Payment to be valid must be made to the mortgagee or other person entitled to the money or his duly authorized agent.

Payment to one of two or more mortgagees on a joint debt, or to one of two or more executors of a mortgagee, is good (q). Where, however, mortgagees have advanced money on a joint account, payment to one of them during the other's lifetime, though a good discharge of the debt at law, discharges the security only to the extent of the payee's beneficial interest (if any), even though the payee becomes the survivor in the joint account (r).

(n) Blumberg v. Life Interests, etc., Corporation, [1897] 1 Ch. 171, [1898] 1 Ch. 27.

(o) 9 & 10 E. 7, c. 14; 5 G. 5, c. 4.

(P) Bank Act, 3 & 4 G. 5, c. 9, s. 71.

(q) Wallace v. Kelsall, 1840, 7 M. & W. 264; Steeds v. Steeds, 1889, 22 Q.B.D. 537; Ewart v. Dryden, 1867, 13 Gr. 50.

(r) Powell v. Brodhurst, [1901] 2 Ch. 160.

If payment be made to a person not duly authorized by the mortgagee it will not be a good payment. Thus, the employment of a person to serve a notice demanding payment of the mortgage money does not give him an implied authority to receive it (s), and where a person has authority to receive interest on a mortgage that alone does not imply authority to receive the principal (t). An agent who is authorized to collect rent, and to contract for the sale of property and receive payment of the purchase money, is not thereby authorized to receive payments on a mortgage given for the unpaid purchase money (u).

The onus of showing that a solicitor who is in possession of a mortgage and collects the interest has authority also to collect the principal is upon the mortgagor, and unless this onus is clearly discharged the mortgagor and not the mortgagee must bear the loss arising from the solicitor's misappropriation of the funds (v).

The custody of a mortgage gives no right to the custodian, whether he be the solicitor of the mortgagee or not, to receive any part of the principal or interest secured. A mortgage not only secures money, but affects the land; and for its effectual discharge not only payment but reconveyance is essential, and for this reason the law does not infer a right to receive the money from the mere possession of this kind of security (w). But payment made to the solicitor employed by the mortgagee to bring an action to recover the mortgage money is valid and will discharge the mortgagor (x).

(s) Toms v. Wilson, 1862, 4 B. & S. 442.

(t) Palmer v. Winstanley, 1874, 23 U.C.C.P. 586.

(u) Greenwood v. Commercial Bank of Canada, 1867, 14 Gr. 40.

(v) In re Tracy, Scully v. Tracy, 1894, 21 O.A.R. 454; Wilkinson v. Candlish, 1854, 5 Ex. 91; Kent v. Thomas, 1856, 1 H. & N. 473; Scully v. Robertson, 1894, 30 C.L.J. 472; McMullen v. Polley, 1886, 12 O.R. 702.

(w) Gillen v. The Roman Catholic Episcopal Corporation of the Diocese of Kingston, 1884, 7 O.R. 146.

Formerly an agreement to accept payment of a smaller sum, on or after the day named for payment, in discharge of a larger sum was nudum pactum and not enforceable (y).

Where, however, there was a dispute as to the amount due; or where the money was paid before it was due; or where a chattel, cheque or promissory note, though of less value, was given and accepted in satisfaction; or where that which was given in satisfaction was more beneficial to the mortgagee, this was considered sufficient to support a defence of accord and satisfaction (z).

In Ontario, however, it is now provided by the Mercantile Law Amendment Act, R.S.O. 1914, c. 133, s. 16, as follows:

16. Part performance of an obligation either before or after a breach thereof when expressly accepted by the creditor in satisfaction, or rendered in pursuance of an agreement for that purpose, though without any new consideration, shall be held to extinguish the obligation.

Where a cheque was given in full of all demands but accepted only on account, it was held that the keeping of the cheque was not conclusive (a).

Mortgagees sent a written notice to the mortgagor stating that the sum of £48, 5s. 8d. which would shortly become due to them should be paid at their office, and asking the mortgagor "when remitting" to return the notice. The mortgagor sent to the mortgagees by registered post a packet containing £48 in treasury notes and a postal order and stamps for 5s. 8d.

(x) Bourton v. Williams, 1870, L.R. 5 Ch. 655; but see Palmer v. Winstanley, 1874, 23 U.C.C.P. 586.

(y) Foakes v. Beer, 1883, 9 App. Cas. 605.

(z) Curlewis v. Clark, 1849, 3 Ex. 375; Goddard v. O'Brien, 1882, 9 Q.B.D. 37; Bidder v. Bridges, 1887, 37 Ch.D. 406.

(a) Day v. McLea, 1889, 22 Q.B.D. 610; Mason v. Johnston, 1893, 20 O.A.R. 412.

The packet was stolen before it reached the mortgagees and they never received the money. It was held that by the use of the word "remitting" the mortgagees had impliedly authorized the mortgagor to pay them by sending the money through the post in the ordinary way in which money was remitted by post, but that it was not usual to send so large a sum as £48 in treasury notes by post, and that the mortgagor had therefore failed to prove that he had paid his debt to the mortgagees (b).

A mortgage given to secure a floating balance is not discharged by payments made on account, so long as the dealings between the parties continue and any balance remains due in respect thereof, even although the payments exceed in amount the debt due when the mortgage was made or the sum mentioned in the mortgage (c).