If money is advanced on a first mortgage in instalments, the mortgagee, in making subsequent advances pursuant to the terms of the mortgage, is entitled to act on the supposition that no second mortgage has been made on the property and if a second mortgage has been made he has priority over it with respect to advances made subsequent to the second mortgage but without notice of it up to the full amount for which the first mortgage is expressed to be security. He is not entitled to priority with respect to an advance made after he receives notice of the second mortgage, but as to such advance his security is subject to whatever rights the second mortgagee has at the time of the advance (v).

Ch. 678. As to imputed notice, see chapter 7. Equitable Principles governing Priorities, Sec. 66.

(u) The Judicature Act, R.S.O. 1914, c. 56, s. 36. In the case of the equitable mortgagee the action might be brought for specific performance of the contract to give a formal mortgage implied in the deposit of title deeds. Carter v. Wake, 1877, 4 Ch. D. 605, at p. 606. An equitable mortgagee by deposit may in an action for foreclosure or sale obtain an injunction restraining the mortgagor from conveying the legal estate. London and County Banking Co. v. Lewis, 1882, 21 Ch. D. 490; cf. chapter 5, Equitable Mortgages, Sec. 46.

(v) Hopkinson v. Rolt, 1861, 9 H.L.C. 514, 3 R.C. 523; Bradford Banking Co. v. Briggs, 1886, 12 App. Cas. 29; Union Bank of Scotland v. National Bank of Scotland, 1886, 12 App. Cas. 53. The principle would apply in the case of any conveyance of the equity of redemption subsequent to the first mortgage.

It was decided in Pierce v. Canada Permanent Loan Co. (w) that the priority of the first mortgagee with respect to an advance made after a second mortgage but without notice of it was not affected by the fact that the second mortgage was registered before the making of such advance (x). The registration would under s. 75 of the Registry Act constitute notice to any person "claiming any interest in the land, subsequent to such registration," but the first mortgagee's interest in the land was held to be prior not subsequent to the registration of the second mortgage.

While the case just referred to was pending the legislature of Ontario passed a statute declaring the law for the future, to the same effect (y). The statute is now embodied in R.S.O. 1914, c. 124, s. 74, as follows:

74. Every registered mortgage shall as against the mortgagor, his heirs, executors, administrators, assigns and every other person claiming by, through or under him, be a security upon the land comprised therein to the extent of the money or money's worth actually advanced or supplied under the mortgage, not exceeding the amount for which such mortgage is expressed to be a security, notwithstanding that the money or money's worth, or some part thereof, was advanced or supplied after the registration of a conveyance, mortgage or other instrument affecting the mortgaged lands, executed by the mortgagor, his heirs, executors or administrators, and registered subsequently to such first-mentioned mortgage, unless, before advancing or supplying such money or money's worth, the mortgagee in such first-mentioned mortgage had actual notice of the execution and registration of such conveyance, mortgage or other instrument; and the registration of such conveyance, mortgage or other instrument after the registration of such first mentioned mortgage, shall not constitute such actual notice.

(w) 1894, 25 O.R. 671, affirmed, 1896, 23 O.A.R. 516. The first mortgage was registered before the registration of the second mort-gage, but the decision would have been the same if the first mortgage had been unregistered and the second mortgagee had had notice of it.

(x) A different rule applies as to an advance made after the registration of a lien under the Mechanics and Wage Earners Lien Act, so that on this account a search should be made in the registry office at the time of each advance. See Sec. 79.

(y) 57 V. c. 34, s. 1.

The same principle would apply to a writ of execution against lands placed in the sheriff's hands (z). A writ of execution binds the lands from the time of the delivery thereof to the sheriff for execution (a). It is subject to mortgages or other interests affecting the land created before the time (b), and attaches only to the real interest of the execution debtor in the lands (c). It has, however, priority over mortgages or other interests subsequently created (d).

Even if a first mortgagee has bound himself without qualification to advance the mortgage money, he is not entitled to priority with respect to advances made after he has received notice of a subsequent mortgage (e) or execution.

(z) It is nevertheless customary and prudent to search both in the registry office and in the sheriffs office at the time of each advance so as to avoid any question as to the mortgagee's having actual notice of a subsequent instrument or execution.

(a) The Execution Act, R.S.O. 1914, c. 80, s. 10; Beekman v. Jarvis, 1847, 3 U.C.R. 280; Converse v. Michie, 1865, 16 U.C.C.P. 167. See also chapter 10, The Land Titles Acts, Sec. 96.

(b) Even if the execution is placed in the sheriff's hands before the registration of the mortgage. Russell v. Russell, 1881, 28 Gr. 419.

(c) Hamilton Provident and Loan Society v. Gilbert, 1884, 6 O.R. 434; In re Trusts Corporation of Ontario and Boehmer, 1894, 26 O.R. 191; cf. Case v. Bartlett, 1898, 12 M.R. 280 (rights of creditor under registered judgment held' to be' subject to prior unregistered charge); Oxley v. Culton, 1899, 32 N.S.R. 256 (execution subject to unregistered interest of cestui que trust).

(d) As to the distribution of the amount realized by a sheriff on an execution against lands where there are executions both prior and subsequent to a mortgage, see the Creditors' Relief Act, R.S.O.

1914, c. 81, s. 33; Roach v. McLachlan, 1892, 19 O.A.R. 496; Breit-haupt v. Marr, 1893, 20 O.A.R. 689; Union Bank of Canada v. Taylor,

1915, 33 O.L.R. 255, 23 D.L.R. 679; Re Harrison, 1915, 35 O.L.R. 45, 26 D.L.R. 157.

(e) West v. Williams, [1899] 1 Ch. 132. In the case of a building loan or any loan which is to be advanced in instalments, it is a convenient practice to have a collateral unregistered agreement instruments were executed or upon the legal or equitable nature of the claims themselves. In the second place, a person who is prima facie entitled to priority by reason of the prior registration of the instrument under which he claims is not deprived of the benefit of such priority by the fact that he has constructive notice of an earlier claim, actual notice being required in order to postpone his claim.

In West v. Williams (f) Lindley, M.R. said:

"When a man mortgages his property he is still free to deal with his equity of redemption in it, or, in other words, with the property itself subject to the mortgage. If he creates a second mortgage he cannot afterwards honestly suppress it, and create another mortgage subject only to the first. Nor can any one who knows of the second mortgage obtain from the mortgagor a greater right to override it than the mortgagor himself has. On the other hand, the first mortgagee has no right to restrain the mortgagor from borrowing money from some one else, and from giving him a second mortgage, subject to the first. Even if the first mortgagee has agreed to make further advances on the property mortgaged to him, the mortgagor is under no obligation to take further advances from him and from no one else, and if the mortgagor chooses to borrow money from some one else, and to give him a second mort-gage, the mortgagor thereby releases the first mortgagee from his obligation to make further advances. Whatever prevents the mortgagor from giving to the first mortgagee the agreed security for his further advances releases the first mortgagee from his obligation to make them. A plea of exoneration and discharge before breach would be a good defence at law to an action by the mortgagor against the first mortgagee for not making further advances. If, notwithstanding his release, the first mortgagee makes further advances, with notice of a second mortgage, he is in no better position than any one else who does the like."