Although the term "legal mortgage" is inappropriate to a mortgage under the land titles system (o) and is not in fact in common use, the term 'equitable mortgage," which under the old system is used in contradistinction to a legal mortgage, is under the new system commonly used to indicate a mortgage or charge other than a registered or statutory mortgage. Under the old system any mortgage subsequent to a legal mortgage is necessarily an equitable mortgage (p), but under the new system a second mortgage is of the same nature as a first mortgage (q). In other respects, however, the ordinary rules as to equitable mortgages prevail under the land titles system (r). Thus, an equitable mortgage may be created by an agreement to execute a mortgage or to charge money on land or by deposit of documents of title (s).

Under the English Land Transfer Acts of 1875 and 1897, upon the former of which the Ontario statute was based, it has been held that the legal estate is not necessarily in the registered owner or mortgagee. As between unregistered charges the possession of the legal estate may confer priority, subject to the overriding power of the statute in favour of a registered disposition, and they take effect between themselves in the same manner as if the land was not registered (t).

(n) [1905] A.C. 176.

(o) A legal mortgage, strictly speaking, means a mortgage by which the legal estate is transferred (see chapter 2, Mortgage at Common Law, Sec. 11), whereas a mortgage under the land titles system operates by way of security merely (see Sec. 93, supra).

(p) See chapter 5, Equitable Mortgages, Sec. 41.

(q) Except perhaps in Manitoba, where by the Real Property Act, s. 116, a first mortgagee has the same rights and remedies as if the legal estate were vested in him subject to the usual redemise clause giving the mortgagor the right to possession until default. See Sec. 99, infra.

(r) Thom, Canadian Torrens System, pp. 274 ff.

(s) See chapter 5, Sec. Sec. 44, 45.

A caveat may be filed in Manitoba by " any person claiming an estate or interest in land, mortgage or incumbrance under the new system," in Alberta by "any person claiming to be interested .. in any land, mortgage or incumbrance," in Saskatchewan and the Northwest Territories by "any person claiming to be interested in land" (u). The effect of the filing of a caveat is that so long as it remains in force the registrar is prohibited from registering any instrument affecting the land, mortgage or incumbrance "unless such instrument is expressed to be subject to the claim of the caveator" (Manitoba, Alberta) or "except subject to the claim of the caveator" (Saskatchewan, Northwest Territories) (v).

In Saskatchewan and the Northwest Territories, it will be observed, the statutes do not expressly authorize the filing of a caveat claiming an interest in mortgages and incumbrances but in view of the wide definition of "land" contained in each of the statutes it is difficult to see why such a caveat should not be filed (w).

In Manitoba there is a special provision (x) as follows:

The filing of a caveat by the district registrar, or by any caveator, shall give the same effect, as to priority, to the instrument or subject matter on which said caveat is based, as the registration of any instrument under this act; and the district registrar may, in his discretion, allow the withdrawal of such caveat at any time, and the registration, in lieu thereof, of the instrument under which the person on whose behalf such caveat was filed claims his title or interest; and, if the withdrawal of such caveat and the registration of such instrument be simultaneous, the same priority shall be preserved to all rights under the instrument as the same rights were entitled to under the caveat.

(t) Capital and Counties Bank v. Rhodes, [1903] 1 Ch. 631.

(u) Man. s. 138; Alta. s. 84; Sask. s. 128; N.W.T. s. 131. In Ontario (s. 72) a caution may be lodged by "any person interested in any way in any land or charge registered in the name of any other person." See Re Clagstone and Hammond, 1897, 28 O.R. 409.

(v) Man. s. 140; Alta. s. 87; Sask. s. 134; N.W.T. s. 134; cf. Ont. s. 73.

(w) Scott, Torrens System Mortgages, p. 285.

(x) Man. s. 151.

In Alberta (y) there is a provision substantially in the same terms except that after the words "claims his title or interest" there follow the words "provided that such instrument is an instrument that may be registered under this Act" (z).

It has been held under the Saskatchewan statute that the lodging of a caveat in the land titles office prevents the acquisition of any legal or equitable interest in the lands in question adverse to or in derogation of the claim of the caveator. A company being the registered owner of land, made a written agreement to sell it to P., who assigned his interest in the contract to G., who then agreed to transfer the equitable interest thus acquired to the plaintiff. Subsequently, without knowledge of the plaintiff's interest, the defendants acquired a like interest from G. A caveat was then lodged by the plaintiff, and subsequently, without enquiry and without actual notice of the caveat, the defendants received an assignment of the original agreement of sale to P. and obtained the company's approval of it. In an action for specific performance it was held that as the purchasers from G. were on equal terms as to equities except that the plaintiff had priority in point of time when his caveat was lodged, his priority was preserved by the lodging of the caveat, and that the subsequent advantage which would otherwise have been secured by the defendants by virtue of the company's approval was postponed to any equitable right which the plaintiff might have to a transfer (a).

(y) Alta. s. 97.

(z) A similar proviso was formerly contained in the Manitoba statute.

It has also been held in Saskatchewan that a transferee for value without notice of an earlier equitable charge takes subject to the charge if a caveat is lodged in respect of it after the payment of the purchase money and the execution of the transfer but before registration of the transfer (b).

Under the Alberta statute that one of two equitable interests in respect of which a caveat is first filed has priority over the other notwithstanding that the latter is prior in time. Therefore, where a duplicate certificate of title has been deposited with one person by way of equitable mortgage and subsequently a registerable mortgage is made in favour of another person, who is unable, however, to register the mortgage because the duplicate certificate is not in the land titles office, the filing of a caveat by the holder of the registerable mortgage will give him priority over the equitable mortgagee (c).