It is well settled that the parties to a mortgage of real property may agree that in addition to their principal relation as mortgagor and mortgagee they shall also as regards the mortgaged lands stand towards each other in the relation of landlord and tenant, the mortgagor remaining in possession as tenant of the mortgagee (l).

(f) Trust and Loan Co. v. Lawrason, 1882, 10 Can. S.C.R. 679.

(g) As to this clause, see chapter 22, Action for Possession, Sec. 214.

(h) Royal Canadian Bank v. Kelly, 1869, 22 U.C.C.P. 279 (as explained in 14 C.L.J. 8), reversing 19 U.C.C.P. 196, 20 U.C.C.P. 430, 519; Trust and Loan Co. v. Lawrason, supra.

(i) Brown v. Metropolitan Counties Life Insurance Society, 1859, 1 El & El. 832, 9 R.C. 610.

(j) LaVassaire v. Heron, 1880, 45 U.C.R. 7.

(k) Lehain v. Philpott, 1875, L.R. 10 Ex. 242; Fawell v. Andrew. 1917, 10 S.L.R. 162, 34 D.L.R. 12.

"Undoubtedly, a mortgagor and a mortgagee have the right to insert in their mortgage deed a clause making the mortgagor attorn as tenant to the mortgagee, and thus by contract constituting the relation of landlord and tenant between them." (m)

"There can be no doubt that such clauses contained in mortgage deeds are valid and operative in themselves, and that they may, and ordinarily do create the relationship of tenant and landlord between the mortgagor and mortgagee, and with it the ordinary right of distress which the law attaches to that relationship." (n)

A mortgage contained, in addition to the statutory short forms of distress clause and so-called redemise clause (o), the following provision: "And the mortgagor doth release all his claims upon the said lands and doth attorn to and become a tenant at will to the [mortgagee] subject to the said proviso." It was held that the relation of landlord and tenant was not validly created so as to entitle the mortgagee to claim the rights of a landlord as against an execution creditor, there being no sufficient reservation of rent (p).

The attornment clause may be in the following form:

The mortgagor hereby attorns to the mortgagee and becomes a tenant of the said lands during the term of this mortgage at a rent equivalent to and payable at the same days and times as the payments of interest are hereinbefore agreed to be paid, such rent when so paid to be in satisfaction of such payments of interest. Provided that the mortgagee may on default of payment or on breach of any of the covenants hereinbefore contained enter on the said lands and determine the tenancy hereby created without notice, and that neither the existence of this clause nor anything done by virtue thereof shall render the mortgagee liable as mortgagee in possession so as to be accountable for any moneys except those actually received.

(I) Hobbs v. Ontario Loan and Debenture Co., 1890, 18 Can. S.C.R. 483, at pp. 492, 493.

(m) Ex parte Jackson, In re Bowes, 1880, 14 Ch.D. 725 at p. 739, Cotton L.J.

(n) Ibid, 14 Ch.D. at p. 743, Thesiger, L. J.

(o) Which in themselves do not create the relation of landlord and tenant See Sec. 361, supra.

(p) Trust and Loan Co. v. Lawrason, 1882, 10 Can. S.C.R. 679, affirming, by an equally divided court, 6 O.A.R. 286. See also Sec. 363, infra, as to the requirements of a valid tenancy.

Where a mortgage contained the following attornment clause: "And the said mortgagor doth hereby attorn to and become tenant of the said lands to the mortgagees at a yearly rental of $96 to be paid in the manner and upon the terms hereinbefore appointed for the payment of interest," it was held that the relation of landlord and tenant was validly created (q).

It is not necessary to the creation of a valid tenancy that the mortgage should be executed by the mortgagee, notwithstanding the provisions of the Statute of Frauds (r).

The admission under seal by the mortgagor of the terms of the demise amounts to an estoppel binding on him (s).

The attornment to the mortgagee by deed executed by the mortgagor in possession and delivered to the mortgagee is sufficient evidence of the creation of the tenancy between the parties (t), and it is not essential to the creation of a valid tenancy that the mortgagor should be let into possession. It is sufficient if there is a continued occupation by the mortgagor instead of a change of possession and a letting into possession again (u).

In order to create the relation of landlord and tenant the legal reversion of the lands need not be in the mortgagee.

(q) Linstead v. The Hamilton Provident and Loan Society, 1896, 11 M.R. 199.

(r) 29 Car. 2, c. 3; R.S.O. 1914, c. 102, ss. 2, 3, 4.

(s) Hobbs v. The Ontario Loan and Debenture Company, 1890, 18 Can. S.C.R. 483; Morton v. Woods, 1869, L.R. 4 Q.B. 293, affirming L.R. 3 Q.B. 658. See also Ex parte Yoisey, In re Knight, 1882, 21 Ch.D 442.

(t) West v. Fritche, 1848, 3 Exch. 216; Morton v. Woods, 1868, L.R. 3 Q.B. 658, 4 Q.B. 293; Ex parte Voisey, in re Knight, 1882, 21 Ch.D. 442.

(u) Morton v. Woods, supra; West v. Fritche, 1848, 3 Exch. 216.

"Although it may appear on the face of the deed that the defendants, the lessors, have not the legal estate yet the tenant and those who claim through him'are estopped, after he has attorned, from denying that the relation of landlord and tenant existed between the defendants and the mortgagor so as to pass as between them the reversion of the lessor." (v)

There may be two or more attornments by the same mortgagor to different mortgagees; and the mortgagees will be entitled to distrain for the purposes of their respective mortgages and during the same period of time.

"If by a contract, notwithstanding the fact is known that the legal estate is outstanding in a mortgagee, and that the mortgagor is not really the owner of the reversion, you can create a' tenancy between the second mortgagee and the mortgagor by what may be called estoppel, or quasi estoppel (it does not matter what term we use), it appears to me that there is nothing either in law or in good sense to prevent the same arrangement being made with more than one mortgagee." (w)

A tenancy from year to year or from month to. month will be a good yearly or monthly tenancy notwithstanding that the mortgage contains a proviso that it may be determined at any time at the will of the .mortgagee (x). There may be a tenancy at will although the rent reserved is payable yearly (y).

The creation of the relation of landlord and tenant by express stipulation does not alter the equitable relation existing between them which arises out of the relation of mortgagor and mortgagee. The existence of the tenancy may, however, interfere with the mortgagee's right to take possession unless he has the right to determine the tenancy at any time (z); and a clause giving the mortgagee this right is valid (a).

(v) Morton v. Woods, 1868, L.R. 3 Q.B. 658 at p. 667.

(w) Ex parte Punnett, 1880, 16 Ch.D. 226, at p. 234.

(x) In re Threlfall, 1880, 16 Ch.D. 274; Ex parte Voisey, In re Knight, supra; Kemp v. Lester, [1896] 2 Q.B. 162.

(y) Doed. Dixie v. Davies, 1851, 7 Ex. 89.

(z) In re Stockton Iron Furnace Co., 1879, 10 Ch.D. 335.

(a) Doe d. Garrod v. Olley, 1840, 12 A. & E. 481; Metropolitan Counties etc. Assurance Society v. Brown, 1859, 4 H. & N. 428.

It has been held that an attornment clause creating the relation of landlord and tenant does not in itself render the mortgagee liable to account as a mortgagee in possession (b), but in view of the dicta to the contrary (c) it is prudent to add to an attornment clause a proviso that the mortgagee shall not thereby be rendered liable as mortgagee in possession so as to be accountable for any moneys except those actually received (d).