CHAPTER XXVII. MORTGAGES. [§ 1004. The general definition of mortgages. § 1005-1011. The germ of common-law mortgages in the civil law. § 1015. In equity the mortgagor is treated as the owner of the land. § 1016. The mortgagee's interest is merely that of a security. § 1016 a. If he take possession, is accountable for rents and profits. § 1016 a and note. The mode of applying rents and profits. § 1016 b. Is entitled to compensation for necessary repairs. § 1016, 1016 b. Both mortgagor and mortgagee may be enjoined from waste. § 1016 c. The purchaser may insist upon keeping encumbrances on foot. § 1016 d. The purchaser of an equity of redemption compelled to respond to the mortgagee. § 1017. The mortgagor holds as owner, but may not commit waste. § 1018. The essential quality to create a mortgage is a debt. § 1018 a. Mortgage may be released by surrender of defeasance. § 1018 b. Where the facts are doubtful, courts incline to treat conditional deeds as mortgages. § 1018 c. No stipulation will defeat mortgagor's equity. § 1018 d. The assignee takes it subject to all equities. § 1018 e. Effect of payment of the debt upon the title. § 1019. The equity of redemption not barred by express agreement. § 1020, 1020 a. Equitable mortgages created by deposit of title-deeds. § 1021. All vested estates may be mortgaged. § 1021 a. Subsequent title acquired by mortgagor enures to the benefit of mortgagee. equity has allowed a portion to be raised by sale or mortgage in the lifetime of the parents, subject, nevertheless, to the lifeestate. The parent's death is anticipated, in order to make provision for the children. The result of the very protracted series of these discussions for one hundred and fifty years is, that if an estate be settled to the use of the father for life, remainder to the mother for life, remainder to the sons of the marriage in strict settlement, and, in default of such issue, with remainder to trustees to raise portions, and the mother dies without male issue and leaves issue female, the term is vested in remainder in the trustees; and they may sell or mortgage such a reversionary term, in the lifetime of the sur viving parent, for the purpose of raising the portions; unless the contingencies, on which the portions were to become vested, had not happened, or there was a manifest intent that the term should not be sold or mortgaged in the lifetime of the parents, nor until it had become vested in the trustees in possession. The inclination of the Court of Chancery has been against raising portions out of reversionary terms by sale or mortgage, in the lifetime of the parent, as leading to a sacrifice of the interests of the person in reversion or remainder. And modern settlements usually contain a prohibitory clause against it." Post, § 1248, 1249. [See 1 Perry on Trusts, § 346-356.] § 1022. How far one having a power to sell may mortgage. § 1023 All persons having a vested interest may redeem. § 1023 a, 1023 b. Effect of mortgage to secure future advances. § 1023 c. Subject further discussed. § 1023 d. Notice required of subsequent encumbrances. § 1023 e. Discharge of mortgage and reconveyance. § 1024. The mortgagee's remedy by the civil law. § 1025. The sale of the premises the more equitable remedy. § 1027 a. Such powers construed favorably. § 1028. On bills to redeem, sometimes marshal securities. § 1028 a. Right to redeem barred in twenty years. § 1028 b. So also of the right of the mortgagee to foreclose. § 1030. Difference between a mortgage and pledge of personal estate. § 1031. Equity of redemption in chattels foreclosed by sale. § 1032. Bill to redeem not proper in cases of pledge. § 1033. Foreclosure in equity the effectual remedy for the pledgee. § 1034. Subsequent advances presumed to be a lien on the pledge. § 1035. This rule in analogy to that of the civil law. § 1035 a. Prior equities acquired, by notice, or purchase of legal title. § 1035 b. How the interest of mortgagor or lessor of personalty is liable to execution. § 1035 c. Mortgage extinguished by payment of debt, &c. § 1035 d. Mortgage paid cannot be made security for further advance; but if so agreed, equity will not interfere. § 1035 e. How mortgage of personalty is waived or extinguished. § 1035 f. The mortgagee may accept from a part-owner of the equity of redemption his proportion of the mortgage debt. § 1035 g. Enumeration of other cases and points decided. § 1004. In the next place as to MORTGAGES. It is wholly unnecessary to enter into a minute examination of the origin and history of this well-known and universally received security in the countries governed by the common law. During the existence of the system of feudal tenures in its full rigor, mortgages could have had no existence in English jurisprudence, as they were incompatible with the leading objects of that system. The maxim of the feudal law was "Feudalia, invito domino, aut agnatis, non recte subjiciuntur hypothecæ, quamvis fructus, posse esse, recep tum est."2 But, as soon as the general right of alienation of real property was admitted, the necessities of the people almost immediately led to the introduction of mortgages.3 Littleton has enumerated two sorts, which were distinguished by the names of vadium vivum, and vadium mortuum. 1 Glanville, Lib. 10, cap. 6. The latter was, in the com 82 Fonbl. Eq. B. 3, ch. 1, § 1, and note 2 Bac. Abridg. Mortgage, A.; 2 Fonbl. (a); Bac. Abridg. Mortgage, A. Eq. B. 3, ch. 1, § 1, note (a). 4 Litt. § 327, 332; Co. Litt. 202 b, 205 a. mon law, called a mortgage, from two French words, mort (mortuum, or dead), and gage (vadium pignus, or pledge), because if not redeemed at the stipulated time, it was dead to the debtor.1 The former was called simply a living pledge, in contradistinction to the latter, for the reason given by Lord Coke. "Vivum autem dicitur vadium, quia nunquam moritur ex aliquâ parte, quod ex suis proventubus acquiratur."2 Thus, if a man borrowed £100 of another, and made over an estate of lands to him, until he received the same sum out of the issues and profits of the land, it was called a vivum vadium; for neither the money nor the land dieth or is lost. But, if a feoffment was made of land, upon condition that, if the feoffor paid to the feoffee the sum of £100 on a certain day, he might re-enter on the land; there, if he did not pay the sum at the day, he could not, at the common law, afterwards re-enter; but (as Littleton said) the land was taken away from him for ever, and so dead to him. And, if he did pay at the day, then the pledge was dead as to the feoffee; and, therefore, the feoffee was called tenant in mortgage, the estate being mortuum vadium.3 § 1005. It has been generally supposed, that the notion of mortgages, and of the redemption thereof, in the English law, was borrowed from the Roman law, although Mr. Butler contends that they were strictly founded on the common-law doctrine of conditions. Whatever truth there may be in this latter observation, as to the origin of mortgages of lands in the English law, there is no doubt that the notion of the equity of redemption was derived from the Roman law, and that it is purely the creature of courts of equity. In the Roman law there were two sorts of transfers of property, as security for debts; namely, the pignus and the hypotheca. The pignus, or pledge, was when any thing was pledged as a security for money lent, and the possession thereof was passed to the creditor, upon the condition of returning it to the owner when the debt was paid. The hypotheca was, when the 1 Glanville seems to give a somewhat different explanation. Mortuum vadium dicitur illud, cujus fructus vel reditus interim percepti in nullo se acquietant. Glanv. Lib. 10, cap. 6; 4 Kent, Comm. Lect. 58, p. 136, 137 (3d edit.), and note (b). 2 Co. Litt. 205 a. this opinion of Mr. Butler is certainly entitled to great consideration; for Littleton expressly puts mortgages as estates on condition. In respect to mortgages and pledges of personal property, there may have beer originally a distinction, borrowed from the civil law. Glanville, Lib. 10, cap. 6. Courts of equity, in a * Littleton, § 332; Co. Litt. 205 a; 2 great variety of cases of both sorts, act Black. Comm. 157. In respect to mortgages of lands, upon the principles of the civil law. thing pledged was not delivered to the creditor, but remained in the possession of the debtor. In respect to what was called an hypothecary action there was no difference between them. "Inter pignus" (says the Institutes) "autem et hypothecam (quantum ad actionem hypothecariam attinet) nihil interest; nam de qua re inter creditorem et debitorem convenerit, ut sit pro debito obligata, utraque hac appellatione continetur. Sed in aliis differentia est. Nam pignoris appellatione eam proprie rem contineri dicimus, quæ simul etiam traditur creditori; maxime si mobilis sit. At eam quæ sine traditione nuda conventione tenetur, proprie hypothecæ appellatione contineri dicimus."2 The Digest states the distinction with still more pregnant brevity. "Proprie pignus dicimus, quod ad creditorem transit; hypothecam, cum non transit, nec possessio ad creditorem." 3 § 1006. In the Roman law, it seems that the word pignus was often used indiscriminately to describe both species of securities, whether applied to movables or immovables. Thus, it is said in the Digest: "Pignus contrahitur non sola traditione, sed etiam nuda conventione, etsi non traditum est." But, in an exact sense, pignus was properly applied to movables, and hypotheca to immovables. "Pignus appellatum" (says the Digest) "a pugno, quia res quæ pignori dantur, manu traduntur. Unde etiam videri potest verum esse, quod quidam putant, pignus proprie rei mobilis constituti." So that it answered very nearly to the corresponding term pledge in the common law, which, although sometimes used in a general sense to include mortgages of land, is, in the stricter sense, confined to the pawn and deposit of personal property. In the Roman law, however, there was generally no substantial difference in the nature and extent of the rights and remedies of the parties, between movables and immovables, whether pledged or hypothecated. But in the common law, as we shall presently see, the difference as to rights and remedies between a pledge of personal property and a mortgage of real estate, or even of personal property, is very marked and important." 1 Halifax, Roman Law, ch. 15, p. 63; Bac. Abr. Mortgage, A.; The Brig Nestor, 1 Sumner, 81, 82; Vinn. ad Inst. Lib. 3, tit. 15, Comm. 1, 2; Ryall v. Rolle, 1 Atk. 166, 167; Story on Bailments, § 286. 2 Justin. Inst. Lib. 4, tit. 6, § 7; Dig. Lib. 20, tit. 1, L. 5, § 1; Vinn. ad Inst. Lib. 3, tit. 15. Dig. Lib. 13, tit. 7, 1. 9, § 2. 4 Dig. Lib. 13, tit. 7, 1. 1. 5 Dig. Lib. 50, tit. 16, 1. 238, § 2; Pothier, Pand. Lib. 20, tit. 1, n. 1; 1 Domat, B. 3, tit. 1, § 1, art. 1; Vinn. ad Inst. 4, tit. 6, § 8, Comm. 112; id. Lib. 3, tit. 15, § 4, and Comm. 1; Story on Bailments, § 286; Ryall v. Rowles, 1 Ves. 358; 8.0. 1 Atk. 166, 167. 6 See 4 Kent, Comm. Lect. 68, p. 138, § 1007. In the Roman law there were two sorts of actions, applicable to pledges and hypothecations; the action called actio pigneratitia, and that called actio hypothecaria. The former was properly an action in personam, and divisible into two sorts: (1.) Actio directa, which lay in favor of the debtor against the creditor to compel him to restore the pledge when the debt had been paid;1 (2.) Actio contraria, which lay in favor of the creditor against the debtor, to recover the proper value or compensation, when the latter had retained possession of the pledge, or when the title to it had failed by fraud or otherwise; or when the creditor sought compensation for expenses upon it.2 The actio hypothecaria, on the other hand, was strictly in rem, and was given to the creditor to obtain possession of the pledge, in whosesoever hands it might be.3 § 1008. Without dwelling more upon topics of this sort, which are purely technical, it may be useful to state, as illustrative of some of the doctrines admitted into equity jurisprudence, that under the civil law, although the debt for which the mortgage or pledge was given, was not paid at the stipulated time, it did not amount to a forfeiture of the right of property of the debtor therein. It simply clothed the creditor with the authority to sell the pledge and reimburse himself for his debt, interest, and expenses; and the residue of the proceeds of the sale then belonged to the debtor. It has been supposed by some writers, that to justify such a sale, it was indispensable that it should be made under a decretal order of some court upon the application of the creditor. But, although the creditor was at liberty to make such an application, it does not appear that he might not act, in ordinary cases, without any such judicial sanction, after giving the proper notice of the intended sale, as prescribed by law, to the debtor. When the debtor could not be found, and notice could not be given to him, such a decretal order seems to have been 130 (2d edit.); Story on Bailments, § 286, 287; 1 Powell on Mortg. 3, by Coventry, and Hughes, and Rand. 1 Just. Inst. Lib. 3, tit. 15, § 4; Vinn. ad Inst. Lib. 3. tit. 15, Comm. 2, 3. * Dig. Lib. 13, tit. 7, 1. 3, 8, 9; Pothier, Pand. Lib. 13, tit. 7, n. 24 to 29; Vinn. ad Inst. Lib. 3, tit. 15, § 4, Comm. 2, 3; id. Lib. 4. tit. 6, § 8, Comm. 6. The statement of Mr. Powell respecting the Actio Pigneratitia and Hypothecaria is not accurate. See 1 Brown, Civil Law, 204, note (8). 3 Vinn. ad Inst. Lib. 3, tit. 15, § 4, Comm. 3; id. Lib. 4, tit. 6, § 8, Comm. 1, 2; Pothier, Pand. Lib. 20, tit. 1, § 29 to 36. 4.Pothier, Pand. Lib. 20, tit. 5; 1 Domat, B. 3, tit. 1, § 3, art. 1. |