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conveyance of the property to the creditor, subject only to its being defeated if the debt should be paid at the time fixed—an arrangement to which the law has attached See also:

PECULIAR

peculiar incidents designed to carry out its real See also:

OBJECT

object. The See also:

HISTORY

history of mortgage transactions in See also:

ROMAN

Roman law shows three well-marked stages. ' In the beginning the See also:

ESTATE (through O. Fr. estat, mod. flat, from Lat. status, state, condition, position, stare, to stand)

estate was conveyed absolutely to the creditor, who made a See also:

covenant (fiducia) to reconvey it when the debt should be paid. All the See also:

INTEREST

interest, however, in the meantime passed from the debtor to the creditor, and should the latter refuse to reconvey there was no remedy to the See also:

ORIGINAL

original owner except a personal See also:

ACTION

action. In the second See also:

STAGE (Fr. 6/age; from Lat. stare, to stand)

stage (that of pignus) the property did not pass to the creditor; he merely received See also:

possession of the thing pledged, together with certain rights of See also:

sale, &c., in the event of See also:

PAYMENT (Fr. paiement, from payer, to pay; Lat. pacare, to appease, pax, peace)

payment not being made at the time appointed. Lastly, without parting with the possession even of the pledge the debtor could create a See also:

LIEN

lien or charge (hypotheca) over it in favour of the creditor, who See also:

Coke on See also:

Littleton gives the following explanation of the meaning: " It seemeth that the cause why it is called mortgage is, for that it is doubtful whether the feoffor will pay at the See also:

day limited such summe or not, and if he doth not pay, then the See also:

LAND

land which is put in pledge upon See also:

CONDITION (Lat. condicio, from condicere, to agree upon, arrange; not connected with conditio, from condere, conditum, to put together)

condition for the payment of the money is taken from him for ever, and so dead to him upon condition, &c. And if he doth pay the money, then the pledge is dead as to the See also:

TENANT (from Lat. tenere, to hold)

tenant, &c."acquired thereby a right on failure of payment to follow the thing by real action against the possessor, whosoever he might be, and to repay himself from the proceeds of his sale. The mortgage of English law is the result of two distinct influences. Its origin and See also:

FORM (Lat. forma)

form belong to the See also:

COMMON

common law; the restrictions by which it is made to serve the purpose of a See also:

SECURITY (Lat. securus, free from care, safe)

security only, and nothing more, belong to the courts of See also:

EQUITY (Lat. aequitas)

equity. In. the See also:

eye of the common law the mortgagee was the owner of the estate conveyed in the mortgage; in equity the mortgagor remains the real owner, and the mortgagee is merely an encumbrancer. A, the owner of land in See also:

FREEHOLD

freehold, conveys to B and his heirs, with a proviso that on repayment of money See also:

LENT (0. Eng. lenclen, " spring," M. Eng. lenten, lente, lent; cf. Dut. lente, Ger. Lenz, " spring," 0. H. Ger. lenzin, lengizin, lenzo, probably from the same root as " long " and referring to " the lengthening days ")

lent by B to A, on a future day, with interest until payment, B or his heirs will reconvey the estate to A and his heirs, and that, until See also:

DEFAULT (Fr. defaut, from defailler, to fail, Lat. fallere)

default be made in payment, A and his heirs may hold without interruption from B and his heirs.

This is a common mortgage of land, and at law, after failure of payment, the land belonged absolutely to the mortgagee, while in the meantime, before payment, the legal estate was considered to be vested in him, subject only to being defeated by payment at the proper time. The See also:

court of See also:

CHANCERY

chancery first interfered in the reign of See also:

James I. to See also:

DECREE (from the past participle, decretus, of Lat. decernere)

decree a redemption after See also:

FORFEITURE (from " forfeit," originally an offence, and hence a fine exacted as a penalty for such; derived through the O. Fr. forfeit, from the late Lat. foris factum, a trespass, that which is done foris, outside)

forfeiture, and a See also:

case in the reign of See also:

Charles I. decides that payment after forfeiture has the same effect as payment before. The right of the mortgagor to redeem his estate after it has been forfeited, according to the terms of the See also:

DEED (in O. Eng. dead, from the stem of the verb " to do ")

deed, is called his equity of redemption. No agreement between the parties was suffered to oust the See also:

jurisdiction of the court, or to deprive the debtor of his equity of redemption. And this equity, at first regarded as a See also:

mere right of the debtor, became established in course of time as an estate in land which descended to the heirs of the mortgagor. On the other See also:

hand, the interest of the mortgagee is See also:

PART

part of his personal estate, and passes to his executor and not to his See also:

HEIR (Lat. heres, from a root meaning to grasp, seen in heres or erus, master of a house, Gr. xeip, hand, Sans. hat ana, hand)

heir. In spite of the terms of the mortgage, the owner of the land is still the owner, and the mortgagee is a creditor for the money he advanced and the interest thereon. It may be a question whether a given deed is a conveyance or a mortgage, and the court, in deciding, will look at all the circumstances of the case, and will treat it as a mortgage when it was the real intention of the parties that it should operate as a security only. Thus, if the See also:

price was grossly inadequate, if the purchaser was not let into immediate possession, if he accounted for the rents to the grantor, retaining an amount See also:

EQUIVALENT

equivalent to interest, if the expense of. the deed was See also:

BORNE, KARL LUDWIG (1786–1837)

borne by the grantor, there would be See also:

REASON (Lat. ratio, through French raison)

reason to believe that the conveyance was only meant to be a mortgage. And " once a mortgage, always a mortgage "; no subsequent agreements can See also:

CHANGE (derived through the Fr. from the Late Lat. cambium, cambiare, to barter; the ultimate derivation is probably from the root which appears in the Gr. «a urmu', to bend)

change its See also:

CHARACTER (Gr. xapareri7p, from xap&crew, to scratch)

character. A mortgagee may, however, on default of payment See also:

FILE

file a See also:

BILL

bill of See also:

FORECLOSURE

foreclosure requiring the mortgagor to pay the amount of the debt with interests or See also:

COSTS

costs by an appointed day, or submit to be deprived of his equity of redemption. The effect of failure to pay by the time appointed would be to make the mortgagee See also:

ABSOLUTE (Lat. absolvere, to loose, set free)

absolute owner of the estate; but the court in any foreclosure suit may, at the See also:

REQUEST, LETTERS OF

request of either See also:

side, See also:

order a sale instead of a foreclosure.

And a See also:

POWER [WILLIAM GRATTAN] TYRONE (1797-1841)

power of sale is now implied as one of the incidents of the mortgage, unless forbidden or varied by See also:

EXPRESS (through the French from the past participle of the Lat. exprimere, to press out, by transference used of representing objects in painting or sculpture, or of thoughts, &c. in words)

express destination. The mortgagee is entitled to retain out of the proceeds of the sale the amount of his See also:

PRINCIPAL

principal, interest and costs, the surplus belonging to the mortgagor. A mortgagor cannot require the creditor to receive payment before the time appointed in the deed; and, on default of payment at the appointed time, he must give the creditor six months' See also:

NOTICE

notice of his intention to pay off the mortgage, so that the creditor may have time " to look out for a fresh security for his money." When the same land is successively mortgaged to different persons, their rights take priority according to their See also:

CHRONOLOGICAL

chronological order. But the operation of equitable doctrines in the formation of the law of mortgage leads to an important modification of this See also:

RULE

rule. Of the successive mortgagees, the first only takes the legal estate, and this, according to the See also:

MAXIM, SIR HIRAM STEVENS (184o- )

maxim of the court of chancery, will turn the See also:

scale when there is an equality of equitable rights between two contracting parties. Thus, if the third mortgagee had no notice at the time of making his advance of the existence of the second mortgagee, the equities of the two claimants are supposed to be equal, and if nothing else intervened priority of time would decide the order of their rights. But if the third mortgagee gets an See also:

ASSIGNMENT, ASSIGNATION, ASSIGNEE

assignment of the first mortgage, he can tack his third mortgage to the first, and so postpone the second mortgagee. And if the first mortgagee himself makes an additional advance after the date of the second mortgage, but without notice of it, his whole debt will take See also:

PRECEDENCE (from Lat. praecedere, to go before, precede)

precedence of the second mortgage. A similar result of equitable rules is seen in the consolidation of securities. Two See also:

SEPARATE

separate estates, mortgaged at different times and for different sums of money by the same mortgagor to the same mortgagee, are regarded as consolidated, so that the whole of the land becomes security for the whole of the money, and the owner cannot redeem either mortgage without redeeming the other. If the mortgagor should have mortgaged another estate for more than its value, the holder of the deficient security may buy in the first mortgage, consolidate it with his own, and exclude the second mortgagee. An equitable mortgage is constituted simply by the See also:

DEPOSIT (Lat. depositurn, from deponere, to lay down, to put in the care of)

deposit of See also:

TITLE (0. Fr. title, mod. titre, from Lat. titulus)

title-deeds in security for money advanced.

The enactment of the See also:

STATUTE

Statute of Frauds that no action shall be brought on " any See also:

contract or sale of lands," &c., or any interests in or concerning them unless the agreement be in See also:

writing and signed by the party to be charged, has been cited as incompatible with the recognition of equitable mortgages, but it is argued by See also:

Lord See also:

ABINGER, JAMES SCARLETT, 1ST BARON (1769-1844)

Abinger that the See also:

ACT (Lat. actus, actum)

act was never meant to affect such a transaction. The deeds which are the See also:

EVIDENCE (Lat. evidentia, evideri, to appear clearly)

evidence of title could not be recovered in an action at law, and, if they were claimed in equity, the court would require the claimant to do equity by repaying the money borrowed on the deposit. Any subsequent legal mortgagee, having notice of the deposit, will be postponed to the equitable mortgagee, and when the legal mortgagee has not inquired as to the title-deeds the court will impute to him such knowledge as he would have acquired if he had made inquiry. A Welsh mortgage is one in which an estate is conveyed to a creditor, who takes the rents and profits in lieu of interest and without See also:

account, the estate being redeemable at any time on payment of the principal. Any form of property, with few exceptions, may be mortgaged. See also:

UNITED

United States.—In the United States there has been express legislation dealing with mortgages of land in most of the states. For the most part legislation has followed the lines of the English law, but there is a See also:

GREAT

great variation in the extent to which the principles of equity have been substituted for the rules of common law. In some states, the mortgage deed is held to create a seizin of and an estate in the premises, with all its common law incidents, to be enforced if need be by See also:

EJECTMENT (Lat. e, out, and jacere, to throw)

ejectment. In others, the mortgagee's rights are limited to such as the rules of equity prescribe, and may not be enforced by a suit at law. In yet others, the mortgagee's interest is not deemed an estate at all, but is here only to be enforced by the sale of the premises as a means of paying the debt. See See also:

Fisher on Mortgages; See also:

COOTE, SIR EYRE (1726-1783)

Coote on Mortgages; Ashburner on Mortgages; L. A.

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