the mortgage-money: which course has been since pretty generally continued, principally because on the death of the mortgagee such term becomes vested in his personal representatives, who alone are entitled in equity to receive the money lent, of whatever nature the mortgage may happen to be. As soon as the estate is created, the mortgagee may immediately enter on the lands; but is liable to be dispossessed, upon performance of the condition by payment of the mortgage-money at the day limited. And therefore the usual way is to agree that the mortgagor shall hold the land till the day assigned for payment; when, in case of failure, whereby the estate becomes absolute, the mortgagee may enter upon it and take possession, without any possibility at law of being afterwards evicted by the mortgagor, to whom the land is now for ever dead. But here again the courts of equity interpose; and, though a mortgage be thus forfeited, and the estate absolutely vested in the mortgagee at the [159] common law, yet they will consider the real value of the tenements compared with the sum borrowed. And, if the estate be of greater value than the sum lent thereon, they will allow the mortgagor at any reasonable time to recall or redeem his estate (8); paying to the mortgagee his principal, interest, and expenses: for otherwise, in strictness of law, an estate worth 1000l. might be forfeited for non-payment of 1007. (8) The policy of the statute of limitations (32 Hen. VIII. c. 2,) applies as strongly to a mortgaged estate as to any other. So long as the estate can be shewn to have been treated as a pledge, so long there is a recognition of the mortgagor's title: (Hodle v. Healey, 1 Ves. & Bea. 540. S. C. 6 Mad. 181. Grubb v. Woodhouse, 2 Freem. 187): but from the time when all accounts have ceased to be kept by the mortgagee; and provided also he has in no other way, (either in communications to the mortgagor or in dealings with third parties, Hansard v. Hardy, 18 Ves. 459. Ord v. Smith, Sel. Ca. in Cha. 10), admitted the estate to be held as a security only; the statute will begin to run, unless the mortgagor's situation bring him within some of the savings of the statute: and if he do not within twenty years assert his title to redeem, his right will have been forfeited by his own laches. (Marquis of Cholmondeley v. Lord Clinton, 2 Jac. & Walk. 180, et seq. Whiting v. White, Coop. 4. S. C. 2 Cox, 300. Barren v. Martin, 19 Ves. 327). But to shew that an estate has been treated as one affected by a subsisting mortgage, within twenty years immediately preceding a bill brought for redemption, parol evidence is admissible. (Reeks v. Postlethwaite, Coop. 170. Perry v. Marston, cited 2 Cox, 295. Edsell v. Buchanan, 2 Ves. jun. 84). In the case of Montgomery v. The Marquis of Bath, (3 Ves. 560), a decree was made for a foreclosure as to the share of one of several joint mortgagees: but, it is to be observed, no opposition was made by the mortgagor in that case; and it is very doubtful whether a decree for a partial foreclosure ought ever to be made. (See Cockburn v. Thompson, 16 Ves. 324, n.) It is, at all events, certain, there can be no foreclosure or redemption, unless the whole of the parties entitled to any share of the mort gage money are before the court: (Lowe v. Morgan, 1 Br. 368. Palmer v. The Earl of Carlisle, 1 Sim. & Stu. 425): it being always the object of a court of equity to make a complete decree, embracing the whole subject, and determining (as far as possible) the rights of all the parties interested. (Palk v. Člinton, 12 Ves. 58. Cholmondeley v. Clinton, 2 Jac. & Walk. 134). Upon analagous principles, not only the mortgagor but a subsequent mortgagee, who comes to redeem the mortgage of a prior mortgagee, must offer to redeem it entirely; although the second mortgage may affect only part of the estates comprised in the first, and the titles are different. (Palk v. Clinton, 12 Ves. 59. Reynolds v. Lowe, cited from Forrester's MS. in I Hovenden's Suppl. to Ves. junr. 280). It is true that Lord Hardwicke (in Ex parte King, 1 Atk. 300), intimated a doubt whether it was an established rule of the court, that a mortgagor who has borrowed, from the same party, money on the security of two estates, shall be compelled to redeem both, if he will have back either estate: but it had previously been decided, that, in such cases, if one of the securities proves to be scanty, the mortgagor shall not be allowed to bring his bill for the redemption of the other mortgage only: (Purefoy v. Purefoy, 1 Vern. 29. Shuttleworth v. Laycock, 1 Vern. 245. Pope v. Onslow, 2 Vern, 286): and modern cases have confirmed the doctrine, that the mortgagee may insist on being redeemed as to both his demands, or neither; with this reasonable restriction, however, that a man who happens to be engaged with another in one mortgage only, may redeem the same, though the other person concerned therein has also pledged another estate. (Jones v. Smith, 2 Ves. junr. 376. Ca tor v. Charlton, and Collett v. Munden, cited 2 Ves. junr. 377). or a less sum. This reasonable advantage, allowed to mortgagors, is called the equity of redemption (9): and this enables a mortgagor to call on the mortgagee, who has possession of his estate, to deliver it back and account for the rents and profits received, on payment of his whole debt and interest; thereby turning the mortuum into a kind of vivum vadium. But, on the other hand, the mortgagee may either compel the sale of the estate, in order to get the whole of his money immediately; or else call upon the mortgagor to redeem his estate presently, or in default thereof, to be for ever foreclosed from redeeming the same; that is, to lose his equity of redemption without possibility of recall. And also, in some cases of fraudulent mortgages (a), the fraudulent mortgagor forfeits all equity of redemption whatsoever (10). It is not however usual for mortgagees to take possession of the mortgaged estate, unless where the security is precarious, or small; or where the mortgagor neglects even the payment of interest when the mortgagee is frequently obliged to bring an ejectment (11), and take the land into his own hands in the nature of a pledge, or the pignus of the Roman law: whereas, while it remains in the hands of the mortgagor, it more resembles their hypotheca, which was, where the possession of the thing pledged remained with the debtor (b). But by statute 7 Geo. II. c. 20. after payment or tender by the mortgagor of principal, interest, and costs, the mortgagee can maintain no ejectment; but may be compelled to re-assign his securities (12). In Glanvil's time, when the universal method of conveyance was by livery of seisin [*160] or corporal tradition of the lands, no gage or pledge of lands was good unless possession was also delivered to the creditor; "si non sequatur ipsius vadii traditio, curia domini regis hujusmodi privatas conventiones tueri non solet ;" for which the reason given is, to prevent subsequent and fraudulent pledges of the same land: "cum in tali casu possit eadem res pluribus aliis creditoribus tum prius tum posterius invadiari (e).” And the frauds which have arisen since the exchange of these public and notorious conveyances for more private and secret bargains, have well evinced the wisdom of our ancient law (13). (a) Stat. 4 & 5 W. & M. c. 16. (b) Pignoris appellatione eam proprie rem contineri dicimus, qua simul etiam traditur, creditori. At eam, quae sine traditione nuda conventione te (9) 2 Saund. 8. 46. 11. a. (10) By the 4 & 5 W. & M. c. 16. if any person mortgages his estate, and does not previously inform the mortgagee in writing of a prior mortgage, or of any judgment or incumbrance, which he has voluntarily brought upon the estate, the mortgagee shall hold the estate as an absolute purchaser, free from the equity of redemption of the mortgagor. (11) The mortgagee is not now obliged to bring an ejectment to recover the rents and profits of the estate, for it has been determined that where there is a tenant in possession, by a lease prior to the mortgage, the mortgagee may at any time give him notice to pay the rent to him; and he may distrain for all the rent which is due at the time of the notice, and also for all that accrues afterwards. Moss. v. Gallimore, Doug. 279. The mortgagor has no interest in the premises, but by the mere indulgence of the mortgagee; he has not even the estate of a tenant at will, for it is held he netur, proprie hypothecae appellatione contineri may be prevented from carrying away the emblements, or the crops which he himself has sown. Ib. 2 Fonblanque on Equity, 258. If the mortgagor grants a lease after the mortgage, the mortgagee may recover the possession of the premises in an ejectment against the tenant in possession without a previous notice to quit. 3 East, 449. Keech v. Hall, 1 Doug. 21. But if the landlord mortgages, pending a yearly tenancy, the tenant is entitled to six months' notice from the mortgagee. 1 T. R. 378. (12) The statute contains exceptions. See decisions, 7 T. R. 185. 2 Chitty's Rep. 264. (13) An experiment made in the counties of York and Middlesex, to counteract, by registration, the inconveniences alluded to in the text, is mentioned by our author (at the close of the 20th chapter of this book), as one of very doubtful utility in practice, however plausible in theory. If a mortgagee neglect to take possession IV. A fourth species of estates, defeasible on condition subsequent, are those held by statute merchant, and statute staple; which are very nearly related to the vivum vadium before mentioned, or 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 13 Edw. I. de mercatoribus, and thence called a statute merchant; the other pursuant to the statute 27 Edw. III. 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 (d), from whence this security is called a statute staple. They are both, I say, securities for debts acknowledged to be due; and originally permitted only among traders, for the benefit of commerce; whereby not only the body of the debtor may be imprisoned, and his goods seized in satisfaction of the debt, but also his lands may be delivered to the creditor, till out of the rents and profits of them the debt may be satisfied; and, during such time as the creditor so (d) See Book I. c. 8. of, or if he part with, the title deeds of the mortgaged property, with a view to enable the mortgagor to commence frauds upon third persons; he will be postponed to incumbrancers who have been deceived, and induced to advance money, by his collusion with the mortgagor: but the mere circumstance of not taking, or keeping, possession of the title deeds, is not, of itself, a sufficient ground for postponing the first mortgagee; unless there be fraud, concealment, or some such purpose, or concurrence in such purpose; or that gross negligence which amounts to evidence of a fraudulent intention: (Evans v. Bicknell, 6 Ves. 190. Martinez v. Cooper, 2 Russ. 216. Barnett v. Weston, 12 Ves. 133. Bailey v. Fermor, 9 Pr. 267. Peter v. Russell, Gilb. Eq. Rep. 123) and, of course, a prior incumbrancer, to whose charge on the estate possession of the title deeds is not a necessary incident, cannot be postponed to subsequent incumbrancers, because he is not in possession of the title deeds. (Harper v. Faulder, 4 Mad. 138. Tourle v. Rand, 2 Br. 652). Among mortgagees, where none of them have the legal estate, the rule in equity is, that, qui prior est tempore potior est jure; and the several incumbrances must be paid according to their priority in point of time. (Brace v. Duchess of Marlborough, 2 P. Wms. 495. Clarke v. Abbot, Bernard. Ch. Rep. 460. Earl of Pomfret v. Lord Windsor, 2 Ves. Sen. 486. Maundrell v. Maundrell, 19 Ves. 260. Mackreth v. Symmons, 15 Ves. 354), But when, of several persons having equal equity in their favour, one has been fortunate, or prudent, enough to get in the legal estate; he may make all the advantage thereof which the law admits, and thus protect his title, though subsequent in point of time to that of other claimants; courts of equity will not interfere in such cases, but leave the law to prevail. In conformity to this settled doctrine, if an estate be encumbered with several mortgage debts, the last mortgagee, provided he VOL. I. 72 lent his money bona fide and without notice, may, by taking in the first incumbrance, carrying with it the legal estate, protect himself against any intermediate mortgage: no mesne mortgagee can take the estate out of his hands, without redeeming the last incumbrance as well as the first. (Wortley v. Birkhead, 2 Ves. sen. 573. Morret v. Paske, 2 Atk. 53. Frere v. Moore, 8 Pr. 487. Barnett v. Weston, 12 Ves. 135). But, to support the doctrine of tacking, the fairness of the circumstances under which the loan desired to be tacked was made, must be liable to no impeachment: (Maundrell v. Maundrell, 10 Ves. 260): and, though the point has never called for decision, it has been said to be very doubtful,—whether a third mortgagee, by taking in the first mortgage, can exclude the second, if the first mortgagee, when he conveyed to the third, knew of the second. (Mackreth v. Symmons, 15 Ves. 335). Indisputably, a mortgagee purchasing the mortgagor's equity of redemp tion, or a puisne incumbrancer, cannot set up a prior mortgage of his own, (nor, consequently, a mortgage which he has got in), against mesne incumbrances of which he had notice. (Toulmin v. Steere, 3 Meriv. 224. Mocatta v. Murgatroyd, 1 P. Wms. 393. Morret v. Paske, 2 Atk. 62). Upon analogous principles, if the first mortgagee stood by, without disclosing his own incumbrance on the estate, when the second mortgagee advanced his money, under the persuasion that the estate was liable for no prior debt; the first mortgagee, in just recompence of his fraudulent concealment, will be postponed to the second. And the rule, as well as the reason, of decision is the same, where the mortgagor has gained any other advantage, in subsequent dealings respecting the mortgaged estate, by the connivance of the mortgagee. (Becket v. Cordley, 1 Br. 357. Berrisford v. Milward, 2 Atk. 49). Part of this note is extracted from 2 Hovenden on Frauds, 183, 196. holds the lands, he is tenant by statute merchant or statute staple. There is also a similar security, the recognizance in the nature of a statute staple, acknowledged before either of the chief justices, or (out of term) before their substitutes, the mayor of the staple at Westminster and the recorder of London; whereby the benefit of this mercantile transaction is extended to all the king's subjects in general, by virtue of the statute 23 Hen. VIII. c. 6. amended by 8 Geo. I. c. 25. which directs such recognizances to be enrolled and certified into chancery. But these by the statute of frauds, 29 Car. II. c. 3. are only binding upon the lands in the hands of bona fide purchasers, from the day of their enrolment, which is ordered to be marked on the record. V. Another similar conditional estate, created by operation of [*161] law, for security and satisfaction of debts, is called, an estate by elegit. What an elegit is, and why so called, will be explained in the third part of these commentaries. At present I need only mention that it is the name of a writ, founded on the statute (e) of Westm. 2. by which, after a plaintiff has obtained judgment for his debt at law, the sheriff gives him possession of one half of the defendant's lands and tenements, to be occupied and enjoyed until his debt and damages are fully paid: and during the time he so holds them, he is called tenant by elegit. It is easy to observe, that this is also a mere conditional estate, defeasible as soon as the debt is levied. But it is remarkable that the feodal restraints of alienating lands, and charging them with the debts of the owner, were softened much earlier and much more effectually for the benefit of trade and commerce, than for any other consideration. Before the statute of quia emptores (f), it is generally thought that the proprietor of lands was enabled to alienate no more than a moiety of them: the statute therefore of Westm. 2. permits only so much of them to be affected by the process of law, as a man was capable of alienating by his own deed. But by the statute de mercatoribus (passed in the same year) (g) the whole of a man's lands was liable to be pledged in a statute merchant, for a debt contracted in trade; though one half of them was liable to be taken in execution for any other debt of the owner. 6. I shall conclude what I had to remark of these estates, by statute merchant, statute staple, and elegit, with the observation of sir Edward Coke (h). These tenants have uncertain interests in lands and tenements, and yet they have but chattels and no freeholds;" (which makes them an exception to the general rule) " because though they may hold an estate of inheritance, or for life, ut liberum tenementum, until their debt be paid; yet it shall go to their executors: for ut is similitudinary; and though to recover their estates, they shall have the same remedy (by assise) as [*162] a tenant of the freehold shall have (i), yet it is but the similitude of a freehold, and nullum simile est idem." This indeed only proves them to be chattel interests, because they go to the executors, which is inconsistent with the nature of a freehold; but it does not assign the reason why these estates, in contradistinction to other uncertain interests, shall vest in the executors of the tenant and not the heir; which is probably owing to this; that, being a security and remedy provided for personal debts due to the deceased, to which debts the executor is entitled, (e) 13 Edw. 1. c. 18. (f) 18 Edw. I. (g) 13 Edw. I. (h) 1 Inst. 42, 43 (t) The words of the statute de mercatoribus are, "puisse porter bref de novele disseisine, auri sicum de franktenement." the law has therefore thus directed their succession; as judging it reasonable from a principle of natural equity, that the security and remedy should be vested in those to whom the debts if recovered would belong. For upon the same principle, if lands be devised to a man's executor, until out of their profits the debts due from the testator be discharged, this interest in the lands shall be a chattel interest, and on the death of such executor shall go to his executors (k): because they, being liable to pay the original testator's debts, so far as his assets will extend, are in reason entitled to possess that fund out of which he has directed them to be paid (14). CHAPTER XI. OF ESTATES IN POSSESSION, REMAINDER, AND HITHERTO We have considered estates solely with regard to their duration, or the quantity of interest which the owners have therein. We are now to consider them in another view; with regard to the time of their enjoyment, when the actual pernancy of the profits (that is, the taking, perception, or receipt, of the rents and other advantages arising therefrom) begins. Estates therefore with respect to this consideration, may either be in possession, or in expectancy and of expectancies there are two sorts; one created by the act of the parties, called a remainder; the other by act of law, and called a reversion. I. Of estates in possession (which are sometimes called estates executed, whereby a present interest passes to and resides in the tenant, not depending on any subsequent circumstance or contingency, as in the case of estate executory), there is little or nothing peculiar to be observed. All the estates we have hitherto spoken of are of this kind; for,. in laying down general rules, we usually apply them to such estates as are then (k) Co. Litt. 42. (14) In New-York there is no statute merchant, statute staple, or elegit: but on an execution, the lands of a debtor may be sold absolutely. The doctrine of tacking mortgages does not apply here, at least as between registered mortgages; 1 Caines' Cases, 112; and probably would not be applied to unregistered mortgages. By statute 1 R. S. 756, every convey ance of real estate thereafter made (including mortgages, id. 762.) must be recorded in the office of the clerk of the county where the lands are situated, or is void as against any subsequent purchaser (including mortgagees, &c. id. 762), in good faith and for a valuable consideration, whose conveyance shall be first recorded. Formerly, an unrecorded deed given subsequent to an unrecorded mortgage had a preference over the mortgage, which was not lost by the mortgage being recorded after the purchase, but before the deed was recorded. (19 Johns. R. 281, &c.) Notice, however, of a prior incumbrance binds a sub- (1) Anestate in possession gives a present right of present enjoyment. An estate in remainder gives a right of future enjoyment, whether certainly or eventually depends on the form of the gift; and when the interest is contingent in its limitation, then on the events which have taken place. An estate in reversion gives a present fixed right of future enjoyment. 1 Prest. on Est. 89, &c. |