particular day the mortgagee should then, or at any time after, at request of the mortgagor, re-convey the property mortgaged; and this is the form now invariably adopted. A re-conveyance then became sufficient for the support of the title whatever were the facts as to the payment. At the same time courts of law still held the mortgagor as strictly as before to the performance Equity of [*302] of his condition to the letter. This strict compliance redemption. with the exact terms of the contract was, however, not in reality the intention of the parties, and therefore courts of equity taking a less restricted view of their relations, and looking to the spirit and intention of the transaction, established the doctrine that the mortgagor should have a right at any reasonable time to require a re-conveyance upon payment of the principal money, interest, and all expenses which the mortgagee might properly have incurred, thus, in fact, rendering the condition little more than a peculiar form of stating the nature of the transaction. (288) This they have declared to be a loan of money, with, as a collateral security, a pledge of the land (0): the loan or debt being the primary fact, the conveyance of the land being only a means of securing the debt from becoming a loss (p). Upon this principle, equity declares that a transaction which is once a mortgage shall be always a mortgage; which means, that no contract, however explicit in its terms, shall exclude him, who initially is a borrower and not a vendor, from redeeming the property (9): and, so long as this relation of debtor and creditor exists, the right to redeem, (0) Seton v. Slade, 7 Ves. 264, see p. 273. "The contract is in this court a mere loan of money secured by the pledge of the estate." "You shall not by special terms alter what this court says are the special terms of that contract." (p) A mortgage usually implies a personal debt, and indeed has been said always to do So. Quarrell v. Beckford, 1 Mad. 278; King v. King, 3 P. W. 358; Yates v. Aston, 4 Q. B. (288) According to the strict rule of the common law, a mortgagor who failed to perform the conditions contained in the mortgage would forfeit his right to the land, or to redeem it by subsequently tendering the amount due upon the mortgage. Courts of equity, however, took a more liberal view of the relations of the parties, and, instead of treating the mortgage as an instrument which must be strictly performed as a condition of preventing a forfeiture of the land, they held that the mortgage was a mere security for the repayment of the money mentioned in it, and that an omission to pay at the day, or according to the conditions in the mortgage, did not forfeit the estate, and that the mortgagor might redeem the lands after a breach of such conditions. This right to redeem is known as an "Equity of Redemption." This difference between the strict rules of the common law and the liberal rules of a court of equity will serve to explain many of the apparent discrepancies in the decisions of the courts as to the rights of the respective parties. At the common law the mortgagee was regarded as holding the freehold, and he might maintain ejectment to recover possession of the land; so he might devise it, and it would descend to his heir. In the view of a court of equity the land is regarded as a pledge, which the mortgagee holds as a security for the debt due to him. This security is a mere chattel interest, and, until a foreclosure, the mortgagor continues the real owner of the fee. The equity of redemption is the real and beneficial estate, and it is as clearly descendible by inheritance, devisable by will, and alienable by deed, as it would be were it an absolute estate of inheritance at law. or equity of redemption, as it is called, will also exist (r). (289) * Never[* 303 ] theless equity will not leave the mortgagee entirely in the power of the mortgagor, as to whether there shall be a redemption or not, for equity has always allowed the mortgagee to foreclose the equity of redemption (s): (290) (r) lb. Where there has been fraud on the part of the mortgagor in concealing from the mortgagee some charge upon the property, he forfeits the right to redeem: 4 & 5 W. & M. c. 16. The mortgagee must, however, also be honest, in order to take advantage of this statute: Stafford v. Selby, 2 Vern 589. See Kennard v. Futvoye, 2 Giff. 81. (8) The right to foreclose only arises after default has been made, though where the proviso for redemption was in payment five years after the mortgage, but interest meanwhile to be paid half-yearly, the mortgagee was allowed to foreclose before the five years had expired, the interest not having been paid. Edwards v. Martin, 25 L. J. Ch. 284. (289) It is an established rule that a mortgagee can never provide, at the time of making the loan, for any event or condition upon which the equity of redemption shall be discharged and the conveyance become absolute. Vernon v. Bethell, 2 Eden, 113; Waters v. Randall, 6 Metc. 483; May v. Eastin, 2 Port. 414; Henry v. Davis, 7 Johns. Ch. 42; S. C. affirmed, 2 Cow. 324; Spurgeon v. Collier, 1 Eden, 55, 59; Jaques v. Weeks, 7 Watts, 261; Batty v. Snook, 5 Mich. 231; Walling v. Aikin, 1 McMullan's Eq. 1; Courtney v. Scott, 6 Litt. 457; Mayo v. Judah, 5 Munf. 495. A mortgagor may release the equity of redemption to the mortgagee at a time subsequent to the original transaction. But such releases will be closely scrutinized by the courts, and will be strictly construed, and the fairness of the transaction, and the value received by the mortgagor, must be shown by clear and satisfactory evidence. Holdridge v Gillespie, 2 Johns. Ch. 34; Hammonds v. Hopkins, 3 Yerg. 525; McKinstry v. Conly, 12 Ala. 678; Hicks v. Hicks, 5 Gill & Johns. 85; McGan v. Marshall, 7 Humph. 121; Mills v. Mills 26 Conn. 213. The right of redemption may be barred by the statute of limitations in the same manner as other rights and demands; and the length of time required for this purpose will usually be governed by the local laws of the State or country in which the land is situated. An adverse possession by the mortgagee for such a length of time as would bar the mortgagor's right, will raise a presumption that the equity of redemption has been extinguished. But, so long as the mortgage is regarded and treated as a subsisting security, no length of time of holding possession by the mortgagee will bar the right of redemption. Wiley v. Eroing, 47 Ala. 418; Tripe v. Marcy, 39 N. H. 439; Ayres v. Waite, 10 Cush. 72; Chick v. Rollins, 44 Me. 116; Miner v. Beekman, 50 N. Y. (5 Sick.) 337; 14 Abb. N. S. 1; Dexter v. Arnold, 1 Sumn. 109; 3 id. 152; Lamar v. Jones, 3 Harr. & McHen. 328; Kane v. Bloodgood, 7 Johns. Ch. 90; Slee v. Manhattan Co., 1 Paige, 48. (290) The right of the mortgagee to foreclose his mortgage and thus bar or cut off the right of redemption is well settled in this country. And this may be done whenever the money secured by the mortgage becomes due, or whenever a default occurs by which the conditions of the mortgage are broken and the right to foreclose becomes operative. But this right of foreclosure, like the right of redemption, may be lost or barred by the lapse of time. And, if the mortgagee permits the mortgagor to remain in possession and to occupy the lands for such a length of time as will be a bar by the statute of limitations, and without any entry or claim by the mortgagee, or without any payment or accounting, or acknowledgment of the existence of the debt, the right to foreclose will be barred, upon the presumption that the mortgage debt has been paid. Boyd v. Harris, 2 Md. Ch. 210; Roberts v. Welch, 8 Ired. Eq. 287; Evans v. Huffman, 1 Halst. Ch. 354; Haskell v. Bailey, 22 Conn. 569; Thayer v. Mann, 19 Pick. 535; Howard v. Shurtleff, 2 Metc. 26; Richmond v. Aiken, 26 Vt. 324; Elkins v. Edwards, 8 Ga. 326; Belmont v. O'Brien, 12 N. Y. (2 Kern.) 394 ; Blethen v. Dwinel, 35 Me. 556; Tripe v. Marcy, 39 N. H. 439. In these cases in which the mortgage is regarded as a mere security for a debt and the mortgagor is regarded as the owner of the fee, a tender of the money due on the mortgage, at any time before a foreclosure, is valid and sufficient, and discharges the lien. Kortright v. Cady, 21 N. Y. (7 Smith) 343; Hutchings v. Munger, 41 N. Y. (2 Hand) 155; Darling v. but this can only be done by a suit in equity, in which the court always gives the mortgagor a considerable period to pay the money. Foreclosure. But if, after the formal proceedings of a chancery suit have been completed, and the final hour fixed by the court for payment has passed without payment by the mortgagor, then the court declares that the estate shall thenceforth be the absolute property of the mortgagee, and the mortgagor shall be foreclosed and barred of his right to redeem: but at any time before this final order is made, the mortgagor may pay the principal, interest, and costs, and obtain a re-conveyance (t). By a recent statute the court is empowered, in a foreclosure suit, to direct a sale of the mortgaged property, instead of foreclosure at the request of either party (u). The doctrines thus established in a court of equity as to the primary importance which is attached to the personal debt, to secure which a mortgage is made, do not apply in all their completeness when the property subject to the mortgage has been conveyed away by the mortgagor; because, in this case, the person so becoming entitled cannot be under any personal liability to the mortgagee: the utmost liability which he can incur is to indemnify the original mortgagor against any claim made on him personally by the mortgagee, and this would, of course, depend upon the contract between them. The property in his hands, however, ceases to be regarded as a mere collateral [*304] security, but becomes primarily liable to pay the amount of the mortgage (x). But subsequent dealings between the alienee of the equity of redemption and the mortgagee may, and often do, have the effect of casting upon the former a personal liability to pay the amount, and in this case the estate is restored to its original position as a collateral security (y). We may here notice that, by a recent act (z), where a mortgagor dies, the heir or devisee who becomes entitled to the property subject to the mortgage takes it cum onere, and is not entitled to require payment of the debt out of (t) 7 Geo. 2, c. 20, s. 2. (u) 15 & 16 Vict. c. 86, s. 48. (x) Shafto v. Shafto, 2 P W. 664 n; Scott v. Beecher, 5 Mad. 96; Rickham v. Cruttwell, 3 M. & Cr. 763. (y) Waring v. Ward, 7 Ves. 332; Earl of Oxford v. Lady Rodney, 14 Ves. 417; Lush- Chapman, 14 Mass. 101; Caruthers v. Humphrey, 12 Mich. 278; Van Husan v. Kanouse, 13 id. 306; Moynahan v. Moore, 9 id. 9; Willard v. Harvey, 5 N. H. 252. Contra, Shields v. Lozear, 34 N. J. Law (5 Vroom), 496. Payment by the mortgagor, and an acceptance by the mortgagee of the amount of the mortgage debt, extinguishes the debt and the lien. Joslin v. Wyman, 9 Gray, 63; Vose v. Handy, 2 Greenl. 322; Williams v. Thurlow, 31 Me. 392; Gray v. Jenks, 3 Mason, 520; Craft v. Webster, 4 Rawle, 253; Paxon v. Paul, 3 Harr. & McH. 399; Griffin v. Lovell, 42 Miss. 402; Atkinson v. Stewart, 46 Mo. 510; Atkinson v. Angert, id. 515; Sherwood v. Wilson, 2 Sweeny, 684; Swain v. Seamens, 9 Wall. 254. In relation to the satisfaction of a mortgage it has been held that, in the absence of an agreement between the parties, the mere receipt of rents and profits from the mortgaged premises by the mortgagee in possession, to an amount sufficient to satisfy the mortgage, is not a legal satisfaction of the mortgage; and that the mortgagor must resort to an accounting in equity to have such receipt so applied; and that, until so applied by a judgment of the court in satisfaction of the mortgage, the character of the mortgagee, as mortgagee in possession, is not divested, and therefore ejectment cannot be maintained against him or his grantee. Hubbell v. Moulson, 53 N. Y. (8 Sick.) 225. the personal assets of the deceased, unless the deceased shall, by his will, have signified the contrary or other intention (a). Besides allowing foreclosure, courts of equity, even before the passing of the act which limits the period in which suits shall be brought, were accustomed to refuse relief to a mortgagor who allowed a long lapse of years to take place without asserting his right. Therefore if a mortgagee were in possession of the mortgaged premises for twenty years or more, without giving any acknowledgment of the mortgagor's title, and without any claim being made by the mortgagor, the court held that he should not afterwards be disturbed (b). As soon as the estate vests in the mortgagee under the deed, he may immedi ately enter upon the lands, being * liable to be dispossessed upon per- [305] formance of the condition, or being redeemed. But it is not unusual to agree that, until default shall have been made in payment, at the time specified, the mortgagor may retain possession. After this time has passed, however, the estate being absolute at law, the mortgagee may enter without fear of the mortgagor evicting him by legal procedure (c). This right of entry is not unfrequently exercised where the security is of scanty value, and particularly when the mortgagor neglects even the payment of interest. But here, as in other points, equity gives the mortgagor its careful protection, for it requires the mortgagee to account most strictly for the profits of the land, not only those which he has actually received, but also those which, but for his wilful default, he might have received (d); (291) and he is bound (until after foreclosure) to appropriate the receipts which he has thus to account for in discharge first of interest and costs, and then of the principal monies owing. A mortgagee thus taking possession is entitled to receive all rents and profits accruing afterwards, though of course he has no right to any account of rents or profits previously received by the mortgagor (e). (292) How far he is enti (a) As to these words, see the Amendment Act, 30 & 31 Vict. c. 69. (b) Anon., 3 Atk. 313; see 3 & 4 Will. 4, c. 27, s. 28, which enacts that no suit shall be brought for the recovery of land but within a period of twenty years from the last acknowledgment of the mortgagor's title by the mortgagee, a further period being allowed in cases of disability. (c) But even after default, if he have not actually entered, he may not even at law bring ejectment, if the mortgagor tender principal, interest, and costs. 7 Geo. 2, c. 20. (d) The form of decree which is made against a mortgagor in possession in a redemption suit is given in Seton on Decrees, pp. 366, 461. See also Nelson v. Booth, 3 D (291) A mortgagee who enters into possession of the mortgaged land, under the mortgage, before foreclosure, will be accountable for the net rents and profits actually received, and nothing more, unless they were lost or reduced, by his willful neglect, or gross negligence. Moore v. Degraw, 1 Halst. Ch. 346; Shaeffer v. Chambers, 2 id. 548; Richardson v. Wailis, 5 Allen, 78; Miller v. Lincoln, 6 Gray, 556; Robertson v. Campbell, 2 Call. 354; Ballinger v. Worseley, 1 Bibb, 195; Van Buren v. Olmstead, 5 Paige, 1. The mortgagee, by taking possession of the land, imposes upon himself the duty of a careful and prudent owner, and he is bound to obtain and secure what such an owner would with reasonable diligence have secured. Ib. (292) The same rule prevails in this country. Syracuse City Bank v. Tallman, 31 Barb. 201; Hughes v. Edwards, 9 Wheat. 489; Clarke v. Curtis, 1 Gratt. 289; Whitney v. Allen, 21 Cal. 233; Mayo v. Fletcher, 14 Pick. 525; Wilder v. Houghton, 1 id. 87. tled to receive rents in arrear seems to depend upon several circumstances. If the tenant hold under lease or * agreement from the mortgagor, made [* 306 ] since the mortgage, there is no privity between the mortgagee and him, and so the mortgagee cannot distrain, he simply puts an end to the tenancy so created and a new tenancy under him commences; still if any rent be in arrear an action for mesne profits seems to lie (ƒ). If the lease have been created prior to the mortgage or with the concurrence of the mortgagee, he is then the true landlord of the tenant, and may, on taking possession, distrain, as well for rents in arrear as accruing rents (g). Power of sale added by contract. Such were till recently the outlines of the relation between mortgagor and mortgagee, and the rights relative to the mortgaged estate, which they respec tively had by virtue of the contract of mortgage alone without further stipulations. But it long ago became the practice, in addition to the rights which we have mentioned, to give to the mortgagee a power of selling the property so as, in the hands of the purchaser, to be free from all equity of redemption (h). This power, existing by contract, usually formed part of the mortgage deed, and commonly it was stipulated that it should be exerciseable only after some considerable notice to the mortgagor of the mortgagee's intention to sell. The practical utility of this power, obviating as it did the expense of a chancery suit, has led to its recognition by the legislature; and a recent enactment declares (i) that every mortgagee by deed (k) shall, whether the mortgage deed provides for Now by statute. [*307] it or not, have a power to sell the property at any time after the expiration of one year from the time when the principal money shall have become payable according to the terms of the deed, or after any interest shall have been in arrear for six months: but no sale is to be made until after giving six months' notice in writing to the mortgagor, or affixing such a notice on some conspicuous part of the property (7). (293) We may notice that it (f) Pope v. Biggs, 9 B. & C. 245; Evans v. Elliot, 9 A. & E. 342. (g) Moss v. Gallimore, Doug. 279; Rogers v. Humphreys, 4 A. & E. 313. A mortgagee is not entitled to any profits of the property which have been actually taken by the mortgagor, though not disposed of by him. Codrington v. Johnstone, i Beav. 520; and see the discussion in Brown v. Tanner, L. R. 3 Ch. 597, a peculiar case as to when the profits of a ship are earned. (h) Clay v. Sharpe, 1802, Reg. lib. B. A. fo. 66; Sug. V. & P. 396; Corder v. Morgan, 18 Ves. 314. (i) 23 & 24 Vict. c. 145, s. 11. (k) The act only relates to "hereditament of any tenure or any interest therein;" therefore is not applicable to mortgages of mere chattels. Ib. (1) 23 & 24 Vict. c. 145, s. 13. (293) In this country it is the usual practice to insert in the mortgage a power of sale in case of a default, which will enable the mortgagee to obtain an easy, prompt remedy, without the delay, trouble and expense of a foreclosure by a bill in equity, or other action in the courts. Such powers of sale have long been, and they are now, in extensive use, and their validity is universally recognized by the courts. The general rule is, that a sale made in pursuance of such a power, to be valid, must strictly comply with its terms. Wing v. Cooper, 37 Vt. 169; Cranston v. Crane, 97 Mass. 459; Bourty v. Mitchell, 7 Gray, 243; Smith v. Procin, 4 Allen, 518; Bradley v. Chester Valley R. R. Co., 36 Penn. St. 141; Simson v. Eckstein, 22 Cal. 590 ; Mitchell v. Bogan, 11 Rich. 686; Walthall v. Rives, 34 Ala. 91. The sale may be made by the mortgagee; but, in such a case, if he bids off the property as purchaser, it has been held that the sale is voidable at the election of the mortgagor, unless there was an express agreement or authority for that purpose, or unless a statute permitted such sale and purchase. Benham v. Rowe, 2 Cal. 387; Hall v. Towle, 45 Ill. 493 |