If the owner of land mortgages it and thereafter leases it (a), the lease is binding upon the tenant, who is not permitted tion in the case of a mortgage which conveys the equity of redemption is mentioned.

(w) See'chapter 32, Appointment of Receiver, Sec. 351.

(x) Vacuum Oil Co. v. Ellis, [1914] 1 K.B. 693.

(y) Finck v. Tranter, [1905] 1 K.B. 427.

(z) R.S.O. 1914, c. 155, s. 5 (Landlord and Tenant Act), adopting the English Conveyancing Act, 1881, s. 10; Turner v. "Walsh [1909] 2 K.B. 484.

(a) See Sec. 141, supra, for a brief comparison between this case to dispute his landlord's title, and so long as the mortgagee does not interfere with the tenant's possession, the mortgagor may receive the rent and may distrain for it (b). The lease is also binding by estoppel upon the mortgagor and all persons claiming under him except the mortgagee, and gives to the tenant a sufficient interest in the equity of redemption to entitle him to redeem the mortgage (bb).

A lease made after the land has been mortgaged, unless it is made by the authority of the mortgagee or pursuant to a power to lease contained in the mortgage (c), is not at common law binding upon the mortgagee. The mortgagee, so soon as he becomes entitled to possession under the mortgage, may without notice eject a tenant who has been let into possession under the lease (d). If, however, the mortgagee after he is entitled to possession ejects a tenant, he will be liable in equity to account as a mortgagee in possession (e).

The mortgagee cannot merely by giving notice to the tenant create the relation of landlord and tenant between them or entitle himself to sue or distrain for rent due or thereafter accruing due. If the tenant refuses to pay rent to the mortand the case of the owner leasing his land and thereafter mortgaging it.

(b) Trent v. Hunt, 1853, 9 Ex. 14; Carpenter v. Parker, 1857, 3 C.B. N.S. 206; Wilton v. Dunn, 1851, 17 Q.B. 294. The mortgagor is not entitled to distrain after the appointment of a receiver. Woolston v. Ross, [1900] 1 Ch. 788.

(&&) Tarn v. Turner, 1888, 39 Ch.D. 456; Martin v. Miles, 1883, 5 O.R. 404; see chapter 24, Action for Foreclosure, Sec. 234.

(c) In England a mortgagor or mortgagee in possession has by statute, subject to the terms of the mortgage, certain powers as to making leases. See Sec. 144. As to a lease made by the mortgagee as agent for the mortgagor, see Chapman v. Smith, [1907] 2 Ch. 97.

(d) Keech v. Hall, 1778, Dougl. 21, 18 R.C. 123; Gibbs v. Cruick-shank, 1873, L.R. 8 C.P. 454.

(e) See chapter 28, Mortgagee in Possession, Sec. 301.

gagee no tenancy is created and the mortgagee's remedy is an action for possession (f).

The mortgagee, when he is entitled to possession, may, however, bring an action against the tenant not only for possession but also for trespass and mesne profits, and in respect of the latter causes of action may recover an amount equivalent to the rent, if any, which has become payable since he became entitled to possession (g) and which is in fact unpaid at the time of the service of the notice. The tenant would be justified in paying, on demand but without action, out of the rent owing by him such amount as the mortgagee would be entitled to recover (h).

On the other hand a new tenancy between the mortgagee and the tenant may be created by express agreement between them or may be implied from their conduct. Giving the tenant notice to quit, or demanding or receiving or distraining for the rent may be conduct on the mortgagee's part sufficient to amount to a recognition of the mortgagor's tenant as his own tenant (i), but there is no new tenancy created if the tenant refuses to pay rent after demand, and the mere fact that the tenant remains in possession after demand is not sufficient evidence of a new tenancy (j). If, however, the tenant pays rent to the mortgagee pursuant to a notice from the mortgagee, a new tenancy from year to year is created in the absence of evidence of a contrary intention (k), but it does not follow that the tenant holds upon the terms of the old lease so far as they are applicable to a tenancy from year to year, the terms of the new tenancy being a matter of evidence or inference from what is done by the parties (l).

(f) Towerson v. Jackson, [1891] 2 Q.B. 484; Evans v. Elliott, 1838, 9 A. & E. 342.

(g) See Sec. 142, supra, where it is pointed out that in England it is not customary, as it is in Ontario, to insert in a mortgage a proviso for quiet enjoyment until default, so that the mortgagee becomes entitled to possession upon the making of the mortgage.

(h) Pope v. Biggs, 1829, 9 B. & C. 245; Rusden v. Pope, 1868, L.R. 3 Ex. 269, at p. 275; Barnett v. Guildford (Earl), 1855, 11 Ex. 19; Ocean Accident and Guarantee Corporation v. Ilford Gas Co., [1905] 2 K.B. 493. It would appear however that in view of the Apportionment Act, referred to in Sec. 142, the mortgagee would not be entitled to recover the equivalent of rent accruing due in respect of the period prior to his becoming entitled to possession, although payable subsequently.

(i) Doe v. Cadwaller, 1831, 2 B. & Ad. 473; Doe v. Hales, 1831, 7 Bing. 322; Smith v. Eggington, 1874, L.R. 9 C.P. 145.