seems to have been taken for granted). In Gilhert v. Bourne, 6 Q. L. J., at p. 272, it was said by Harding, J. : " It is not necessary for the TORRENS SYSTEM MORTGAGES. 21 decision in this case, but after careful considera- tion of the Real Property Act, I think that there is a formidable, if not an irresistible argument, that a blank transfer is no better than a blank sheet. The Act is very specific and clear as to what constitutes any memorandum of transfer in the same way as in a deed. To constitute a deed there has to be a sealing. To constitute a memor- andum of transfer, certain details must exist before it becomes a transfer. I have a strong opinion that such a document is absolutely void.^' It has been held in Fimicane v. The Registrar of Titles, 1902, S. R. Q. 75, that a deed, if unregis- tered, has no more effect than if it had been made not under seal, and it is suggested by Hogg (p. 909) that it is reasonable to suppose that in the case of an express stipulation — and not one implied by the statutes — contained in a statutory instrument, nothing short of due registration would be held to give it the technical effect of a deed in general law. (See Kelly v. Fuller, 1 S. A. R. 14, and Sinclair v. Gumpertz, 15 W. N. (KS.W.) 125). It has been held in Timarii v. Hoare, 16 N. Z. R. 582, that a person named in an unregis- tered instrument as transferee of an estate or in- terest is not bound by the provisions of the instru- ment if he does not execute it, and he seems to be no further bound by the registration of the instru- ment. (See Wellington & Manawatu v. Hazelden, 18N. Z. R. 278). A statutory instrument such as a mortgage may be executed by a person who has not yet been reg- 22 TORRENS SYSTEM MORTGAGES. istered, with the intention of registering his trans- fer and the mortgage simultaneously {Royal Bank of Canada v. Banque d'Hochelaga, 7 W. W. R. 817). It should be noticed that in the Canadian stat- utes, there is no provision, as there is in Australian statutes, giving agreements in statutory forms the same force as if made by deed. See as to suggested differences in the law in the two countries arising from this fact: Great West Lumber Go. v. Muryin d Gray, [1917] 1 W. W. R. 945. The covenants which are implied in a mortgage are as follows : — In Alberta there is implied against the mort- gagor remaining in possession a covenant that he will repair and keep in repair all buildings or other improvements erected and made upon the land, and that the mortgagee may at all conven- ient times, until the mortgage is redeemed, be at liberty with or without surveyors or others to enter into or upon the land to view and inspect the state of repair of the buildings or improvements. (Land Titles Act, section 69). A similar provision occurs in the Saskatchewan Land Titles Act, section 102, but no such provi- sion appears in the Manitoba Act. For the covenants implied in a transfer of mortgaged land, see Chapter V., infra. TORRENS SYSTEM MORTGAGES. 23 CHAPTER IV. Form of Mortgage. A statutory instrument is defined by Hogg as an instrument which is either in the form pre- scribed by the statutes, or officially authorized for general use, or, which although not in such form, is accepted by the registry as sufficient under the circumstances, as if it were in prescribed form. In general, he says, ''A scheduled form is not intended to be rigidly adhered to, but to be adapted to cir- cumstances as they arise," citing Ex parte Hamil- ton (3 S. C. R. (N.S.W.) 317). A statutory mortgage requires attestation, and, at any rate as between the parties to the instru- ment, it seems that invalidity for want of attesta- tion would not be cured by registration. (See Nichols V. Skedanuk, 4 W. *W. R. 587.) Hogg, at p. 917, notes as the real distinction between an ordinary deed of assurance and a statutory in- sti'ument duly signed, etc., and the vital difference in the functions assigned to the registration of the deed under the general law, and registration under the Torrens system, the difficulty of exactly defin- mg the position of a transferee under a statutory instrument in case the transferor should happen to die after signing the transfer, and before its registration. He concludes that as between volunteers at any rate it cannot be said that the transferee, etc., is absolutely entitled to have his statutory instru- ment registered, if his transferor had died since signing it. 24 TORRENS SYSTEM MORTGAGES. In Be Kelly & Colonial Investment Loan Co., 3 W. L. R. p. 62, it was held that a covenant in a mortgage to a loan or investment company to ob- serve the rules and by-laws of such company had not the effect of incorporating them in the mort- gage, and would not bind the ' transferee of the mortgagor. The decision was given in reliance upon Wilhins v. Deans, 1888, 6 N. Z. L. R. 425, where it was held that the rules of a building so- ciety which were referred to in the mortgage were not thereby incorporated in it. As to the form of the instrument, it has been held in Australia that the object of the Transfer of Land Act is not to obstruct, but to facilitate busi- ness, and that the Registrar is not justified in re- fusing to register an instrument merely because it does not literally comply with the precise form prescribed for such instruments, provided that any variation from the form does not affect the substance {Brake v. Templeton, 1913, V. L. R. 537 ; Perpetual Executors and Trustees Assn. of Aus- tralia Ltd. v. Hoskin, 14 C. L. R. 286, and Mahoney v. Hoskin, 14 C. L. R. 379). The Registrar of Titles ought not to refuse to register an instrument of mortgage because it con- tains a guarantee signed by persons other than the parties to the mortgage, guaranteeing the due per- formance by the mortgagor of the covenants of the mortgage {Re Hoskin, [1911] V. L. R. 357; in which case l7i re the Transfer of Land Act, Ex parte Clarke, 17 V. L. R. 82, was followed, and Taylor v. The Land Mortgage Bank of Victoria, 12 V. L. R. 748, was explained). TORRENS SYSTEM MORTGAGES. 25 As to compliance with the statutory form, the general principle is to be found in those English cases which deal \vith the form of Bills of Sale; thus in Thomas v. Kelly, 58 L. J. Q. B. QQ, Lord Fitzgerald says: " Does the bill of sale before your Lordships conform to the provisions of the Statute ? Is it in accordance with the form ? I do not think that the legislature intended by the words ' in accordance ' a literal conformity with the statutory form of the bill of sale. I adopt the view of Lord Justice Bowen that it is sufficient if the bill of sale is substantially in accordance with and does not depart from the prescribed form in any material respect. In Ex parte Stanford, 55 L. J. Q. B. 341 ; L. R. 17 Q. B. D. 259, Lord Justice Bowen, in laying down a rule of construction, as the judgment of the whole six Judges of the Court of Appeal, says a divergence only becomes substantial or material when it is calculated to give the bill of sale a legal consequence or effect either greater or smaller than that which would attach to it, if drawn in the form which has been sanctioned, and he adds: ^We must consider whether the instrument as drawn will, in virtue either of addition or omission, have any legal effect which either goes beyond or falls short of that which would result from the statutory form.' That he states to be the rule of construction. I would hesitate to criticise a proposition coming from a tribunal so important and so weightily constituted. I am not now called on to do so, nor shall I say more than that I am not now to be taken as adopt- ing in all its terms that rule of construction as affording an inclusive as well as exclusive test." 26 TORRENS SYSTEM MORTGAGES. It has been held that if by reason of a variation in form the bill of sale is misleading (Ex parte Stanford, supra), or if its wording produces what is conveniently termed a puzzle, as for instance, by the use of inconsistent clauses, it is not in accord- ance with the statutory form (see Furher v. Cohh, 18 Q. B. D. 494, and Curtis v. National Bank of Wales, 5 T. L. R. 338. In Thomas v. Kelly, supra. Lord McNaughten said : " It has been held, and I think rightly, that section 9 does not require a bill of sale to be a verbal and literal transcript of the statutory form. The words of the Act are ' in accordance with the form,' not ' in the form;' but then comes the ques- tion when is an instrument which purports to be a bill of sale not in accordance with statutory form? Possibly when it departs from the statu- tory form in anything which is not merely a mat- ter of verbal difference. Certainly, I should say when it departs from the statutory form in any- thing which is characteristic of that form." In North West Telephone Co., 12 W. L. R. 300, a mortgage containing a reference to a trust deed conveying unspecified lands unto and to the use of a trustee was held to be unregisterable. In Re Spokane v. Eastern Trust Co.'s Mort- gage, 15 W. L. R. 637, it was held that an instru- ment purporting to be a mortgage, but containing a clause by which the mortgagor purported to convey his estate in the land to the mortgagee, and also an habendum clause, was unregisterable. In Re Rumley Co., 17 W. L. R. 160, it was held that a document which showed on its face that its TORRENS SYSTEM MORTGAGES. 27 object was to secure a debt was a mortgage, and could be registered only when it complied with Form I., appended to the Saskatchewan Land Titles Act (the form appropriate to a mortgage), and also that even if the instrument had not shown on its face that its object was to secure a debt, it still could not be registered owing to non-compli- ance with Form J. (the form proper to an incum- brance). The case further laid down the general principle that the class of documents which can be registered are limited to those specified in the Act, and that a man cannot obtain registration of a non- registerable agreement by tacking it on to one which is in the registerable form, if the effect is to vary the legal consequence of the latter. In NicJiols V. Skedamik, 4 W. W. R. 587, it was held that in view of sections 60 and 102 of the Land Titles Act, Albeiia, attestation is necessary before a document can be treated as a valid mort- gage under the Act, and that the particular cir- cumstances of the case rendered it doubtful whe- ther the proviso to section 103 of the same Act, em- powering a Judge to authorize the registration of the instrument notwithstanding its defective exe- cution, was applicable. It has been decided by the Master of Titles in Saskatchewan that a mortgage with a trust deed attached and incorporated therein, such trust deed containing a power of attorney from the mort- gagor to the mortgagee, is registerable under the Land Titles Act, relying upon the w^ords of Lamont, J., in Re Rumley Co., supra, which ex- pressed as a proper test the words of the Inter- 28 TORRENS SYSTEM MORTGAGES. pretation Act, section 5, sub-section 36, which provides that whenever forms are prescribed, slight deviations therefrom not aifecting the sub- stance or calculated to mislead shall not vitiate them. In Re Rumley Co.;, Lamont, J., stated the object of the legislature in providing the form in the Land Titles Act to be two-fold, first, to enable those using them to know without difficulty the nature and effect of the instruments they are exe- cuting ; secondly, to enable Registrars also without difficulty to determine whether or not documents presented to them for registration are in the proper form. An exact verbal compliance is not necessary, but the document must be in substance the same as the form prescribed, and it is not the same in substance when the divergence in form gives to one or more of the parties to it rights or remedies, or imposes upon them duties or obliga- tions, which would not result from the use of the prescribed form. The mere fact that the Acts prescribe a form of mortgage for registration, and that an unregis- tered instrument which creates an equitable mort- gage is not in that form should not constitute a bar to the protection of such mortgage interest. Such equitable mortgage may be protected by caveat notwithstanding the decisions in Be Eb- bing, 2 Sask. L. R. 167, and Gaar-Scott v. Gigiiere, 2 Sask L. R. 674, as what was laid down in those cases ought not to be extended any further than their special circumstances warranted. (See also Re Wark Caveat, 2 Sask, L. R. 431). TORRENS SYSTEM MORTGAGES. 29 These cases simply hold mider the particular circumstances that in order to register a mortgage or a caveat founded on a mortgage, there must be evidence to satisfy the Registrar that the mort- gagor is entitled to create a mortgage, and that, until there is evidence that the mortgagor is en- titled to create a mortgage, the Registrar can refuse to register the mortgage or the caveat founded upon the mortgage. The case of SJiore v. Wehher, 24 W. L. R. 343, was explained by Elwood, J., as merely holding that an incumbrance which on the face of it shows that it was given for a debt due by the defendant to the plaintiif is in effect a mortgage, and not be- ing in the form provided by the Act for mortgages can not be registered. . ' ' At the conclusion of the judgment of the last case," says the learned Judge, '' a reference is made to Gaar-Scott v. Giguere, supra, and if the judgment in Shore v. Wehher is intended to express the opinion that Gaar-Scott v. Giguere is authority for the proposi- tion that a mortgage w^hich is not in the form pre- scribed by the Act cannot in any case be registered by way of caveat, I must dissent from any such proposition {Imperial Elevator Co. v. Olive, 6 W. W. R. 1562). 30 TORRENS SYSTEM MORTGAGES. CHAPTER V. Transfer of Land Subject to a Mortgage. It is provided in the Alberta Land Titles Act that in every instrument transferring land, for which a certificate of title has been granted sub- ject to mortgage or incumbrance, there shall be implied the following covenant by the transferee both with the transferor mid the mortgagee, that is to say, the transferee will pay the principal money, interest, annuity or rent charge secured by the mortgage or incumbrance after the rate, and at the time specified in the instrument creating the same, and will indemnify and keep harmless the transferor from and against the principal sum or other moneys secured by such instrument, and from and against the liability in respect of any of the covenants therein contained, or under this Act implied on the part of the transferor (Alta. s. 52). In Saskatchewan and Manitoba, there are simi- lar provisions, but in Saskatchewan the implied covenant is merely with the transferor, and so long as such transferee shall remain the registered owner with the mortgagee or encumbrancer (s. 63). In Manitoba the covenant is merely with the transferor (s. 97). Stuart, J., in Short v. Graham, 7 W. L. R. 787, reviews the law as to the right of a mortgagor to indemnity upon a transfer of the mortgaged land. Where property was sold subject to mortgage the purchaser was held in equity bound to indem- nify the vendor against his personal liability to TORRENS SYSTEM MORTGAGES. 31 the mortgagee under the covenant to pay contained in the mortgage. The only way by which the mort- gagee could avail himself of this equitable obliga- tion was by obtaining an assignment of his rights by the vendor to himself, and then having obtained this, he could sue the purchaser for personal judg- ment: Moloney v. Camphell (28 S. C. R. 228), also in the Court below (24 A. R. 224). In the latter report MacLennan, J. A., referring to a previous judgment of Chancellor Spragge, Y.C., said '' that very learned Judge declared emphatically that he had no doubt that the equity of a mortgagor to com- pel his assignee to pay would pass by express as- signment to the mortgagee. He added that such an assignment would not fall within the mischief of Prosser v. Edmonds, 1 Y. & C. 481, and that class of cases, and that it would simplify the remedy for the recovery of the mortgage money, giving a direct right of suit between the party to receive and the proper party to pay, and would create the privity which alone was wanting to make such a suit maintainable. In the result Stuart, J., held that the applica- tion of the statute should be restricted entirely to the case where there has been a real purchase by the transferee, and a complete parting with all his interest on the part of the transferor,, and that whenever it is impossible for the vendor, the trans- feror, to take advantage of the covenant declared to be implied in his favour, that is, wherever he would have had before the statute no right against the purchaser capable of assignment to the mort- gagee, then the covenant could not be implied in favour of the mortgagee either. 33 TORRENS SYSTEM MORTGAGES. " I am speaking now," he says, " of course without regard to the possible exception in the case of an express agreement by the vendor to waive his right of indemnity. The law formerly was that the purchaser taking finally the whole interest in property subject to an incumbrance was bound to pay off that incumbrance, and could be sued by the vendor, and made to pay the money, not to the vendor himself, but to the mortgagee, and I think that the statute was merely intended to make that obligation enforceable by the mort- gagee directly against the purchaser without any circuity of procedure. ' ' Stuart, J., also said that he doubted very much whether the transfer in question in the case could be considered as an instrument transferring land within the meaning of the statute at all, because as a matter of fact, it did not transfer any inter- est in the land whatever, but only the bare legal estate. The transfer was made by way of mort- gage, but no money was in fact advanced there- under. It should be noted that the ordinary rule of the general law that the purchaser of an equity of redemption, is in general bound in equity to indemnify the mortgagor against liability for pay- ment of the mortgage debt, laid down in Waring V. Ward, 7 Ves., at p. 337, by Lord Eldon, C, was in a late case held not to apply where the cir- cumstances of the transfer rebut the presumption that such was the intention of the party. (Mills V. United Counties Bank, [1912] 1 Ch. 231). It appears that the implied covenants may be negatived, even in a vesting order (see Bernard v. TORRENS SYSTEM MORTGAGES. 33 Faulkner, 7 W. W. R. 162), where Walsh, J., held that section 52 of the Alberta Act applied to the vesting order, and that under it the plaintiff as transferee of the land was impliedly bound to in- demnify the defendant from liability under the covenant of his mortgage, yet as it was perfectly competent under section 131 of the Act, for an ordinary transferee who takes title to mortgaged lands to relieve himself from personal liability for the mortgage debt by apt words in the trans- fer, so the plaintiff might be freed from such implied liability by the express language of his vesting order. In Evans v. Ashcroft, 8 W. W. R. 899, Mc- Carthy, J., held that a trustee transferee of land subject to a mortgage cannot be held to covenant impliedly with the mortgagee that he will pay the principal money and interest secured by the mort- gage. This appears to be a considerable extension of the doctrine enunciated in Short v. Graham, and subversive of the ordinary doctrine of Eng- lish law that a trustee undertakes the complete liabilities of beneficial owner, looking merely to his cestui que trust for indemnity. In Montreal Trust Co. v. Boggs & Beresfo7'd, 8 W. W. R. 1200, it was held that the section 63 of the Land Titles Act, Saskatchewan, had no appli- cation where the transferee of mortgaged land ac- quires only a portion of the mortgagor's interest in the mortgaged premises. (See Dominion v. Car- stens, [1917] 3 W. W. R. 153, and Dominion v. Gelhorn, [1917] 3 W. W. R. 231). In Great West Lumber Co. v. Murrin & Gray, 9 W. W. R. 1451, the question of these implied 34 TORRENS SYSTEM MORTGAGES. covenants came before the Appellate Division of Alberta, where there was a remarkable dift'er- ence of opinion as to their effect on the part of the Judges. Scott, J., doubted whether the implied covenants on the part of the transferee of mortgaged land could be negatived so as, without his consent, to deprive a person who was not a part}^ to the instrument, of the rights given to him by the implied covenant, and that, even if such a negation was possible, it could only be- come effective by the express declaration in the in- strument of transfer provided by section 131 of the Land Titles Act ; while Stuart, J., held that a mortgagee gains nothing at all by sections 52 and 131 of the Land Titles Act, unless he has the signa- ture of the transferee, and that either under seal or with a consideration moving from himself suffi- cient to give the agreement a binding force and effect, and even then that the agreement would operate in the same way, but to no greater extent than if it had been set forth at length in the trans- fer; whilst, Beck, J., held that section 52 w^as largely declaratory of the previous law, and simply meant that the transferee of mortgaged land im- pliedly covenanted to indemnify the mortgagor, but that the existence of such a covenant may be rebutted, and that the provision contained in sec- tion 131, that an implied covenant might be nega- tived or modified by express declaration in the in- strument did not exclude the admission of other evidence to rebut the implication or to show that it does not arise. Beck, J., expressed an opinion that the whole of section 52 ought to be repealed at the first op- portunity. TORRENS SYSTEM MORTGAGES. 35 Morice v. Kernighan (9 W. L. R. 307) is a case where a transfer of land subject to a mortgage was made with an option of repurchase upon pay- ment of the purchase price with interest, and the transferor assigned to her mortgagee all her rights to indemnity against all and every person whatso- ever under any implied covenant in any transfer given by her to the transferees. Cameron, J., held that the transfer to the defendants was absolute in fact as in form, and that the covenant to indem- nify set forth in section 97 of the Real Property Act, Manitoba, must therefore be read into the transfer, and that such covenant had been effect- ively assigned, distinguishing Short v. Graham, supra. In Colonial Investment d' Loan v. Foisie (19 W. L. R. 748; 1 W. W. R. 397), it was held that when a mortgagee seeks to hold a transferee of mortgaged land personally liable under the im- plied covenant to pay, the mortgagee's claim must be expressly alleged, and such relief specifically claimed on the pleadings. This case was followed in Home Investment Assn. V. Middleditch, 7 W. W. R. 1202, and in As- siniboia Land Co. v. Acres, 10 W. W. R. 358, where, however, it was held that the defendant had been distinctly informed of the nature of the claim against him, the statement of claim having asked for judgment '' in accordance with the implied covenant referred to in the Land Titles Act," and stated that the defendant was the registered owner of the land in question. [See Chapter XVI. and note at end of book.] 36 TORRENS SYSTEM MORTGAGES. CHAPTER VI. Parties to a Mortgage. All infant cannot in general bind himself by a mortgage, but probably a mortgage given by an infant for securing money lent for the purpose of purchasing necessaries is not void, but merely void- able {Martin \. Gale, 4 C. D. 428 ; Zoucli v. Par- sons, 3 Burr. 1794, and Inman v. Inman, 15 Eq. 260). Apparently, the mortgage of a person of un- sound mind not so found by inquisition is binding unless it can be proved that the other party or parties to the mortgage knew the mortgagor to be so insane as to be incapable of understanding what he w^as doing. The general rule is that where a person apparently of sound mind, and not known to be otherwise, enters into a contract, which is fair and l>ona -fide, and the parties cannot be put in statu quo, the obligation will be enforced against the lunatic {Campbell v. Hooper, 1 Jur. N. S. 670, and Kirktvall v. Fliglit, 3 W. R. 529). A partner unless special authority is given to him so to do cannot execute a mortgage of partnership property so as to bind other partners either during the continuance of the partnership or after its dissolution {Harrison v. Jackson, 7 T. R. 207, and Steiglitz v. Eggington Holt, N. P. 141), but any partner has an implied authority to pledge, otherwise than by deed, the real estate, if dealing in it is one of the objects of the partner- ship, unless he has been forbidden so to act, and TORRENS SYSTEM MORTGAGES. 37 the person dealing with him either knows that he has no authority or does not know or believe him to be a partner. {Re Ogden, 1 Mont. & A. 494). A personal representative of a deceased person has power to mortgage his lands. A trustee cannot mortgage the trust property unless power is expressly given to him by the trust instrument, or where he has statutory power. A power to mortgage is implied from a power of sale, where the latter power is given for the pur- pose of raising a i)articular charge (Stroughill v. Anstey, 1 DeG. M. & G. 635). 38 TORRENS SYSTEM MORTGAGES. CHAPTER. VII. Procedure in Registry. Where mortgages are presented to the Regis- trar without being accompanied by the duplicate certificate of title, and the certificate of title is sub- sequently produced to the Registrar by or on be- half of another person than the intending mort- gagees, and for a purpose other than the registra- tion of those mortgages, the duplicate certificate of title cannot be considered to be in the posses- sion of the Registrar for the purpose of registra- tion of the mortgages. {Be Green shields, 2 W. L. R. 421). Where mortgages were received by the Regis- trar by mail, the Registrar was held to be not only prohibited from entering either of the mortgages in the day book, but even from receiving them, for the purpose/ of registration, inasmuch as if they had been brought into his office by some person instead of having been forwarded by mail, he might have declined to receive them at all, unless the duplicate certificate of title were pro- duced to him. {Be American Ah ell Engine dc Thresher Co., and Noble, 3 W. L. R. 324). These decisions which were on the Dominion Land Titles Act of 1894, w^ere followed since the introduction of the Land Titles Act in Saskatche- wan, in Re Toth v. /. /. Case Threshing Machine Co., 14 W. L. R. 704, where it was held that sec- tion 36, which provides for a receiving book, did not affect the question. TORRENS SYSTEM MORTGAGES. 39 '' That section," says Brown, J., delivering the judgment of the full Court, " simply contemplates the receipt of instruments, and the entering of a record of the same in a receiving book until an opportunity is presented for examining them, in order to ascertain if they be complete and in proper foiTQ, and fit for registration." The duplicate certificate of title is something quite apart from the instrument, and the produc- tion of the same is under section 41 absolutely essential before the Registrar can be said to be under any obligation to receive or to have any authority to receive the instrument for registra- tion, it being the duty, or at least the right, of the Registrar under such circumstances to reject the mortgage. It must be assumed to be out of his office, and he cannot be held to have any further responsibility with reference to it. The powers conferred upon the Registrar under section 160 (now 148) are primarily for the convenience of the Registrar, and not primarily for the convenience of someone else. Where a solicitor forwarded a mortgage to the Registrar, but did not forward the duplicate cer- tificate of title, which as a matter of fact was not then in existence, it was held that the mortgage, though retained in the physical possession of the Registrar, yet was not in his possession as Regis- trar. (Hall v. Registrar of the Yorkton Land Registration District, 16 W. L. R. 568). The Registrar has no duty to determine rights as between mortgagee and mortgagor in carrying out the provisions of section 62a of the Land Titles 40 TORRENS SYSTEM MORTGAGES. Act, Alberta (Wiltse v. The Excelsior Life Insur- ance Co., 10 W. W. R. 90). This last decision was adopted by the Master of Titles in Saskatchewan with respect to that pro- vince (1917, 1 W. W. R. 302), where it was held that after the registration by a mortgagee of notice of intention to exercise his power of sale, the Registrar has no duty to consider or deal with an}^ informal notice of misrepresentation on the part of the mortgagee, regarding the consideration in the mortgage on which the proceedings are be- ing taken before him, and that he is justified in al- lowing the proceedings to continue until stopped by the order of the Court, except where he might feel himself unable to move until the disputed questions should be settled by the Court. In Ex parte H assail (10 S. C. R. N. S. W. 292), it was held that the Registrar, before registering a transfer by a mortgagee exercising his power of sale, is entitled to require proof of the mortgagor's default, having continued up to the time of the sale. In Stables v. McKay, 11 N. Z. L. R. 258, it was held that the Registrar should have exercised his discretion by refusing to register the mortgage of a lease, the mortgage containing a covenant to buy all beer contained on the mortgaged premises from the mortgagee during the term of the lease. In R. V. Registrar-General, 1 S. C. R. Q. 201, it was held that where an instrument purporting to be a mortgage and substantially in the statutory form, was presented to the Registrar, he was not justified in declining to register it on the ground TORRENS SYSTEM MORTGAGES. 41 that he considered it to contain more than one mortgage. In In re Kaihu Valley Railway Co. & Owen, 8 N. Z. L. R. 522, the Registrar was held wrong in inquiring whether a mortgage from a company presented for registration was ultra vires or not. (See also Mutual Assurance Society v. Registrar- General, 1 Q. L. J. 177, and In re Registrar-Gen- eral, 21 N. S. W. L. R. 225). The question whether or not the Registrar should accept a document for registration must be determined by the provisions of the Land Titles Act {Re Ehhing, 2 S. L. R. 170). An officer in a position corresponding to a Registrar is not to be deemed a mere machine for making registration (Maiming v. The Commis- sioner of Titles, 15 A. C. 195; 59 L. J. P .C. 59; Re Land Registry Act and Shaiv, 8 W. W. R. 1270) . 42 TORRENS SYSTEM MORTGAGES. CHAPTER VIII. Statutory Powers Considered Generally. In considering the statutory powers given to a mortgagee by the various Acts, an important ques- tion has to be solved at the outset, viz.: Are the statutory remedies exclusive or non-exclusive of other powers, conventional or contractual, which may be given to attain the same objects as those aimed at by the statutory powers, but by a differ- ent procedure ? Thom, at p. 298 of his work on the Canadian Torrens System, appears to be of the opinion that the statutory remedies are exclusive. He quotes the language of a judgment in Smith v. National Trust Co., 20 Man. L. R., at p. 533, when before the lower court : * ' The Real Property Act creates a method for realizing by sale or foreclosure in case of mortgages under it, which method is clearly meant to be exclusive, unless otherwise permitted by the Act itself. It is a full and sufficient method, and its enactment impliedly repeals as to such mortgages any powers of sale given by the pre- vious Acts, including Lord Cranworth's, if it would otherwise have applied." *' The same rule," infers Thom, " should logi- cally be applied to powers to take possession and lease contained in the same paragraphs of the Act ; that is to say, the right to take possession and to make leases must be exercised by the mortgagee pursuant to the provisions of the Land Titles Act, so far as they go, by service and filing of notice. TORRENS SYSTEM MORTGAGES. 43 Furthermore the proceedings under the Act are authorized only in pursuance of a covenant (this remark is, of course, applicable only to Saskatche- wan), necessarily implying that without such pro- ceedings under the Act the covenant is unenforce- able, and carrying the inference a step further, confinning the view that no other covenants and powers are enforceable by the mortgagee directly, but only through the Courts. ' ' It is difficult to accept this view in all its ful- ness, as will, it is thought, be shown by an examin- ation of the cases upon the subject. It has been held in Re Alarie, 5 W. W. R. 257, that " In the case of a mortgage under the Real Property Act, the mortgagee having no estate in the land, a final order for foreclosure in an action in the King's Bench does not vest in the mortgagee the estate or interest of the mortgagor. The only way to obtain foreclosure of such a mortgage is under sections 113 and 114 of the Real Property Act (now sections 122-123.) " This case when examined is not an authority for the proposition that powers must be exercised in pursuance of the provisions of the Acts, where the power sought to be exercised is a conventional one. It does not go further than to lay down the rule that where the Act prescribes a course of proced- ure in the case of a simple mortgage by which title is to be got in from the mortgagor, that course must be taken. ^' Of course," says Howell, C.J.M., '' if a spe- cial agreement was made between the parties, rais- 44 TORRENS SYSTEM MORTGAGES. ing equities as to title, and perhaps agreements as to conveyance, different questions might arise, but this is a simple mortgage under the new system." The order in question in the case was, in the words of Howell, C.J.M., a simple, ordinary final order in the following words: '' That the defend- ant Hormidas Frechette do stand absolutely de- barred, and foreclosed of and from all right, title and equity of redemption in and to the mortgaged premises. ' ' It did not pretend to order or effect a convey- ance or transfer of the title, and no case was made out in the pleadings for a conveyance, and there was no contractual or conventional power of sale in the mortgage ; consequently, it is impossible to surmise what the judgment of the Coui-t would have been if the order had directed accounts, and that in default of payment of the sum due, the de- fendant should execute a statutory transfer in favour of the plaintiff, a form that is quite usual in the case of an equitable mortgage by deposit of deeds. That a statutory foreclosure is the only method of foreclosing of a statutory mortgage is laid down in Greig v. Watson, 7 V. L. R. Eq. 79, and Long v. Town, 10 N. S. W. L. R. Eq. 253. In Canada the authority for a proposition of this nature is an obiter dictum of Duff, J., in Smith V. National Trust Co., 45 S. C. R. 618, based largely on the National Bank of Australasia v. United Hand-in-Hand Band of Hope Co., 4 A. C. 391. TORRENS SYSTEM MORTGAGES. 45 Before considering the proposition in general, it would be well to consider what was actually de- cided in Smith v. National Trust Co. A mortgagor had given a statutory mortgage containing a conventional power of sale by means of covenant and grant, " to sell the said lands." The mortgagee exercised this power of sale, and the purchaser claimed in an action against the ad- ministrator of the estate of the mortgagor to have it declared that the sale to him was a valid exercise of the power of sale contained in the mortgage deed, and that the transfer was effectual to give him an estate in fee simple in the land. The action was dismissed. It is true that Duff, J., delivering a judgment concurred in by a bare majority of the Court, states that the judicial opinion of the Victoria Superior Court, and that of the Privy Council in the Nor tional Bank v. United Hand-in-Hand Co., were un- animously in favour of regarding the foreclosure provisions in the Victoria statute as providing the only means by which the mortgagee could extin- guish the mortgagor's title, and leans towards the view that proceedings under a conventional power of sale are entirely forbidden. In the Australian case. Sir James W. Colville, in delivering the judgment of the Judicial Com- mittee, said at p. 405 of the Law Reports' Report, " the company was the registered owner of the land under the provisions of the Transfer of Land Statute, and the inortgage was made under, and subject to the provisions of the 83rd and following sections of that Act, and was duly registered there- 46 TORRENS SYSTEM MORTGAGES. under. The instrument itself is in the form set forth in the 12th Schedule to the Act, except that it contains, as that form permits, a special coven- ant or agreement, which will be hereafter con- sidered, hence the only way in which the mortgagee could extinguish the rights of the mortgagor in the mine was by foreclosure under 31 Vict. No. 317, of which there is no question here, or by its sale under the 84th, 85th and 87th sections of the Trans- fer of Land Act. ' ' The report states that the special clause in the instrument of mortgage (referred to supra) was to the effect that notwithstanding anything con- tained in the Land Transfer Act, it should be law- ful for the bank in the event of default being made in the payment of the principal money and inter- est secured, ' ' on such demand being made as afore- said, immediately to serve such notice of demand as aforesaid, in the manner prescribed by the 84th section of the statute on the company, and after the expiration of fourteen days from the service of the notice of demand, to sell the land, in pursuance of the powers in that behalf vested in the mortgagee under the 85th section of the Act." It would appear then that the words of the Privy Council, to the effect that the only way in which the mortgagee could extinguish the rights of the mortgagor was by sale under the Act, will be satisfied by supposing them to refer to the cir- cumstances of the case; the circumstances being that, as a matter of fact, the only sale provided for was a sale under the provisions of the Act. TORRENS SYSTEM MORTGAGES. 47 It is not going too far, then, to say that what- ever the true state of the law may be on the sub- ject, it has not yet been decided that in Manitoba, the only method of effectuating a sale or fore- closure of lands mortgaged by a statutory mort- gage is that provided by the Act. It is suggested that the true view of Smith v. National Trust is probably that expressed by El- wood, J., in Bollefson v. Olson, 8 W. W. R. 481, where he says at p. 485, with reference to the ex- ercise of the power of leasing: ^' So far as the effect is concerned of Smith v. National Trust Co. I do not understand that judgment to hold other than that under the facts of that case, the mortgage did not give power to the mortgagee to transfer the land, and in my opinion it did not hold that the parties might not so contract that power to give a transfer might be given the mortgagee. ' ' It might be quite possible to accept the state- ment that the only foreclosure that can be effected by a statutory mortgagee is that prescribed by the statutes, without at the same time accepting it as to sale, taking possession, leasing, etc., on the prin- ciple which as to procedure in foreclosure pro- ceedings is laid down in or to be inferred from Campbell v. Commercial Bank, 2 N. S. W. L. R. 375; Public Trustee v. Morrison, 12 N. Z. L. R. 425. In re Barton, 27 V. L. R. 441, that powers of foreclosure are to be construed more strictly than other powers. Smith V. National Trust Co. may perhaps be taken as an authority that the power of sale given by Lord Cranworth's Act of 1860, applicable to all 48 TORRENS SYSTEM MORTGAGES. charges made to secure loans or debts, cannot be resorted to in the case of statutory mortgages, as the power of sale implied by that Act enabled an equitable mortgagee in fee from a mortgagor who had the legal estate to convey the legal estate upon his exercise of such power. (See Re Solomon d Meagher's Contract, 40 C. D. 508). ^ It is difficult to see why a power of attorney enabling the mortgagee upon the exercise of his conventional power of sale to execute a transfer to the purchaser from him should not be effectual for that purpose; such power of attorney would be given for valuable consideration, and provision is made by the Acts for the registration of powers of attorney. A power of attorney of this nature would, of course, on general principles be irre- vocable. It has been stated that an instrument contain- ing such a creation of agency or power of attorney would fall within the evil aimed at by the full Court of Saskatchewan in Re Rumley Co. v. Reg- istrar, Saskatoon, L. R. D., and would be re- jected on presentation for registration as attempt- ing to combine two instruments of different natures in one (see Thom, Canadian Torrens System, p. 292). This objection, if it is really valid, might pre- sumably be got over by the registration of the power of attorney as a separate instrument. The powers of entering into possession and of leasing in Saskatchewan are considered in Rollef- son V. Olson and TJie Mutual Life Assurance Co., 8 W. W. R. 481. In that case a mortgagor by his TORRENS SYSTEM MORTGAGES. 49 mortgage deed attorned to his mortgagee at a yearly rental, and by covenant and grant gave the company a power upon default in payment of the principal sum and interest to enter into possession of the land and to lease the same. The mortgagor fell into default, and the mort- gagee entered into possession, and leased the land to the mortgagor for one year, the lease being exe- cuted b}^ the mortgagor, but not by the mortgagee. It was urged on behalf of the plaintiffs in the case (execution creditors) that the company's en- tering into possession of the mortgaged premises was inoperative and void because the proceedings were not taken in tjccordance with the provisions of sub-section 2 of section 93 of the Land Titles Act, while the right to take possession and to make leases must be exercised by the mortgagee in ac- cordance with that sub-section, that is, after ser- vice and registration of notice. '' This objection is met at the very threshold," says Haultain, C.J., '^ by the fact that the mort- gagor acquiesced in the possession, and leasing by the mortgagee. In any event this is not an objec- tion which concerns the present case. This is not the case of a sale, as in Smith v. National Trust Co., 20 Man. L. R. 533; 45 S. C. R. 618; 1 W. W. R. 1122, and the interests of none of the persons to whom notice is required to be given by the above mentioned enactment are in the least affected by the results." '' Under the Act," says El wood, J., in the same case, ^'the mortgagee could without consent, T.S.M. 4 50 TORRENS SYSTEM MORTGAGES. and without taking any further proceedings, enter and lease the land immediately after giving the notice. I cannot see how the respondents would be affected by, or interested in a notice where noth- ing was sought to be done other than to enter and lease the land. The mortgagor by entering, exe- cuting and accepting the lease surely waived any right he had to object to the want of notice. The notice is only necessary in case the assistance of the Act is being invoked by the mortgagee. The right to enter and lease is given in such a case as a right in addition to other rights, but in a case such as the present one, where the assistance of the Act is not being invoked, where nothing is required to be done in the Land Titles Act, and where the mort- gagor consents, no notice is in my opinion neces- sary. ' ' In Alberta and Saskatchewan there are provi- sions (Alta. s. 70, Sask. s. 103)' to the effect that where certain words are used in a mortgage, a fuller form in a schedule in the Acts shall be taken to have been used. There is no doubt that these scheduled forms are the forms appropriate to a mortgage, which professes to be a conveyance of the legal estate, but their inappropriateness to a statutory charge cannot, it is thought, justify their rejection. These statutory forms seem to be very com- monly used. One of the shorter forms which im- pliedly include the scheduled forms is '^ will exe- cute such further assurances of the land as may be requisite." The use of this form introduces into the mortgage a covenant that the mortgagor will TORRENS SYSTEM MORTGAGES. 51 make, etc., '' all and every such further and other reasonable act or acts, deed or deeds, devices, con- veyances and assurances in the law for the further, better and more perfectly and absolutely convey- ing the said lands, tenements and hereditaments and premises, with the appurtenances unto the said mortgagee, his heirs, executors, administra- tors and assigns, as by the said mortgagee, his heirs, executors or his or their counsel learned in the law, shall or may be lawfully and reasonably devised, advised or required. It seems to the writer that some " counsel learned in the law ' ' might well ' ' lawfully and rea- sonably devise " a plan, upon failure of the mort- gagor to pay the mortgage moneys, whereby the Court would direct specific performance of this covenant. It seems hopeless, here as in many other places in the Acts, to speculate as to what the draftsman could have intended by the inclusion of these sec- tions, but it is, at any rate, difficult to read the covenant as meaning anything else than that upon default the mortgagor will convey the legal estate in the land to the mortgagee. It is interesting to note that the Land Transfer Commission, 1911, in England, proposed that mort- gagees with power of sale should be authorized to transfer the land, and that the registrar should give to the purchaser a certificate of the vendor's power of sale. 52 TORRENS SYSTEM MORTGAGES. CHAPTER IX. Statutory Leases. The statutory power of leasing arises in Al- berta upon default in payment of the principal sum, interest, annuity or rent charge, or a part thereof, secured by any mortgage or encumbrance registered under the Act, or in case default is made in the observance of any covenant expressed in any mortgage or encumbrance, or declared by the Act to be implied in such instrument, and in case such default is continued for the space of one calendar month, or for sucli longer period of time as may be expressly limited in the mortgage. It is not clear v/hether the statutory notice is a condition precedent to exercising the power of leasing, but it is thought that grammatically the section conferring the power, section 62a, owing to the repetition of the word ' ' may ' ' therein, does not postulate such a notice. In Saskatchewan, the powers are similar, and it is thought that for the same reason, neither a covenant conferring the power of leasing in a mort- gage (which in the case of actual entry into pos- session is a condition precedent) nor the statutory notice need exist before the exercise of the power of leasing. The power of leasing extends to making a lease of any part of the mortgaged premises ; such power would apparently enable a mortgagee in accord- ance with what is laid down in Brotun v. Peto. [1900] 2 Q. B. 653; 69 L. J. 2 Q. B. 869, to make a lease of any incorporeal hereditament. TORRENS SYSTEM MORTGAGES. 53 It is supposed that a lease when executed under the statutory power would probably have the same effect as if the mortgagor had joined therein, that is to say, would take effect out of the legal estate (See Wilson v. Queen's CWb, [1891] 3 Ch. 525, and John Brothers Co. v. Holmes, [1900] 1 Ch. 188). The statutory provision that the mortgagee may make any lease of the mortgaged premises as he may see fit, is, in terms, of a very extensive nature. It would enable, for instance, if unchecked by the equitable jurisdiction of the Court, a mortgagee to make a lease of the mortgaged premises for 999 years at a pepper corn rent. It is not thought, how- ever, that such an inequitable exercise of the power of leasing would be permitted. In most of the Australian jurisdictions, there is no provision as to power of leasing, but it has been held that a mortgagee who takes possession may effectually lease for a period to last during the con- tinuance of the mortgage (see Finn v. London Bank of Australia, 19 N. S. W. L. R. 364). In Manitoba there is by section 118 of the Act a provision similar to that contained in the Alberta Act, and by section 116, every present and future first mortgagee for the time being has the same powers as he would have had or been entitled to, if the legal estate in the land or term mortgaged had been actually vested in him, with a right in the owner of the land to quiet enjoyment of the mort- gaged land until default in the payment of the principal and interest money secured or some part thereof respectively, or breach of covenant. It seems to have been held in Victoria under a similar provision that, if a time is fixed for pay- 54 TORRENS SYSTEM MORTGAGES. ment of the principal, the right of quiet enjoyment amounts to a re-demise (Equity Trustees Co. v. Ayrey, 26 V. L. R. 625 ; Commercial Bank v. Breen, 15 V. L. R. 572 ; Farrington v. Smith, 20 V. L. R. 90), but that, where no such time is fixed, there is no re-demise, and the mortgagor has only a right of action for breach of the implied covenant for quiet enjoyment (Hogg, p. 961). These decisions seem, however, to neglect the distinction which is drawn attention to in Smith's Leading Cases, vol. 1, 598 (12th ed.), between an agreement to be collected from the mortgage deed that the mortgagor shall remain in possession for a time certain, which operates as a re-demise, and an agreement that the mortgagee may enter upon, or the mortgagor hold until a default, the time of which is uncertain, which agreement cannot oper- ate as a re-demise for want of certainty (see Doe v. Lightfoot, 8 M. & W. 564, and Doe v. ^Day, 2 Q. B. 147). The power granted to a mortgagee to lease *' whether in or out of possession," presents some difficulties, as the exercise of such a power would, it is thought, amount to a taking of possession , at any rate, in so far as to render a mortgagee so exercising the power of leasing liable to account as a mortgagee in possession. It is not without significance that most of the Australian statutes enable the mortgagee to enter into possession hy taking the rents and profits, and the Canadian Acts provide for entry into posses- sion of the land and a receipt and taking of the rents and profits. TORRENS SYSTEM MORTGAGES. 55 Tenants of the mortgaged premises, upon the exercise of the power of receiving the rents of the mortgaged property, would probably be entitled to notice of such entry, whether they held by regis- tered leases or not. (See Bank of N. S. W. v. Palmer, 2 N. S. W. L. R. 125, and Equity Trustees Co. v. Ayrey, 26 V. L. R. 625). Possession can be obtained by an action of ejectment in the ordinary way (see Alta., section 104, Sask., section 136, and Manitoba, section 84. providing for recovery of the land by that process in the case of a moi'tgagee against a mortgagor). The case Oelkers v. Merry, 2 S. C. R. (Q.) 193, presents the solution of a curious problem. That case decided that the words "as against a mort- gagor" could be treated as mere surplusage, and that the action of ejectment might be brought against any person in possession and need not be against a defaulting mortgagor or his tenant. The plaintiff was the representative of a mortgagee, and the defendant was not the mortgagor or his representative, but a stranger claiming under an adverse title, that is, a subsequently registered cer- tificate of title, and it was held that although the defendant did not represent the mortgagor, the action lay against him at the suit of a mortgagee entitled to possession. It is presumed that in the Acts the words " ac- tion of ejectment '' have no technical meaning and are simply a varia lectio for an action for the recov- ery of land. (See further as to these proceedings for obtaining possession of the land. Colonial Bank V. Rahhage, 5 V. Jj. R. 462; Commercial Bank v. McGaskill 23 V. L. R. 10). 56 TORRENS SYSTEM MORTGAGES. CHAPTER X. Power to Take Possession. A mortgagee by the conveyance of the legal estate, or by conveyance of the equity of redemp- tion, has the right to take possession of the mort- gaged land, even piior to any default, especially, in the latter case, if the mortgage gives him that right. (See Ocean Accident and Guarantee Cor- poration v. Ilford Gas Company, 74 L. J. K. B. 799 ; Campion v. Palmer, 1896, 2 I. R. 445 ; Gen- eral Finance Co. v. Liberator Building Society, 10 C D. 15, at 24; Antrim County Land Company V. Stetvart, 1904, 2 I. R. 357.) A puisne mortgagee, being entitled under his mortgage to take possession, served notice on the tenants to pay their rents to him, and it was held that a judgment obtained against the mort- gagor after service of the notice could not be en- forced by garnishee proceedings against the rent. {Campion v. Palmer, 1896, 2 I. R. 445. See also Antrim Land Co. v. Stetvart, 1904, 2 I. R. 357). Ashburner on Mortgages doubts the right to take possession on the part of an equitable mort- gagee, but the statement in the text seems most consonant with principle, though an equitable mortgagee by mere charge cannot take possession of the land (per North, J., in Gar fit v. Allen, 57 L. J. Ch. 420), save where a contractual right is given. It appears from these cases that a contractual right to take possession given in a Torrens mort- TORRENS SYSTEM MORTGAGES. 57 gage should be considered as effectual (see also Rollefson v. Olson, 8 W. W. R. 481), and that whether the right to possession is to arise upon default or prior thereto. Where a mortgagee is entitled to possession, ^Mch he prima facie is by a conveyance of the legal estate by way of mortgage, he can gain pos- session either by actual entry upon the land, if this can be done peaceably, or by bringing an ac- tion to recover possession of the land, or by giving a tenant of the mortgaged land notice to pay the rent to him, where such property is in the occupa- tion of a tenant whose tenancy is binding upon him (see Ocean Accident and Guarantee Cor. v. Ilford Gas Co., [1905] 2 K. B. 493). The statutory right of possession in Alberta and . Saskatchewan is given upon default of pay- ment of mortgage moneys or interest or non-ob- servance of express or implied covenants contin- ued for one calendar month or any longer contract- ual period, and after notice given. (Alberta sec- tion 62a ; Saskatchewan 93 (2).) In Manitoba the right of entry into possession of mortgaged land given by section 114 is in terms confined to entry into possession by receiving the rents and profits thereof or by bringing an action to recover the land, either before or after receiving the rents and profits thereof, and may be exercised apparently without notice. By section 118, the mortgagee has a right of possession similar to that in Alberta and Saskatchewan. The proceedings for obtaining possession may apparently be taken 58 TORRENS SYSTEM MORTGAGES. either against the mortgagor or against a third party (see Oelkers v. Merry, 2 Q. S. C. R. 193). A mortgagee who enters into possession of the mortgaged property, since he thereby does what amounts to taking proceedings to recover his mort- gage money, deprives himself of his equitable right to insist on six months notice or interest in lieu of notice from a person seeking to redeem the mortgage, and where a person takes possession he may be redeemed before the time limited by the mortgage for ]>ayment of the mortgage money expires (Bovill v. Endle, [1896] 1 Ch. 248, 65 L. J. Ch. 542, followed by Stuart, J., in Great West Per- manent Loan Co v. Jones, 7 W. W. R. 767 ; see also Edmonson v. Copland, [1911] 2 Ch. 301), though the mortgagor could not, before the time limited for payment to the mortgagee expires, either insist on acceptance of a tender of the mortgage money or take proceedings to redeem {Brotvn v. Cole, 14 Sim. 427). Other drawbacks to taking possession are the strict accountability to which a mortgagee in pos- session is held, and the fact that it is extremely doubtful as to whether a mortgagee after he has once taken possession can relinquish it {Be Pry- therch, 42 C. D. 600), though the Court might, but only in exceptional cases, extricate him from this difficulty by the appointment of a receiver: (County of Gloucester Bank v. Rudry Mertiyr Colliery Company, [1895] 1 Ch. 629). A mortgagee may take possession either of the whole or part of the mortgaged premises as in Simmins v. Sliirley, 6 C. D. 173, where a farm was TORREJSrS SYSTEM MORTGAGES. o^ let to a tenant without either the shooting or the timber, and a notice to the tenant to pay rent to the mortgagee was held only to amount to taking pos- session of the farm (see also Soar v. Dolby, 15 B. 156) . It is stated in Berard v. Bruneau, 8 W. W. R. 635, that in Kinsman v. Rouse, 17 C. D. 104 ; 50 L. J. Ch. 486, Jessel, M.R., held that possession by a mortgagee of any part of the lands comprised in the mortgage operated as possession of the whole. Reference to the latter case does not however com- pletely bear out this statement, the point of the case being that the mortgagor was debarred from redemption by lapse of time as to one part of the mortgage and not as to another. He may, however, obtain possession of the whole of the property provided that the property is so bounded and defined that entry on part can be regarded as entry on the whole (see Low Moor Co. V. Stanley Coal Co., 34 L. T. 186— C. A.) He may make forcible entry at the risk of a criminal prosecution (5 Richard 2 st. 1, c. 8) ; or of having to pay damages for injury to the occupier, his family or his furniture (see Beddall v. Mait- land, 17 C. D. 174, at 187, and Edwick v. Hawkes, 18C. D. 199). The receipt of rents constitutes a taking of possession, as a rule, but not the mere asking for them without receiving them (see Ward v. Cartar, 35 Beavan 171). To make him a mortgagee in possession he must receive the rents and profits in such a way as to take upon himself and to take out of the hands oc the mortgagor the power and 60 TORRENS SYSTEM MORTGAGES. the duty of managing the estate and collecting the rents. Mere insurance of the mortgaged property or merely making arrangements with the tenants, if they do not recognize him as their landlord, will not constitute the mortgagee a mortgagee in pos- session (Ward V. Cartar, supra). It is presumed that the power to take posses- sion is limited and could not operate in such a case as where an unpaid vendor is in possession of mort- gaged propert}^ by agreement with the mortgagor, until the purchase money is paid. See Commercial Bank v. McGaskill, 23 V. L. R. 10, "and Colonial Bank v. Rahhage, 5 V. L. R. (L.) 462. TORRENS SYSTEM MORTGAGES. 61 CHAPTER XI. Sale Under Registrar. A notice is a condition precedent to the exer- cise of the power of sale under the Acts. The provision in Saskatche^Yan, section 93 (2) provides that the notice shall be written and that a copy shall be filed in the Land Titles Office. The notice may require payment within the time to be specified or observance of covenants, and is to state that all remedies competent will be resorted to unless the default in payment or in observance of the covenant be remedied. In Alberta the notice shall contain a statement that in case default continues for two months from the date of service of the notice, the mortgage lands may be sold, and may require payment of the moneys due or observance of the covenants, and may declare the intention of a*pplying for fore- closure: s. 62a (2), (3), (4). Provisions similar to those of Saskatchewan are contained in the Manitoba Act, section 118. Where formal demand of payment which is a necessary precedent to a power of sale has been made, the mortgagee may as well after as before the occurrence of actual default, by his conduct in negotiations with the mortgagor, estop himself from alleging that the demand has ever been made. In such a case a f resli demand must be made before a mortgagee can be heard to allege that default has been committed. (Barns v. Queensland National Bank, Ltd., 3 C.Ij. R. 925). 62 TORRENS SYSTEM MORTGAGES. It appears that the period of contmuance of default in payment or in the observance of any covenant, may be waived (see Puhlic Trustee v. Morrison, 12 N. Z. L. R. 423). As to waiver of notice see generally Thompson dc Holt, 44 C. D. 492 ; Camphell v. Commercial Bank, 2 N. S. W. L. R. 375; Wilson v. Mcintosh, [1894] A. C. 129; iVa- tional Bank of Australasia v. United Hand-in- Hand Co., 4 A. C. 391, and Van Damme v. Bloxam, 9 S. A. L. R. 27. It might, indeed, be said that under the New Zealand Act, it is settled law that the power of sale and the conditions of its exercise are now matters of contract between the parties, and that the im- plied powers may be varied at the will of the par- ties. (See 3Iiles v. Hiissey, 28 N. Z. L. R. 382). It seems to be the practice in Australia to ab- breviate by the terms of the mortgage the time for which default must continue and notice must be given. Where seven days notice was provided for in the mortgage, and the mortgagee gave notice that the land would be sold unless the money due under the mortgage be forthwith paid, it was held that the notice was invalid, as not showing whether both principal and interest were demanded, and as fail- ing to give the necessary seven days for repay- ment. MacDonald v. Rotve (3 A. J. R. 90 and 4 A. J. R. 134). Where too large a sum is demanded the notice is not necessarily rendered invalid, and the mort- gagor must still offer to pay the amount due. TORRENS SYSTEM MORTGAGES. 63 It has been held that a notice of demand may be given before registration of the mortgage though registration must be effected before the sale ac- tually takes place {Matlieson v. Mercantile Finance & Agency Co., Ltd., 17 V. L. R. 271). Where a demand was made for payment of the money owing, after default had been made in pay- ment of interest, it was held that such demand in- timated a willingness on the part of the moilgagee to receive his principal, although the date fixed for its payment had not arrived, and accordingly, on payment of the principal and the interest then due, could not demand the payment of future interest (Ewart V. General Finance, etc., Soc. of Austral- asia,!^ V. L. R. 625). A notice that a mortgagee intends to exercise his power of sale owing to non-observance of cov- enants contained in the mortgage should specify which covenants are alleged to be broken {Stacy \. Hansen, 20 \.l^.^.bQl). Under the provisions of the English Convey- ancing Act of 1881, which require a lessor to serve on the lessee a notice specifying the particular breach complained of, and if the breach is capable of remedy applying to him to remedy it, it has been held that the notice must be so distinct as to direct the attention of the tenant to the particular thing of which the landlord complains, so that the tenant may be able to remedy the breaches before an ac- tion to enforce the forfeiture is commenced {Fletcher v. Nokes, [1897] 1 Ch. 271 ; Re Serle, [1898] 1 Ch. 652). 61: TORRENS SYSTEM MORTGAGES. i The notice is not bad if it includes breaches which have not been committed {Matthews v. Usher, [1900] 2 Q. B. 535 ; Pannell v. City of Lon- don Brewery Co., [1900] 1 Ch. 496) ; but it is bad if it claims for breaches of covenant which are not in the lease (Guillemard v. Silvertliorn, 99 L. T. 584), or refers to the wrong covenant (Jacob v. Down, [1900] 2 Ch. 156). The notice need not specify the -acts which the lessee must do in order to repair a breach of coven- ant (Piggott V. Middlesex County Council, [1909] 1 Ch. 134). The notice may be addressed to " the lessee " or to '^ the lessee and other persons inter- ested " (see Cronin v. Rogers, Cab. & El. 348). Upon a sale under the registrar, the purchase money is to be applied, first, in payment of the ex- penses incurred by the sale, second, in payment of the money which may then be due or owing to the mortgagee, thirdly, in payment of the subsequent mortgages, incumbrances or liens, and fourthly, the surplus is to be paid to the mortgagor (Alberta, section 62a ; Saskatchewan, section 92 (4) ; Man- itoba section 120). As to Alberta, see Memo. It is presumed that a mortgagee would be en- titled to retain proper and just allowances (see National Bank of New Zealand v. Barclay, 17 N. Z. L. R. 819), see Memo, at end of book. The provision that only moneys which may then be due or owing to the mortgagee are to be paid to him, seems likely to cause difficulty where the statutory procedure is set in motion upon a non-payment of some part of the principal sum, TORRENS SYSTEM MORTGAGES. ^^ or of interest, or upon non-observance of a cove- nant. In Alberta provision is made for the payment into Court of the surphis moneys, if payment can- not be made to the mortgagor, etc., but there are i]o analogous provisions in Manitoba or Sas- katchewan. (See Memo, at end of chapter). In Thompson v. Bergliind, 16 W. L. R. 154, where land was sold by a mortgagee under section 103 of the Land Titles Act, and the surplus after payment of expenses and the amount due to the mortgagee was paid into Court, and claimed by several execution creditors as su])seciuent incum- brancees, it was held that the provision of sub-sec- tioii 4 of the section, to the effect that the sub- sequent incumbrances should be i)aid in the order of their priority, was controlled by the provision of section 3 of the Creditors Relief Ordinance, de- claring that there should be no priority among' creditors by execution, and that, therefore, the money should be distributed among the execution creditors in equal shares (see Dawson v. Moffatf, 11 O. R. 484, and Re Bokstal 17 P. R. 201). In Edmonton Mortgage Co. v. Gross, 18 W. L. R. 385, where land was sold under a judgment in a mortgage action and there was a surplus, after paying the claim of the plaintiff, the first mort- gagee, sufficient to pay in full the amounts of three executions against the defendant, the registered owner and the amount of a second mortgage registered after the three executions were lodged, ])ut not sufficient to ])ay in full as well 66 TORRENS SYSTEM MORTGAGES. the amounts of several executions lodged after the second mortgage, it was held that the three inter- vening execution creditors were entitled to be paid in full instead of pari passu with the subsequent execution creditors (see Roach v. McLachlan, 19 A. R. 486 ; Breithaupt v. Man; 20 A. R. 689 ; Re Massey, 2 Terr. L. R. 84, and Hotvard v. //. R. Trading Co., 4 Terr. L. R. 109). In J. I. Case Threshing & Machine Co., 19 W. L. R. 701, it was suggested by Wetmore, C.J., that the duty of distributing the surplus moneys was intentionall}^ cast upon the mortgagee by the statute, and that he could not escape that duty by paying the money into Court. If after reasonable inquiry, he is unable to ascertain the amount due to the subsequent incumbrancer, or if some doubt- ful question arises, he would be justified in paying the money into Court, but his duty would not end there. It would then be open to him to apply to the Court under section 49 of the Trustee Act, and Rule 481 of the Rules of Court (Sask.). In Gilbert v. Ullerich, 17 W. L. R. 157, certain persons claiming under a covenant to give a mort- gage upon lands which had been sold, claimed to be subsequent incumbrancers, so as to be entitled to be paid out of the proceeds of the sale, through hav- ing registered their equitable mortgage by way of caveat. It was held, however, that until they estab- lished in an action that they had a lien on the land by virtue of the agreement, they could make no claim whatsoever upon the moneys in Court. The duty of the Registrar in conducting the sale was considered by Harvey, C.J., in Re Sun TORRENS SYSTEM MORTGAGES. 67 Life Assurance Co. (& Widmer, 9 W. W. R. 961, where he lays down that where a mortgagee gives notice under section 62a of the Land Titles Act, Alberta, the Registrar, upon application to him for direction for a sale of the mortgaged land, is en- titled to require the production of {a) an affidavit of default, and continued default; (&) an affidavit of value of the property; (c) a statement of the amount due under the mortgage, with an esti- mate of the cost of sale proceedings, taxes, etc. ', {d) a reserve bid form, and (e) instructions to auc- tioneer, in order that he may be satisfied («) that the mortgagee is entitled to offer the lands for sale, and {}), c and d) that he may settle a reserve bid, and (e) that he may be sure that the sale will be conducted in accordance with the conditions. The' statement at p. 329 of Thom on the Tor- rens System to the effect that the fixing of a re- served bid is not a matter for the registrar is dis- approved of. Under the provisions of the New^ Zealand Act relating to a sale under the conduct of the Regis- trar of the Supreme Court, it has been decided that the Registrar has no power to fix a reserve price {Hamilton v. Bank of New Zealand, 24 N. Z. L. R. 371). In Re Smi Life Assurance Co. the history of the power of sale is outlined. When the Torrens system was first introduced into the North- West Territories, in 1886, the power of sale was given by the statute instead of by the nioi-tgage, Ijut it was in much the same terms as is 68 TORRENS SYSTEM MORTGAGES. usually given by the mortgage, and it was auth- oi'ized to be exercised without supervision. It is probably true that the Registrar, before registering a transfer from a mortgagee to a pur- chaser, had both a right and duty to see that the mortgagee had the right to make the sale, but the method and the conditions of the sale were left practically entirely in the hands of the mortgagee. When the Land Titles Act, 1894, chapter 28, was passed a new principle was applied. The power of sale was still given, but was not permit- ted to be exercised without supervision. The Reg- istrars of land titles were still the i^ersons who had been Registrars of deeds under the old system before 1886, and the power of supervision was not given to them, but reposed in a Judge. It was only subject to the direction of a Judge that a sale could be made, and a sale could only be made sub- ject to the conditions he imposed, and the transfer from the mortgagee could only be registered when the sale had l)een confirmed by a Judge. As the proceedings were thus in fact before a Judge, it probably being considered that the_v might as well be so in name also, in 1898 another change was made, and the powder of sale given by the statute was wiped out entirely, and the mortgagee was required to resort to the Court to obtain a sale. Though there was no statutory provision tliat a mortgagee under the statutory mortgage of the Act should have the same rights as a mortgagee under the old mortgage deed, yet the Courts ap- ])]ied in a general way the j)roceedings under the old mortgage, and that practice continTied until TOREENS SYSTEM MORTGAGES. 69 last year (1915), ^Yhen the present provisions con- tained in section 62a were first enacted. In 1908 the Judges of the Court formulated certain rules of practice for mortgage actions. It was pointed out that as the mortgage was only a security, the mortgagee's right was in the first in- stance a right of sale, and not as under the old mortgage a right of foreclosure, which term, though scarcely appropriate, has continued to be applied to our mortgage proceedings. In essentials the provisions of the Act are now back to what they were under the Act of 1894, be- fore its alteration. The fact that the person desig- nated in that Act as supervisor w^as a Judge instead of a Registrar is unimportant; his powers and duties were conferred upon him by the Act, and did not exist by virtue of his being a Judge of the Court. In Be Sun Life Assurance v. Widmer, 9 W. W. R. 961, Harvey, C.J., seems to disapprove of the proposition that a contractual power of sale may take the place of that conferred by the Statute, but the point seemed not to have arisen in the case, and the language of the learned Judge is at least am- biguous. Where land has been knocked down to a pur- chaser at a mortgage auction sale held under the order of the Registrar, the deposit paid, and the conditions of the sale signed, but the contract has not been carried out, the Registrar has no power to direct a resale, or to deal further with the land, excepting under the direction of the Court {Ue Duty of Registrar in Mortgage Proceed- 70 TORRENS SYSTEM MORTGAGES. ings, 1917, 1 W. W. R. 331 (Sask.) ), but after an abortive sale he may apparently ratify a private sale which has been made without notice, and with- out authority, if he is reasonably satisfied that the mortgagor has no beneficial interest in the lands (Re Sale of 31 ort gaged Lands hy Private Contract, 5W. W. R. 1328 (Sask.)). The failure to serve a person who joined in the covenants of a mortgage with notice of mortgage proceedings is not fatal to the proceedings, but the Registrars are instructed that the name of the co- covenantor should be mentioned in the memoran- dum of registration of the mortgage on the title, and the Registrar is justified in requiring service of notice of intention to exercise the power of sale, and all subsequent proceedings, on such co-coven- antor, unless the mortgagee has consented to waive his rights on the covenants against the co-coven- antor {Be Co-covenantors cfc Merger, 1917, 1 W. W. R. 1084 (Sask.) ). The Registrar is justified in refusing to merge any mortgage in the title, even if requested to do so, as the doctrine of merger, in the opinion of the Master of Titles, does not fit in with the Torrens System, and while a practice has grown up in the province of merging caveats on the title passing to the caveator, at the request of the parties inter- ested, there should be no extension of the practice to other instruments, such as mortgages (S.C-). A right to receive notice of intention to exer- cise the power of sale has been held in Australia to be capable of waiver (In CampJ)ell v. Commer- cial Bank, 2 N. S. W. R. 375; Piihlic Trustee v. TORRENS SYSTEM MORTGAGES. 71 Morrison, 12 N. Z. L. R. 423, and Wilsori v. Macin- tosh, 1894, A. C. 129; 63 L. J. Ch. 49). In the last cited case the respondent lodged an application in the office of the Registrar-General to bring certain land under the Act N. S. W., and the appellant filed a caveat, but took no proceed- ings to establish her title. More than three months after lodging the caveat the respondent stated a case for the opinion of the Supreme Court, and obtained an order of the Court directing the aj)- pellant to state a case on her behalf. On subse- quent motion by the respondent to have the caveat set aside on the ground that the appellant had failed to take proceedings within three months after the filing of the caveat, the Privy Council held that he had waived the lapse by stating a case, and applying for an order for the appellant to state her case. *' Their Lordships," runs the judg- ment, " are of opinion that the maxim qiiilihet po- test renunciare juri pro se introducto applies to this case, that it was competent for the applicant to waive the limit of three months, and the lapse of the caveat by section 23, and that the respondent did waive it by stating a case and applying for and obtaining an order upon the appellant to state her case, both which steps assumed and i^roceeded on the assumption of the continued existence of the caveat." Their Lordships quoted with approval the observations of the Chief Justice of N. S. W. : '' It is to my mind a clear principle of equity, and I have no doubt there are abundance of authorities on the point that equity will interfere to prevent the machinery of an Act of Parliament being used '<' TORRENS SYSTEM MORTGAGES. by a person to defeat equities which he has himself raised and to get rid of a waiver created by his own acts." It has been held that the power of sale con- tained in a mortgage under the Land Transfer Act of 1908, N.Z., does not include a power to exchange {Taylor v. Parkinson, 31 N. Z. L. R. S. C. 354). There is considerable distinction between the powers of sale conferred by the Australian Acts and those given in Canada, in which the mortgagee is given power to sell upon such terms as he may think fit, a distinction which has been drawn attention to • by Harvey, C. J., in Re Sim Life Assurance Co. v. Widmer, 9 W. W. R. 961. In this case he says:' '' The title can be transferred from one person to another only by the act of the Registrar, and an assurance fund is pro- vided to which recourse may be had in case the Registrar makes a mistake and deprives someone improperly of his land. It is apparent then that while a purchaser, or any person subsequently dealing with the land, under the old system must satisf.y himself and take the chances of the power of sale having been properly exercised, under the new system he may place implicit reliance on the act of the Registrar which insures his title." Under the New Zealand Act it has been held that a mortgagee is not a trustee for the mortgagor of the jiower of sale, though he must exercise the power in good faith (see Miles v. Hussey, ante). A mortgagee under the Victorian Acts is bound to take reasonable means to obtain a fair price TORRENS SYSTEM MORTGAGES. 73 (Gunn V. Land Mortgage Bank of Victoria, 12 A. L. T. 49). He cannot sell for a lump sum land comprised in a statutory mortgage and other land (Ross v. Victorian Permanent Building Society, 8 V. L. R. (Eq.) 254) ; nor (senihle) several pieces of land inortgaged by different mortgages by one mort- gagor. The registration of a transfer executed for the purposes of the sale vests the interest of the owner of the property in the purchaser, discharged " from any mortgage lien, charge or encumbrance created by any instrument registered subsequent thereto. ' ' Under the Xew Zealand Act, which provides that the registration of a transfer passes the in- terest of the mortgagor discharged from all lia- bility on account of " any estate or interest regis- tered subsequent thereto," it was held that, if the mortgagee sells expressly subject to a term of years created subsequently to the mortgage by the mortgagor, the purchaser cannot avoid the term: Thomson v. Finhii/ (1886), N. Z. L. R. 5 S. C. 203. It ought to be noticed in this connection that the interest of the mortgagor at the time of the sale in the mortgaged premises may be greater than it was at the time of the mortgage (see Smith v. Davy, 2 N. Z. L. R.'S. C. 398). A purchaser from the mortgagee is not to be answerable for the loss, misapplication or non- application, or l)c obliged to see to tlie application of the purchase money by him paid, nor shall he 74 TORRENS SYSTEM MORTGAGES. be obliged to inquire as to the fact of any default or notice having been made or given as aforesaid, or how the purchase money to arise from the sale of any such land, CvState or interest shall be applied (Alta. s. 62a (7), Man. s. 120, Sask. s. 93 (4). It seems to be by no means clear to whom the protection given by these clauses will extend. Will a purchaser who receives notice of the ab- sence of some of the conditions precedent before his transfer is registered, be entitled to compel his own registration, or if registered, will he then have a title, which is perfect as against the mort- gagor? No doubt he could pass a perfect title to another. In McDonald v. Roive, 3 A. J. R. 90, Moles- worth, J., thought that a purchaser was protected from the date of his contract, but he afterwards doubted the truth of this dictum in Ross v. The Victorian Permanent Building Society, 8 V. L. R. (Eq.) 254 at 265. A purchaser who has been registered is pro- tected by the section {Jones v. SellicU, 6 S. A. L. R. 13; Van Damme v. Bloxam, 9 S. A. L. R. 27). See further as to the date of the commencement of protection: PuMic Trustee v Arthur, 25 S. A. L. R. 78 (date of contract) ; and contra, Cowell v. Stacey, 13 Y. L. R. 84, and George v. A. M. P. Society, 4 N. Z. L. R. S. C. 165. This vesting of the interest of the ow^ner is to take place upon the registration of the instrument of transfer: (Man. s. 121; Sask. s. 93 (5); Alta. s. 62a (9)), and, accordingly, it has been said that TORRENS SYSTEM MORTGAGES. 'J'5 the policy of the Act (Vict. — a similar provision) is to give security to transferees whose titles have been completed by the issue of new certificates, but not before (London Chartered Bank of Aus- tralasia V. Hayes, 2 V. R. (Eq.) 104; see also Kick- ham V. The queen, 8 V. L. R. (Eq.) 1, 250). As to execution after abortive sale in Alberta, see note at end of book. In Ex parte H assail, 10 S. C. R. (N.S.W.) 292 at 299, it was said that before registering a trans- fer from the mortgagee to the purchaser at a sta- tutory sale, there should, where the money is pay- able on demand, be proof of the demand having been made and of default having happened and continued, and also of service of the statutory notice. The N. S. W. statute, however (s. 9), directs I'egistration upon proof, '' that such default has been made and continues. ' ' See further: National Bank of Australasia v. Hand-in-Hand, dec., Co., 4 A. C. 391 at 407. [Memo: — By amendment 1917 in Alberta the purchase moneys received under a sale under the Registrar, the money is paid directly into Coui"t, and the surplus after paying costs and the mort- gagee is paid out on a judge's order to subsequent mortgagees, etc., and to the owner or beneficial owner as his interest may appear.] 76 TORRENS SYSTEM MORTGAGES. CHAPTER XII. Express Power of Sale. A mortgagee must not be regarded as a trustee of the power of sale, and his exercise of the power will not be interfered with by the Court, provided he has exercised his power bona fide (the exist- ence of which bona fides is to be decided by all the circumstances of the case), for the purpose of realizing his security, and has taken reasonable precautions to secure a proper price (see Jen- kms V. Jones, 2 Giff. 99 ; Farrar v. Farrars, Ltd., 40 C. D. 395; Kennedy v. de Trafford, [1897] A. C. 180, and Nutt v. Easton, [1899] 1 Ch. 873). The motive of the mortgagee is immaterial (Nash V. Fads, 25 Sol. Jo. 95, but see Pooley's Trustee v. Wlietham, 33 C. D. 111). A sale may be made on the terms that the whole money may remain on a mortgage, and the mortgagee can sell on credit (Tlmrlow v. Macheson, 4 Q. B. 97 ; Farrar V. Farrars, Ltd., supra, and Lockhart v. Yorkshire Guarantee and Securities Corporation, Ltd., 14 B. C. R. 28). The sale may be set aside if there has been fraud or conduct amounting to fraud, e.g., if the price has been so low as to l)e in itself evidence of fraud (Nutt V. Easton, [1900] 1 Ch. 29 ; Warner v. Jacob, 20 C. D. 220; Bettyes v. Maynard, 31 W. R. 461; Haddington Island Quarry Co. v. Htison, [1911] A. C. 722, and Canada Permanent Mortgage Cor- poration V. Jesse (sale for 25 cents), 11 W. L. R. 295). The mere fact that the sale is disadvantage- ous is insufficient to warrant interference by the TORRENS SYSTEM MORTGAGES. '^^ Court (Colson v. WilUams, 58 L. J. Ch. 539, and cases supra) . The consequence, however, of not selling with proper precaution, is that the mortgagee will be charged in taking the accounts, with any loss that results from such want of precaution (Wolff \. Vanderzee, 17 W. R. 547). See also as to negli- gence Carruthers v. Hamilton, 12 Man. L. R. 60, and for a case of a mortgagee trying to take ad- vantage of his own negligence, see Fox v. Hunter, 12 W. L. R. 87. The mortgagee selling under a power as dis- tinct from a mortgagee selling under the Land Titles Act, etc., is entitled to insert what conditions of sale he may please, if such conditions of sale are ordinary ones (Falkner v. Equitable Re- versionary Soc, 4 Drew, 352; Kersliaw v. Kaloir, l.Jur. K S. 974). He may employ agents if he selects such as are presumably competent, though he may be liable for a serious blunder on the part of the agent {Tomlin \. Lute, 41 Q. D. 573). A mortgagee cannot sell to himself, nor to him- self and others, nor to a trustee for himself (Downs V. Grazehrook, 3 Mer. 200; Robertson v. Norris, 1 Gift*. 421; National Bank of Australasia v. United Hand-in-Hand and Band of Hope Co., 4 A. C. 391; Asfn-ood v. Cohbold, [1894] A. C. 150; Farrar v. Farrars, Ltd., 40 0. I). 395; Mitehell v. Rutherford, 12 AV. L. R. 55). The mortgagee cannot sell to an agent, e.g., the officer of a company who is a mortgagee, and who 78 TORRENS SYSTEM MORTGAGES. is concerned with the conduct of the sale, or to a so- licitor who has the conduct of the sale (Whitcoml) V. Minchin, 5 Madd. 91 ; Orme v. Wright, 3 Jur. 19 ; Be Bloye Trust, 1 M. & G. 488; Martinson v. Clowes, 21 C. D. 857; Hodson v. Demies, [1903] 2 Oh. Q^lxNiitt V. Easton, [1899] 1 Ch. 873). A second mortgagee may purchase the pro- perty on his own account from the mortgagee, whether he is in possession or not (Kirkivood v. Thompson, 2 DeG. J. & Sm. 613 ; Kennedy v. De Traford, [1897] A. C. 180; Union Bank v. Bates, 6 W. W. R. 170). Where a first mortgagee has notice of claims of subsequent incumbrancers, he is liable for paying these surplus proceeds to the mortgagor (TF. Lon- don Commercial Bank v. Reliance Permanent Bldg.Soc, 29 C. D. 954). A proviso in a power of sale which relieves a purchaser from enquiry as to any irregularity does not protect him where he knows of an irregularity ; at any rate if that irregularity is one which could not be waived (Selwyn v. Garfitt, 38 C. D. 273). Sale in Lieu of Foreclosure. Under the Chancery Procedure Amendment Act, 1852, there is a statutory jurisdiction to di- rect a sale instead of foreclosure, on the request of the mortgagee or of any person interested either in the mortgage money or the equity of redemp- tion, but such request is a condition precedent to the exercise of the power of granting a sale (Can- ada Life Assurance Co. v. Vance, 12 W. L. R. 231 ; Colonial Investment Co. v. Weine, 7 W. W. R. 672 ; TORRENS SYSTEM MORTGAGES. 79 see also Excelsior Life v. Prestniak, 1 Sask. L. R. 215). It has been held in Credit Fonder v. Schultz, 10 Man. L. R. 158, that the Court has no power to direct the sale of mortgaged property after fore- closure has been ordered, without the consent of the defendant, although it be shown that the mort- gaged premises are not worth the amount due under the mortgage. After an order nisi for foreclosure has been made, the Court may direct sale (/. I. Case Co. V. Preston, 12 W. L. R. 12, following Union Bank of London v. Ingram, 20 C. D. 464; S. W. District Bank v. Turner, 31 W. R. 113, and Weston \. Davidson, W. N. 1882, p. 28, the last case de- ciding that where an application to enlarge the time for payment is pending, the sale may be or- dered on motion for foreclosure absolute). An order for foreclosure absolute may be made after an order for sale (Lloyd's Bank, Ltd. v. Cols- ton, [1912] W.N. 6). This last mentioned power to order a sale is exercised where the primary remedy on the secur- ity is foreclosure, but in other cases a sale may be ordered under the general jurisdiction of the Court as the appropriate method of enforcing the secur- ity, as for instance where the security is unpro- tected : MacKenzie v. Robinson, 3 Atk. 559, or is de- ficient: Kinnoul v. Money, 3 Swan 202n., or where the mortgagee is also the trustee of the equity of redemption: Tennant v. Trenchard, 4 Ch. 537, or unless the mortgagee has or is entitled to have a 80 TORRENS SYSTEM MORTGAGES. moi'tgage containing a power of sale: Lister v. Turner, 5 H. 281 ; Woof v. Barron, 1873, W. N. 71. Under Lord Cranworth's Act, 1860, the power of sale was given in the case of mortgages oi* charges made to secure loans or debts, and under it the mortgagee had power to convey the property sold for all the interest which the mortgagor had power to dispose of, with power to call for the title deeds and to call for a conveyance of the legal estate if it was outstanding in a trustee for the mortgagor, so that an equitable mortgagee in fee from a mortgagor who had the legal estate- could convey the legal estate (Re Solomon aufl Meagher's Estate, 40 C. D. 508), or a mortgagee of leaseholds by sub-demise could convey the entire residue of the term (Hiatt v. Flilhnau, 19 -W. R. 694). It does not appear that where no express pi'o- vision is made as to notice there need be any notice given of the intention to exercise the power of sale ; thus in the Dominion Trust Co. v. Botver, 3 W. L. R. 157, Irving, J., held that he was im- able to deduce from the authorities any equity under which a sale under a i^ower of sale in a mortgage, silent on the question of notice, when no notice had been given either to the mortgagor or a second mortgagee, could be held to be invalid. However this may be, it has been held that where the power of sale is made exercisable at any time after default, such a provision may be considered as oppressive (see Miller v. Cooky 10 Eq. 641) ; though it would not be considered as op- pressive where the mortgage is to secure an exist- TORRENS SYSTEM MORTGAGES. 81 ing debt which is being pressed for, or where the subject matter of the mortgage is hazardous (Pooley's Trustee v. Whetham, 33 C. D. Ill C. A.). Where the power is exercisable on demand, reasonable time must be allowed to the mortgagor to comply with the demand (Rogers v. Mutton, 7 H. &N. 733). As to what amounts to sufficient notice see Lock- Jiart V. Yorkshire Guarantee dt Securities Cor. Ltd., 9 W. L. R. 182, and for a case where there was no notice, but the mortgagor stood by and let the sale proceed, see Gamphell v. Imperial Loan Co., 8 W. L. R. 501. Where a sale was made for 25c., it was set aside {Canada Permanent Mortgage Co. v. Jesse, 11 W. L. R. 295). The sale is good though it does not profess to be made under the power {Lockliart v. Yorkshire/ s Guarantee d' Securities Cor. Ltd., supra). As to sale before foreclosure absolute, see de Beck V. Canada Permanent Mortgage Cor., 4 W. L. R. 91, and Williams v. Sun Life Assurance Co., 19 W. L. R. 564. Leave to bid at a sale by the Court should not be given to a mortgagee or other person who is selling land to realize a lien, and who has the conduct of the sale, save under very special circum- stances; generally speaking, where a man's duty and interest in respect of purchase conflict, he cannot become the purchaser of the thing sold (Crotvn Life Insurance Co. v. Clarke, 9 W. W. R. ^2 TORRENS SYSTEM MORTGAGES. 333; Griesbach \. Ilocjan, 8 W. W. R. 356, disap- proved). In Dakota Lumber Co. v. Rinderknecht^ 1 W. L. R. 481, it was stated that leave to bid is never re- fused to the plaintiff. Wliere the mortgagee sells under a power, he is not precluded from suing on the covenant for pa^^ment in the event of the sale not realizing enough to pay otf the mortgage (Budge v. Richens, 8 C. P. 358 j Barker's Claim, [1894] 3 Ch. 290; Crotty V. Taylor, 8 Man. L. R. 188). After a mortgagee has obtained a decree nisi of foreclosure, he camiot sell under a power of sale without the consent of the Court (Stevens v. Theatres, Ltd., [1903] 1 Oh. 857). TORRENS SYSTEM MORTGAGES. ^3 CHAPTER XIIL Redemption. If there is a time fixed for redemption, the right to redeem cannot be exercised before that time: (Brotvne v. Cole, 14 Sim. 427), unless such date is more than five years from the date of the mort- gage. In that event any person entitled to redeem a mortgage made since July 1st, 1880, can, in effect, redeem by paying the amount due, together with three months' further interest (The Interest Act, R. S. C. 1906), except where the mortgage is given by a joint stock company or other corporation. Where a mortgagor by conveyance of the legal estate desires to redeem, he must by a rule of prac- tice give six months' notice of his intention to do so or pay six months' interest (Brotvn v. Lockhart, 10 Sim. 424 ; Smitli v. Smith, 1891, 3 Ch. 552 ; Arch- hold V. Building & Loan Association, 15 O. R. 237). As to necessity of a fresh notice on expiry of the six months without payment : see Be Moss, 31 C. D. 90. This rule does not apply to an equitable mort- gage by deposit of title deeds {Fitzyer old's T trus- tee V. Mellersh, [1892] 1 Ch. 385, and Spencer Bell V. L. S. W. Railway Co., 33 W. R. 771). Nor, it seems, would it be applied where the transaction is not a mortgage in the proper sense of the word, but a mere hypothecation giving only a right of realization by judicial process in case of non-pay- ment of the debt (see Johnson v. Shippen, 2 Lord Raymond 982). ^"^ TORRENS SYSTEM MORTGAGES. In Re Pamhrun v. Short, 6 W. W. R. 68, it was held by Beck, J., that the rule did not apply to Alberta. The rule is dealt with in Manitoba by R. S. M., 1902, chapter 115, section 7. The rule has been held good in Australia: see Cape V. Trustees of Savings Bank, 14 N. S. W. Eq. 204. The rule has been held to apply where there was no proviso for redemption, but the security was a conveyance on trust for sale {Bell v. Carter, 17 B. 11). An enlargement of time for redemption is. not granted as a matter of course (Re Parhola, Ltd., [1909] 2 Ch. 437), but will be granted where the security is ample, and the mortgagor has a reason- able probability of obtaining sufficient nioney to satisfy the mortgage : Forrest v. Shore, 32 W. R. 356; Idington v. The Trusts and Guarantee Co., [1917] 2 W. W. R. 154; or where there has been a hona -fide mistake {ColUnson v. Jeffery, [1896] 1 Ch. 644). It appears that if application be made before the day fixed for payment, the reason need not be a strong one {Nanny v. Edwards, 4 Rus. 124; Eyre V. Hanson, 2 B. 478). More than one enlargement of the time can be obtained (see Edtvards v. Ciin- liffe, 1 Mad. 287). An enlargement has been obtained even after order for foreclosure absolute {Ford v. Wastell, 6 H. 229; 2 Ph. 591, and Thornhill v. Manning, 1 Sim. (N.S.) 451). TORRENS SYSTEM MORTGAGES. 85 The granting to a mortgagor of an extension of the time for redemption is a matter for judicial discretion, which will not be interfered with by an Appellate Court, unless the discretion has been ex- ercised upon a wrong principle {McGregor \. Peterson, 10 W. W. R. 349). An enlargement of time is more readily granted to a second mortgagee (see Cameron \. Rutledge, 2W. L. R. 473). From that case it appears that the ordinary time allowed for the redemption of mining pro- perties in the Yukon Territory is two months. Any person entitled to redeem may tender the amount due to the mortgagee, whom it is his duty to find, at any time of the day appointed, when it is light enough to count the money (Wade/s Case, 5 Coke 114a). The necessity of tender has been dealt with in Hammond v. Strong, 6 W. L. R. 694, and 8 W. L. R. 362, and in Western Trust Co. v. Popham, 2 W. W. R. 297. where it was held that a mortgagee right- fulh^ commencing an action to enforce his mort- gage securit}' is entitled to prosecute that action until he has been paid or tendered his money, and is consequently entitled to the costs incident to such prosecution, and cannot be compelled to tax his costs until he gets his money. In order to deprive a mortgagee of his costs there must be paid or ten- dered to him the amount of principal and interest necessary under the Act to relieve the mortgagor of the consequences of his default, and to place the mortgage in good standing. If the mortgagor 86 TORRENS SYSTEM MORTGAGES. does this, the mortgagee is only entitled to costs to that date. The general principles of tender are as follows : A person cannot redeem before the time appointed even though he tenders both the principal and the interest to that time (Brown v. Cole, 14 Sim. 427). In order to make an effectual tender, the mort- gagee must tender the full amount due (including principal, interest and costs) in legal currency: {Sentance y. Porter, 7 H. 426; Letvis v. Wehher, 1876, W. N. 178), and must produce the actual money to the mortgagee unless the latter waives the production (Douglas v. Patrick, 3 T. R. 682; Powney v. Blomherg, 8 Jur. 746; Lake v. Biggar, 11 U. C. C. P. 170; Long v. Ljong, 17 Or. 251). Tender by cheque may be ineffectual, as where made to an agent without authority to receive (Blu7nherg v. Life Interests Corporation, [1897] 1 Ch. 171), but may be good where the creditor does not object (Polglass v. Oliver, 2 C. & J. 15, and Jones v. Arthur, 8 Dowl. P. C. 442). The tender must be unconditional, but it may be made under protest (Siveny v. Smith, 7 Eq. 324; Peers v. Allen, 19 Gr. 98 ; Greenwood v. Sutcliffe, [1892] 1 Ch. 1). Where a place for payment is named in the mortgage deed, the tender should be made there; otherwise it should be made to the mortgagee or to his agent. The tender must be made by the person who has a prima facie right to redeem, and not by a stranger. TORRENS SYSTEM MORTGAGES. 87 After a proper tender interest and all subse- quent costs stop : Bishop v. CUurcli, 2 V. Sen. 371 ; Garforth v. Bradley, 2 Ves. Sen. 675, and Knapp v. Bower, 17 Gr. 695. A mortgagee may, by an improper refusal to accept money properly tendered, lose his right to receive costs, or even be ordered to pay the costs where he renders necessary an action of redemp- tion (Harmer v. Priestly, 16 B. 569, and Bank of New South Wales v. O'Connor, 14 A. C. 273), or commences an action of foreclosure (Smith v. Green, 1 Coll 555). A tender may have the eif ect of stopping the running of interest, even although it has not been such a tender as would afford a defence at law (WeU V. Crosse, [1912] 1 Ch. 323). After sale proceedings regularly taken by a mortgagee of land under the Real Property Act, R. S. M. 1902, chapter 148, pursuant to sections 108 to 112 inclusive, whereby the property is sold to a hona fide creditor, who makes the first payment called for by the terms of the sale, and binds him- self to complete the purchase,4t is too late for the mortgagor to apply for redemption, even if the purchaser has made default in strict compliance with his agreement. The fact that in such a case the purchaser has not yet received his transfer from the mortgagee makes no difference : Saltman V. 3IcColl, 19 Man. L. R. 456. In that case National Bank of Australia v. United TIand-in-Hand and Band of Hope Co., 4 A. C. 391, was distinguished as having been a case of collusion and pretended and fictitious sales. 88 TORRENS SYSTEM MORTGAGES. The mere fact that a mortgagee claims more than he is entitled to is not sufficient to deprive him of his costs : Hodges \. Croydon Canal Co., 3 B. 86, and In re Watts, 22 C. D. 5. If the plea of tender is to be successful at law, two. matters are requisite, first that the defendant must not only make the tender, but must always be ready to perform entirely the contract upon which the action is founded, and secondly, that the plea must be accompanied b}^ payment into Court, and in any event the Court must be satisfied of the existence of the continued readiness to pay, which both at law and in equity is essential to the success of a plea of tender (Kinnaird v. Trollope, 42 C. D. 615). As to the necessity of keeping money ready, see also Gyles v. Hall, 2 P. W. 378; Dixon v. Clark, 5 C. B. 365, and Knapp y. Bower, 17 Gr. 695. The Court has no power under the Saskatche- wan Land Titles Act to open up a foreclosure after a certificate of title is issued to the transferee of the moi-tgagee (Richards v. Thompson, 18 W. L. R. 179). Any person may redeem who has any interest in the equity of redemption of any part of the mortgaged property (see Tarn v. Turner, 39 C. D. 457, where a person holding under the mortgagor by an agreement on the part of the latter to grant a lease was held to have such an interest). In that case Cotton, L.J., said: " The interest which he got from the mortgagor makes him to a certain extent an assignee of the equity of redemption, and TORRENS SYSTEM MORTGAGES. 89 therefore entitled to all the rights which appertain to the owner for the time being, however small his interest in the equity of redemption may be with regard to the duration of time. ' ' A judgment creditor who has proceeded far enough to obtain a charge on the mortgaged land is interested in the equity of redemption, and is entitled to redeem (In re Parhola, Ltd., [1909] 2Ch. 437). Where a mortgagor has sold an equity of re- demption and is thereafter sued upon the covenant for the mortgage debt, he then becomes entitled to redeem, subject to any equity of redemption there may be in his assignee or any other person (Kin- naird v. Trollope, 39 C. D. 636). Where there are several successive mort- gages, an intermediate mortgagee, say the third mortgagee of four mortgagees, cannot redeem the mortgages prior to him without foreclos- ing the mortgagee subsequent to him and the mortgagor, though he might foreclose such sub- sequent mortgagee and the mortgagor without re- deeming the prior mortgages. This rule is gen- erally formulated in the shape of a statement that a puisne mortgagee may foreclose without redeem- ing, but caimot redeem without foreclosing (see Teevan v. Smith, 20 C. D. 724). A person who has contracted to buy the equity of redemption cannot, before his purchase is com- pleted, sue to redeem (Tasker v. Small, 3 My. &C. 63). !^0 TORRENS SYSTEM MORTGAGES. In an action for redemption under the ordin- ary procedure, it is essential to make all neces- sary parties defendants, e.g., the mortgagee or his personal representative or transferee {Chmnhers V. Goldtvin, 9 V. 269), cestuis que trust or their trustees, and sub-mortgagees (Yates v. Hambly, 2 Atk. 237, and Holart v. Allot, 2 P. Wms. 643), second mortgagees {Bolton v. Salmon, [1891] 2 Ch. 48). The best test for ascertaining who should be parties to a foreclosure or redemption action is, who are interested in the taking of the account ? It has been suggested (see Trust and Agency Co. V. Marktvell, 4 S. C. R. Q. 50, and generally, Greig v. Watson, 7 V. L. R. 79) that there can be no such thing as an action for redemption in mort- gages under the Torrens system, inasmuch as an action for redemption seems to postulate the exist- ence of an equity of redemption, and in the case of a Torrens mortgage there can be no equity of redemption, inasmuch as the remedy at law (viz., an action to compel vacation of the mortgage by the mortgagee) is sufficient, and there can be no reason to invoke the principles of equity. (See as to the analogous case of a pledge of goods, the special property wherein, temporarily existent in the pledgee, determines on tender of the money due, Martindale v. Smith, 1 Q. B. 389, and Bank of New South Wales v. O'Connor, 14 A. C. 482). The phrase ^' equity of redemption " is however in constant use in connection with these mortgages, so much so as to have become ratified by usage, TORRENS SYSTEM MORTGAGES. 91 even if there were no such authority for suggesting that not only is the term correct, but also that an ordinary action for redemption may be brought under a Torrens mortgage, as is presented by the judgment of the Privy Council in National Bank of Australia v. United Hand-in-Hand Company, 4 A. C. 391. It does not appear to be quite correct to deny the existence of an equity of redemption after a Torrens mortgage has been given. Lord Parker in Kreglinger v. Netv Patagonia Meat and Cold Storage Co., 83 L. J. Ch. 79, care- fully distinguishes between the equity to redeem, which arises on failure to exercise a contractual right of redemption, and the equitable estate which, in the case of a mortgage by conveyance of the legal estate, remains from the first in the mort- gagor, and is sometimes referred to as an equity of redemption. " In the case of a mortgagor merely charging a property with payment to the mortgagee of a sum of money, not only does the mortgagee take no interest at law in the property charged, but there is no contract for reconveyance at all. The right to redeem is from the very outset a right in equity only, and it is merely the right to have the property freed from the charge on payment of the moneys charged thereon. If the charge is for payment of a specified sum on a specified day, payment on that day will set the property free; and if the day passes w^ithout payment there will still be «n equity to have the property so freed notwithstanding any ^2 TORRENS SYSTEM MORTGAGES. provision in the nature of a penalty, such final provision being a clog on the equity. The differ- ence between transactions! by way of equitable charge and transactions by way of conveyance be- ing chiefly important when, for the purpose of determining whether a particular stipulation ought or ought not to be rejected for inconsistency or repugnancy, the nature of the transaction be- tween the parties has to be investigated." For examples of the use of the term in Aus- tralia, see Coleman v. De Lissa, 6 N. S. W. Eq. 104, and Nioa v. Bell, 27 V. L. R. 82. TORRENS SYSTEM MORTGAGES. 93 CHAPTER XIV. Clogs ox Redemption. The rule against fetters or clogs on the redemp- tion is stated by Lord Parker in the case of Kreg- linger v. New Patagonia Meat and Cold Storage Co., 83 L. J. Ch. 79, at 91, as follows : ^' The equity which arises on failui'e to exercise the contractual right cannot be fettered or clogged by any stipula- tion contained in the mortgage or entered into as part of the mortgage transaction.'' In that case the doctrine of the clog upon the redemption, and the standard cases thereon {NoaJ^es cC- Co. \. Rice, 71 L. J. Ch. 139, [1902] A. C. 24; Bradley v. Carritt, 72 L. J. 471, [1903J A. C. 253 ; Samuel v. Jarrah Tiniber & Wood Cor- poration, [1904] A. C. 323, and Santley v. Wilde, [1899] 2 Ch. 474), were considered afresh. The rule was laid down that there is now no rule in equity which precludes a mortgagee, whe- ther the mortgage be made on the occasion of a loan or otherwise, from stipulating for any col- lateral advantage, provided that such collateral advantage is not either imfair or unconscionable, in the nature of a penalty clogging the equity of redemption, or inconsistent with or repugnant to the contractual and equitable right to redeem. The facts of the case were that the appellants advanced money to the respondents upon the secur- ity of a floating charge over all their property pre- sent and future, and ^agreed that the payment should not be demanded for a period of five years, but the respondents were to be able to repay the debt at an earliei- period on giving notice. The i^4 TORRENS SYSTEM MORTGAGES. agreement also contained a provision that the bor- rowers should not sell any sheep skins to any purchasers other than the lenders for a period of five years from the date of the agreement, so long as the lenders were willing to purchase the same at an agreed price. The loan was paid off before the expiration of the five years, but in the opinion of the House of Lords, the option of purchasing the sheep skins was not terminated, but continued for the period of five years. In the course of his judgment, Lord Parker stated, '* I think that the ruie depends upon the inconsistency or repugnancy involved in any such provision. If once you come to the conclusion that the parties intended that the property should bo redeemed on payment of the moneys secured, any provision which would prevent this must be re- jected as inconsistent to and repugnant to the true intention. But, on the other hand, if you once come to the conclusion that this was not the real in- tention of the parties then the transaction is not one of mortgage at all." It should be noted that the provision, in order to be a clog, must form part of the mortgage agree- ment {Reeves v. Lisle, [1902] A. C. 461). There may be a provision giving the right to redeem for a reasonable time (see Teevan v. Smith, 20 C. D. 729 ; Biggs v. Hoddinott, [1898] 2 Ch. 307 ; Morgan v. Jeffreys, [1910] 1 Ch. 620; and Fair- dough V. Stvan Brewery Co., Ltd., [1912] A. C. 565) ; but thirty years is too long a time {Talbot v. Braddill, 1 Vern. 183, 394). A provision which gives the mortgagee the right to extraneous advan- tages during the period of the mortgage only is TORRENS SYSTEM MORTGAGES. 95 not a clog (Biggs v. Hoddinott, supra), but even where this extraneous advantage stops with the mortgage, the Courts regard it with suspicion {James v. Kerr, 40 C. D. 449. See also Staples v. Mackay, 11 N. Z. L. R. 258.) The provision is a clog if the effect of its exer- cise would be to prevent an inchoate right of re- demption ever arising (Samuel v. Jarrah Timber d Wood Corporation, Ltd., supra) . A provision making the total sum due upon a mortgage bond, given to secure instalment pay- ments, enforceable on default in payment of any instalment, is not to be considered a penalty (Wal- lingford v. Mutual Society, 5 A. C. 685). For further cases as to right of limiting or postponing the right to redeem, see Mellor v. Lees, 2 Atk. 495; Cowdry v. Day, 1 Giff. 316; Field v. Hopkins, 44 C. D. 524, and British South Africa Co. Y. DeBeers, [1910] 1 Ch. 354, [1910] 2 Ch. 502, [1912] A. C. 52. Where a person having an interest in land as heir-at-law of a deceased owner assigns such in- terest in consideration of an advance of money on the security thereof, and at the time of executing such assignment also executes a separate instru- ment, giving the person so advancing the money an option to purchase the property, and also gives him a promissory note for the amount advanced, the assignment, although it is absolute and gives a power of attorney to the person advancing the money authorizing him to sell, mortgage or other- wise dispose of the property, will be held an equit- able mortgage to secure the advance, and the option will be held a clog on the equity of redemption, and 9(> TORRENS SYSTEM MORTGAGES. therefore void (Arnold v. National Trust Co., 3 W. W. R. 183). Where a loan is obtained from an insurance company on the security of a mortgage, and at the same time the mortgagor takes from the same company a policy of insurance on his life, and in the mortgage assigns such policy as a collateral security for the repayment of the loan, the mort- gagor covenanting to pay the premiums, and the mortgage providing that the premium shall be a charge on the said lands, the effect of the agree- ment is that upon the company becoming indebted to the mortgagor or his estate upon his death, it may instead of paying him the debt, set it off at once against his debt to the company, although the latter has not entirely fallen due. By such an agreement it cannot be said that the company is getting a collateral advantage out of the necessity of the borrower. The fact that under such au agreement the premiums are not paid by the morl gagor, but are charged up by the compan}^ againsi the land, does not constitute a clog on the equity of redemption. The covenant to pay premiums is void after redemption of the mortgage, or payment of all debts secured by it. In such a case the in- surance company cannot be said to be keeping the policy alive merel.y for its own benefit. There is no objection to the securing, by one mortgage, debts or pecuniary obligations of a different nature or arising from dift'erent causes, provided none of the different obligations are of such a continuing nature that the possibility of redemption is clog- ged (Wiltse V. Excelsior Life Insurance Com- pany, 10 W. W. R. 1166.) TORRENS SYSTEM MORTGAGES. 97 CHAPTER XV. Foreclosure. A decree of foreclosure was technically a de- cree determining the equitable right of the mort- gagor to redeem after the mortgage estate became absolute at law (Bonham v. Newcomh, 1 Vern. 232 ; Sampson v. Pattison, 1 H. 533 ; Carter \. Wake, 4 C. D. 605). Under a mortgage by wa}^ of conveyance of the legal estate the mortgagee becomes absolute owner at law as soon as the redemption period has ex- pired, but an equity of redemption arises, by vir- tue of the interference of equity, to allow the mort- gagor to redeem, notwithstanding that his legal right of redemption is gone. In such a case, after a final order for foreclosure has been made, a new title vests in the mortgagee, and the beneficial own- ership in the land for the first time vests in him {Heatli V. Pugli, 6 Q. B. D. 345 at 360). An order for foreclosure directs accounts, payment of the sum found due, at a named time and place, within six months (12 months in Manitoba, see 1908, Edw. VII., c. 13), and reconveyance upon payment and foreclosure upon default. In case of a mortgage by deposit the order is prefaced by a declaration of charge, and directs conveyance by the mortgagor to mortgagee in case of default (see Seton, 7th ed., 1825, and forms). An equitable mortgagee who has taken a con- veyance of the equity of redemption, so that in the '>8 TORRENS SYSTEM MORTGAGES. event of paying off prior mortgages, he would have a right to call for the legal estate, or an equitable mortgagee b,y deposit of title deeds with or with- out a memorandum, is entitled to an order for foreclosure {Cox v. Toole, 20 B. 145). A Welsh mortgage, i.e., one which gives a -mere right to receive the income of the mortgaged property until the debt is satisfied, gives no right to foreclosure (Lonqiiet v. Scawen, 1 Y. 402, and Balfe V. Lord, 2 Dr. & War. 480.) It has been laid down that where there is a mere charge, without either an express or implied agree- ment for a legal mortgage, foreclosure is not the proper remedy {Tenncmt v. TrencJiard, 4 Ch. 537). A judgment debtor whose execution has become a charge on the land is entitled to foreclose {Jones Y. Bailey, 17 B. 582; Messer v. Boyle, 21 B. 559; see contra, Wells \. Kilpin, 18 Eq. 299). A mortgagee who has assigned the mortgage debt, but has expressly reserved the benefit of the security, is entitled to ask for foreclosure {Morley V. Morley, 25 B. 253). The transferee of a mortgage may claim fore- closure, subject, however, to payments of interest, or payments on account or in discharge of the capi- tal of the mortgage debt made by the mortgagor to the mortgagee, after, but without knowledge on the part of the mortgagor of the transfer {With- ingtou v. Tate, 4 Ch. 288; Haywood v. Gregg, 24 W. R. 157 ; Winiams v. Sorrell, 4 Y. 389 ; Re SoutJi- ampton's Estate, 50 L. J. Ch. 218 ; Dixon v. Winch, [1900] 1 Ch. 736; Turner v. Smith, [1901] 1 Ch. 213 ; Xioa v. Bell, 27 Y. L. R. 82). TORRENS SYSTEM MORTGAGES. 99 A judgment for foreclosure may be made in re- spect of land in another jurisdiction {Paget v. Ede, 18 Eq. 118; Toller v. Carteret, 2 Vern. 494; Colyer v. Finch, 5 H. L. C. 915 ; Ee Hawthorne, 23 C. D. 743, and Deschamps y. Miller, [1908] 1 Ch. 857). In an order for personal payment, the costs are limited to so much of the costs of the action as would have been incurred if the action had been Ijrougiit for payment only (Farrer v. Lacy, Hart- land and Co., 31 C. D. 42), and in such an action the statement of claim should contain an express statement of the covenant for payment (Law v. Philhy, 56 L. T. 230). A second action on the covenant, whether payment is asked for in the first or not, is improper {Farrer v. Lacy, Hartlarut d- Co., supra, and Poulett v. Hill, [1893] 1 Ch. 277). A mortgagee may bring a foreclosure action at any time after default (apart from special con- tract) ; and even in cases where he has covenanted not to call in the mortgage moneys for a definite period, it will be implied that such arrangement is conditional upon the punctual payment of inter- est, and further, where the mortgaged property is leasehold, upon the observance of the covenants contained in the lease {Seat on v. Twyford, 11 E(|. 591; Bnrrowes v. Molloy, 2 J. & L. 52: Edwards V. 3Iartin, 25 L. J. Ch. 284.) '\\niere a mortgagee holds collateral securities, the Court directs him first to realize them, and then to proceed to foreclose the mortgage for so much of the debt as his collateral securities may not satisfy (Dyson v Morris, 1 H. 423). 100 TORRENS SYSTEM MORTGAGES. The final dismissal of an action for redemp- tion of a legal mortgage has been held equivalent to a foreclosure judgment (Bishop of Winchester V. Paine, 11 V. 199; Inman v. Wearing, 3 De G. & S. 734). This is not so in the case of an equitable mortgage; nor where the dismissal is for want of prosecution {Marshall y. Shreivshury, L. R. 10 Ch. 250). Where a person is interested only in a part of the mortgage monej^s, he cannot obtain an order for foreclosure of a corresponding part of the mortgaged property, but he can make the other persons interested defendants, and sue for fore- closure of the whole property {Davenport v. James, 7 H. 249; Palmer v. Cadisle, 1 Sim. & St. 423). A surety for the mortgagor is not a necessary party to a foreclosure action, unless he has paid off a portion of the mortgage debt {Geclye v. Mat son, 25 B. 310). The right to enforce a statutory mortgage l)y foreclosure is resident in the Courts, both in Al- berta and in Saskatchewan, by virtue of statutory provision. Thus, it is provided in Alberta that proceedings to enforce payment of moneys secured by mortgage or incumbrance, or to enforce the observance of the covenants, agreements, stipula- tions or conditions contained in any mortgage or incumbrance, or for the sale of the lands mort- gaged or incumbered, or to foreclose the estate, interest or claim of any person in or upon the land mortgaged or incumbered, as also proceedings to redeem or discharge any land from any such TORREXS SYSTEM MORTGAGES. 101 mortgage or incumbrance, may be had and taken in the Supreme Court of the Xorth West Territor- ies, or any Court thereafter constituted exercising within the province the jurisdiction, power and authority, at the date of the passing of the Act, exercised therein by the Supreme Court of the N. W. T., under the practice and procedure of the said Coui't. (See also sec. 93 of the Saskatchewan Act, whose terms are almost identical with the above section (s. 62 Alta.). The Courts of Manitoba have no similar ex- press powers of foreclosure. Whether a power of foreclosure of a statutory mortgage is exercisable b}^ them seems very uncertain. It would certainly be unsafe to assume that the Courts of Manitoba will consider that they have any such powers resi- dent in them (see Barnes v. Bcvird, 15 Man. L. R. 162: Wniiams v. Boir, 44 S. C. R. 1: Smitli v. Na- tional Trust, 45 S. C. R. 618: and Re Alarie, 5 W. W. R. 257). In Williams v. Boj:, 44 S. C. R., it was held that, mider the statutory provisions then in the Manitoba Act, the Court could exercise a power of re-opening a statutory foreclosure. Section 126 of the Act then read: '^ Xothing contained in this Act shall take away or affect the jurisdiction of any competent Court on the ground of fraud, or over contracts for the sale or other disposition of land, or over equitable interests therein, or over mortgages. Nor shall ami:hing contained in this Act affect the right of the mortgagee to foreclose or sell through any competent Court, which right, it is hereby declared, may be exercised in such Court." 103 TORRENS SYSTEM MORTGAGES. In giving his decision Davies, J., rested the right to open a foreclosure largely on the retention of the jurisdiction of the Court over mortgages by the express word of the statute, but expressed the opinion that it was to remove a possible doubt as to whether the mortgagee's right under the statutory mortgage was such an equitable interest in the lands as entitled the mortgagee to ignore the enabling provisions of the Act, providing for fore- closure before the District Registrar, and go into the Court and foreclose his mortgage there; but that the mortgagor certainly had no equitable in- terest in the land charged which would enable him, under the 126th section, before it was amended, to invoke the equitable jurisdiction of the Court to ■ open up a statutory foreclosure. Angiin, J., who expressed the opinion of the majority of the Court, thought that an order for foreclosure under section 114, must be subject to the jurisdiction of the Court at least to the same extent as a certificate of title, and that such an order is an instrument with which the Court is empowered by section 52 to deal, that section en- abling a Judge to order a District Registrar to issue, cancel or correct certificates and to require the Registrar to deal as he may direct, but he con- tinues : "I entertain no doubt that since the amend- ment to section 126, conferring upon the Court, or declaring it to possess in respect of mortgages, the jurisdiction which it would have if the Real Pro- perty Act had not been passed (probably enacted to remove doubts), the Court has power to open up foreclosure proceedings taken under sections 113 TORRENS SYSTEM MORTGAGES. 103 and 114 of the Real Property Act, in the same manner and upon the same grounds as it may open up a foreclosure decreed in an ordinary action." The Manitoba Act has since this decision been amended b}-^ excising from section 126 all words subsequent to '' over equitable interests therein," and by removing from section 114 the words de- claring the statutory mortgagee's rights and reme- dies at law and equity to be the same as if the legal estate had been vested in him, including the right to foreclose and sell in any competent Court. Thom, in his work on the Canadian Torrens system, says that owing to- this amendment, the position in Manitoba is now back to what it was before 1906," that is, before the amendments to section 108, and section 126, which now have been removed, as out- lined in the preceding cases, except that the right of the Court to grant such an order has been ad- versely passed on by the Courts, has been declared by statute, and the declaration subsequently re- pealed, so that the lack of jurisdiction of the Courts in such cases is now made quite plain. It is difficult, however, to see how the removal of clauses which were, according to the dicta of the Judges of the Supreme Court of Canada, in- serted to remove doubts, can have the effect of not only reawakening the doubts, but of settling in an adverse sense the doubt to remove which they were expressly inserted. See, however, the decision of the Court of Appeal of Manitoba in Be Alarie, 5 W. W. R. 257, where it was held that a simple ordinary final order for foreclosure of a statutory mortgage cannot vest the estate of the mortgagor 104 TORRENS SYSTEM MORTGAGES. in the mortgagee (Perdue, J. A., and Haggart, J.A., adopting the decisions in Greig v. Watson, 7 V. L. R. 79, and Long v. Town, 10 N. S. W. Eq. 258, and the dictum by Duft*, J., in Smith y. National Trust Co., 45 S. C. R. 618, at 644, to formulate a general rule that foreclosure of a statutory mortgage can only be effected by foreclosure under the Act). In Thom's Torrens System, at page 312, et seq., doubts are expressed as to whether the Courts of Alberta and Saskatchewan have authority to make what are called foreclosure orders vesting the land in the mortgagee, and directing the registrar to cancel the existing certificate of title, and issue a new one in the mortgagee. (See Colonial Invest- ment and Loan Co. v. King, 5 Terr. L. R. 371; Cameron v. Biitledge, 2 W. L. R. 473; Gilroy v. Proe, 8 W. L. R. 777; C. P. R. v. Mang, 8 W. L. R. 774; Matthew v. McLean, 11 W. L. R. 630; Thiion BanK- v. McElroy, 11 W. L. R. 259 ; Swam v. Wheeler, 11 W. L. R. 730; Bernard v, Falkner, 7 AV. W. R. 162, for the exercise of this power). Quite apart from the fact of the futility of objecting to the validity of the foreclosure orders made by the Courts of Alberta and Saskatchewan for years past, and apart from the fact that ex- press statutory authority is conferred upon them by s. 62 of the Alberta Act, and section 93 (1) of the Saskatchewan Act, it might easily be con- tended that the right to make orders for foreclo- sure in the case of charges, whether statutory or otherwise, is vested in the Courts. " The case of In re Owen, [1894] 3 Ch. 220, wliich is often quoted as an authority for the proposition that a foreclo- TORRENS SYSTEM MORTGAGES. 105 sure order is not the proper remedy for a charge, does not on examination bear out this contention. It is an authority for the proposition that the owner of a charge on land created hy will is not entitled to foreclosure, but not for the proposition that a charge created by contract and springing from a loan of money will not be entitled to fore- closure. It is true that in Williams v. Box, 19 Man. L. R. 560, it is said by Perdue, J.A., at page 586, that, before the introduction of the clauses in the Manitoba statute making provision for foreclosure, a Court of Equity could only en- force the charge against the land created by a statutory mortgage by sale of the land. A state- ment w^hich, though referred to b}^ Idington, J., in the same case on an appeal to the Supreme Court, 44 S. C. R. 1, is not accepted by him in all its fulness. The proposition is not only contrary to the rea- soning in Re Owen, supra, but the foundations on which it is based are definitely dissented from in the judgment of Kekewich, J., in Sadler v. Worley, 63 L. J. Ch. 551, where the holder of debentures creating a floating charge on the property of a company was held entitled to an order for fore- closure. "What is foreclosure?" says Kekewich, J.: " The answer shall be given in the words of Sir George Jessel, 46 L. J. Ch. 841 — Carter v. Wake. ' The principle on which the Court acts is that in a regular legal mortgage there has been an actual conveyance of the legal ownership, and then the lOG TORRENS SYSTEM MORTGAGES. Court has interfered to prevent that from having its full e:ffect, and when the ground of interference has gone by the non-payment of the debt, the Court simply removes the stop it has itself put on. That is, in strictness only applicable to a legal mortgage in the full sense of the term. That is to say, it is not in strictness applicable even to an equitable mortgage, such as a puisne mortgage necessarily is, though expressed in legal form ; and it is still less applicable to a mortgage by way of charge. ' '' Nevertheless the Court has got over the diffi- culty where the charge has been made by deposit of title deeds, and notwithstanding the absence of an accompanying memorandum with or without an agreement to execute a legal mortgage. In these cases, using again the words of Sir George Jessel in Carter v. Wake, the Court treats the deposit of title deeds as an agreement to execute a legal mort- gage, and therefore as carrying with it all the remedies incident to such a mortgage. ''There are cases in w^ich equitable mortgagees of property have been held entitled to foreclosure. ' ' There are however more pointed instances to be found in Seton on Decrees, 5th ed., vol. 2. . . . One of these (p. 1661) deals with the mortgage of a pension, which was apparently assigned to the mortgagees, but in such form that an irrevocable power of attorney to enable them to receive it was required in event of foreclosure, so that something was necessar}^ to complete the legal title, and the moi'tgage was in substance equitable. TORRENS SYSTEM MORTGAGES. 107 ''Another (p. 1659) deals with consols in Court, and the notes (pages 1652 and following) mention further cases proceeding on the same line. In an earlier note, bottom of page 1583, it is stated, and, I believe, with accuracy, that the remedy of a judgment creditor has been, after some conflict of authority, stated to be foreclosure and not sale. Is there any good reason why these authorities should not he extended, as apparently^dhey never yet have heefi, to such a charge as is now under consideration? If there be any adverse principle •of law or rule of practice, the question must be answered in the negative, but otherwise it is well to remember that foreclosure is not lijvely to be asked, and is still less likely to be asked success- fully, except where the security is insufficient, and that in that class of cases the remedy is peculiarly appropriate, and has a value for the mortgagee which can attach to none other. . . . ''Tennant v. Trenchard was cited, but the judg- ment in that case seems to me to proceed entirely on the special character of the contract, which made it improper for the trustee to destroy the trust property. I am reluctant to make an order the like of which has never been made before. On the other hand I ought not to hesitate to apply a prin- ciple to facts to ivhich it seems to me to he properly applicahle, merely hecause it has never yet heen so applied. ''There is this further to be considered, even if this debenture does not give, one might easily be framed so as to give, a right of foreclosure as re- gards the leasehold property comprised in it, and 108 TORRENS SYSTEM MORTGAGES. it would be difficult I think to recognize the right of foreclosure as regards part, and to deny it as regards the other part of the property comprised in the same debentures. ' ' In Httgill v. Wilkinson, 57 L. J. Ch. 1019, there was a memorandum to the following effect, " re- ceived the sum of £150, from my brother John Wilkinson, on the 22nd day of September, 1870, and I hereby give him as security, the whole of my interest I am entitled to out of the property left b}^ my grandfather Joseph Hugill." In his judgment North, J., says: " Now the right of John Wilkinson against Joseph Wilkin- son, and the persons claiming under him, is the right to enforce a charge ; that charge may be enforced by way of foreclosure. This case is quoted by Sterling, J., in his judg- ment in Re Owen, supra, in close juxtaposition to his words quoted supra. '' Wlien the grounds of that decision, says Sterling, J., are examined they are found to be these. (1) That an equitable mortgagee has a remedy against the land by way of foreclosure." Maitland, in his work on Equity, speaking of foreclosure, says, at p. 284 : ' ' What can be done by a signed writing, stating an agreement to grant a mortgage, can be done also by a signed writing declaring that the land is charged with the repay- ment of the loan." '^ In the case of a mortgagor merely charging a property with payment to the mortgagee of a sum TORRENS SYSTEM MORTGAGES. 109 of money, not only does the mortgages take no in- terest at law in the property charged, but there is no contract for reconveyance at all. The right to redeem is from the very outset a right in equity only, and it is merely the right to have the property freed from the charge on payment of the moneys charged thereupon. If the charge is for payment of a specified sum on a specified day, payment on that day will set the property free ; and if the day passes without payment fJiere will still he an equity to have the property so freed notwithstanding any l^rovision in the nature of a penalty, such final provision being a clog on the equity. The differ- ence between transactions by wa}" of equitable charge and transactions by way of conveyance with a proviso for reconveyance is chiefly im- portant when, for the i^urpose of determining whether a particular stipulation ought or ought not to be rejected for inconsistency or repugnancy, the nature of the transaction has to be investi- gated " (see Kreglinger v. New Patagonia Meat and Cold Storage Co., 83 L. J. Oh. p. 79, at p. 93). There seems to be no reason why an order for foreclosure should not operate to foreclose the equitable rigiit of a mortgagor to have his land discharged from the debt secured thereon, after he has failed to make payment on the due date, pro- vided the order is couched in apt |)hraseology. Mortgages by deposit and mortgages of copy- holds are foreclosed, thougli the legal interest re- Diains in the mortgagor. 110 torrens system mortgages. Form of- Order for the Foreclosure of Copy- holds^ Legal Estate not having been Conveyed. In default of payment of amount certified, to be due, order tliat the defendant do stand abso- lutely debarred and foreclosed of and from all right, title, interest, and equity of redemption of, in, and to the said copyhold hereditaments; and in case of such foreclosure, it is ordered that the defendant do surrender the said copyhold heredi- taments to the use of the plaintiff, his heirs and assigns, or as he or they shall direct, and in default thereof this Court doth declare that the plaintiff will be entitled to be admitted to the said copyhold hereditaments. See Chapman v. Andreivs^ Pear- son, J., 2nd July, 1884. (Set on, 7th ed., 1830). TORREN'S SYSTEM MORTGAGES. HI CHAPTER XVI. Opening Up Foreclosure. It has been held that if, after an order of fore- closure absolute, the mortgagee sues the mortgagor on his covenant, the mortgagor acquires a new right to redeem even though he has parted with the equity of redemption (see Perry v. Barker, 8 V. 527, and 13 V. 198; Lockhart v. Hardy, 9 B. 349; Palmer v. Hendrie, 27 B. 349, and 28 B. 341 ; Kin- naird v. Trollope, 39 C. D. 636, 57 L. J. Ch. 905; Piatt V. AsMridge, 12 Gr. 105; Bank of Toronto v. Irwin, 28 Gr. 391;Mniiseu v. Hauss, 22 Gr. 279; Henry v. CUsliolm, 19 N. S. R. 497; NoUe v. Campbell, 21 Man. L. R. 597, 18 W. L. R. 591). The foreclosure will also be opened, whenever there are sufficient equitable grounds for the same e.g., where it has been obtained by fraud or col- hision (HiU \. Handy, 6 W. W. R. 244; Loyd v. Mansell, 2 P. Wms. 73 ; Gore v. Stacpoole, 1 Dow. 18, H. L. ; Harvey v. Tehtttt, 1 J. & W. 197. See also Jones v. Cresirickc, 9 Sim. 304; Ford v. Was- tell, 6 H. 229, 2 Ph. Ch. 591 ; Thornhill v. Manning, 1 Sim. 451 ; Patch v. Ward, 3 Ch. 203 ; Ingham v. Sutherland, 63 L. T. 614. See also Holford v. Yate, 1 K. & J. 677, where foreclosure appears to have, been opened because the mortgagee received rents prior to the final order, and Burgh v. Langton, 5 Bro. P. C. 213, where a decree of foreclosure was opened after sixteen years, owing to the dispropor- tionate value of the equity of redemption, the mortgagor being in distressed circumstances). 112 TORRENS SYSTEM MORTGAGES. It has been opened as against a purchaser from the mortgagee who contracted to purchase before the order for foreclosure absolute (Camphell v. Holyland, 7 C. D. 166), but it was held In re Potver and Carton's Contract, 25 L. R. Ir. 459, that a sale by the mortgagee subsequent to the order for foreclosure to one of the parties to the action did not reopen the foreclosure. The mortgagor must apply promptly for this relief and will lose his right by acquiescence in the ownership of the mortgagee, especially where there have been any dealings with, or expenditures on the estate (see ThornhiU v. Manning, 1 Sim. 451; Camphell \. Holyland, 7 C. D. 166; Fleettvood v. Jansen, 2 Atk. 467, and Ord v. Smith, Cas. Temp. King 9. See also Ricliards v. TJiompsou, 18 W. L. R. 179). An enlargement of time for redemption can be obtained even after the order for foreclosure abso- lute has been passed and entered (see Ford v. Wastell, 6 H. 229, 2 Ph. 591 ; ThornJiill v. Man- ning, 1 Sim. (N. S. 451). Camphell v. Holyland, supra, affords so many criteria for the exercise of the power of foreclo- sure, that much of the judgment is here quoted in extenso. ''Every person taking property by virtue of an order for foreclosure absolute is presumed to have actual knowledge that the Court has a judicial dis- cretion to allow the mortgagor to redeem. ''The terms on which that judicial discretion will be exercised must depend on the circumstances of each case. TORRENS SYSTEM MORTGAGES. 113 *'It has been said by the highest authority that it is impossible to say a priori what are the terras. They must depend on the circumstances of each case. * * In the first place the mortgagor must come, as it is said, promptly, that is within a reasonable time. He is not to let the mortgagee deal with the estate as if it was his own, if it be a landed estate, being in possession of it and using it, and then without any special reason come and say, " Now I will redeem. ' ' He cannot do that, he must come within a reasonable time. Promptness is the great and important feature; see Thornhill y. Manning, 1 Sim. 451. ''What is a reasonable time"? You must have regard to the nature of the property. As has been stated in more than one of the cases, where it is an estate in land in possession, and the mortgagee takes it in possession and deals with the estate and alters the property and so on, the mortgagor must come much more quickly than where it is an estate in reversion, as to which the mortgagee can do nothing except sell it. ''Then you must have regard to the circum- stances. Was the mortgagee entitled to redeem but by some accident unable to redeem? Did he expect to get the money from a quarter from which he might reasonably hope to obtain it and was he disappointed at the very last moment ? ( See Jones V. Creswiche, 9 Sim. 304). Was it a very large sum, and did he require a considerable time to raise it elsewhere? 114 TORRENT SYSTEM MORTGAGES. ^'An element for consideration has always been the nature of the property as regards value; for instance, if an estate were worth 50,000/, and had been foreclosed for a mortgage debt of 5,000Z, the man who came to redeem that estate would have a longer time than where the estate w^as worth 5,100/, and he had foreclosed it for 5,000/. ''But not only is there money value, but there are other reasons for dealing with rights of pro- perty. It may be an old family estate, a chattel, a picture which possesses a special value for the mortgagor, but does not possess the same value for other people, or it may be, as has happened in this instance, that the property, though a reversionary interest in the funds, is of especial value to both the litigants, having regard to some other litiga- tion, not merely a positive money value, but a peculiar value, having regard to the nature of the title and other instances as to which it is impos- sible to set a money value on it. ''Then it is said you must not interfere against purchasers. As I have already explained there are purchasers and purchasers. If the purchaser buys a freehold estate in possession after the lapse of a considerable time from the foreclosure order abso- lute, with no notice of any extraneous circum- stances which would induce the Court to inter- fere, I for one would decline to interfere with such a title as that. But if the purchaser bought the estate within twenty-four hours after the foreclo- sure absolute, and with notice of the fact that it was of much greater value than the amount of the mortgage debt, is it to be supposed that the Court TORRENS SYSTEM MORTGAGES. Ho of Equity would listen to the statement of that purchaser that he was not to be interfered with?" Foreclosure has been reopened where the mort- gagee sold under his power of sale, but only so as to make him account for the surplus proceeds, and not so as to affect a purchaser from him (Watson v. Marston, 4 De G. M. & G. 230. Cf. Re Alison, 11 C. D. 284). In Queensland it has been held that a mortgagee may sell, and after sale sue the mortgagor on his personal covenant (see Trust and Agency Co. \. Markwelh B. C. R. 16 Mer., 1874, cited by Power at p. 81). A mortgagee who had contracted to sell the mortgaged property was allowed after foreclosure, on rescinding the contract and offering to re-con- vey, to prove for his principal and interest in the administration of the estate of the mortgagor, but was not allowed to prove for the costs of the foreclosure suit (Haynes v. Haynes, 3 Jur. N. S. 504). It has been held in Miller v. McCiiaig, 6 Man. L. R. 539, that a mortgagee may purchase at a tax sale, and that the effect of his so doing is equiva- lent to a final order for foreclosure. If after having bought at a tax sale, a mort- gagee sues upon the covenant, he must be regarded as having elected to treat the mortgage as still re- deemable. The mortgagor should in that case be placed in the same position as if the mortgagee was suing after having obtained a final oi'der of foreclosure. (S. C, see also judgment of Spragge, V.C, in Kelly v. MacUem, 14 Gr. 29). 11(J TORRENS SYSTEM MORTGAGES. A mortgagee should still be regarded as being able to reconvey even though he has sold the build- ing on the land which was the whole value of the subject matter of the mortgage. That is simply a question of account {Munsen v. Hauss, 22 Gr. 279). Where a mortgagee purchases the mortgaged lands at a tax sale and receives a tax deed therefor, he is entitled to the surplus moneys realized by the municipality from such sale in excess of the taxes and costs (Re Grant, 7 M. R. 468). It has been held in Colonial Investment Co. v. King, 5 Terr. L. R. 381, by McGuire, C.J., that after a vesting order obtained in a foreclosure action, the mortgagee could no longer sue on the covenant for payment contained in the mortgage, the right to sue having merged in the judgment or order, owing to absence of any indication of a contrary intention. McGuire, C.J., said: '' It was, therefore, by their ow^i deliberate acts that a judgment was ob- tained vesting the title in them, instead of hav- ing the property sold. The result was the same as if the mortgagor had given them a transfer. Now had he given them a conveyance they could not have sued him on his covenant ' in the absence of evidence to show a contrary intent or result:' North of Scotland Mortgage Co. v. Udell, 46 U. C. Q. B. 511. On the same page the learned Chief Justice says: ' I am strongly of opinion that the burden is thrown upon the plaintiff to satisfy a jury that a different effect was in- tended to be given to the transaction.' In the TORRENS SYSTEM MORTGAGES. 117 present case there is no evidence to show that the plaintiffs intended to reserve the right to sue on the covenant. There are some circumstances tending to establish the opposite, such as their in- tentionally electing to take a vesting order rather than an order for sale, and the fact that they waited over sixteen months after getting their vesting order before beginning the present action. In the case just referred to, the plaintiffs had taken a deed in fee, but the cases relied upon by Hagarty, C.J., show that a conveyance of the equity of re- demption has the same effect. It seems to me that, if anything, the conveyance by a mortgagor in the Territories to the mortgagee of his legal estate is when unexplained even stronger evidence that the mortgagee did not intend to reserve a right to sue on the covenant. To use again the language of the judgment of Hagarty, C.J., in such a case, ' the natural presumption must be that the charge is merged in the complete ownership of the inheri- tance.' Now there was, it is true, no conveyance executed by King to the mortgagees, but there is what is its equivalent — a conveyance by order of the Court, and whatever reasons apply in the one case seem to me equally applicable in the other, for presuming a merger of the charge in the title thus vested in the mortgagees. It may often be a very distinct advantage to a mortgagee to get the pro- perty itself in preference to receiving his money, especially in the West here where land values are rapidly increasing. At any rate, where he chooses to take the title without reserving his right to sue on the covenant, it seems only reasonable that the presumption should be as laid down in the case 118 TORRENS SYSTEM MORTGAGES. just cited. I think that a jury would reasonably find in the present case that the mortgagees did not intend to reserve a right to sue upon the cov- enant, and that is the conclusion I have arrived at on the facts. As to the merger of a claim in a judg- ment, see Toronto Dental Mfg. Co. v. McLaren, 14 P. R. 89. The head note of a decision taken from a digest of Australian cases under the Torrens Land System {Campbell v. Bank of N. S. Wales, 16 N. S. W. L. R. 285; 11 A. C. 192), was cited on the argument by counsel for the defendant King : * Where the formalities provided by the Real Pro- perty Act for the foreclosure of a mortgage under the Act had been complied with and there has been no fraud, the Court has no power to reopen the foreclosure. ' Unfortunately I Jhave been unable to see the reasons given in the judgments in the case, and one is left to conjecture what were the grounds of the decision. ^' There were other points which I may refer to; for example, the plaintiffs' offer to reopen the foreclosure. I am not convinced that the judgment in the present case was a ' foreclosure ' in the sense in which the word is used where the law as to re- opening a foreclosure is dealt with. It seems to me it is a judgment, and the evil of allowing the plain- tiffs to reopen it would be the same as allowing a plaintiff to get a new trial in any other case in which he has proceeded to judgment and has got all he asked for. See case last cited from 14 P. R. " The position as to foreclosure in Australia, prior to the decision in Re Fink, infra, was as follows : " The statutory foreclosure cannot be reopened by TORRENS SYSTEM MORTGAGES. H^ the mortgagor as can be done under the general law, and in accordance with the principles of the system the mortgagor would either have to show, as against the mortgagee, irregularity or fraud (CmnpheU \. Bank of New South Wales, 1886, 16 N. S. W. Eq. 285; 11 A. C. 192; In re Premier Permanent Association, 25 V. L. R. 77 ; Matton v. Lipscomh, 1895, 16 N. S. W. Eq. 145), or that the mortgagee was treating the mortgage as still ex- isting, whilst, as against a purchaser from the mortgagee, the mortgagor would appear to have no remedy at all (Gihhs v. Messer, [1891] A. C. 248, at 255). But it is conceived that the mortgagor would still have his personal remedy against the mortgagee as for an improper exercise of his powers under the mortgage " (Hogg, p. 960). In Re The Premier Permanent Building Land and Investment Association, Ex parte LyeJl, 25 V. L. R. 77, it was held that notwithstanding the words of section 130 of the Transfer of Land Act, 1890, as to the mortgagee after registration of a foreclosure order being deemed a transferee and becoming a proprietor, foreclosure under that Act may be re-opened by the mortgagee bringing an action on the covenant contained in the mortgage deed. Madden, C.J., said: '* This statute is a convey- ancing Act, and was not intended to over-ride the ordinary rules of equity applying to land, merely because it is brought under this particular system of conveyancing." Hodges, J., said: " It seems to me that when a mortgagee sues on his covenant after foreclosure 120 TORRENS SYSTEM MORTGAGES. he thereby reopens the foreclosure, and although the Act takes away and bars the right of the mort- gagor, yet probably this action of the mortgagee gives a new right to the mortgagor which had been taken away by the Act. It is, so to speak, not his old right to redeem, but probably it gives him a new right by reason of the step taken by the mortgagee. ' ' Robertson v. Fink (1906), V. L. R., p. 554, ex- X)ressly follows this case, Chomley, J., saying: '* I think the obligation arising from the covenant to pay contained in the mortgage continues, notwith- st-anding the foreclosure, ' ' and again : " If the de- fendant has a right of redemption by reason of the bringing of this action, I think his original right has revived, not that a new right has been created. ' ' Upon appeal the Court held (4 C. L. R. 864), that on foreclosure under sections 129 and 130 of the Transfer of Land Act, 1890, the title of the mortgagee, when, pursuant to section 130, he is re- gistered as proprietor of the mortgaged land, is, in the absence of fraud, absolute and unimpeachable, and by reason of the provision in section 130 that the mortgagee shall be deemed a transferee of the mortgaged land, and of. the other provisions of the Act as defining the obligations incurred by a trans- feree of mortgaged land, with respect to the mort- gage debt, the mortgage debt is extinguished, and therefore 7io action will lie suhseqiiently hy the mortgagee upon the covenant in the mortgage to repay the mortgage debt (Griffith, C.J., and Warton and O'Connor, J J., Higgins, J., dissent- ing as to extinguishment of the mortgage debt). TORRENS SYSTEM MORTGAGES. 121 The Court further said: '' We are of opinion that when the statute says in express terms that a person \Yith respect to whom certain facts can be predicated shall be deemed to be the transferee of land, the meaning is that he shall be the trans- feree to the same intent and with the same con- sequences as if he had become a transferee hj registration of an instrument called an instrument of transfer, and executed by the person whose in- terest is transferred." Higgins, J., in a dissenting judgment said: " It is obvious to my mind that no such implication of a promise to indemnify can be deduced from an order of the Court which merely gives effect to the rights of the parties, as from a transfer inter partes, which rests on agreement. The mortgagor does not on foreclosure transfer the land to the mortgagee. It is the registration order which transfers it." Higgins, J., also called attention to the fact that one curious result of holding that the fore- closure of a mortgage involves the release of the debt is that a mortgagee who has foreclosed one mortgage must discharge unconditionally all the securities for the same debt. As to the operation of the entry of a foreclo- sure order to discharge a surety for the payment of the mortgage debt, see Matton v. Lipscomb, 16 y. S. W. L. R. Eq. 142. In Noble v. Campbell, 21 Man. L. R. 597; 18 W. L. R. 591, Robson, J., did not follow Fink v. Bobinson, preferring the dissenting opinion of Higgins, J. : ^' I take the solution of the matter in 132 TORRENS SYSTEM MORTGAGES. question here to be, that as the result of Williams V. Box, 44 S. C. R. 1, mortgage transactions un- der the Act as it then stood, are to be dealt with in accordance with the principles of equity juris- prudence, and that foreclosure under the statute did not, as between the parties, any more than a decree absolute would have done, prevent Courts of equity from regarding the intent rather than the form, and applying the principle stated by Jessel, M.R., in Campbell v. Holyland, 7 C. D. 166. One result is that, as shown by the words of Van Koughnet, C, quoted from Piatt v. Ashhridge, 12 Gr. 106, the mortgagee notwithstanding the fore- closure, may recover on the covenant unless he has parted with the property. In view of the implied repeal or modification of the words in section 114, '^ free from all right and equity of redemption on the part of the owner, mortgagor, etc.," there would seem to be no difficulty in applying these principles. Section 114 also declares that upon entry of a fore- closure order under the Act the mortgagee shall be deemed a transferee of the land and become the owner thereof. The principles of equity referred to may equally be applied in such circumstances as in the case of foreclosure by decree. Were a trans- fer absolute in form made in the first place by the mortgagor as security, although the mortgagee would be a transferee, and under the Act owner of the land, the transaction would still be treated as if it were a mortgage. See Blunt v. Marsh, 1 Terr. L. R. 126. The fact that there is now a certi- ficate of title for the land in the name of the mort- gagee indicates merely a change of form of the TORRENS SYSTEM MORTGAGES. 133 transaction, and does not prevent the mortgagee from suing, any more than a decree absolute in the first place or a conveyance absolute in form, than in fact a security would have done. The setting aside of a final decree of foreclos- ure is not necessary in an action for redemption subsequently brought; see Chat field v. Cunning- ham, 23 O. R. 153, at p. 161. I am aware that in Fink V. Robertson, 4 C. L. R. 864, it was held that after foreclosure under the Act there in force, a mortgagee could not recover on the covenants. It does not appear, however, that in the legislation under consideration in that case, the principles of equity in respect of mortgages were preserved un- affected as under the Act in question here. Aside from that the dissenting opinion of Higgins, J., seems more in accord with the view expressed in Williams v. Box, than does the majority." It must be remembered, as pointed out by Thorn, at p. 316, that the words of the Manitoba Act, upon which Williams v. Box largely turned, have, since the circumstances of Noble v. Campbell arose, been repealed. ' ' In view of the more recent decision in Smith V. National Trust Co., 45 S. C. R. 618, it seems unlikely that the Supreme Court," says Thom, ''would not extend the principle of Williams V. Box to cover the Manitoba Act as amended, and therefore in all probability the law as stated in Colonial Investment Co. v. King and Fink v. Rob- ertson, correctly states the present law in regard to enforcement of the covenant after foreclosure in all Canadian jurisdictions, namely, that such 124 TORRENS SYSTEM MORTGAGES. covenant is extinguished upon the registration of a foreclosure order." It does not, however, seem that this deduction of Mr. Thorn is a necessary deduction, and it has not been full.y adopted in Bernard v. Faulkner, 7 W. W. R. 162, where Walsh, J., decided that upon an application for a final order of foreclosure and vesting order after an abortive sale, there might be included in the order a paragraph reserv- ing the rights of the mortgagee upon the covenant for payment and directing that none of the coven- ants implied under section 52 of the Land Titles Act, Alberta, should apply thereto, but that, should the mortgagee, after an order for foreclosure con- taining such a reservation, attempt to enforce his personal remedy on tlie covenant for payment, the foreclosure must be opened up and the mortgagee be prepared to transfer the land upon being paid in full. It would also appear that the view adopted in Fink v. Robertson has not been adopted by the legislature in Alberta, which by an amendment to section 62 of the Land Titles Act provides that no proceedings under that section for the enforcement of the covenant for payment shall be commenced, or if commenced shall be continued until the reme- dies provided by the next following section (that is attempted sale and foreclosure) are exhausted. [See Orser v. Colonial Investment Co., 1917, 3 W. W. R. 513, for negation of implied covenant and note at end of book on Opening Foreclosure.] TORREN'S SYSTEM MORTGAGES. 135 CHAPTER XVII. Right to a Receiver. The general principles of appointing a receiver by way of equitable execution have been lately con- sidered in Morgan v. Hart, 83 L. J. K. B. 782. where it was held that the Court has no jurisdiction to appoint a receiver by way of so-called equitable execution in aid of a judgment at law, except in cases where, by reason of the nature of the pro- perty, execution cannot be levied in the ordinary way, and in which the Court of Chancery would before the Judicature Act of 1873, have had jur- isdiction to make the order; see Harris v. Beau- champ, 63 L. J. Q. B. 480 ; 1894, 1 Q. B. 801. That was a case where, owing to chattels being so mixed up in a furniture repository as to be indistinguish- able from the chattels of other persons, the credi- tor was unable to indicate to the sheriff the chat- tels he wished to have seized, and so was unable to exercise the common law right. In Imperial Bank of Canada v. T ivy ford, 1 W. L. R. 157, a receiver by way of equitable execu- tion was appointed of rents of property owned by defendant subject to a mortgage (see also Kirk v. Burgess, 15 O. R. 608). A mortgagee by way of equitable deposit has a right to a receiver upon an interlocutory applica- tion, provided that he makes out a prima facie 126 TORRENS SYSTEM MORTGAGES. case that he has an equitable mortgage, that he shows that at least his interest is in arrear, and that his action is to enforce his security (Union Bank of Canada v. Engen, [1917] 1 W. W. R. 271, and [1917], 2 W. W. R. 395). In the case just cited, it appeared that sub- sequent to the creation of the equitable mortgage by deposit of the duplicate certificate, the mort- gagor subsequently executed in the favour of the equitable mortgagee a statutory mortgage on a por- tion of the mortgaged lands to better secure a por- tion of his indebtedness. It was objected that the appointment of a re- ceiver operated as a taking possession, and that a mortgagee was not entitled to take possession of the mortgaged property, unless he proceeded as set up in sub-section 2 of section 93 of the Land Titles Act, Saskatchewan. " Section 93 of the Land Titles Act provides two modes of foreclosure, or otherwise realizing from mortgages," says New^lands, J. " Sub-sec- tion 1 provides that the mortgage may be fore- closed or the land sold under the practice and pro- cedure under the Supreme Court, and the follow- ing sub-sections provide for the foreclosure or sale by proceedings before the Registrar." " The two methods of procedure are entirely distinct, and sub-section 2 has no application when the mortgagee elects to proceed under the first sub- section under the practice and procedure of the Supreme Court. TORRENS SYSTEM MORTGAGES. 127 * ' It would, appear that in this case the receiver was asked for, as much for the preservation of the mortgaged property as for any other reason. ' ' The mortgagor having transferred the land to his wife, and the transfer having been registered, the mortgagor was in fact in insolvent circum- stances." A right to a receiver appointed by the Court is not necessarily lost even where a statute provides a statutory method for the appointment of a re- ceiver. Thus in TiUet v. Nixon, 53 L. J. Ch. 199, North, J., says: '^ I have no doubt that the mort- gagee might appoint a receiver under the Convey- ancing Act of 1881, without coming to the Court, but when an action for foreclosure is pending, and the parties are at arnrs length, it is much more desirable that the receiver should be appointed by the Court." Where a business is carried on on mortgaged property, the receiver will not be appointed to manage the business unless the business is included in the security {Whitley v. Challis, [1892] 1 Ch. 64), or it is necessary to protect the mortgaged pro- perty (Camphell v. Lloi/ds Bank, [1891] 1 Chy. 136), or it is necessary to protect the property b}^ selling the business with it as a going concern (Malmis y. Percy Thotson d Sons, [1891] 1 Ch. 133). A mortgagee wlio lias taken possession may under certain circumstances have a receiver ap- pointed (Tillet V. Nixon, 25 Ch. T). 238; Mason v. Westohy, 32 C. D. 206; In re Pryfherch, 42 C. D. 590 ; Comity of Gloucester Bank v. Bndry Merthyr Colliery Co., [1895] 1 Cb. 629). 138 TORRENS SYSTEM MORTGAGES. Where his interest is in arrear, an equitable mortgagee has a prima facie right to a receiver (Strong v. Carlyle Press, [1893] 1 Ch. 268). Where a prior mortgagee declines to take pos- session a receiver will be appointed at the instance of a puisne mortgagee, but not where the prior mortgagee is in possession, unless the prior mort- gagee is paid off, or refuses to accept what is due to him (Cadogan v. Lyric Theatre, [1894] 3 Ch. 338; Hiles v. Moore, 15 B. 175; Qiiarrell v. Beck- ford, 13 y. 377 ; Codrington v. Parker, 16 V. 469, and Berney v. Sewell, IJ. & W. 647). TORRENS SYSTEM MORTGAGES. 139 CHAPTER XVIII. Accounts. The right of a mortgagor to redeem is of the same nature, whether it be exercised under an order for redemption or an order for foreclosure, except that in the former case the mortgagee is allowed in the account all arrears of interest: Re Lloyd, [1903] 1 Ch. 385, but in the latter case only six years. The order will direct an account of what is due for principal and interest and costs, the gen- eral rule being that the mortgagee will be allowed all costs incurred in perfecting, maintaining, and realising his security, and, if he takes possession, all charges and expenses reasonably incurred in collecting the income and managing the property. Where such expenditure is claimed the order will direct an account of moneys expended on sub- stantial repairs and lasting improvements, but not otherwise, but any sums properly included under the terms of the contract may be claimed, by the mortgagee as just allowances, without any direc- tion in the judgment for that purpose {Blackford V. Davis, 4 Ch. 304), and sums exi:)ended in neces- sary repairs will also be included under that head- ing {Tipton Green Co. v. Tipton Moat Co., 7 C. D. 192 ; Sandon v. Hooper, 6 B. 246 ; Quarrell v. Beck- ford, 14 V. 177; Wehh v. Rorke, 2 Sc. & Lef. 676; Pelley v. Bascomhe, 11 W. R. 706; 13 W. R. 306; Sclwle field v. Lockwood, 11 W. R. 555; Eyre v. T.S.M. — 9 13i> TORRENS SYSTEM MORTGAGES. Hughe s, 2 C. D. 148; Shepard v. Jones, 21 C. D. 469; Wliite v. City of London Brewery Co., 42 C. D. 237) ; but such costs do not constitute a debt of the mortgagor in respect of which an action can be brought, not being founded on an implied con- tract to pay them {Ex parte Fewings, 25 C. I). 3.38, at 352). The mortgagee will be allowed: — (1) The costs of proceedings between mort- gagee and mortgagor {National Provincial Bank of England and Games, 31 C. D. 582) ; but costs incurred in negotiating for the loan cannot be added to the mortgage debt {Wales v. Carr, [1902] 1 Ch. 860). (2) Moneys paid by the mortgagee to preserve the property, for example, rent and premiums on life policies {Lacon v. Mertins, 3 Atk. 4). (3) The salary of a person employed in manag- ing mortgaged property, or the commission of an agent to collect the rents, where the mortgagee would employ one, if the owner {Godfrey v. Wat- son, 3 Atk. 517 ; Eyre v. Hughes, 2 C. D. 148 ; Free- hold Loan Co. v. McLean, 9 Man. L. R. 15 ; see also Powell Y. Broadhurst, [1901] 2 Ch. 160 ; Shepard v. Jones, 21 C. D. 469; Tipton Green Colliery Co. v. Tipton Moat Colliery Co., 7 C. D. 192. (4) The costs of litigation properly itnder- taken in respect of the mortgage debt or the mortgage security, e.g., those of defending the mortgagor's title {Godfrey v. Watson, 3 Atk. 517), or of obtaining possession of the mort- gaged property {Owen \. Crouch, 5 W. R. 545; Horlock v. Smith, 1 Coll. 298), or of an action TORRENS SYSTEM MORTGAGES. 131 against the surety (Sachs v. Asliby & Co., 88 L. T. R. 393), or incident to the dishonour of a bill or note (Aherdeen v. Cliitty, 3 Y. & C. 379), or of ad- ministration to a deceased mortgagor (Ramsden v. Langley, 2 Vern. 536). (5) The mortgagee's costs of the redemption or foreclosure action. (6) All insurance premiums and salvage pay- ments when he is entitled mider the mortgage to insure the premises against fire at the mortgagor's expense (Dohson v. Land, 8 Ha. 216; Bellamy v. Brickenden, 2 J. & H. 137; but for allowance without contiactual right : see Scholefield \. Lock- wood, 11 W. R. 555). (7) The mortgagee may also charge interest on outlays of a permanent nature, at the rate reserved ])y the mortgage (Woolley v. Drage, 2 Anst. 551; but see Wrigley v. Gill, [1905] 1 Ch. 165) ; but not on what is expended by him upon ordinary repairs, when he is in receipt of the rents and profits (but see Eyre v. Hughes, supra). The rate of interest allowed upon redemption is not affected by the fact that the covenant to pay has been merged in a judgment (Economic Life Assurance Society \. Ushorne, [1902] A. C. 147). (8) The costs of an abortive sale (Sutton v. Rawlings, 3 Ex. 407; see Cameron v. Mcllroy, 1 Man. L. R. 242). A receipt clause is prima facie evidence of the amount advanced, but it is not conclusive (Main- land V. Upjohn, 41 C. D. 126). The actual amount due on a mortgage to secure a current account, or for further advances, may be 132 TORRENS SYSTEM MORTGAGES. proved by evidence outside the mortgage {Melland y. Gray, 2Y. & C. Qh.im). Where a mortgagee assigns his mortgage with- out the concurrence of mortgagor, the costs of the transfer cannot be added to the mortgage debt: {In re Radcliffe, 22 B. 201). A solicitor-mortgagee is not allowed to charge profit costs for legal work done by himself, and neither an auctioneer (Fiirher v. Cohh, 18 Q. B. D. 494), nor broker-mortgagee (Arnold v. Gar- ner, 2 Ph. 231), can charge a commission for sell- ing, but the partner of a mortgagee may be en- titled to make a charge (Re Doody, [1893] 1 Ch. 129). It was held in Phillips v. Pratt, 12 Man. L. R. 143, that where, in the negotiations for a loan to be secured by a mortgage, the mortgagee stipulates for a bonus, or a special commission or other charge in consideration of advancing the money, in addition to the interest, he may retain it, and if he deducts the amount at the time from the loan, and only advances the balance, or in case the amount is otherwise paid and settled, but other- wise such bonus or special advantage cannot be recovered or allowed in equity. This head note is perhaps scarcely accurate, and if accurate, seems to be in conflict with Bucknell v. Vickery, 64 L. T. R. 701 P. C, where Lord Hobh-ouse says if the contract between the parties entitles the mortgagee to a commission he can claim it, either in taking the amount oif what is first due on his mortgage, or under the heading '^ Just Allowances." (See also Mainland v. TJpjolm, 41 C. D. 126; Potter v. TORRENS SYSTEM MORTGAGES. 133 Edwards, 26 L. J. Ch. 468; Biggs v. Hoddinott, [1898] 2 Ch. 367. See also The Benwell Toiver, 72 L. T. R. 664, at 670. See contra, Broad v. Selfe, 11 W. R. 1036, and James v. Kerr, 4 C. D. 449, at 459). It is clear that an arrangement to pay a greater sum in the future in consideration of a present advance is valid (Walling ford v. Mutual Society, 5 A. C. 685, at 702). A mortgagee has no right as against the mort- gagor to improve the mortgagor out of his pro- perty {Sandon v. Hooper, 6 B. 246), and if he lays out a very large sum, that is in itself a thing which he has no right to do. The mortgagor must not be prevented from redeeming by the mortgagee when in possession throwing a greater burden upon him {Sliepard v. Jones, 21 C. D. 469). ' A mort- gagee may be entitled to the costs of extensive improvements where there is no fraud or oppres- sion, and the money is reasonably expended in pro- ductive improvements which are lasting, necessary and proper {Henderson v. Astwood, [1894] A. C. 150; Manitoha Lumber Co. Limited v. Emerson, 2W. W. R. 419). A mortgagee in possession who has made ex- penditure in the way of permanent improvements, not falling within such terms as just allowances or necessary repairs, must allege and prove to the Court the substantial facts upon which he founds a claim therefor, before any special reference wiU be made allov;ing the same {Manitoha Lumber Co. V. Emerson, 6 W. W. R. 1450). 134 TORRENS SYSTEM MORTGAGES. A mortgagee must not j)roceed with perman- ent improvements in the face of a suit for redemp- tion. S.C. In Canadian Mortgage Investment Co. v. Baird, 10 W. W. R. 1195, Beck, J., had to deal with the right of the mortgagee to insurance premiums, fees paid for tax certificates, commission on collection of arrears, charges by solicitors or agents, and the mortgagee's and solicitor's charges for letters. As to the first item he held them recoverable because of the usual provision under the mortgage auth- orizing their paj^ment, and even without that as a payment made to protect the security. The other items he considered as coming under the title of extraordinary costs, charges and expenses, which are somewhat different from and beyond the costs taxable, which are not allowed as a matter of course, but require a special case to be made for them, and can only be allowed if there is in the judgment a special direction making them a sub- ject of action. " Generally speaking," says Beck, J., " items of expense, reasonable in amount and reasonably incurred in preserving the security or in efforts to realize upon it, are allowed with- out any special covenant in the mortgage, and gen- erally speaking a covenant will not magTiify the right. The fact that the mortgagee has, or has not, gone into possession is a material circumstance. The mortgagee is not entitled to make any personal profit from his owai services.'^ With respect to the particular items, he held that the mortgagees were entitled to the fees paid for searches to ascer- tain whether taxes were in arrear or not, but that TOERENS SYSTEM MORTGAGES. 135 this should be clone by the mortgagees themselves, and not put into the hands of solicitors. As to the letters b}^ the solicitors demanding payment, lie held that they were not collectable except as charges included in the taxable costs of proceedings pend- ing or subsequently commenced. As to the com- missions and collections, he held that in the ab- sence of the mortgagee having taken possession, or of a receiver having been appointed, and in the absence of an arrangement made after default, they were not allowable, whether made in conse- quence of legal proceedings or not, except in extremely special cases. In Cockshutt Plow Co. \. Gray, 12 W. L. R. 435, the mortgagees in a foreclosure action were compelled to give an account of moneys re- ceived, or wdiich ought to have been received by them under a trust agreement with the mortgagor. The Judge distinguished the case of Sanguinetti V. Stuckeifs Banking Co. [1896] 1 Ch. 502), which decided that any special circumstance or fact af- fecting the amount due from the mortgagor to the mortgagee in a foreclosure action — such as a valuation of the security in bankruptcy — should be pleaded or brought to the attention of the Court before the usual foreclosure judgment is made, in order that a direction may ])e given to the chief clerk to have regard, in taking the account, to such special circumstance or fact, and that if tliis is not done at the trial, no such question should be subsequently raised on taking action. Where the mortgagor is indebted to the moi't- gagee otherwise than on the mortgage, the mort- 136 TORRENS SYSTEM MORTGAGES. gagee cannot, as against other incumbrancers appropriate sums received under the mortgage to such other debts {Young v. English, 7 B. 10). In the Bank of Hamilton v. Leslie (No. 2), 7 Terr. Law Reports 303, it was held that while the general rule in suits for foreclosure or redemption is to allow the mortgagee all his costs even where he does not succeed in establishing his right to the full amount claimed, yet where the conduct of the mortgagee has been oppressive and unconscienti- ous, the Court has the discretion to deprive him of costs and to award costs to the mortgagor. The case of Cottrell v. Finney, 9 Ch. 541, was ex- pressly approved, where James, L.J., says: '' The mortgagee is entitled to liis security, as security for principal, interest and costs — that is the cost of a redemption suit or foreclosure suit — unless the mortgagee has refused to take when offered the full sum due him, in which case he loses subsequent interest and all costs, and is made liable to pay costs, or unless the Court says that the conduct of the mortgagee has been oppressive, and that he has been availing himself of his power to extort something which he ought not to have, or doing something which this Court regards as un- conscientious." The carrying on or resistance of proceedings by the mortgagee unreasonably, leaves the question of costs in the discretion of the Judge {Charles v. Jo?ies,33C. D. 80). In Hammond v. Strong, 6 W. L. R. 694, it was held (following Kinnaird v. Trollope, 42 C. D. 615 ; Hodges v. Croydon Canal Co., 3 B. 86, and In re TORRENS SYSTEM MORTGAGES. 137 Watts, 22 C. D. 5), that the mere fact of the mort- gagee claiming more than he is entitled to is not sufficient to deprive him of his costs. In Union Trust v. Duplat, 7 W. L. R. 459, the costs of serving prior incumbrancers with a copy of a foreclosure summons were directed to be borne by the plaintiffs personally, and not to be charged against the property foreclosed. In Confederation Life Assn. v. Leier, 8 W. L. R. 343, the costs of correspondence between the mort- gagees and their solicitors and the mortgagor and their own agents were allowed. In Matthew v. McLean, 11 W. L. R. 630, the costs of an application for an order varying an order nisi for foreclosure, and adding thereto the amount of taxes levied against the land since the order msi, and paid by the mortgagee, were di- rected to be borne by the mortgagee, inas- nuich as the mortgagee had not been compelled to make this payment to protect his security. A mortgagee entering into possession as owner, and not as mortgagee, is not, upon opening of a foreclosure, bound to account as strictly as an ordi- nary mortgagee in possession. (Semhle) (Wil- liams V. Box, 5 W. W. R. 912; see also Bird v. Gaudy, 2 Eq. Cas. Abr. 251 (4) ; Parkinson v. Han- hury,2B.. L. 1). Where a mortgagee actually enters into law- ful possession of land under the terms of his mort- gage, he becomes entitled to any crops growing on the land as against a mortgagee of the crops under a chattel mortgage executed after his mort- gage and before possession taken, but if the 1 58 TORRENS SYSTEM MORTGAGES. crops are cut at the time of possession taken, the hokler of the chattel mortgage will have priority (Harrison v. Carhery Elevator Co., 7 W. L. R. 535, following Laing v. Ontario Loan dc Sav- ings Co., 40 U. C. Q. B. 114, and Re Phillips, 16 CD. 104). A mortgagee may be even compelled to pay costs, e.g., where he has denied the right of the plaintiff to redeem (Hall v. Heivard, 32 C. D. 430), or claimed that the mortgage was an absolute conveyance (Baker v. Wind, 1 Ves. Sen. 160 ; LeTarge v. De Tuyll, 3 Gr. 369, and Livingston v. Wood, 27 Gr. 515), or refused accounts (Powell v. Trotter, 1 Dr. & Sm. 388) ; or being overpaid, has claimed a bal- ance due to him (Heath v. Chinn, 98 L. T. R. 855) ; see also Bryso7i v. Huntington, 25 Gr. 265 ; Miller V. Brotmi, 3 O. R. 210, and Graham v. Ross, 6 O. R. 154). A mortgagee is not bound to accept payment of his money by driblets (Nelson v. Booth, 3 De G. & J. 119, and Wrigley v. Gill, [1905] 1 Ch. 241), and, therefore, a direction is not usually given to take the account as against a mortgagee in possession with rests. After a mortgage has been satisfied the mortgagee must account with rests (Wilson v. Metcalfe, 1 Russ. 530, and Ashtvorth v. Lord, 36 C. D. 545; see also Lloyd v. Jones, 12 Sim. 491). A mortgagee in possession is boimd to account, not only for what he has received, but also for what, but for his wilful default, he might have received: Sherwin v. Shuliespear, 5 De G. M. & G. 517; Parkinson v. Hanhury, 2 H. L. 1, and that TORRENS SYSTEM MORTGAGES. 139 though no charge of wilful default has ])een made in the pleadings {Mayer v. Murray, 8 C. D. 424). On this footing a mortgagee in possession is responsible for not letting the property and for not getting full rents {Hughes v. Williams, 12 V. 493; Brandon \. Brandon, 10 W. R. 287; Noyes v. Pollock, 32 C. D. 53, and White v. City of London Breivery Co., 42 C. D. 237). He is not bound to distrain {Cocks v. Gray, 1 Griff. 77). A mortgagee is bound to act as a provident owner, and so is responsible for loss occasioned by his improper conduct, e.g., by a failure to observe the covenants contained in the lease, where lease- holds are mortgaged {Perry v. Walker, 24 L. J. Ch. 319). While not called upon to make large expendi- tures, a mortgagee in possession must make repairs where they are necessary in order to derive rental from the property, where the amount is small com- pared with the rental which can thereby be derived; but he is not called upon to rebuild, or lay out large sums beyond the rent {Williams v. Box, 4 W. W. R. 244; Richards v. Morgan, 4 Y. & C. 570; Sherwin V. Shalcespear, 5 De G. M. & G. 517; Kensington v. Bouverie, 7 De G. M. & G. 134, and Moore v. Pain- ter, 6 Jur. 903; 3Iarshan v. Cave, 3 L. J. Ch. 57). An action for an account of surplus proceeds after a sale by the mortgagee is not within the rule as to costs of redemption actions, and a mortgagee may have to pay the costs {Williams v. Jones, 55 Sol. Jo. 500; Boulton v. Rowland, 4 O. R. 720, and Beatty v. O'Connor, 5 O. R. 747). [See as to cost of ploughing land, at end of book,] 140 TORRENS SYSTEM MORTGAGES. CHAPTER XIX. Attornment Clauses. The question of the extent of the effectiveness of an attornment clause has been of late frequently before the Courts, chie% with respect to the power to distrain upon the goods of others than the mort- gagor, and the power to distrain under the pro- visions of 8 Anne, c. 14, Ruff. (c. 18 in Revised Statutes). This question may be most effectively dealt with by considering first the validity of these clauses apart from Torrens S.ystem mortgages, and subsequently considering the exceptions engrafted on the general law by the peculiarities of that sys- tem. The general principle is laid down in Re Bowes Ex parte Jackson, 14 C. D. 725, where Chitty, L.J., states that a mortgagor and a mort- gagee have a right to insert in their mortgage deed a clause making the mortgagor attorn as tenant to the mortgagee, and thus hy contract constituting the relation of landlord and tenant between the two. A distinction must be drawn between the effect of an attornment clause and that of an express power of the mortgagee to enter and distrain. Under the latter the mortgagee can only take the mortgagor's goods; under the implied power of distress the mortgagee may take any goods he finds on the demised premises: In re Willis, 57 L. J. Q. B. 634, per Lindley, L.J. The rent must be fair and reasonable. (As to what is a fair and reasonable rent see Ex parte TORRENS SYSTEM MORTGAGES. 141 Williams^ 7 C. D. 138; In re Stockton Iron Fur- nace Company, 10 C. D. 335; 48 L. J. Ch. 417; Ex parte Jackson, 14 C. D. 725 ; Ex parte Voisey, 21 C. D. 442 ; Hohhs v. Ontario Loan d Dehenture Co., 18 S. C. R. 483 ; Stikeman v. Fnmmerton, 21 Man. L. R. 754. See also 6 C. L. T. 217, 265, 313; McKay v. Grant, 30 C. L. J. 70 ; Waterous Engine Works V. Wells, 16 W. L. R. 274; Independent Lumber Co. v. David, 1 W. W. R. 134, 19 W. L. R. 387; Thomas v. Cameron, 8 O. R. 441). The at- tornment clause must not be merely a device to evade the bankruptcy laws. The case of In re Stockton Iron Furnace Com- pany, supra, demands especial attention for many reasons : first, it was a case of a mortgage in which the legal estate was not parted with, being a mort- gage of copyholds by covenant to surrender; and secondly, Jessel, M.R., makes clear, what is some- times forgotten, viz., that what is called an attorn- ment clause is often more than a mere attornment, {i.e., a mere acknowledgment of a tenancy), and is or amounts to an agreement for a tenancy; and James, L. J., is clear on the point that the creation of the tenancy operates to give the mortgagees all the liabilities of mortgagees in possession, and further to give them all the rights and incidents of the relationship between landlords and tenants, both as regards the parties themselves and a third person whose goods happen to be on the property. Bramwel], J., suggests the reason why the law should look with e(iuanimity on a mortgagee land- lord asserting his right to seize the goods of a third party upon the mortgaged premises. " The law," ^i-' TOKPvENS SYSTEM MORTGAGES. says he, '' does not forbid thorn entering into such an arrangement as this, taking all the beneficial and all the inconvenient consequences arising from it." Lastly, the case shows that the rent may be fluctuating in amount, the mortgage being given to secure a current account. A rent is certain, if by calculation and upon the happening of given events it becomes certain. As to a valid attornment clause {i.e., a clause which by agreement creates a tenancy, as distinct from being a mere acknowledgment) being potent to give the mortgagee the full rights of a landlord, see also Kearsley v. Phillips, 11 Q. B. D. 621. The relationship created b}^ an attornment clause is not the ordinary relationship of landlord and tenant, but it is the ordinary relation of mort- gagee and mortgagor. In equity the mortgagor was the owner of the estate, and the mortgagee was only entitled to a charge upon it; at law the mortgagee was the legal owner of the estate, and the mortgagor was what was called tenant at will, a very peculiar kind of tenancy. That was the legal relationship be- tween the parties. The relation in equity was totally different. In an ordinary case there being no rent reserved, the tenant at will did not pay any rent, and was not liable to pay any ; but you might superadd to that legal relationship an express agreement for a tenancy. That altered the legal relationship between the parties, but it did not alter the equitable relation. The rent, if paid, was in equity ])aid on account of principal and interest; TOERENS SYSTEM MORTGAGES. 143 if it exceeded the interest, it would go in reduction of the principal. It ^Yas the subject matter of ac- count bet\Yeen the mortgagee and the mortgagor, therefore in equity the mortgagee remained only a chargee, and the mortgagor remained the owner of the estate, notwithstanding this variation in the ordinary legal relation between them (Ex parte Tsherwood, 52 L. J. Ch. 370, per Jessel, M.R.). The position that the relationship of landlord and tenant in no way overrides the original rela- tionship existing between the parties as mortgagor and mortgagee, is further emphasized by the case of Ex parfe Punnett, 50 L. J. Ch. 212. From this case it is apparent that but little stress is laid on the possession of the legal estate by the mortgagee. Jessel, M.R., bases the existence of a tenancy between mortgagor and mortgagee entirely upon agreement, and can see no reason why the relationship of landlord and tenant should not exist between two mortgagees and a mortgagor at one and the same time : " If the second mortgage created the relation of landlord and tenant, which it did by the operation of a legal fiction," he says, ' ' I am not at all finding fault with legal fictions — they are necessary for the purposes of justice (they are merel.y a mode of putting in legal form the contracts of the parties) — if that is so, does it make any difference that there was a prior attorn- ment to a prior mortgagee ? I do not see how it can. If by a contract, notwithstanding the fact is known that the legal estate is outstanding in a mortgagee and that the mortgagor is not really the owner of the reversion, vou can create a tenancy between the 144 TORRENS SYSTEM MORTGAGES. second mortgagee and the mortgagor by what may be called estoppel or quasi-estoppel (it does not matter what term we use), it appears to me that there is nothing either in law or good sense to pre- vent the same arrangement being made with more than one mortgagee, otherwise this would hap- pen : If a mortgage were made to two mortgagees by the same deed, and the mortgagor were to at- torn tenant to the two mortgagees, there being a proviso between themselves that the one should be first and the other second, that would be good; but if the one mortgage were made by a deed dated the day after the other it would be bad. It ap- pears to me that that would be a mere over-refine- ment, and consequently having regard to the deci- sions which I have mentioned {Morton v. Woods, 9 B. & S. 632), I think that the right to distrain exists, and that effect ought to be given to it." It is thought that a not unfair deduction from these authorities is that in England the attornment clause creates the relationship of landlord and ten- ant by the operation of a legal fiction, which takes no account of where the legal estate is, and that that relationship carries with it the right to dis- train upon the property of third parties, a logical result from the existence of the relationship, in which there is nothing inequitable, inasmuch as the mortgagee whilst reaping the benefit of the rela- tionship in his power of distress, also submits to the burdensome inconveniences of being a mort- gagee in possession. In accordance with these principles it has been held that attornment to a receiver appointed by TORRENS SYSTEM MORTGAGES. 145 the mortgagor and mortgagee creates the relation of landlord and tenant between the parties to which the right to distrain is incident, and also that it is immaterial that the want of a legal estate ap- pears in the instrument by which the tenancy is constituted {Jolly v. Arduthnot, 4 De G. & Jo. 224, and Morton v. Woods ^ supra). In Manitoba it is provided that the right of mortgagees to distrain for interest due upon mort- gages shall be limited to the goods and chattels of the mortgagor only, and, as to such goods and chat- tels, to such only as are not ^exempt from seizure imder execution (R. S. M. c. 49, s. 2). In Linstead v. Hamilton Provident and Loan Soc, 11 Man. L. R. 199, it was held that section 2 of the Distress Act, Manitoba, had no application to the rights of mortgagees to distrain for rent qua rent (^.e., not eo nomine as interest), under a tenancy validly created, distinguishing the appar- ently contradictory cases Edmofids v. Hamilton Provident and Loan Society, infra, and Trust and Loan Debenture Co. v. Lawrason, 10 S. C. R. 679, as being a case in which no rent was reserved, and Hohhs V. Ontario Loan and Deheriture Co., 18 S. C. R. 483, as a case of unreasonable rental. See also Miller v. Imperial T^oan cO Investmetit Co., 11 Man. L. R. 247, where, however, the warrant seems to have commanded the levy for interest eo nomifie). A similar Ontario provision (The Mortgage Act, R. S. O. 1887, c. 102, s. 316), was in Edmonds V. The Hamilton Provident Society, 18 O. A. R. T.S.M. — 10 146 TORRENS SYSTEM MORTGAGES. 347, declared to be remedial and intended to pro- tect the goods of strangers to the mortgage, and accordingly restrictive of the right of distress under an attornment clause. " Its intention was," Osier, J. A., says, ^' to reach every case in which the mortgagee, whether in the character of land- lord or licensee, but still under and for the pur- poses of the mortgage, had the right to distrain." See, however, Pegg v. Independent Order of For- esters, 1 O. L. R. 97. It should be noted that in Edmoyids v. Hamil- ton Provident and Loan Society, supra, the war- rant was directed against the mortgagors by name, and comprised arrears of instalments for which admittedly the goods of a stranger could not be distrained, as well as of interest, and section 6 of the same Ordinance provides that the goods dis- trained for such interest or principal shall not be sold except after such notice as is required to be given by a landlord who sells goods distrained for rent. The clause considered in the case was in the following words: '' The mortgagors do attorn to and become tenants at will to the mortgagees, at a rent equal in amount to the interest hereby re- served, payable at the times mentioned' in the above proviso : Provided that the mortgagees may dis- train for arrears of interest: Provided that the mortgagee may distrain for arrears of instal- ments. ' ' In Re Chalmers and Freedman, 10 W. L. R. 434, a Manitoba case, Edmonds v. The Hamilton TORRENS SYSTEM MORTGAGES. 147 Provident Society, supra, was followed without comment. By the Ordinance respecting Distress for Rent and Extra- Judicial Seizure (Alta.), section 5, ap- plicable to Alberta and Saskatchewan, it is pro- vided that the right of a mortgagee of land, or his assigns, to distrain for interest in arrear or prin- cipal due upon a mortgage shall, notwithstanding anything stated to the contrary in the mortgage, or in any agreement relating to the same, be limited to the goods and chattels of the mortgagor or his assigns, and as to such goods and chattels to such only as are not exempt from seizure under execution. In Hall V. Welman, 5 W. W. R. 6, Beck, J., suggested that, owing to the obviously intentional difference between the wording of the Ontario and Manitoba statutes, and that of the Alberta en- actment, such cases as Linstead v. Hamilton .P. and L. Soc, supra, were not applicable in the in- terpretation of the Alberta statutory provision. In Vousden v. Hopper, 16 W. L. R. 294, Ed- monds Y. Hamilton Provident and Loan Society, supra, was expressly approved, and it was pointed out that the addition of the words ' ' notwithstand- ing anything stated to the contrary in the mort- gage or in any agreement relating to the same," made the intention of the North-West Assembly in that direction much more emphatic. The case furth(;r decided that the tenant of a mortgagor is not an assign. Johnston, J., held also that the only I'ecourse a mortgagee could have against a tenant of the mortgagor under a lease made after the 148 TORRENS SYSTEM MORTGAGES. mortgage, would be that of an action or proceeding for the recovery of possession, in reliance upon Rogers v. HiimpJu'eys, 4 A, & E. 299, and Evans v. FAliott, 9 A. & E. 342. In McDermott v. Fraser, 8 W. W. R. 196, and Sturgeon v. Henderson, [1917] 3 W. W. R. 56, the Linstead case was expressly approved. In Great West Saddlery Co. Ltd. v. Grieshach, 9 W. W. R. 528, it was held, in reliance on Tadman V. Henman, [1893] 2 Q. B. 168, and Jellicoe v. Wellington Loam, Co., 4 N. Z. L. R. (S.C.) 330, that a tenancy created by an attornment clause to se- cure mortgage interest is one created by estoppel, and binds those privy to the estoppel, but not third parties, and further, that the fact that the mort- gagee has neither the legal estate in the mortgaged lands, nor any reversion, does not disentitle him from distraining, applying Morton v. Woods, supra, and Ex parte Piinnett, supra. (See also Thomson v. Fiyilay, 5 N. Z. L. R. (S. C. 203). In Hyde v. Chapin, 9 W. W. R. 1142, the Ap- pellate Division of Alberta held that the ordinary attornment clause, though it might create contract- ual rights of distraint between the parties, could not create any real tenancy in the mortgagor so as to give the mortgagee the benefit of the statute of 8 Anne, c. 14. The matter is of such importance that it is thought best to give the judgment of Stuart, J., in full:— '' The facts are that the Chapin Co. are exe- cution creditors of one Michael Kunkel and one Anna Kunkel by virtue of a writ of execution filed TORRENS SYSTEM MORTGAGES. 119 in the sheriff's office for the Judicial District of Macleod on July 27th, 1914, which writ is still in force and unsatisfied. On March 1st, 1908, Anna Kunkel had given a mortgage on certain lands for the sum of $2,612 in favour of Hyde and had re- mained in possession of the lands covered by the mortgage. The mortgage contained an attornment clause in the following words : — '' ' And we do attorn and become tenant from year to year to the mortgagee from the day of the execution hereof at a yearly rental equivalent to, applicable in satisfaction of, and payable at the same time as, the interest upon the principal here- inbefore provided to be paid ; the legaL relation of landlord and tenant being hereby constituted be- tween the mortgagee and ourselves, but it is agreed that neither the existence of this clause nor any- thing done by virtue thereof shall render the mort- gagee a moi-tgagee in possession so as to be ac- countable for any moneys except those actually re- ceived. ' '' The rate of interest payable under the mort- gage was 7 per cent, per annum payable yearly. The yearly interest was $182.82. On September 10th, the execution creditor seized the crop grown on the land. By arrangement the crop was sold and the sum of $472 was left in the sheriff's hands pending a decision by the Court upon the point whether the mortgagee had a claim to one year's interest or one year's rent in priority to the exe- cution creditor. " The mortgagee claims priority by virtue of the provisions of the statute 8 Anne, c. 14, s. 1, which begins and proceeds as follows: — 150 TORRENS SYSTEM MORTGAGES. *' * For the more easy and effectual recovery of rents reserved on leases for life or lives, terms of years, at will, or otherwise, be it enacted, etc., that from and after (a certain date) no goods or chattels whatsoever lying or being in or upon any messuage, lands or tenements which are or shall be leased for life or lives, terms of years, at w^ill, or otherwise, shall be liable to be taken by virtue of any execution * * * ' unless the execution creditor first satisfies the landlord's claim for rent to the extent of one year's arrears but no more. '' The question is whether this statute applies to such a case as the present. The learned Judge below thought that it did, and gave judgment in favour of the mortgagee. The execution creditors appeal. ' ' It appears that the only point involved arises out of the difference between our mortgages and mortgages in England. In the latter the fee is conveyed to the mortgagee and an attornment in a mortgage there is therefore to a person holding the legal estate. Under our mortgages the legal title does not pass, but remains in the mortgagor. '' It is clear that where there is an attornment clause in an English mortgage the statute applies and the mortgagee is protected, qua landlord: Yates V. Ratledge, 5 H. & N. 248 ; Foa on Landlord and Tenant, 5th ed., p. 175; Cox v. Leigh, L. R. 9Q. B. 333;43L. J. Q. B. 123. '' We are, it seems, face to face with one of the difficult problems which inevitably arise from the necessity, or supposed necessity, of attempting to engraft upon our system of land titles principles TORRENS SYSTEM MORTGAGES. 151 of the English law, statutory and otherwise, which were developed and worked out under a different system altogether. There is no question which has so profoundly affected English decisions (I do not mean merely upon the particular point involved in this case, although in Yates v. Ratledge the reference to the matter is very pointed) as the question, who has the legal estate in fee simple ? *' There is no doubt that in such cases as Morton V. Woods, L. R. 4 Q. B. 293; 38 L. J. Q. B. 81, the mortgagee 's right to distrain was held to exist even though, being only second mortgagee, he did not possess the legal estate. But while it may be an immaterial matter who holds the legal estate as long as the mortgagor does not, but has parted with it, it seems to me it is not so clear by any means that the fact that the mortgagor himself holds the legal estate in fee simple and has never j^arted with it, may not have a very decisive influence upon the result. '' How can the mortgagor be at the same time the owner of the legal estate in fee simple and also a tenant for a term of years? This could indeed happen if he had granted a lease, for example, for life, and then had taken a sub-lease for a lesser term to himself because another estate would have intervened and there would be no merger. Foa, 5th ed., p. 528. ''But is there any intervening estate here .^ Certainly there is no legal estate. The mortgagee has a charge on the land to secure the repayment of his money. This charge is no doubt recognized by the statute, and may be registered under the 152 TORRENS SYSTEM MORTGAGES. statute, which is made notice to third parties. But in so far as the legal position between the parties is concerned, aside^ of course, from a statutory legal right created by registration, there is noth- ing ijiore created, it seems to me, than that equit- able charge defined by Halsbury, Vol. 21, p. 83, as ' a security which does not transfer the propert}^ with a condition for reconveyance, but only gives a right to paj^ment out of the property, entitles the holder to have the property comprised therein sold to raise the money charged thereon * * * and the strict mode of enforcing it is by sale and not by foreclosure. ' '' Is it possible to say that the legal relation of a tenant to a landlord was really created by the clause in question so as to bring about the operation of the Statute of Anne ? In an English mortgage the fee is conveyed, and of course the holder of the fee can take the grantor as his ten- ant if they both so agree. And even to a second mortgagee the mortgagor may attorn and become tenant because he has no legal estate in the land at all, but only an equitable right to redeem. But where he is the owner of the fee simple himself how can he be a tenant to the person to whom he has given a mere statutory charge? It may be true that the mortgagee has an equitable interest or a statutory charge which he can deal with and alienate, but certainly, if he can grant a lease of it, and assuming that he can, that would be a dif- ferent thing from a lease of the land itself upon which his charge (which is his equitable estate) rests. TORRENS SYSTEM MORTGAGES. 153 '' For these reasons I think the attornment clause in our forms of mortgages cannot create any real tenancy in the mortgagor, no matter what the parties say, so as to bring in the Statute of Anne. Xo doubt it is valid, as creating merely con- tractual rights, between the parties, and the mort- gagee by virtue of the license given him may dis- train if there is no legal impediment in his way. But the seizure by the sheriff puts the goods in custodia legis and the Statute of Anne does not help the mortgagee. '' This view is the basis of the decision in Jelli- coe V. Wellington Loan Company, 4 N. Z. L. R. 330, a case under a similar statute of Land Titles. '' With much respect, I do not see the applica- tion of the rule that a tenant cannot deny his land- lord's title. That rule applies where there has been in very fact a demise or an attornment. But even then where the tenancy is alleged to have arisen in the iirst place by estoppel then the tenant is not estopped from denying title in the person claiming to be his landlord. See Foa, 5th ed., p. 462. Nor do estoppels hold as against third parties. ' ' In Rollefson v. Olson, 8 W. W. R. 481, Haul- tain, C.J., and Elwood, J., seem to approve of the validity of an attornment clause to protect a mort- gagee against execution creditors, though Brown, J., was of opinion that the leasing power of a mort- gagee must depend on a prior proper exercise of his statutory power to take possession in reliance upon the dicta of the majority of the members of the Supreme Court as to the exercise of the power 154 TORRENS SYSTEM MORTGAGES. of sale in Smith v. National Trust Co., 45 S. C. R. 618. In The Traders Bank of Cayiada v. Rutherford, 10 W. W. R. 796, McLorg, D.C.J., followed Hyde V. Chapin, supra, distinguishing Independent Lumber Co. v. David, supra, as being a case of vendor and purchaser, and not of mortgagor and mortgagee, and Rollefson v. Olson, supra, as being an expression of opinion given obiter. In the First National Banlc \. Cudmore, 1917, 2 W. W. R. 479, the Supreme Court of Saskatche- wan en banc followed Hyde v. Chapin, supra, as to the effect of an attornment clause, holding that such a clause can do no more than create by estoppel the relationship of landlord and tenant as between the parties and their privies, '' an execution creditor not being a privy," and so give merely a personal right to the mortgagee and impose only a per- sonal liability upon the mortgagor. The case also decided that when a mortgagee gives a lease to the mortgagor the lease effects a surrender by operation of law of whatever term exists under an attornment clause in the mortgage, in reliance upon I) odd v. Acklom, 6 Man. & G. 679 ; Lyon V. Reed, 13 M. &. W. 306, and Nicholls v. Atherstone, 10 Q. B. 946. In his own language the far reaching effect of a decision on the point must be the justification for quoting the judgment of Haultain, C.J., on this point in extenso. " The attornment clause in question is as fol- lows : *' * And for the purpose of better securing the punctual payment of the interest on the said prin- TORRENS SYSTEM MORTGAGES. 155 cipal sum, I the mortgagor do hereby attoni tenant to the mortgagees for the said lands at a yearl}" rental equivalent to the annual interest secured hereby to be paid yearly on each da}^ appointed for the payment of interest, the 'legal relation of landlord and tenant being hereby constituted be- tween the mortgagees and the mortgagor. Pro- vided also that the mortgagees may at any time after default in payment hereunder enter into and upon the said lands or any part thereof, and de- termine the tenancy hereby created without giv- ing me any notice to quit; but it is agreed that neither the existence of this clause, nor anything done by virtue thereof, shall render the mortgagees in possession so as to be accountable for any moneys except those actually received. '' ' And, further, that if I shall make default in payment of any part of the said principal or interest at any date or time hereinbefore limited for the payment thereof, it shall and may ])e law- ful for, and I do hereby grant full power, right and license to the mortgagees to enter, seize and distrain upon the said lands or any part thereof, and by distress warrant to recover by way of rent reserved as in the case of demise of the said lands as much of such principal and interest as shall from time to time be or remain in arrear and un- paid, together with all costs, charges and expenses attending such levy or distress, as in like cases of distress for rent.' ** The mortgage is, apart from other special provisions, a ' mortgage ' made and registered under the Land Titles Act, R. S. S. c. 41. 156 TORRENS SYSTEM MORTGAGES. ' ' On this point I agree with the decision of the Alberta Court in Hyde v. Chapin (1916), 9 W. W. R. 1142; 33 W. L. R. 559, that an attornment clause in a ' mortgage ' under the Land Titles Act, though it may create contractual rights between the parties, does not create the relation of land- lord and tenant so as to give the mortgagee the protection of the statute of 8 Anne, c. 14, s. 1. The same view was held by the New Zealand Court in Jellicoe v. Wellington Loan Company, 4 N. Z. L. R. 330. See also T adman v. Henman, [1893] 2 Q. B. 168. '' The far reaching effect of a decision on this point may, perhaps, be my justification for its lengthy consideration. ^' The decisions of the English Courts must be distinguished at the very outset on account of the difference between a mortgage deed and a ' mort- gage ' under the Land Titles Act. Under a mort- gage deed, the legal title is vested in the mortgagee and the mortgagor remains in possession of the mortgaged premises either by sufferance of or agreement with the mortgagee, and, in that case, ' the mortgagor is a tenant within the strictest de- finition of that word:' Partridge v. Bere (1822), 5 B. & Aid. 604. '' Although it is not quite clear from the auth- orities in what position the mortgagor stands in respect of the mortgagee, during the mortgagor's actual possession or receipt of the rents, it seems, however, to be established that he will be con- sidered as tenant for a term or at will, or at suffer- ance or as a trespasser, according to circum- TORRENS SYSTEM MORTGAGES. 157 stances:' Coote on Mortg. (2nd ed.), 389. Hitch- man V. Walton, 4 M. & W. 409, at p. 413 ; 8 L. J. Ex. 31. See also note to Partridge v. Bere, supra. '' In England prior to the Bills of Sale Acts, 1878 and 1882, attornment clauses in mortgage deeds, when valid, gave the same right of distress, including that of seizing the goods of third parties on the land, as though the tenancy was an ordin- ary tenancy: Kearsley v. PJiilips (1883), 11 Q. B. D. 621 ; 52 L. J. Q. B. 581, and a tenancy created by attornment in a mortgage deed came within the provisions of the Statute of Anne: Yates v. Rat- ledge (1860), 5 H. & N. 249; 29 L. J. Ex. 117. '' In this case the mortgagees, who were clothed with the legal estate, redemised the premises to the mortgagors who attorned as tenant to them at a certain rent. *^ See also Brown v. The Metropolitan Counties L. A. Society (1859), 28 L. J. Q. B. 236. " In connection with the foregoing cases, see also Hohhs v. The Ontario Loan and Debenture Company (1890), 18 S. C. R. 483, per Strong, J., at pp. 492, 493 ; Trust & Loan Co. v. Lawrason, 6 A. R. 286; 10 S. C. R. 679. " The tenancy created by a mortgage deed with an attornment clause is a real tenancy, because the legal ownership is in the mortgagee and the mortgagor is in possession of the land hy redemise and the rent is incident to the reversion. All the incidents of a real tenancy are there. '' In the present case, all these elements are lacking. The k'gal ownership is in the mortgagor, 158 TORRENS SYSTEM MORTGAGES. there is no foundation for a redemise, and the ' rent ' is not incident to the reversion. ** ' It is a maxim in law that the rent must be reserved to him from whom the state of the land moveth, and not to a stranger.' Co. Litt. 143, b. '^ Bacon Abridgement, 7tli ed., by Gwillim & Dodd: '' ' If the lord upon the donation had reserved to himself any gabel or rent and had afterwards granted the rent to a stranger, though the tenant had attorned or consented to the grant, yet the stranger could not distrain for the rent as the power of seizure, so the distress that was substi- tuted in its place belongs only to him of whom the lands were and in whom the right. of reverter was when the feudal deed was spent.' '^ I shall now consider a number of cases cited on behalf of respondent in support of the opposite conclusion. '' Jolly Y. Arhtithnot (1859), 4 De G. & J. 224; 28 L. J. Ch. 547 ; 45 E. R. 87, is a case where a mortgage deed was made to the mortgagee and a receivership deed was made contemporaneously by which ^ the mortgagor and mortgagee appointed a receiver and constituted him their agent and attor- ney to receive the rents of the mortgaged property, and to use such remedies by way of entry and dis- tress as should be requisite for that purpose. By the same deed the mortgagor attorned as tenant from year to year to the receiver. ' *' On the mortgagor being found bankrupt it was held that, as against the assignees in bank- ruptcy, the relation of landlord and tenant had TORRENS SYSTEM MORTGAGES. 159 been created between the receiver and mortgagor, and that the receiver was entitled to distrain and take the goods that had belonged to the mortgagor on the mortgaged premises. • ^ The fact that the mortgagee was a party to the deed containing the attornment clause distin- guishes the facts of this case from the case of a mere attornment to a stranger. It would also ap- pear that a private receiver may distrain when furnished with express authority: Ward v. Shetv (1833), 9 Bing. 638; 2 L. J. C. P. 58. '• Lord Chelmsford, the Lord Chancellor, in giving judgment in Jolly v. Arhutlmot, p. 92, said: '' ' It appears to me, however, that the circum- stance of the truth of the case appearing upon the deed is a reason why the agreement of the parties which it embodies should be carried out, either by giving effect to their intentions in the manner which they have prescribed, or by way of estoppel to prevent their denying the right to do the acts which they have authorized to Ije done. If attorn- ment to a mortgagee would be good to create a ten- ancy in the mortgagor (which seems to be provided for by the 11th Geo. 2d, c. 19), why should not an attornment to a third person, with the consent of the mortgagee, operate either to create a tenancy or to estop all parties from denying that such a ten- ancy exists ? The statement in the deed of the char- acter with which Aplin was to be clothed in order to carry out the object of the parties, and the proof which it affords of his having no previous title to the land, appears to me to furnish no objection to the validity of the distress in question.' 160 TORRENS SYSTEM MORTGAGES. ** On the ground of estoppel alone the assignees in bankruptcy were bound by the agreement of their assignor, the bankrupt. ** In Dancer v. Hastings, 4 Bing. 2; 5 L. J. C. P. 3, a demise from a receiver was held as against the lessee to be a good lease to entitle the lessor to distrain and to estop the lessee from pleading non-tenant. In this case, the receiver was a re- ceiver in Chancery and had a right to distrain: Bennett v. RoUns (1832), 5 Car. & P. 319; Pitt v. Snowden (1752), 3 Atk. 750. See also Ward v. Shew, supra. *' A receiver appointed by the Court also has power to let for any term not exceeding three years: Shaff v. Holdaway (1863), mentioned in Daniell's Ch. Pr., 7th ed., vol. 2, p. 1443. '' In the case of Morton v. Woods (1869), L. R. 3 Q. B. 658, a mortgagor in possession, having al- ready mortgaged in fee, executed a second mort- gage in fee to the defendants and attorned tenant to the defendants at a certain rent. The defend- ants distrained for a year's rent. Shortly after- wards, the mortgagor was adjudicated a bankrupt and the plaintiffs were appointed creditors' as- signees. The plaintiffs paid the defendants the rent and costs of distress under protest, and a ques- tion was stated for the opinion of the Court as to whether the distress was legal and valid. It was held that the parties having agreed that the rela- tion of landlord and tenant should be established, the mortgagor was estopped from setting up that the defendants had no legal reversion. Here, again, the decision goes no further than to declare TORRENS SYSTEM MORTGAGES. 161 a tenancy by estoppel between the parties and those claiming under them. " In Ex parte Piinnett, In re Kitchin (1880), 16 Ch. D. 226 ; 50 L. J. Ch. 212, the right of a second mortgagee to distrain under an attornment clause was upheld as agamst the trustee in bankruptc}^ This case, again, goes no further than to decide that, notwithstanding the legal estate is outstand- ing in a prior mortgagee, a tenancy by estoppel or quasi estoppel can be created between the second mortgagee and mortgagor. '' The main point for decision in In re Tlirel- faJl (1880), 16 Ch. D. 274; 50 L. J. Ch. 318, was whether a tenancy created by an attornment clause in a mortgage deed was a tenancy from year to year or a tenancy at will. The right of the mortgagee to distrain against the trustee in bankruptcy under the Bankruptcy Act, 1869, s. 34, was upheld. '' In Ex parte Voisey (1882), 21 Ch. D. 442; 52 L. J. Ch. 121, the principal point for decision was whether the attornment clause in a mortgage deed was valid or merely a contrivance to defeat the law in bankruptcy. The attornment clause and the distress levied under it were held valid as against the trustee in bankruptcy. Sir George Jessel, M.R., at p. 456, says: " ' In this case we have an attornment to the legal owner by deed executed by the tenant in possession and delivered to the legal owner — very good evidence of a tenancy — evidence, therefore, of an agreement for a tenancy, and as was said in Ex parte Piinnett, that is an estoppel in pais which T.S.M. — 11 162 TORRENS SYSTEM MORTGAGES. would prevent the tenant from denying the tenancy. ' In Kearsleii v. PJiilips (1883), 11 Q. B. D. 621; 52 L. J. Q. B. 581, a mortgage was created by w^ay of demise for a term of years, and the mortgagor attorned and became tenant to the mortgagee at a certain rent. The mortgagor let the mortgaged premises to one King, who assigned his goods upon the premises to the plaintiff by a registered bill of sale. The mortgagees distrained under the attorn- ment clause on goods assigned by King to the plain- tiff. It was held that the distress was lawful. The cases of Jolly v. Arhiithnot and Morton v. Woods were cited by Lindley, L.J., in support of this finding, but Fry, L.J., at p. 626, says: " ' The question as to the effect of an attorn- ment is in truth immaterial; the real point is whether ))y the so-called attornment clause the defendants re-demised the premises to James Kearsley: I am of opinion that they did. But apart from tliat point the plaintiif 's counsel have failed to satisfy me that in the case of a mere at- tornment the right to distrain a stranger's goods does not exist.' " Nearly all the foregoing cases, as will ])e seen, deal with the right of the mortgagee under an attornment clause as against the trustee in bankruptcy. Apart from the limitation of the distress to one year's rent, the Bankruptcy Acts, from the earliest times down to the present, left the right of distres for rent intact, and from 1869 at least that right was reserved ' to a landlord or other persoi} to whom any rent is due from the TORRENS SYSTEM MORTGAGES. 163 bankrupt. ' In addition to that broad reservation, the doctrine of estoppel applies to the trustee in bankruptcy to the same extent as it does to the mortgagor. '' In re Threlfall, supra, per Bacon, C.J., at p. 279: ' ' ^ If you find that a man has become bankrupt, that he is represented by a trustee who can have, no other rights in this case than the bankrupt him- self could have had if he had not become bank- rupt, and distress is levied for the rent which he owed to the landlord, is it necessary to have any other facts to deal with? The statute [the Bank- ruptcy Act, 1869, s. 34] is plain. The trustee can claim no right which the bankruj^t could not have claimed. Suppose there had been no bankruptcy and distress levied, and the tenant replevied, then the law is clear.' " From the foregoing, I come to the conclusion that the attornment clause in question cannot create a real tenancy, as in the case of a mortgage deed with a valid attornment clause, in which case a tenancy is created, x)rovided the true effect of the deed is to create such a tenancy. As Fry, L.J., said in Kearslej/ v. Philips, supra, which decided that an actual tenancy was created by re-demise, ' the question as to the eifect of an attornment is in truth immaterial: the real point is whether by the so-called attornment clause, the defendants re- demised the premises to James Kearsley,' the mortgagor. ^' As Ix'tween the {jarlies, this chiuse cannot do more than to create the relationship of landlord 164 TORRENS SYSTEM MORTGAGES. and tenant by estoppel. The mortgagor, or those claiming under him, must not be allowed to deny his deed. In other words, the deed must be truly interpreted and effect must be given to that inter- pretation as between the parties. In that event it is onl}^ binding between the parties and their pri- vies. It was argued by counsel for the respondent that an execution creditor is a privy, but I can find no authority for the statement, while Eichards V. Jenkins (1887), 18 Q. B. D. 451; 56 L. J. Q. B. 293, is a direct authority to the contrary. The estoppel should not be binding on execution credi- tors in any event, on the broad principle that a party should not be allowed by his own private in- strument to defeat the object of an Act of Parlia- ment to the prejudice of others who were not parties to the deed. Everest v. Strode, p. 225. '' The estoppel in this case is only an estoppel b}^ deed and not an estoppel in pais, as in the cases of Ex parte Punnett; Ex parte Voisey; Morton v. Woods; Dancer v. Hastings, and other cases al- ready referred to. " The true principle of this estoppel {in pais) between a landlord and tenant is, that a tenant while in possession is estopped from disputing that, at the time tvhe^i Jie received possession, the landlord from whom he received it had a good title to the premises. Two conditions are essential to the es- toppel; first, possession; secondly, permission: Everest & Strode, 268-9 ; Cook v. Whellock (1890), 24 Q. B. D. 658, at p. 661; 59 L. J. Q. B. 329. ^' This was the principle underlying the de- cision in Dancer v. Hastings, supra, where the TORRENS SYSTEM MORTGAGES. 165 tenant i^eceived possession from" the receiver in Chancery. The same idea is expressed in Morton V. Woods, supra, where it \Yas held that the mort- gagor had received possession from the mortgagee and entered on the premises and, therefore, was estopped from denying that the legal estate was in the landlord. Per Cockburn, C. J., at p. 668, and Lush, J., at p. 671. ' ' This distinction, hovrever, though interesting, is not material, as an estoppel in pais only extends to j)ersons claiming possession under the tenant: Tadman v. Henman, supra. '' In any event, where the person claiming as landlord is not the person by whom the tenant was let into possession of the premises, evidence may be received to show that the relation of landlord and tenant does not in fact exist : 13 Halsbury, p. ^04:; Gregori/ v. Doidge, 3 Bing. 474; 4 L. J. (O.S.) C. P. 159. '' While a lease may be created by estoppel when the lessor has nothing in the law, it is only effective against the person estopped, see note (p) at p. 373, 13 Halsbury. " The clause in question, therefore, while it uses certain words ' can have no effect at all upon the reality of the circumstances :' Per Brett, L.J., in Simm v. Anglo-American Telegraph Co., 5 Q. B. D. 188 ; 49 L. J. Q. B. 392. '' It only creates a personal right in the mort- gagee to enforce the clause, and a personal liability on the mortgagor to have the clause enforced. It does not make a ' stranger ' a landlord, or make what is not rent, rent.. 166 TORRENS SYSTEM MORTGAGES. *' It was also argued on behalf of the respond- ent that there has been express recognition of the mortgagee's right of distraint by several Terri- torial Ordinances and Provincial Statutes. '' Ordinance No. 9 of 1884 enacted that, after the first day of January, 1885, * the right of mort- gagees to distrain for interest due upon mortgages shall be limited to the goods and chattels of the mortgagor only and as to such goods and chattels, only such as are not exempt from seizure under execution. ' '' The ^ right of mortgagees to distrain for ar- rears of interest ' must refer to the proviso in the short form of deed of mortgage in the schedule to Ordinance No. 1 of 1881,' ' An Ordinance respect- ing Short Forms of Indenture. ' The short form of the proviso is, ' provided that the mortgagor may distrain for arrears of interest,' and the extended form is identical with the form in the Ontario Act which was under consideration in Trust & Loan Co. V. Latvrason, mentioned above. In that case, the form in question was held not to create a ten- ancy, and the distress provided for was not to be for rent, but for interest to be recovered in the same way as rent. ' ' Ordinance No. 16 of 1898, s. 1, enacted : " ' 5. The right of a mortgagee of land or his assigns to distrain for interest in arrear or prin- cipal due upon a mortgage shall, notwithstanding anything stated to the contrary in the mortgage or in any agreement relating to the same, be limited to the goods and chattels of the mortgagor or his as- signs, and as to such goods, and chattels, to such TORRENS SYSTEM MORTGAGES. 16 v only as are not exempt from seizure under execu- tion. [Section 5 of c. 34 of C. 0. 1898]. " ' And the same provision is contained in our statute book to-day (R. S. Sask., 1909, c. 51, s. 5).' '' I do not see how the use of the expression ' the rigiit of a mortgagee to distrain ' can be taken as conferring any greater rights than he actually had at the time. The legislature can only be taken as saying to mortgagees, ' Whatever rights you may have by law or by contract shall hereafter be limited.' The principles of interpretation laid down in sections 18 and 19 of the Interpretation Act (R. S. Sask., c. 1) should apply." Although the law in Alberta and Saskatchewan now seems to be well settled, to the effect that under an attornment clause in a Torrens system mortgage the mortgagee cannot claim the protection of the statute of 8 Anne, c. 11, s. 1, yet it may not be al- together impertinent to suggest some reasons why these decisions are not altogether satisfactory. To begin with, Tadman v. Henman, supra, is the de- cision of a single Judge of the King's Bench Division, and at best only decides that where a person having no right whatsoever to demise, does so, the goods of a licensee of the tenant by estoppel cannot be distrained upon. If it is to be taken as an authority to the effect that the goods of third persons can under no circumstances be so dis- trained, then it is in direct opposition to Syllivan V. Stradling, 2 Wils. 208. Next, more stress seems to have been laid on the necessity of the presence of the legal estate than is warranted by the English decisions, and it seems to have been taken for 168 TORRENS SYSTEM MORTGAGES. granted that the typical English mortgage vests the legal estate in the mortgagee ; though it would not be incorrect to say that mortgages which fail to convey the legal estate are many times more numerous. Thirdly, the position of a mortgagee with statutory powers of entry into, possession, leasing of the moi'tgaged premises and foreclo- sure, is very closely analogous to that of a mort- gagee with the legal estate, and bears but the shadowiest resemblance to that of an equitable charge in England. The broad reasons given by the Judges of the English Court of Appeal for their findings in favour of the validity of attornment clauses, and their seeming neglect of the w^hereabouts of the legal estate, have not perhaps been taken suffi- ciently into consideration. Cotton, L. J., in Ex parte Jackson, 14 C. D. 725, says undoubtedly a mort- gagor and a mortgagee have a right to insert in their mortgage deed a clause making the mortgagor attorn as tenant to the mortgagee, and thus by con- tract constituting the relation of landlord and ten- ant between the two. Under such circumstances, where it is a real and not a fictitious or sham ar- rangement, the 07'dinary consequences of a tenancy folloiv, and there can be a distress for the rent agreed upon, which will be valid and effectual in the case of bankruptcy. As has been pointed out by Lord Justice Baggallay, this is quite reasonable, for the mortgagee has a right to take possession by himself or by his tenant. If the mortgagor is in possession by a tenant, then the rent which that tenant pays comes into the hands of the mortgagee. TORRENS SYSTEM MORTGAGES. 169 If the property is in the possession of the mort- gagor himself, the mortgagee may turn him out and let the property either to a stranger or to the mortgagor; and therefore there is nothing unrea- sonable, or that can be called a fraud on the law of bankruptcy, in allowing the parties to make a contract in the mortgage deed, which they might validly and effectually make afterwards. If the mortgagee lets to a third party, no question arises. It is true that the mortgagee 's right to take pos- session does not under the Torrens system arise until after default in the payment of interest, but neither does the power of distraint under an attorn- ment clause. After such default the mortgagee can at once enter and lease upon what terms he will. It can scarcely be said that it is more un- reasonable in the one case than the other to allow the parties to make a contract in the mortgage deed which they might validly and effectually make afterwards. The contract, if made after the entry, would in both cases, it seems, create an actual ten- ancy with all its attendant rights, including that of distraint. In the passage from Ex parte Punnett quoted supra, Jessel, M.R., says there may be an attorn- ment between the mortgagor and each of two mort- gagees ; there is nothing either in law or good sense to prevent such an arrangement being made. ."Otherwise," says he, "this would happen, if a mortgage were made to two mortgagees by the same deed, and the mortgagor were to attorn tenant to the two mortgagees, there being a proviso as be- tween themselves that the one should be first and 170 TORRENS SYSTEM MORTGAGES. the other second, that would be good, but if the one mortgage were made by a deed dated the day after the other, it woukl be bad. It appears to me that that woukl be a mere over-refinement." It seems not unlikely that the same Judge would have thought it an over-refinement that a transfer of land b}' way of security, and a contemporaneous attornment by the transferor to the transferee, should result in a valid tenancy, but that a statu- tory mortgage with all its attendant powers would prevent any such result. Another ground for holding an attornment clause good has been mentioned, namely, that the mortgagee hy undertaking the heavy onus of being a mortgagee in possession, is only fairly re- quited by being allowed to reap all the benefits of his position as lessor. It is true that it is by no means an unani- mous opinion that the mere insertion of an attorn- ment clause renders the mortgagee a mortgagee in l^ossession, so as to be liable to account on the foot- ing of wilful default. In favour of this view are Lord Justice James and Lord Justice Bramwell in Re Stockton Iron Furnace Co., supra ; Sir George Jessel in Ex parte Punnett, and Day, L.J., in Green v. Marsh, [1892] 2 Q. B. 385. Whilst on the other side are the dictum of Lord Selborne in reply to a counsel, who in his argument relied on Re Stockton Iron Furnace Co. " That is to say," says Lord Selborne, *' as between himself and a subsequent mortgagee, you could not say he was in that position as regards the mortgagor. ' ' TORRENS SYSTEM MORTGAGES. I'^l Bacon, V.C., in Stanley v. Grundy, 22 C. D. 478, 52 L. J". Ch. 248, held that the attornment clause did not make a mortgagee a mortgagee in posses- sion as against subsequent mortgagees ; and it may be conceded that Bacon, V.C, in the latter case gives the true view of the case : ' ' The mortgagee must take advantage of the attornment clause be- fore he can be said to go into possession," or to put it in another way, the distraint and the entry into possession are identical or at any rate con- temporaneous. The case does not in any way seem to interfere with the proposition in the former cases, which is but the corollary of a well worn maxim, Qui sent if onus, sent ire debet et commodiim. The distraint imposes upon the mortgagee the liabilities of a mortgagee in possession, and eo instanti gives * him the full rights of a landlord. One of the arguments that is at the bottom of the refusal to admit the complete efficacy of these attornment clauses seems to be that the statutory mortgage is a mere charge. It may well, however, be regarded as something very much more than a mere charge. It is thought that what is gen- erally meant by "a mere charge " is a charge imposed on property in cases where that which is secured is not a debt, e.g., the ordinary por- tions charge imposed by settlement or will. A charge which springs from contract and secures a loan is, it is thought, in its essence of an entirely distinct nature. The latter charges are of a more or less modern prigin, and it is possible to trace in 1''3 TORRENS SYSTEM MORTGAGES. the decisions and dicta of Judges a tendency to ap- proximate them as closely as possible to true mort- gages. Kekewich, J., in Sadler v. Worley, [1894] 2 Ch. 170, enforced the floating charge created by a series of debentures by foreclosure, and in Re Otven, 1894, 68 L. J. Ch. 749, a clear distinction be- tween the two species of charges emerges. It seems to be a matter of regret that a broader view has not prevailed in Alberta and Saskatche- wan, following out the lines laid down by that great master of equity, Mr. Maitland, in his lectures on Equity, where speaking of foreclosure he says at p. 284: '' What can be done by a signed writing stating an agreement to grant a mortgage can be done also by a signed writing declaring that the land is charged with the repayment of the loan, ' ' or that hinted at by Lord Parker in Kreglinger v. Neto Patagonia, etc., 83 L. J. Ch. 79, where he says: ^' The difference between transactions by way of equitable charge and transactions by way of conveyance with a proviso for reconvey- ance is chiefly important when, for the purposes of determining whether a particular stipulation ougM or ought not to be rejected for inconsistency or repugnancy, the nature of the transaction has to be investigated. ' ' It does not seem that it would be going too far to speak of a statutory mortgagee as having a constructive legal estate, so many of the powers incident to the possession of the legal estate have been committed to him by statute. With respect to the insistency in Yates v. Bat- ledge, supra, spoken of by Stuart, J., on the neces- TORRENS SYSTEM MORTGAGES. 1'<'3 sity for the legal estate being in the mortgagee, it is respectfully suggested that the fact of its exist- ence is emphasised solely to answer the argument that the lessor was not the beneficial owner. ' ' True, ' ' is the reply, ' ' but he had the legal estate, and that suffices." Stuart, J., asks the question: ^' How can the mortgagor be at the same time the owner of the legal estate in fee simple and also a tenant for a term of years?" The reply is very respectfully given that he can very easily be so. Suppose two mortgages made by the expressed conveyance of the legal estate, and the first debt discharged and re-conveyance taken, both mortgages having con- tained attornment clauses. Is the attomment clause in the second mortgage no longer valid? Suppose a cestui que trust creates a mortgage by deed with an attornment clause and the trustee thereafter conveys to the cestui que trust. Is the attornment clause invalidated? Bacon, in his Abridgement, 7th ed., v. 4, p. 850, says that he may even by contract bind himself to become tenant of his own land. It was long contended in Scotland that the ab- surdity of a man being his own vassal necessarily inferred ipso jure a consolidation of estates thus circumstanced, but this subtlety has been fully refuted, and there is an end to all these doubts and questions (see Bell's Principles of the Law of Scotland, 341). The position of a licensee, who under a license is working a patent right for which another has l^i TORRENS SYSTEM MORTGAGES. got a patent is very analog^ous indeed to the posi- tion of a tenant of lands who has taken a lease of those lands from another. So long as the lease re- mains in force, and the tenant has not been evicted from the land, he is estopped from denying thait his lessor had title to that land. When the lease is at an end the man who was formerly a tenant, but has now ceased to be so, may shew that it was al- together a mistake to have taken that lease and that the land really belonged to him; but during the continuance of the lease he cannot shew any- thing of the sort. It must be taken as against him that the lessor had a title to the land (per Lord Blackburn in Clark v. Adie, 46 L. J. Ch. 598, at 606). The question as to whether a right of distress on the goods of third parties is incident to the re- lationship created by lan attornment clause is, of course, (jiiite distinct from the question as to the power to distrain under the provisions of 8 Anne e. 14. In Freeman v. Edwards^ 2 Ex. 732, there was a power in the mortgage to distrain for interest in like manner as if for rent reserved on a lease. The mortgage was of copyholds, and was made in the usual way by covenant to surrender and there- fore did not convey the legal estate. In his judgment Baron Parke said: '* Probably the argu- ment that the grant operated so as to create a rent charge is correct; and if so the rent charge con- tinued until the surrender and admittance." In this particular case the fact that a rent charge had TORRENS SYSTEM MORTGAGES. l^o been created was of no avail, as it was, of course, merged on the subsequent surrender and admit- tance. It appears from the case of Saffery v. Elgood, 1 A. & E. 191, that the goods of a stranger not shewn to hold the premises by title paramount to the rent charge may be distrained upon for arrears of the rent (see also Johnson v. Faulkner, 1842, 2 Q. B. 928, at 931). All rents which have been created since the first da}^ of the session of Parliament in 1730, may be recovered by distress in the same manner as rent reserved upon a lease (Landlord and Tenant Act, 1780, 4 Geo. II., c. 28). See also Re Gerard and Beacham's Contract, [1894] 3 Ch. 295; Dodds v. Tltompson, L. R. 1 C. P. 133, and Williams v. Hay- ward, 1 E. & E. 1040. In Be Stockfoii Iron Furnace Co., supra, the company gave a mortgage to their bankers by cov- enant to surrender, so that the legal interest in the premises remained in the company, and the com- pany hy the mortgage deed, attorned and became tenant of their bankers from year to year. Counsel brought forward the argument that the bankers had not the legal estate. Jessel, M.R., in his judgment does not directly notice the argument, l)ut he shows clearly that in his opinion the whole matter depends largely on the agreement and intention of the par- ties. He says : " In the first place one must remem- ber that according to the course of practice of con- veyancers, when the mortgagor is occupying, so that there is no rent receivable to meet the interest. l'^6 TORRENS SYSTEM MORTGAGES. it was the common practice that he should agree to become tenant. There is Clothing novel or re- markable in the mortgage. It is in the ordinary form. It was part of the bargain that they should become landlord. What they did therefore was only for the purpose of exercising their right of distress, which is a right incident to their position of landlord." James, L.J., says: '' The bankers probably did mean to get a security upon the chat- tels which otherwise they would not have had. But then they got that security upon the chattels by means which are not prohibited by law, they got it by means of an arrangement that they should be landlords, and that arrangement did carry with it the incident of distress. They were incurring lia- bilities as mortgagees in possession, and they have a limited right as landlords. It appears to me that they have all the rights and incidents of the relationship hettveen landlords and tenants^ both as regards the parties themselves and a third per- son whose goods happen to he on the property.'^ Throughout the English cases on the subject of these attornment clauses there seems to be a ten- dency to distinguish between estoppel and the real creation of the relationship of landlord and tenant, by what may he called estoppel or quasi-estoppel (it does not matter what term we use) says Jessel, M.R., in Ex parte Punnett, supra. The distinction is illustrated by a query of James, L.J., in Re The Stockton Iron Furnace Company, which seems to make it clear that he was not prepared to ac- quiesce in the application of the ordinary rule that estoppels do not bind third parties to attornment TORRENS SYSTEM MORTGAGES. !'?'<' clauses. ^ ' A mortgagor owner of an estate lets to a farmer, and on the premises are another person's goods. Has not the mortgagor the ordinary rights of a landlord, though the legal estate be outstand- ing in the mortgagee?" The opinion is ventured with much diffidence that as between mortgagor and mortgagee there is no question of estoppel in the proper sense of the word. There is an agreement for a tenancy and to effectuate the intention all the incidents of the rela- tionship of landlord and tenant are annexed to that tenancy by the operation of a legal fiction. It is suggested that, when Jessel, M.R., in The Stockton Iron Funiace Company, speaks of quasi estoppel, and Lord Chelmsford, in Jolly v. Arhuthnot, speaks of carrying out the agreement of the parties either by giving effect to their intentions in the manner which they have prescribed, or by way of estoppel, and later on in his judgment says : '* Of course, if a tenancy were created, the right to distrain would follow as an incident to it," it can scarcely be denied that Jessel, M.R., consid- ered, and Lord Chelmsford inclined to the opin- ion, that by an attornment clause a tenancy was created between mortgagor and mortgagee irre- spective of questions of reversion or legal estate, and that a right of distress was incident to it. It was not necessary for Lord Chelmsford to ex- press any decided opinion on the subject, as the express power to distrain contained in the docu- ment in question was sufficient for the purpose of his decision. T.S.il. — 12 178 TORRENS SYSTEM MORTGAGES. It seems impossible that these Judges could have spoken of a mere right to distrain in gross as an incident to a tenancy. Their view seems to have been, with respect to tenancies created by what is called an attornment clause, what with respect to tenancies in general lias been given statutory recognition in Ireland by the Act of 1860 (Deasy's Act), which enacts that the relation of landlord and tenant shall be deemed to be founded on the express or implied contract of the parties, and not upon tenure or service, and a reversion shall not be necessary to such re- lation, which shall be deemed to subsist in all cases in which there shall be an agreement by one party to hold land from or under another in con- sideration of any rent. The competing view has been outlined to the author by a competent authority in the following words: '' The sacredness in the old days attached to the ownership of land and the rights and reme- dies of an extraordinary^ character given to a land- lord, appear to be an anachronism, especially in a nevv country. The spirit of the times and country tends to a restriction rather than an extension of such rights and remedies." With the words, there can be no disagreement, but it can be at least doubted whether conscious expression of the spirit of the times and country is not best left to legisla- tion. TORRENS SYSTEM MORTGAGES. 179 CHAPTER XX. Insurance. A mortgagee who insures the mortgaged pro- perty is not entitled to retain the amount of the insurance moneys, for his own use, if the property is destroyed or damaged during the subsistence of the security; but the insurers can claim on pay- ment to have the whole or a proportionate part of the mortgage debt assigned to them (Castellain v. Preston, 8 Q. B. D. 613, 11 Q. B. D. 380). As to the right of contribution where both mort- gagor and mortgagee insure, see per Mellish, L.J., in NortJi British Insurance Co. v. London Globe Insurance Co., 5 Ch. D. 569, 583, 46 L. J. Ch. 537. '' But I can see no reason why the principle in respect of contribution should not be exactly the same in respect of fire policies as it is in respect of marine policies, and I think if the same person, in respect of the same right, insures in two offices, there is no reason why they should not contribute in equal proportions in respect of a fire policy as they would in respect of a marine policy. The rule is perfectly established in the case of a marine pol- icy that contribution only applies where it is an insurance by the same person having the same rights, and does not apply where different persons insure in respect of different rights. The reason of that is obvious enough. The cases where dif- ferent persons insure the same property in respect of their different rights may be divided into two classes. It mav be that the interests of the two 180 TORRENS SYSTEM MORTGAGES. between them make up the whole property, as in the case of a tenant for life and remainderman. Then if each insures they may use words appar- ently insuring the w^hole property, yet each would recover from their respective insurance compan- ies only the value of their own interest, and of course those added together would make up the value of the whole property. Therefore it would not be a case either of subrogation or contribution because the loss would be divided between the two companies in proportion to the interests which the respective assured had in the property. But then, there may be a case where, although two different persons insure in respect of different rights, each of them can recover the whole, as in the case of a mortgagor and mortgagee ; but wherever that is the case it will necessarily follow that one of these two has a remedy over against the other, because the same property cannot in value belong to two dif- ferent persons. Each of them may have an inter- est which entitles him to insure for the full value because, in certain events, if the other party be- comes insolvent, it may be that he would lose the full value of the property, and therefore would have in law an insura!ble interest so that he can insure the full value. But yet, it must be that if each can recover the full value of the property from his insurer one must have a remed}^ over against the other. I think whenever that is the case the company which has insured the person who has the remedy over succeeds to his right of remedy over, and then it is a case of subrogation." TORRENS SYSTEM MORTGAGES. 181 Money paid for insuring mortgaged property against fire was formerly not allowed whether the mortgagee were in possession or not, unless the insurance was effected and continued in accord- ance with the provisions of the mortgage deed {Dohson V. Land, 8 H. 216; Bellamy v. Brickenden, 2 J. &H. 137). Where a mortgagor and mortgagee effected a joint insurance on the mxortgaged pro^Derty, the mortgagee paying the premiums, the mortgagor's assignees in bankruptcy were, on destruction of the premises by fire, directed to pay the insurance money into Court, there being no right in one of the parties to a joint security to apply the pro- duce irrespective of the claims of the other. Where a bill of sale of machinery to secure a loan provided that the mortgagor should insure, but contained no provision as to the application of the insurance moneys, it was held upon the de- struction of the property that the mortgagee had no claim to the insurance moneys as agamst the mortgagor {Lees v. Whitely, 2 Eq. 143). A mortgagor who covenanted to lay out insur- ance moneys in rebuilding the mortgaged property expended some of the money in building on ad- joining property, but it was held that the moi't- gagee had no charge on such property for the amount of the money so expended as against a mortgagee of the adjoining propei-ty, although such mortgagee had notice of the covenant (Harry- man V. Collins, 18 B. 11). In Westminster Fire Office v. Glasgow Provi- dent Investment Society, 13 Appeal C. 699, where 183 TORRENS SYSTEM MORTGAGES. two moi'tgagees insured and the first mortgagee received sufficient to reinstate the destroyed mort- gaged premises, but not enough to amount to the difference between the insurable vakie of the pro- perty and its value after deterioration by fire, the second mortgagee was held entitled to recover on his insurance. The statutory condition contained in policies of fire insurance requiring the com- pany's consent to an assignment of the property insured refers to the absolute divesting by the insured of all title and interest in the property {Trotter and Douglas v. Calgary Fire Insurance (7o., 3 Alta. L. R. 12). If a mortgage company, through its manager, undertakes with the mortgagor to keep alive an insurance on the mortgaged property, and takes steps towards carrying out such undertaking, but fails to carry it out, he is guilty of such negligence as to render him liable in damages to the mort- gagee if ignorant of such failure, for the amount of such insurance, in case the property is burnt after the policy lapses (Camphell v. Canadian Co-operative Investment Co., 16 Man. L. R. 464, following Skelton v. L. d; N. W. R., 2 C. P. 636). Where a mortgagee voluntarily undertakes the duty of insurance, and fails to effect a policy, the mortgagor may set off the damages resultant from loss of the mortgaged premises by fire as against an assignee of the mortgage {Camphell v. Canadian Co-operative Investment Co., 5 W. L. R. 153). By the Fires Prevention Act, 1774, section 83, insurance offices are required;, upon the request of any person interested in or entitled to any house TORRENS SYSTEM MORTGAGES. 1B3 or other building burnt down or damaged by fire, to apply the insurance money in reinstating or re- pairing such house or building. It was held that the provisions of this enactment applied to insur- ance in England and Wales generally (Ex parte Goreli), 4 D. Gr. J., and Sm. 477), but the correct- ness of this decision has been doubted. (See West- minster Fire Office v. Glasgow Investment Society, 13 A. C. 699, per Lord Watson at 716, and per Lord Selborne at 713, but see also In re Quickes Trusts, [1908] 1 Oh. 887, at 893). Whether it could in an}^ event be considered applicable to Canada is very doubtful. 181 TORRENS SYSTEM MORTGAGES. CHAPTER XXI. Consolidation. The general principle of consolidation has been approved of by MacKay, J., in the Saskatchewan General Trust Corprn. v. Thompson^ 10 W. W. R. 661, where he expressly approved of the statement in Robins on Mortgages, vol. 2, page 255, that the authorities lead to this conclusion that if two or more distinct mortgages be made of different es- tates between the same parties, or if a sum of money be advanced on one estate, and other estates be afterwards made a securit}" for the sum already advanced, and also for further advances, although without any agreement that the first estate shall be charged with the further advances, nevertheless neither the mortgagor nor anyone claiming under him the equity of redemption of one of the estates, although without notice of the other mortgage or charge, shall be permitted to redeem one mortgage without redeeming both. A right to consolidate the mortgagee's securi- ties must in order to be effective be the subject of express stipulation (Greig v. Watson, 7 V. L. R. 79; Wilkin v. Deans, 6 N. Z. L. R. 425). In the first case one of the two portions of land, in the second, both were under the Act. It can hardly be doubted that a mortgagor who assented to such stipulation would be bound by it ; whether the cov- enant would invariably bind his transferee where the other securities were statutory mortgages of land under the system, perhaps admits of some TORRENS SYSTEM MORTGAGES. 185 doubt, and the point appears not to have been decided; on principle there would seem to be no reason why such a covenant should not bind transferees since it must necessarily, that is, in the absence of fraud or the grossest negligence, come to the knowledge of a person proposing to purchase the land from the mortgagor, but the y^atio deci- dendi in Wilkin v. Deans, where it was held that the rules of a building society which were referred to in the mortgage were not thereby incorporated in it, is somewhat against this view of the effect of a covenant, since its practical effect would be to incorporate in the mortgage provisions in other mortgages, and thus run counter to the enactments which make the registered instruments the sole evi- dence of the rights of the party. Indeed Wilkin V. Deans might well be quoted to the effect that the doctrine of consolidation has been entirely super- seded by the acts. A transferee is not bound by the original mort- gagor's assent to the right of consolidation where the other securities of the mortgagee consist of mortgages over land not under the system (Hogg, 947). In England the tendency is against any further extension of the principle of consolidation, as aj)- pears from the provision, section 17 of the Con- veyancing Act of 1881, which enacts that where the mortgages, or one of them, is made after the commencement of the Act, there is to be no right of consolidation, unless a contrary intention appears. 186 TORRENS SYSTEM MORTGAGES. Whei'c^ an owner mortgages two or more pro- perties to the same person, he or his transferee can redeem one when the mortgage debt becomes pay- able without redeeming the other or others {Jen- nings V. Jordan, 6 A. C. 698). Should the mortgagor or his transferee then fail to do so, the mortgagee is allowed to consoli- date the debts and refuse to permit the redemption of one only {Hughes v. Britannia Benefit Society, [1906] 2 Ch. 607). Where the mortgages w^ere originally made to different persons the assignees of the equities of redemption are bound by the same rules when the assignments w^ere made after the vesting of the mortgages in one and the same person {Min- ter V. Carr, [1894] 3 Oh. 498). There is no consoli- dation unless the different mortgages were made by the same mortgagor {Sharp v. Richards, [1909] I'ch. 109). TORRENS SYSTEM MORTGAGES. 18T CHAPTER XXII. Mortgage of Mortgage. In case of a mortgage by a mortgagee of his estate or interest in the mortgage, the person in whose favor such charge is created shall be deemed the transferee of such estate or interest, and shall have all rights and powers as such, subject to the provisoes and provisions expressed in the instrument creating the charge or implied therein by virtue thereof (Sask. Land Titles Act, sec. 98 (4)). Upon the registration of any transfer or mort- gage of a mortgage, encumbrance or lease, the mortgage or encumbrance, or the estate or interest of the transferor as set forth in such instrument, with all rights, powers and privileges thereto be- longing or appertaining, shall pass to the trans- feree, and such transferee shall thereupon become subject to and liable for all and every of the same requirements and liabilities to which he would have been subject and liable if named in such instru- ment originally as mortgagee, encumbrancee, or lessee of such land, estate or interest (Man. Real Property Act, sec. 110). There seems to be no provision in Alberta as to sub-mortgages, but there is no reason why they should not be created in the ordinary statutory form. It is said that in Australia in practice, an absolute transfer of the mortgage is more fre- quently taken, the sub-mortgagor being protected 188 TORRENS SYSTEM MORTGAGES. ' by entering into a collateral agreement containing the terms of the transaction, and lodging a caveat (See Hogg, p, 964). It has been held in New Zealand that as a sub- mortgage is a transfer of the estate and interest of the original mortgagee in the original mortgage, it follows that upon registration of the sub-mort- gage no registrable interest is left in the original mortgagee and a transfer thereof not being of a registrable interest, cannot be registered {Pott v. District Land Registrar, 26 N. Z. L. R. 141). TORRENS SYSTEM MORTGAGES. 189 CHAPTER XXIII. Acceleration Clauses. In Sterne v. Beck, 1 De G. & S. 595; 137 R. R. 307, there occurred in a mortgage deed the proviso that upon default being made in payment of an}^ instalment of mortgage moneys (the debt being repayable by instalments), the whole unpaid por- tion of the debt with interest should immedi- ately become payable. Turner, L.J., construed the proviso as not being in the nature of a penalty, but as expressing the mode in which under certain conditions the payment was to be made, the con- tract between the parties being that the sum should be i)ayable by instalments, provided that they were punctually paid, but that in case of any default in paying, the whole should become payable at once. (See also National Trust Co. v. Camphell, 17 Man. L. R. 587; 7 W. L. R. 754; Walling ford v. 3Iutual Society, 5 A. C. 696; Protector Endowment Com- pany V. Grice, 5 Q. B. D. 592; Graham v. Ross, 6 O. R. 154; Tylee v. Hinton, 3 A. R. 60; Leeds v. Broadhent, [1898] 1 Ch. 343, and Wilson v. Camp- hell, 15 I*. R. 254). The provisions of section 126 of the Real Pro- perty Act of Manitoba (which provides that the mortgagor may, notwithstanding any provision to the contrary, and at any time prior to sale or fore- closure, pay such arrears as may be in default under the mortgage together with taxed costs, and thereupon be relieved from the consequences of non-payment of so much of the mortgage money as 190 TORRENS SYSTEM MORTGAGES. has not become due and payable by reason of the lapse of time), is applicable to a mortgage under the old system as well as to one under the new sys- tem {National Trust Co. v. Campbell, supr^a). In Wasson v. Harker, 3 W. W. R. 218, the Supreme Court of Saskatchewan en banc con- strued sub-section 10 of section 93, of the Land Titles Act of Saskatchewan, in a similar wa}^, and granted relief against acceleration, and it was further held that an assignment of the equity did not preclude relief against the acceleration clause. (This case disapproved of McGregor v. Heynstreet, 20W.L. R. 642.) In Canada Co. v. Layton, 10 W. W. R. 580, it was held that a default judgment might be signed in an action on the covenant under the mortgage calling for arrears, and also for principal due ])y virtue of an acceleration clause, but such judg- ment, in addition to reciting the full amount for which judgment was recovered, should also recite that the defendant will be relieved from the con- sequence of his default on payment of the amount of arrears in default with costs to be taxed. It should be noticed that there does not appear to be any provision in the Alberta Land Titles Act as to relief in the case of these acceleration clauses. TORRENS SYSTEM MORTGAGES. 191 CHAPTER XXIV. Priortties Between Mortgages and Mechanics" Liens. The Mechanics' Lien Act of Alberta, section 9, provides that where work or improvements are put upon mortgaged premises the liens by virtue of* the Act shall be prior to such mortgages, as against the increase in value of the mortgaged premises by reason of such works or improvements, but not further unless the same is done at the request of the mortgagee in writing, and that the amount of such increase shall be ascertained upon the basis of the selling value upon taking of the account, or b}^ the trial of an action or issue, as provided herein, and that thereupon the Judge may, if he shall consider the works or improvements of suffi- cient value to justify the proceedings, order the mortgaged premises to be sold at an upset price equal to the selling value of the premises immedi- ately prior to the commencement of such works or improvements (to be ascertained as aforesaid), and that any sum realized in excess of such upset price shall be subject to the lien provided for by the Act. The moneys equal to the upset price as aforesaid are to be applied towards the mortgages according to their priority, but nothing in the sec- tion is to prevent the lien from attaching upon the equity of redemption, or other interest of the owner of the land subject to such mortgage or charge. The word " mortgage " in the section does not include any part of the principal sum secured by 192 TORRENS SYSTEM MORTGAGES. the mortgage, but not actually advanced to the borrower at the time the works or improvements were commenced. The Mechanics' Lien Act, Manitoba, section 5b, provides that, in case the land upon or in respect of which work is done or materials or machinery are placed, be encumbered by a mortgage or other charge existing or created before the commence- ment of the work, or of the placing of the materials or machiner}^ upon the land, such mortgage or other charge is to have a priority over a lien under the Act to the extent of the actual value of the land at the time the improvements were com- menced. The Saskatchewan Mechanics' Lien Act, sec- tion 5, provides that in case the land upon or in respect of which any work or service is performed, or upon or in respect of which materials are placed or furnished to be used, is encumbered by a prior mortgage or other charge, and the selling value of the land is increased by the work or service, or by the furnishing or placing of the materials, the lien under the Act is to be entitled to rank upon such increased value in prioritj^ to the mortgage or other charge. A prior mortgage need not necessarily be reg- istered at the time of the lien {Cook v. Belshaw^ 23 0. R. 545). As a lien may be registered immediately after the contract is made and before any work is per- formed, it would seem that a mortgage might be made before the commencement of the work, and yet not be a prior mortgage (see Wallace on TORRENS SYSTEM MORTGAGES. 193 Mechanics' Liens, p. 353), but except in the case of actual notice the lien may be defeated by prior registration of a mortgage (see Hynes v. Smith, 27 Gr. 150 ; Eeinhart v. Shutt, 15 O. R. 325 ; Wanty V. Robins, 15 0. R. 474; West v. Sinclair, 28 C. L. J. 119 ; 12 C. L. T. 44 ; McVean v. Tiffin, 13 O. A. R. 1, and McNamara v. Kirkland, 18 O. A. R. 271). A lien does not take priority over advances made under a mortgage for future advances and before registry of the lien, and actual notice thereof {Cook V. Belshaw, 23 O. R. 545). Where a mortgage is given to pay off prior in- cumbrances, the lien fails to attach to the extent of such incumbrances (Locke v. Locke, 32 C. L. J. 332). A lien for materials only takes priority over a mortgage to the extent of the value of the material placed on the ground prior to the mortgage money being advanced (Rohock v. Peters, 13 Man. L. R. 139. The mortgagee is a necessary party to proceed- ings to enforce the lien against the increased value, and unless he is a party the premises must be sold subject to the mortgage {Fimi v. Miller, 10 C. L. T. 23). See also on this section Re Empire Brewing & Malting Co., 8 Man. L. R. 424, and Flack v. Jef- frey, 10 Man. L. R. 514. Notice cannot affect the question of priority where the lienholder has not registered his lien, and the mortgagee need not hesitate to advance money legitimately under his mortgage because possibly the lienliolder might thereafter register T.S.M. 13 194 TORRENS SYSTEM MORTGAGES. Ms lien (Sask.) Independent Lumher Co. v. Bocz, 16W.L. R.316). The onus of proving that the selling value of the land was increased by the materials furnished and placed above what it was before they were so furnished and placed is on the persons asserting the lien (vS.C). The right of sub-contractors to a lien in prior- ity to a mortgage is considered in Collhu) v. Stim- smi, 4 W. W. R. 597. Where a mortgage is prior to a mechanic 's lien and the property affected becomes depreciated in value, the loss must fall upon the lienholder, that is, the selling value of the land is not the value at the date of the completion of the work by reason of vrhich the mechanic's lien attached, and it should, it seems, be measured by the price at which the property is actually sold {National Trust v. Batten, 9 W. W. R. 1265, referring to Patrick v. WaTbourne, 27 O. R. 221, and Brougliton v. Small- piece, 2b Q^.U. 2m). As against a prior mortgagee the priority given to the mechanic lienholder in respect to the in- crease in the selling value of the property is only to the extent of his proportionate contribution to that increased value, but in calculating that pro- portion all of the material supplied or work done by the lienholder should be taken into account, whether included in the lien or not (Sask. Security Lmnher Co. v. Dtijjlat, 10 W. W. R. 1270). For the purpose of arriving at the sum as to which the holder of the mechanic 's lien should have priority over a prior mortgagee, the value of the TORRENS SYSTEM MORTGAGES. 195 owner's property prior to the attaching of the lien may be ascertained, that vahie fixed at the upset price and a sale directed. The lien only attaches to the excess of the purchase price over the value so ascertained. Where there are several independ- ent and consecutive contracts a lien can only be claimed under any one specific contract to the ex- tent to which the work done under that contract enhances the selling value of the premises (ChaTii- pion Y. World Building, Limited, 10 W. W. R. 470, B.C.). A mortgagee caimot do anything to prejudice the vested statutory right of the lienliolder to a lien upon the property to the extent to which its value has been increased by the work or materials of the lienliolder {High River Trading Co. v. Anderson, 10 W. L. R. 127). 196 TORRENS SYSTEM MORTGAGES. CHAPTER XXV. Right to Make Further Advances. The right of a mortgagee to make further ad- vances and to tack them on to the original mortgage, so as to exclude all intermediate en- cumbrances, can only arise when, by the terms of the original mortgage, further advances may be made by the mortgagee. It has been held in Australia, that where the first mortgage authorized further advances, the first mortgagee may, in the absence of notice, and notwithstanding a caveat [this on the ground that a caveat does not affect dealing with property out- side the Real Property Office, P. G. & G., p. 79], showing the existence of a second and registered mortgage, make further advances to the mort- gagor, which will have priority over any subse- quent mortgage (Quee7island Trustees v. Registrar of Titles, 5 Q. L. J. 46; Hogg, p. 963). The fact that such subsequent mortgage was actually regis- tered would seem to be immaterial. In Pierce v. Canada Loan & Savings Co., 25 O. R. 671, Boyd, C, held that the security of a first mortgage providing for further advances is not impaired unless notice of a second mortgage goes to the mortgagee, and after knowledge of this, he makes subsequent advances, and that in the absence of notice (that is, notice w^hich gives him real and actual knowledge and showing facts), the mortgagee is entitled to assume and act on the as'^^- ntion th*^' the state of the title has not TORRENS SYSTEM MORTGAGES. 197 changed. That protection is given to him by virtue of the Registry Act, says Boyd, C, as well as by the doctrine enunciated in Hopkinson v. Eolt, until he is made aware of a change, not by finding a hypothetical operation of an instrument registered subsequent to his, but by a reasonable communi- cation of the fact by the one who comes in under the subsequent instrument. (See also Hopkinson v. RoU, 9 H. L. C. 514 ; Bradford Banking Co. v. Briggs, 12 A. C, p. 36; Union Bank of Scotland v. National Bank of Scotland, 12 A. C, p. 95, and specially as to notice West v. Williams, [1899] 1 Ch. 132). In the case of Rohinson v. Ford, 7 W. W. R. 747, it was argued that the effect of registering the prior mortgage was to give the mortgagee the right to advance all of the money notwithstanding notice to him, but the Court en banc held that the mort- gagee in making further advances after notice would be committing a fraud, and to the extent of such subsequent advance would not be a Ijona fide mortgagee. It has been said that the equitable doctrine of tacking has been abolished (see Reeves v. Kon- schur, 10 W. L. R. 680), but it is suggested that when the question is not between registered mort- gages, a second equitable mortgagee may by taking a transfer of a statutory mortgage become entitled to add the amount of his claim on the equitable mortgage to the sum due on the legal mortgage, in priority to all prior equitable mortgages of which he was ho7ia fide ignorant when he gave the value for his equitable mortgage (see section 62a (8) 198 TORRENS SYSTEM MORTGAGES. (Alberta), as to application of purchase moneys after statiitorj^ sale and corresponding sections in other Acts). A first mortgagee of a ship, whose mortgage is taken to cover future advances, cannot claim over the second mortgagee, the benefit of advances made, after he has notice of the second mortgagee's mort- gage {The Benwell Tower, 8 Asp. M. L. C. 13). This case is quoted owing to the close resemblance between the provisions of the Torrens Acts as to notice and those of the Merchant Shipping Acts. The rule, however, does not apply where the agree- ment as to future advances is contained in a sepa- rate unregistered document. {Parr v. Applehee, 24 L. J. Ch. 767.) As to the non-applicability of the doctrine of tacking in general, see Latouche v. Lord Bunsany, 1 Sch. & Lef . 137. TORRENS SYSTEM MORTGAGES. 199 CHAPTER XXVI. Fixtures. A mortgagee by leaving his mortgagor in pos- session of the mortgaged premises impliedly auth- orises him to hire and bring and fix other fixtures necessary for his business, and to agree with their owner that he shall be at liberty to remove them at the end of the time for which they are hired. The right of the owner to unfix or remove things so fixed, ceases, however, when the mortgagee takes possession, but if the implied permission is at vari- ance with the express language of the contract be- tween the mortgagee and the mortgagor no implied permission can as between them be supported (D'Augiguey v. Brnnswich Balke CoUender Co., 1917, IW.W.R. 1331). The case of D 'Augigney was decided in reliance upon Ellis V. Glover & Hohson, [1908] 1 K. B. 388 ; 77 L. J. K. B. 251, but it is difficult to see how far the reliance is warranted. In the latter case Cozens-Hardy, M.R., and Farwell, L.J., held that as a general rule no authority ought to be implied from a mortgagee to a mortgagor in possession to remove trade fixtures affixed to the mortgaged premises. In that case Gough v. Wood & Co., 63 L. J. Q. B. 564; [1894] 1 Q. B. 713, is carefully con- sidered. The Court of Appeal in the latter case had regard to the nature of the premises mort- gaged, that is, a leasehold nursery garden with the usual trees and plants and shrul)s grown on it, and the Court of Appeal held that the mortgagee must be taken to have given implied authority to the mortgagor to agree to the removal of a boiler and 200 TORRENS SYSTEM MORTGAGES. pipes installed under a 'hire-and-purchase agree- ment, Lindley, J., stating that " by leaving the mortgagor in possession, the mortgagee impliedly authorized him to carry on his business, and to sell and remove plants, trees and shrubs, which though fixed to the soil constituted his stock in trade. This implied authority can hardly be confined to such things, but can fairly be re- garded, and I think ought to be regarded, as authorizing the mortgagor, whilst in possession, to hire and bring and fix other fixtures neces- sary for his business, and to agree with their owner that he shall be at liberty to remove them at the end of the time for which they are hired." Whilst, Kay, L.J., said: ''The mortgagor was a nursery man carrying on his business on the land mortgaged ; he was left in possession by the mort- gagee, and during such possession it must be infer- red that the mortgagee assented to the mortgagor doing ever}i:hing that was usual and proper to enable him to trade as a nurseryman, for example, until prevented hy the mortgagee taking possession, he might remove and sell the young trees he was cul- tivating for that purpose, though they while grow- ing were a part of the land. If, then, while in such possession, he obtained the boiler and pipes upon an agreement which allowed the vendor to remove them if default was made in paying for them, why should not the mortgagee be taken to have assented to the vendor being allowed to remove them, just as a purchaser of trees might do with the consent of the mortgagor in possession?" '' But this reasoning." says Farwell, L.J., in Ellis V. Glover, supra, * ' has no application where TORRENS SYSTEM MORTGAGES. 201 the mortgage is simply of a messuage or dwelling house with the fixed machinery then or thereafter to be affixed. There is nothing corresponding to the trees of the nurseryman from which an infer- ence could be drawn which would extend to other fixtures. ' ' It should be noted that the mortgaged premises (Ellis V. Glover) were of a laundry and fixed machinery. Although the Court of Appeal distinguished Gongli Y. Wood, the vigorous dissenting judgment of Fletcher Moulton should be noticed. He says: '' An attempt was made to distinguish the fact of Gongli v. Wood from the facts of the present case, by the suggestion that in the case of Gough v. Wood & Co., the mortgagor was a nurseryman, and therefore, must be considered to have had implied authorit}" to remove young trees for the purpose of sale, even though they were fixed to the freehold, and that the Court were influenced by this, in com- ing to the conclusion that there was implied auth- ority to remove the boiler and pipes. In my opinion we should be showing scant respect to the eminent Judges who decided the case of Gough v. Wood, if we were to suppose them capable of de- ciding that because a man being a nurseryman was entitled to take up and sell the young trees, there- fore he must be entitled to take up and sell a boiler and hot water pipes. Moreover when the judg- ments were examined, it is in my opinion evident that the Court proceeded on no such extraordinary principle as is suggested. The judgments show clearly that the Court fully appreciates that it was 202 TORRENS SYSTEM MORTGAGES. dealing with a general principle, and not with the case of a particular trade." *'It is too late at this time of day to contend that a regularly executed mortgage of a lease will not carry the fixtures of that property which is in lease and of which the deeds are deposited. I apprehend that the reason for that is not simply that the chattels are there in the house which has been so mortgaged, but because whilst attached to the land, although for the benefit of trade the law has held that trade fixtures may be at any time during the limited interest which the owner of the lease may have, removed by him, yet if he does not remove them during the lease, he is held to have allowed them to pass to the owner of the reversion, because and only because they are attached to this reversion, and if they are not removed, as the law would have enabled the person to remove them during the lease, he is held to have allowed them to pass to the owner of the reversion, because and only be- cause they are attached to his reversion, and if they are not removed, as the law would have enabled the person to remove them during the lease, they must be considered to have passed over at once and finally to the owner of the reversion. The doctrine therefore was that they were a part of the land during the time they remained attached, but that for the benefit of trade, they might during the interest of that person who had only a partial in- terest in the land be removed so long as he had that interest, although there was no power whatever given to him for the purpose of removal if he chose to allow the time to pass during which he TORRENS SYSTEM MORTGAGES. ^03 might have removed them, and so far severed them from the property. Upon that ground it is that, without saying anything about underlease, as we have not got to consider that question now, I ap- prehend that a mortgage or assignment out and out of all a leaseholder's interest in the property itself, as distinguished from the fixtures, carries with it also the interest in the fixtures attached to the property, although those fixtures might be sub- ject to the right of removal if the mortgage had not been executed by the party entitled to the lease. I mention that because it appears to me to cover the question of any fixtures that may have been added subsequently to the memorandum of deposit by the mortgagor in this instance. If subsequently to the memorandum of deposit, he had attached other chattels to the property, the mortgagee of the lease stood in the same position as his mort- gagor, and those things when attached to the free- hold passed during the interest that still remained in the lease. ^ ' Therefore, the mortgage would attach to that, and the mortgagee would at any time during the lease have the benefit which his mortgagor had of removing those chattels that first attached anterior to his mortgage, and also subsequently attached posterior to his mortgage." (Per Hatherley, L.J., in Meux v. Jacob, 44 L. J. Ch. 481). The general rule as to the implied permission given by a landlord to a tenant to remove fixtures does not apply as between mortgagor and mort- gagee. The mortgagor is entitled to all fixtures which may be on the land whether they are placed 204 TORRENS SYSTEM MORTGAGES. there before or after the mortgage, whether the mortgage be a mortgage of leaseholds or freeholds or be legal or equitable, and therefore, the right of the mortgagor attaches to chattels fixed to the mortgaged premises, unless there be some agree- ment, either express or implied, which limits this right of the mortgagor. The rule is just as applic- able when a hire purchase agreement follows the mortgage as when it precedes it. In Hohson v. Gorringe, [1897] 1 Ch. 182, it would appear that it was the opinion of the Court that if the mortgagee had had notice of the hire agreement he would have been bound by it, and would not have been allowed to retain the chattels as against their vendor, but that being without notice of the agreement he was entitled on taking possession to retain the chattels. The cases of Re Morrison, 83 L. J. Ch. 129, and Be Allen d Sons, 16 L. J. Ch. 362; [1904] 1 Ch. 575, must be noticed. In the former case a pur- chaser under a hire purchase agreement affixed the purchased chattels to his premises, and then mort- gaged the premises by deposit. The purchaser made default under his agreement ; the vendor de- manded redelivery of the chattels. Parker, J., held that the bank, being an equitable mortgagee, took subject to the hire purchase agreement; that the hire purchase agreement created an equitable interest by which a subsequent purchaser who had not the legal estate was bound, and that the interest of the bank under its mortgage was postponed to the interest of the vendors of the machinery under the liire purchase agreement; in other words that TORRENS SYSTEM MORTGAGES. 205 the right to remove the chattels fixed to the free- hold was equivalent to an interest in land, and that on the ordinary principal, the owner of the prior equitable interest had priority. This principle was approved in the latter case, where it was held that debenture holders of a com- pany, without notice of a prior hire purchase agreement for machinery, should be postponed to the vendors of the machinery, and that such ven- dors could therefore enter upon the premises and remove the machinery notwithstanding the ap- pointment of a receiver. It is supposed that the application of Re Allan to Torrens mortgages may not be very direct, inas- much as a mortgagee under such mortgages, al- though he does not take the legal estate, yet takes a legal interest. The mortgagee not in possession will not be entitled to an injunction to restrain the removal of such fixtures, or to obtain damages for the removal, unless his security is thereby rendered insufficient. Per Farwell, L.J. {Ellis v. Glover, supra, and D'Augigney v. Brunswicke Balke Collender Co,, supra). It seems in the latter case that the principles applicable to a legal mortgage in fee are also ap- plicable to a mortgage under the Torrens system, as far as the right of possession goes. For it seems to have been assumed that a license to fix and remove the fixtures could have been implied from the fact that the mortgagor remained in possession. v06 TORRENS SYSTEM MORTGAGES. CHAPTER XXVII. Discharge of Mortgage. Ill Alberta, discharge of a statutory mortgage is provided for by sections 63 and 71, and in Sas- Ivatchewan by section 94, and in Manitoba by sec- tion 112 of tihe respective Land Titles Act. These sections follow : — As amended 1911-12, c. 4, 15 (15) (Alta., s. 63). Upon the production of any mortgage or in- cumbrance having endorsed thereon or attached thereto a receipt or acknowledgment in the Form I. in the schedule to this Act, signed by the mortgagee or incumbrancee, or where it is stated in the mort- gage or incumbrance that the money has been ad- vanced on joint account, by the surviving mort- gagee or incumbrancee and proved by the affidavit of an attesting witness discharging the whole or any part of the land comprised in such instrument from the whole or any part of the principal sum or annuity secured thereby, or upon proof being made to the satisfaction of a Judge of the pay- ment of all or part of the moneys due on any mort- gage or incumbrance, and the production to the Registrar of a certificate signed by the Judge to that effect, or upon the production of a receipt or acknowledgment in the said Form I. accompanied hy evidence satisfactory to the Registrar of the loss or destruction of the mortgage or incumbrance the Registrar shall thereupon make an entry on the certificate of title, noting that such mortgage or incumbrance is discharged, as aforesaid, as the TORRENS SYSTEM MORTGAGES. 207 case requires, and upon such entry being so made, the land or the estate or interest in the land or the portion of the land mentioned or referred to in such endorsement as aforesaid, shall cease to be subject to or liable for such principal sum or an- nuity, or as the case may be, for the part thereof mentioned in such entry as discharged. As amended 1911-12, c. 4, 15 (16) (Alta., s. 71). In every case where land is subject to a mort- gage or incumbrance signed by the owner, the dup- licate certificate of title shall be deposited with the Registrar, who shall retain the same on behalf of all persons interested in the land mentioned in such certificate. The Registrar shall, if desired, furnish to the owner of such mortgage or incum- brance a certificate of charge in Form G.Gr. hereto, and before anv instrument dealing with or dis- charging the said mortgage or incumbrance is reg- istered, except in the case provided by section 65 of this Act, said certificate of charge shall be de- livered up to the Registrar to be cancelled. Provided, however, that the Registrar may dispense with such production upon satisfactory evidence bemg produced of the loss or destruction of any such certificate. (Man., s. 112). Upon the production of any memorandum of discharge of mortgage or incumbrance duly exe- cuted, discharging the whole or part of such mort- gage or incumbrance or the whole or part of the land comprised in such mortgage or incumbrance from the moneys thereby secured, the District Reg- istrar shall make an entry in the register, noting 208 TORRENS SYSTEM MORTGAGES. that such mortgage or incumbrance is discharged wholly or partially, or that part of the land is dis- charged as aforesaid, as the case may require, and upon such entry being made, such mortgage or incumbrance shall be released to the extent named in such memorandum of discharge. (Sask., s. 94). Upon the production of any memorandum of discharge of mortgage or incumbrance duly exe- cuted and attested, discharging the whole or part of such mortgage or incumbrance from the moneys thereby secured, or the whole or part of the land comprised in such mortgage or incumbrance, or on proof being made to the satisfaction of the Judge of the payment of all or part of the money due on any mortgage or incumbrance, and the production to the Registrar of a certificate signed by the Judge to that effect, the Registrar shall make an entry on the register noting that such mortgage or incum- brance is discharged wholly or partially, or that part of the land is discharged as aforesaid, as the case may require. Upon such entry being so made the land or the estate or interest in the land or the portion of the land mentioned or referred to in such endorsement as aforesaid shall cease to be subject to or liable for such principal sum or an- nuity, or as the case may be, for the part thereof mentioned in such entry as discharged. In Alberta, where a mortgagor is entitled to redeem he shall on payment have power to require the mortgagee, instead of giving a discharge of the mortgage, to transfer the property to any third party as the mortgagor directs, and the mortgagee TORRENS SYSTEM MORTGAGES. 209 is bound to so transfer the mortgage (Land Titles Act, Alberta, s. 62 (17) ). A similar provision occurs in the Saskatchewan Act, section 93 (9). It would appear from these enactments that the mortgagor has no right to insist on a transfer of the security to himself, instead of a statutory dis- charge, as the transfer is directed to be made to any third party. It is presumed, therefore, that where a second mortgagee pays off a prior mort- gagee, he is only entitled to a statutory discharge, at any rate, the Acts provide no machinery by which the second mortgagee can avail himself of the prior mortgage to recover the money he has paid. It might here be noted that payments made by a mortgagor, who has had no notice of the transfer of a mortgage, to the original mortgagee subse- quently in the transfer, are to be considered as pay- ments in discharge of the debt (Nioa v. Bell, 27 Y. L. R. 82). Where the mortgagee is al)sent from the j^rov- ince, paj^ment may be made to the Provincial Treasurer, in Manitoba, section 125, and in Sas- katchewan (sections 96 and 97), and Alberta (sec- tion 65), a Judge may direct payment to be made to a chartered bank, and the Registrar on pre- sentation of the Judge's order and the receipt of the manager of the bank, shall make a memoran- dum of discharge of the mortgage. It seems doubtful as to whether the registration of the dischai-ge puts an end to the mortgagor's T.S.M. — 14 210 TORRENS SYSTEM MORTGAGES. covenant in the mortgage, but there is no doubt that until actual registration of the discharge the rights and powers of the mortgagee remain (see Taiilor \. Wolfe, 18 V. L. R. 727). ' It lias been held in New Zealand (Staples \. Mackay, 11 N. Z. L. R. 258) that the registration does ipso facto put an end to the mortgagor's covenants. In that case the mortgage given by a hotelkeeper of his lease contained a covenant that the mortgagor would at all times during the con- tinuance of the lease purchase from the mortgagee all colonial ale and stout, etc., at any time during the continuance of the lease, used, consumed or sold on the premises, and it was lield that the cov- enant ceased to be binding upon the payment of the principal and interest secured by the mortgage, and that the mortgagor was entitled to an un- (jualified release of the mortgage, although the term of the lease had not then expired. It lias, however, been held in Bell v. Rotve, 26 V. L. R. 523, that the registration of the discharge does not ipso facto put an end to the mortgagor's covenants in the mortgage, and this probably is a correct statement of the law^, inasmuch as, on the ordinary principles forbidding a clog against the equity of redemption, the covenant tieing the beer house would come to an end in any event upon repaj^ment of the mortgage moneys. It would appear that the provisions as to dis- charge require that it should be given by a regis- tered mortgagee, and therefore, an executor prior to registration would be unable to give a valid dis- charge (Payne v. Rex, 26 V. L. R. at 753, 762). TORRENS SYSTEM MORTGAGES. 211 A mortgagee must execute a release upon pay- ment of his principal and interest, and a mort- gagee refusing so to do is liable to pay the costs of an action for redemption (Staples v. Mackay, Hupra). A mortgage under the Act, although subse- quently discharged, is not sufficient proof of the exact amount alleged to have been paid as the con- sideration of the mortgage {Hayes v. Wilson, 6 A. L. T. 249). It should be noticed that on the same principle it was held in Flanagan v. Bladen, 1 A. L. R. 62, that a transferee was not estopped from relying on the real facts and showing that the considera- tion for the transfer was not fully stated in the instrument ; so also it was held in Kelly v. Fuller, 1 S. A. L. R. 15, that a registered transfer did not operate as an estoppel so as to prevent a vendor from showing that the moneys acknowledged therein to have l)een paid, had not been in fact paid. This decision has, however, been doubted in Sinclair v. Gmnpertz, 15 W. X. N. S. W. 125. The Australian Statutes nearly all provide that the effect of registration is that the instrument when registered created the same obligations as if the same had been sealed and delivered, or make some similar provision. It might be noticed that none of the Acts make any provision as to the removal of the entry of a moi-tgage, where the right of tlie mortgagee has become barred by the Statute of Limitations. It w^as decided in New Zealand that in such cases the mortgagee is bound to give a proper discharge, but 212 TORRENS SYSTEM MORTGAGES. that decision has not met with entire approval (Shirley v. Tapper, 23 N. Z. L. R. 849 ; Be Camp- hell, 11 Gaz. L. R. 760). A mortgagor after default is liable to bear the costs of registering a transmission of the mort- gage, so as to receive a proper discharge (Ellis v. Fenton (Tas.), May 22nd, 1895, per Dobson, C.J., applying King v. Smith, 6 Hare 473, cited by Can- away, p. 100). TORRENS SYSTEM MORTGAGES. 213 CHAPTER XXVIII. Limitation of Actiox — Remedy Against Land. All action of ejectment, or an action of fore- closure, cannot be brought after the expiration of twelve years from the last payment of any part of the principal money or interest, or, where there has been no such payment, from the date when the action could first have been taken (3 & 4 AYm. IV., c. 27, s. 14; 7 ^Ym. IV. and 1 Vict. c. 28, and 37 & 38Vict. c. 55, ss. 1&9). An acknowledgment in writing of the title of the mortgagee, given by the mortgagor to the mort- gagee or his agent, causes the period to run from the date of the acknowledgment, i^rovided such acknow- ledgment is given prior to the claim having be- come unenforceable by action through la j)se of time (In re Alison, 11 C. D. 2S4:; Sanders v. Sanders, 19 C. D. 373, and Kihhle v. Fairtliorne, [1895] 1 Ch. 219). The actions for ejectment or foreclosure are barred, even when the debt has not been barred (Kibble Y.Fairthorne, [1895] 1 Oh. 219.) The making of an order for foreclosure vests in the mortgagee a new right to the estate, for the possession of which he may sue within twelve years from the date of the order (Pugh v. Heath, 7 A. C. 235). The right of the mortgagee to bring an action within twelve vears is not ousted by the fact that 214 TORRENS SYSTEM MORTGAGES. a stranger has acquired a title under the Statute of Limitations as against the mortgagor (Ludhrook v. Ludhrook, [1901] 2 K. B. 96), though in Thornton V. France, [1897] 2 Q. B. 143, where the stranger was in possession adversely to the mortgagor at the date of the mortgage, it w^as held that the mort- gagee was barred. See, however. Doe d. Palmer v. Eyre, 17 Q. B. 366 ; Doe d. Baddeley v. Massey, 17 Q. B. 373, and Cameron v. Walker, 19 O. R. 212. In case of concealed fraud, in some way im- putable to the person invoking the aid of the stat- ute, the period runs from the discovery of the fraud, or from the time when it might with reason- able diligence have been discovered, except as against hona fde purchasers for value (3 & 4 Wm. IV. c. 27, s. 26, and Thome v. Heard, [1895] A. C. 495). Relief ma}^, however, be refused to persons whose claims are not barred by the statute, under the equitable doctrine of acquiescence (3 & 4 Wm. lY. c. 27, s. 27). It has been held that this section applies to foreclosure actions but not to actions for raismg by sale or mortgage of the land a sum of money charged thereon (Wrixon v. Vize, 3 Dr. & War. 104 ; Trust and Loaii Co. v. Stevenson, 20 O. A. R. 66 ; Ba7'2vick v Bartvick, 21 Gr. 39, and Re Owen, [1894] 3 Ch. 220). In foreclosure actions the time dates from breach of the condition contained in the mortgage deed for repayment of the principal. (See Wrixon TORRENS SYSTEM MORTGAGES. ^15 V. Vize, supra; Heath v. Pugh, 7 A. C. 235; 6 Q. B. D. 345, and Kihhle y. FairtJiorne, [1895] 1 Ch. 219), and ceases to run wlien the writ is issued in an action for foreclosure (Re Turner, 43 W. R. 153, and WiUiams \. Morgan, [1906] 1 Ch. 804). When the mortgage is payable an demand, time runs from the date of the mortgage, and no de- mand is necessary (Brotvn v. Brotvn, [1893] 2 Ch. 300). • The payment which causes the statute to cease running must be a payment made on account of principal or interest, and if not professedly made on such account, it cannot be ratified by the mortgagor. Payment of rent by a tenant of the mortgaged premises cannot be ratified by the mortgagor {Earloclx v. Ashherry, 19 C. D. 539). It is not necessary, however, that the payment should be made by the party sought to be charged himself, but it cannot l)e made by a stranger, as such payment would only amount to a voluntary present to the creditor {Chinnerij v. Evans, 11 H. L. C. 115; HarlocJi y. Asliherry, supra, and Leivin V. Wilson, 11 A. C. 639), and must be made to the person entitled to receive the money as mortgagee (Barclay v. Owen, 60 L. T. 220). Upon the expiration of the statutory period for making an entry or bringing a suit, the title of the mortgagee is extinguished (Dawkhis v. Pen- rhyn, 4 A. C. 51). The mere fact that the land is in possession of a prior mortgagee does not extend the riuniing of 216 TORRENS SYSTEM MORTGAGES. the statute against the subsequent mortgagee (S. Johnson & Sons v. Brock, [1907] 2 Ch. 533). The periods of disability arising from infancy (coverture), idiocy, hmacy or unsoundness of mind are to be excepted from the period leading to ex- tinguishment of the action (37 & 38 Vict. c. 57, ss. 3, 4 and 5). The exception of coveii;ure is of course no longer operative. TORRENS SYSTEM MORTGAGES. 217 CHAPTER XXIX. Limitation of Action — Redemption. An action for redemption cannot be brought after the expiration of twelve years next after the time at which a mortgagee has obtained possession or receipt of the profits of the mortgaged land, un- less in the meantime an acknowledgment of the title of the mortgagor has been given. Possession or receipt of profits will include the case of a mortgagee of wild lands, who has paid the taxes thereon (Coivderoy v. Kirhy, P. C. 2 W. W. R. 723), and receipt of rent by the mort- gagee from a tenant in possession (Ward v. Cart- tar, 1 E(|. 29, and Manvick v. Hardingham, 15 C. J). 339). If an acknowledgment in writing of the title of the mortgagor to the land, or of his right to redeem, is given by the mortgagee or a person claiming through him to the mortgagor or his agent, the period dates from tlie acknowledgment (37 & 38 Vict. c. 57, s. 7). An acknowledgment subsequent to the comple- tion of the period will not revive the mortgagor's title {Sanders v. Sanders, 19 C. D. 373). An acknowledgment given by the agent of the mortgagee is insufficient (Richardson v. Younge, 6 Ch. App. 478), as is an acknowledgment given to a third person, i.e., not to the mortgagor or his agent (Batchelor v. Middleton, 6 II. 75, at 83), an agent including any person who has acted as or 218 TORRENS SYSTEM MORTGAGES. been treated by the person making the acknowledg- ment as snch (Trulock \. Eohey, 12 Sim. 402). An acknowledgment by a person entitled jointly has no effect (Richardson y. Young e, supra) . In order that the statute may oj^erate there must be, not only a going out of possession on the part of the owner, but also actual exclusive pos- session for the statutory period and an actual, constant and visible possession by some one else (Smith V. Lloyd, 9 Ex. 562 ; Agency Co. v. Short, 13 App. Cas. 793 P. C. ; Gibson v. Wise, 35 W. R. 409 ; Bucknam v. Stewart, 11 Man. L. R. 625 ; Mc- Conaghy v. Denmark, 4 S. C. R. 609; Camphell V. Imperial Loan Co., 8 W. L. R. 502 ; Delaney v. C. P. R., 21 O. R. 11, and Creamer v. Gooderham, 3 W. W. R. 950, and 6 W. W. R. 250). Where neither the mortgagor nor the mortgagee has been in actual possession since the date of de- fault under a mortgage, the mortgagee conserves his right to sell or foreclose, and the mortgagor conserves his right to redeem (Creamer v. Good- erham, supra). A mortgagee of wild lands, who for over twenty years before the institution of a suit for its re- demption has paid the taxes upon it to the know- ledge and with the consent of the mortgagor, will be held to be in possession of it during that time, within the meaning of section 40 of the Statute of Limitations (B.C.), which provides that the mort- gagor or any person claiming through him shall^ not bring a suit to redeem the mortgage, but within TORRENS SYSTEM MORTGAGES. 219 twenty years next after the time at which the mort- gagee obtained such possession or receipt (Cote- deroy v. Kirdy, P. C. 2 W. W. R. 723). Possession must be considered in every case with reference to the peculiar circumstances, the character and value of the property, the suitable and natural mode of using it, the course of conduct which the proprietor might reasonably be expected to follow, with due regard to his own interest ; all these things greatly varying as they must under various conditions, are to be taken into account in determining the sufficienc}^ of possession (The Lord Advocate v. Lord Ijovett, 5 A. C. 217). In Manitoba (s. 83), and Saskatchewan, s. 61 b, no title adverse to or in derogation of the title of the registered owner can be acquired by possession. 230 TORRENS SYSTEM MORTGAGES. CHAPTER XXX. Limitation of Action — Recovery of Mortgage Debt. No action, suit or other proceeding can be brought at law or in equity to recover any mort- gage debt except within twelve years next after a present right to receive the same shall have ac- crued to some person capable of giving a dis- charge for or release of the same, unless in the meantime some part of the principal money, or some interest thereon, shall have been paid, or some acknowledgment of the right thereto shall have l^een given in writing, signed by the person by whom the same shall be payable or his agent to a person entitled thereto, or his agent, and in such case no such action or suit or proceeding shall be brought, but within twelve years after such pay- ment or acknowledgment, or the last of such pay- ments or acknowledgments. (The Real Property Limitation Act, 1874, s. 8). If the mortgage debt is a simple contract debt, the personal action will be barred at the expiration of six years (Barnes v. Glenton, [1899] 1 Q. B. 885; Hodges v. Croydon Canal Co., 3 B. 86, and Wiley V. Ledyard, 10 P. R. 182). Section 8 of the Real Property Limitation Act, 1874, governs not only the remedy against the land, but also the personal remedy against the mort- gagor on the covenant in the mortgage deed, or on a collateral bond given by him to secure the mortgage TORRENS SYSTEM MORTGAGES. 331 debt {Boe v. Williams, 5 Ad. & E. 291, 2m -, Sutton Y. Sutton, 22 Ch. D. 511; Fearnside v. Flint, 22 Ch. D. 579; In re England, [1895] 2 Ch. 820). Similarly section 1 of the Act of 1874 governs not only the remedy against the land, but also that on the personal covenant (Shaw v. Crompton, [1910] 2 K. B. 370). See also as to actions against a surety. Re Frisby, 43 C. D. 106, and Re Powers, 30 C. D. 291 ; and see contra McDonald v. Elliott, 12 O. R. 98 ; Macdonald v. McDonald, 11 O. R. 187, and Allan v. McTavish, 2 O. A. R. 278. Where the mortgage comprises both land and i:)ure personalty, the remedy against the pure per- sonalty is lost as soon as the remedy against the land and the mortgagor is lost under the Real Pro- perty Limitation Act {Charter v. Watson, [1899] 1 Ch. 175), contrary to the rule where the mort- gage is of pure personalty only. (See London dc Midland Banl- v. MitcheU, [1899] 2 Ch. 161). A payment which is made less than twelve years ])ef()re the action is brought, but more than twelve years after the cause of action has accrued, is a payment sufficient to stop the running of the Act. Any i)erson under a legal incapacity, e.g., an in- fant or lunatic person, is not capable of giving a discharge within the meaning of the Act (Pigott v. Jefferson, 12 Sim. 26) . The payment may be made by an agent (Bradshaw v. Widdrington, [1902] 2 Ch. 430). Payment by any person lia])le to pay will stop the running of the time (in re Frishy, 43 C. D. 106), but payment by a stranger has not that effect 232 TORRENS SYSTEM MORTGAGES. (Roddam \. Morley, 1 DeG. & J. 1, and Pears v. Laing, 12 Eq. 41). Wliere two portions of land have been mort- gaged togetlier, payments made by the mortgagor who has sokl the equity of redemption in one of the portions, keeps the debt alive as against the pur- chaser of the sold portion (Chinnery v. Evans, 11 11. L. C. 115, and Hornsey Local Board v. Monarch Building Society, 24 Q. B. D. 1). Time does not run where the same hand has to pay and to receive. (See In re Brax, [1903] 1 Ch. 781). An acknowledgment in a will, and an admission of indebtedness in the balance sheet of a bankrupt have been held sufficient to take the debt out of the statute {Millington v. TJiompson, 3 I. Ch. R. 236; Barrett v. Birmingham, 4 I. Eq. R. 537), but quwre as to a statutory declaration in lunacy proceedings. (Per Swinfen-Eady, J., in Hervey V. Wynn, 22 T.Ij. R. 93). The amount of the debt need not be stated in the acknowledgment, and its identity may be estab- lished by parol evidence (St. John v. Br ought on, 9 Sim. 219 ; Jortin v. S.-E. Railway Co., 6 DeG. M. & a. 270; Hanan v. Power, 8 I. L. R. 505, and Dug- dale Y. F/0e,5I. L. R. 568). Where a mortgagee of land under the Transfer of Land (Victoria) Act, 1890, had entered into pos- session of the land, and was in receipt of the rents and profits thereof, his powder of sale under the mortgage was held not to be aifected by the fact that his right to recover the mortgage money was TORRENS SYSTEM MORTGAGES. 323 barred by section 47 of the Real Property Act, 1890, inasmuch as the words '' or other proceed- ings," in that are to be read as ejusdem generis with the preceding words, '' action or suit," and do not include the exercise of a mortgagee's power of sale {In re Australian Deposit & Mortgage Bank, L^c?., 1907, V.L.R. 348). [Xote that in Manitoba under the Real Pro- pert}^ Limitation Act, the twelve years prescribed by the English statutes is a ten-year period, in -so far as any limitation is imposed]. 284 TORRENS SYSTEM MORTGAGES. CHAPTER XXXI. Limitation of Action — Arrears of Interest. No arrears of interest in resi^ect of any sum of money charged upon or payable out of any land can be recovered by any distress action or .suit, but within six years next after the same shall have become due, or next after an acknowledgment of the same in writing shall have been given to the person entitled thereto or his agent, signed by the person by whom the same was due or his agent (The Real Property Limitation Act, 1833, section 42, The Real Property Limitation Act (Man.) section 18). R. S. M. c. 100. In a foreclosure action only six years of interest can be claimed, even though the mortgagor has covenanted, or entered into a collateral bond for payment of the mortgage money {Hunter v. Nock- olds, 1 M. & G. 640; McMicUng v. Gihlons, 24 O. A. R. 586, and note that Du Vigier v. Lee, 2 H. 326, was overruled by the first mentioned case) ; but if the action be brought on a covenant or bond only, the mortgagee can recover twenty (or per- haps only twelve: see Sutton v. Sutton, 22 C. D. 511) years arrears of .interest by suing under sec- tion 3 of the Civil Procedure Act, 1833 (Strachan V. Thomas, 12 Ad. & E. 536, and Round v. Bell, 31 L. J. Ch. 127). In a redemption action, however, the mort- gagor is compelled to pay all arrears of interest (Dingle v. Coppen, [1899] 1 Ch. 726, but see Mc- MicUng V. Gihhons, 24 O. A. R. 586), and the TORRENS SYSTEM MORTGAGES. 235 mortgagee is entitled to retain upon sale of the mortgaged property all arrears of interest due {Edmunds v. Waugh, 1 Eq. 418; i^e Lloyd, [1903] 1 Ch. 385 ; Ford \. Allen, 15 Gr. 565, and In re Stead's Mortgaged Estates, 2 C. D. 713). An acknowledgment b}^ a mortgagor does not enable a first mortgagee to recover more than six years of interest as against a second mortgagee (Bolding v. Lane, 1 DeG. J. & S. 122). Part payment of an instalment of interest does not prevent the statute running as to the balance (Asthury v. Asthury, [1898] 2 Ch. 111). Where the claim is to redeem a mortgagee in possession, or for arrears of interest, there is no exception for disabilities, e.g., infancy and lunacy (Kinsman v. Rouse, 17 C. D. 104, and Forster v. Patterson, 17 C. D. 132), these actions not being suits to recover land within the meaning of the Act. Wliere a prior mortgagee has been in posses- sion within one year from action brought by a sul)- sequent mortgagee, the latter may recover (R. P. L. Act, s. 42; The Real Property Limitation Act (Man.), s. 19) for the whole period of the former's possession. The acknowledgment need not amount to a promise to pay {Moodie v. Bannister, 4 Drew 432), should be made to the person entitled to re- ceive the money {Holland v. Clarke, 1 Y. & C. Ch. Cas. 151, but see Forsytli v. Bristowe, 8 Ex. 716), and will revive the debt, although made after the remedy has been barred {Moodie v. Bannister, 4 Drew 432). T.S.M. — 15 226 TORRENS SYSTEM MORTGAGES. CHAPTER XXXII. Prescripttve Titles. The mere fact that no machinery is provided in the statutes for altering the register of land titles in accordance with rights acquired by mere lapse of time will not prevent the Court from adjudicat- ing on the rights of litigants and directing that the register be altered accordingly. Re Allen, 22 V. L. R. 24, and Be Tanner, 5 N. Z. S. C. 107; Hogg, p. 963). This view has iiot been followed in Alberta and Saskatchewan, where it has been held that an oc- cupier of land, who has satisfied the requirements of the Real Property Limitation Act of 1874, as to possession for twelve years, acquires a title which cannot be attacked by the registered owner, and is entitled to a declaration that he is owner in fee simple of the lands by virtue of the possession for the statutory period, but is not entitled to a cancel- lation of the existing certificate of title and an is- sue of a new certificate to himself {Wallace v. Pot- ter, 4 W. W. R. 738). In Bradshaw v. Patterson, 18 W. L. R. 402, Lamont, J., decided that the plaintiff had acquired a possessory title to land not then under the Act and expressed himself as being un- able to see why she should not, upon a proper ap- plication to the Registrar, have the land brought under the Act and a certificate of title issued to her. This case was based on a decision of Stuart, J. {Be Anderton, 8 W. L. R. 319). See also Harris V. Keith, 16 W. L. R. 433. TORRENS SYSTEM MORTGAGES. 227 In view of the opinion expressed in Loke Yeiv Y. Port Stvettenham Rubber Co., [1913] A. C. 491, as to the duty of the Court to direct the rectifica- tion of the register, there seems to be now no rea- son why the old certificate of title should not be cancelled and a new one issued to a person with a possessory title. In Manitoba it is expressly provided by section 83 of the Real Property Act, that after land has been brought under the Act no title thereto adverse or in derogation to the title of the registered owner shall be acquired by any length of possession merely. As to Sask., see 61 (b), a similar section. By chapter 100 of the Revised Statutes of Man- itoba, 1902, s. 24 (3), it is provided that in so far as any limitation is imposed by the Act, on the rights, remedies or powers under mortgages, the same shall be held not to apply to mortgagees or encumbrancees in mortgages or incumbrances heretofore or hereafter made under " The Real Property Act," except as to the liability under covenants for payment of any moneys secured thereby. This sub-section shall be retroactive (1908), 7 & 8 Edw. VII. c. 52, s. 6. The Land Transfer Act of New Zealand, J908, section 61, provides that after land has become sub- ject to the Act no title thereto or to any right, pri- vilege or easement in, upon or over the same shall be acquired by possession or use adversely to or in derogation of the title of the registered proprietor. Under this section it was held that the word ''land" included any estate or interest in land, and the words "registered proprietor" included the 328 TORRENS SYSTEM MORTGAGES. owner of an estate or interest as mortgagee of the land, and that accordingly a mortgagee's rights over the land under the Act cannot be barred by any statute of limitations (Campbell v. District Land Registrar, 29 N. Z. L. R. 332, overruling Shirley v. Tupper, 23 N. Z. L. R. 849). In In re Allen, 22 V. L. R. 24, the registered owner allowed another person to occupy the land for the statutory period required by the Limitation Acts and the occupant applied to have the land brought- under the system. It was held that this could not be done, and that the proper course for the applicant to take was to have himself placed on the register by means of a transfer or a vesting order. In In re By^yman, 9 Q. L. J. (N.C.) 93, Bryman sold land to Sharp, and delivered the certificate of title to him without executing a transfer. Sharp handed the certificate of title to a purchaser, but executed no transfer. Sharp then died and Bry- man disappeared. The applicant purchaser re- mained in possession for more than 20 years, but was refused a vesting order, the Judge being of opinion that the Statute of Limitations did not run against a registered proprietor. In Wadliam v. Buttle, 13 S. A. L. R. 1, Gwynne, J., said: " I am utterly ignorant as to what the Statute of Limitations has to do with the merits of the case at all. The Real Property Act makes a certificate of title absolute and indefeas- ible evidence in any Court of law or equity here; and in this case a person holding a certificate of title comes into Court to maintain an action of TORRENS SYSTEM MORTGAGES. 229 ejectment. He produces the certificate and that is final and absolute evidence of his right to the land, unless the defendants are prepared to get rid of the certificate by showing that it was obtained by fraud. If they cannot get rid of it in this man- ner, they are bound by it, for it is absolute and indefeasible evidence, and no Court can refuse to receive it as such." The nature of the estate gained by possession under the Statute of Limitations is explained by Cozens-Hardy, M.R., in In re Atkinson and Hor- selVs Contract, 81 L. J. Ch. 588:— " The true view is that whenever you find a per- son in possession of property that possession is prima facie evidence of ownership in fee, and that prima facie evidence becomes absolute when once you have extinguished the right of every other person to challenge it. That is the effect of sec- tion 34 of the Real Property Limitation Act, 1833 ; and that explains how^ the person who has been in possession for more than the statutory period does get an absolute legal estate in the fee, because there is nobody who can challenge the presumption that his possession of the property gives." 230 TORRENS SYSTEM MORTGAGES. CHAPTER XXXIII. Interest. Even where the ipaortgage contains no provi- sion as to interest, interest will yet be allowed the mortgagee seeking foreclosure. (See In re Kerr*s Policy, 8 Eq. 331). There is no longer any reason why compound interest should not be stipulated for by mortgage deed {Clarkson v. Henderson, 14 C. D. 348, and McLaren v. Miller, 20 Gr. 637, but see provisions of Interest Act, infra), but in the absence of contract, express or implied, simple in- terest only is chargeable {Daniell v. Sinclair, 6 A. C. 181). It has been held, however, that compound inter- est is always incidental to the relationship between banker and customer, so long as the same subsists (see Fergiisson v. Fyfe, 8 CI. & F. 121 ; Crosskill v. Botver, 32 B. 86 ; Williamson v. Williamson, 7 Eq. 542 ; Barf eld v. Loiigliboro, 8 Ch. 1 ; National Bank V. United Hand-in-Hand Co., 4 A. C. 391). A proper tender always stops the running of interest on the mortgage debt, provided that the mortgagor keeps the money ready to pay over to the mortgagee {Kinnaird v. Trollope, 42 C. D. 610, and Bank of N. S. W. v. O'Connor, 14 A. C. 273). A mortgagee may charge interest upon all sums which he is expressly or impliedly authorized to add to his security, e.g., moneys paid in entire or partial discharge of prior incumbrances or for improvements, insurance premiums or taxes (Quarrell v. Beckford, 1 Madd. 269, and Mc- Master v. Hector, 8 C. L. J. 284). TORRENS SYSTEM MORTGAGES. 231 It is provided by the Act respecting interest (R. S. C. 1906, G. 120) as follows : 2. Except as otherwise provided by this or by any other Act of the Parliament of Canada, any person ma}' stipulate for, allow and exact on any contract or agreement whatsoever, any rate of in- terest or discount which is agreed upon. 3. Whenever interest is pa^^able by the agree- ment of parties, or by law, and no rate is fixed by such agreement or by law, the rate of interest shall be live per centum per annum. 6. Whenever any principal money or interest secured by moi-tgage of real estate is by the same made paj^able on the sinking fund plan or on any plan uiider which the payment of principal money and interest are blended, or on any plan which in- volves an allowance of interei^t on stipulated re- pa^^ments, no interest whatever shall be chargeable, payable or recoverable on am^ part of the principal money advanced, unless the mortgage contains a statement showing the amount of such principal money, and the rate of interest chargeable thereon, calculated yearh^ or half yearly, not in advance. 7. Whenever the rate of interest shown in such statement is less than the rate of interest which would be chargeable by virtue of any other provi- sion, calculation, or stipulation in the mortgage, no greater rate of interest shall be chargeable, pay- able or recoverable on the principal money ad- vanced, than the rate shown in such statement. 8. No fine or penalty or rate of interest shall be stipulated for, taken, reserved or exacted, on any arrears of principal or interest secured by 232 TORRENS SYSTEM MORTGAGES. mortgage of real estate, which has the effect of in- creasing the charge on any such arrear beyond the rate of interest payable on principal money not in arrear, but nothing in this section contained shall have the effect of prohibiting a contract for the payment of interest on arrears of interest or prin- cipal at any rate not greater than the rate payable on principal money not in arrear. 9. If any sum is paid on account of any inter- est, fine or penalty not chargeable, payable, or re- coverable under the three sections last preceding, such sum may be recovered back or deducted from any otlier interest, fine or penalty chargeable, pay- able or recoverable on the principal. 10. Whenever any principal money or interest secured by mortgage of real estate is not, under the terms of the mortgage, payable until a time more than five years after the mortgage, then if at any time after the expiration of such five years, any person liable to pay or entitled to redeem the mort- .gage tenders or pays to the person entitled to re- ceive the money, the amomit due for principal money and interest to the time of payment, as cal- culated under the provisions of the four sections last preceding, together with three months' further interest in lieu of notice, no further interest shall be chargeable, payable or recoverable at any time thereafter on the principal money or interest due under the mortgage : Provided that nothing con- tained in this section shall apply to any mortgage upon real estate given by a joint stock company or other corporation, nor to any debenture issued by any such company or corporation, for the payment TORRENS SYSTEM MORTGAGES. 233 of which security has been given by way of mort- gage on real estate. In Colonial Investment Co. v. Borlmid, 2 W. W. R. 960, Harvey, C.J., in delivering the judg- ment of the Court en banc, seems to suggest that a covenant may amount to a statement so as to comply with the provisions of the Interest Act. In Canadian Mortgage Investment Co. v. Baird, 10 W. W. R. 1195, Beck, J., held that a statement in a mortgage, that it is declared and agreed be- tween the mortgagor and the mortgagees, that the principal sum secured hereby is $1,300, and the rate of interest chargeable hereon and on all sums which may be added to the mortgage money here- under, is 10 per cent, per annum as well after as ))efore default, is a sufficient compliance with QQ of the Interest Act, the v/ord statement in that sec- tion being used in the same sense as in " statement of claim," '^ statement of facts," '' statement of affairs," which imports more than real figures, and the words, " not in advance," are not required to be in the statement, but constitute a prohibition on the mortgagee against calculating the interest in advance. • In Canadian Mortgage Investment Co. v. Cam- eron, 10 W. W. R. 959, the covenants in the mort- gage were : 1. That he will pay the above sum of $1,400 and interest thereon, at the rate hereinafter specified, that is to say, in instalments of $179.90 half-yearly on tlie 24th days of June and December in each year until the whole of the said principal and the interest thereon is fully paid and satisfied, making 234 TORRENS SYSTEM MORTGAGES. in all 10 half-3^eaiiy instalments, the first of said instalments to become due and be payable on the 24th of December, 1907, all arrears of both prin- cipal and interest to bear interest at 10 per centum per annum. 2. That he will pay interest on the said sum or so much thereof as remains unpaid at the rate of 10 per centum per annum by half-yearly pay- ments on the 24th days of December and June in each and every yeai' until the whole of the princi- pal money and interest are paid and satisfied. Harvey, C.el., in giving his decision said that it was impossible to ascertain from the terms of the mortgage whether the interest that was pay- able under the instalments mentioned, was pay- able yearly or half-yearly, and that therefore the mortgage failed to comply both in form and sub- stance with the conditions of the statute, and that consequently no interest whatever could be re- covered. ( See note at end of chapter) . In Stiihhs V. The Standard Reliance Mortgage Cor., [1917] 1 W. W. R. 850, the mortgage con- tained the following additional clause: "And it is further agreed between me and the said mort- gagee that the principal is $700, and the rate of interest chargeable thereon is 10 per cent, per an- num as well after as before the default. Provided, however, and it is hereby expressly agreed between me and the said mortgagee that if the said 135 monthl}^ instalments be punctually paid and all covenants hereunder performed by me, I shall be entitled to a discharge of this mortgage and the re- lease from all liabilit}^ hereunder, and that after TORRENS SYSTEM MORTGAGES. 235 12 of the said monthly payments have been made and I am not in default of arrears hereunder, or in respect of any of the by-laws of the mortgagee, I may pay off this mortgage subject to the by- laws of the mortgagee in that behalf on payment to them of three monthly instalments in advance by w^ay of bonus." The Court of Appeal, Man., held that the stat- ute had not been complied with. (See note.) In Canadian Mortgage Investment Co. v. Cam- eron, on appeal, [1917] 2 W. W. R. 18; Walsh, J., with the concurrence of Beck, J., held that the information to which section 6 of the Interest Act entitles the mortgagor, can be given just as eifect- ually through the medium of his own covenant as by tabulating a formal statement, and that the covenant in this case was sufficient to meet the re- quirements of the Act, w^hereas Ives, J., with the concurrence of Stuart, J., held that the covenant did not amount to a statement and that a covenant to pay interest at a rate and date named together with some other provision or stipulation of the mortgage wherein the principal and interest are blended and made payable by instalments, their number and amounts being given, did not satisfy the requirement of section 6 of the Interest Act, pressl}^ reserved {Farqtihar v. MorrlH, 7 T. R. gagee of fairly exhibiting the statement. (See note). A mortgage carries interest, although not ex- pressly reserved {Farquliar v. Morris, 7 T. R. 124; Savile v. Drax, [1903] 1 Ch. 781; so also in case of a mere deposit of deeds: Re Kerr's Policy, L. R. 8 Eq. 331). ?36 TORRENS SYSTEM MORTGAGES. It is legal to insert a proviso for the reduction of the rate of interest "if paid within the prescribed time, and such reduction of interest may be provided for even by a verbal agreement {Milton V. Edgworth, 5 Bro. P. C. 313 ; Gregory v. Pilking- ton, 8 De G. M. G. 616 C. A.) ; there may be a verbal agreement for a higher rate subsequent to the mortgage. See Standard Trust Co. v. Hurst, 6 W. W.^ R. 493 ; section 8 of Interest Act does not apply to such subsequent agreement. An agreement for increasing the rate of inter- est on failure of punctual pajTuent, is a penalty against which the Courts will relieve {Holies v. Wise, 2 Vern. 289 ; Wallingford v. Mutual Soc, 5 A. C. 685; Spa^iing v. Cumiingliam, 4 W. L. R. 336, and Nichols v. Maynard, 3 Atk. 519). Lord Hatherley in Wallingford v. Mutual Soc, supra, referred to this distinction as being ex- tremely fine and nice, and Kay, J., in 31ainland V. Upjohn, 41 C. D. 126, considers that a clause in- creasing the rate of interest in case of non-punc- tual payment is a stipulation for a collateral ad- vantage, which it probably is, and not really a pen- alty — a penalty being a liability which is intended by the parties to be in terrorem, or a security merely, and which it would be unconscionable to enforce save by way of indenmity (see Dunlop's Case, [1915] A. C, p. 79, and see 32 L. Q. R., p. 426). Wliere a mortgage provides for interest up to the date fixed for payment, but not beyond, a con- tract for the continuance of interest at the same i-ate, or any rate at all, cannot be implied, and TORRENS SYSTEM MORTGAGES. 237 interest is given in such cases as damages for de- tention of the debt {Cook v. Fowler, 7 H. L. 27; Re Roberts, 14 C. D. 49, and Goldstron v. Taller- man, 18 Q. B. D. 1). A¥here a mortgage deed provides for payment of interest after default, and then judgment on the covenant is obtained, the mortgage is as a rule merged in the judgment (see Ex parte Fewings, 25 CD. 38 ; Arlnitlmot v. Bunsilall, 62 L.T. 234 ; Econ- omic Life Assurance Soc. v. Ushorne, [1902] A. C. 47 ; *S'^. John v. Rykert, 10 S. C. R. 278 ; Potvell v. Peck, 15 O. A. R. 138 ; European Central Railway Co., 4 C. D. 33 ; Re Roberts, 14 C. D. 49 ; Popple v. Sylvester, 22 C. D. 98 ; Manitoba d) iV. TF. Loan Co. v. Barker, 8 Man. L. R. 296 ; Freehold Loan Co. v. McLean, 8 Man. L. R. 116, and Credit Fonder v. .S'c/2w7^£:,9Man. L. R. 70). Provisions in a mortgage contract that interest at a specified rate should be payable ^' until paid," ''until payment in full" or ''until repayment thereof," are not to be construed as provisions to pay interest after maturit}^ (see cases supra; Credit Fonder v. Schultz, supra, is a case of an implied covenant to pay interest after maturity). Lowry v. Williams (1895), 1 I. R. 274, con- tains a good summary of the law on this subject as follows : In that case Walker, L. C, says: "Those cases appear to establish : 1. That if there is a covenant in a mortgage to pay a pVincipal sum and interest at a contract rate on a named day, and no further covenant, a judgment recovered for the principal sum and interest to date merges the debt and •338 TORRENS SYSTEM MORTGAGES. interest at 4 per cent, on the judgment is recover- able, even though property is assigned as security ; (2) that if there is such a covenant as last men- tioned, and also a covenant that if the principal sum remains unpaid after the day named, interest at a certain contract rate shall be paid, while the principal sum or any part thereof remains unpaid, and judgment is recovered for the principal sum and interest to date, there is nothing left for the subsequent covenant to pay interest to operate up- on, as the covenant to pay the principal has been merged and gone, and therefore a claim or action on such subsequent covenant will fail; (3) but if such subsequent covenant is in the form of an obli- gation to pay interest at a contract rate while the principal money remains due on the security of the indenture or equivalent words, and property has been mortgaged or charged to secure the loan, and the claim is to realize the subsequent interest at the contract rate out of the security, then the sub- sequent covenant is independent, and must have full eifect given to it, as against the property" (in this judgment O'Brien, C.J., Fitzgibbon, L.J., and Barry, L. J., concurred). Fitzgibbon, L.J., said: '' I confess that the distinction between the English cases is very fine; and I think that it would have been a more satisfactory principle to lay down that every cov- enant for the payment of interest upon a debt is * subsidiary ' to the covenant for payment of the principal, and that when the principal has passed into rem jndicatam, no larger sum should be recov- erable, for either principal or interest, than what TORRENS SYSTEM MORTGAGES. 839 was recoverable under the judgment. Such a prin- ciple would be in accordance with the reasoning of Lord Bramwell in the European Central Railway Co.; and though Popple v. Sylvester was recog- nized in Ex parte Fetvings, Lord Justice Fry was then a member of the Court of Appeal; and the other members of the Court distinguished rather than adopted his previous decision, which I find it difficult to reconcile with what seems to me to be a corollary from Lord Bramwell's dictum that ' there cannot be two debts ' — namely that ' the sole debt between the parties ' cannot bear two rates of interest. " The covenant in ArhiitJinot \. Bunsilall does not clearl}^ appear to me to be less 'subsidiary' than the covenant here ; and I should prefer to fol- low Stirling, J., if I could do so, without disregard- ing Popple v. Sylvester, as recognized by the Eng- lish Court of Appeal." [Since the above chapter was put into type, it has been decided in the Supreme Court of Canada that the statements or covenants in Canadian Mortgage Investment Co. v. Cameron, supra, and Stubhs V. Standard Reliance Mortgage Corpora- tion, supra, sufficiently complied with the require- ments of the Interest Act. See [1917] 3 W. W. R. 395 and 402. See also Standard Reliance Mortgage Corporation v. Cowie, [1917] 3 W. W. R. 238.] 240 TORRENS SYSTEM MORTGAGES. CHAPTER XXXIV. Merger. The doctrine of merger is frequently referred to in the course of cases on the Torrens System Acts. It is thought that most of these cases are more properly cases of extinguishment than of merger. Merger is defined as follows: In Blackstone, whenever a greater estate and a less coincide, and meet in one and the same person without any inter- mediate estate, the less is immediately annihilated, or, in the law phrase is said to be merged, that is sunk or drowned in the greater : 2 Black Com. 177. The requisites for merger to take place are : (1) Two estates. (2) Vested in the same person at the same time. (3) The estates must be immediately expectant one upon the other. (4) The expectant must be larger than the pre- ceding particular estate (9 Enc. Laws of Eng. 193). Equit}' would in every case interfere to pre- serve beneficial interests from being destroyed by the merger of two legal estates, regarding the matter as governed entirely by intention (see Brandon v. Brandon, 31 L. J. Ch. 47 ; Capital & Counties Bank v. Rhodes, [1903] 1 Ch. 631, and Lea V. Thurshy [1904], 2 Ch. 57). Questions relating to extinguishment of charges on the fee or other estates charged have nothing TORRENS SYSTEM MORTGAGES. 241 to do with merger propeiiy so-called, thpiigii they are often confused with it, and are often improp- erly included in the word. It may now be regarded as conclusively settled that (1) u.pon a charge and the estate charged coming to the same hands the charge will never be extinguished contrary to the express intention, of the party, and (2) that in the absence of expressed intention, the intention may be inferred from what would most have conduced to the parties ])enefited. Though there will never be an extinguishment contrary to the intention of the parties, yet special circumstances may exist to prevent him in equity from setting up the charge against a subsequent encumbrancer. (See Challis's Real Property, 3rd ed., p. 96). As to extinguishment generally, see Toulmin V. Steere, 3 Mer. 210: Evans v. Angel, 5 C. D. 634; Thome v. Cann [1895], A. C. 11; CrosUe-Hill v. Sayer [1908], 1 Ch. 866; PliiUips v. Giittridge, 4 DeG. & J. 531 ; Manx v. Whifely [1911], 2 Ch. 448 ; [1912], 1 Oh. 735; 81 L. J. Ch. 457, C. A., and 83 L. J. Ch. 349, and Forbes v. Moffaf, 18 V. 384. It would appear that where a mortgage is dis- charged by the mortgagor, the mortgage debt is thereby extinguished, but where the mortgage is redeemed or discharged by a third party, and the effect of a merger of the debt would be to make a gift to the next incumbrancer or person interested at the expense of the party redeeming or discharg- ing the mortgage, there is a presumption that the party redeeming the mortgage intended to keep alive the mortgage and it would be treated as still T.S.M. — 10 242 TORRENS SYSTEM MORTGAGES. subsisting for his benefit (Toiilmin v. Steere, 3 Mer. 210; Otter v. Lord Vaux, 2 K. & J. 650; Manx V. Whiteleij (1912), 1 Ch. 735, and on appeal Ch. 81 L. J. Ch. 457 ; Burrell v. Egremont, 7 B. 205 ; Thome v. Conn [1895], A. C. 11, and Liquida- tion Estates Co. V. Willoughhij [1898], A. C. 321). There is a presumption in favour of merger when the absohite interest in a charge is united with the estate in fee simple in the land, there be- ing no advantage in keeping the charge alive {Forbes v. Moffatt, 18 V. 384), but there is a pre- sumption against merger when a tenant for life or other limited owner acquires or pays off a charge since the merger would operate as a gift to those in remainder {Burrell v. Egremont, 7 B. 205, at 232 ; Pitt V. Pitt, 22 B. 294, and Gifford v. Fitz- hardinge [1899], 2 Ch. 32). These presumptions al- ways yield to the intentions either expressed or implied, e.g., where the non-merger would be for the benefit of the owner (see Forbes v. Moffatt, supra, but see also Manx v. Wliiteley, upon appeal supra). Even an express declaration will not keep the charge alive if there are circumstances point- ing conclusively to merger {Re Gibbon [1909], 1 Ch. 367, and Swabeij v. SwaJ)ey, 15 S. 106). In Reeves v. Konschur, 10 W. L. R. 680 ; 2 Sask. L. R. 125, the defendant owned certain land sub- ject to first and second mortgages and to an exe- cution. The first mortgagee having commenced foreclosure proceedings, the execution creditor paid off the mortgage, took an assignment thereof and a transfer of the land, which she registered, TORRENS SYSTEM MORTGAGES. 243 and also took an acknowledgment of indebtedness from the defendant. The Registrar issued to her a certificate of title, showing her to be the owner subject to the second mortgage, on the ground that the first was extinguished by the transfer to her. It was held that the intention must prevail and control the covenant implied between mortgagor and mortgagee for indemnity, and that the mort- gage was not extinguished. Semhle, that where a lessee under the Land Transfer Act whose lease is subject to a registered mortgage acquires the fee simple of the land leased to him, it is the duty of the District Land Regis- trar, when the transfer of the fee simple is pre- sented for registration, to indorse upon the certifi- cate of title the fact that it is subject to the lease and the mortgage over the lease. Under these cir- cumstances the lease does not merge in the free- hold, and the legal doctrine of merger does not apply to land held under the Land Transfer Act. The equitable rule that where a lessee who has mortgaged his lease acquires the freehold of the land, the mortgage over the lease is not destroyed applies to land held under the Land Transfer Act (Beavau v. Dohson, 26 N. Z. L. R. 69). 244 TORRENS SYSTEM MORTGAGES. CHAPTER XXXV. Notice and Fraud. The sections of the various Land Titles Acts re- lating to fraud in so far as the registered owner is concerned are as follows: The owner of land for which a certificate of title has been granted shall hold the same subject (in addition to the incidents implied by virtue of this Act) to such incumbrances, liens, estates or interests as are notified on the folio of the register which constitutes the certificate of title absolutely free from all other incumbrances, liens, estates or interests whatsoever except in case of fraud wherein he has participated or colluded (Alta., s. 42). Every certificate of title hereafter or hereto- fore issued under this Act shall so long as the same remains in force and uncancelled be conclusive evi- dence at law and in equity as against His Majesty and all persons whomsoever that the person named in such certificate is entitled to the land described therein for the estate or interest therein specified, subject, however, to the right of any person to show that the land described in such certificate is subject to any of the exceptions or reservations mentioned in section 78 or 82, or to show fraud wherein the registered owner, moi'tgagee, or encumbrancer has participated or colluded and as against such re- gistered owner, mortgagee or encumbrancee, but the onus of proving that such certificate is so sub- TORRENS SYSTEM MORTGAGES. 245 ject or of proving such fraud, shall be upon the person alleging the same (Manitoba, s. 79). In Saskatchewan the provision, section 65, is similar to that of section 42 of Alberta. - The provisions relating to the protection of a purchaser, etc., are as follows : In Alberta, except in the case of fraud, no per- son contracting or dealing with, or taking, or pro- posing 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 cir- cumstances 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 pur- chase money, or of any part thereof, nor shall he be affected by notice, direct, implied, or con- structive, of any trust or unregistered interest in the land, any rule of law or equity to the contrary notwithstanding, and the knowledge that any trust, or unregistered interest is in existence shall not of itself be imputed as fraud (Alberta, s. 135). In Manitoba, section 99 is very similar to sec- tion 135 of Alberta, except that it uses the general term " instrument," instead of " transfer," " mortgage," etc. The Saskatchewan Act, section 162, is also similar to section 135 of the Alberta Act, except that it makes clear that the fraud which will affect the purchaser, etc., is his own fraud, which seems to be true in the other jurisdictions. From these sections it is apparent that actual notice in itself will not amount to fraud. It is 246 TORRENS SYSTEM MORTGAGES. true that in the sections relating to the protection of the owner, there is no proviso that knowledge of a prior interest is not in itself to be imputed as fraud, but it is thought that the general scheme of the Acts would import some such proviso. The law as to the similar sections in Australia is laid down as follows in Hogg, p. 835 : ** With regard to decisions on the sections re- lating to the conclusive effect of certificate of title, it has been held in some cases that the fraud there mentioned means actual or moral fraud, not merely constructive or legal fraud (see Gregory v. Alger, 19 V. L. R. 565 ; Thomson v. Finlay, 5 N. Z. 8. C. 203, and Lake v. Jones, 15 V. L. R. 728). " In other cases fraud has been said to include constructive, legal, and every kind of fraud {Biggs V. McAllister, 14 S. A. R. 86; Saunders v. Cahot, 4 N. Z. C. A. 19, and Franklin v. hid, 17 S. A. R. 159). ' ^ In other cases again, knowledge of other per- sons ' rights and the deliberate acquisition of a reg- istered title in the face of such knowledge has been held to be fraud which rendered voidable the certi- ficate of title so obtained {Davis v. Wekey, 3 V. R. 1 ; National Bank v. National Mortgage Co., 3 N. Z. S. C. 257; Ogle v. Aedy, 13 V. L. R. ^61; Finnoran V. Weir, 5 N. Z. S. C. 280; Bell v. Beckman, 10 N. S. W. Eq. 251; Kissick v. Black, 10 N. Z. R. 519; Loudon V. Morrison, 14 N. Z. R. 245; LocJier v. Eoivlett, 13 N. Z. R. 584 ; GUhert v. Bourne, 6 Q. L. J. 270, and Merrie v. MacKay, 16 N. Z. R. 124), and voluntary ignorance is for this purpose the same TORRENS SYSTEM MORTGAGES. 247 as knowledge (LocJier v. Howlett, supra, and Gil- bert V. I^ourne, supra). '^ But in none of these three classes of cases was there absent the element of intention to deprive another of just rights, which constitutes the essen- tial characteristics of actual distinguished from legal fraud. " In yet another class of cases the Courts have declined to infer fraud from the existence of facts which showed an intention to rely on the positive or legal title conferred by the statutes without any active steps being taken to deprive others of their rights (Lake v. Jones, 13 V. L. R. 728; Arnold v. Wcdtvork, 20 N. 8. W. 368; Rohertson v. Keith, 1 Y. R. 11; Cooke v. Union Bank, 14 N. S. W. Eq. 280, and Oertel v. Hordern, 2 S. R. (N.S.W.) 37)." The foregoing extract from Mr. Hogg's valu- able book represents his position at the end of the year 1904, but his more mature opinions are presented in an article in the Law Quai*terly Re- view, No. 116, at p. 434, as follows : '' It will be submitted in the following part of this article that the legislative efforts to in- . sist on the validity of registration in the face of notice should also be considered to have failed except as to mere constructive notice." This conclusion is based on the decision (Loke Yetv V. Port Swettenham Ruhher Co., 82 L. J. P. C. 89; [1913], A. C. 491, and it is thought is not fully borne out by that case. Before giving reasons for this (>})iiii()ii, it woiikl be well to consider the facts of that case. 248 TORRENS SYSTEM MORTGAGES. The facts were : In 1894 the residents of Selan- gor granted three hundred and twenty-three acres to a certain Haji Mohamed Yusuf, and Yusuf dis- posed of portions of the land to cultivators by grants and perpetuities subject to an annual rent. The documents affecting these disposals were not registered, and at various times Loke Yew pur- chased some grants from their owners. In 1910 the Port Swettenham Rubber Co. formed the project of acquiring the land included in the grant to Yusuf with full knowledge of his various disposals thereof. Yusuf endeavoured to buy back his sub-grants, but Loke Yew refused to sell. When the deed of con- veyance purporting to convey the original grant in its entirety was presented to Yusuf, he re- fused to sign the same without a document show- ing that he was not selling Loke Yew's land. The agent of the company asserted that he would pur- chase Loke Yew's interest, and signed and gave to Yusuf the following document: " I have pur- chased the land comprised in grant No. 675, etc., as regards Loke Yew and See Oh Kongsee's land which is included in the said grant ; I shall have to make my own arrangements." The judgment of the Privy Council says : " Their Lordships have no doubt that the true conclusion to be drawn from the evidence is that the above statement of Mr. Glass to Yusuf was intended to be, and was a state- ment as to present intention as well as an under- taking with regard to the future, and that that statement was false, and fraudulently made for the purpose of inducing Yusuf to execute a conveyance which in form comprised the whole of the original TORRENS SYSTEM MORTGAGES. 349 grant, and that but for such fraudulent statement that conveyance would not have been executed." Later, the judgment runs: " Their Lordships, therefore, find that the formal transfer of all the rights under the original grant was obtained by the deliherafe fraud of Mr Glass." Later on, the judgment runs: '' The conclusion to which their Lordships have come as to the trans- fer having been obtained by fraud brings the case within the exception, section 7, and is, therefore, a sufficient answer to these arguments. But their Lordships are of the opinion that for other rea- sons they are irrelevant, and beside the mark. They take no account of the power and duty of a Court to direct rectification of the register. So long as the rights of third parties are not implicated a wrongdoer cannot shelter himself under the regis- tration as against the man who has suffered the wrong; indeed the duty of the Court to rectify the register in proper cases is all the more imperative Ijecause of the absoluteness of the effect of the reg- istration, if the register be not rectified. Take for example the simple case of an agent who has purchased land on behalf of his principal, but has taken the conveyance in his own name, and in virtue thereof, claims the ownership of the land, whereas he is in truth a bare trustee for his prin- cipal. The Court can order him to do his duty just as much in a country where registration is compulsory as in any othei' country; and if that duty includes fresh entries in the register, or the correction of existing entries, it can ordei' the necessary acts to be done accordingly. It may be 250 TORRENS SYSTEM MORTGAGES. laid down as a principle of general application, that where the rights of third parties do not inter- vene, no person can better his position by doing that which it is not honest to do ; and inasmuch as the registration of this absolute transfer of the whole of the original grants was not an honest act under the circumstances, it cannot better the posi- tion of the plaintiff as against the defendant, and they cannot rely on it as against him when seek- ing to so enforce rights which formally belong to them onl}^ by reason of their own fraud. ' ' It must be remembered that the transfer was obtained from an unwilling transferor by a blameful contrivance, that is, the false and fraudulent statement as to a present fact, viz., the present intention of Mr. Glass to purchase the claim from Loke Yew, and also that the decision was also based upon tlie fact that in an illustration appended to section 3 of enactment No. 9 of 1903, i.e. The Specific Relief Enactment Act of the Malay States, the law is laid down to the following effect : ^' A. buys certain land with notice that B. has already contracted to buy it. A. is a trustee within the meaning of this enactment for B. of the land so bought. ' ' Under such circumstances it cannot be said that the case expressly decides that actual notice neces- sarily amounts to fraud, and at any rate the prin- ciple involved or suggested in Robinson v. Ford, 25 W. L. R. 569 ; 5 W. W. R. 542 ; Sydie v. Sask. Land & Development Co., 5 W. W. R. 194; 25 W. L. R. 570; Rounsevell v. Ryan, 1910, S. A. R. 67, and Oertel v. Hordern, 2 S. R. N. S. W. 37, is still true, TORRENS SYSTEM MORTGAGES. 251 that is, the general principle that whether actual notice amounts to fraud or not is always a question of fact, a principle which involves the possible ex- istence of a state of facts in which actual notice would not be fraud. In the first mentioned case, Rohinson v. Ford, it was held that though mere knowledge of the exist- ence of an unregistered outstanding transfer does not necessarily imply fraud as against a party get- ting title and having such knowledge, yet where assignees of a mortgage know that the holder of the outstanding transfer is under the impression that the mortgage has been discharged, that the source of his impression was the bank with whom the mortgage was deposited, that the holder of the transfer was earnestly seeking for information as to the status of the mortgage, while they them- selves leave the holder under his false impression, keep him in ignorance of foreclosure proceedings taken by them, and keep the Court in ignorance of his interest, such conduct is fraud within the meaning of the Land Titles Act, and any title ob- tained in such a way ought not to be allowed to stand. In Independent Lumber Co. v. Gardiner, 13 W. L. R. 548, the Court, though considering the ques- tion, does not determine it, that is as to whether the acquiring of a registered mortgage of certain property with knowledge of a prior transfer of the same property, and knowledge that the registra- tion of the mortgage would defeat the transfer would amount to fraud. Brown, J., in delivering the decision of the full Court, quotes, however, the 252 TORRENS SYSTEM MORTGAGES. opinion of Hogg, as set out in his work on Owner- ship and Incumbrance of Registered Lands, at p. 151, to the following effect : " It is consistent both with good faith and the scheme of the system that other persons than the registered owners should be known to have interests in the land, not appear- ing on the face of the register, and to effect regis- tration with the knowledge of the existence of such interest may be justifiable and proper. But to ef- fect registration with the knowledge that another person is also taking steps to effect registration in respect to the same property could hardly under any circumstances be otherwise than dishonest and fraudulent. ' ' In Sydie v. Saskatchewan Land Co. supra, Sydie bought from a certain company, of which Brown was secretary-treasurer, ten lots in Edmonton in a certain block 9. One of these lots having been sold, the company sent to Sydie two agreements of sale, one for nine lots in block 9 and another for another lot, lot 15, in block 5, which Sydie executed, and Brown signed as secretary-treasurer of the com- pany. Upon Sydie 's paying all that was due, the company sent him a transfer for 10 lots including 15 in block 15, instead of in block 5. Sydie noticed the mistake, which had probably been caused by a letter which he had written to the company giv- ing them information as to the lots he had bought, such information being necessitated by the fact that the records had been accidentally destroyed by fire. Whilst Brown and the company knew the mistake which had been made, Brown, who had then severed his connection with the company, TORRENS SYSTEM MORTGAGES. 253 bought lot 15 in block 5 from the company and registered his transfer. It was held by Stuart, J., that the conduct of Brown amounted to fraud, in reliance upon Syyi- dicate Lyonnais du Klondike v. McGrade, 36 S. C. R. 251, where it was held that a company hav- ing notice, not that there had in fact been a fraud, but that another person was claiming in an action that their vendor's certificate had been obtained by fraud, was not entitled to the protection of section 135. Stuart, J., quoted with approba- tion the remark of Richmond, J., in National Bank V. National Mortgage & Agency Co., 3 N. Z. S. C. 257: " That it may be an act of downright dishon- esty, knowingly to accept from the registered owner a transfer of property which he had no right to dispose of, and that it is enough to say on which side of a possible line of demarcation, the case falls without pretending to draw the actual line.'' In RouuHevell v. Ryan, 1910, S. A. R. 67, Ryan had obtained from the owner of land a written agreement for a four-years' lease, and Rounsevell purchased the land knowing of this agreement, but being informed that it was a verbal one only, Rounsevell asked his vendor not to disclose the fact that he was buying the property, and the title was accepted expressly subject to this agreement for the lease, but no entry as to the lease was made upon the register. It was decided that Rounsevell was entitled to eject Ryan on the ground that he ])e- lieved the agreement, being merely verbal, to be unenforceable, so that he could obtain a clear title by registering his transfer. 254 TORRENS SYSTEM MORTGAGES. In Oertel v. Hordern, 237 S. R. (N. S. W.), Hordern purchased the land knowing that there was a tenant in occupation, and being informed shortly afterward that that tenant had a lease. Im- mediately before the completion of the sale, Oertel, the tenant, gave the defendant formal notice that he had a lease under seal for three years with an option of renewal for another two years, and that he intended to exercise such option. Defendant completed the purchase, took a transfer, and was registered. He then sought to eject Oertel, and Oertel in this case asked for an injunction on the ground that Hordern had been guilty of fraud within the meaning of the Acts. The conclusion drawn by Hogg, on p. 440 of the article above referred to, is as follows: " No cases, Australian or other, are referred to in the judgment of the Judicial Committee, but the decision and the grounds upon which it rests are quite inconsistent with the two Australian cases above mentioned {Oertel v. Hordern, and Eounsevell v. Ryan). It is submitted that these should now be regarded as overruled as well as Cooke V. Union Bank, 14 S. W. Eq. 280. The ob- servations as to notice and fraud contained in Rob- ertson V. Keith, 1 V. R. 11, and Lake v. Jones, 15 L. R. 728, would also in this view cease to be auth- oritative. These three cases are all relied on in Oertel v. Hordern." It is thought that a more accurate statement of the law of notice is as suggested above ; that actual notice does not necessarily amount to fraud; it may be difficult to draw the line between the actual TORRENS SYSTEM MORTGAGES. 255 notice that amounts to " fraud importing grave moral blame" within the meaning of Battison V. Hohson [1896], 2 Ch. 403, and that disregard of notice wliich might possibly show a low moral per- ception within the meaning of Lake v. Jones, 15 Y. L. R. 728, where an endeavour by a registered proprietor and a purchaser from him to take ad- vantage of a mistake, whereb.y land, though occu- pied by the defendant, was wrongly included in the certificate of title of the purchaser plaintiff, was held not to l)e fraud within the meaning of the sta- tute, or it may be difficult to say that any particular case was rightly decided, but yet the distinction is a real one. Upon questions of notice, it might be well to consider the language of, and the cases decided under the Merchant Shipping Act, 1894, some of the sections of which are very similar to those con- tained in the Torrens System Statutes. Section 69 of the Act says: " If there is more than one mortgage registered on the same ship, or share therein, the mortgagees shall notwitlistand- ing anij express, implied or constructive notice, be entitled in priority, one over the other, according to the dates at which each instrument is recorded in the register books, and not according to the date of each instrument itself." Williams, J., with reference to the arguments of counsel that an intending mortgagee of a ship belonging to a company, having had notice of the issue of debentures by the company, shouhl l)e post- poned to the charge created l)y the d('l)ontures, says: '' It seems to me that 69th section is a liv- 356 TORRENS SYSTEM MORTGAGES. ing section and I must give effect to it," and further says, " I hold, therefore, that the title of these people, they having got a mortgage in the statutory form, which has been registered, is to be preferred to the title of those people who, hav- ing a prior equitable title chose not to get, as they were entitled to get if they chose, their prior equit- able title converted into a legal title in the statu- tory form and registered." (Black v. Williams [1895], 1 Ch. 408; 65 L. J. Oh. 137). In Barclay d Co. Ltd. v. Poole, 76 L. J. Ch. 488, an owner of shares in a ship mortgaged his shares to mortgagees, who did not register the mort- gage. He then misappropriated part of the ship's money, and agreed to sell his shares to two other owners of shares in the ship, and to apply the pur- chase money in discharging his debt to the ship; the balance to be paid to himself. The bill of sale was duly registered, and the mortgagees on learn- ing of its registration, claimed to have a prior right to the purchase money, but it was held that not- withstanding this notice, the purchasers w^ere en- titled to apply the purchase money in paying the vendor's debts to the ship, and that the mortgagees could only claim the balance. ' ' It is obvious to every one that the Torrens Act is the mere adaptation of the Shipping Acts to land, and if it be allowed to substitute the word '' land " for '' ship "in the judgments of the Lords Justices in Hughes v. Morris, 2 DeG. M. & G. 349, that case undoubtedly governs the present. (Per Gwynne, J., in Lange v. Rutvoldt, 7 S. A. L. R. 15). TORRENS SYSTEM MORTGAGES. 257 '' The great policy of the Shipping Acts, to which everything had to be subservient and which required a particular mode of transfer and regis- tration in order to afford the means of discover- ing the true owners of British ships, in order that none but British subjects should have interest in them, and which compelled the Courts, even in the absence of prohibitive words, to declare there could be no transfer of equitable as distinguished from legal interest in British ships, or in a form not recognized by the Acts, has no counterpart in the Real Property Acts, except as to the protec- tion of purchasers from adverse claims, which can be sufficiently effected without prohibiting the ex- istence of trusts enforceable, except as against pur- chasers, and transferable like any other descrip- tion of equitable estates or interests in real pro- perty not under the provisions of the Act. There is nothing in the policy of the Real Property Act which renders it necessary that trusts should not exist or that contracts for the sale of land should not be enforced, so long as a person ac- quiring a title by transfer as a purchaser is pro- tected from adverse claims, estates or interests, and this, we are of opinion, appears clearly from the language of the Act in the preamble, and those clauses which are enacted with a view to effect the intention of the legislature" (Guthbertson v. Sivan, 11 S. A. R. 102, at 111. See, however, Rohison t. Coal Cliff Co., 12 N. S. Eq. 315, and in support eee In re Wildash, 1 Q. L. R. Part 2, 47 at 49). Cyprian Williams at p. 1189 of his work on the Law of Vendor and Purchaser, in considering the T.S.IC. — 17 358 TORRENS SYSTEM MORTGAGES. question as to whether the purchaser of land reg- istered under the English Act, who before com- pletion receives notice of some unregistered estate, interest, or equity, adverse to the vendor's regis- tered estate, is bound to have regard thereto, sub- mits that he is not so bound, that priority of interest is to be determined by priority of registra- tion alone, and that so long as the persons claiming unregistered interests do not protect themselves by a registered caution, etc., anyone dealing with reg- istered land in such a way that he is about to be- come registered as the proprietor or a chargee thereof is entitled if he can, to gain priority of interest, by procuring priority of registration, notwithstanding that he have notice actual, or constructive, of any unregistered interest what- ever. He regards persons who are entitled to unreg- istered interests, but who fail to protect them by an appropriate entry on the register, as being estopped from asserting their claim against per- sons taking under an exercise of their statutory powers. He suggests that to refrain, when informed of a proposed dealing with the land, from protecting a bare right or equity, such as the right to set aside a prior conveyance induced by fraud, by a caveat or other method of registration, is evidence of an intention to affirm the voidable conveyance, but when he comes to a rule of practice, he lays down the rule that an intending purchaser or mortgagee of registered land cannot safely assume more than this, viz., that where by the equitable rule of TORRENS SYSTEM MORTGAGES. 259 notice, it would be merely a technical fraud in equity to act in disregard of notice acquired of some unregistered estate or interest, he is at liberty, if he can, to acquire priority of interest by priority of registration. By technical fraud in equity, he means the kind of fraud which Courts of equity held to be com- mitted when a purchaser or mortgagee of land in a register county, registered his conveyance in priority to some previous assurance of which he had notice (see LeNeve v. LeNeve, Amb. 436, and Wyatt V. Barwelh 19 V. 435). At p. 1192 Williams considers the question as to whether a vendor can enforce a contract for sale or a mortgage against a purchaser who has notice of an unregistered estate, interest, or equity. He suggests that the Court will not interfere to assist the vendor to get rid, by registration of a transfer or charge from himself, of any lawful estates or interests which would otherwise remain perfectly valid, but that, even if the Court did so interfere, the purchaser would be entitled to enforce the contract in every case where the im-registered estate, interest, or equity would be extinguished or defeated by the registration of transfer from the registered proprietor to himself. If this suggestion be correct, he says, a pur- chaser of registered land, who had received notice of unregistered estates or interests adverse to tlie vendor's title, would have two courses open to him — ^he might object to the title, and refuse to com- plete, except with the concurrence of all persons entitled to the unregistered interest, or if the 360 TORRENS SYSTEM MORTGAGES. unregistered interests were such as would be ex- tinguished by the transfer to himself, and remained unprotected on the register, he might proceed with his purchase. In Cooper v. Anderson, 20 W. L. R. 347, and 1 W. W. R. 848, it was held that where land is reg- istered under the Real Property Act, Manitoba, and a purchaser, relying on a certificate of title, enters into an agreement to buy from the regis- tered owner, pays part of the purchase price and registers a caveat without notice of any fraud affecting the title (the fraud in this case being the fraudulent use of a power of attorney, to effect the sale to the vendor), the certificate of title is conclusive so far as the purchaser is concerned and cannot be set aside or altered to his prejudice. Subsequent notice of fraud does not affect the purchaser, even if received before completion of the purchase by payment in full or transfer of the land. In other words, it is decided that the protection against notice given in section 91 of the Land Titles Act, Manitoba, operates to protect a contract from its inception, if that were innocent, to its termina- tion by completion or otherwise. If this is the correct interpretation of Cooper V. Anderson, it would seem that the existence of a prior contract of sale operates to protect a purchaser who registers with notice of fraud, while a purchaser, without a prior contract, under circumstances otherwise identical, would not be protected; so also the commission of the fraud subsequent to the contract would TORRENS SYSTEM MORTGAGES. 261 apparently not vitiate the registration of such a purchaser (see, however, George v. A. M. P. Society, 4 N. Z, S. C. 165; Cowell v. Stacey, 13 V. L. R. 84, and Ross v. Victorian Permayient Build- ing Society, 8 V. L. R. 265, and in favour of the protection of the purchaser from the formation of the contract see Public Trustee v. Arthur, 25 S. A. R. 59, and McDonald v. Roice, 3 A. J. R. (N.) 90). A registered proprietor or a mortgagee is not protected by the provisions of the Land Transfer Act, 1885, if the circumstances under which he ac- quires title raise in his mind a strong suspicion that the transaction in which he is engaged is fraud on the rights of another. In such a case he is bound to go no further in it without full enquiry, and to omit such enquiry is a want of honest deal- ing {Sheerin v. Slieerin and Guy, 5 Gaz. L. R. (X.Z) 421). See also the case of Purmal Brick Co. v. Gen. Electric Co., 7 W. W. R. 143, where Simmons, J., seems to have thought that a registered mortgage might be notice to the world. As to notice between completion of a transac- tion and registration, see Hine v. Dodd, 2 Atk. 275 : Elsey v. Lutyens, 8 H. 159, and Reilly v. Gar- nett, I. R. 7 Eq. 1. The question of notice is of such importance as affecting priorities, that the judgments in Mono- lithic Building Co., [1915] 1 Ch. 659, 84 L. J. Ch. 441, are here given as showing the tendency to construe modern Acts strictly as far as doctrines of equity are concerned, as it must be presumed 263 TORRENS SYSTEM MORTGAGES. that the legislature legislated with such doctrines in view. In that case Cozens-Hardy, M. R. says at p. 661: '' This is an appeal from a decision from Astbury, J., and it raises a point which has never been authoritatively decided before. It is undoubtedly of impoi'tance, but counsel have not brought to light any authority which expressly decides the question before us. It turns really upon the true meaning of section 98 of the Companies (Consolidation) Act, 1908. The facts which raise the point may be very shortly stated. The defendant company is a limited com- pany subject to the provisions of that Act. It acquired some property in Hertfordshire, and exe- cuted a mortgage on March 3rd, 1913, in the ordin- ary form, for an advance of £500. That was a mortgage to the plaintiff. That mortgage was not registered; it was registered afterwards, but not registered within the period required by the sec- tion. The omission to register was not due to any fraud; it was a common mistake of the advisers Avho thought that a mortgage on land did not re- quire to be registered with the Registrar. There was a first mortgage debenture subsequent to that, which was registered (that was granted to the plaintiff) , and there was a second mortgage deben- ture, which was also registered. The fact that Jenkins, the defendant, had notice of everything that had taken place is quite clear. I never came across a case in which notice was so clearly proved. He was the managing director of the company, he had witnessed the execution of the deed, and I TORRENS SYSTEM MORTGAGES. 263 think was the person who affixed the company's seal, so that Jenkins had the clearest possible notice of the plaintiff's mortgage. I should add — and this is all I need say about it — that subse- quently, on ]\Iarch 27th, 1914, three days before the writ in this action was issued, an order of the Court was made extending the time for registering the plaintiff 's mortgage until April 17th, 1914, and that order was made without prejudice to the rights of the parties prior to the time when the mort- gage was actually registered. '' I propose to consider the language of section 93 without having my mind influenced for the mom- ent — I had almost said without having my mind poisoned for the moment — by consideration of any authorities or other Acts dealing with this ques- tion. This was a mortgage on land executed by a company, and s. 93 says (The Master of the Rolls read the section and continued) : Mr. Jenkins, of course, was the creditor of the company in respect of his registered debenture. That is quite plain. This section says that so far as any security under the propert}^ comprised in the unregistered mort- gage is concerned it is to be void against the liqui- dator and any creditor of the company unless registered within this period. What does that mean ? I confess my inability to see that it means anything else than exactly what it says, namely, that it is void against any creditor who has a reg- istered charge on the company's property. I can- not myself see any reason to doubt that, as a mat- ter of construction of this section. It is void also against the liquidator in the event of winding up. 364 ' TORRENS SYSTEM MORTGAGES. but that is a contingency which we need not con- sider here, and which might give rise to certain questions which have been stated and discussed in argument, but as to which, I deliberately refrain from expressing an opinion. I only propose to deal with this case in reference to the difference of position between a registered secured creditor and a prior unregistered secured creditor. It is said that we ought to read seption 93 contrary, as it seems to me, to its construction and intent, as say- ing an unregistered mortgage shall be void against any creditor of the company, except where he has had notice of its existence. I ask why ? Notice is not material in the case of a creditor. I feel the greatest possible difficulty in saying that that doc- trine can apply. I put aside altogether any ques- tion of fraud. The doctrine of the Court in a case of fraud, of course, proceeds upon a different foot- ing, and any security may be postponed if you can find fraud in its inception. But it is not fraud to take advantage of legal rights, the existence of which may be taken to be known to both parties. We are dealing with a case where there is a com- mon mistake. Then we are asked to go back 170 years, to Le Neve v. Le Neve, 3 Atk, 646. and to consider the decisions under the Middlesex Regis- try Act, and certain other Acts under which it was held that there might be such an equity as would induce the Court to say that an unregistered charge should not be postponed to a registered charge. '' In the first place, the language of the Mid- dlesex Registry Act seems to me to be materially different. The preamble to the Act (7 Anne, c. TORRENS SYSTEM MORTGAGES. ^65 20), which is found in section 1, is framed in this way : ' Whereas by the different and secret ways of conveying lands, tenements, and hereditaments, such as are ill-disposed have it in their power to commit frauds, and frequently do so, by means whereof several persons (who through many years industry in their trades and employments, and by great frugality, have been enabled to purchase lands, or to lend moneys on land security) have been undone in their purchases and mortgages by prior and secret conveyances and fraudulent in- cumbrances, and not only themselves but their whole families thereb}^ utterly ruined,' and it then provided that deeds not registered should be ad- judged fraudulent or void against any subsequent purchaser for valuable consideration. '' In the great case of Le Neve v. Le Neve, 3 Atk. 646, where there was a solicitor who had really been concocting a scheme by which the children of a first marriage should be defrauded and deprived of their security by means of a second marriage set- tlement on the second marriage, Lord Hardwicke held that notice to the solicitor was notice to the second wife, and that in some respects she was af- fected by his fraudulent conduct. But I do not think it would be correct to say that Lord Hard- wicke 's decision w^ent simply upon the actual fraud in the concoction and carryiiig through of the arrangement. That decision, and the decisions which have followed it, have, certainly for the last half-century — it may be for longer — been strongly dissented from by the Courts, and have been fol- lowed with great reluctance by Judge after Judge. ^66 TORRENS SYSTEM MORTGAGES. But those Judges felt themselves not at liberty — in dealing with the Registry Act on which this de- cision had been given, and on the interpretation of which many decisions had doubtless depended — to override Lord Hardwicke's decision, and they have in many cases followed it. '^ I fail to see the reason why we should apply that principle to a section of a modern Act of Par- liament, namely, section 93, which I have read. '' Then it is said that the Court of Appeal in the case of Greaves v. Tofield, 14 C. D. 563, in the year 1880, really adopted the same principle. It is necessary to consider that case. It arose on the construction of section 12 of the Judgments Act, 1885, which says : ' And whereas by reason of the repeal in the last session of Parliament of the Acl of the fifty- third year of King George the Third, chapter one hundred and forty-one, requir- ing the enrolment of life annuities or rent-charges, purchasers are no longer enabled to ascertain by search what life amiuities or rent-charges may have been granted by their vendors or others : Be it, therefore, enacted by the authority aforesaid as follows : Any annuity or rent-charge granted after the passing of this Act, otherwise than by marriage settlement, for one or more life or lives, or for any term of years or greater estate determinable on one or more life or lives, shall not affect any lands, tenements, or hereditaments as to pur- chasers, mortgagees, or creditors, unless and un- til a memorandum or minute containing the name, and the usual or last known place of abode, and the title, trade, or profession of the person whose TORRENS SYSTEM MORTGAGES. 367 estate is intended to be affected thereby ' — and other particulars ' shall be left with the senior master of the Court of Common Pleas at West- minster, who shall forthwith enter the particulars aforesaid in a book.' The words there are ' es- tates intended to be affected thereby,' and it was held in the Court of Appeal by James L. J., Mellish, L.J., and Baggallay, L.J., that that did not apph' where there was notice of an unregistered deed. But I personally do not feel much difficulty about that case for this reason: if you look at it that section was the last section of an Act, in several sections of which it was expressly said certain con- sequences shall follow notwithstanding any notice. Section 4 says ' that no judgment . . . shall affect an}^ lands, tenements, or hereditaments, at law or in equity, as to purchasers, mortgagees, or creditors, unless and until such a memorandum or minute as in the said Act in that behalf mentioned shall have been left with the proper officer of the proper Court, any notice of any such judgment, decree, order, or rule to any such purchaser, mort- gagee, or creditor in anywise notwithstanding.' If you go to section 5, which deals with pi'otections against judgments not registered, it is again pro- vided, ' so that notice of any judgment, decree, order, or rule, not duly registered, sliall not avail against purchasers, mortgagees, or creditors.' Sec- tion 10 says that ' no order of the Court of Bank- ruptcy shall affect lands unless it is registered,' any notice of any such order to any such purchaser, mortgagee, or creditor in anywise notwithstand- ing.' Then you come to section 12, in which there 268 TORRENS SYSTEM MORTGAGES. is a remarkable omission of any reference to the absence of notice. In those circumstances the Court held, differing from Sir George Jessel in the Court below, that there was no contradiction in that case under s. 12, and that the fair meaning of that section was that the old equitable doctrine which had been applied in these matters for many years was deliberately not intended to extend to a section excluding those words which were correctly inserted in sections 3, 4 and 5. (Sic in Law Reports. The Law Journal Report runs, more correctly it is thought ' not intended to be excluded,' seeing that words to the contrary were not inserted, as they had been in sections 4, 5 and 10 W. S. S.). Whether that was or was not sufficient to justify the decision I cannot say, but it certainly was a point in the case which distinguishes it from the present case. But is that the only case we ought to consider? I think not. There is another decision of this Court, Edtvards v. Edtvards, 2 C. D. 291, under the Bills of Sale Act, a modem Act, where it was argued that an unregistered bill of sale ought to be held good as against a judgment creditor who had notice of its existence, and Le Neve V. Le Neve was cited. James, L.J., before referring to the language of the Bills of Sale Act, said: * I think it would be dangerous to engraft an equitable exception upon a modern Act of Par- liament. This Act provides that a bill of sale shall be registered within twenty-one days, ' otherwise such bill of sale shall as against all sheriff's offi- cers and other persons seizing any property or effects comprised in such bill of sale, in the execu- TORRENS SYSTEM MORTGAGES. 269 tion of any process of any Court of Law or Equity authorizing the seizure of the goods of the person by whom or of whose goods such bill of sale shall have been made, and against every person on whose behalf such process shall have been issued, be nuU and void to all intents and purposes whatsoever, so far as regards the property in or right to the possession of any personal chattels comprised in such bill of sale. ' ' ' Then a little lower down he says: ' The mortgagee says to the execution cre- ditor, ' you are not prejudiced, for you knew of my security. ' The execution creditor replies, ' I knew that you had a security, but you knew the law as well as I. You knew that if I issued execution your security would be of no avail as to chattels of which you had not taken possession. I knew that my remedy against those chattels was liable to be defeated by your taking possession before I seized them in execution. You knew that your security was liable to be defeated by my taking them in exe- cution before you took possession.' Both parties stood on their legal rights — neither of them was misleading the other. It is not consistent with the policy of the Legislature to import fine equitable distinctions into these cases, and I am therefore of opinion that the argument founded on the know- ledge of the judgment creditor cannot prevail.' Mellish, L.J.'s, judgment is, if possible, still more in point. He says: ^ Then it is urged that although this instrument, which was a bill of sale within the Act, was not registered, it is good against the cre- ditor, because he had notice of it when his debt was contracted. Notice he clearly had, but does that ~"<^ TORRENS SYSTEM MORTGAGES. take the case out of the Act ? I am of opinion that at law it clearly would not be held to do so. ' Then lower down he says : ' Then, is a Court of Equity to act differently ? I agree with the Lord Justice James that we ought not to put such constructions on modern Acts of Parliament. If the Legislature says that a deed shall be ' null and void to all in- tents and purposes whatsoever, ' how can a Court of Equity say that in certain circumstances it shall be valid ? The Courts of Equity have given relief on equitable grounds from provisions in old Acts of Parliament; ' — obviously referring to the Registry Acts — ' but this has not been done in the case of modern Acts, which are framed with a view to equitable as well as legal doctrines.' "Now, can any distinction be drawn because that Act says that the deed shall be 'null and void to all intents and purposes whatsoever? ' If a deed is said to be void against the first and second in- cumbrancers, what is added by saying that it shall be void to all intents and purposes ? Of course the deed is not void to all intents and purposes. It is a perfectly good deed against the company so long as it is a going concern. It is not void to all intents and purposes, but it is void as between the two incumbrancers. It is rather strange, but Edtvards v. Edwards was not cited in Greaves v. Tofield. 1 have difficulty in distinguishing the principle which guided the Court in those two cases unless the distinction is based upon those two sections to which I have referred. As between those two decisions I certainly prefer Edtvards v. Edwards, and I think the principle of the old equi- TORRENS SYSTEM MORTGAGES. 271 table doctrine laid down in Le Neve v. Le Neve, and subsequent cases which have followed it, ought not to be applied or extended to modern Acts of Parliament. " For those reasons I think the decision of the learned Judge below was wrong, and that this ap- peal ought to be allowed." Phillimore, L. J., w:as of the same opinion — and continued : " No case of fraud w^as made against the de- fendant Jenkins, and we need not consider, and cannot consider, whether or not the plaintiff has any remedy against him for negligence or mis- conduct in his independent office of director of this company. We have to construe section 93 of the statute. It makes void a security ; not the debt, not the cause of action, but the security, and not as against everybody, not as against the company grantor, but against the liquidator, and against any creditor, and it leaves the security to stand as against the company while it is a going concern. It does not make the security binding on the liqui- dator as successor of the company. There are three ways in w^hich documents, or three degrees to which instruments, may be void. They may be void alto- gether, like a bill of sale under £30 under the Bills of Sale Act, 1882 ; they may be void as to the secu- rity and good as to the obligation ; and they may be void against certain parties only; but in each of those cases they are quoad a particular transaction void, and the matter is not made stronger by saying ' to all intents and purposes ' or any phrase of that kind. ^72 TORRENS SYSTEM MORTGAGES. *' Now it is suggested here that the defendant's knowledge of the plaintiff's mortgage precludes him from insisting upon his rights as a registered holder of debentures. I answer in the terms of Edwards v. Edwards, which has already been quoted by the Master of the Rolls, but which I must just briefly read because I am not going to put any other answer in my own language. ' The mort- gagee says to the execution creditor, ' You are not prejudiced, for you knew of my security.' The execution creditor replies, ' I knew that you had a security, but you knew the law as well as I. ' ' .1 omit the next words, because they have been al- ready cited. ' Both parties stood on their legal rights — neither of them was misleading the other. ' That is this case as the facts have been found. The difficulty in our way is the case of Greaves v. To- field. As to Greaves v. Tofield, three explanations may be given for it, any one of which will let it stand with the principle laid down in Edwards v. Edivards. Greaves v. Tofield was decided on the ground that there was the same phrase in that Act as in the Act of William and Mary. ' Shall not affect any lands or tenements ' is the Act of 18 & 19 Victoria. ' No judgment not docketed shall affect any land or tenements,' says the Act of William and Mary, upon which the decision in Davis V. Earl of Strathmore, 16 Ves. 419, was given, the case which has been followed ever since. This is the first observation to make. Secondly, the mischief in each Act is recited in the same way, as also in the Act of Anne. It is the mischief that the second incumbrancer or purchaser will be deceived TORRENS SYSTEM MORTGAGES. 373 by absence of knowledge of the first, a mischief which cannot ensue if he knows. I omit the subtleties of constructive notice for this purpose. It cannot arise if he in fact knows. The third point is that w^hich the Master of the Rolls has already referred to, that when in that Act it was intended that knowledge or notice should prevent a subse- quent purchaser or incumbrancer from relying on non-registration, it was so stated in three other sections, but no such statement was made in the section under consideration in that case. On these giounds it seems to me that Greaves v. Tofield may well stand as a decision — and we cannot overrule it — upon the particular Act of Parliament without being in an}" way in conflict with the broader lan- guage of Edwards v. Edwards. ^' Now, what principles do the resjDondents in this case contend for ? There are only two ways in which this matter can be put. The first is, that the object of registration is to prevent people advanc- ing money or purchasing in the dark. It is in order that people who do not know shall not be affected by a prior assurance. If they do know the mischief disappears, and therefore although there is no such phrase in the Act it does not apply to such cases. The other is on a different principle. The other makes the subsequent incumbrancer trus- tee for the first incumbrancer, and that is the view in Le Neve v. Le Neve, which Lord Ilardwicke puts upon dolus mains, imd what he calls (quoting from the civil law) ' macJiinafionem ad circumvenien- dum.' In the particular case there was that very thing. If B. knows of an incumbrance on Black T.S.M.— 18 ^'^'4 TORRENS SYSTEM MORTGAGES. Acre already effected in favour of A., he may take a second incumbrance without intending to destroy A.'s incumbrance, when he takes it thinking that there will be sufficient for both and when he finds that there will not be sufficient for both he may effect registration of his incumbrance knowing that the other has not been registered, with a view to getting as much advantage as he can. There is no fraud in that. He is standing on his legal rights. -But if A. has a conveyance of the whole property, and B. takes a second conveyance of the whole pro- perty, knowing that A.'s is not registered, and promptly registers, then his endeavour from the beginning has been to destro}^ that which he knows was an honest transaction though not protected by law. It is the same of course if, knowing that A. has a conveyance of the whole property, he takes a mortgage which partially affects A., or if, A. hav- ing a mortgage, B. takes a conveyance which will defeat A.'s mortgage, and that is what happened in Le Neve v. Le Neve. It was not that the regis- tration was effected in order to gain an advantage. It was that the whole inception of the transaction was to create an assurance which would defeat what the party intending to defeat it knew was an honest transaction. In such a case, I assume that the manner in which the matter would be worked out would be by making the second person trustee of his advantages in favour of the first where there are third persons to be considered; but if there are none, all that need be said is that the second person is postponed to the first because he must be taken to have known of the first all along. The way TORRENS SYSTEM MORTGAGES. 275 of working out an administration of the assets if there was a liquidation, and if there were other creditors coming in, would be, it seems to me, diffi- cult in both those cases, and extremely difficult in the case where, as in this case, there was no fraud at all. " On all these grounds it seems to me that the best thing is to go to the plain words of the statute. This document as against any creditor is void. The defendant here is a creditor, and therefore as against him it is as if it did not exist. Let us not import considerations wMch maj^ be applicable, where there is dolus mains, but which in any other case neither are applicable, nor should be made applicable. '' Therefore I agree that this appeal should be allowed." Joyce, J., said — *' This appeal, it appears to me, raises an important general question, and that is whether a creditor, in this case a secured creditor, who at the time of his debt being contracted, or of his taking his security, had notice of a prior un- registered security on the company's property, is thereby precluded from setting up section 93 of the Companies (Consolidated) Act, 1908, against such prior security. '' Now, in my opinion it would be most unfor- tunate, and lead to endless difficulty and confusion, if the decision of the Court below in this case were to stand. We have to consider the plain, or cer- tainly tolerably plain, words of that recent Act of Parliament. There is a saying of Parke, B., 10 M. & W. at p. 521, with reference to the con- 376 TORRENS SYSTEM MORTGAGES. struction of Acts of Parliament, which I should like to cite : ' It is our duty to construe the statute according to the grammatical meaning of the words, unless some absurdity would ensue from so construing it, or a uniform series of decisions had already established a different construction. I do not think any of the cases cited of sufficient weight to preclude us from putting our own construction on the words of the statute.' There are also some observations of Sir George Jessel, very similar to what we constantly hear about the construction of wills, in Ex parte Blaiherg, 23 Ch. D. 254, 257, which was a bill of sale case. He says: ' What- ever view we take of this case the result will be a singular one, and one which was probably not con- templated by the Legislature. I think the proi)er course is to read the section of the Act and to ascer- tain its meaning, and not to trouble ourselves about decisions upon the former Act. Any other course would be apt to lead us astray. If the later Act can have only one meaning we ought to give effect to it accordingly. If instead of doing that we com- pare it with the former Act, and say that it differs from it only to such and such an extent, and then consider the decisions on the former Act, we might in that way go back to half a dozen older Acts, and after considering the decisions on them, we might at last arrive at a conclusion exactly contrary to the later Act. ' '' Now, this is a modern Act. I will not read again what the Master of the Rolls has read from Mellish, L.J.'s, judgment, which has never been questioned or criticized in any respect, but those TORRENS SYSTEM MORTGAGES. 277 observations in his judgment are, to my mind, very much in point in this case. I think that before getting lost in any wilderness of authorities, or a multitude of exceptions, we ought to look at the Act itself, and I think the Act is perfectly plain. The Act itself does not say that any charge shall be void altogether, but it specifies in the most pre- cise and complete manner — it takes several lines to do it — it prescribes in the most precise and par- ticular manner the extent to which the other charges are to be avoided. Upon that specification the respondents seek to set up a qualification, or rather to insert an exception among the creditors. They want to insert the following exception from the creditors there mentioned : ' with the excep- tion of creditors who have notice of the prior charge.' Having regard to that contentiou, it is important to remember that the statute avoids the charge as against the liquidator. Now, he of all persons is the person who has notice. The com- pany, and he represents the company, has notice of the charge. If the unregistered charge is to be void as against him, I, myself, have great difficulty in seeing what would be the sense of making it not void as against some other creditors, and I should also have great difficulty in seeing how the matter wotdd work out if we assented to the construction sought to be placed on this section by the respon- dent. I have great difficulty in seeing how it would work out in a winding-up. Practically, in my opin- ion, it woukl be unworkable, and, for my own part, I could not sanction the engrafting on these plain words of the Act a very ingenious limitation, which ^78 TORRENS SYSTEM MORTGAGES. in the result would render this section unworkable and absurd. I think the section means exactly what it says, and that it is not subject to any such exception as has been suggested by the respondent in this appeal." Questions relating to forgery raise questions somewhat different from fraud. In Bailey \. Crihh & McDonald, 2 Q. L. R. 42, Bailey's land was transferred to Cribb by a forged transfer, and the latter became registered. The title was subsequently transferred to McDonald, who also became registered. The title of McDonald to the land was held to be unimpeachable. In Gihhs v. Messer, 60 L. J. P. C. 20; [1891], A. C. 248, a certain Mrs. Messer resident in Scot- land was the registered proprietor of land in Victoria. Her husband in Victoria had a power of attorney to sell or mortgage the land. On his return to Scotland he deposited this power of attorney and his wife 's duplicate certificate of title with a certain Cresswell. Cresswell forged a transfer of the land by Mr. Messer, as his wife's attorney to a fictitious person, '^ Hugh Cameron, of North Hamilton, County of Dundas, grazier." It was admitted that no such person was in existence. Cresswell then gave a mortgage signed by '' Hugh Cameron," he himself being the attest- ing witness, to a certain Mclntyre. In the Victorian Supreme Court it was held that Cresswell had assumed the name of Hugh Cameron and that in favour of the mortgagee, Mclntyre, he was to be regarded as the proprietor of the land with whom Mclntyre had dealt on the TORRENS SYSTEM MORTGAGES. ^'^^ faith of the certificate evidencing his title. This view did not commend itself to the Privy Council upon appeal. The Board held that a man cannot with any propriety, be said to assume a name, or in other words, an alias, unless he acts personally under that name or asserts it to be his own desig- nation. '' In first registering a fictitious Hugh Cameron as proprietor of the land, and then exe- cuting and delivering a mortgage in the name of Hugh Cameron, Cresswell represented the mort- gagor to be a person other than himself, and committed the crime of forgery." The mortgage was held to be a nullity and Mclntyre was held not to be withiii the protection of the statute, owing to having dealt not with a registered proprietor but with an agent and a forger, whose name was not on the register, in reliance upon his honesty. Their Lordships approved of the principle that a forged transfer or mortgage will, when duly entered on the register, become the root of a valid title in a dona fide purchaser, but pointed out that there was no enactment which made in- defeasible the registered right of a transferee or mortgagee under a null deed. In Assets Co. v. 31 ere Roihi, 74 L. J. P. C. 49, it was held that the fraud which must be proved in order to invalidate the title of a registered purchaser for value, whether he buys from a prior registered owner, or from a person claim- ing under a title, certified under the Native Land Acts, must be brought home to the person whose registered title is impeached or to his agents. Fraud by persons from whom lie claims does not 380 TOERENS SYSTEM MORTGAGES. affect liim, unless knowledge of it is brought home to him or his agents. The case was distinguished from Gihhs v. Messer, supra, by the fact that in the latter case two hona fide purchasers were on the register and the case turned on the non-existence of any real person to accept a transfer and get registered himself and then to make a transfer to someone else. '* Moreover," says Lord Lindley, ' ' forgery is more than fraud, and gives rise to con- siderations peculiar to itself." And again in his judgment he sa3^s, ''It is said that Gihhs v. Messer, 60 L. J. P. C. 20, 1891 A. C. 248, shows that regis- tered titles may not be conclusive even in favour of a hona fide registered purchaser from a registered owner. The cases, no doubt, do show that such a case may occur. The case was one of fraud and forgery. A transfer from a registered owner to a, non-existent person had been fraudulently pro- cured and registered and a fictitious transfer from that fictitious transferee to a hona fide mortgagee was afterwards registered. In a suit by the first registered owner against the Registrar, the regis- tered mortgagee and the perpetrator of the fraud, the name of the first registered owner was ordered to be restored to the register by this Board. The Supreme Court of Victoria had held that the true owner had lost her property, but was entitled to damages under the Compensation Fund. The ap- peal was by the Registrar from this decision. This Board held that as there was in fact neither any transferee from the first registered owner nor any transferor to the registered mortgagee, there was TORRENS SYSTEM MORTGAGES. 281 nothing to deprive the first registered owner of her property, nothing in fact on which the subsequent registrations could operate, and those registrations were accordingly ordered to be cancelled. Lord Watson, in his observations on the protections given to bona fide purchasers, points out that a bona fxle purchaser from a registered owner is in a better position than a first registered owner whose title may be impeached for fraud, but there is nothing in his judgment in favour of the view that an original registered owner claiming through a real person, does not get a good title against everyone, e:j^cept in the cases specially mentioned in the Act, fraud being one of them." As to a mortgage taken from an innocent trans- feree under a forgery, see Brown v. Broughton, 8 W. W. R. 889. 282 TORRENS SYSTEM MORTGAGES. CHAPTER XXXVI. Ca\^ats. The lodging of a caveat, or the failure to lodge, may affect considerably priorities as between mort- gagees or other persons having an interest in the mortgaged lands. The sections relating to the effect of the registration of a caveat are as follows : Any person claiming to be interested under any mil, settlement, or trust deed, or any instrument of transfer, or transmission, or under an unregistered instrument, or under an execution where the exe- cution creditor seeks to affect land in which the execution debtor is interested beneficiall}^, but the title to which is registered in the name of some other person ; or otherwise howsoever in any land, mortgage, or incumbrance, may cause to be filed on his behalf with the Registrar a caveat in Form W., in the schedule to this Act, against the registration of any person as transferee or owner of, or of any instrument affecting such estate or interest unless such instrument be expressed to be subject to the claim of the caveator. (Alta., s. 84). So long as any caveat remains in force, the Registrar shall not register an instrument purport- ing to affect the land, mortgage or incumbrance in respect to which such caveat is lodged, unless such instrument is expressed to be subject to the claim of the caveator. (Alta., s. 87). Any person claiming an estate or interest in land, mortgage, or incumbrance under the new sys- tem may file or cause to be filed on his behalf with TORRENS SYSTEM MORTGAGES. 383 the District Registrar a caveat in the form in Schedule H. to this Act forbidding the registra- tion of any person as transferee or owner of, or of any instrument affecting such estate or interest, or unless such instrument be expressly subject to the claim of the caveator. (Man., s. 138). So long as any caveat prohibiting the transfer or other dealing with any land, mortgage, or in- cumbrance remains in force, the District Registrar shall not register any instrument purporting to transfer, mortgage or incumber the land, mortgage or incumbrance in respect to which such caveat is lodged, unless such instrument be expressed to be subject to the claini of the caveator. (Man., s. 140). The filing of a caveat by the District Registrar, or by any caveator, shall give the same effect as to priority to the instrument or subject matter on which said caveat is based, as the registration of any instrument under this Act ; and the district registrar may, in his discretion, allow the with- drawal of such caveat at any time, and the registra- tion, in lieu thereof, of the instrument under which the person on whose behalf such caveat was filed claims his title or interest ; and, if the withdrawal of such caveat and the registration of such instru- ment be simultaneous, the same priority shall be preserved to all rights under the instrument as the same rights w^ere entitled to under the caveat. (Man., s. 151). Registration by way of a caveat whether by the Registrar or by any caveator shall have the same effect as to priority as the registration of any 284 TOPvRENS SYSTEM MORTGAGES. instrument under this Act, and the Registrar may in his discretion allow the withdrawal of such caveat at any time and the registration in lieu thereof of the instrument under which the person on whose behalf such caveat is lodged claims his title or in- terest, provided that such instrument is an instru- ment that may be registered under this Act, and if the withdrawal of such caveat, and the registra- tion of such instrument is simultaneous, the same priority shall be preserved to all rights under the instrument as the same rights were entitled^ to un- der the caveat. (Alta., s. 97). It should be noticed that Man. section 151 origi- nally ran in language similar to that of Alta. 97, but has since been altered to its present form. Any person claiming to be interested in any will, settlement or trust deed, or under any instru- ment of transfer or transmission, or under any un- registered instrument, or under an execution where the execution creditor seeks to affect land, in which the execution debtor is interested beneficially, but the title to which is registered in the name of some other person, or otherwise howsoever w^hether un- der an instrument in writing or not, may lodge a caveat with the Registrar to the effect that no regis- tration of any transfer or other instrument affect- ing the said land shall be made, and that no certifi- cate of title therefor shall be granted until such cavpat has been withdrawn, or has lapsed, as here- inafter provided, unless such instrument or certi- ficate of title is expressed to be subject to the claim of the caveator as stated in such caveat. (Sask., s. 125). TORRENS SYSTEM MORTGAGES. ^85 So long as any caveat remains in force the Registrar shall not enter in the register any memorandum of any transfer or other instrument purporting to transfer, incumber, or otherwise deal with, or affect the land in respect of which such caveat is lodged, except subject to the claim of the caveator. (Sask., s. 128). These sections, with perhaps the exception of the somewhat extraordinary provisions made by section 97 of the Alberta Act, seem to give the caveat fairly definite characteristics, and before generalizing as to the caveat, it may be well to note some of their minor differences. • It is said that in Manitoba and Alberta, but not in Saskatchewan, caveats claiming an interest in mortgages and incumbrances are permitted. It is difficult to see, however, how the failure to enumer- ate mortgages and incumbrances as the possible subject matter of interest upon which caveats can be founded, can reasonably be translated in this sense, especially in view of the statutory definition of the word " land " contained in all the statutes. See Thom on Canadian Torrens System, p. 388. It was said, prior to the recent addition of the words ^'howsoever whether under an instrvunent in writing or not," that in Saskatchewan the effect of the words "or otherwise" was not to extend the enumeration of the interests upon which a caveat may be founded, and that consequently a caveat cannot be founded upon any transaction which is not effected or evidenced by a wi'itten instrument. (See Thorn's Torrens System, 366). The state- ment is based upon a decision said to liave been ■^S6 TORRENS SYSTEM MORTGAGES. given by the Master of Titles in Be Ostad's Caveat; the conclusion being drawn that (notwithstanding the language of Wetmore, C.J., in Re WarU Ca- veaty 2 Sask. L. R. 431, viz., " the expression in section 136 (now 125) of the Act of 1906, that any person claiming to be interested in the land may lodge a caveat with the Registrar, is not governed by section 79 (now 68). The word 'claiming' gives this section a wider significance, and I apprehend that it is good, therefore, to enable any person claiming a beneficial interest of any sort to lodge his caveat so as to prevent the land being disposed of," a claim such as under a vendor's lien or an equitable mortgage ])y deposit of certificate of title without written memorandum, or a claim by the prior registered owner that the present registered owner had obtained the land fraudulently and without con- sideration are not grounds for filing a caveat in Saskatchewan. With respect to the provision in the Alberta Act, where the words are '' or otherwise howso- ever," it has been held, in Be McCullougJi v. Graham, 21 W. L. R. 349, that the interest in partnership land belonging to the partnership may be protected by a caveat, although the partnership was not evidenced by writing. Apart then from that eccentric section, 97, of the Alberta Statute, it w^ill be sufficient for the pre- sent purposes, which is merely to state the nature of a caveat sufficiently to serve as an introduction to a determination of its effect with regard to con- ferring or retaining priority for the charge or other interest on which it may be based, to state some- what arbitrarilv that nature. TORRENS SYSTEM MORTGAGES. 287 The power of caveating conferred by the enact- ment is a very wide one, and the right to do so is closely analogous to the right of obtaining an in- junction from the Courts: Ex parte Soiling, 14 N. S. W. 399; Biggs v. Waterhouse, 12 S. A. R. 75; Clissold V. Bellomi, 10 N. S. W. Eq. 191; In re Hitchcock, 17 W. N. N. S. W. 62 ; General Finance Company v. Perpetual Executors, 27 V. L. R. 739 ; In re Bielfeld, 12 N. Z. R. 596; Iii re Martin, 1900, S. A. R. 69 ; McEacharn v. Colton [1902], A. C. 104. In Broadfoot v. Foxwell, 7 Q. L. J. 4, where the plaintiff's interest was held sufficient to entitle him to an injunction, and Staples v. Corby, 19 N. Z. R. 517, where the interest was held not to be sufficient to support a claim for an injunction, caveats were not lodged, but the two rights to an in- junction, and to a caveat, seem to have been treated on the same footing, and governed by the same principles. Neglect to lodge a caveat or keep it alive ap- pears to be treated as evidence of a waiver of the rights which might have been protected by means of a caveat: See PatcJiell v. Maunsell, 7 V. L. R. 6 ; Ex parte Clark, 17 V. L. R. 82 ; Oertel v. Hor- dern, 1902, 2 S. R. Eq. (N.S.W.) 37; Howell v. Union Bank, 6 N. Z. R. 567; Hogg, p. 1039. The true principle which should govern the question whether an interest be caveatable or not is that a caveat may be entered under circumstances which would justify an injunction being granted by the Courts, and at the same time it must be re- membered that given the caveator's interest, a caveat ma}- be entered as a matter of right under 388' TORRENS SYSTEM MORTGAGES. circumstances that might not call for the immedi- ate intervention of the Courts : Hogg, p. 1039. A caveat, then, will keep the property in statu quo, and will atford notice to persons who pro- pose to deal with the registered owner of restric- tions upon his rig^hts. The mere fact. of the caveat being entered upon the register is not, however, necessary notice to all the world of the restrictions imposed on the pro- prietor of the land {In re Wildash, supra; Queens- land Trustee v. Registrar-General (1893), 5 Q. L. J. at 51 ; but see as to effect of registration gener- ally, Purmal Brick v. Gen. Electric Co., 7 W. W. R. 143). A caveat is sometimes spoken of as though it were an instrument which, by priority of registra- tion, secured priority of interest (see In re Scan- Ian, 3 Q. L., J. 43) ; the observations to this effect in the judgment were not necessary for the decision of the case, since the caveator's equitable title was prior in date independently of his caveat. But the proper view seems to be that a caveat is worthless unless there is in existence, at the time of its entry on the register, an enforceable right of some kind relating to the land, and that on any such right coming to an end the caveat becomes of no effect. (See Butler v. Saddle. Hill G. M. Co., 2 N. Z. S. C. 296; Kissling v. Mitclielson, 3 N. Z. C. A. 261 : but see Alta., s. 97, and Royal Bank v. Banque D'lloclielaga, 7 W. W. R. 817, and Stephens v. rrV«7/,5W. W. R. 201). In Re Scanlan, 3 Q. L. J. 43, one Donahue, on Tune 25th, 1886, bargained and sold a piece of TORRENS SYSTEM MORTGAGES. 389 land to one Heaslop. On June 30th Donahue tried to withdraw from the bargain, and Heaslop 's soli- citors, by his instructions, entered a caveat against the land. The caveat was lodged in the registry on July 1st, but it was not entered upon the register until the 13th. On June 26th Donahue had sold the same land to Scanlan, and on July 14th Scanlan paid the purchase money and received the memo- randum of transfer, with the certificate of title, from Donahue. He did not, however, lodge these in the registry until August 13th. Lilley, C. J., in his judgment dealt with the action as if the caveat had been registered as of July 15th : — '* Neither of them had title completed by actual entry on the register, that is a legal title as distin- guished from an equitable one, but, either of them being a purchaser for value, could obtain prioritj^ of the other by getting in the legal title, or, in other words, securing priority of registration. As be- tween the two on their equitable titles, Heaslop was first in time, and therefore stronger in right. On the following morning, the 15th of July, Heas- lop 's position was further strengthened; he had lodged his caveat, which was on that day entered on the register by the Registrar, and had obtained a statutory protection of his prior equitable right. The eif ect of a caveat was expressly decided by me in the case, In re Wildash. In that case I find, at p. 53, I said, * A caveat prohibits any subsequent dealing under the Act, and with greatei- force, out- side the Act in derogation of the claim it protects, if it is well founded. As between the unregistered T.S.M. — 19 290 TORRENS SYSTEM MORTGAGES. transactions of Scanlan and Heaslop the caveat protected the prior good equitable title of Heaslop against any ei^ort of Scanlan to secure a para- mount title b}' registration. Scanlan 's title, if re- gistered, could only take effect from the 13th of August, when he delivered the transfer and certifi- cate to the Registrar ; consequently he must fail, as Heaslop 's prior title was protected certainly from the 15th July. Heaslop was in fact first on the register on that day.' " (See judgment in Barnes v. James^ quoted at end of chapter). In considering the question of the effect of a caveat much stress is commonly laid on the case of McKillop ii- Benjafield v. Alejcander, 45 S. C. R. 551, but it must be remembered that that case is primarily not a decision so much upon the effect of a caveat, as upon the effect of a covenant contain- ing an agreement guarding against the recognition hy the vendor of sub-purchasers. The facts were that the Canadian Northern Railway Co. sold land to a certain Potter by in- stalment payments, the purchaser covenanting for himself and his assigns ; but no assignment of the contract should be valid, unless the same should be for the entire interest of the purchaser and ap- proved and countersigned on behalf of the company by a duly authorized person. Potter in turn sold land to a certain Gesman, and he sold half of the lands to Alexander, and immediately afterwards sold the whole of the land to McKillop & Benja- field. Immediately after the latter sale Alexander registered the caveat, and about a month after- TORRENS SYSTEM MORTGAGES. 291 wards McKillop & Benj afield paid Gesman the balance of the purchase money, and received an assignment of the original agreement of sale, that assignment being approved by the vendors at a date intermediate between the lodging of Alexan- der's caveat and the assignment of Gesman. The majority of the Court agreed that Alexander was protected by the lodging of his caveat, prior to the completion of the purchase by McKillop & Benja- field. But Duff, J., dissented from the decision. The majority of the Court treated the case as if it were a case of competing equities, and held that the prior equity of Alexander, protected as it was by a caveat prior to the registration of McKil- lop & Benj afield, was entitled to priority. There is no doubt that Duff, J., would not have dissented from the conclusion if his premises had been the same, but he considered, it seems, that there was only one equity, viz.: that of McKillop & Benja- field, Alexander having no equity owing to the con- dition in the original agreement restrictive of un- approved assignments. (See further as to the effect of such conditions, Atlantic Realty Co., Limited, d Bonneau v. Jackson, 5 W. W. R. 535, and C. N. R. v. Peterson, 6 W. W. R. 1194). It is true that Anglin, J., delivering a judg- ment concurred in by Brodeur, J., says that he inclined to the view that a caveat must be deemed notice to every person who claims to have acquired subsequently to its being lodged any interest in the lands, or to have increased oi' bettei'cd any such interest alreadv held, and that whatever its effect 292 TORRENS SYSTEM MORTGAGES. might be as to notice that a caveat when properly lodged prevented the acquisition or the bettering or increasing of any interest in the land legal or equitable adverse to, or in derogation of the claim of the caveator, at all events as it exists at the time when the caveat is lodged. The views of Duff, J., seem to be more conson- ant with principle. He says the fundamental principle of the system of conveyancing established by this and like enactments is that title to land and interests in land is to depend upon registration by a public officer and not upon the effect of transac- tions between parties. *'The Act at the same time recognizes unregistered rights respecting land, con- firms the jurisdiction of the Courts with respect to such rights, and furthermore makes provision by the machinery of the caveat for protecting such rights without respect to the Courts. This machin- ery, however, was designed for the protection of rights, not for the creation of rights. A caveat pre- vents any disposition of his title by the registered proprietor in derogation of the caveator's claim until that claim has been satisfied or disposed of, but the caveator's claim must stand or fall on its own merits. If the caveator has no right enforce- able against the registered owner which entitled him to restrain the alienation of the owner's title, then the caveat itself cannot and does not impose any burden on the registered title. Alexander's caveat consequently conferred no right upon him. It could only operate to protect such rights as he had, or could enforce against the land, that is to say, against the registered owner of the land. It is TORRENS SYSTEM MORTGAGES. ^93 quite clear, as I have pointed out, that he had no such rights, and the filing of the caveat therefore was wrongful interference with the proprietary rights of the company, for which Alexander might have been answerable in damages, if the company had sustained any loss in consequence of it. It seems equally clear that the caveat could not affect the appellant, as bringing home to them notice of the transaction between Alexander and Gesman. The statute does not say that the caveat shall ope- rate as notice of the facts stated in it to intending purchasers, and there is not anything in the sta- tute giving the least ground or colour for attribut- ing to it any such operation. If an intending pur- chaser chooses to close his purchase by paying his purchase money without first acquiring a regis- tered title, he runs the risk of finding that he can- not get a registered title until some registered claim has been satisfied, or some unregistered interest acquired, but he incurs this risk, not because he is deemed to have had notice of the claim, and for that reason to be bound in good faith to recognize it, but because he can only acquire a title by regis- tration, and registration he cannot have free from an enforceable claim against the registered title in face of a caveat founded upon such a claim until that claim has been satisfied, or the superiority of his claim has been established." In view of the language of the sections relating to the effect of a caveat, it is difficult to accept the words of Anglin, J., in all their fulness, and it is suggested that in order to give them a meaning v/arranted by the Acts, they must be read as if they 294 TORRENS SYSTEM MORTGAGES. asserted that a caveat when properly lodged pre- vents the acquisition hy registration or the better- ing or increasing of any interest in the land legal or equitable adverse to, or in derogation of the claim of the caveator ; at all events as it exists at the time the caveat was lodged by the same means. See Queensland Trustee v. Registrar of Titles, 5 Q. L. J. 46, where it was held that a caveat does not prevent dealings wdth the land which may be completed without registration, e.g., the making of further advances under a mortgage which provides therefor, the mortgagee not being bound to search for caveats before making each new advance, and the existence of a caveat not operating as notice to him. The enigmatical section of Alberta, viz., section 97, supra, presents problems of its own. These problems came up for consideration in Stephens v. Bannan & Grey, 5 W. W. R. 201. In that case Stephens bought by instalment pay- ments from the Hudson's Bay Co., and assigned the benefit of his agreement to Dodge & Goldsmith. Prior to this assignment Dodge & Goldsmith agreed to sell the land to Lloyd on instalment payments, and five years after the assignment Lloyd agreed to sell to Grey by instalment payments, and Grey filed a caveat. In the meantime Stephens had died, and his executor paid the full amount due from Stephens to the Hudson's Bay Co., and prior to registration and to Grey's caveat agreed to sell the land to Mrs. Bannon, and Mrs. Bannon filed a caveat about a month subsequent to the filing of the caveat by TORRENS SYSTEM MORTGAGES. ^95 Grey, and shortly afterwards paid Stephens' exe- cutor the whole purchase money. The executor on obtaining an abstract of title to the land for the purpose of asking a transfer from the H. B. Co. discovered Grey's caveat. The Court decided that Grey was entitled to priority on the general prin- ciple of qui prior est tempore, potior est jure. Beck, J., in delivering judgment, said that as between claims of two caveators the section fixed the priorities of the claim according to the dates of the lodging of the caveats, so that the only ques- tions that could be opened between the two cavea- tors were, (1) whether the respective dealings with the land — were it not for the other — created an interest, and that in the same interest in the land, and (2) whether the claim of either of the caveat- ors is avoided by fraud. In the Royal BanJi of Canada v. La Baiique cVHochelaga, 7 W. W. R. 817, the question as to the effect of 97 came up squarely for de- cision. In that case a certain Schwalbe mort- gaged to a certain Muller ; Schwalbe transferred to Gustave Gardel, who became registered owner sub- ject to the mortgage. On January 13th, 1911, Gustave Gardel depo- sited the duplicate certificate of title with the Royal Bank by way of equitable mortgage as secu- rity for previous advances made to him. On May 13th, 1911, Gustave Gardel executed a transfer to George Gardel whicli was not then registered. On July 17th, 1911, George Gardel, with know- ledge of Gustave and at his request, executed a 296 TORRENS SYSTEM MORTGAGES. mortgage to La Banque d'Hochelaga to secure advances theretofore made by the bank to Gustave Gardel. On July 18th, 1911, the solicitor for La Banque d'Hochelaga tried to register the transfer to George Gardel and the mortgage, but owing to the certificate of title not being in the Land Titles Office, this could not be done and a caveat was filed in respect of the mortgage on July 19th, 1911. Gustave Gardel on July 27th, 1911, executed a mortgage in the regular form to the Royal Bank to secure its advances. On August 1st, 1911, this mortgage was regis- tered in the Land Titles Office. On August 22nd, 1911, the transfer to George Gardel was registered. On September 9th, 1911, the mortgage to La Bancjue d'Hochelaga was registered and the Registrar asked to register it as of date of the caveat, but he merely registered it as of September 9th subject to caveat. The property was sold under the Muller mort- gage by an order made in the present action, and after the satisfaction of Muller 's claim a balance remained in Court. The Court held that the caveat filed by La Banque d'Hochelaga was, by virtue of section 97, as effective as if the memorandum of mortgage which the bank held (N.B. — Executed by a trans- feree who had not at the date of the caveat been registered) had then been registered, but Stuart, J., adhered to his opinion expressed in Stephens v. TORRENS SYSTEM MORTGAGES. 297 Bannan, supra, that the words '' registration by way of caveat " cannot be interpreted as meaning anything more than registration of a caveat and that s. 97 of the Alberta Act does not give anything more than protection against interests subse- quently created. A caveat is considered to be an instrument with- in the meaning of section 3 of the interpretation clause of the Queensland Real Property Act, and has been so held by Anglin, J., in McKillop v. Ben- jafield, 45 S. C. R. 551, but it has been held not to be an instrument under the Alberta Land Titles Act by Beck, J., in Stephens v. Bannan (& Grey, 5 W. W. R. 201, where that Judge says that a caveat is nothing more than a caution, and an effective notice of a claim of title grounded upon something else, and preventing any change in the rights of the caveator by dealings with the land subsequent to the lodging of the caveat. (Query: Whether the words ''by the registered owner " should not be inserted after the word " land," see supra). In Brookshank v. Burn, 15 W. L. R. 661, Har- vey, J. (now C.J.), held that the effect of this sec- tion was that any caveator who registered his claim under an agreement of purchase thereby obtained priority for his claim, over any other purchaser though prior in time, who registers his claim by way of caveat at a subsequent time. ''I cannot understand," says he, referring to section 97 of the Albei-ta Statutes, "what meaning can be given to this provision other than that a caveator who regis- ters his claim under an agreement to purchase thereby obtains priority for his claim over any 398 TORRENS SYSTEM MORTGAGES. other purchaser who registers his claim by way of caveat at a subsequent time, in the same way as a mortgagee who registers his mortgage first ac- quires priority over one who registers his after." A city sold lands by instalment payments to a certain Valle. Valle, who, as a matter of fact, was trustee for the North-West Construction Co., assigned his agreement to a certain Wolfe, who gave notice of his assignment to the city. The North- West Construction Co., subsequently to the sale to Wolfe, filed a caveat, and took an action against Valle and Wolfe to have the sale to Wolfe set aside, but the Courts refused to accede to the request of the plaintiif company, considering that it was gross negligence in the plaintiffs not to have filed a caveat earlier or notified the city that Valle was a trustee for them {North-West Construction Co.Y. Fa/?e, 4 W. L. R. 37). The filing of a caveat does not ordinarily give any validity to the claim of the caveator other than such as it has at the time of the filing of the caveat : (O'Brien v. Pearson, 20 W. L. R. 510, 1 W. W. R. 1026.) All the effect that the caveat has is to prevent the Registrar passing a title to a transferee or registering an incumbrance or mortgage by or from a registered owner without putting a memo- randum of the caveat upon the certificate of owner- ship or other document, and the person purchasing or taking the mortgage, or acquiring the incum- brance, is bound to take notice of what the caveator has claimed in this caveat, and takes his right to the property subject to those rights whatever they may be. TORRENS SYSTEM MORTGAGES. 399 The following statement of the judgment of a'Becket, J., in Barnes v. James, 27 V. L. R. 749, will be found useful : — " In this action the cause of trouble is the fraud of the defendant James. The plaintiff's case is this : He made an agreement with James under which he advanced mone}^ to James to obtain a mining lease, on an agreement between them, which was valid as between them, that on obtaining the lease James should transfer the lease to the plaintiff, but that the plaintiff would only have a half interest. He was to have executed a declara- tion of trust that he held the other half as trustee for Barnes, and there was some agreement between them that the lease should be sold. As to how it should be sold the evidence is not explicit, but it ma.y be taken as between them that it would not be sold without communication with Barnes. Then the lease was obtained by James, who then, behind the plaintiff's back, sold it to the defendant com- pany, who gave him^ £300 for it, and worked it, and when the money was paid got a transfer of the lease under the Transfer of Land Act, and got possession of the land. Under these circumstances the plaintiff makes both James and the company parties to the action, and claims a declaration that he is entitled to the property and possession of it, and he seeks as against James to make him perform his agree- ment to execute a proper transfer, and against the company possession, accounts, a delivery up of the transfer, and an injunction to restrain it from working the mine. Then undei* the new rules the 300 TORRENS SYSTEM MORTGAGES. defendant company is asked to state what its de- fence is. It states that it is a purchaser for value without notice, and has a better right than the plaintiff. I have to consider whether that is a valid defence. The defendant company has gone into evidence, perhaps unnecessarily, to show that which I think appeared before, viz., that there was no notice to it, that it acted with perfect honesty, was as vigi- lant as it could be, and had done all that it was able to do to ascertain that James, who appeared to be the proprietor of the lease, was the proprietor, and that there was no caveat against his dealing with the lease, nor any other bar against his selling what he professed to be able to sell. That was distinctly proved. Then, as between persons so situated, what is the Court to do? That is what I have to consider. James does not appear ; there is no diffi- culty as to him. Then, as regards this defence of purchaser for value without notice, so far as I am aware, all the authorities, where real estate is the subject of controversy, are with reference to the general law. They deal with the possession of title deeds, the acquiring of the legal estate, and other matters affecting the general system of real property law. Without saying that a different principle should be applied when dealing with land under the Transfer of Land Act, still I think it should not be left out of sight that we are consider- ing dealings und6r a special system. Provisions as to showing title, as to what amounts to a sufficient statement of the title, as to the effect of a regis- tered interest, the effect of a caveat, and the general TORRENS SYSTEM MORTGAGES. 301 provisions of the Act are not to be lost sight of, and may, perhaps, to some extent modify and make inapplicable cases of priorities and cases applying to purchasers under the general law. With refer- ence to the Transfer of Land Act, I am not dealing with this case as one in which, by force of that Act, the plaintiff's right is in any way excluded. Accident prevented the defendant company from obtaining registration of the transfer of the lease, and would in the absence of fraud have been a com- plete answer to the plaintiff's claim. But the de- fendant company did not reach that position, al- though it had a transfer executed by the lessee. Therefore, suppose there were a good equity on the part of the plaintiff, a good legal right to undo what had been done, to have an injunction of the Court to restrain the action of the defendant com- pany with reference to this lease, the Court's hand would not be stayed by any provision of the Act. I am not dealing with this case as concluded by the provisions of the Transfer of Land Act. It is open to the plaintiff in such a case, notwithstand- ing the transfer which has been executed, to say that the transfer shall not be registered. But the plaintiff must come with a better case than that of the defendant. Then the defendant says that he is entitled to set up the defence that he is a purchaser without any notice, as undoubtedly he is, and in good faith. He then says that consistently with the principles upon which justice was administered by a Court of Equity, and is now administered by this Court, which is a Court of Law and Equity, this Court. 302 TORRENS SYSTEM MORTGAGES. should not exercise its powers against the defend- ant company, it being in the position I have de- scribed. Then, on the other hand, it is said that even if a Court of Equity would stay its hand, leaving the plaintiff to the remedy, if any, at law, the fact that this Court, which is a Court of Law and Equity, should in this action decline to inter- fere would be something more than a mere refusal of equitable assistance, and would amount to an ad- judication in favour of the defendant company. My impression was and is that the present defence as a defence of that character of purchaser for value without notice would be a reason for the Court de- clining to exercise its jurisdiction by ordering delivery up of the transfer or restraining regis- tration of the transfer, or other things by which the defendant company would be in a position to perfect its title. The case has been ably argued for the plaintiff. I cut short the argument for the defendant company, because my mind inclined in its favour. An authority has been cited which I consider quite in point, and an authority which does to some extent support the contention of counsel, viz., that this is a matter as between two equities ; that consistently with the principles acted upon in that case, there being something of the nature of a prior estate in the land — not a mere equitable right not reaching the stage of an interest in the land, but an equitable interest — I should re- gard the plaintiff and the defendant as equitable incumbrancers. Notwithstanding that case, I still think that this defence is a good one. I think there is a better right on the part of the defendant com- TORRENS SYSTEM MORTGAGES. 303 pany, and I think that better right consists in this, that no step was omitted by it by which it could have ascertained the existence of a prior interest in any other person. I cannot say that the plaintiff was negligent, but he might have done more than he did to protect his title by entering a caveat when he ascertained that a lease was issued. There were difficulties in the way, but he could have done more. However, he trusted to James, who imposed upon him. Then the defendant company is in this posi- tion — it has paid its money, it has got the lease, it has got a transfer of the lease, and it could have obtained registration immediately but for the ab- sence of its attorney, who was to have signed on its behalf. For that reason it has a better right. I think it would be inequitable to postpone the rights which had been acquired' by the defendant company to deprive it of the advantages which it has. It has not the legal estate, but it was on its way to obtain from the proprietor of the legal estate all that was necessary to give it that legal estate. It was in such a position that having acted in perfect good faith and having given value, I think it is more entitled to an affirmance of its title by the Court than the plaintiff is. There- fore, as against the defendant company, this action should be dismissed. I give judgment for the defendant company with costs. Judgment for the plaintiff against James, the damages being half the amount the company gave. I give the plaintiff his costs over against James, who seems to hav^ deceived everyone with whom he came into contact, so far as this case is concerned. I think the Mines 304 TORRENS SYSTEM MORTGAGES. Department should accept this as an adjudication in favour of the defendant company." See also 27 V. L. R. 739, pp. 744-45. '' It has been argued that a caveat is not notice. In one sense, perhaps, it is not notice. It is not on the ground that a caveat is notice that I shoukl con- sider it proper for any man to search for caveats before he concludes any contract in respect of land which has been brought under the Act, where there is a possibility of there being an outstanding equitable interest. It would, however, be undoubt- edly a prudent thing to do. The effect of the caveat is this, that a person claiming any unregistered in- terest in land which has been brought under the Act can by lodging it prevent either the registered proprietor of such land or of any incumbrance thereon, or any other person claiming any interest in such land, from getting any instrument regis- tered which affects the interest claimed by the caveator until the caveator has had an opportunity of showing that it would be a fraud on his rights to permit such instrument to be put on the register. The man who lodgesa caveat as Grant did prevents any man coming after him from attempting to get priority by saying, as w^as said in this case, that he had got possession of something which he was pleased to call the title deeds, w^hen in fact they weie only certificates in the names of former owners. The lodging of a caveat is the means pointed out by the Transfer of Land Act to enable a* man who has not been and cannot get registered as the proprietor, or as mortgagee or otherwise, to protect his interest, whatever that interest may be. TORRENS SYSTEM MORTGAGES. 305 It may be that his interest will not prevail, but he has an opportunity of protecting it, and that is the protection which the Act gives him. Let us take the case of a simple trustee, one who has the fee simple in him as trustee, and gets a certificate of title without any incumbrances upon it, as he may be justified in doing. The Act points out the one means by which the person who may have the whole beneficial interest in himself may be pro- tected. What is that? Entering a caveat. The Act does not recognize trusts except in this way; and it was very much doubted at first whether any equitable interests could be recognized at all; but the very section which authorizes the lodging of caveats prescribes the mode of protection, and shows that every person having only an equitable interest ought to lodge a caveat if there is anybody to protect himself against. By doing so he does no harm to anybody, and he does all he can in self- defence in case anybody should afterwards assail his title." '^ When for the purpose of giving notice of his interest, an unregistered second mortgagee (by deposit of certificate) lodges a caveat which pre- vents the entry of transmission to the mortgagor, the caveat must be withdrawn to enable the first mortgagee to perfect his security. (Ee Stvain's Caveat, 1902, S. R. (Q.) 120.) ''This provision expressly recognizes that an unregistered instrument may create a 'claim' cog- nizable by a Court of Justice, and the caveat is the means devised for the protection of the right of the T.S.M. — 20-f 306 TORRENS SYSTEM MORTGAGES. claimant pending proceedings in a competent Court to enforce it ": Griffith, C. J., in Barry v. Heider, 19 C. L. R. 197. Ah unregistered right to enter and cut timber (an interest in land) unprotected by caveat cannot prevail over a subsequent equitable mortgage pro- tected by caveat: Connolly v. Noone, 1912, S. R. (Q.) 70.' An execution, a copy of which is filed in the proper office, gives priority over an unregistered equitable mortgage {Union Bank v. Liimsden Mil- ling Co., 8 W. W. R. 1167 ; Supreme Court of Sas- katchewan en banc. See Evans v. Postill, 3 Alta. L. R. 141). The proprietor of an equitable charge on land has priority over a subsequent transferee of the land for value without notice, by reason of the lodgment of a caveat subsequent to the transfer and payment of the purchase moneys, but prior to the registration of the transfer {Coast Lumber Co. V. McLeod, 7 W. W. R. 113, Supreme Court of Sas- katchewan en banc; but see dissenting judgment of Newlands, J.) torrens system mortgages. 307 Transfer of Mortgaged Land — Implied Cove- nants. It is difficult to see ihow in the case of a fore- closure order under the Acts, the mortgagor can be considered as a 'transferor' in jurisdictions where foreclosure is carried out by a vesting order and not by a direction to the mortgagor or to convey, so as to bring into play the covenants for payment of the mortgage moneys and indemnity implied upon a transfer of mortgaged land. Under the Acts the mortgagee after a foreclosure order is to be deemed a ' transferee, ' but there is no direction that the mortgagor is to be deemed a transferor. Consequently the mortgagee as transferee may not be bound by any covenant (implied) to indemnify the mortgagor. A possible construction of s. 52 of the Alberta Act is t-hat tbe implied covenant is a covenant with the transferor and the mortgagee jointly. If this be so, the covenant would be void on the mortgagee becoming both transferee and mortgagee, on the general principle that a man cannot covenant with himself, either alone or jointly with another or others; see Boyce v. Edhrooke] [1903] 1 Ch. 836, and Faulkner v. Lotve, 2 Ex. 595. If the covenant were construed to be a joint covenant, it would not be affected by s. 165, which directs the construction of implied covenants as several, and not as joint, iuasnuich a,s transferees do not as a rule execute the transfer. It may be, indeed, that in order to carry out the general scheme of these implied covenants, they may be considered uotionally to have executed tlie trans- fer. 308 TORRENS SYSTEM MORTGAGES. NOTE AS TO CASES DECIDED SINCE THIS BOOK WAS PRINTED. Execution after Judgment upon the Covenant IN Alberta. A plaintiff mortgagee in proceedings under section 92 of the Land Titles Act (Albei-ta), who has obtained judgment on the covenant and an order for sale, will not where the sale has proved abortive, be given leave to issue execution on his judgment. There must be an actual, as distin- guished from an abortive sale, before execution can issue without further proceedings (Ollon v. Montgomery, [1917] 3 W. W. R. 757). Situs of Mortgage Debt. A mortgage debt secured by a statutory mort- gage duly registered under the Land Titles Act (Alberta), is situate in the Province of Alberta (but queer e as to whether if the duplicate be under seal it may not also be situate in another province, if the duplicate be found there), and is liable to succession duty in Alberta (Rex v. Toronto Gen- eral Trusts Corporation, 1917, 3 W. W. R. 633). Mortgagee's Accounts. A mortgagee who sells the mortgaged land un- der the Act is a trustee of the proceeds of sale for the mortgagor and other encumbrancees, and hold- ing these proceeds as trustee is entitled to retain any moneys which may be due to him under the mortgage, including any moneys which he has TORRENS SYSTEM MORTGAGES. 309 rightfully expended in connection with the mort- gaged estate. He may retain money expended in ploughing the mortgaged land to get rid of weeds, if such expenditure in fact increased the selling price (Waterloo Manufacturing Co. Ltd. v. Hol- land, 1917, 3 W. W. R. 198). Opening Foreclosure. In Orser t. Colonial Investynent Co., 1917, 3 W. W. R. 513, it was decided that in a foreclosure ac- tion where the order nisi gives the mortgagee per- sonal judgment, the taking of the final order and vesting of the mortgaged property in the mort- gagee does not prevent the mortgagee from pro- ceeding to realize the debt under his personal judgment, so long as he is in a position to reconvey the mortgaged property. If, however, he proceeds on his judgment the foreclosure will be opened. INDEX Absent mortgagee, payment in case of, 209. Acceleration clauses, generally, 189. Account on footing of wilful default, 138. Accounts, mortgage, generally, 129. Accounts with rests, 138. Acknowledgment in writing, effect, 213. Acknowledgment of right of redemption, 217. Action of ejectment, possession by, 55. Administration to deceased mortgagor, allowance of costs of, 131. Alienation, mortgage as an inchoate and potential, 7. Attestation necessary to mortgage, 27. Attestation, necessity of, 23. Attornment clause as constituting a mortgagee in possession, 170. Attornment clause, as constituting a rent charge, 174. Attornment clause in mortgage of copyholds, 141. Attornment clauE.e, not creating real tenancy, 153. Attornment clauses, generally, 140. Bidding by mortgagee at sheriff's sale, 15. Bill, allowance of costs incident to dishonour of, 131. Blank, execution of transfer in, 20. Bonus, right of mortgagee to, 132. Caveat as notice, 288, 291, 304. Caveat, neglect to lodge, as waiver, 287. Caveat, power of lodging, analogous to injunction, 287. Caveat, protection of equitable mortgage by, 28. Caveat, protection of partnership land by, 286. Caveat, what will support a, 285. Caveat, whether priority of interest gained by, 288. Caveats, generally, 218. Certificate of title, duplicate, necessary to registration of mort- gage, 38. Certificate of title not on same footing as ordinary title deeds, 13. Charge, extinguishment of, 240. Charge, foreclosure not proper remedy for mere, 98. Charge, foreclosure of, 108. Charge, mere, meaning of, 171. Cheque, tender by, 85. Clogs on redemption, generally, 93. Co-covenantor, service of notice of mortgage proceedings on, 70. Collateral advantages, may be stipulated for, 93. Collateral securities, realization of, before foreclosure, 99. Collusion, opening foreclosure on grounds of. 111. Commission, broker-mortgagee has no right to, 132. 312 INDEX. Commission, collection, allowance of, 134. Commission, payable to partner of mortgagee, 132. Commission, right of mortgagee to, 132. Conditional sale, tests to distinguish mortgage from, 9. Consideration for mortgage, mortgage not an estoppel as to, 211. Consolidation as applicable to Torrens System mortgages, 184. Contract, notice after formation of, 260. Contribution where mortgagor and mortgagee insure, 179. Copyholds, attornment clause in mortgage of, 141. Copyholds, foreclosure of, 110. Costs, claim of excessive amount as ground for deprivation, 137. Costs, deprivation of, on grounds of oppression, 136. Costs, incident to dishonour of bill or note, allowance of, 131. Costs of abortive sale, allowance of, 131. Costs of action against surety, allowance, 130. Costs, of administration to deceased mortgagor, allowance of, 131. Costs of foreclosure action, allowance of, 131. Costs of litigation, allowance of, to mortgagee, 130. Costs of mortgagee, allowance," 130. Costs of obtaining possession, allowance, 130. Costs of redemption action, allowance of, 131. Costs of solicitor mortgagee, 132. Costs of transfer, when to be added to debt, 132. Costs of transmission so as to receive proper discharge, 212. Costs, pajiment of, by mortgagee, 138. Costs where mortgagee refuses money tendered, 87. Court, payment of surplus sale moneys into, 65. Courts, foreclosure by, 100. Courts, foreclosure orders by, 104. Covenant for indemnity by trustee, 33. Covenant for indemnity, implied, must be specially pleaded, 35. Covenant for indemnity in transfer of mortgaged lands, 30. Covenant for indemnity, where part only of mortgaged lands transferred, 33. Covenant for payment, implied, 1. Covenant for payment, merger of, in judgment, 116. Covenant, interest after judgment on, 237. Covenant not to mortgage, execution of unregistered mortgage not a breach of, 19. Covenant, notice of intention to sell on breach of, 63. Covenant, opening foreclosure by suing on. 111. Covenant, order in action on the, 99. Covenant, short forms of, 50. Covenant, statement in imregistered instrument amounting to, 17. Covenant, suing on, after sale under power, 82. Covenant to observe by-laws of building society, effect of, 24. Covenants implied in mortgage, 22. Covenants, incorporation of, by reference, 24. Covenants in mortgage, time of arising, 20. Covenants in transfer of mortgaged lands, 30. Covenants, registration of discharge as terminating, 210. Crops, right of mortgagee in possession to, 137. INDEX. 313 Debenture holders, foreclosure by, lOo. Debt, recovery of, limitation of action, 220. Deed, comparison between unregistered Instruments and, 21. Deposit, mortgage by, 12. Deposit, mortgage by, order nisi, 15. Deposit of certificate creating an interest in land, 14. Discharge by mortgagor, merger on, 241. Discharge by third party, extinguishment of debt a question of intention, 241. Discharge, costs of transmission so as to receive proper, 212. Discharge, executor prior to registration cannot give, 211. Discharge of mortgage, 206. Discharge, registration of, as terminating covenants, 210. Discharge, transfer to mortgagor in lieu of, 206. Discharge, where mortgagee barred by Statute of Limitation, 212. Discharge, where second mortgagee paying off first is entitled to, 209. Discharge, who may give, 211. Distress, express power of, 140. Distress for Interest, 145, 147. Distress under attornment clauses, generally, 140. Distress under attornment clauses on goods of third parties, 174. Duties of registrar, 38. Ejectment-barred, debt not being barred, 213. Ejectment, possession by action of, 55. English and Torrens mortgages, resemblances of, 4. English mortgage, nature of, 1. Enlargement of time for redemption, 84. Entry, forcible, by mortgagee, 59. Equitable estate, and equity to redeem, distinction between, 91. Equitable interests, recognition of, 18. Equitable mortgage by deposit, no necessity for notice of intention to redeem, 83. Equitable mortgage, priority of execution over unregistered, 306. Equitable mortgage, protection of, by caveat, 28. Equitable mortgagee, right of, to receiver, 128. Equitable mortgagee, right of, to take possession, 56. Equities, notice of unregistered, 259. Equity of redemption, covenant for indemnity, by purchaser of, 32. Equity of redemption, right to redeem after sale of, 89. Estoppel, from failure to make entry on register, 258. Estoppel in pais between landlord and tenant, 164. Estoppel, statement in mortgage as to consideration not an, 211. Estoppel, tenancy by, 148, 176. Exchange, power of sale not including a power of, 72. Execution creditor, not a privy, 154, 164. Execution creditors, rights of, to sale moneys, 65. Execution of mortgage by person not yet registered owner, 2L Execution, priority of, over unregistered equitable mortgage, 306. Executor prior to registration cannot give discharge, 211. ExtinguLshment of charge, 240. T.S.M.— 20o ;u4 INDEX. Fire insurance by mortgagors and mortgagees, 179. Fire insurance premiums, allowance of, 131. Fixtures, right of removal, 199. Floating charge, foreclosure of, 105. Forcible entry, by mortgagee, 59. Foreclosure action, allowance of costs of, 131. Foreclosure action, interest in, 129, 224. Foreclosure action, surety when necessary party to, 100. Foreclosure action, time for bringing, 99. Foreclosure action, where covenant not to call in moneys for defi- nite period, 99. Foreclosure actions, when time runs from, 214. Foreclosure barred, debt not being barred, 213. Foreclosure by ohargee, 105. Foreclosure by Courts, 100. Foreclosure by debenture holders, 105. Foreclosure, decree of, nature of, 97. Foreclosure, dismissal of redemption action equivalent to, 100. Foreclosure, mere chargee has no right to, 98. Foreclosure, mortgagee by deposit entitled to. To. Foreclosure, mortgagee who has assigned debt has right to, 98. Foreclosure of charge, 108. Foreclosure of copyholds, 110. Foreclosure of floating charge, 105. Foreclosure, opening, 101. Foreclosure, opening, by suing on covenant, 111. Foreclosure, opening of, impossible after issue of title to trans- feree, 88. Foreclosure, opening, on grounds of fraud or collusion, 111. Foreclosure, opening of, generally, 111. Foreclosure order, discharge of surety by, 121. Foreclosure order, effect of, 2. Foreclosure order, form of, 97. Foreclosure order, persons entitled to, 98. Foreclosure orders by Courts, 104. Foreclosure, realization of collateral securities before foreclosure, 99. Foreclosure, right of judgment creditor, 98. Foreclosure, sale after order for, 79. Foreclosure, sale in lieu of, 78. Foreclosure, statutory right of, whether exclusive, 42. Foreclosure, strict construction of powers of, 47. Foreclosure, transferee of mortgagee, right of, 98. Foreclosure, Welsh mortgagee has no right to, 98. Foreclosure, where applicant interested only in part of mortgage moneys, 100. Foreclosure without redemption, 89. Foreclosure with respect to land outside jurisdiction, 99. Forgery, general principles as to, 279. Form, literal compliance with statutory, unnecessary, 24. Form of mortgage, 23. INDEX. 315 Fraud, concealed, Statute of Limitations, 214. Fraud, generally, 244. Fraud, knowledge as, 246. Fraud, opening foreclosure, on grounds of. 111. Fraud, technical, in equity, meaning of, 259. Fraud, voluntary ignorance as, 246. Further advances, right to make, generally, 196. Future advances, mechanics' lien and mortgage for, 193. General law of mortgage, application of, to Torrens mortgages, 5. Guarantee of covenants inserted in mortgage, 24. Habendum clause, insertion of, in mortgage, effect, 26. Hire agreements, rights to fixtures installed under, 203. Hire purchase agreement as creating an interest in land, 204. Implied covenants in mortgage, 22. Improvement of mortgagor out of his property, 133. Improvements, accounts of, 129. Improvements, costs of, 133. Indemnity, covenant for, in transfer of mortgaged lands, 30. Infant, as a party to mortgage, 36. Injunction, power of caveating, analogous to, 287. Injunction to restrain removal of fixtures from mortgaged prem- ises, 205. Insurance by mortgagor and mortgagee, contribution, 179. Insurance, fire, as between mortgagor and mortgagee, 179. Insurance moneys, right of mortgagee to, 179. Insurance of mortgaged premises generally, 179. Insurance of mortgaged property, not a taking of possession, 60. Insurance policies, allowance of premiums, 130. Insurance premiums (fire), allowance of, 131. Interest after judgment in covenant, 237. Interest after maturity, when payable, 237. Interest, arrears. Statutes of Limitation, 224. Interest as damages for detention of debt, 237. Interest, compound, 230. Interest, distress for, 145. Interest, generally, 230. Interest in case of mortgage by deposit, 235. Interest, increase of, on failure of punctual payment, 236. Interest in land, hire purchase agreement as creating, 204. Interest in foreclosure action, 129, 224. Interest in land, meaning, 6. Interest In redemption action, 129, 224. Interest, legal, given by Torrens mortgage, 4. Interest, mortgage carries, though not expressly reserved, 235. Interest, no contract for continuance after date for payment, 236. Interest on additions to security, 230. Interest on outlay, allowance of, to mortgagee, 131. Interest, reduction of, by agreement, 236. 316 INDEX. Interest, sinking fund plan, 231, 239. Interest stops after tender, 87. Interest, tender stops running of, 230. Interest, waiver of future, by demand, 63. Irregularities at sale under registrar, effect of notice of, 74. Judgment creditor entitled to redeem, 89. Judgment, merger of mortgage in, 237. Knowledge as fraud, 246. Lease, exercise of power to, equivalent to taking possession, 64. Lease made after mortgage, rights of mortgagee, 147. Lease of part of mortgaged premises, 52. Lease, power to, dependent on taking possession, 153. Lease, statutory, effect of, 53. Lease, statutory, for what term, 53. Lease, statutory notice prior to statutoir. 52. Lease, statutory right to, whether exclusive, 42. Lease, surrender of, by operation of law, 154. Leases, statutory, 52. Legal interest, Torrens mortgages gives a, 4. Leave to bid, sale by Court, 81. Life Insurance policies, allowance of premiums, 130. Limitation of action, possession or receipt of profits, 217. Limitation of action, recovery of mortgage debt, 220. Limitation of action, redemption, 217. Limitation of action, redemption, acknowledgment, 217. Limitation of action, remedy against land general, 213. Limitation of action, see also Statutes of Limitation. Lunatic, mortgage by, 36. IVTachinery, removal of, by owner, 205. Manager, allowance of salary of, 130. Manager, receiver and, right to, 127. Materials, lien for, and mortgage, 193. Mechanics' liens, priorities between mortgages and, 191. Merchant Shipping Acts, notice under, 255. Merger in general, 240. Merger not applicable to Torrens system, 70. Merger of covenant for payment in judgment, 116. Merger of mortgage in judgment, 237. Merger of mortgage in title, 70. Merger, presumption in favour of, 242. Merger, whether applicable to Torrens system mortgages, 243. Mining properties, time for redemption, 84. Mortgage before registration, effect of, 17. Mortgage by agreement to execute formal mortgage, 11. Mortgage by deposit, interest in case of, 235. Mortgage by deposit, see also Deposit. INDEX. 317 Mortgage by deposit, no necessity for notice of Intention to re- deem, 83. Mortgage by transfer, 8. Mortgage, discharge of, 206. Mortgage, enforcement of contract for, in face of notice, 259. Mortgage, equitable, 11. Mortgage, ess-ential characteristics of, 1. Mortgage, execution of, by person not yet registered owner, 21. Mortgage, form of, 23. Mortgage, incorporation of trust deed in, 27. Mortgage, meaning of, in Mechanics' Lien Acts, 191. Mortgage, merger of, in judgment, 237. Mortgage moneys, demand for, on non-payment of interest, waiver of future interest, 63. Mortgage of mortgage, generally, 187. Mortgage, ultra vires, duty of registrar as to, 41. Mortgagee, bidding at sheriff's sale by, 15. Mortgagee, by deposit, right of, to receiver, 125. Mortgagee in possession, accounts of, generally, 129. Mortgagee in possession, attornment clause as constituting, 170. Mortgagee, in possession, not entitled to notice or Interest, 58. Mortgagee in possession, not entitled to relinquish possession, 58. Mortgagee in possession, redemption of, before time for payment, 58. Mortgagee in possession, repair by, duty of, 139. Mortgagee in possession, right of, to crops, 137. Mortgagee in possession, right to receiver, 127. Mortgagee not bound to accept payment in driblets, 138. Mortgagee, payments by mortgagor to original, 209. Mortgagee, payment of costs by, 138. Mortgagee, sale by, under express power, 76. Mortgagee, taking possession as owner, accounts by, 137. Mortgagee, title of, extinguished on expiry of statutory period, 215. Mortgagor, death of, before registration, 23. Mortgagor, payments by, to original mortgagee, 209. Nature of m.ortgage, 1. Note, allowance of costs incident to dishonour of, 131. Notice after formation of contract, 259. Notice between completion of transaction and registration, 261. Notice, caveat as, 288, 291, 304. Notice, enforcement of contract for mortgage on face of, 259. Notice, generally, 244. Notice of intention to redeem, when necessary, o, 83. Notice of irregularity at sale under registrar, effect, 74. Notice of mortgage proceedings, service of, on co-covenantor, 70. Notice of sale on breach of covenant, nature of, 63. Notice of sale under registrar, 61. Notice of unregistered equities, 259. Notice under English Act, 258. Notice, under Merchant Shipping Acts, 255. 318 INDEX. Order for foreclosure of copyholds, 110. Order in action on the covenant, 99. Order nisi, mortgage by deposit, 15. Opening foreclosure not possible after issue of title to transferee of mortgagee, 88. Opening up foreclosure, generally, 111. Parties to mortgage, 36. Partnership land, protection of, by caveat, 286. Partner, mortgage by 36. Partner of mortgagee, commission payable to, 132. Payment by mortgagor to original mortgagee, 209. Payment, implied covenant for, 1. Payment in driblets, mortgagee not bound to accept, 138. Payment of surplus sale moneys into Court, 65. Payment to cause Statute of Limitations to cease running, 215. Payment to stop running action on debt, 221. Payment, vrhere mortgagee absent, 209. Penalty, acceleration clause not creating, 189. Penalty, increase of interest, a, 236. Penalty, mortgage provisions imposing a, 94. Personal representative, mortgage by, 37. Possession, agreement for continuance of, by mortgagor, as a redemise, 53. Possession by action of ejectment, 55. Possession by forcible entry, taking, 59. Posession by mortgagee of wild lands, 218. Possession, contractual rights to, 56. Possession, costs of obtaining, allowance, 130. Possession, exercise of power to lease equivalent to taking, 54. Possession, insurance of mortgaged property not a taking of, 60. Possession, mortgagee not entitled to relinquish, 58. Possession, mortgagee taking, as owner, accounts by, 137. Possession of part of mortgaged premises, 58. Possession of part of mortgaged premises as po-ssession of whole. 58. Possession, power to take, generally, 56. Possession, receipt of rents as a taking of, 59. Possession, right of equitable mortgagee to take, 56. Possession, statutory right of, whether exclusive, 42. Power of attorney as auxiliary to power of sale, 48. Power of sale, contractual, whether permissible, 42. Power of sale, conventional, and power of attorney, 48. Power of sale, express, 76. Power of sale. Lord Cranworth's, 47. Power of sale, mortgagee not a trustee for mortgagor, 72. Power of sale, not implied in mortgage by transfer, 8. Power of sale, not including a power of exchange, 72. Power of sale, power to mortgage implied from, 37. Power of sale under Lord Cranworth's Act, 1860, 80. Prescription, title by, 226. INDEX. 319 Prescription titles (Manitoba), 227. Price, lowness of, as evidence of fraud, 76. Priority between mortgages and mechanics' liens, 191. Privy, execution creditor not a, 154, 164. Procedure in registry, 38. Purchase moneys after statutory sale, application of, 64. Receiver and manager, right to, 127. Receiver appointed by Court, right to, Avhere also a statutory method, 127. Receiver, appointment of, at instance of puisne mortgagee, 128. Receiver by way of equitable execution, 125. Receiver, right of equitable mortgagee to, 128. Receiver, right of mortgagee by deposit to, 125. Receiver, right of mortgagee in possession to, 127. Receiver, right to, 125. Receipt clause, not conclusive evidence of amount advanced, 131. Rectification of register, 227. Redeem, notice of intention to, 5. Redeem, person who has merely contracted to buy equity cannot, 89. Redeem, right to, after sale of equity of redemption, 89. Redeem, who entitled to, 88. Re-demise by mortgagee, 53. Redemption action, allowance of costs of, 131. Redem.ption action, dismissal of, equivalent to foreclosure, 100. Redemption action, interest in, 224. Redemption, before time fixed, 83. Redemption, clogs on, generally, 93. Redemption, defendants in action for, 90. Redemption, enlargement of time for, 84. Redemption, equity of, correctness of term in connection with Torrens mortgages, 90. Redemption, limitation of action, 217. Redemption, none, without foreclosure, 89. Redemption, notice of, 83. Redemption of mortgagee in possession before time for payment, 58. Redemption, provisions extending time for, 94. Register, rectification of, 227. Registrar, duties of, 38. Registrar, duty of, in conducting sale, 66. Registrar, fixing of reserve bid by, 67. Registrar not a mere machine, 41. Registrar, ratification of private sale by, 69. Registrar, refusal of, to merge mortgage in title, 70. Registrar, re-sale by, 69. Registrar, sale under, 61. Registration, death of mortgagor before, 23. Registration, effect of mortgage before, 17. Registration of discharge as terminating covenants, 210. 320 INDEX. Registration of mortgage, duplicate certificate of title necessary to, 38. Registry, procedure in, 38. Release by mortgagee, 211. Rent, allowed to mortgagee, 130. Rent charge, attornment clause as constituting a, 174. Rent in attornment clause, 140. Rents, receipt of, as a taking possession, 59. Rents, receiver of, 125. Repair, duty of mortgagee in possession to, 139. Repairs, accounts of, 129. Re-sale by registrar, 69. Reserve bid, fixing of, by registrar, 67. Rests, account with, 138. Salary of manager, allowance of, 130. Sale after order nisi for foreclosure, 79. Sale by Court, leave to bid. 81. Sale by mortgagee, negligence, 77. Sale by mortgagee to himself, 77. Sale by mortgagee under express power, 76. Sale by sheriff, mortgagee bidding at, 15. Sale, costs of abortive, allowance of, 131. Sale, conditional, tests to distinguish mortgage from, 9. Sale, duty of registrar in conducting, 66. Sale, equitable mortgagee by deposit may be entitled to, 14. Sale in lieu of foreclosure under Chancery Procedure Amendment Act, 78. Sale of land in statutory mortgage and other land for lump sum, 73. Sale moneys, payment of surplus, into Court, 65. Sale moneys, rights of execution creditors to, 65. Sale, power of, not including a power of exchange, 72. Sale, private, ratification of, by registrar, 69. Sale, statutory, application of purchase moneys, after, 64. Sale, statutory right of, whether exclusive, 42. Sale under express power, suing on covenant after, 82. Sale under express power without notice, 80. Sale under power of sale after decree nisi for foreclosure, 82. Sale under registrar, 61. Sale under registrar, protection of purchaser from what time, 73. Sale under registrar, purchaser may rely on act of registrar, 72. Sale under registrar, purchaser with notice of irregularity, 74. Salvage payments, allowance of, 131. Searches, allowance of costs of, 134. Security, Torrens mortgage merely a, 2. " Selling value " of land subject to mechanics' lien, 194. Sheriff, mortgagee bidding at sale by, 15. Short forms of covenant, 50. Sinking fund plan, interest, 239. Sinking fund plan, principal and interest payable on, 231. INDEX. 321 Solicitor mortgagee, costs of, 132. Solicitor's letters, allowance of fees for, 134. Specific performance in face of notice, 259. Statute of Limitations, acquisition of title by stranger, effect, 214. Statutes of Limitation, arrears of interest, acknowledgment, 225. Statutes of Limitation, arrears of interest, disabilities, 225. Statutes. of Limitation, arrears of interest generally, 224. Statutes of Limitation, arrears of interest, part payment, effect, 225. Statute of Limitations, concealed, fraud, effect, 214. Statutes of Limitation, disability, periods of, 216. Statute of Limitations, foreclosure actions, when time runs from, 214. Statutes of Limitation, loss of remedy where mortgage of land and personalty, 220. Statutes of Limitation, nature of estate, gained under, 229. Statute of Limitations, pajinent sufficient to stop running, 215. Statutes of Limitation, possession by mortgagee of wild lands, 218. Statutes of Limitation, recovery of mortgage debt, acknowledg- ment, sufficiency of, 222. Statutes of Limitation, recovery of mortgage debt generally. 220. Statutes of Limitation, recovery of mortgage debt, incapacity to give discharge, 221. Statutes of Limitation, recovery of mortgage debt, payment to stop running, 221. Statutes of Limitation, recovery of mortgage debt, time of run- ning, 222. Statutes of Limitation, cedemption, actual, exclusive possession, 218. Statutes of Limitation, redemption generally, 217. Statutes of Limitation, redemption, possession, general nature of, 219. Statutes of Limitation, remedy against land, acknowledgment, 213. Statutes of Limitation, remedy against land, acquiescence, 214. Statutes of Limitation, remedy against land, concealed fraud, 214. Statutes of Limitation, remedy against land disabilities, 216. Statutes of Limitation, remedy against land, payments to stop run- ning, 215. Statutes of Limitation, remedy against land, time of running, 214. Statute of Limitations, right of mortgagee barred by, removal of entry, 212. Statutes of Limitation, time from which statute runs, 214. Statutes of Limitation, time of running, where money payable on demand, 215. Statutes of Limitation, see also Limitation of Action. Statutory form, literal compliance with, unnecessary, 24. Statutory form, objects in providing, 28. Statutory leases. 52. Statutory remedies, whether exclusive or not, 42. Sub-contractors, right of, to lion, in priority to niortgage. 194. Sub-mortgages, generally, 187. Surety, action against, allowance of costs of, 130. 323 INDEX. Surety, discharge of, by foreclosure order, 121. Surety, when necessary party to foreclosure action, 100. Surplus sale moneys, distribution of, 65. Surrender of lease by operation of law, 154. Tacking, 196. Tax certificates, allowance of fees for, 134. Tax sale, purchase by mortgagee at, 115. Tenancy, attornment clause not creating real, 153. Tenancy by estoppel, 148, 176. Tenant, owner of land as, 173. Tender at law, requisites, 88. Tender by stranger, 86. Tender, general principles of, 85. Tender, interest stopping after, 87. Tender may be under protest, 86. Tender, must be unconditional, 86, Tender, necessity of, 85. Tende^r, necessity of keeping money ready, 88. Tender, place for making, 86. Tender, refusal of, costs upon, 87. Tender stops running of interest, 230. Tender to be made by whom, 86. Time for redemption, enlargement of, 84. Trade fixtures, rights as to, 199. Transfer absolute in form, mortgage by, 8. Transfer in blank, execution of, effect, 20. . Transfer in lieu of mortgage in Australia, 9. Transfer, mortgage by, power of sale not implied in, 8. Transfer of mortgage lands, covenants in, 30. Transfer to mortgagor, in lieu of discharge, 209. Transfer, unregistered, rights conferred by, 19. Transferor, death of, before registration, 23. Trust deed, incorporation of, in mortgage, 27. Trustee, covenant for indemnity by, 33. Trustee, mortgage by, 37. Ultra vires mortgage, duty of registrar, as to, 41. Vesting order, negation of implied covenants in, 32, 124. Waiver, neglect to lodge caveat, as, 287. Waiver of future interest by demand for principal, 63. Waiver of notice of intention to exercise power of sale, 70. Waiver of statutory conditions, 62. Welsh mortgage, nature of, 98. Wild lands, possession by mortgagee of, 218. Wilful, accounts on footing of, 138. . UC SOUTHERN REGIONAL LIBRARY FACILITY AA 000 858 141 5