Sec. 191. Reconveyance to the person best entitled, p. 324.

Sec. 192. Statutory right to assignment of mortgage instead of reconveyance, p. 326. Sec. 193. The amending statute, p. 329. Sec. 194. Priorities unaffected by the statute, p. 330. Sec. 195. Assignment on the same terms as reconveyance, p. 335. Sec. 196. Statute not applicable to mortgagee in possession, p. 336.

Sec. 191. Reconveyance to the person best entitled

The effect of a legal mortgage is to transfer the legal estate in the land to the mortgagee and to create in favour of the mortgagor a right to redeem the mortgage. The effect of a second mortgage is to transfer to the second mortgagee the right to redeem the first mortgage and to create in favour of the mortgagor a new right, namely, to redeem the second mortgage (a). In other words, the mortgagor, by making the second mortgage has interposed the second mortgagee between himself and the first mortgagee, so that the three persons may be thought of as standing in a row-the first mortgagee having the legal estate, the second mortgagee next entitled, and lastly the mortgagor. In the event of a further mortgage being made, a similar result follows. Each new mortgage has. the effect of interposing a new mortgagee in the row of persons immediately prior to the mortgagor, and the persons interested will be entitled in succession-the first mortgagee, the second mortgagee, the third mortgagee, etc., the mortgagor (b). Each mortgage after the legal mortgage will necessarily be merely an equitable mortgage (c), but each of the persons interested will be potentially entitled to the legal estate in succession, in the event of prior claims ceasing to exist. The mortgagor may of course at any time convey the land absolutely subject to the mortgage or mortgages existing at the time of conveyance and the grantee will take the mortgagor's place in the succession of persons interested (d).

(a) Cf. chapter 14, Transferee of the Equity of Redemption, Sec. 131.

(b) Cf. Langdell, Brief Survey of Equitable Jurisdiction, p. 9.

No person who redeems a mortgage is entitled to call for an assignment of the mortgage otherwise than by virtue of a contract to that effect or by virtue of the statute mentioned below (e). Apart from statute or a special agreement a mortgagee on being redeemed is obliged merely to reconvey the mortgaged estate (f). The mortgagee is bound to reconvey to the person best entitled to the estate (g), that is, to the owner of the equity of redemption, if there is no subsequent encumbrancer, otherwise to the first subsequent encumbrancer (h), but he is not obliged to convey to any other person who by virtue of the conveyance would acquire the position of mortgagee in priority to persons better entitled to the legal estate (i). If the mortgagee, instead of reconveying, executes a discharge in the statutory form, this discharge upon registration will in the case of a registered mortgage operate as a reconveyance of the estate to the person best entitled (j).

(c) See chapter 5, Equitable Mortgages, Sec. 43.

(d) See chapter 14, Sec. 132.

(e) See Sec. 192, infra.

(f) Gooderham v. Traders Bank, 1888, 16 O.R. 438, at p. 441.

(g) Cf. chapter 19, Discharge or Reconveyance, Sec. 182.

(h) Smith v. Green, 1844, 1 Coll. 555, at p. 563.

(i) James v. Biou, 1819, 3 Swan. 234, at p. 241; Dunstan v. Patterson, 1847, 2 Ph. 341, at p. 345; Colyer v. Colyer, Pawley v. Colyer, 1863, DeG. J. & Sm. 676, at p. 693; cf. 21 Halsbury, Laws of England, p. 170; Fisher, Law of Mortgages, 6th ed., p. 989.

(j) See chapter 19, Sec. 184.