A conveyance of property, in consideration of an advance, upon trust to sell in the discretion of the grantee with a declaration of the trusts of the proceeds of sale and a power on the grantee's part to enter and apply the rents in keeping down the interest is in substance a mortgage whether it is made to the lender himself or to a third party as trustee (x).

Equity regards the substance rather than the form of the transaction. If a conveyance absolute in form is intended to be a mortgage, the vendor will have the usual equitable right of a mortgagor to redeem (y), but in the absence of evidence that the transaction is a disguised mortgage or of fraud, undue influence or other ground of invalidity, the vendor will receive no assistance from equity. The evidence that the transaction is really a mortgage must be clear and conclusive (z), especially if it is contradicted by the recitals in the document (a).

Similar principles apply to the case of a conveyance with an option to repurchase. In the absence of fraud or unless the transaction is a disguised mortgage (b), time is of the essence of the contract and equity will give no relief if the option is not exercised within the period contracted for (c).

(x) In re Alison, Johnson v. Mounsey, 1879, 11 Ch.D. 284, at p. 294.

(y) Williams v. Owen, 1840, 5 My. & Cr. 303, at p. 306; Beaton v. Wilbur, 1906, 3 N.B. Eq. 309; Winthrop v. Roberts, 1907, 17 M.R. 220; Whitlow v. Stimson, 1909, 14 B.C.R. 321.

(z) McMicken v. Ontario Bank, 1891, 20 Can S.C.R. 548; Holmes v. Matthews, 1855, 9 Moo. P.C. 413, 5 Gr. 108.

(a) Barton v. Bank of New South Wales, 1880, 15 App. Cas. 379; Boardman v, Handley, 1899, 4 N.W.T.L.R. 266

(b) Fink v. Patterson, 1860, 8 Gr. 417; Hawke v. Milliken, 1866, 12 Gr. 236.

(c) Joy v. Birch, 1836, 4 CI. & F. 58, at p. 89; Roscoe v. McCon-ncll, 1913, 29 D.L.R. 121, 25 O.W.R. 149; cf. Dibbins v. Dibbins, [1896] 2 Ch. 348. But the right to strict performance may be waived. Pegg v. Wisden, 1852, 16 Beav. 239.

Extrinsic evidence may be given of circumstances which tend to shew that a conveyance absolute in form or a conveyance with an option to repurchase is really a mortgage, as, for instance, that the consideration was grossly inadequate as the purchase price of the property, that the purchaser was not let into immediate possession of the property, that the purchaser kept accounts of the receipts and disbursements or otherwise continued to treat the vendor as his debtor, or that the vendor remained liable to repay the money or paid interest (d).

Evidence may also be given of the declared intention of the parties. It was held in some cases in Upper Canada and Ontario that oral evidence of the intention of the parties that the transaction was a mortgage was not admissible unless a foundation had first been laid by evidence of circumstances such as those mentioned above (e). This qualification of the right to give evidence to show that the document is other than it appears to be does not seem to be maintained in the English cases, and evidence is admitted on the ground that to exclude it would enable the Statute of Frauds to be used as a cloak for fraud (f).

(d) Thornbrough v. Baker, 1677, 3 Swanst. 628, at p. 631, 18 R.C. 231, at p. 233; cf.,2 W. & T.L.C. Eq., at pp. 31-35. The test is the mutuality and reciprocity of the remedies of the parties. If the transaction is a mortgage for one party it must be a mortgage for the other. Goodman v. Grierson, 1813, 2 Ball & B. 274, 18 R.C. 6; Allenby v. Dalton, 1835, 5 L.J.K.B. 312; Bell v. Carter, 1853, 17 Beav. 11; Alderson v. White, 1858, 2 DeG. & J. 97; Bullen v. Renwick, 1862, 9 Gr. 202; Hawke v. Milliken, 1866, 12 Gr. 236; Healey v. Daniels, 1868, 14 Gr. 633; Rapson v. Hersee, 1869, 16 Gr. 685; Robinson v. Chisholm, 1894, 27 N.S.R. 74; Cleary v. Aitken, 1914, 19 B.C.R. 369, 17 D.L.R. 548.

(e) See review of earlier cases in Ross v. Scott, 1875, 21 Gr. 391, affirmed 22 Gr. 29; cf. dissenting judgment of Strong J. in Barton v. McMillan, 1892, 20 Can S.C.R. 404, at p. 412.

(f) In re Duke of Marlborough, Davis v. Whitehead, [1894] 2 Ch. 133; Rochefoucault v. Boustead, [1897] 1 Ch. 196, at pp. 206, 207. See also a learned and elaborate article by C. B. Labatt in 29

If a mortgage is expressed in the form of an absolute conveyance, the mortgagor's right to redeem cannot be asserted as against a purchaser in good faith without notice from the mortgagee (g). The mortgagee has no power of sale, unless indeed a statutory power of sale can be imported into the deed; nor can the mortgagee foreclose; he holds the land as trustee, and his only remedy, in the absence of the concurrence of the mortgagor, is to have a sale through the court (h).

The doctrine that a transfer absolute in form may be shown to be in reality a mortgage applies to a transfer and a certificate of title under the land titles system (i), but it has been held in Manitoba that where land is transferred and a certificate of title is issued and it is proved that the transaction is intended to be by way of security merely, the effect is the same as if the transferee had, not a statutory charge or mortgage under the new system of land titles, but a bare mortgage under the old system of registration without redemise clause, covenants or provisoes (j).