What is the effect of a clause in a mortgage that states that a mortgagor agrees that the advance of the mortgage is solely to the mortgagees?
Alberta, Canada
The following excerpt is from Two Hills Rental Properties Ltd. v. First City Trust Company, 1982 CanLII 1095 (AB QB):
In meeting the plaintiff’s case herein, the defendant also cites several cases. The first case, Schwartzman v. Great West Life, supra, dealt with a mortgage containing the following clause [quoted at p. 39]: The mortgagor agrees that neither the execution nor registration of this mortgage, nor the advancing in part of the monies shall bind the mortgagees to advance the money or any unadvanced portion thereof but that the advance of the monies or any part thereof from time to time shall be in the sole discretion of the mortgagees.
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