If there is a covenant for payment the limitation of action upon it is governed in Ontario by the Limitations Act, RS.0. 1914, c. 75, s. 49, as follows:

49.- (1) The following actions shall be commenced within and not after the times respectively hereinafter mentioned:

(a) An action for rent, upon an indenture of demise;

(b) An action upon a bond, or other specialty, except upon a covenant contained in an indenture of mortgage made on or after the 1st day of July, 1894;

(c) An action upon a recognizance;

within twenty years after the cause of action arose.

(k) An action upon a covenant contained in an indenture of mortgage, made on or after the 1st day of July, 1894, within ten years after the cause of action arose.

Clause (k) and the corresponding exception in clause (o) were introduced in Ontario by the statute 56 V. c. 17, but in other respects the foregoing provisions are derived from the English statute 3 & 4 W. 4, c. 42, s. 3, adopted in Upper Canada by the statute 7 W. 4, c. 3, s. 3.

The period of limitiation of actions to recover money out of the land is ten years (a) and only six years arrears of interest may be so recovered (b). The section now in question is confined to the personal action on the covenant for payment. It has been held, in the case of mortgages made before the 1st of July, 1894, that the action on the covenant for payment is not barred until after twenty years although the right to resort to the land may have been already barred, and similarly that in an action on the covenant arrears of interest up to twenty years may be recovered, although only six years arrears may be recovered out of the land (c). It follows that in the case of mortgages made on or after the 1st day of July, 1894, a personal judgment on the covenant may be recovered for ten years arrears of interest, although only six years arrears may be recovered out of the land. In Ontario any charge or transfer of land registered under the Land Titles Act may be duly made by an instrument not under seal, and if so made the instrument and every agreement, stipulation and condition therein shall have the same effect for all purposes as if it were made under seal (d). A contract to pay the mortgage money expressed or implied in such charge is therefore a "covenant contained in an indenture of mortgage" within the meaning of s. 49 of the Limitations Act (e).

(a) R.S.O. 1914, c. 75, s. 24. See Sec. 264, infra. (b) R.S.O. 1914, c. 75, s. 18. See Sec. 266, infra. (c) Airey v. Mitchell, 1874, 21 Gr. 510, at p. 512; McDonald v. Elliott, 1886, 12 O.R. 98; following Allan v. McTavish, 1878, 2 O.A.R.

An action for debt grounded upon any lending or contract without specialty must be brought within six years after the cause of action arose (f). Therefore if a mortgage contains no covenant to pay and the mortgagor is nevertheless personally liable to the mortgagee (g), the mortgagee is entitled to recover from the mortgagor only six years arrears of interest, and the personal remedy by action to recover either principal or interest will be barred in six years (h).

The limitation of actions for account is governed in Ontario by R.S.O. 1914, c. 75, s. 50, as follows:

50. Every action of account, or for not accounting, or for such accounts as concern the trade of merchandise between merchant and merchant, their factors and servants, shall be commenced within six years after the cause of action arose; and no claim in respect of a matter which arose more than six years before the commencement of the action, shall be enforceable by action by reason only of some other matter of claim comprised in the same account, having arisen within six years next before the commencement of the action.

278, in preference to Sutton v. Sutton, 1882, 22 Ch.D. 511, 16 R.C. 298. See Sec. 264, below.

(d) R.S.O. 1914, c. 126, s. 102.

(e) Beatty v. Bailey, 1912, 26 O.L.R. 145, 3 D.L.R. 831.

(f) R.S.O. 1914, c. 75, s. 49 (1) (g); 21 Jac. 1, c. 16, s. 3 (1623),

(g) As to the personal liability of the mortgagor in the absence of a covenant to pay, see chapter 23, Action on the Covenant, Sec. 221.

(h) The period is still governed in England by 21 Jac. 1, c. 16, and it has not been enlarged by the Real Property Limitation Acts. Barnes v. Glenton, [1899] 1 Q.B. 885.

This section is derived from the English Mercantile Law Amendment Act, 1856, 19 & 20 V. c. 97, s. 9 (i).

If a mortgagee sells under a power of sale according to the terms of which he is declared to be a trustee of the surplus, the statute of limitations does not apply to an action by the mortgagee to make the mortgagee account for the surplus (j), but if by the terms of the mortgage the mortgagee is not expressly declared to be a trustee of the surplus, he is merely a constructive trustee and the period of limitation is six years (k).