two persons, not to secure a joint debt, but to secure the several debt of each, they hold as tenants in common, not as joint tenants, and the survivor can enforce only his own individual claim." 151 153 CONSIDERATION 63. Mortgages are usually given as security for the payment of a sum of money. They are, however, sometimes conditioned for the support and maintenance of the mortgagee, or even given as security for the faithful performance of specified duties by the mortgagor." When given for the payment of money, the debt intended to be secured usually represents either a preexisting indebtedness or an indebtedness incurred contemporaneously with the execution of the instrument, the precise amount of which is set forth in the mortgage." It frequently happens, however, that mortgages are given to secure future advances of money which are to be made by the mortgagee, the exact amount of which cannot be known in advance, and therefore cannot be inserted in the mortgage.". In some of the United States, out of a regard for subsequent purchasers from the mortgagor, statutes have been enacted which provide that such mortgages shall be null and void as to third parties, unless the amounts of such future advances, and the times when they are to be made, be specifically set forth in the mortgage. There are regulations, in other states, that no such mortgage shall be a lien except from the time the loan or advance is actually made." 64. Covenants. - Mortgages given as security for the payment of money borrowed on the credit of real estate usually contain covenants for the payment of interest on the loan, for the payment of taxes upon the property conveyed, and for the placing of insurance upon the buildings. 15155 Me. 520 (1868.) 152 29 Kans. 765 (1883). 15371 Pa. 219 (1872). 1545 Conn. 442 (1825). EQUITY OF REDEMPTION 65. The doctrine of the mortgagor's equity of redemption arose from the view which English courts of equity as distinguished from the courts of law took of the vadium mortuum. They promulgated the doctrine that the forfeiture of the mortgagor's land upon his failure to pay the debt upon the very day appointed in the mortgage, was nothing short of a penalty, and as such should be relieved against. They held that mortgages should be regarded as the Roman law had regarded them, as mere securities for the payment of the debt. During the reign of Charles II, the equitable doctrine was firmly established that the mortgagee held the lands, although forfeited at law, as a trust, and that the mortgagor, upon payment of the debt and all equitable charges, had the right to redeem the land at any time before the foreclosure of the mortgage. This right of the mortgagor to redeem the land, after the estate had become vested at law in the mortgagee, was called his equity of redemption.' 156 The equity of redemption being intended for the protection of the mortgagor, courts of equity were soon required, by the artifices, connivance, and oppression of the mortgagor's creditors, aimed at the nullification of the doctrine, to enunciate a still further principle of scarcely less importance which has survived to the present time, namely, that the mortgagor cannot, by any words in the original mortgage, preclude himself from the right to redeem his property at any time up to the actual foreclosure of the mortgage. "Once a mortgage always a mortgage," became, and still remains, one of the most important maxims of the law. Any agreement or stipulation of the parties, made at the time of the execution of the mortgage, waiving or barring the mortgagor's right of redemption, is void. When a mortgage takes the form of a deed absolute, with a separate agreement to reconvey executed simultaneously with the principal instrument, a provision in the separate agreement that if the debt be not paid within the time stipulated the 157 156 Ping. Mort., Secs. 7. 8: Story Eq.. 157 29 Ark. 544 (1874); 96 U. S. 332 (1877). Sec. 1,013; Jon. Mort., Sec. 5 agreement to reconvey shall be void and the deed become absolute "with no right of redemption," is null and void, and the grantee will be entitled to redeem at any time up to the time of foreclosure.' 158 66. Waiver. But a mortgagor may, by an agreement executed subsequently to the mortgage, and founded upon a new and sufficient consideration, waive his equity of redemption. An agreement to reconvey executed at the same time as an absolute deed may subsequently be cancelled so as to give an absolute title to the grantee, where the transaction is conducted with fairness both as between the parties and as against the creditors of the mortgagor, and where the rights of no third parties have intervened. 159 67. Purchasers of the Equity of Redemption. – A purchaser of mortgaged premises who expressly assumes the payment of the mortgage thereby makes himself personally liable for the payment of the debt, and the recourse of the mortgagee is not confined to proceedings on the mortgage alone. In such a case, the original mortgagor stands in the position of a surety for the payment of the mortgage, and may be sued as such. The purchaser is the principal debtor, but the mortgagee may at his election treat both as principal debtors and obtain a personal decree against both.100 161 A purchaser who simply buys subject to an existing mortgage assumes no personal liability. He is considered, in the absence of other evidence, simply to have become the purchaser of the equity of redemption. He is, indeed, interested in the payment of the mortgage as being an encumbrance upon his land, but he is not considered to have entered into any obligation on his part to pay the debt, and if he part with his title, he has no longer any interest in the mortgage. To create personal liability in such a purchaser, the deed of conveyance must contain words which clearly import the assumption of an obligation to pay the 162 1581 Allen (Mass.) 107 (1861). 159 17 Pick. (Mass.) 213 (1835). 160 47 N. Y. 236 (1872); 115 U. S. 505 (1885). 16158 N. H. 380 (1878). debt. 103 The rule, however, is universal, whether the purchaser expressly assume the payment of the mortgage or only take subject to the mortgage, that in either case the land itself is the primary fund for the payment of the debt, and is as effectually charged with the encumbrance of the mortgage as if the purchaser had himself made the mortgage.' 164 A purchaser of the equity of redemption at a sheriff's sale cannot call upon the mortgagor to pay off the mortgage. He takes his purchase subject to the mortgage. It follows that he incurs no personal liability to the mortgagee, who must collect his debt out of the land itself." THE MODERN MORTGAGE 68. In England, a mortgage is one thing at law, and another in equity. At law, a mortgage is an estate; in equity, it is merely a security.166 167 In the United States, there is not, as in England, a distinct, harmonious doctrine or system governing the subject of mortgages, but the mortgagor's equity of redemption is recognized. In most of the states, the English doctrine prevails that a mortgage has the dual character of being a conveyance of the estate at law and a mere security for the debt in equity, with reciprocal rights in the parties which are enforceable in the appropriate courts of law or of equity. In such states, as against the mortgagor, the mortgage is held to pass the legal title to the mortgagee, who is entitled to immediate possession, to be held subject to the mortgagor's exercise of his equity of redemption. If the equity of redemption be lost by the foreclosure of the mortgage, the estate vests absolutely in the mortgagee.1oo Other states have abolished the distinction between courts of law and courts of equity, and have established a single statutory action or remedy in which the legal and equitable rights of the parties are administered at the same time and 163 29 Barb. (N. Y.) 524 (1859). 164 38 Iowa 112 (1874). 165 10 Paige (N. Y.) 249 (1843). 166 Jon. Mort., Sec. 11. 167 Ping. Mort., Secs. 9-27. 1685 Metc. (Mass.) 1 (1842); 65 Pa. 278 (1870). 169 170 by the same tribunal.' In such states, the doctrine is practically universal that the mortgagee takes no estate of any kind in the premises, but only a lien on them as a security for his debt, and can only acquire possession of the premises by a foreclosure and sale." In some states, even where the mortgagee has acquired the legal title by foreclosure and sale, he is permitted to retain title only so long as may be necessary for him to pay his debt out of the rents and profits of the land."" 69. Summary. - Reviewing what has been said, it will be apparent that the following general observations may be made of the views taken of the modern mortgage by the courts of England and of this country. 1. At law, both in England and in most of the United States, a mortgage is a conveyance of the legal title, as against the mortgagor; but a mere security for the debt, as against all other persons. 2. In equity, both in England and in most of the United States, a mortgage is merely a security for the debt, not only as against third persons, but also as against the mortgagor himself. 3. In some of the United States, a mortgage is never, under any circumstances, anything but a mere security for the debt. KINDS OF MORTGAGES 70. Power-of-Sale Mortgages. In England, and in many jurisdictions of the United States, the practice exists of inserting in the ordinary form of mortgage a power of sale, that is, an authority to the mortgagee to foreclose the mortgage or to sell or convey the property upon default by the mortgagor; and a provision is generally coupled with it, for payment of an attorney's fee." Where the mortgage contains no such authority, power to sell upon the mortgage is conferred by statute, both in England and in most of the 169 Ping. Mort., Secs. 9-27. 170 Code of Ga. (1873), Sec. 1,954; 36 Mich. 364 (1877); 2 Barb. Ch. (N. Y.), 119 (1847). 1711 Houst. (Del.) 320 (1853); 52 Miss. |