(a) Hayes v. Hayes, 1881, 8 O.P.R. 546.

Sec. 241. Subsequent accounts and appointment of new day for redemption. If the first subsequent encumbrancer fails to redeem within the period of six months allowed to him for that purpose an order may be obtained in chambers declaring him to be foreclosed. If he redeems he may proceed with the action for the purpose of foreclosing the encumbrancers subsequent to himself, if any, and the owner of the ultimate equity of redemption. In either case it will be necessary that a new day should be appointed for redemption by the next encumbrancer, or the owner of the equity as the case may be, and that a new account should be taken of the amount to be paid on such new day. In the case of the first subsequent encumbrancer having redeemed, the amount so to be paid will include the amount owing on his mortgage as well as the amount paid by him to redeem the plaintiff's mortgage (c).

(b) Federal Life Assurance Co. v. Stinson, 1906, 13 O.L.R. 127, affirmed, 1907, 39 Can. S.C.R. 229, sub nom. Scott v. Swanson.

(c) See, for instance, Federal Life Assurance Co. v. Stinson, supra.

In England it is the practice on taking the subsequent account, to allow interest on the gross sum of principal, interest and costs, found due by the last preceding report (d), but in Ontario it has not been customary to allow interest upon interest with respect to an encumbrancer's own claim unless the mortgage expressly provides therefor. Where, however, a subsequent encumbrancer pays off a prior encumbrance, he is entitled to interest on the aggregate amount paid by him for principal, interest and costs, the interest on the principal being computed at the rate reserved in his own encumbrance, that on the interest and costs at the statutory rate only (e).

Where the plaintiff after the taking of the account paid a sum for insurance under a provision in the mortgage deed, the master in taking a subsequent account allowed the sum together with interest thereon (f).

If there are several successive encumbrancers who have proved their claims in the master's office, it will be necessary to have successive new accounts taken and successive new days appointed for redemption until finally an account is taken and a day is appointed for redemption by the owner of the ultimate equity of redemption.

It is provided by rule 477 as follows:

477. Subsequent accounts shall, from time to time, be taken, subsequent costs taxed, and necessary proceeding had, for redemption by, or foreclosure of, the other parties entitled to redeem the mortgaged premises, as if specific directions for all these purposes had been contained in the judgment.

If a subsequent encumbrancer does not redeem pursuant to the report, it is not usually necessary that any subsequent proceedings should be taken in the master's office or that a new report should be made by him, because by the order made in chambers declaring the first subsequent encumbrancer foreclosed a new day may be appointed for redemption by the next encumbrancer and a new amount named including interest to the day appointed. But if the subsequent accounts are of such nature as to require notice to be given to the defendants so that they may attend on the taking of the accounts, or if a subsequent encumbrancer redeems the plaintiff, the proper procedure would be to obtain an appointment from the master to proceed with the reference (g).

(d) Elton v. Curteis, 1881, 19 Ch.D. 49; cf. Jacob v. Earl of Suffolk, 1728, Mosely 27.

(e) McMaster v. Hector, 1872, 8 C.L.J. 284; Holmested, Ontario Judicature Act, 4th ed., p. 1069.

(f) Bethune v. Calcutt, 1853, 3 Gr. 648.

In order to obtain an order declaring a subsequent encumbrancer foreclosed, the plaintiff must file a certificate of the local manager or agent of the bank to which the money was directed to be paid, verified by affidavit of execution (h), and an affidavit of the plaintiff proving non-payment of the debt and that the plaintiff has not been in possession or in receipt of the rents and profits of the land, or as the case may be (i).

According to the former practice a period of three months was given to each subsequent encumbrancer after the first, but it is now proved by rule 489 that when it becomes necessary to fix a date for redemption after the lapse of the first period of six months the further time allowed shall be one month.

If the first subsequent encumbrancer redeems the plaintiff's mortgage he will be entitled to a conveyance of the mortgaged property or an assignment of the plaintiff's mortgage, at his option.

(g) For forms of report on taking subsequent accounts in a case where a subsequent encumbrancer has not redeemed, and in a case where he has redeemed, respectively, see Bell & Hoyles, Practice Forms, nos. 644, 645; Holmested & Langton, Forms and Precedents, 2nd ed., nos. 1076, 1079.

(h) See Bell & Hoyles, Practice Forms, nos. 646, 647; Holmested & Langton, Forms and Precedents, 2nd ed., nos. 596, 597.

(i) See Bell & Hoyles, Practice Forms, nos. 637, 638, 639; Holmested & Langton, Forms and Precedents, 2nd ed., nos. 598, 599, 600.

It is provided by rule 482 as follows:

482. Subject to the provisions of The Mortgages Act, upon payment of the amount found due, the mortgagee shall, unless the judgment otherwise directs, assign and convey the mortgaged property to the party making the payment, or to whom he may appoint, free and clear of all encumbrances done by him, and shall deliver up all deeds and writings in his custody or power relating thereto.

The reference in the rule just quoted is to s. 3 of the Mortgages Act, under which the person paying is entitled to require the mortgagee to assign the mortgage instead of conveying the mortgaged property (j).

The proceedings may then be continued at the instance of the first subsequent encumbrancer instead of the plaintiff. The next encumbrancer may in turn redeem the two prior mortgages and himself continue the proceedings for the purpose of foreclosing the encumbrancers, subsequent to his own, if any, and the owner of the ultimate equity of redemption.

It is difficult to imagine a procedure more perfectly adapted to give effect successively to the rights of mortgagees and owners of the equity of redemption according to their several priorities than the equitable procedure in a foreclosure action embodied in modern rules of practice. Every encumbrancer in turn has his opportunity of acquiring the mort-gaged property by paying all charges prior to his own and foreclosing all claims subsequent to his own, subject to the right of any person having a subsequent interest in the property to redeem -the price of redemption in every case being the total of the claims of all prior encumbrancers who have proved their claims in the master's office together with inter-terest to the time of payment and the costs of the prior encumbrancers.

(j) See chapter 20, Right to Assignment of the Mortgage.