has been decided, although perhaps sufficiently obvious, that the power of sale which existed by contract did not interfere with the mortgagee's ordinary power to foreclose (m). The same is of course true with respect to the statutory power of sale. (294)

The same statute gives to the mortgagee a power to insure the property against fire, if of an insurable nature, and a power to appoint a receiver of the rents (n).

Possession usu

mortgagor.

Inasmuch as the intention of the parties to a mortgage is nearly always that the loan secured by the mortgage should continue upon the security for a considerable period, and, except so far as may be necessary for the ally retained by purpose of enforcing the security, it is not desired to interfere with the possession of the mortgagor and the management by him of the property, it becomes a question of some interest to inquire into the exact legal position of the mortgagor whilst so in possession. In equity he is, in accordance with the principles which we have mentioned, considered, until foreclosure or sale, as the owner of the property, subject only to the liability of having it taken from him to satisfy the mortgage debt. At law, however, after default in payment upon the day * stipulated in the [* 308] deed, he has lost his original estate (if the mortgage be of his whole interest), and his legal interest, if any, is a tenancy under the mortgagee. In the absence of any special agreement, after the execution of a legal mortgage, the mortgagor, so long as he retains possession, is tenant at sufferance of the mortgagee; but if there is a general agreement, either verbal or by writing, that he shall retain the possession, and no term is specified, he is tenant at will (0).

(m) Ex parte Hodgson, 1 Gil. & J. 12; ex parte Davis, 3 Deac. & Ch. 504. 23 & 24 Vict. c. 145, ss. 11, 17, 18, 19, 20, 21, & 22.

(n) These powers were often inserted in mortgage before the act (the former invaria bly in a well-drawn mortgage). The advantage of a receiver is that he is considered as the agent of the mortgagor and not of the mortgagee, who therefore obtains the advantage without the liability to a strict account attending his being himself in possession.

(0) Keech v. Hall, Dougl. 22; Birch v.

Wright, 1 T. R. 378; Partridge v. Bere, 5 B. & AL. 604; Doe d. Roby v. Maisey, 3 Man. & R. 107; Doe v. Cadwallader, 2 B. & Ad. 473; Doe d. Fisher v. Giles, 5 Bing. 421. When the tenancy at will is determined by the death of the mortgagor, it has been thought that the heir entering is a disseisor, and that an adverse possession commenced. Per Holt, J., Smartle v. Williams, 3 Lev. 387; 1 Salk. 245. Locke King's act, 17 & 18 Vict. c. 113, sup. p. 304, may perhaps have some bearing upon this.

Griffin v. Marine Co. of Chicago, 52 id. 130; Roberts v. Fleming, 53 id. 196; Edmonson v. Welsh, 27 Ala. 578; Richards v. Holmes, 18 How. 143; Parmenter v. Walker, 9 R. I. 225.

But if the mortgage by its terms authorizes the mortgagee to make a sale of the premi ses, and to purchase them at such sale, this, in the absence of fraud, or some statutory regulation to the contrary, will be entirely valid. Elliott v. Wood, 45 N. Y. (6 Hand) 71; affirming S. C., 53 Barb. 285.

When the power has been executed by a valid sale in pursuance of its terms, the sale passes an absolute title to the land to the purchaser, free from any right of redemption. Capron v. Attleborough Bank, 11 Gray, 492, 493; Bloom v. Van Rensselaer, 15 Ill. 503; Hyman v. Devereux, 63 N. C. 624; Montague v. Dawes, 12 Allen, 397; Brackett v. Baum, 50 N. Y. (5 Sick.) 8.

(294) The insertion of a power of sale is a mere cumulative remedy, and it does not in any manner interfere with or prevent the remedy by suit or action in the courts for a foreclosure of the mortgage. Walton v. Cody, 1 Wis. 420; Carmerais v. Genella, 22 Cal. 116; Marriott v. Givens, 8 Ala. 694; Carradine v. O'Connor, 21 id. 573, Morrison v. Bean, 15 Tex. 267; Thompson v. Houze, 48 Miss. 444.

VOL. I.-78

The mortgage deed, however, sometimes contains a stipulation that the mortgagor shall retain the possession, generally until default shall be made in payment. An agreement of this kind is construed as a re-demise from the mortgagee to the mortgagor until the day fixed for payment (p).

In those cases where the mortgagor is in the actual personal enjoyment of the property, it is not uncommon for him to attorn tenant to the mortgagee at a rent equal to the interest upon the mortgage debt, thereby giving the tenant power to distrain for the amount of interest; in such a case he is either tenant at will or yearly tenant.

[* 309 ] With respect to under-tenants of the land under the mortgagor, since he cannot, after the mortgage, grant a valid lease or demise as against the mortgagee, they have no title to hold against the mortgagee; but of course any tenant under a demise prior to the mortgage is not affected by the mortgage, and until he receive notice from the mortgagee to pay rent to him, he is justified in continuing to pay rent to the mortgagor (q), who, in fact, for this purpose, may be considered as the bailiff of the mortgagee, but without any liability to account (r).

gages.

We will here add a few short remarks upon some subsidiary points relating to mortgages, which are of constant and practical application. It is not at Successive mort- all uncommon for the same property to be made subject to a number of successive mortgages. For although the first mortgage alone can completely fill the character of a true mortgage, inasmuch as that alone can confer upon the mortgagee a legal estate, still the equity of redemption is regarded to such an extent as an ownership, that a conveyance of it in a form exactly similar to a first mortgage is considered to constitute a security, having many of the properties and much of the value of a first mortgagee; except of course this, that should the property prove insufficient in value to satisfy both claims, the first mortgagee is entitled to a complete discharge of all money owing upon his security before the second or subsequent mortgagees can obtain anything. (295) Where there are several mortgages upon the same

(p) See Shepp. Touch. 272, where a distinction is taken between those cases where the time during which the mortgagor may retain possession is certain and where not; and also between the different forms which the stipulation may assume. See as to these questions, Wilkinson v. Hall, 4 Scott, 301; Doe v. Goldwin, 2 Q. B. 143; Doe v. Day, 2 Q. B. 147;

Doe v. Lightfoot, 8 M. & W. 553; and as to how far the execution of the deed by the mortgagee is necessary, in order to constitute a valid legal term in the mortgagor. Morton v. Woods, L. R. 3 Q. B. 658.

(q) Ante, p. 306, and see Doe d. Marriott v. Edwards, 3 N. & M. 193.

(r) Moss v. Gallimore, Doug. 285.

(295) Several different mortgages of the same land may be executed at the same time; and unless affected by a priority of recording or registry, the general rule is that the mortgagees will have equal and concurrent rights, in proportion to the amounts of their respective claims. Aldrich v. Martin, 4 R. I. 520; and see Donnels v. Edwards, 2 Pick. 617; Russell v. Carr, 38 Ga. 459.

Where two mortgages are executed and recorded at the same time, if it is agreed by all parties that one of the mortgages shall have a priority over the other, the law, for the purpose of carrying that intention into effect, will presume that the mortgage intended to be preferred was first delivered. Jones v. Phelps, 2 Barb. Ch. 440; Pomeroy v. Latting, 15 Gray, 435; Douglass v. Peele, Clarke's Ch. 563; see Isett v. Lucas, 17 Iowa, 503; Stafford v. Van Rensselaer, 9 Cow. 316.

So where a grantee of land at the instant of receiving his deed executes and delivers two mortgages of a part of it, one of which is to his grantor, to secure the payment of a part of the purchase money, and the other is to a third person, and all the deeds are entered for

property there often arise questions as to the order of priority of the claims, which are of the highest importance to the parties. They usually arise in foreclosure or redemption suits; therefore such questions have principally been dealt with by courts of equity, and are also from their inherent nature subject to the jurisdiction of those courts. The fundamental doctrine upon which such questions usually depend is that of notice, *which [*310] involves a most righteous principle, viz., that a person who takes property with notice of a prior right, even though he be a bona fide purchaser for valuable consideration, yet he shall give full effect to that prior right (s).

Doctrine of notice.

Where there is no duty arising out of that good faith which courts of equity require from every man, then he who has the legal estate is considered to have the better equity, so that if a third mortgagee (who lent his money without notice of the existence of the second mortgage) takes a transfer of the first mortgage, thus obtaining the legal estate, he is considered as having a better equity than that of the second mortgagee (t). Where, however, there is nothing else to distinguish the equities of various incumbrancers, the maxim qui prior est tempore poteor est jure applies, and the incumbrances rank in the order of their date (u). (296)

(8) Le Neve v. Le Neve, Amb. 436; s. c. 3 Atk. 646; 1 Ves. 64. Notice to an agent is notice to his principal; ib. The cases upon notice are very numerous, both as to what constitutes actual, as well as constructive notice. We cannot here enter into these details The principle has been recently applied to the case where the contract was expressly extended to future advances. For it was held that if A. mortgaged to B. to secure present and future advances, the mortgage was invalid as against C., so far as regarded advances made after notice of a second mortgage to C. Hopkinson v. Rolt, 9 H. L. 514.

(t) Marsh v. Lee, 2 Vent. 337. This right has become well known under the name of the tabula in naufragio given to it by Lord Hale. See also Wortley v. Birkhead, 2 Ves. S. 571. The doctrine has been applied in cases almost innumerable, and with endless variations in the circumstances. The priorities of successive incumbrances are not, it seems, altered by one getting in the legal estate from one who is trustee for all. Sharples v. Adams, 32 Beav. 213.

(u) The maxim quoted is, however, the last consideration which the courts entertain, for any negligence on the part of a mortgagee

record at the same moment, the mortgage to his grantor will take precedence. Clark v. Brown, 3 Allen, 509.

A mortgagor may, before foreclosure, make a second mortgage, or indeed any number of subsequent mortgages, as his interest in the equity of redemption may be mortgaged. Justice v. Uhl, 10 Ohio St. 170, 176.

A second mortgagee stands in the place of the mortgagor, as to his right of redeeming the first mortgage; and if there are other successive mortgages of the same property, each new mortgagee succeeds to the rights of his mortgagor. Norton v. Warner, 3 Edw. Ch. 106; Peabody v. Roberts, 47 Barb. 91, 95; Cronin v. Hazeltine, 3 Allen, 324.

(296) In this country the rights of the mortgagee depend materially if not essentially upon the recording or registry of his mortgage, and upon the priority of such recording or registry. The statutes of each State will be consulted by those who wish to learn what the law is in any particular State. As one of the objects of recording a mortgage is to give notice of its existence to subsequent bona fide purchasers or mortgagees, it is a settled rule that if a subsequent purchaser or mortgagee has notice, at the time of taking his deed or mortgage, of the existence of the prior unregistered or unrecorded mortgage, he will not be permitted to defeat it by a prior registry or recording of his deed or mortgage; for such notice is, as to him, the same as though the prior mortgage had been duly recorded or registered. Hewes v. Wiswell, 8 Greenl. 94; Brackett v. Waif, 6 Vt. 411; Jackson v. Burgott, 10 Johns. 457; Williamson v. Brown, 15 N. Y. (1 Smith) 354, 364; Acer v. Westcott, 46 N. Y. (1 Sick.) 384; Cambridge Valley Bank v. Delano, 48 N. Y. (3 Sick.) 326; Reed v. Gannon, 5 N. Y. (5 Sick.) 345; Fort v. Burch, 5 Denio, 187; Jaques v. Weeks, 7 Watts, 261; Hudson v,

[*311]

Equitable mortgages.

*We cannot leave the subject of mortgages without referring to those of the peculiar kind which courts of equity have sanctioned, and which are consequently called equitable mortgages. These, although they do not confer any estate either at law or in equity upon the mortgagee, and therefore are not properly within the scope of this chapter, yet have in effect such similarity to mortgages properly so called, and are also of such great practical utility, that a passing notice of them may well find a place here. Courts of equity have declared that if a contract can be shown to exist that land should be charged with the payment of a debt, even without the evidence of writing (notwithstanding the statute of Frauds), if the title deeds of the land be deposited with the mortgagee, or some equivalent act done, it is a good mortgage (x). (297)

(not legal) may be fatal to his priority: see Atterbury v. Wallis, 8 De G. M. & G. 454; but a legal mortgagee without gross negligence will not be postponed. See Colyer v. Finch, 5 H. L. 905; Perry Herrick v. Attwood, 2 De G. & J. 21. We may here remark that if the mortgages are of personal property in the hands of a third person, such, for instance, as a trust fund or a debt, the mortgagee who first gives notice to the trustee, debtor, or other person in whose hands the fund is, obtains priority whatever be the date of his security. See Dearle v. Hall, 3 Russ. 1; Loveridge v. Cooper, ib.; Foster v. Cockerell, 3 Cl. & Fin. 456. This does not apply to mortga. ges of real estate, or chattels real, even if the property be vested in a trustee. Rooper v. Harrison, 2 K. & J. 86; Jones v. Jones, 8 Sim. 633; Wiltshire v. Rabbits, 14 Sim. 76; Wilmot

v. Pike, 5 Hare, 14; and it is to be observed that the notice to be of any effectual use must be given to the trustee, &c., after he has been fully constituted such by having the fund in his hands; it will be useless if given merely in contemplation of his becoming a trustee, &c. See Buller v. Plunkett, 1 J. & H. 441; Somerset v. Cox, 33 Beav. 634; Webster v. Webster, ib. 39; where the subjects of the mortgages were the produce of commissions in the army, and the notices were to the army agents.

(x) Russel v. Russel, 1 Bro. C. C. 269. See ex parte Whitbread, 19 Ves. 209; Whitbread v. Jordan, 1 Y. & C. 303. A deposit of part of the deeds even creates a mortgage. Lacon v. Allen, 3 Dr. 579. See Roberts v. Croft, 2 D. G. & J. 1; Thorpe v. Holdsworth, L. R. 7 Eq. 139.

Warner, 2 Harr. & Gill, 415; Rogers v. Jones, 8 N. H. 264; Bush v. Golden, 17 Conn. 594, 603; Spofford v. Weston, 29 Me. 140; Chiles v. Conley, 2 Dana, 23; Pike v. Amistead, 2 Dev. Eq. 24; Newman v. Chapman, 2 Rand, 93; Roads v. Symmes, 1 Ohio, 281; Dixon v. Doe, 1 Sm. & Marsh. 70.

A mortgage not recorded or registered is preferred to a subsequently docketed judgment, as it is a valid conveyance and binds the lands except as against bona fide purchasers and mortgagees, whose conveyances are first recorded. Knell v. Green Street Building Association, 34 Md. 67; Rodgers v. Gibson, 4 Yeates, 111; Heister v. Fortner, 2 Binn. 40; Cover v. Black, 1 Penn. St. 493.

But, if the purchaser at the sale on the execution, under such judgment, has his deed first recorded, he will gain a preference over the mortgage. Jackson v. Dubois, 4 Johns. 216; Ash v. Ash, 1 Bay, 304; Hampton v. Levy, 1 McCord's Ch. 107.

A mortgage, though not recorded or registered, is valid between the parties to it. Sulmon v. Clagett, 3 Bland, 126; Andrews v. Burns, 11 Ala. 691; Moore v. Thomas, 1 Oregon, 201; Howard v. McIntyre, 3 Allen, 571.

(297) In this country there is no uniform rule upon the question whether there can be an equitable mortgage by a mere deposit of title deeds. In some of the States such a security is recognized and held valid. Hackett v. Reynolds, 4 R. I. 512; Jarvis v. Dutcher, 16 Wis. 307 Mounce v. Byars, 16 Ga. 469; Chase v. Peck, 21 N. Y. (7 Smith) 581, 584; Rockwell v. Hobby, 2 Sandf. Ch. 9; Gothard v. Flynn, 25 Miss. 58; Mandeville v. Welch, 5 Wheat. 277, 284; Robinson v. Urquart, 1 Beasl. (N. J.) 515, 523; Welsh v. Usher, 2 Hill's Ch. (S. C.) 166, 170; Richards v. Leaming, 27 Ill. 431; Keith v. Horner, 32 id. 526.

In some of the other States such a mortgage is not recognized by the courts. Probasco v. Brannon, 2 Disney (Ohio), 96; Meador v. Meador, 3 Heisk. 562; Bicknell v. Bicknell, 31 Vt. 498; Vanmeter v. McFaddin, 8 B. Monr. 435, 437; Shitz v. Dieffenbach, 3 Penn. St. 233.

The principle upon which the courts have sanctioned this proceeding is, that what has been agreed to be done shall be deemed to be done, if the consideration be sufficient and some act of performance done, in pursuance of the agreement: as there would otherwise be a breach of good faith. The practice of depositing title deeds being * found of great convenience, [*312] as on the occasion of temporary loans made by bankers to their customers, the courts have gone a step further and presumed that where no other object or intention can be shown, the title deeds were delivered by a debtor to his creditor as a security. Some difference of opinion as to what is the true remedy of an equitable mortgagee has existed amongst the judges, some holding that it is to have a regular legal mortgage executed, with a consequent right of foreclosure: others, that it is merely a right to require a sale of the property (y). (298) Of course if any memorandum, as often happens, accompanies the deposit, the construction of that document has a material bearing upon the nature of the decree which the court will make (z).

Estates by statute ute merchant.

A fourth species of estates, defeasible on condition subsequent, are certain ancient estates held by statute merchant and statute staple (a); which are very nearly related to the vivum vadium before mentioned, or staple, and stat- estate held till the profits thereof shall discharge a debt liquidated or ascertained. For both the statute merchant and statute staple are securities for money; the one entered into before the chief magistrate of some trading town, pursuant to the statute of 13 Edw. 1, stat. 3, de mercatoribus, and thence called a statute merchant; the other pursuant to the statute 27 Edw. 3, stat. 2, c. 9, before the mayor of the staple, that is to say, the grand mart for the principal commodities or manufactures of the kingdom, formerly held by act of parliament in certain trading towns (b), from whence this security is called a statute staple. They were both securities for debts

acknowledged to be due; * and originally permitted only among trad- [*313]

ers, for the benefit of commerce; whereby not only the body of the debtor might be imprisoned, and his goods seized in satisfaction of the debt, but also his lands (c) might be delivered to the creditor, till out of the rents and profits of them the debt should be satisfied; and during such time as the

(y) See Tuckley v. Thompson, 1 J. & H. 126; Mathers v. Goodday, 31 L. J. Ch. 282.

(2) Mathews v. Goodday, ub. sup. See Tennant v. Trenchard, 38 L. J. Ch. 169.

(a) As to these securities in general, see 2 Saunders, by Wms., 70, and index, Statute Merchant, and Statute Staples; 8 Price, 316.

(b) See 27 Ed. 3, stat. 2, c. 1.

(c) That is to say, his freehold lands, and lands in ancient demesne, but not his copy. holds. 2 Inst. 397; 4 Id. 270; 3 Rep. 80; 8 Ves. 394.

The remedy of the mortgagee, whatever that may be, is in equity. Whether the decree shall be for a foreclosure or for a sale has been a question in the English courts. See Pain v. Smith, 2 M. & K. 417: Parker v. Housefield, id. 419; Brocklehurst v. Jessop, 7 Sim. 438; Moores v. Choat, 8 id. 508, 515, 523; Price v. Carver, 3 M. & C. 157, 161; Lister v. Turner, 5 Hare, 281.

In Tuckley v. Thompson, 1 Johns. & H. 126, the court held that the remedy was by sale and not by by foreclosure. But the late cases hold that the remedy is by foreclosure and not by sale. James v. James, L. R., 16 Eq. 153; Pryce v. Bury, id. in note; Redmayne v. Forster, L. R., 2 Eq. 467.

(298) For the late English cases upon this subject, see the latter part of the last preceding

note.