LECTURE LVIII.

ON THE LAW OF MORTGAGE.

A MORTGAGE is the conveyance of an estate, by way of pledge for the security of debt, and to become void on payment of it. The legal ownership is vested in the creditor; but, in equity, the mortgagor remains the actual owner, until he is debarred by his own default, or by judicial decree.

There is no branch of the law of real property which embraces a greater variety of important interests, or which is of more practical application. The different, and even conflicting views, which were taken of the subject by the courts of law and of equity, have given an abstruse and shifting character to the doctrine of mortgages. But the liberal minds and enlarged policy of such judges as Hardwicke and Mansfield, gave expansion to principles, tested their soundness, dispersed anomalies, and assimilated the law of the different tribunals on this as well as on other heads of jurisprudence. The law of mortgage, under the process of forensic reasonings, has now become firmly established on the most rational foundations.

In the examination of so extensive a title, I shall endeavour to take a just and accurate, though it must necessarily be only a very general view of the subject, under the following heads: I. Of the general nature of mortgages:

II. Of the mortgagor's estate and equity of redemption: III. Of the estate and rights of the mortgagee:

IV. Of foreclosure.

I. Of the general nature of mortgages.

(1.) Different kinds of mortgages.

The English law of mortgages appears to have been borrowed, in a great degree, from the civil law; and the Roman

hypotheca corresponds very closely with the description of a mortgage in our law. The land was retained by the debtor, and the creditor was entitled to his actio hypothecaria, to obtain possession of the pledge, when the debtor was in default; and the debtor had his action to regain possession, when the debt was paid, or satisfied out of the profits, and he might redeem at any time before a sale. The use of mortgages is founded on the wants and convenience of mankind, and would naturally follow the progress of order, civilization and commerce. In the time of Glanville, the mortgage of lands, as security for a loan, was in use, though, during the feudal ages, it was doubtless under the same check as the more absolute alienation of the fee; and both the alienation and mortgage of land were permitted only with the concurrence *of the lord.

The English books distinguish between *137 a vadium vivum and vadium mortuum. The first is when the creditor takes the estate to hold and enjoy it, without any limited time for redemption, and until he repays himself out of the rents and profits. In that case, the land sur

Mr. Butler is of opinion that mortgages were introduced less upon the model of the Roman pignus, or hypotheca, than upon the common law doctrine of conditions. But, upon a view of the Roman hypotheca, it is impossible to withhold our belief, that the English law of mortgages, taken in its most comprehensive sense, was essentially borrowed from the civil law. Thus, in the Roman law, the mortgage could be held as security for further advances; (Code, 8. 27. 1,) and a covenant that the mortgage should be forfeited absolutely on a default, was void. Code, 8. 35. 3. So, a mortgagor was entitled to due notice and opportunity to redeem, before his right was extinguished; and the pledge could not be sold without a protracted notice, or judicial decree. Code 8. 28. 4. Ibid. 34. 3, sec. 1. The mortgagee was allowed to tack subsequent debts, in the case of the mortgagor seeking redemption, though this was not permitted to the extent of impairing the rights of intermediate incumbrancers. Dig. 20. 4. 3. Ibid. 20. 4. 20. Code, 8. 27. 1. See Story's Com. on Eq. Jurisprudence, vol. ii. 276, note. The analogy might be traced in other important particulars. See Pothier's Pandecta Justinianæ, lib. 27, and Dict. du Digest, par Thevénot-Dessaules, tit. Hypotheque, passim. In Dr. Brown's View of the Civil Law, vol. i. 200-210, the general features of similitude between the Roman hypotheca and the English mortgage, are strongly delineated. In Burges' Com. on Colonial and Foreign Laws, vol. ii. 164-246, there is a full and instructive view of the law of mortgages, under the Roman civil law, and the law of those modern nations which have adopted the civil law; and such a view gives us a profound impression of the wisdom, refinement and justice of the property regulations of the Roman law.

b Glanville, lib. 10. c. 6. Nulli liceat feudum vendere vel pignorare sine permissione illius domini. Feud. lib. 2. tit. 55.

vives the debt; and, when the debt is discharged, the land, by right of reverter, returns to the original owner. In the other kind of mortgage, the fee passed to the creditor, subject to the condition of being defeated, and the title of the debtor to be resumed, on his discharging the debt at the day limited for the payment; and if he did not, then the land was lost, and became dead to him for ever. This latter kind of mortgage is the one which is generally in use in this country. The Welsh mortgages, which are very frequently mentioned in the English books, though they have now entirely gone out of use, resembled the vivum vadium of Coke, or the mortuum vadium of Glanville; for though in them the rents and profits were a substitute for the interest, and the land was to be held until the mortgagor refunded the principal; yet, if the value of the rents and profits was excessive, equity would, notwithstanding any agreement to the contrary, decree an account.b

Co. Litt. 205. a. 2 Blacks. Com. 157.

Fulthorpe v. Foster, 1 Vern. 476. The Welsh mortgage, under its strict contract, without any mitigation of its severity in equity, was analogous to the contract termed antichresis in the Roman law. Dig. 20. 1. 11. 1. It was likewise analogous to the mortgage of lands in the age of Glanville; and he gives to a mortgage, by which the creditor was to receive the rents and profits during the detention of the debt, without account and without applying them to reduce it, the name of mortuum vadium. It was a hard and unconscientious, but a lawful contract; and Glanville, with primeval frankness and simplicity, does not scruple to condemn it as unjust, while he admits it to be lawful: injusta est et honesta. Glan. lib. 10. c. 6. 8. The French Code Civil, No. 2085, has adopted the Roman antichresis, with this mitigation, that the rents and profits are to be applied to keep down the interest, and the surplus, if any, to extinguish the principal. Under the Civil Code of Louisiana, taken from the Code Napoleon, there are two kinds of pledges: the pawn, when a movable is given as security, and the antichresis, when the security given consists in immovables or real estate. Under the latter the creditor acquires the right to take the rents and profits of the land, and to credit, annually, the same to the interest, and the surplus to the principal of the debt, and is bound to keep the estate in repair, and to pay the taxes. Upon default upon the part of the debtor, the creditor may prosecute the debtor, and obtain a decree for selling the land pledged. Civil Code, art. 3143-3148. Livingston v. Story, 11 Peters, 351. Judge Ruffin, in Poindexter v. M'Cannon, 1 Bad. & Dev. Eq. Cas. N. C. 377, speaks in indignant terms of the vadium vivum: “No mortgagee or mortgagor ever yet made a contract, upon which the possession was to change immediately, unless it were the veriest grinding bargain that could be driven with a distressed man, who had no way to turn."

(2.) Of the pledge and mortgage of chattels.

There is material distinction also to be noticed between a pledge and a mortgage. A pledge, or pawn, is a deposit of goods redeemable on certain terms, and either with or without a fixed period for redemption. Delivery accompanies a pledge, and is essential to its validity. The general property does not pass, as in the case of a mortgage, and the pawnee has only a special property. If no time of redemption be fixed by the contract, the pawnor may redeem at any time; and though a day of payment be fixed, he may redeem after the day. He has his whole lifetime to redeem, provided the pawnee does not call upon him to redeem, as he has a right to do at any time, in his discretion, if no time for redemption be fixed; and if no such call be made, the representatives of the pawnor may redeem after his death. As early as the time of Glanville, these just and plain principles of the law of pledges were essentially recognised; and it was declared, that if the pledge was not redeemed by the time appointed, the creditor might have recourse to the law, and compel the pawnor to redeem by a given day, or be for ever foreclosed and barred of his right. And if no time of redemption was fixed, the creditor might call upon the debtor at any time, by legal process, to redeem or lose his pledge. The distinction between a pawn and mortgage of chattels is equally well settled in the English and in the American law; and a mortgage of goods differs from a pledge or pawn in this, that the former is a conveyance of the title upon condition, and it becomes an absolute interest at law, if not redeemed by a given time, and it may be valid in certain cases without actual deliv

In the Roman law, the pignus, pledge or pawn, answered to a pledge of movables in the common law, and possession was requisite. But the hypotheca answered to a mortgage of real estate, where the title to the thing might be acquired without possession. Inst. 4. 6, 7. Dig. 13. 7. 35. Vide supra, vol. ii.

577.

123.

Burnet, J., in Ryall v.
Ratcliff v. Davis,

b Bro. Abr. tit. Pledges, pl. 20. tit. Trespass, pl. 271. Rowley, 2 Ves. 358, 359. Mores v. Gorham, Owen's Rep. 1 Bulst. 29. Cro. Jac. 244. Yelv. 178. S. C. Com. Dig. tit. Mortgage by Pledge

of Goods, b. Demaudray v. Metcalf, Prec. in Ch. 419. Bro. 21. Perry v. Craig, 3 Missouri Rep. 516.

• Glanville, lib. 10. c. 6. 8.

Vanderzee v. Willis, 3

*139 ery.a (1)

According to the civil law, *a pledge could

not be sold without judicial sanction, unless there was a special agreement to this effect; and this is, doubtless, the law at this day in most parts of Europe. The French Civil Code has adopted the law of Constantine, by which even an agreement at the time of the original contract of loan, that if the debtor did not pay at the day, the pledge should be absolutely forfeited, and become the property of the creditor, was declared to be void. While on this subject of pledges, it may be proper further to observe, that the pawnee, by bill in chancery, may bar the debtor's right of redemption, and have the chattel sold. This has frequently been done in the case of stock, bonds, plate or other personal property pledged for the payment of debt. But without any bill to redeem, the creditor, on a pledge or mortgage of chattels, may sell at auction, on giving reasonable opportunity to the debtor to redeem, and apprising him of the time and place of sale; and this is the more convenient and usual practice. While the

The Master of the Rolls, in Jones v. Smith, 2 Ves. jr. 878. Powell on Mortgages, 3. Barrow v. Paxton, 5 Johns. Rep. 258. Brown v. Bement, 8 ibid. 96. M'Lean v. Walker, 10 ibid. 471. Garlick v. James, 12 ibid. 146. Wilde, J., in 2 Pick 610. Haven v. Law, 2 N. H. Rep. 13. De Lisle v. Priestman, 1 Brown's Penn. Rep. 176. Langdon v. Buel, 9 Wendell, 80. Rep. 532.

Gifford v. Ford, 5 Vermont

Code, 8. 35. 3. Perezius on the

Bell's Com. on the Law of Scol

b Inst. lib. 2. tit. 8. sec. 1. Vinii Com. h. t. Code, vol. ii. 62. tit. 34. sec. 4, 5. p. 63. sec. 8. land, vol. ii. 22. 5th ed. Merlin's Repertoire, art. Gage. Code Civil, art. 2078. Institutes of the Laws of Holland, by J. Vander Linden, translated by J. Henry, Esq., 180.

c

Kemp v. Westbrook, 1 Ves. 278. Demaudry v. Metcalf, Prec. in Ch. 419. Vanderzee v. Willis, 3 Bro. 21.

d Tucker v. Wilson, 1 P. Wms. 261. 1 Bro. P. C. 494. edit. 1784. Lockwood v. Ewer, 2 Atk. 303. Hart v. Ten Eyck, 2 Johns. Ch. Rep. 100. Johnson v.

(1) It seems that the interest of a mortgagor of personal property, if he has not a right of possession for a definite time, is not the subject of levy and sale on execution. Mattison v. Baucus, 1 Comst. R. 295.

Even if a mortgagee of chattels acquire a complete title to them on default of payment, the mortgagor has a right to redeem; and a sale by the mortgagee, under a power of sale, of an amount equal to the debt, is a full payment, and the residue of the chattels belong to the mort. gagor. Charter v. Stevens, 3 Denio's R. 33. Where the mortgage contained a power of private sale on default, it was held, that the mortgagee's title became absolute on default without sale. Burdick v. McVanner, 2 Denio's R. 170.

The mortgagee is entitled to immediate possession, in the absence of an agreement to the contrary. Ferguson v. Thomas, 26 Maine R. 499.