Problem
Paramount Life Insurance Co. v. Hill [1986] A.J. No. 1111 (C.A.)
Hill had been turned down by Paramount Life Insurance Company when he tried to obtain a loan to be secured by a mortgage on the house that his wife owned. He then sold the property to his business partner and had his partner arrange for a loan with Paramount to be secured by a mortgage on the property. This mortgage was granted. The problem was that he had not obtained his wife's consent for the sale, but had forged her signature on the documents. Neither the partner nor the insurance company knew this fact.
When Mr. Hill died, Paramount foreclosed, as it was no longer receiving mortgage payments. Mrs. Hill now discovered what her husband had done; she fought the foreclosure action, claiming she was still entitled to the property because of the fraudulent sale. Assuming this took place in a land titles jurisdiction, will she be liable for the mortgage payments? What if it were in a jurisdiction with a registration system? Show explanation.