the estate mortgagee has no such right, and that notwithstanding any such purchase, he will still continue mortgagee, and liable to redemption. A mortgagee stands as above remarked, much in the position of a trustee for sale; his duty as vendor is to obtain as much as possible for the property, his interest as purchaser is the reverse of this, and that the property shall sell for as low a price as possible. Courts of Equity forbid a man placing himself in this position, wherein his interest may conflict with his duty. So jealous are the courts in allowing the mortgagee to deal with the interest conveyed to him, that at one time it seemed question- Mortgagee able whether where the mortgagee should purchase on a may buy in sale for taxes the lands mortgaged, he would not still hold for taxes. them as mortgagee, and as liable to redemption on the terms of the mortgage (a). And where a mortgagee bought the Purchase from equity of redemption under pressure of an insolvent mort- under presgagor, at considerably less than its value, the purchase was sure. set aside at the instance of the assignee in bankruptcy of the mortgagor (b). It has been held, however, that a second mortgagee buying the legal estate on a sale by the first Second mort gagee buying mortgagee, under a power of sale in his mortgage, takes the estate on sale by prior mortestate as any stranger, free from the equity of redemption gagee. (c). And if the mortgage of the second mortgagee be in trust for sale on default, instead of with the usual power of sale, so that the mortgagee stands more in the position of a trustee, it is said (d) even then he can purchase from a prior mortgagee.' Whoever is entitled to the right to redeem is the person Application of who is entitled to the residue of the property left unsold ceeds of sale. (a) Smart v. Cottle, 10 Grant, 60, per VanKoughnet, C.; Scholfield v. Dickinson, 10 Grant 226. That on such purchase he can hold absolutely, see Kelly v. Macklem, 14 Grant, 29. (b) Ford v. Olden, L. R. 3 Eq. 461; Davidson Conv., 3rd. ed. 864, n. m.; see also Webb v. Rorke, 2 Sch. & Lef. 661. (c) Shiw v. Burny, 11 Jur. N.S. 99; Parkinson v. Hanbury, 13 W. R. 331; Watkins v. McKellor, 7 Grant, 584; Brown v. Woodhouse, 14 Grant, 684. (d) Fisher mtge, 3 ed. 490. mortgagor surplus pro Royal after satisfaction of the mortgage debt, and the surplus proceeds if all be sold. If the mortgagor of a freehold does not intend this, but intends a conversion in the event of a sale, and that the proceeds shall go as personal estate, then that should be clearly expressed; for when there is a mere power and not an absolute trust for sale, and a sale takes place after the death of the mortgagor, the surplus proceeds will go to the heir, even though the trust of them be declared in favour of the personal representatives (a). On a badly drawn mortgage, by inattention to the above, the mortgagee may frequently be misled into payment to the wrong party. Where a sale is had in the lifetime of the mortgagor, the surplus proceeds will go to personal representatives on his death before payment. The general principle is, the property or its proceeds will where there is a mere power of sale, go to real or personal representatives, according to the state in which it was on the death of the mortgagor.' 'A right of distress (b) is sometimes given by the mortgage (a) Wright v. Rose, 2 Sim & Stu. 323; Bourne v. Bourne, 2 Hare, 35; Lewin on Trusts, 7 ed. 813; see also Fletcher v. Ashburner and Ackroyd v. Smithson, 1 White & Tud. Lg. Ca. equity, in notes. (b) This very important matter, especially as connected with the Act as to Short Forms of Mortgages, has been much discussed in our Courts. In Royal Canadian Bank v. Kelly, 20 C. P. U. C. 519, 22 C. P. U. C. 29, in Appeal, the Bank v. Kelly. facts were as follows: The appellant mortgagee (Kelly) had more than six months after 1st January, 1867, distrained on goods of the bank on the mortgaged premises for interest (as rent), claimed to be due on a mortgage from one Dewey, dated 23rd February, 1866, payable with principal and interest in one sum on 1st January, 1867. The mortgage was according to the statutory form, containing a provision, as in the Act, that the mortgagee might distrain for arrears of interest, and that till default the mortgagor might remain in possession it was not executed by the mortgagee. The mortgagor had, after 1st January, 1867 (the day named for payment), continued in possession, and there was no evidence as to any agreement in respect of such continuance, or of either assent or dissent to it by the mortgagee. The principal and interest were unpaid. The distress was for interest from date of mortgage to time for its payment (1st January, 1867), as also for interest from that time, till 1st January, 1868. The bank replevied. The Court of Common Pleas had decided in favour of the right of distress; this decision was reversed on appeal. Gwynne, J., who gave the judgment in the Court below, concurring, as stated in the report, only on the ground that after 1st January, 1867, interest was not due as of right, but only as damages, This is effected in as a security for payment of interest. a point which, he said, had not been raised in the Court below." The written judgment of the Court was lost, and so the report is merely as above, and the reasons for reversal are not given. Mr. Leith was of counsel for the bank on the appeal. It will be observed that there could be no doubt that there was the position of landlord and tenant created up to January, 1867, but the chief question was whether it was at a rent. There can be little doubt that afterwards, in consequence of total absence of all evidence as to any continuance of any tenancy, the mortgagor was not a tenant at will, but a mere overholding tenant, and, if such, then certainly either a tenant at sufferance or trespasser at the election of the landlord, and consequently liable to no rent. It was contended for the appellants that even though there was a tenancy for a term or at will down to the time of distress, yet it was not at any rent at any time, and that the distress clause gave only a personal licence to take the mortgagor's own goods, and did not at any time create a reservation of rent, or give all the rights of a landlord as on a lease at a rent. Even admitting that it did, still the tenancy at a rent was only up to 1st January, and the distress was bad, 1st, inasmuch as for the rent (interest) which fell due on 1st January, the distress was more than six months overdue, and could not be upheld under 8 Anne c. 14; and 2nd, no rent accrued due after 1st January, as the mortgagor after then was (as contended at least) a mere overholding tenant; and 3rd, even though he were, after 1st January, a tenant at will or other tenant, yet there was no fixed rent, since interest after that time was not due as of right, but only as damages. It will be seen that on this latter ground only, viz., that after first January no rent could accrue due, Gwynne, J., concurred in reversing judgment: there being no doubt but that the distress for the rent (if any rent were payable qua rent) due up to 1st January was too late. Whether the other learned members of the Court confined their judgment to this reason does not appear by the report. They may have considered that the distress clause was a mere license by the mortgagor to take his own goods and dispose of them as landlord on distraining; or, that even though it were intended to create the position of landlord and tenant at a rent, still the reservation was bad, for the reasons as contended for the appellants and shewn in the report: son. In Trust and Loan Company v. Laurason, 45 U. C. R., the Court virtually Trust & Loan held that the distress clause in the Act as to Short Forms of Mortgages does Co. v. Lauracreate the position of landlord and tenant at a rent equivalent to the interest payable by the mortgage, with all the rights of a landlord under an ordinary lease at a fixed rent. Armour J. however, gave no judgment as he only heard part of the argument, he expressed himself, however, when judgment was given as entertaining a view against it. Cameron J. expressed himself as concurring with the Chief Justice with some hesitation, thinking the distress clause somewhat an evasion of the Chattel Mortgage Act. Under these circumstances, and considering the decision at Nisi Prius of Mr. Justice Cameron in La Vassaire v. Heron, 45 U. C. R. 9, that under the statutory clause goods not belonging to the mortgagor, could not be distrained, which was not referred to in the judgment of the Court: that, as a matter of construction, the clause points far less to the train for arrears of interest and expenses, and to dispose of the distress as landlords may do for rent in arrear; or, by the operation of an attornment clause actually creating at a rent position of landlord and tenant. If the remedy be given by the former mode, viz., by mere grant of right to distrain, then it will be seen it is less efficacious than the Does not con- latter, for it can operate as nothing more than a mere per fer a land lord's reme dies. Tenancy or attornment clause. sonal license to take the goods of the mortgagor; it cannot operate so as to give the mortgagee the ordinary right of landlords to take the goods of third persons on the premises demised (a). Neither can it operate as a grant of a rent charge for want of an estate in the mortgagor whereout to grant it (b), his estate having been conveyed by the mortgage. It is more to the interest of the mortgagee to consti creation of rent service than to a mere license; since, if a rent service were intended, the simple course would have been to have added to the possessory or attornment clause "at a rent equivalent to the interest;" whereas if a mere license to take the mortgagor's own goods were intended, it would be difficult to draft more concisely that which a conveyancer with any foresight, to avoid disputes would provide for, viz., the mode in which the goods seized should be disposed of, and which is done by reference to the mode in which landlords may act : that if, as suggested by Mr. Justice Cameron, the clause, construed as giving a right to rent as rent service is of questionable validity as an evasion of the Chattel Mortgage Act, then, ut res magis valeat quam pereat, it should be construed as a license; for if construed not as a license, but as intended to create rent service, and yet invalid for that purpose, it is entirely nugatory for any purpose: that not construed as a license the goods of the mortgagor cannot be seized off the premises: considering the above, and the language of Mr. Justice Gwynne, as above mentioned, on the giving of judgment in the appeal of the Bank v. Kelly, and that in the case of the Trust and Loan Company there was, at least in the mere language of the mortgage, a distinction from the Bank case, the authors may be excused if they suggest that it may be prudent for a mortgagee if he uses he mere statutory forms, to add to the possessory clause the words "the term hereby granted is at a rent, equivalent to, and payable on the same days as the interest, and when paid will be in satisfaction thereof," or to that effect. The mortgagee should execute the mortgage if the term granted by the clause requires to be in writing; Swatman v. Ambler, 8 Ex. 72; Pitman v. Woodbury, 3 Ex. 4. (a) Chapman v. Beechman, 3 Q. B. 723; Fisher on Mortgage, 3rd ed. 448; La Vassaire v. Heron, 45 U. C. R.9; Freeman v. Edwards, 2 Ex. 732; Royal Canadian Bank v. Kelly, 19 C. P. U. C. 196, per Gwynne, J. (b) Per Patteson, J., Doe d. Garrod v. Olley, 12 A. & E. 481; see per Park, B., in Freeman v. Edwards, 2 Ex. supra. tute the mortgagor his tenant, either at will, or from year to year at a rent: the latter tenancy is to be preferred, as the former is defeasible by the death (a), or alienation of either party with notice to the other (b), and consequently the rent is precarious. If a tenancy from year to year be created, care must be taken to introduce a clause enabling the mortgagee at any time after default to determine the tenancy, as otherwise, unless intent to the contrary were apparent on the mortgage, the ordinary right given to the mortgagee to enter might be overridden, and the mortgagor might, notwithstanding default by him, be entitled to the usual half-year's notice to quit, incident to a tenancy from year to year, before the tenancy could be determined (c). If an attornment clause as above, creating a tenancy, be introduced, it will be unnecessary, perhaps indeed improper, to insert the usual clause authorizing the mortgagor to retain possession in default.' or tenancy 'The tenancy is created by a clause declaring that the Attornment mortgagor attorns and becomes tenant from year to year (or clause. otherwise) to the mortgagee, his heirs or assigns, of the premises conveyed, at a yearly rent of the sum named equivalent to the interest, and expressed to be, when paid, in satisfaction thereof, payable in half-yearly or other payments, according to the days fixed for payment of interest, with a proviso that the mortgagee, his heirs or assigns may on certain events, as defauit in payment, or breach of covenant, enter and determine the tenancy without notice. This tenancy would not seem to be open to any objection on the ground of want of certainty in the term (d): a subject which is hereafter considered.' 'The operation of the proviso for quiet enjoyment by the Proviso for (a) Turner v. Barnes, 2 B. & 8. 435. (b) Post p. 216, n. ƒ. (c) Metropolitan Society v. Brown, 4 H. & N. 428; Doe d. Bastow v. Cox, 11 Q. B. 122; see further the notes to Keech v. Hall, 1 Smith Lg. Cases,523. (d) Wilkinson v Hall, 3 Bing. N. C. 533; Ford v. Jones, 12 C. P. U. C. 358. quiet enjoyment till default. |