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A mortgage debt is an interest in land of a personal nature. It is the conveyance by the mortgagor of his estate to the mortgagee in fee simple, or by demise for a term of years as a security for the payment of a sum of money with a condition that the instrument shall be void or that the mortgagee shall re-convey the premises upon payment of the mortgage money and interest within a limited time. Upon the failure of this condition, called the proviso for redemption, the mortgagee's estate becomes absolute at law, and he may recover possession of the premises by ejectment without any demand of possession. If, when the day of payment comes, the mortgagor should repay the mortgage money and interest, the mortgagee or, in case the mortgage has been assigned, then the person entitled to the mortgage money must discharge the mortgage at the mortgagor's expense. This is done by a certificate of discharge of mortgage under the late Registry Act.
From the date of the mortgage the legal estate in fee simple belongs to the mortgagee, and the mortgagor is thenceforward unable to create any legal estate or interest in the premises. Although the day fixed for payment of the money has passed, the mortgagor has still a right to redeem the premises on payment of principal, interest and costs up to the time of payment. This right to redeem is called the mortgagor's equity of redemption, and no agreement with the mortgagee expressed in any terms however stringent can deprive the mortgagor of this equitable right on payment within a reasonable time. But the mortgagor's right will be barred by the Statute of Limitations after 10 years from the time the mortgagee takes possession of the mortgaged premises. When the mortgagee is in possession, the Court of Chancery will compel him to keep a strict account of the rents and profits. If the mortgagor does not repay the amount on the day fixed for payment, the mortgagee can file a bill of foreclosure in the Court of
Chancery against the mortgagor at any time within 10 years next after the last payment of any part of the principal or interest secured by the mortgage, in order that the mortgagee's estate in fee simple in the premises conveyed to him when the mortgage was first executed may be made absolute. The Court of Chancery, however, can direct a sale of the property at the request of either party. The action at law on the covenant is not barred until after the lapse of 20 years.
In addition to the remedy by foreclosure, involving as it does, the necessity of a suit in Chancery, a more speedy and sometimes less expensive remedy is often provided by inserting a power of sale in the mortgage, giving the mortgagee power to sell the premises in case of default in
payment. This course prevents the delay of applying to the Court of Chancery. The mortgagee is a trustee, and it is contrary to a well-known rule in equity for a trustee to purchase the estate ; and if a morgagee purchases the es
; tate under a power of sale contained in his mortgage he still continues mortgagee, and is liable to be redeemed by the mortgagor. Watkins v. McKellar, 7 Grant, 584. A mortgagee may also, on default being made, serve a notice on the person in possession to pay all rents to the mortgagee; and he may sue the tenant for use and occupation of the premises. A mortgagee after default, has three remedies in order to obtain his rights. 1st. To foreclose. 2nd. To sue at common law, on the covenant to pay contained in the mortgage, and 3rd, To bring ejectment against the mortgagor or those in possession. By foreclosure alone the mortgagee takes the land, and it becomes his own absolutely.
By Rev. Stat. (O), cap. 99, s. 5, executors are empowered to convey, assign, release or discharge the mortgage debt and the legal estate in the land.
By Rev. Stat. (O), cap. 104, similar provisions are made as in the case of the statutes authorizing short forms of conveyance, and short forms of lease. By the provisions of this Act that cumbrous verbiage which is for the most
part only intelligible to a mind trained in the law, is dispensed with; and a few simple and clearly understood words are declared to mean all that is stated in the long covenants. Reference should be made to the full covenants in the statute, as otherwise misconception of the force of the covenant is probable. This also, as before mentioned, now that duplicate originals of all deeds are registered in full, effects a considerable saving in the item of registration.
An equitable mortgage is defined to be a deposit of title deeds without any writing as security for a debt or loan of money.
The Registry Act, Rev. Stat. cap. 111, enacts that no equitable lien, charge or interest affecting land shall be declared valid in any Court in this Province as against a registered instrument, executed by the same party, his heirs or assigns, and “tacking shall not be allowed in any case to prevail against the provisions of this Act.”
By 14 & 15 Vic. cap. 45, any mortgagee or any assignee of a mortgage, may receive from the mortgagor or his assignee, a release of the equity of redemption, or may purchase the same under any judgment, decree or execution, without merging the mortgage debt as against any subsequent incumbrancer, or person having a charge on the same property.
Leaseholds are also frequently the subjects of mortgage. The term of years of which the estate consists is assigned by the mortgagor to the mortgagee, subject to a proviso for redemption or re-assignment, on payment at a given time by the mortgagor to the mortgagee, of the sum advanced with interest. As the mortgagee is assignee of the term, he will be liable to the lessor during the continuance of the mortgage, for the payment of rent and performance of covenants in the lease ; and against this liability the covenant of the mortgagor is his security. To obviate this liability, where the rent and covenants are onerous, mortgages of leasehold are frequently made by
ay of demise or underlease for the residue of the term,
less a few days at a nominal rent. By this means the mortgagee becomes tenant only to the m mortgagor, privity is created with regard to the lessor.
OF TITLES BARRED BY LAPSE OF TIME AND
OF THE LIMITATION OF ACTIONS. By Rev. Stat. (O), cap. 108, no person shall make any entry or distress, or bring any action for the recovery of land or rent, but within 10 years next after the time at which the right to make such entry or distress, or bring such action shall have first accrued to him or to some person through whom he claims. But a written acknowledgment of the title of the person claiming will extend the time to 10 years from such acknowledgment. If when the right first accrues, the person entitled should be under disability, by reason of infancy, coverture, lunacy or absence from the Province, 5 years are allowed from the time the person entitled shall have ceased to be under disability notwithstanding the period of 10 years may have expired, yet so that the whole period do not, including the time of disability, exceed 20 years.
Sec. 17 enacts that in case of lands granted by the Crown of which the grantee has not taken actual possession, and some other person not claiming under such grantee has been in possession, then unless such grantee had knowledge of the land being in the possession of such other person, the lapse of 20 years shall bar the right of such grantee to bring ejectment to recover the land.
Lands of the Crown not duly surveyed and laid out, are also excepted from the above provisions, in accordance with the maxim, “No time runs against the King." But by the 9 Geo. III. cap. 16, the Queen's prerogative is limited to 60 years. By Revised Statutes (Ontario), cap. 108, s. 19, it is also enacted that whenever a mortgagee has obtained possession of the land comprised in the mortgage, the mortgagor shall not bring a suit to redeem, but within 10 years next after the time when the
mortgagee obtained possession or next after any acknowledgment of the title of the mortgagor or his' right to redeem. The mortgagee has also 10 years, from the last payment of mortgage money, within which to bring his suit to foreclose or recover such land.
Money secured by mortgage, judgment or lien or otherwise charged upon or payable out of land and also legacies, are to be deemed satisfied at the end of 10 years, if no interest should be paid or acknowledgment in writing given in the meantime.
The several lengths of uninterrupted enjoyment which will render indefeasible, rights of way or other easements, water-courses, the use of any water and the use of light for buildings, are regulated by the same statute. By the same statute no arrears of rent or of interest in respect of any sum of money charged upon or payable out of any land, or rent, or in respect of any legacy or any damages in respect of such arrears of rent or interest, shall be recovered by any distress, action or suit, but within six years after the same respectively became due, or next after an acknowledgment in writing.
The same statute enacts that no person claiming any land or rent in equity, shall bring any suit to recover the same, but within the period allowed at law. In
every case of a concealed fraud, sec. 32 enacts that the right in equity to bring a suit for the recovery of any land or rent of which one may have been deprived by such fraud, shall be deemed to have first accrued at and not before the time at which such fraud shall, or with reasonable diligence, might have been first known or discovered, unless in the case of a bona fide purchaser for valuable consideration and without notice. REGISTRATION OF TITLES TO REAL ESTATE.
The registry of any instrument affecting lands will in equity constitute notice of such instrument to all persons claiming any interest in such lands, subsequent to such registry