When the Court of Chancery began to entertain applica-cations by mortgagors for leave to redeem notwithstanding that by default in payment they had lost their legal or contractual right to redeem, it was obliged in turn, in order to do complete equity, to entertain applications by mortgagees for foreclosure-the effect of a decree of foreclosure being simply to require a mortgagor within a definite time to redeem under penalty of being finally foreclosed or deprived of his equitable right to redeem (a). The correlative and reciprocal remedy to redemption is foreclosure. Equity, which by its interference has prevented the mortgagee from asserting his legal right to absolute ownership under the strict terms of the contract, simply removes the stop it has itself put on, upon default of the mortgagor in discharging the debt after reasonable time given to him, or in other words decrees foreclosure (b).

As a general rule upon default in payment of the moneys secured by a mortgage, the mortgagee may bring an action for foreclosure (c), whether he has a power of sale or not (d), whether he has taken possession or not (e), and whether the mortgage is a legal mortgage or is an equitable mortgage under an agreement for a legal mortgage (f) or by deposit of title deeds (g) or is a mortgage of an equity of redemption (h).

(a) See chapter 3, Legal Mortgage in Equity, Sec. 22.

(b) Carter v. Wake, 1877, 4 Ch.D. 605.

(c) Balfe v. Lord, 1842, 2 Dr. & W. 480, 18 R.C. 481.

(d) Slade v. Rigg, 1843, 3 Hare 35; Wayne v. Hanham, 1851, 9 Hare 62.

(e) Lord Penrhyn v. Hughes, 1799, 5 Ves. 99, at p. 106.

(f) Frail v. Ellis, 1852, 16 Beav. 350.

(g) James v. James, 1873, L.R. 16 Eq. 153; York Union Banking Co. v. Artley, 1879, 11 Ch.D. 205; Sadler v. Worley, [1894] 2 Ch. 170, at p. 174; London County and Westminster Bank v. Tompkins, [1918] 1 K.B. 515, at p. 529.

(h) Rose v. Page, 1829, 2 Sim. 471; Richards v. Cooper, 1842, 5 Beav. 304.

A mortgagee is usually entitled to foreclosure or sale at his option (i), but in some cases he is entitled to sale only. The right of foreclosure arises only if there has been a forfeiture by reason of a breach of condition (j), because it is only in that case that there is an equitable right to redeem to be foreclosed.

A mortgagee is not entitled to bring an action for foreclosure unless the mortgage is overdue (k). Default in payment of interest or of an instalment of principal is sufficient (I) if such default is in breach of the condition for reconveyance or defeasance, because in that event the mortgagee's estate becomes absolute at law and foreclosure will therefore lie (m). A mortgagee may foreclose if an instalment of principal is overdue, even though he has agreed that the final instalment of the principal shall not be payable until the happening of a certain event and that event has not yet happened (n), but he is not entitled to foreclose if he has agreed that mortgagor would be entitled to have the foreclosure action stayed on payment of the other instalments and accrued interest and the costs. Thomson v. Willson, 1915, 51 Can. S.C.R. 307, 23 D.L.R. 468, varying Willson v. Thomson, 1914, 31 'O.L.R. 471, 19 D.L.R. 593. As to the mortgagor's right to apply for a stay of the action upon payment of the overdue instalment and interest and costs, see Sec. 242, infra. (o) Burrowes v. Molloy, 1845, 2 Jo. & Lat. 521.

(i) York Union Banking Co. v. Artley, 1879, 11 Ch.D. 205; Meyers v. Harrison, 1850, 1 Gr. 449; Sadler v. Worley, [1894] 2 Ch. 170, at p. 174; sed cf. In re Owen, [1894] 3 Ch. 220, at p. 227; Backhouse v. Charlton, 1878, 8 Ch. D. 444.

(j) Bonham v. Newcomb, 1684, 1 Vern. 232; Sampson v. Pattison 1842, 1 Hare 533. As to an action for sale and the jurisdiction of the court to decree sale in a foreclosure action, see below in this chapter, Sec. 245. Sale by a mortgagee under his power of sale is discussed in chapter 31.

(k) Even if another mortgage on the same land to the same mortgagee is overdue. Thibodo v. Collar, 1850, 1 Gr. 147.

(l) Stanhope v. Manners, 1763, 2 Eden 197; Cameron v. McRae, Sparks v. Redhead, 1852, 3 Gr. 311; Canada Settlers Loan Co. v. Nicholles, 1896, 5 B.C.R. 41.

(m) Williams v. Morgan, [1906] 1 Ch. 804. It was held that the proviso for reconveyance in this case did not import that interest was to be paid half-yearly on the days specified in the covenant for payment, and that there was consequently no breach of condition by reason of the failure to pay the interest and therefore no forfeiture and no right to foreclose.

(n) But the mortgagee would not be entitled to a judgment on the covenant in respect of the last mentioned instalment, and the the whole principal sum shall not be called in before a certain event and that event has not happened (o). Where there was a stipulation that in default of payment of any instalment of interest for six months the whole principal should become due, it was held that a suit to foreclose could not be brought until after the six months had expired (p).

If the security is a mere charge or lien, and not in the nature of a mortgage or an agreement for a mortgage, the proper remedy is an action for sale to realize the security and not foreclosure(q). Thus, sale and not foreclosure is the proper remedy under the informal instruments commonly called "lien notes" which are usually given to secure the price of goods sold and by which the purchaser agrees that the price shall be a charge or lien on his land (r). So, if a mortgage is in the form of a trust for sale, the mortgagee is entitled to sale not foreclosure (s). A person entitled to the benefit of an equitable charge created by will upon a reversionary interest in land has no remedy by way of foreclosure, but only by way of sale or mortgage of such interest (t). In the case of a Welsh mortgage there is no right of foreclosure (u).

(p) Parker v Vine Growers' Association, 1876, 23 Gr. 179.