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for payment of the debt in money at one point, can he be said judicially to be unable immediately to pay? The answer to this in the case of an insufficient security is simple: As soon as the security became insufficient; and it may therefore, I think, be said that, prima facie, a mortgagor with a security which has become of insufficient value since the war is within the subsection, prima facie only, because it is of course open to the mortgagee to prove, if he can, that the deficiency is attributable to causes other than the war. But in the case of a sufficient security there is greater difficulty, and a difficulty which at first sight might appear to increase proportionately with the excess value of the security over the mortgage debt. For with a security worth the full amount of the mortgage debt-and a fortiori with a value largely in excess of the mortgage debt-it is impossible, it has been argued, to say the mortgagor is unable to pay. may have to make great sacrifices and submit to very burdensome conditions before he can raise the money elsewhere, but so long as he has property which, ex hypothesi, is worth at least what is demanded of him, no court ought to hold him unable to pay, unless he proves that he cannot raise the money by realization or transfer except on extortionate or quite unreasonable terms. I do not think I am bound to impose that construction on the subsection. To do so would bring about this somewhat startling result: every mortgagor who could only produce an insufficient security would be within the subsection, but no mortgagor whose security was ample could bring himself within it unless prepared to prove that he could not raise the amount required to pay off the debt except on extravagant terms. I think that a mortgagor who satisfies the court that he has no other resources available for payment of the debt, and that he has made bona fide efforts to raise the money either by sale of the mortgaged property or transfer of the security for a fair and reasonable price, or on reasonable conditions, and has failed, and that such

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failure or the inability to sell is attributable to the exceptional circumstances brought about by the war, brings himself within the subsection, and this even though the mortgaged property exceeds in value the debt. But this last consideration is, of course, an element to be taken into account where the discretion under the latter part of the subsection, to which I am now passing, comes to be exercised. The excess value of the security over the debt is a factor which may properly be regarded as a material one alike from the point of the mortgagee and the mortgagor. the one hand, the probability of the mortgagor being able to realize or to obtain a transfer of such a security on reasonable terms, within a comparatively short time, may incline the court to defer the operation of the mortgagee's remedies for a brief period only; on the other hand, the fact that the debt is amply secured may furnish good ground for saying that the mortgagor should be given ample time to extricate himself from the difficulties into which circumstances for which he is in no way responsible have plunged him. The particular weight to be attached to this factor must vary largely in different cases, and, after all, it is but one of 'all the circumstances of the case' which the court has to consider in exercising its discretion. It is undesirable, even if it were possible, to attempt to enumerate all the factors which have to be regarded in determining whether and upon what conditions the rights of the mortgagee are to be suspended. many cases there must be matters peculiar to the particular case, which far outweigh the considerations applicable in ordinary cases, and in such cases orders will be made appropriate to the position brought about by these particular matters."

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In the foregoing case the mortgagee out of possession made an application to exercise his right to realize his security. It appeared that prior to the war all payments had been made punctually and all covenants had been strictly performed and observed. The court said: "Now it is clear that in

this case, if there was no war, the mortgagors would have had to provide for repayment by a transfer. It was argued that they had not brought themselves within the protection of the section. But I am satisfied on the evidence, and having regard to the general conditions of which I am bound to take judicial notice, that it is almost impossible to obtain the necessary advance of money by any transfer of the mortgage except on terms which would leave the borrower in a position which is many times worse than that which he occupies in existing circumstances. I am quite satisfied that they have established a case within the section."

It was held in Charles Schofield & Co. v. Maple Mill (1918) 34 Times L. R. 423, that the proper course was not to suspend but to annul the contract, where a contract to do work in the erection of a mill, consisting partly in the flooring of the mill with maple boards, became impossible of performance, owing to a prohibition of the importation of maple, and application was made under the statute that the contract should be suspended or annulled.

(b) Annulment or suspension of lease. Section 2 of the (Emergency Powers) Amending Act 1916 (6 & 7 Geo. V. chap. 13) reads as follows: "Any officer or man of his Majesty's Forces who is the tenant of any premises under a tenancy from year to year, or for any longer period, may apply to the county court . for leave to determine such tenancy, and, upon any such application being made, the court may, in its absolute discretion after considering all the circumstances of the case and the position of all the parties, by order authorize the applicant to determine the tenancy by such notice and upon such conditions as the court thinks fit, and thereupon such tenancy may, notwithstanding any provision in the tenancy agreement or lease, be determined accordingly."

In Tozer v. Viola (1917) 117 L. T. N. S. 748, the court said: "The purpose of this statute was to relieve officers and men engaged in his Majesty's Forces from the burden of sub

sisting tenancies, they having to leave their work, or to leave their farm, or to leave their business premises, and engage in the war. The object was to bring their tenancies to an end, and so relieve them from the anxiety of their obligations under tenancy agreements. That is the obvious manifest purpose of this act, and in construing the statute no further effect should be given to it than the words require except so far as is necessary to achieve the purpose of the legislature."

Under this section the court is empowered to adjudicate the rights and liabilities of all the parties to the lease. Revill v. Bethell [1918] 1 K. B. 638, 87 L. J. K. B. N. S. 787, 118 L. T. N. S. 303, 34 Times L. R. 323, 62 Sol. Jo. 438, 16 L. G. R. 443; Daniell v. Carter [1918] W. N. 380.

In Revill v. Bethell, supra, the court said: "I can see no reason why he should not adjudicate upon the rights and liabilities as between all the parties. Nor do I see any reason

why the conditions upon which the tenancy is to be determined should be limited to conditions onerous upon the tenant, nor why they should not include, in a case where the circumstances justify it in the opinion of the county court judge, relief from arrears of rent and past breaches of covenant. In my opinion, the county court judge had jurisdiction to make the order."

So, in Daniell v. Carter, supra, the court granted leave to the volunteer to determine his lease, but ordered him to give the landlord six weeks' notice, and to pay the rent until the premises were vacated. An appeal from so much of the order as determined the tenancy of the wife was dismissed.

But an order made under the authority of 2, permitting a tenant to determine his lease, does not necessarily relieve the tenant of liability on the covenants contained in the lease. Thus, in Tozer v. Viola, supra, it appeared that the defendant had subleased the premises at a profit for a long term, and that the plaintiff (sublessee) had assigned the lease to one Spero. It also appeared that the defendant had licensed the plaintiff to assign the

lease only on the condition that the assignee would covenant with the plaintiff to pay the rent reserved by, and perform covenants and conditions contained in, the lease. The effect therefore was that, notwithstanding the license, the plaintiff remained liable for the rents and the covenants to the defendant, but that the assignee became directly liable, by the privity of contract. Spero made an application under § 2 to determine the lease. The order was granted, which in part stated that "nothing in this order contained shall affect any question as to the respective rights and liabilities of the respondent and the said William Charles Tozer in respect of the premises under the hereinbefore-mentioned lease, assignment, and license respectively." The present action was brought against the defendant, in which it was claimed that the tenancy had been determined, and that the plaintiff had been discharged from all liability under the lease. The lower court made the following order: "This court doth declare that as from the 25th March, 1917, the indenture of lease dated the 5th June, 1907, in the pleadings mentioned, and the term thereby created, have been determined, and that the plaintiff has been discharged from all further or future liability under the covenants therein contained." On appeal the court said: "What is it that the plaintiff Tozer relies upon in saying that the lease has been determined, and that he has been discharged from liability to the defendant? Simply the order of the county court judge-there is nothing else and the notice assumed to have been given by the tenant thereunder, determining his tenancy. But the order of the county court judge was made upon terms, and one of those terms was that 'nothing in this order contained shall affect any question as to the respective rights and liabilities of the respondent and the said William Charles Tozer in respect of the premises under the hereinbefore-mentioned lease, assignment, and license respectively.' In my judgment it is not open for Tozer to claim the benefit of an order . . which in terms contains

the statement that nothing in it is to affect the question of his liabilities

under the lease. The whole foundation of Tozer's claim is that, under and by virtue of this order and the notice determining the tenancy, given in pursuance of it, he has been discharged from all further liability.

In my opinion that is not so. The present statute provides that the man who is the tenant of any premises may apply, and then the court may authorize the applicant to determine the tenancy upon terms. Having regard to the terms which are embodied in this order, I am satisfied that the liability of lessor and lessee as between themselves continues; the lessee remains liable to the lessor, and the order sanctioning the termination of the tenancy has not the effect which is contended for it. It has not released the original sublessee from his liability to the original sublessor."

But when the court exercises the authority permitted under § 2, notice should be served on all the parties. Thus, in Tozer v. Viola (1917) 87 L. J. Ch. N. S. 90, 117 L. T. N. S. 748, supra, the court said: "The act gives wide powers to the county court judge. It says: "The court may in its absolute discretion, after considering all the circumstances of the case and the position of the parties, authorize the applicant to determine the tenancy by such notice and upon such conditions as the court thinks fit.' I am of opinion that that confers the fullest jurisdiction upon the county court judge in considering the matter, in his absolute discretion to impose conditions. The act says so. But, in my judgment, the county court judge ought to take care that notice of the application is given to and served upon all parties who are or may be affected by any order that he proposes to make, and that 'after considering all the circumstances of the case and the position of all the parties' means that he should see that notice is served, before making any order under that section, upon all parties who are or may be affected-that is to say, all parties interested in the premises, or having or claiming an interest in the prem

ises which are or may be affected by the order which he is about to make." In a concurring opinion, Warrington, L. J., said: "Having regard to the very wide powers given to the county court judge, of affecting the rights and the position of parties who may be interested in the premises subject to the tenancy in question, it is eminently desirable that the county court judge should have before him on any application under § 2 of the act all those parties, so that he may hear what they have to say, and, after hearing what they have to say, settle the conditions upon which the soldier's application should be acceded to."

Act Act

(c) Effect of Defense of Realm Act. The Defense of the Realm [Courts (Emergency Powers) 1917] was a branch of the emergency legislation which had for its object the more successful prosecution of the World War. It was especially directed against the activities of suspicious persons, the control of food, and the conservation of labor and materials. Under that act, in order to conserve labor and materials, the completion of buildings in the course of construction could be prohibited. To guard against any hardship that might befall the parties to any contract, by reason of an order prohibiting the completion of a building, § 1, subsec. 2, of the act provided as follows: "Where, upon an application by any party to any contract whatsoever, the court is satisfied that, owing to any restriction or direction imposed or given by or in pursuance of any enactment relating to the defense of any regulation made thereunder. any term of the contract cannot be enforced without serious hardship, the court may, after considering the circumstances of the case and the position of the parties to the contract and any offer which may have been made by any party for the variation of the contract, suspend or annul the contract or stay any proceedings for the enforcement of the contract or any term therefor or any rights arising thereunder on such conditions (if any) as the court may think fit." Subsection 3 provided that "this section shall be construed as one of

the Courts (Emergency Powers) Act 1914."

In order to bring a case within the act it is necessary to show that the nonfulfilment of the contract was due to a requirement of a government department. Herman v. Morris [1919] W. N. 152, 35 Times L. R. 328.

An interesting question arose in Boyce v. Hill [1918] 2 K. B. 616, as to the meaning of the words "any contract whatsoever," in § 1, subsec. 2. That section provided that "upon an application by any party to any contract whatsoever the court

may suspend," etc., and by subsec. 3 it was to be construed as one of the emergency powers under the Act of 1914. The 1914 act, supra, prohibited the payment of a sum of money, etc., and provided that "this subsection shall not apply to any sum of money (other than rent not being rent at or exceeding £50 per annum) due and payable in pursuance of a contract made after the beginning of the fourth day of August, nineteen hundred and fourteen." In the case referred to it appeared that the rent was in excess of £50 per annum. It further appeared that the construction of the building was stopped by an order under the Defense of the Realm Act when the structure was half completed. The plaintiff asked relief under the act. Lush, J., said: "This case raises a question of considerable importance as to the construction of § 1, subsec. 2, of the Courts (Emergency Powers) Act 1917. . . . Now subsec. 1 deals in terms with a contract for the construction of a building, or for the supply of materials for a building, entered into before the war, and it provides for relief against enforcement of the contract where, owing to difficulties in procuring the necessary materials or labor, it could not be enforced without serious hardship. Then comes the subsection which I have to construe, subsec. 2: 'Where upon an application by any party to any contract whatsoever the court is satisfied,' etc., I may say in pass

ing that I think the words, 'or any term thereof,' are to be read along with the words, 'suspend or annul the

contract,' as well as with the words, 'stay any proceedings for the enforcement: Pausing there, one would have thought the matter was clear. After dealing, in subsec. 1, with a particular kind of contracts,-building contracts made before the war,—the legislature proceeds, in subsec. 2, to deal with 'any contract whatsoever.' Prima facie those general words would apply to all contracts of whatever kind, and whether made before the war or after. But it is said that having regard to subsec. 3, which provides that the section 'shall be construed as one with the Courts (Emergency Powers) Act 1914,' subsec. 2, notwithstanding its wide language, must be read as limited to the particular class of contracts dealt with by the earlier act, namely, contracts made before the war and tenancy contracts at a rent below £50, made after the war. It is contended that it would be absurd to suppose the legislature, after expressly enacting that relief should not be granted in the case of post-war tenancy contracts at a rent over £50 (under which head it is said the present contract falls), should in the same act proceed to extend the relief to the class of contracts which it had already excluded. Further, it was contended that the words 'any contract whatsoever' in subsec. 2 did not include tenancy contracts at all, for that if they did one would be faced with this difficulty, that, on the one hand, the court is empowered to annul or suspend the contract as it thinks fit, and, on the other hand, has to take cognizance of the fact that the legislature has itself provided in § 2 for what is to be done with respect to the very contracts against which the court is asked to give relief in § 1, subsec. 2. In my opinion, neither of those contentions is sound. I do not think that, because the two acts are to be read together, one is forced to the conclusion that § 1, subsec. 2, of the later act, cannot be read as applying to post-war contracts of tenancy at a rent of over £50. Section 1 of the earlier act no doubt provided for relief against such contracts only in the event of their having been made before the war. But

the reason for affording relief exists just as much in the case of a contract of tenancy entered into after the war, where the difficulty of carrying out the contractises from restrictions imposed by the government after the contract was entered into. In both cases the tenant has been placed in a position of difficulty by reason of unforeseen circumstances which have arisen in consequence of the outbreak of war, and I cannot see any reason why the legislature should not have intended to apply the scheme of relief to the one class of tenants just as much as to the other. With regard to [the] second argument, that § 2 expressly provides that if by reason of restrictions of this kind a tenant is unable to carry out his contract he shall not be liable to any mandatory order or injunction or to pay any sum of money or incur any forfeiture, and that it would be unreasonable to suppose that the legislature, having thereby provided that the contract, although broken, shall be left in force, should give the court power to order that the contract shall be suspended or annulled, it is to be observed that § 2 only applies to a limited class of breaches of a contract of tenancy; but to that extent there is admittedly a difficulty. But there are many ways in which I think that difficulty can be dealt with, though I am not now concerned to define them. I see no ground on that account for refusing to give effect to the plain terms of § 1, subsec. 2. The words 'any contract whatsoever,' in my opinion, mean what they say."

The power of the court to suspend or annul is limited to an entire contract. The relief from a particular term or right thereunder must be by a stay of proceedings. Metropolitan Electric Supply Co. v. London [1919] 1 Ch. 357, wherein the court said: "Now, on the plain grammar of the words used (and it is to be remembered that precisely the same words are used in both subsec. 1 and subsec. 2, so that the language is quite deliberately chosen), there are two distinct powers given to the court-namely, first, a power to suspend or annul a