Sec. 361. Express power to distrain, p. 694.

Sec. 362. Tenancy created by attornment, p. 696.

Sec. 363. Distress in case of attornment, p. 700.

Sec. 364. On what goods the mortgagee may distrain, p. 705.

Sec. 365. What arrears may be recovered by distress, p. 709.

Sec. 366. Attornment under the Land Titles Acts, p. 710.

Sec. 361. Express power to distrain

The right of the mortgagee to distrain on the lands of the mortgagor for arrears of interest or of principal does not arise from the relation of mortgagor and mortgagee and is not incident thereto. There are two modes by which this right may be given to the mortgagee, firstly, by a stipulation in the mortgage that the mortgagee may distrain; and secondly, by a provision creating the relation of landlord and tenant between the parties. In the latter case the right to distrain arises by implication as incident to the relation of landlord and tenant (a).

No particular form of words is necessary to give the mortgagee the right to distrain. The mortgage may provide that the mortgagee may distrain for all the mortgage moneys, principal as well as interest, and this without regard to the value of the land and whether the goods are on the mortgaged premises or elsewhere. As between the parties such a stipulation is valid (b).

(a) For an instructive discussion of the rights of a mortgagee in regard to distress, see articles by A, H. Marsh in 6 C.L.T. pp. 217, 265 and 313 (May, June, July, 1886).

(b) Hobbs v. The Ontario Loan and Debenture Company, 1890, 18 Can. S.C.R. 483, at p. 552.

In Ontario the usual practice is to insert in a mortgage the short form of distress clause provided by the Short Forms-of Mortgages Act (c), as follows:

Provided that the mortgagee may distrain for arrears of interest.

If the mortgage is expressed to be made in pursuance, of the statute the foregoing clause has the same effect as if it were in the following terms (d):

And it is further covenanted, declared and agreed by and between the parties to these presents, that if the said mortgagor, his heirs, executors, or administrators, shall make default in payment of any part of the said interest at any of the days or times hereinbefore limited for the payment thereof, it shall and may be lawful for the said mortgagee, his heirs, executors, administrators or assigns, to distrain therefor upon the said lands, tenements, hereditaments and premises, or any part thereof, and, by distress warrant, to recover by way of rent reserved, as in the case of a demise, of the said lands, tenements, hereditaments and premises, so much of such interest as shall, from time to time, be, or remain in arrear and unpaid, together with all costs, charges and expenses attending such levy or distress, as in like cases of distress for rent.

It would seem under the statutory clause that the mortgagee may exercise his right to distrain at any time whether before or after the maturity of the mortgage debt or of any instalment thereof, but only arrears of interest which have accrued before the maturity of the mortgage debt can be distrained for in cases where there is no provision in the mortgage for payment of interest after maturity. In such cases the interest payable after maturity of the principal would be recoverable, not by the terms of the contract, but as damages, and the right to distrain under the statutory clause is given only where the mortgagor makes default in payment at the time limited therefor (e).

(c) R.S.O. 1914, c. 117, schedule B, clause 15.

(d) See chapter 35, Short Forms of Mortgages Act, Sec. 381.

(e) Klinck v. Ontario Industrial Loan and Investment Co.,. 1888, 16 O.R. 562; Powell v. Peck, 1888, 15 O.A.R. 138.

The clause above mentioned operates simply as a personal license from the mortgagor to the mortgagee rendering it lawful for the latter to distrain upon the goods of the former, and does not create the relation of landlord and tenant (f), even when it is read along with the so-called redemise clause by which the mortgagor is entitled to possession until default (g), there being no reservation of rent and no redemise for a definite term (h).

A mere license to distrain cannot be exercised by the assignee of the mortgagee unless the assigns of the mortgagee are named in the license, nor can the assignee distrain for arrears of rent which accrued due before the assignment, even if the assigns are named (i).

A mortgagee having made a first seizure for arrears of interest and abandoned the seizure cannot seize a second time for the same demand. A seizure for more than is due is illegal (j).

The effect of the mortgagee's distraining is that the debt in respect of which the distress is made is suspended so long as the mortgagee holds the goods in his hands unsold (k).