The statute (s) provides that it shall not apply if the mortgagee is or has been in possession. ' The reason why a mortgagee in possession cannot be required to give an assignment of the mortgage instead of reconveying is that he remains liable to account as mortgagee in possession notwithstanding the transfer (t); and although a transfer at the request of the mortgagor or an encumbrancer might release him from this liability as regards the mortgagor or such encumbrancer, he would not be released as regards other persons interested in the equity of redemption . Hence after a mortgagee has been in possession he cannot with safety transfer his security except under the direction of the court (u). A mortgagee in possession may, however, be required to give a reconveyance (v).

Mortgagees in possesion of the mortgaged lands afterward* acquired by transfer a second mortgage on the same lands, and then brought action on the covenant for payment in the first mortgage against the original mortgagors, who had parted with the equity of redemption before the second mortgage was given. It was held that although the defendants were not entitled to an assignment of the mortgage, because the mortgagees were in possession, they were entitled, on paying the first mortgage, to a reconveyance for the purpose of enabling them to maintain a charge upon the estate for the money paid by them, such reconveyance to be subject to the rights of redemption of all other persons interested in the equity of redemption (w).

(r) Leitch v. Leitch, 1901, 2 O.L.R. 233, followed in Jones v. Shortreed, 1907, 14 O.L.R. 142.

(s) See Sec. 192, supra.

(t) See chapter 28, Mortgagee in Possession, Sec. 304.

(u) Hall v. Howard, 1886, 32 Ch. D. 430, at p. 435; 21 Halsbury, Laws of England, p. 170.

(v) Stark v. Reid, 1895, 26 O.R. 257.

(w) Stark v. Reid, supra, following Kinnaird v. Trollope, 1888, 39 Ch.D. 636. It was also held in Stark v. Reid that the mortgagees were not entitled to tack the amount of the second mortgage to that of the first and require payment of both. See chapter 9, Consolidation and Tacking, Sec. 87.