It is provided by the Interest Act, R.S.C. 1906, c. 120, s. 2, as follows:

2. Except as otherwise provided by this or by any other Act of the Parliament of Canada, any person may stipulate for, allow and exact, on any contract or agreement whatsoever, any rate of interest or discount which is agreed upon.

In the case of a mortgage the right conferred by this section is subject to ss. 6 to 9 of the Interest Act (h) and to the Money-Lenders Act (i). The Bank Act provides that no the dicta relating to an implied contract to pay interest refer to interest from the time when the principal is payable, not to interest in the interval between the making of the mortgage and the time fixed for payment.

(d) But not on interest which is overdue. Daniell v. Sinclair, 1881, 6 App. Cas. 181, 18 R. C. 144.

(e) McDonnell v. West, 1868, 14 Gr. 492; Reid v. Wilson, 1881, 9 O.P.R. 166.

(f) Re Phillips v. Hanna, 1902, 3 O.L.R. 558; cf. cases cited in Sec. 313, as to rate of interest after default.

(g) See chapter 26, Limitation of Actions, Sec. 266.

(h) Ss. 6, 7 and 9 are quoted below. S. 8 is discussed in Sec. 314. They apply only to mortgages executed after the 1st day of July, 1880: R. S. C. 1906, c. 120, s. 11.

(i) R. S. C. 1906, c. 122, a statute applicable only to loans of not more than $500 made by persons who carry on the business of money lending and who make a practice of lending money at a higher rate of interest than 10%. See also the Ontario Money Lenders Act, R.S.O. 1914, c. 175.

higher rate of interest than 7 per cent. shall be recoverable by a bank (j).

Ss. 6, 7 and 9 of the Interest Act above referred to are as follows:

6. Whenever any principal money or interest secured by mortgage of real estate is, by the same, made payable on the sinking fund plan, or on any plan under which the payments of principal money and interest are blended, or on any plan which involves an allowance of interest on stipulated repayments, no interest whatever shall be chargeable, payable or recoverable, on any part of the principal money advanced, unless the mortgage contains a statement showing the amount of such principal money and the rate of interest chargeable thereon, calculated yearly or half-yearly, not in advance.

7. Whenever the rate of interest shown in such statement is less than the rate of interest which would be chargeable by virtue of any other provision, calculation or stipulation in the mortgage, no greater rate of interest shall be chargeable, payable or recoverable, on the principal money advanced, than the rate shown in such statement.

9. If any sum is paid on account of any interest, fine or penalty not chargeable, payable or recoverable under the three (k) sections last preceding, such sum may be recovered back or deducted from any other interest, fine or penalty chargeable, payable or recoverable on the principal.

It is not necessary under s. 6 that the mortgage shall contain a statement showing how much of each blended payment is principal and how much is interest or showing the actuarial calculation by which the amount of each payment is fixed, and it is sufficient if the mortgage contains a covenant to pay a specified sum for principal and a specified rate of interest (l), or a statement specifying the amount of the principal and the rate of interest (m).

(j) 3 & 4, G. 5, c. 9, s. 91.

(k) As to s. 8, see Sec. 314, infra.

(l) Canadian Mortgage Investment Co. v. Cameron, 1917, 55 Can. S.C.R. 409, 38 D.L.R. 428, reversing 11 A.L.R. 441, 33 D.L.R. 792.

(m) Standard Reliance Mortgage Corporation v. Stubbs, 1917, 55 Can. S.C.R. 422, 38 D.L.R. 435, reversing 27 M.R. 276, 32 D.L.R. 57.

It is provided by the Interest Act, s. 3, as follows:

3. Except as to liabilities existing immediately before the seventh day of July, one thousand nine hundred, whenever any interest is payable by the agreement of parties or by law, and no rate is fixed by such agreement or by law, the rate of interest shall be five per centum per annum.

Prior to the 7th of July, 1900, the rate of interest prescribed in the case mentioned in this section was 6% (n). The exception refers to liabilities for interest not to liabilities for principal, so that if a mortgage was made prior to the 7th of July, 1900, and does not contain any express provision as to the rate of interest after default, the rate payable after default will be only 5% in respect of the period subsequent to the 7th of July, 1900 (o).