The mortgagee's action on the covenant may be barred by lapse of time (j) or may be extinguished by a release of the equity of redemption (k), by a release of the mortgage debt, either under seal or for valuable consideration, or by accord and satisfaction (I), or by payment (m).

If a mortgagee purchases the equity of redemption at a sale under an execution against the lands of the mortgagor, he must release the mortgage debt (n), and generally, whenever, the equity of redemption and the mortgagee become united in the same person,the mortgage is extinguished by merger unless there is sufficient evidence of an intention to the contrary on the part of the person in whom the two interests unite (o).

If a mortgagee sells the mortgaged lands under his power of sale (p), and the proceeds of the sale are insufficient to pay the amount owing on the mortgage, he may sue the mort-gagor on his covenant in order to obtain payment of the deficiency (q). Similarly if a sale takes place in an action for foreclosure or sale, the mortgagee may obtain an order for payment by the mortgagor of the deficiency (r). In such cases the mortgagor is liable to pay notwithstanding that he cannot obtain a reconveyance of the property on payment. Likewise if the mortgaged property is lost to the mortgagor by reason of the exercise of a power of sale contained in a prior mortgage or otherwise through the default of the mortgagor, a subsequent mortgagee may recover on the covenant although he cannot reconvey the property on payment being made (s).

(j) See chapter 26, Limitation of Actions, Sec. 261.

(k) See chapter 3, Legal Mortgage in Equity, Sec. 29.

(l) Foakes v. Beer, 1884, 9 App. Cas. 605, at p. 611.

(m) See chapter 25, Action for Redemption, Sec. 255, as to payment and as to the statutory provision in Ontario by which part performance of an obligation expressly accepted by the creditor in satisfaction or rendered in pursuance of an agreement for that purpose extinguishes the obligation.

(n) See chapter 16, Execution Creditors of the Mortgagor, Sec. 154.

(o) See chapter 21, Merger, Sec. 201.

(p) See chapter 31, Sale under Power of Sale.

(q) Pegg v. Hobson, 1887, 14 O.R. 272; Rudge v. Richens, 1873, L.R. 8 C.P. 358.

(r) See chapter 24, Action for Foreclosure or Sale, Sec. 245.

With the exceptions just noted, the mortgagee is not entitled to enforce payment personally by the mortgagor unless he is in a position to reconvey the mortgaged property (t). The mortgagee is not, however, disabled from suing where he is in a position to restore the whole of the mortgaged land, although owing to the removal or destruction of a building on the land the property is not in the condition in which it was when the mortgagee took possession, unless, semble, the building is of such a character that compensation in money, to which the mortgagor in such a ease would be entitled, would not be an adequate indemnity (u).

Where the mortgagee with the concurrence of the person who after the mortgage was given purchased the equity of redemption, but without the concurrence of the mortgagor, made a sale of the lands, it was held that the mortgagee could not recover a deficiency from the mortgagor (v).

Where the mortgagee and mortgagor sold and conveyed part of the mortgaged property, without the concurrence of a person to whom subsequently to the mortgage the mortgagor had sold the remainder of the property, and whose interest was known to the mortgagee, and the mortgagee covenanted for freedom from encumbrances, it was held that the mortgagee having thereby put it out of his power to reconvey the whole of the mortgaged property could not call on the owner of the remaining portion for payment of the balance of the mortgage money (w).

(s) Beatty v. Bailey, 1912, 26 O.L.R. 145; In re Burrell, Burrell v. Smith, 1869, L.R. 7 Eq. 399. Thus a puisne mortgagee who submits to a foreclosure at the suit of a prior mortgagee is not thereby disabled from recovering on the covenant. Worthington & Co. v. Abbott, [1910] 1 Ch. 588.

(t) Kinnaird v. Trollope, 1888, 39 Ch.D. 636. See chapter 19, Discharge or Reconveyance, Sec. 182, as to the general right of a mortgagor to a reconveyance on payment.

(u) Mendels v. Gibson, 1905, 9 O.L.R. 94; Munsen v. Hauss, 1875, 22 Gr. 279.

(v) British and Canadian Loan Co. v. Williams, 1888, 15 O.R. 366; Palmer v. Hendrie, 1859, 27 Beav. 349.

Where, however, a mortgagor conveyed part of the mortgaged property to a purchaser, and gave a covenant against encumbrances, and the mortgagee subsequently released the part so sold from his mortgage, it was held that as the release was in accordance with the mortgagor's own obligation as to that part it did not affect the mortgagee's right to recover the mortgage debt or realize his lien on the rest of the mortgaged property (x).

A mortgagee not only discharged a portion of the mortgaged lands upon part payment, as he was entitled to do under the mortgage, but also assented to a right of way across the whole of the property granted by the then owners of the equity to a purchaser of a portion of it, and released such right of way from his mortgage. It was held that the mortgagee having debarred himself from restoring the mortgaged lands unaltered in character and quantity, in a manner unauthorized by the terms of the-mortgage, an assignee of the mortgage could not claim under the covenant in an administration of the mortgagor's estate, but the claimant was allowed a period of twenty days within which to put himself in a position to restore the land (y).

Even after the mortgagee has obtained a final order of foreclosure he may still, as a general rule, sue on the covenant provided he is in a position to reconvey the mortgaged property (2).

(w) Gowland v. Garbutt, 1867, 13 Gr. 578. (x) Crawford v. Armour 1867, 13 Gr. 576. (y) In re Thuresson, 1902, 3 O.L.R. 271.

The relations of the mortgagee, the mortgagor and the purchaser who agrees with the mortgagor to assume the mortgage and covenants with the mortgagor to indemnify the latter are not those of creditor, surety and principal debtor respectively. Therefore if the mortgagee makes a binding agreement to give time to the purchaser or otherwise deals with him without the consent of the mortgagor, the mortgagor is not discharged and he may be sued upon the mortgage, provided that when he is sued the mortgagee is not then disabled from restoring to the mortgagor the unimpaired property or the unimpaired obligation of the purchaser to indemnify the mortgagor (a).

If a mortgagee has made or given a demand or notice either requiring payment of the mortgage money or declaring his intention to exercise the power of sale, no further proceedings and no action with respect to the mortgage may be taken or commenced until the expiration of the time at or after which payment is to be made or the power of sale is to be exercised, without an order of a judge (b).

(z) See chapter 24, Action for Foreclosure or Sale, Sec. 244.

(a) See chapter 14, Transferee of the Equity of Redemption, Sec. 136.

(b) R.S.O. 1914, c. 112, s. 29, quoted in chapter 31, Sale under Power of Sale, Sec. 340.