Does a purchaser of a mortgaged property have to indemnify the vendor against his personal liability to the vendor under a covenant to pay contained in the mortgage?

Saskatchewan, Canada


The following excerpt is from Montreal Trust Company v. Boggs, 1915 CanLII 129 (SK QB):

Prior to this statutory provision, as was pointed out by Mr. Justice Stuart in Short v. Graham, 7 W.L.R. 787, a purchaser of mortgaged property was in equity held bound to indemnify the vendor against his personal liability to the mortgagee under the covenant to pay contained in the mortgage. This was because the purchaser assumed the mortgage and retained in his possession the amount of purchase money represented by it, and equity compelled him to appropriate such purchase money to the mortgage, or to hand it over to the mortgagor if he had to pay under his covenant. But it was always open to the purchaser to show, by parol evidence or otherwise, that, on the facts of his particular case, no implication arose that he would indemnify the vendor. Beatty v. Fitzsimmons, 23 O.R. 245.

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