Sec. 251. The right to redeem, p. 486.

Sec. 252. When the right arises, p. 490.

Sec. 253. Notice or interest after default, p. 493.

Sec. 254. Tender, p. 496.

Sec. 255. Payment, p. 500.

Sec. 256. Who may be plaintiffs, p. 503.

Sec. 257. Who must be defendants, p. 506.

Sec. 258. Writ and interlocutory judgment, p. 509.

Sec. 259. Proceedings in the master's office, p. 511.

Sec. 251. The right to redeem

When by default in payment according to the terms of a mortgage the mortgagor has forfeited his legal or contractual right to redeem, he has nevertheless an equitable right to redeem, commonly known as the equity of redemption. This equitable right to redeem is an inevitable term of the mortgage, of which the mortgagor cannot deprive himself by any agreement made at the time of or as part of the mortgage transaction (a). It may, however, be subsequently forfeited or terminated in various ways (b).

There are obiter dicta to the effect that an equity of redemption is an estate in the mortgaged lands, and the conclusion has been drawn that the mortgagor has in equity an absolute right to redeem and that the right is one over which the court has no discretionary power provided the right is not barred by the statutes of limitation (c). It is, however, equity is not to be allowed where the mortgagee has been guilty of no misconduct and from the dealings of the parties the allowance would work injustice" (h). Thus where a mortgagor neglected for twenty-one years to prosecute a decree for redemption against a mortgagee in possession, although owing to the pendency of the action the right to redeem was not barred by the statute of limitation, a purchaser from the mortgagee was held entitled to a certificate of title under the Quieting Titles Act (i).

(a) See chapter 3, Legal Mortgage in Equity, Sec. 23. (b) See chapter last cited, Sec. 29.

(c) Martin v. Miles, 1883, 5 O.R. 404, at p. 416. The broad proposition stated in this case was not necessary to the decision, which only by a figure of speech that the equity of redemption is called an estate in the mortgaged lands, and it is only for certain purposes that it is treated as if it were an estate in the lands (d).

The equitable right to redeem being a right invented by courts of equity is granted only on equitable terms (e), and may be refused in certain circumstances if the granting of it would be inequitable, whereas if a person asserts a legal right a court cannot refuse to give effect to it and cannot impose terms (f). It is settled that the court applying the maxim He who seeks equity must do equity, may impose terms as a condition precedent to the enforcement of a claim for equitable relief, or applying the maxim He who comes into equity must come with clean hands, it may consider all the circumstances in order to decide whether it is equitable to grant the relief at all (g).

Redemption may be refused on the ground of laches or staleness of demand even though the claim is not barred by any statute of limitation. The "principle on which an equity. of redemption is founded is relief against forfeiture, and the was simply that a tenant under a lease made by the mortgagor after he had mortgaged the lands was a necessary party to a foreclosure action as being a person interested in the equity of redemption.

(d) See chapter 3, Legal Mortgage in Equity, Sec. 28, especially the case of Paget v. Ede, 1874, L.R. 18 Eq. 118, at p. 125, there cited.

(e) See, e.g., the doctrine of consolidation of mortgages in chapter 9, Consolidation and Tacking.

(f) If tender of the mortgage debt, with interest and costs, is made by the mortgagor to the mortgagee on the day fixed for repayment, and the tender is refused, and in consequence the mortgagor sues for redemption, the redemption asked for is not equitable but legal relief, and the giving of the relief will not be subject to equitable principles. Strahan, Law of Mortgages, 2nd ed., pp. 137-138.

(g) Yorkshire Railway Wagon Co. v. Maclure, 1881, 19 Ch.D. 478, at p. 484; In re Maddaver, Three Towns Banking Co. v. Mad-dever, 1884, 27 Ch.D. 523; Blake v. Gale, 1886, 32 Ch.D. 571.

A bill for redemption of a mortgage was dismissed in the following circumstances. The mortgagee had bought the equity of redemption at a sheriff's sale which at the time was supposed by all parties to be valid though it was in fact invalid on technical grounds. For seventeen years before the filing of the bill to redeem, sales and resales had been made from time to time of various portions of the property, buildings had been erected, altered, destroyed, and replaced, etc., all with the cognizance of the mortgagor's heir, who for ten of the seventeen years was aware of, or had reason to suspect, the defect in the title of the parties. The bill was not filed until a large unsecured claim of the mortgagee against the mortgagor, greatly exceeding the value of the property at the time of the sheriff's sale, had been outlawed, and until the persons interested in resisting the plaintiff's claim and made defendants to the suit numbered nearly one hundred (j).

The provision of the English Real Property Limitations Act, 3 & 4 W. 4, c. 27, s. 27, is preserved in the Limitations Act, R.S.O. 1914, c. 75, s. 3, as follows:

3. Nothing in this Act shall interfere with any rule of equity in refusing relief on the ground of acquiescence, or otherwise, to any person whose right to bring an action is not barred by virtue of this Act.

(h) Skae v. Chapman, 1874, 21 Gr. 534.

(i) Re Leslie, 1893, 23 O.R. 143; cf. Eaton v. Dorland, 1893, 15 O.P.R. 138.

(j) Skae v. Chapman, 1874, 21 Gr. 534. This case was followed in Kay v. Wilson, 1876, 24 Gr. 212, and was referred to with apparent approval in Dougall v. Dougall, 1879, 26 Gr. 401, at p. 408.

When the court allows a mortgagor to redeem after default the relief given is personal" in its nature, and therefore the court, acting in personam (k), may entertain an action for redemption against a mortgagee who is within the jurisdiction, notwithstanding that the land in question is without the jurisdiction (l).

The court will not, however, grant relief by a decree in personam as to lands without the jurisdiction of the court unless there is some contractual obligation, express or implied, or some trust or equity between the parties. Thus the court refused a decree for redemption of a mortgage on lands in Manitoba at the suit of a judgment creditor of the mortgagor, whose judgment was by the Manitoba statute a charge upon the lands, the judgment creditor and the mortgagee both being domiciled in Ontario, for the plaintiff's claim was under a statutory charge which did not create any equity enforceable in personam (m).

The court will not entertain an action to set aside a mortgage of land without the jurisdiction and to declare the defendant a trustee (on the ground that the mortgage was taken in pursuance of a fraudulent scheme to defraud creditors of the original owner through whom the mortgagee claimed) or, in effect,.give the plaintiff relief by way of equitable execution out of the mortgagee's interest (n), or an action for a declaration that a deed in the form of an absolute conveyance of land without the jurisdiction is really a mortgage (o).

(k) Penn v. Lord Baltimore, 1750, 1 Ves. Sen. 444, 1 W. & T.L.C. Eq. 800. See also chapter 24, Action for Foreclosure or Sale, Sec. 231.

(l) Beckford v. Kemble, 1822, 1 Sim. & St. 7; Bent v. Young, 1838, 9 Sim. 180.

(m) Henderson v. Bank of Hamilton, 1893, 23 Can. S.C.R. 716, affirming 20 O.A.R. 646.

(n) Purdom v. Pavey, 1896, 26 Can. S.C.R. 412, reversing 23 O.A.R. 9; Burns v. Davidson, 1892, 21 O.R. 547.