When a mortgage is paid off the statute under discussion provides in effect that the person who in priority to all other persons interested would be entitled to require a reconveyance of the estate from the mortgagee, may require the mortgagee to transfer the mortgage instead of reconveying the estate, but it does not make any change in the priorities inter se of the persons interested (b). The cases decided since the passing of the statute may therefore be used to illustrate the questions of priority which may arise as between the mortgagor and the second mortgagee and as between the mortgagor and the assignee of the equity of redemption.

(x) Coote, Law of Mortgages, 8th ed., vol. 2, p. 1441, citing Kin-naird v. Trollope, 1888, 39 Ch. D. 636, and West London Commercial Bank v. Reliance Permanent Building Society, 1885, 29 Ch. D. 954. To the same effect, see Fisher, Law of Mortgages, 6th ed., p. 989; Leitch v. Leitch, 1901, 2 O.L.R. 233, at pp. 236, 237.

(y) Leitch v. Leitch, supra, citing Fisher on Mortgages.

(z) Fisher v. Mortgages, loc. cit., approved in In re Magneta Time Co., Molden v. The Company, [1915] W.N. 318, 84 L.J. Ch. 814.

(a) Smithett v. Hesketh, 1890, 44 Ch.D. 161.

As between the mortgagor who has paid off the first mortgage and the person to whom he has made a second mortgage, the latter is entitled to priority, and the first mortgagee, on being paid off, must' not assign his mortgage to the mortgagor or his nominee without the consent of the second mortgagee (c). Similarly, if the first mortgagee is himself the second mortgagee, under a mortgage from the same mortgagor, he is entitled for his own protection to refuse to give the mortgagor an assignment of the first mortgage, just as he would be entitled to refuse to reconvey, except subject to the second mortgage (d).

But the case is different if the first mortgagee holds a second mortgage made not by the original mortgagor but by a purchaser of the equity of redemption, as, for instance, if a mortgage is made by B to A, a conveyance of the land by B to C subject to the mortgage, and then a second mortgage by C to A. The original mortgagor is under no responsibility for the second mortgage, and if he pays off the first mortgage there is no equity in the mortgagee's favour as against the mortgagor which would entitle the mortgagee to refuse to give the mortgagor an assignment of the first mortgage (e).

The question whether the original mortgagor is entitled to keep the mortgage alive as a first charge on the land as against the purchaser of the equity of redemption will be next discussed.

(b) See Sec. Sec. 192 and 193, supra.

(c) Teevan v. Smith, 1882, 20 Ch.D. 724.

(d) Rogers v. Wilson, 1887, 12 O.P.R. 322, 545.

(e) Kinnaird v. Trollope, 1888, 39 Ch.D. 636; Wheeler v. Brooke, 1894, 26 O.R. 96.

As between the mortgagor who pays off a mortgage and the assignee of the equity of redemption, the question whether the mortgagor is entitled to require the mortgagee to assign the mortgage depends upon the terms upon which the equity of redemption has been assigned and is independent of the circumstance that there is or is not a second mortgage.

If the equity of redemption has been assigned in such circumstances that as between the mortgagor and the assignee the latter is liable to pay the mortgage, as, for instance, in the ordinary case of the sale of the equity of redemption where the purchaser assumes payment of the mortgage, the mortgagor on paying the mortgage is entitled to require it to be assigned to him so as to keep it alive as a charge on the land in order that he may recoup himself for the money paid by him which the purchaser ought to have paid (f).

A mortgagor of land conveyed his equity of redemption to several grantees, one of whom agreed to pay off the mortgage, and some of whom also executed further mortgages upon the land. The first mortgagee proceeded to foreclose and to sue the mortgagor upon his covenant, whereupon the latter requested the first mortgagee to assign his mortgage to a third person who advanced the money and paid off the mortgage. It was held that the first mortgagee was bound to execute the assignment as asked, notwithstanding the subsequent incumbrances, and that even if the redemption money had been that of the mortgagor himself, it would have made no difference (g).

(f) Hamilton Provident Loan and Investment Co. v. Smith, 1888, 17 O.R. 1; Queen's College v. Claxton, 1894, 25 O.R. 282; Wheeler v. Brooke, 1894, 26 O.R. 96.

(g) Queen's College v. Claxton, 1894, 25 O.R. 282, distinguishing Teevan v. Smith, 1882, 20 Ch. D. 724, and following Kinnaird v. Trol-lope, 1888, 39 Ch. D. 636.

If, on the other hand, the equity of redemption has been assigned in such circumstances that as between the mortgagor and the assignee the former is liable to pay the mortgage, the mortgagor on paying the mortgage is not entitled to require it to be assigned to him, because the keeping of the charge alive would be inconsistent with his obligation to give the land to the assignee free from encumbrance (h).

A purchaser of the equity of redemption may redeem the mortgage as fully as the mortgagor himself might have done, and on the same terms, but the purchaser of an equity of redemption subject to a charge which is his own proper debt, or which he is under contract, express or implied, to discharge, cannot keep such charge alive against a mesne incumbrance, which by the terms of contract of purchase, express or implied, the purchaser was also bound to discharge (i).

Mortgagors of land sold it subject to the mortgage, the purchaser giving them a second mortgage to secure part of the purchase money. The purchaser then sold the land subject to both mortgages, which his sub-purchaser covenanted to pay off. Subsequently the first mortgagors, under a threat of action, paid the claim of the first mortgagees, and took an assignment of the first mortgage to one of themselves. It was held that the sub-purchaser, upon being called on by the first mortgagors and first purchaser for indemnity against the first mortgage, was bound to pay it, and was not entitled to an assignment thereof without also paying the second mortgage (j).

The owner of property mortgaged it and then sold subject to the mortgage, taking from the purchaser as part of his purchase money a second mortgage, which he assigned to the first mortgagee. The purchaser then sold to a sub-purchaser, who, to obtain an extension of time on the first mortgage, entered into a covenant with the mortgagee to pay it, and afterwards sold the property. In a foreclosure action the mortgagee claimed an order for the payment of the first mortgage by the sub-purchaser under his covenant, and the latter refused to pay the amount due on it unless the mortgagee would assign the mortgage to him; but it was held that the mortgagee was not bound to assign unless the sub-purchaser paid off both mortgages (k).

(h) Muttlebury v. Taylor, 1892, 22 O.R. 312; Thompson v. Warwick, 1894, 21 O.A.R. 637.

(i) Blake v. Beaty, 1855, 5 Gr. 359; Thompson v. Warwick, 1894, 21 O.A.R. 637; Muttlebury v. Taylor, 1892, 22 O.R. 312.

(j) Thompson v. Warwick, supra.

Where two mortgages had been created on a leasehold interest in rectory lands, the equity of redemption in which was afterwards sold at a sheriff's sale, and the purchaser paid off the prior mortgage, it was held that the purchaser being bound to protect the mortgagor against both incumbrances was not at liberty to keep alive the prior mortgage as against the second mortgagee (I).

A mortgagee who purchases the equity of redemption is entitled to keep his mortgage alive as against an intervening execution creditor of the mortgagor, in the absence of any act manifesting a contrary intention, but where after purchasing the equity of redemption he releases his mortgage, that is strong evidence that there was no intention to preserve his priority (m).

Where a person interested in the equity of redemption, but not personally liable for the mortgage debt, pays off a mortgage, the question whether it is or is not extinguished is one of intention (n).

(k) Muttlebury v. Taylor, supra. (l) McDonald v. Reynolds, 1868, 14 Gr. 691. (m) Buckley v. Wilson, 1861, 8 Gr. 566. (n) See chapter 21, Merger, Sec. 201.