The mortgagee is entitled to add to his mortgage debt all costs reasonably incurred by him to preserve the mortgaged property or protect the security, and to assert a charge for such costs in priority to all persons claiming under the mortgagor, including subsequent encumbrancers (k). The mortgagee's right to add such costs to his mortgage arises out of the mortgage contract, but it is not founded on an implied contract by the mortgagor to pay them, and while they form part of the price of redemption, they do not constitute a debt of the mortgagor for the recovery of which an action may be brought (l).

Equity, acting on the maxim that he who seeks equity must do equity, requires the mortgagor seeking to redeem, whether in an action for foreclosure or sale or in an action for redemption, to pay not only the principal and interest but also the costs properly incurred by the mortgagee in relation to his mortgage security.

Co. v. West, [1892] 1 Ch. 271; Calvert v. Burnham, 1881, 6 O.A.R. 620; Mennie v. Leitch, 1885, 8 O.R. 397.

(j) National Provincial Bank of England v. Games, 1886, 31 Ch.D. 582.

(k) Dryden v. Frost, 1838, 3 My. & Cr. 670; Barnes v. Racster, 1842, 1 Y. & C.C.C. 401; National Provincial Bank of England v. Games, 1886, 31 Ch.D. 582.

(l) Ex parte Fewings, In re Sneyd, 1883, 25 Ch.D. 338.

"The owner coming to deliver the estate from that incumbrance he himself put upon it, the person having that pledge is not to be put to expense with regard to that; and so long as he acts reasonably as mortgagee, to that extent he ought to be indemnified." (m).

Generally speaking, a mortgagee will not be entitled to add to his mortgage debt the costs of unsuccessful proceedings at law instituted by him without the approval of the mortgagor (n). The test of his right to add to his mortgage debt the costs of litigation with respect to the mortgage security is not the success or failure of the litigation but the reasonableness of his conduct, and he may in the particular circumstances be entitled to the costs of unsuccessful litigation (o).

The rule in the case of a trustee is that he is entitled to indemnity out of the trust estate for costs incurred by him in unsuccessful litigation if he acted under the advice of the court or" if the circumstances were such that the court, if applied to, would have advised the prosecution or defence of the litigation (p). By analogy the mortgagee should be entitled to indemnity if the circumstances were such that, had he been a trustee and therefore entitled to apply to the court for advice, the court would have advised him to act as he did.

The mortgagee is entitled to the costs of sale proceedings, taken reasonably, which prove abortive. Such costs were allowed in a case in which the sale was abortive by reason of the subsequent dishonour of a cheque which the auctioneer accepted as a deposit from a bidder (q).

(m) Detillin v. Gale, 1802, 7 Ves. 583, at pp. 584-5, 18 R.C. 502, at p. 503.

(n) Wells v. Trust and Loan Co. of Canada, 1884, 9 O.R. 170; cf. Peers v. Ceeley, 1852, 15 Beav. 209; Burke v. O'Connor, 1853, 4 Ir. Ch. 418.

(o) Ellison v. Wright, 1827, 3 Russ. 458; National Provincial Bank of England v. Games, 1886, 31 Ch.D. 582, at p. 593; Ex parte Carr, In re Hofman, 1879, 11 Ch. D. 62.

(p) In re Beddoe, Downes v. Cottam, [1893] 1 Ch. 547, at pp. 557. 562; Smith v. Beal, 1894, 25 O.R. 368.

A mortgagee is entitled to add to his mortgage debt the costs of administration procured by him of the personal estate of the mortgagor where the court deems such a course to be reasonably taken for his protection (r), or the costs of procuring administration of the estate of an encumbrancer where that is necessary in order to the carrying on of a foreclosure action (s).

If a mortgagee has been put to expense in defending the title to the mortgaged estate, the defence being for the benefit of all persons interested in the estate, he is entitled to add the costs to his mortgage debt (t), but it has been held that he is not entitled to add his costs of defending an action in which his title as mortgagee only is disputed (u) or the costs of litigation wrongfully brought against him by a stranger, although the proceedings relate to the mortgaged estate (v).

It has been held that when a mortgagee is taking steps, to sell the property under the power of sale contained in the mortgage it is proper for him to supplement his sale-proceedings by an action for possession in order that he may be in a position to deliver possession to the purchaser (w).

(q) Farrer v. Lacy, Hartland & Co., 1885, 25 Ch. D. 636, 31 Ch.D. 42; cf. Corsellis v. Patman, 1867, L.R. 4 Eq. 156; Cameron v. Mcllroy, 1884, 1 M.R. 242; Patchell v. Colonial Investment and Loan Co., 1907, 3 N.B. Eq. 429.

(r) Ramsden v. Langley, 1706, 2 Vern. 536.

(s) Hunt v. Fownes, 1803, 9 Ves. 70.

(t) Parker v. Watkins, 1859, John. 133; Godfrey v. Watson, 1747, 3 Atk. 517.

(u) Unless the persons interested in the equity of redemption have concurred in or assisted the litigation. Parker v. Watkins, supra.

(v) Owen v. Crouch, 1857, 5 W.R. 545; cf. Doe d. Holt v. Roe, 1830, 6 Bing 447.

(w) Trust and Loan Co. v. McGillivray, 1878, 7 O.P.R. 318. But if notice of exercising the power of sale has been given, no action discretion of the court or judge does not extend to deprive a mortgagee of any right to costs out of any particular estate or fund (a).

It has also been held that a mortgagee is entitled to add to his mortgage debt the costs of an action in ejectment brought by him to recover possession of the mortgaged premises or the costs of an action on the covenant for payment, even though in the latter case the action was abortive (x).