If the mortgagor transfers the equity of redemption absolutely, the effect is that the transferee becomes the person entitled to redeem the only mortgage or the latest mortgage, as the case may be, and the mortgagor retains no interest in the land (d). The new owner of the equity of redemption may now either mortgage the equity of redemption or trans-fer it absolutely, and as often as the equity of redemption is transferred absolutely the same alternative presents itself.

(b) If the first mortgage is a legal mortgage the second mortgage is necessarily an equitable mortgage. See chapter 5, Equitable Mortgages, Sec. 41.

(c) See chapter 25, Action for Redemption, Sec. 251.

(d) The vendor may of course have a lien for unpaid purchase money, either secured by a mortgage from the purchaser or not so secured. As to the validity of the equitable lien, or of the mortgage taken to secure it, as against subsequent purchasers or mortgagees, see chapter 7, Equitable Principles governing Priorities, chapter 8, -The Registry Act, and chapter 10, The Land Titles Acts.

It is therefore apparent that the transfer of the equity of redemption, which is the subject of this chapter, may be a transfer by the original mortgagor or a transfer by a person who is himself a transferee of the equity of redemption, and that the subject matter of the transfer always is the right to redeem the latest mortgage only,, if there are two or more mortgages.

A mortgagor may assign any rights incident to his ownership of the equity of redemption (e), but where the equity of redemption was valueless, and an assignment thereof was made merely for the purpose of enabling the assignee to impeach for the benefit of the assignor a prior mortgage on the ground of fraud, the assignment was held to savour of champerty and no relief was granted to the assignee (f). Where, however, the assignee takes beneficially and the assignment is not made merely to enable him to sue in respect of the alleged fraud, it would seem that he may maintain the action assignee in good faith without notice of such advance of rent, it was held that the owner of the equity of redemption was entitled to have the amount of rent so advanced applied in payment of the mortgage debt (h).

(9).

A mortgagor cannot, to the injury of an assignee of the equity of redemption, receive rent from a tenant of the mortgaged premises in advance. Where, therefore, a mortgagor made a lease of the mortgaged lands, and gave an order for rent in advance to the mortgagee, to be, and which was, applied by him in discharge of other liabilities of the mortgagor, who afterwards transferred his equity of redemption to an

(e) Steers v. Rogers, [1893] A.C. 232.

(f) Muchall v. Banks, 1862, 10 Gr. 25; and see Little v. Hawkins, 1872, 19 Gr. 267; Wigle v. Setterington, 1872, 19 Gr. 512; Bell v. Walker, 1873, 20 Gr. 558; Hilton v. Woods, 1867, L.R. 4 Eq. 432

(g) Seear v. Lawson, 1880, 15 Ch. D. 426, 434; Dickinson v. Burrell, 1866, L.R. 1 Eq. 337.

The purchaser of the equity of redemption is, in general, entitled to the benefit of covenants made by the mortgagee with the mortgagor. Thus where a mortgage contained a covenant to release any land sold during the continuation of the mortgage upon the payment of £200 per acre, and an assignee of the mortgagor made a general payment upon the mortgage, and afterwards upon selling a portion, demanded a release from an assignee of the mortgagee, it was held that the benefit of this covenant would pass to an assignee of the equity of redemption, but that the mortgagee must receive the stipulated sum per acre upon the sale of the portion to be released, a general payment on the mortgage not being sufficient (i).

A mortgage on five stores expressed to be for $10,500 contained a provision that the mortgagees would release the easterly store on payment of $2500, and any one or more of the other four stores on payment of $2,000 each, at any time on receiving a bonus of three months' interest on the sum so paid, and it was held that the benefit of this clause passed to the assignee of the equity of redemption, and that he was entitled to enforce it (j).

A purchaser of the equity of redemption is entitled to the surplus after a sale under the mortgage. So where, after a sale of mortgaged premises in an action for sale, the mortgagor made an assignment for the benefit of creditors before certain prior execution creditors had established their claims in the master's office to the surplus, the assignee was held to be entitled to such balance free from any liability to satisfy the executions out of it (k).

(h) Gilmour v. Roe, 1874, 21 Gr. 284.

(i) Webber v. O'Neil, 1864, 10 Gr. 440.

(j) Clarke v. Freehold Loan and Savings Co., 1888, 16 O.R. 598.

A purchaser of the equity of redemption takes subject to the true state of the accounts as between the mortgagor and the mortgagee, and does not by virtue of the Registry Act stand in any better position than the mortgagor did (I).