Sec. 101. Transfer of mortgage may include both debt and land, p. 191. Sec. 102. Assignment of mortgage debt, p. 194. Sec. 103. Notice to, or concurrence of, the mortgagor, p. 196. Sec. 104. Assignment subject to state of account, p. 198. Sec. 105. Assignment subject to equity or set-off, p. 201. Sec. 106. Equity to reform or avoid mortgage, p. 205. Sec. 107. Liability of assignor to assignee, p. 206. Sec. 108. Rights and powers of assignee, p. 208.

Sec. 101. Transfer of mortgage may include both debt and land

A mortgagee has the right to transfer his security either absolutely or by way of sub-mortgage (a), and in certain circumstances he may be obliged to transfer the mortgage instead of reconveying or executing a discharge (b).

The mortgage transaction includes usually both a debt and a conveyance of land as security, and a complete transfer of the mortgage includes an assignment of the debt and a conveyance of the land, but either may be assigned or conveyed separately (c). An assignment of the debt, with a reservation of the security to the assignor, leaves the assignor as the person who is the proper party in foreclosure or redemption, though he is a trustee of any money thereby obtained for the assignee of the debt (d). A transfer of the security without an assignment of the debt carries the benefit of the debt so far as it is charged on the property, since the mortgagor cannot redeem without paying the debt to the transferee, but the transferee cannot sue on the covenant (e).

(a) In re Tahiti Cotton Co., Ex parte Sargent, 1874, L.R. 17 Eq. 273, at p. 279; Taylor v. Russell, [1892] A.C. 244, at p. 255.

(b) See chapter 20, Right to Assignment of Mortgage.

(c) Cf. 21 Halsbury, Laws of England, p. 171.

A transfer of a mortgage is usually made by deed, and this is essential in order to pass the legal estate in real or leasehold property; but, as regards the mortgage debt, an assignment under hand only is effectual, notwithstanding that the debt was created by deed (f); and an assignment under hand is effectual to pass any equitable interest in property which is vested in the mortgagee (g). An assignment of a mortgage by deposit of title deeds should be in writing, but in effect such mortgage may be assigned by the delivery of the deeds by the mortgagee to the assignee who has paid him off (h).

Where the holder of a mortgage, while suffering from an illness of which he subsequently died, endorsed on the indenture a memorandum assigning the same to his wife for the benefit of herself and his children, which he signed but did not seal, although the memorandum expressed it to be under seal, it was held that the wife took no interest under such assignment, either as a gift inter vivos or as a donatio mortis causa; and a bill filed by her to compel the executors to execute a formal assignment of the mortgage was dismissed with costs (i).

(d) Morley v. Morley, 1858, 25 Beav. 253, at p. 258; cf. In re Patrick, Bills v. Tatham, [1891] 1 Ch. 82.

(e) Jones v. Gibbons, 1804, 9 Ves. 407, at p. 411. (f) R.S.O. 1914, c. 109, s. 49. See Sec. 102.

(g) 10 Halsbury, Laws of England, pp. 375, 376.

(h) 21 Halsbury, Laws of England, p. 174; Brocklesby v. Temperance Building Society, [1895] A.C. 173, at pp. 182, 183; Dryden v. Frost, 1838, 3 My. & Cr. 670, at p. 673.

Where a mortgagee by endorsement on the mortgage deed assigned to M. "his executors, administrators and assigns, all his right, title and interest in and to the within mortgage," this was held insufficient to pass the land mortgaged (j), and where an assignment under seal, annexed to a mortgage, stated that the assignor "bargained, sold, assigned and transferred" unto the assignee, "his heirs and assigns, the annexed mortgage, and all the right, title and interest therein" of the assignor, "to have and to hold the same unto the said etc., his heirs and assigns, to his and their sole use forever," it was held that the land mortgaged did not pass by these words (k).

An assignment by an administratrix of a mortgage, being part of the assets of the intestate, was held valid, though not therein stated to be executed by her as administratrix (I).

Where the mortgagee "assigned, transferred, conveyed and set over..........the said indenture of mortgage, and all his right, title and interest therein, and in the premises therein mentioned," it was held that the mortgagee's interest in the land passed (m). A "grant" of the lands wound, of course, be sufficient for the purpose (n). Where the granting part of a deed of assignment transferred the indenture simply, and the habendum mentioned in addition the interest of the mortgagee in "the lands therein described," it was held that the estate passed (o).

It was held that a grant of "all lands situate in the Province of New Brunswick of which the grantor was seized in fee" was insufficient to pass lands to which the grantor was entitled as mortgagee (p).

(i) Tiffany v. Clarke, 1858, 6 Gr. 474.

(j) Moran v. Currie, 1857, 8 U.C.C.P. 60.

(k) Auston v. Boulton, 1866, 16 U.C.C.P. 318.

(l) Yarrington v. Lyon, 1866, 12 Gr. 308.

(m) Watt v. Feader, 1862, 12 U.C.C.P. 254.

(n) See chapter 1, Introductory, Sec. 5.

(o) Doe dem. Wood v. Fox, 1846, 3 U.C.R. 134.

Under the land titles system a mortgage does not convey the legal estate but operates by way of security only (q). A transfer of mortgage must in point of form comply with the Land Titles Act in force in the province where the land is situated and the effect of the transfer is governed by the statute (r).

The English Conveyancing Act, 1881, provides a form of transfer of a statutory mortgage, the operative words of the transfer being that the transferor conveys and transfers "the benefit of the said mortgage." It has been held that a transfer in this form of a mortgage not in the statutory form and to which the statute does not apply does not operate to transfer the legal title in the mortgaged property (s).