(2.) This section applies only if and as far as a contrary S. 17 (2), (3). intention is not expressed in the mortgage deeds or one of them. (3.) This section applies only where the mortgages or one of them are or is made after the commencement of this Act. MORTGAGES. As to the decisions affected by this section, see Fisher, Mortg. 678 et Cases affected. seq. 2nd ed.; Coote, Mortg. ch. 67, 4th ed. " The words "seeking to redeem are general, and apply to the case of a mortgagor or subsequent incumbrancer giving notice to pay off as well as to the case of a redemption suit, or of a payment under an order in a foreclosure suit. Thus in the absence of agreement to the contrary, an equity of redemption arises in the mortgagor free from the right to consolidate. He is put in the same position as if he were another mortgagor, consequently the surplus proceeds of a sale (s. 21 (3)) under one security cannot be applied to make good the deficiency of another security. Equity of redemption altered. How consolida- still In what cases there will be no consolida Under this section consolidation of mortgages can only arise by express contract. It does not in terms repeal any previously existing rule of law, but it confers on the mortgagor a right in opposition to a previously existing rule, and at the same time permits him to waive that right by contract. The result, it is conceived, is to substitute consolidation by contract of the parties in place of consolidation by tion. rules of equity, so that where a contract is not effectual the right to consolidate does not arise. The contract in effect gives, in certain cases, a further charge on other property, and is effectual only where the further charge would be effectual. Thus if A. purchase the equity of redemption of two estates, each from a different vendor, each estate being mortgaged to the same mortgagee, neither vendor was ever in a position to give a further charge on the other estate to his mortgagee, and there can be no consolidation of the two mortgages. The effect of subs. 3 is to reserve to a mortgage made before the commencement of the Act its old right in equity to become consolidated with another mortgage, whatever may be the date of the latter. In ordinary cases the mortgagee will be content to rely on the one security taken by him as being sufficient, and will not reserve the right to consolidate. In special cases, as loans to builders, where it is intended to make numerous advances, the right to consolidate will be reserved. Where the contract is for a single loan on specific property, there can be no more obligation on the solicitor of the vendor to obtain a further charge on other property contingent merely on its becoming vested in his client as mortgagee, than to take a charge on all other present and future property of the mortgagor. E 2 S. 18 (1), MORTGAGES. Leases. Leasing powers of mortgagor and of mortgagee in possession. As to mining lease. Leases. 18.-(1.) A mortgagor of land while in possession shall, as against every incumbrancer, have, by virtue of this Act, power to make from time to time any such lease of the mortgaged land, or any part thereof, as is in this section described and authorized. (2.) A mortgagee of land while in possession shall, as against all prior incumbrancers, if any, and as against the mortgagor, have, by virtue of this Act, power to make from time to time any such lease as aforesaid. (3.) The leases which this section authorizes are— (ii.) A building lease for any term not exceeding See definition of building lease, s. 2 (x.) A mining lease is not by this section directly authorized, as it involves an abstraction of part of the security, but it can be authorized by agreement (see subs. 14). (4.) Every person making a lease under this section may execute and do all assurances and things necessary or proper in that behalf. (5.) Every such lease shall be made to take effect in possession not later than twelve months after its date. (6.) Every such lease shall reserve the best rent that can reasonably be obtained, regard being had to the circumstances of the case, but without any fine being taken. (7.) Every such lease shall contain a covenant by the lessee for payment of the rent, and a condition of re-entry on the rent not being paid within a time therein specified not exceeding thirty days. (8.) A counterpart of every such lease shall be executed by the lessee and delivered to the lessor, of which execution and delivery the execution of the lease by the lessor shall, in favour of the lessee and all persons deriving title under him, be sufficient evidence. (11), (12), (13). MORTGAGES. Leases. (9.) Every such building lease shall be made in con- s. 18 (9), (10), sideration of the lessee, or some person by whose direction the lease is granted, having erected, or agreeing to erect within not more than five years from the date of the lease, buildings, new or additional, or having improved or repaired buildings, or agreeing to improve or repair buildings within that time, or having executed, or agreeing to execute, within that time, on the land leased, an improvement for or in connexion with building purposes. (10.) In any such building lease a peppercorn rent, or a nominal or other rent less than the rent ultimately payable, may be made payable for the first five years, or any less part of the term. The time during which a peppercorn rent is payable can be shortened: see subs. 13. (11.) In case of a lease by the mortgagor, he shall, within one month after making the lease, deliver to the mortgagee, or, where there are more than one, to the mortgagee first in priority, a counterpart of the lease duly executed by the lessee; but the lessee shall not be concerned to see that this provision is complied with. The penalty for omitting to deliver the counterpart is that the power of sale becomes exercisable (see s. 20 (iii.) post.) The validity of the lease is not affected. (12.) A contract to make or accept a lease under this section may be enforced by or against every person on whom the lease if granted would be binding. (13.) This section applies only if and as far as a contrary intention is not expressed by the mortgagor and mortgagee in the mortgage deed, or otherwise in writing, and shall have effect subject to the terms of the mortgage deed or of any such writing and to the provisions therein contained. A contrary intention will be expressed by the mortgagor and mortgagee in the mortgage deed, whether the mortgagee executes or not. The inere acceptance by him of the security binds him, as in the ordinary case of an agreement not to call in the principal money for a fixed term, or for reduction of interest. Leases. S. 18(14),(15), (14.) Nothing in this Act shall prevent the mortgage (16), (17). deed from reserving to or conferring on the mortgagor or MORTGAGES. the mortgagee, or both, any further or other powers of leasing or having reference to leasing; and any further or other powers so reserved or conferred shall be exerciseable, as far as may be, as if they were conferred by this Act, and with all the like incidents, effects, and consequences, unless a contrary intention is expressed in the mortgage deed. Special provisions allowed, This subs. enables special provisions to be made as to leasing, and leases made in accordance with such provisions will be in the same position as leases authorized by this section. (15.) Nothing in this Act shall be construed to enable a mortgagor or mortgagee to make a lease for any longer term or on any other conditions than such as could have been granted or imposed by the mortgagor, with the concurrence of all the incumbrancers, if this Act had not been passed. (16.) This section applies only in case of a mortgage made after the commencement of this Act; but the provisions thereof, or any of them, may, by agreement in writing made after the commencement of this Act, between mortgagor and mortgagee, be applied to a mortgage made before the commencement of this Act, so, nevertheless, that any such agreement shall not prejudicially affect any right or interest of any mortgagee not joining in or adopting the agreement. The subs. enables the provisions of this section to be applied in case of mortgages made before 1881. (17.) The provisions of this section referring to a lease shall be construed to extend and apply, as far as circumstances admit, to any letting, and to an agreement, whether in writing or not, for leasing or letting. Subs. 17, extending the provisions of this section to agreements whether in writing or not for leasing or letting, must be read in connection with the Statute of Frauds (29 Car. 2, c. 3), ss. 1, 2, and 8 & 9 Vict. c. 106, s. 3, by the combined operation of which enactments a lease for three years or less may be in writing or parol, but a lease for more than three years must be by deed: see Woodfall, L. & T. 79, 116, 11th ed. The effect of the words "so far as circumstances admit," is that subss. 7 and 8 as to covenant, condition of re-entry, and counterpart, do not apply to a parol agreement, and subs. 7 as to covenant does not apply to an agreement in writing, except that there ought to be the nearest approach to a covenant, namely an agreement to pay rent. This section removes serious difficulties in granting leases of mortgaged property (see Woodfall, L. & T. 48 et seq. 11th ed.). S. 18 (17). MORTGAGES. Leases. Parol agreement. Effect of leases under this section. Power is given to the person in possession, whether owner or incumbrancer, to grant, or contract to grant (subs. 12), leases of the kind specified in subs. 2, conformable to the other provisions of this section. These leases will be binding on all other persons interested, and will confer a valid legal term, leaving a legal reversion in the mortgagee. The rent and the benefit of the lessee's covenants (see s. 10, ante) will become annexed to the actual legal reversion, and thus the owner Right of and incumbrancers will be in the same position as if they had all joined reversioner. in granting the lease. The actual legal reversioner will have the same remedies as to recovery of rent, suing on covenants, and re-entry for condition broken, and be in the same position as if he had granted the term, and will be entitled to the counterpart under subs. 8 or 11 as the case may be. The lessee will also, to the extent of covenants or clauses authorized by the mortgage deed to be inserted in the lease (see subs. 14), have the same rights against the actual reversioner and persons claiming under him as if he had made or joined in making the lease (see s. 11, ante); but this section taken alone only authorizes the simple lease, and does not authorize any covenant or provision imposing liability on a mortgagor or mortgagee not a party to the lease. If the mortgagor's power to lease given by this section is excluded, then under a lease made by the mortgagor after the mortgage, the mortgagee has no reversion, the covenants by the lessce are covenants in gross, and cannot be sued upon by the mortgagee if he forecloses or takes possession, nor by a purchaser from him if he sells, unless the mortgagor joins in conveying: see Cuthbertson v. Irving, 6 H. & N. 135; Morton v. Woods, L. R. 3 Q. B. 658, 4 ib. 293. The only remedy of the mortgagee when he takes possession is to eject the lessee. This in most cases is not desired, and is an inadequate remedy, especially in the case of house property, where an essential part of the value of the reversion consists in an available remedy against the tenant on the covenants to paint, repair, deliver up in repair, &c. In the case of agricultural land also, the covenants may be of importance if only to give the right to an injunction. Also if the operation of the Act be excluded, acceptance of rent by the mortgagee, or by a purchaser from him will constitute the lessee simply tenant from year to year at Common Law, without reference to the terms of the lease, unless a special agreement be previously made (Woodfall, L. & T. 49, 11th ed.), and in the case of agricultural Effect of excluding operation of s. 18. |