subsequent, which require, from the practical interest attending them, more especial notice. Such are:

Estates in

pledge.

[* 299]

Welsh

mortgage.

Estates held in vadio, in gage or pledge. (283) These are commonly divided into two classes, vivum vadium, or living pledge, and mortuum vadium, dead pledge, or mortgage, as it is usually called (d). *Upon the former of these, vivum vadium, which is now to a great extent out of use, we need not dwell long. It is where a man borrows Estate in a sum of money and grants an estate to the lender to hold until vivo vadio. the rents and profits shall repay the sum so borrowed, together with interest. This is an estate conditioned to be void as soon as the sum advanced is, together with interest, recouped to the lender. The land is said to be living because it survives the debt, on the discharge of which it results to the borrower (e). A particular form of this kind of pledge is that called a Welsh mortgage, where the land is conveyed to the lender who receives the rents and profits in lieu of interest, the borrower retaining the right at any time to redeem the land on payment of the principal only. In this case there is considered to be no debt on the part of the borrower (ƒ). But as, if the rent be excessive, it would be hard upon the borrower that no part of it should be applied in discharge of the principal; courts of equity have established that, even in the case of a Welsh mortgage, there shall be an account of the rents, if they be excessive, and it has been held that an annual profit of 137. was excessive where the loan was only 907. (g). Consequently there is not much substantial difference between a vivum vadium proper and a "Welsh mortgage" (h). Pledges of these kinds are distinguished from those which are presently to notice, or mortgage (properly *so called) by, amongst other qualities, this fundamental difference, that the lender has no right to foreclose, and time is no bar to the borrower to redeem (i).

[*300]

(d) The name "mortgage" is now used without much regard to the exact character of the pledge, to describe incumbrances of nearly all kinds. See Taylor v. Emerson, 4 Dru. & War. 117; Balfe v. Lord, 2 Dru. & War. 480.

(e) Co. Litt. 205. Where land is sold in consideration of a perpetual rentcharge, a practice common in Lancashire, there is usually given to the vendor, in case of default in payment of the rentcharge, a power to re-enter, and hold the lands until the rents and profits shall have paid up all arrears of the rentcharge. The land when so held by the vendor on the exercise of the power, is in vivo vadio.

(f) Yates v. Hambley, 2 Atk. 359; Lawley v. Hooper, 3 Atk. 277,280. Usually a pledge or mortgage implies a debt. See Lord Thurlow's remarks, 1 Bro. C. C. 464, 465, and Quarrell v. Beckford, 1 Mad. 278; King v. King, 3 P. W. 358.

(g) Fulthrope v. Foster, 1 Vern. 476.

(h) The expression mortgage, in the nature of a Welsh mortgage," has been used to describe a vivum vadium.

(i) Talbot v. Braddil, 1 Vern. 183, 395; Orde v. Heming, ib. 418; Fenwick v. Reed, 1 Mer. 114; 5 B. & Al. 233; Hartpole v. Walsh, 5 B. P. C. 267; Teulon v. Curtis, Y. 610.

(283) A mortgage is the conveyance of an estate, by way of pledge for the security of debt, and to become void on payment of it. The legal ownership is vested in the creditor; but, in equity, the mortgagor remains the actual owner, until he is debarred by his own default, or by judicial decree." 4 Kent's Com. 135.

"A mortgage at common law may be defined to be an estate created by a conveyance, absolute in its form, but intended to secure the performance of some act, such as the payment of money and the like, by the grantor or some other person, and to become void if the act is performed agreeably to the terms prescribed at the time of making such conveyance." 2 Washb. Real Prop. 36, 3d ed.; see, also, 1 Hill. Mort. 1, §§ 1, 2.

We must also distinguish from both living and dead pledges a third species of transaction, viz.: an absolute sale accompanied by a contract for re-purchase on certain conditions. (284) A transaction of this kind is, however, not very common, and when it occurs it usually leads to much difficulty in determining whether, in point of fact, the intention of the parties was not a mortgage, or at least whether it is not a

Sale with contract for reemption.

(284) The cases upon the subject in the American courts are very numerous; and, as might be expected, where there are so many different State courts, the decisions are not entirely harmonious. In examining the subject, several points present themselves for consideration. In the cases before our courts the question sometimes has been the general one, can a conveyance which is absolute on its face be shown by parol evidence to be a mere mortgage? As a general rule it has been held by most of the cases that this can be done in a court of equity. Some of the cases also hold that it may be done in a court of law, while others deny that it can be shown in a court of law. In another class of cases the conveyance was, upon its face, an absolute one, with a right to repurchase upon specified terms and conditions; and the question before the court then is, was the conveyance really absolute, with a right of repurchase, or was it, in legal effect, a mortgage? As there is an important difference in the two supposed cases, there have been many cases before the courts for adjudication.

For the purpose of presenting the cases in separate classes, they will be noticed in the following order:

Some of the courts hold that parol evidence is not admissible, either at law or in equity, for the purpose of showing that a conveyance, absolute on its face, was intended as a mere mortgage. See Webb v. Rice, 6 Hill, 219; 1 id. 606; Howe v. Russell, 36 Me. 562; Ellis v. Higgins, 32 id. 34; Streator v. Jones, 1 Murphy (N. C.), 449.

Some of the cases hold that such evidence is admissible either at law or in equity. Prewett v. Dobbs, 13 Sm. & Marsh. 431; Stamper v. Johnson, 3 Texas, 1; Carter v. Carter, 5 id. 93.

Other cases hold that such evidence is admissible in equity, but not at law. Conwell v. Evill, 4 Blackf. 67; Reading v. Weston, 8 Conn. 117; Flagg v. Mann, 2 Sumn. 527; Bickford v. Daniels, 2 N. H. 73.

That such evidence is admissible in some form, or in some court, either of equity or at law, is established by the strong current of authority in this country. Kenton v. Vandergrift, 42 Penn. St. 339; Crane v. Buchanan, 29 Ind. 570; Wells v. Marrow, 38 Ala. 125; Blakemare v. Byrnside, 7 Ark. (2 Eng.) 505; Hogel v. Lindell, 10 Mo. 483; Hodges v. Tennessee Marine & Fire Ins. Co., 8 N. Y. (4 Seld.) 416; Anthony v. Anthony, 23 Ark. 479; Clark v. Condit, 3 C. E. Green (N. J.), 358; Bank, etc., of Winchester v. Whyte, 3 Md. Ch. 508; Horn v. Keteltas, 46 N. Y. (1 Sick.) 605; Stoddard v. Whiting, id. 627, 632; Carr v. Carr, 52 N. Y. (7 Sick.) 251.

The right to redeem the mortgaged property is one of the essential features of a mortgage. But there is a conveyance which, in form, is somewhat similar to a mortgage; and this is a sale with an agreement to repurchase, or, as it is generally termed, a conditional sale. In a sale of this character there is no right of redemption as in the case of a mortgage. A mortgage is a mere security for a debt. A conditional sale is a purchase for a price, and to become absolute upon the happening of a particular event; or a purchase accompanied by - an agreement to resell upon specified terms. To determine whether a given transaction is a mortgage or a conditional sale, is sometimes a matter of some difficulty. The principal incidents to show that a transaction is a mortgage are such as the following:

The lending and borrowing of a sum of money, or the relation of debtor and creditor, and the continuance of a debt between the parties. Glover v. Payn, 19 Wend. 518; Horn v. Keteltas, 46 N. Y. (1 Sick.) 605; Carr v. Carr, 52 N. Y. (7 Sick.) 251; Fiedler v. Darrin, 50 N. Y. (5 Sick.) 437; Pearson v. Seay, 38 Ala. 643; Bacon v. Brown, 19 Conn. 29; Wright v. Bates, 13 Vt. 341, 350; Dougherty v. McColgan, 6 Gill & Johns. 275; Edrington v. Harper, 3 J. J. Marsh. 354.

The retaining of the possession of the property by the grantor. Crews v. Threadgill, 35 Ala. 334; Wright v. Bates, 13 Vt. 341, 350.

Welsh mortgage. Perhaps the distinction between a conditional purchase of this kind and a Welsh mortgage, is somewhat fine (j), but the contention usually is, to show that the transaction was in fact a common mortgage (k). (285)

(j) See Alderson v. White, 2 De G. & J. 97; Gossip v. Wright, 32 L. J. Ch. 648.

(k) Bonham v. Newcomb, 1 Vern. 214; Man

love v. Ball, 2 Vern. 84; Williams v. Owen, 10 Sim. 386; 5 M. & Cr. 303.

The great excess in value of the property over the amount paid, which is an important circumstance in a doubtful case. Crews v. Threadgill, 35 Ala. 334, 344; Streator v. Jones, 3 Hawks. 423; Oldham v. Halley, 2 J. J. Marsh. 113, 115.

Or, the necessities or embarrassed circumstances or condition of the grantor. Horn v. Keteltas, 46 N. Y. (1 Sick.) 605; Streator v. Jones, 3 Hawks. 423, 433.

On the other hand, to show that the transaction is a conditional sale, and not a mortgage, several circumstances will be considered, such as the connection of a third person with the transaction. Carr v. Carr, 52 N. Y. (7 Sick.) 251, 258.

The reservation of a power, on the part of the grantor, to annul the bargain, or to the grantee of a right to buy the land absolutely. Chambers v. Hise, 2 Dev. & Bat. Eq. 305; Saxton v. Hitchcock, 47 Barb. 220; Poindexter v. McCannon, 1 Dev. Eq. 373; Slowey v. McMurray, 27 Mo. 113.

The lapse of a long period of time before any claim of a right of redemption is made. Poindexter v. McCannon, 1 Dev. Eq. 373..

The continuous possession of the property by the grantee. Id.

The approximation of the consideration to the cash value of the property. Robinson v. Cropsey, 6 Paige, 480; 2 Edw. Ch. 138; Poindexter v. McCannon, 1 Dev. Eq. 373.

The surrender of personal securities, or the extinguishment of a debt. Gomez v. Kamp ing, 4 Daly, 77, 81; Baker v. Thrasher, 4 Denio, 493; Mullish v. Robertson, 25 Vt. 603; Coles v. Perry, 7 Texas, 109; Hooper v. Bailey, 28 Miss. 328.

Or, the absence of any personal agreement to repay the purchase-money, making the grantor's right to repurchase, and the grantor's right to recover the price mutual and reciprocal. Horn v. Keteltas, 46 N. Y. (1 Sick.) 605; Conway's Exrs. v. Alexander, 7 Cranch, 218. An omission to give or take a note, bond or other evidence of indebtedness is strong evidence to show that the transaction is a conditional sale instead of a mortgage; but it is not conclusive. Robinson v. Farrelly, 16 Ala. 472; Horn v. Keteltas, 46 N. Y. (1 Sick.) 606; Davis v. Stonestreet, 4 Ind. 101.

When the transaction is a conditional sale the conditions must be strictly performed or the right to repurchase will be lost. Saxton v. Hitchcock, 47 Barb. 220; Robinson v. Cropsey, 2 Edw. Ch. 147; Rankin v. Mortimere, 7 Watts, 372; Hoopes v. Bailey, 28 Miss. 328. The courts will favor a construction which renders the instrument a mortgage, instead of being a conditional sale, as a mortgage is more beneficial to the person receiving the money. Rich v. Doane, 35 Vt. 125; Trucks v. Lindsey, 18 Iowa, 504; McNeill v. Norsworthy, 39 Ala. 156; Dougherty v. McCalgan, 6 Gill & Johns. 275; Crews v. Threadgill, 35 Ala. 334; Turnip seed v. Cunningham, 16 id. 501; Scott v. Henry, 13 Ark. 112.

Though parol evidence may be introduced to show that an absolute conveyance was really a mortgage, it is not competent to show by such evidence that a mortgage was intended to be a conditional sale. Kerr v. Gilmore, 6 Watts, 405; Kunkle v. Wolfersberger, id. 126: Brown v. Mickle, 6 Penn. St. 390; Woods v. Wallace, 22 id. 171; Wing v. Cooper, 37 Vt. 182. (285) While treating of the subject of liens upon real estate, it may be well to notice a vendor's lien upon real estate for the purchase-money. Where the purchase price of lands is not paid, it is the usual practice for the purchaser to execute a mortgage upon the lands for the security of the vendor. But, if no mortgage is given the vendor has, under some circumstances, a lien upon the lands sold, for the purchase-money. The general rule is, that the equitable lien of the vendor for the unpaid purchase-money is recognized as an incident of the debt. Chase v. Pick, 21 N. Y. (7 Smith) 581, 584; Manley v. Slason, 21 Vt. 271, 278; Chilton v. Braiden, 2 Black, 458; Cowl v. Varnum, 37 Ill. 181; Merritt v. Wells, 18 Ind. 171; Russell v. Watt, 41 Miss. 602; Pell v. McElroy, 36 Cal. 268; Kyles v. Tait, 6 Gratt. 44; Carson v. Green, 3 Bibb, 183; Watson v. Wells, 5 Conn. 468; Jackman v. Hallock, 1 Ohio. VOL. I.-77

We now come to mortuum vadium, or mortgage, which being now the common form in which permanent loans are effected, is of the highest importance in a commercial country such as this, where the employment of floating capital rests very commonly with those who are not its owners, and who, therefore, are driven to borrow. The law relating to mortgages has passed through many stages ere it reached its present position. These we will shortly trace.

This kind of pledge is where a man borrows of another a specific sum (e. g. 2007.) and grants him an estate either in fee or for a less period, on condition that, if he, the borrower, or mortgagor, as he is called, or his

Mortgage. heirs, shall repay the mortgagee the sum so borrowed together

with interest at the agreed rate (), (286), on a certain day mentioned [*301] * in the deed, that then the mortgagor may re-enter on the estate so granted in pledge (m): the estate so granted is, therefore, an estate on

(2) Interest is invariably mentioned in the mortgage deed. Where, however, no interest was provided for by the deed, it was held that the mortgage carried no interest. Thompson v. Drew, 20 Beav. 52.

(m) If no day was fixed the mortgagor had his whole life: Co. Litt. 208 b. The definition or description given in the text must not be taken as a complete definition of the word

mortgage as now used, for a mortgage may be made, not only of land, but of any species of property. No difficulty arises, however, on the subject, for the application of the same idea to chattels or other property is not difficult, being only subject to such further rules of law as are specially applicable to the particular cases.

318; Sheratz v. Nicodemus, 7 Yerg. 9; Wynne v. Alston, 1 Dev. Eq. (N. C.) 163; Van Doren v. Todd, 2 Green (N. J.), 397.

While this lien is generally recognized in this country, it is not allowed in some of the States. See Kauffelt v. Bower, 7 Serg. & R. 64; Gilman v. Brown, 1 Mason, 191; Womble v. Battle, 3 Ired. Eq. 182; Simpson v. Maunder, 3 Kans. 172.

And where the lien is recognized and enforced, it is also held that the lien may be waived; as by taking a distinct collateral security for the purchase price. Johnston v. Union Bank, 87 Miss. 526; McCandlish v. Keen, 13 Gratt. 615, 624; Hummer v. Schott, 21 Md. 307; Burger v. Potter, 32 Ill. 66; Mattix v. Weand, 19 Ind. 151.

Merely taking the bond or note of the purchaser does not waive the lien. Neil v. Kinney, 11 Ohio St. 58; Shall v. Biscoe, 18 Ark. 142; Eskridge v. McClure, 2 Yerg. 84; Van Doren V. Todd, 2 Green (N. J.), 397; Lagow v. Badollet, 1 Blackf. (Ind.) 416.

Where a note or bond of the purchaser is taken, and still retains a lien of the vendor, the lien is not one which will be transferred upon a sale or assignment of such note or bond. Brush v. Kingsley, 14 Ohio, 20; Neil v. Kinney, 11 Ohio St. 58; Shall v. Biscoe, 18 Ark. 142; Iglehart v. Armiger, 1 Bland. Ch. 519, 524; White v. Williams, 1 Paige, 506; Briggs v. Hill, 6 How. (Miss.) 362.

Other cases, however, hold that the lien may be assigned. Fisher v. Johnson, 5 Ind. 492; Honore v. Bakeweli, 6 B. Monr. 67; Davidson v. Allen, 36 Miss. 419; Cleveland v. Martin, 2 Head, 128; Magruder v. Campbell, 40 Ala. 647.

(286) The rate of interest reserved must be legal; for, if it be greater than is allowed by law, the mortgage will be void for usury in some of the States, and it will be subject to the general laws relating to usury in the State under whose laws the instrument is to be applied and enforced. Vickery v. Dickson, 62 Barb. 272; 35 id. 96; Baxter v. McIntire, 13 Gray, 168 Lockwood v. Mitchell, 7 Ohio St. 387; Mitchell v. Preston, 5 Day, 100; Morgan v. Tipton, 3 McLean, 339; Robertson v. Campbell, 2 Call. 354.

Where the consideration of a mortgage is illegal it will render the mortgage void, whether the illegality consists of a violation of the common law, or of the provisions of a statute. Baker v. Collins, 9 Allen, 253. See the cases collected in the notes to Collins v. Blantern, 1 Smith's Lead. Cas. 489 (667).

A mortgage executed under duress will be void where any other contract would be void on that ground. Baker v. Morton, 12 Wall. 150; Boyle v. Hammons, 2 Heisk. (Tenn.) 136 ; Bane v. Detrich, 52 Ill. 19; Worcester v. Eaton, 13 Mass. 371; Deputy v. Stapleford, 19 Cal. 802; Fisk v. Stubbs, 30 Ala. 335.

condition liable to determine absolutely if the mortgagor, in accordance with the condition, repay the money at the appointed time; but, should he fail strictly to comply with this condition, the estate of the mortgagee becomes absolute at law, and is, therefore, dead to the mortgagor. (287) During the period between the grant and the day fixed for payment the mortgagee is called tenant in mortgage (n).

Such is the simple idea of a mortgage as originally conceived; some modifications of the form which it assumed were, however, early introduced. For a person having once mortgaged his land was bound afterwards, if he would establish a complete title, to prove that he had complied with the exigency of the condition, a thing often not easy to demonstrate, even if the fact were so. It became common, therefore, to substitute for the conditions defeating the estate granted, a proviso or contract that, if the money were repaid on the

(n) Lit. s. 232.

(287) Mortgages usually contain two parts, the conveyance and the defeasance. It is not essential, however, that the defeasance should be inserted in the mortgage, for a separate instrument for that purpose is equally valid and effectual. Venderhaise v. Hugues, 2 Beasley, 410; Snyder v. Griswold, 37 Ill. 216; Guthrie v. Kohle, 46 Penn. St. 331; Second Ward Bank v. Upmann, 12 Wis. 499; Crassen v. Swoveland, 22 Ind. 427; Hill v. Edwards, 11 Minn. 22; Daubenspick v. Platt, 22 Cal. 330.

The courts do not look with favor upon the practice of executing the defeasance as a separate instrument, because it is liable to accidents and abuses; or it may be a mode of committing frauds, and, besides this, the defeasance may be lost, thus leaving an apparently absolute title in the grantee. Cotterell v. Purchase, Cas. Temp. Talb. 61; Jaques v. Weeks, 7 Watts, 261, 269; Baker v. Wind, 1 Ves. Sen. 160; 4 Kent's Com. 142; Bickford v. Daniels, 2 N. H. 71.

The general rule is, that the defeasance and the deed must be parts of the same transaction to constitute a mortgage. No conveyance will be considered a mortgage unless it became such at the time of its inception; and it can never become one by a subsequent act. Lund v. Lund, 1 N. H. 39; Bickford v. Daniels, 2 id. 71; Bryan v. Cowart, 21 Ala. 92; Reitenbaugh v. Ludwick, 31 Penn. St. 131; Holmes v. Grant, 8 Paige, 243, 255; Swetland v. Swetland, 3 Mich. 482; Freeman v. Baldwin, 13 Ala. 246.

It is not essential that the date of the deed and of the defeasance should be the same, as they will constitute a mortgage if delivered together. McIntier v. Shaw, 88 Mass. (6 Allen) 83; Blaney v. Bearce, 2 Greenl. 232; Kelly v. Thompson, 7 Watts, 401; Bryan v. Cowart, 21 Ala. 92; Swetland v. Swetland, 3 Mich. 482.

Nor that there should be a written defeasance executed at the same time with the absolute deed; for if there is a verbal agreement that a defeasance shall be executed on request, and such defeasance is subsequently executed and delivered to the grantor, it will relate back to the deed and make it a mortgage. Lovering v. Fogg, 18 Pick. 540, 543; Wilson v. Shoenberger's Exrs., 31 Penn. St. 295; Reitenbaugh v. Ludwick, id. 131; Montgomery v. Chadwick, 7 Iowa, 114, 132.

The law does not require that a defeasance shall be expressed in any particular form of language. It will be sufficient if it clearly appears that, upon payment of the debt by the grantor, the conveyance shall become void, or that the grantee will reconvey the land to the grantor. Weed v. Stevenson, Clarke's Ch. 166; Steel v. Steel, 86 Mass. (4 Allen) 417; Bayley v. Bailey, 71 Mass. (5 Gray) 505; Webb v. Patterson, 7 Humph. 431; McGan v. Marshall, id. 121; Colinell v. Woods, 3 Watts, 188; Brown v. Mickle, 6 Penn. St. (6 Barr.) 390; Perkins v. Dibble, 10 Ohio, 433; Baldwin v. Jenkins, 23 Miss. 206; Gillis v. Martin, 2 Dev. Eq. 470. When parol evidence is admissible to show that a deed was intended to be a mortgage, has already been noticed. Ante, 603, note 284. See the same note as to the distinction between a conditional sale and a mortgage.