fore consider the vivum vadium to have implied a security, by which the rents of land were from time to time applied in reduction of the principal of the debt; and the mortuum vadium to have originally implied a security, by which, until payment of a given sum, the rents of land were ad interim lost to the owner, and received by the creditor and unaccounted for, so that the debt remained undiminished, which was at common law, as before remarked, in the event of the creditor dying possessed of the pledge, punishable as usury; and it must be observed, there was the like advantage, in one respect, to the debtor in this form of mortgage, as in the vivum vadium, viz., that the estate was never lost. CHAPTER I. of mortuum There is no trace of the period when this mode of mortgage Modern form fell into disuse. In its stead arose the mortuum vadium, or vadium. mortgage, afterwards so well known at common law, and thus described by Littleton (c): "Item; if a feoffment be made upon such condition, that if the feoffor pay to the feoffee at a certain day, &c., forty pounds of money, that then the feoffor may re-enter, &c. In this case the feoffee is called tenant in mortgage, which is as much as to say in French, come mortgage, and in Latin, mortuum vadium. And it seemeth that the cause why it is called mortgage is, for that it is doubtful whether the feoffor will pay, at the day limited, such sum or not; and if he doth not pay, then the land, which is put in pledge upon condition for the payment of the money, is taken from him for ever, and so dead to him upon condition, &c.; and if he doth pay the money, then the pledge is dead as to the tenant, &c." It is somewhat singular that Littleton should not refer to the Estate on conexplanation of the term as rendered by Glanville; and we may conclude that the original mortuum vadium had by this time totally fallen into disuse and become obsolete. The mortgage described by Littleton was strictly an estate upon condition, that is, a feoffment of the land was made to the creditor, with a condition in the deed of feoffment, or in a deed of defeasance executed at the same time (for the common law does not allow a feoffment to be defeasanced by matter subsequent), by which it was provided, that on payment by the mortgagor or feoffor of a given sum at a time and place certain, it should be lawful for him to re-enter. Immediately on the livery made, the mortgagee or feoffee became the legal owner of the land, and in him (e) Sect. 332. dition. CHAPTER I. Enforcement of conditions at common law. Forfeiture on default of mortgagor. the legal estate instantly vested, subject to the condition (d). If the condition was performed, the feoffor re-entered and was in of his did estate, paramount to all the charges and incumbranees of the feoffee, whether in the Per or in the Post (e), or in other words, above all persons, whether claiming through the feoffee, as heir, widow, or purchaser, or paramount, or collaterally, to the feoffee, as the lord by escheat and the husband by curtesy. If the condition was broken, the feoffee's estate was absolute and his estate was indefeasible, and all the legal consequences followed as though he had been absolute owner from the time of the feoffment. But until breach of condition, possession was not in general given, which was a further distinction between this mode of mortgage and the vivum vadium and old mortuum vadium. In order to protect the mortgagor from the eviction of the mortgagee, to which he was become liable, a proviso was inserted, declaring that, until breach of condition, the mortgagor might hold the estate; and on the other hand, the mortgagor engaged that in such event he would do all lawful acts for further assurance. Although the common law did not favour conditions, but required strict performance of them (f), yet it was in certain. cases satisfied with the performance of the intent of the condition (g), though not performed in words; and although a difference was taken (h) between conditions to preserve and conditions to destroy an estate, the former being allowed to be performed as near the condition as could be, and the latter being strictissimi juris, yet conditions in mortgages, the performance of which, in fact, destroyed the estate of the mortgagee, were favoured in the eye of the law, and rather considered as belonging to the class of conditions for preserving estates. Thus mortgages stood at common law, and it is difficult to conceive, if the Courts of law had been so inclined (which it does not seem they were), on what principle they could have proceeded in giving the debtor relief. The forfeiture was complete; the mortgagee, by the default of the mortgagor, had (d) In 5 Bac. Abr., Mortgage, it is stated that "the mortgagor before forfeiture, and whilst it remains uncertain whether he will perform the condition at the time limited or not, hath the legal estate in him." This is a mistake; the legal estate instantly vests in the mortgagee, subject to be defeated on performance of the condition by the mortgagor. (e) Co. Lit. 239, a. (g) Shep. Touchst. by Prest. 139, 143. become the absolute owner of the estate; it could not be divested from him without a reconveyance, and there remained no remedy short of an actual legislative enactment, without disturbing the settled land-marks of property (i). CHAPTER I. A jurisdiction was, however, arising, under which the harshness Equitable of the common law might be softened without an actual inter- jurisdiction. ference with its principles, and a system established at once consistent with the security of the creditor, and a due regard for the interests of the debtor. form. It may under this head be lastly remarked, that at the present Reconveyance day, if the condition, instead of determining the estate of the mortgage in necessary of mortgagee, be, that on payment, &c., the feoffee, &c. shall ordinary reconvey or re-assign the estate, there, notwithstanding the performance of the condition by payment within the appointed time, an actual reconveyance or re-assignment will be necessary. (i) Notwithstanding the rigour with which the common law punished the breach of the condition, yet it is clear from the concurrent testimony of all our old dramatic writers, the chroniclers of their times, that the law was opposed to the better feelings of the Alathe. Thou hast undone a faithful gentleman, Algripe.-I do confess. I will henceforth practise repentance. The Night Walker, or Little Thief. (6) gage" de fined. CHAPTER II. OF THE NATURE AND INCIDENTS OF A MORTGAGE SECURITY. Term "mort- i.-Definition of Mortgage.-A mortgage, in the modern acceptation of the term in this country, is a security created by contract for the payment of a debt already due or to become due, or of a present or future advance, effected by means of an actual or executory conveyance of real or personal property, charging the mortgaged property with the payment of the money secured, redeemable at law only according to the strict legal conditions of the conveyance, but redeemable in equity independently of such conditions, and enforceable, in default of payment, by foreclosure or sale in lieu thereof (a). Charges by operation of law distinguished from mortgages. Charges under settlements and wills. A charge on real or personal property may arise by operation. of law, or may be effected by contract. In the present Treatise it is proposed to discuss only charges by contract. Charges by contract to secure a debt or loan may be effected by means of mortgage, pledge, or hypothecation. According to the above definition, a mortgage arises out of contract between a debtor and a creditor for the payment of a debt or loan; and herein it is distinguished from a charge arising by operation of law, either under a judgment or charging order made by a Court of competent jurisdiction, or by way of lien as incident to contracts in which the parties stand in a relation to each other other than that of debtor and creditor by virtue of the mortgage contract itself, as, e. g., vendor and purchaser, solicitor and client, and factor and principal. The definition excludes charges created by deed of settlement, or by testamentary disposition, as in the case of a jointure or portion secured by a term and also charges of debts or legacies created by will or codicil. Such charges give no right of foreclosure (b). (a) In Ireland, and in many of the Colonies, mortgages are generally enforceable by sale instead of foreclosure; and the English Courts have power in a foreclosure action to decree a sale. See post, p. 725. (b) See Sampson v. Pattison, 1 Ha. 533, 535; Jenkin v. Row, 5 De G. & S. 107; Re Owen, (1894) 3 Ch. 220. performance Mortgages are also distinguished by the above definition from CHAPTER "I. powers of distress or entry given to secure the performance or Securities for observance of obligations other than the repayment of a debt or obserloan, such as the execution of works, or the payment of rents, vance of obligations. or the keeping of conditions and covenants in leases, &c. gage and The term "mortgage" has frequently been defined as a Distinction pledge fel, and it is apparently derived from the Latin words between mort“mortuum valium," or dead pledge. But, even as regards pledge. real estate, and such personalty as is capable of complete transfer without actual or constructive delivery, it seems necessary, to the completeness of the definition, to indicate that the so-called pledge must be made by means of a legal or equitable conveyance or assurance of the property. And, as regards personal chattels, the use of the word "pledge" seems to overlook important distinctions between a mortgage where the title passes to the mortgagee by virtue of a bill of sale, though without delivery, and a pledge (strictly so called) where a qualified property passes by actual or constructive delivery of the chattels (d). tion distin The repayment of a debt or loan may be secured by hypothe- Hypothecacation, or equitable assignment of choses in action or goods to guished from which the debtor or borrower is entitled, but which are owing mortgage and pledge. by or in the hands of third persons. Such hypothecation amounts to an appropriation of the specific fund or chattels, and may be effected either by agreement between the parties, or by an order on the holder of the fund or chattels (e). An hypothecation differs from a mortgage in that there is no actual or executory conveyance or assurance of the property appropriated for payment of the debt or loan, and from a pledge in that there is no actual or constructive delivery of the property. between civil ii.—Assurance of Property by Mortgage.-The transfer of Difference property by way of mortgage is, according to English common bed the law, to be regarded less as akin to the Roman pignus or hypo- common law theca than as a conveyance on common law condition (f). By to mortgages. of England as the civil law, the debt secured was regarded as the principal, (c) See Co. Lit. 205, a; Com. Dig. tit. Mortgage, A.; Dav. Conv. 3rd ed. vol. ii. p. 2. See also Galton v. Hancock, 2 Atk. 435 (d) See further as to the distinction between mortgages and pledges, post, Chap. LXIII. pp. 1458 et seq. (e) See post, Chap. LXIV. pp. 1487 et seq. (f) See Butler's note, Co. Lit. 205, a. |