The position of a mortgagor who remains in possession after the making of the mortgage, if the mortgage does not reserve to him the right of possession, or after default, if the mortgage provides that he may retain possession until default, is anomalous. The mortgagee is entitled to take possession at any time (r), but until the mortgagee demands possession the mortgagor's possession is rightful and not by wrong, and he is entitled to the rents and profits of the land without account (s). The mortgagor is not a trespasser, but he is not entitled to possession as against the mortgagee.

It is provided in Ontario by the Mortgages Act, R.S.O. 1914, c. 112, s. 5, as follows (t):

5. A mortgagor entitled for the time being to the possession or receipt of the rents and profits of any land, as to which no notice of his intention to take possession or to enter into receipt of the rents and profits thereof shall have been given by the mortgagee, may sue for such possession, or sue or distrain for the recovery of such rents or profits, or to prevent or recover damages in respect of any trespass or other wrong relative thereto, in his own name only, unless the cause of action arises upon a lease or other contract made by him jointly with any other person, and in that case he may sue or distrain jointly with such other person.

Formerly, if a mortgagor was entitled to possession against the mortgagee under a proviso giving him the right to possession till default, he could maintain an action against a third party for possession or for injury done to the property, but he could not maintain such action if the mortgage was in default (u). Similarly in equity a mortgagor in receipt of the rents and profits has been held entitled to sue, without making the mortgagee a party, for an injunction to prevent injury to the property (v).

(q) Armour, Real Property, 2nd ed., p. 186. As to attornment clause, see chapter 33, Attornment and Distress, Sec. 362.

(r) See Sec. 212, supra.

(s) Heath v. Pugh, 1881, 6 Q.B.D. 345, at p. 359, 16 R.C. 376, at p. 383; S.C. sub nom. rugh v. Heath, 1882, 7 App. Cas. 235, 16 R.C. 376. As to the mortgagor's right to the rents and profits, see chapter 27, Accounting between Mortgagor and Mortgagee, Sec. 294.

(t) This provision was prior to 1914 contained in the Judicature Act, it having been adopted in 1881 from the English Judicature Act,.

Under the statute a mortgagor may maintain an action even after default if no notice has been given by the mortgagee of his intention to take possession, but after the giving of such notice the mortgagor's right of action ceases (w).

The court will entertain actions for the protection of the mortgaged property at the suit of the mortgagor alone, but will add the mortgagee as a party if it appears that it is necessary to do so in order to prevent the latter from being prejudiced (x).

The statute above quoted does not give to a mortgagor in possession of land, subject to a lease, the right to re-enter for breach of the covenants in a lease (y), or the right to sue the lessee for damages for the breach of a covenant to repair (z).

1873, s. 25, sub-s. 5. The last 14 words of the section are not contained in the English statute.

(u) Rogers v. Dickson, 1861, 10 U.C.C.P. 481; Ford v. Jones, 1862, 12 U.C.C.P. 358.

(v) Fairclough v. Marshall, 1878, L.R. 4 Ex. 37; Van Gelder, Apsimon & Co. v. Sowerby Bridge United District Flower Co., 1890, 44 Ch.D. 374.

(w) Armour, Real Property, 2nd ed., 187; see also the cases referred to in the next following note.

(x) In re Nickle and the Town of Walkerton, 1886, 11 O.R. 433; Platt v. Grand Trunk Ry. Co., 1886, 12 O.R. 119; McMullen v. Free, 1887, 13 O.R. 57.

(y) Matthews v. Usher, [1900] 2 Q.B. 535.

(z) Turner v. Walsh, [1909] 2 K.B. 484. The mortgagor would, however, have such right in England under the Conveyancing Act, 1881, s. 10, [and in Ontario under the Landlord and Tenant Act, R.S.O. 1914, c. 155, s. 5]. lbid.