If the mortgage is made in pursuance of the Short Forms of Mortgages Act and contains a power of sale in the form provided by that statute (q), the mortgagee is empowered to sell and absolutely dispose of the mortgaged lands, and "to convey and assure the same when so sold unto the purchaser or purchasers thereof, his or their heirs or assigns, or as he or they shall direct and appoint."

Under s. 21 of the English Conveyancing Act, 1881, a mortgagee exercising the power of sale conferred by that statute has power by deed to convey the property sold "for such estate and interest therein as is the subject of the mortgage, freed from all estates, interests and rights to which the mortgage has priority." Under this section it has been held that an equitable mortgagee by deed who exercises the power of sale conferred by the statute cannot convey the legal estate vested in the mortgagor (r), and doubtless the same principle would apply to a sale under the statutory short form in Ontario (s).

Under s. 15 of Lord Cranworth's Act, 23 & 24 V. c. 145, a mortgagee exercising the power of sale conferred by that statute has power by deed to convey or assign to and vest in the purchaser the property sold "for all the estate and interest therein, which the person who created the charge had power to dispose of." Under this section it has been held that an equitable mortgagee by way of deed of sub-lease can convey the whole of the original term (t), and that an equitable mortgagee in fee by deed can convey the legal estate (u). The principle of these decisions would doubtless apply in Ontario to a sale under the implied statutory power contained in the Mortgages Act (v). It is provided by s. 24 of the last mentioned statute that the person exercising the power of sale shall have power to convey or assign to and vest in the purchaser the property sold, "for all the estate and interest therein of the mortgagor and of which he had power to dispose. "

(p) Griffith v. Owen, [1907] 1 Ch. 195, applying the principles of Keech v. Sandford, 1726, Sel. Cas. in Ch. 61, 2 W. & T. L.C. Eq. 706; cf. In re Biss, Biss v. Biss [1903] 2 Ch. 40.

(q) See Sec. 334, supra.

(r) In re Hodson and Howes' Contract, 1887, 35 Ch.D. 668.

(s) See also Burton v. Dougall, 1899, 30 O.R. 543.

A deed under power of sale should recite the power, the default and the service of notice, if any, of exercising the power but it is not essential that the deed should purport to be made in exercise of the power. There must be the intention to sell under the power or to pass the property subject to the power, but the intention may be collected from other circumstances, or may be presumed. Where after a decree and final order of foreclosure, which proved to be invalid, the mortgagees sold the lands, reciting in the deed the foreclosure proceedings but making no mention of the power of sale, it was held that this was a valid exercise of the power (w). A deed in the usual statutory form with the usual covenants and without any recitals was held to have been made in exercise of the power of sale (x).

(t) Hiatt v. Hillman, 1871, 19 W. R. 694.

(u) In re Solomon and Meagher's Contract, 1889, 40 Ch.D. 508 (a case of a mortgage made prior to the commencement of the Conveyancing Act, 1881).

(v) See Sec. 332, supra.

(w) Kelly v. Imperial Loan and Investment Co., 1884, 11 O.A.R. 526, affirmed, (Strong and Henry, J J. dissenting) 11 Can. S.C.R. 516. See Maundrell v. Maundrell, 1802, 7 Ves. 566, 10 Ves. 246; Bennett v. Aburrow, 1803, 8 Ves. 609; Wade v. Paget, 1784, 1 B.C.C. 363; Carver v. Richards, 1860, 27 Beav. 488.

(x) Chatfleld v. Cunningham, 1892, 23 O.R. 153; following Carver v. Richards, supra; Kelly v. Imperial Loan and Investment Co., supra; cf. Lockhart v. Yorkshire Guarantee and Securities Corporation, 1908, 14 B.C.R. 28.

It is provided by s. 22 of the Mortgages Act as follows (y):

22. Where a sale has been made in professed exercise of the power of sale conferred by section 19, the title of the purchaser shall not be liable to be impeached on the ground that no case had arisen to authorize the exercise of such power, or that such power had been improperly or irregularly exercised, or that such notice has not been given; but any person damnified by any such unauthorized, improper or irregular exercise of the power, shall have his remedy against the person exercising the power.

The corresponding section of the English Conveyancing Act, 1881, provides that where a conveyance is made in professed exercise of the power of sale conferred on mortgagees by the act, the title of the purchaser shall not be impeached on the ground that the power was improperly exercised. Therefore, until the conveyance has been made a person who has contracted to purchase from a mortgagee purporting to sell under the statutory power is not precluded from enquiring whether the vendor was in a position to exercise the power, or from proving aliunde, in answer to an action of specific performance, that the power was improperly exercised (z).

The protection afforded by these statutes extends only to the statutory implied power of sale and the purchaser is protected only where there is a professed exercise of such power. The conveyance to the purchaser should therefore recite the power. The protection of the statute, as well as that usually provided in express powers of sale, extends only to purchasers without notice, actual or constructive, of any impropriety or irregularity (a).

(y) See Sec. 332, supra.

(z) Life Interest and Reversionary Securities Corporation v. Hand-in-Hand Fire and Life Insurance Society, [1898] 2 Ch. 230, explaining and distinguishing Dicker v. Angerstein, 1876, 3 Ch.D. 600.

(a) Bailey v. Barnes, [1894] 1 Ch. 25, 18 R.C. 510; cf. Winters v. McKinstry, 1902, 14 M.R. 294; as to notice, actual or constructive, see chapter 7, Equitable Principles governing Priorities, Sec. Sec. 65 and 66. Generally speaking, however, the doctrine of constructive notice is excluded in the case of a conveyance for value duly registered; see chapter 8, The Registry Act, Sec. 72. See also the special form of power of sale suggested in Sec. 333, supra.

In the case of a sale under an express power of sale containing a provision somewhat similar to s. 22 of the Mortgages Act above mentioned, it was held that a sale made to a purchaser in good faith without notice was valid, notwithstanding that it might appear upon the taking of accounts between the mortgagor and the mortgagee that the mortgage had been satisfied at the time of sale (b). Where a mortgage contained a defective power of sale without notice in addition to a power of sale with notice and provided that "no purchaser under said power shall be bound to enquire into the legality or regularity of any sale under the said power," it was held that the fact that the sale was made without notice could not be set up as against a purchaser (c).

Where a sale under a power of sale in a mortgage was irregular and was therefore set aside, it was held that the purchaser should be allowed, as a condition of relief against him, for all improvements made under the belief that he was absolute owner so far as they enhanced the value of the property, and not merely for such improvements as a mortgagee in possession would have been entitled to make, knowing that he was mortgagee (d).

(b) Dicker v. Angerstein, 1876, 3 Ch.D. 600.

(c) Campbell v. Imperial Loan Co., 1908, 18 M.R. 144.

(d) Carroll v. Robertson, 1868, 15 Gr. 173; McLaren v. Fraser, 1870, 17 Gr. 567; see the Conveyancing and Law of Property Act, R.S.O. 1914, c. 109, s. 37: Where a person makes lasting improvements on land under the belief that the land is his own, he or his assigns shall be entitled to a lien upon the same to the extent of the amount by which the value of the land is enhanced by such improvements; or shall be entitled or may be required to retain the land if the Court is of opinion or requires that this should be done, according as may, under all circumstances of the case be most just, making compensation for the land, if retained, as the Court may direct.

Unless the inadequacy of the price paid is so great as to raise a presumption of fraud, the sale to the purchaser is valid, even although the mortgagee may be liable to the owner of the equity of redemption for a greater sum than was realized (e). If a conveyance executed in pursuance of a sale under power is impeached, the purchaser, or those claiming under him, must show a due exercise of the power of sale; the onus of impeaching it is not upon the party alleging the invalidity of the conveyance (f).

Where a creditor of the mortgagor recovers judgment and issues execution after a sale under power of sale is complete and the mortgaged land has been conveyed to the purchaser, the creditor has no status to attack the sale proceedings or to require an account from the mortgagee (g).

By a provision in a mortgage no want of notice was to invalidate any sale thereunder, but the vendor alone was to be responsible. In a conveyance made on a sale under the power of sale it was recited that service of notice had been duly made on the mortgagor and his wife, who had joined to bar dower, and there was no evidence of the untruth of the recital or of the purchaser's knowledge of its untruth. It was held that a subsequent vendor of the land in making title could not be called on to furnish any other evidence of the service of notice (h).