MORTGAGE. A general notion of a mortgage may be collected from the following passage in Littleton (§ 332), who treats of Mortgages, as then in use, under the general head -of estates upon condition.
" If a feoffment be made upon such condition, that if the feoffor pay to the feoffee, at a certain day, 40/. of money, that then the feoffor may re-enter, &c.,— in this case the feoffee is called tenant in mortgage, which is as much to say, in French, as mortgage ; and in Latin, aor tae= 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.
The money thus agreed to be paid by the feoffor must be supposed to be money borrowed from the feoffee, or the amount of a debt due from the feoffor to the feof fee, though Littleton does not expressly say so. According to the terms of this contract, if the feoffor, or the feoffor's heir did not pay the money at the time appointed, the land became the absolute property of the feoffee.
The mortuum vadium of Glanville (book x.) is evidently a different thing from the mortuum vadium of Littleton, and Glanville's explanation of the term seems more applicable to his mortuum vadium, than Littleton's is to the mort gage which he describes. " When an Immovable thing," says Glanville, "is put into pledge, and seisin of it has been delivered to the creditor for a definite term, it has either been agreed between the creditor and debtor that the proceeds and rents shall in the meantime reduce the debt, or that they shall in no measure be so applied. The former agreement is just and binding ; the other unjust and dishonest, and is that called a mortgage, but this is not prohibited by the king's court, although it considers such a pledge as a species of usury." (Beamea' nansl.) Littleton describes the old and strict law of mortgage ; but the courts of equity gradually introduced such modifications as to convert a mortgage from its ancient simplicity into a very artificial and com plicated arrangement. A mortgage is a
contract, and therefore requires two per sons at least, one of whom borrows and the other lends money. The borrower is the owner of land, or has some inte rest in land, which he conveys or transfers as a security to the lender of the money ; the borrower is called the mort gagor, and the lender is called the mort gagee. The whole transaction is proper ly termed a mortgage ; but the name is sometimes applied simply to the debt.
The mortgage deed varies in its terms according to the estate or interest in the lands which the mortgagor conveys to the mortgagee, and according to the spe vial agreement of the parties. By the execution of the deed, the estate of the mortgagor in the lands mortgaged is con ditionally transferred to the mortgagee, but the mortgagor's estate is not forfeited till he makes default in payment of the money borrowed and interest at the time named in the deed. The money borrowed is however seldom paid at the time agreed on, the consequence of which is that the mortgagor's estate is forfeited by his not fulfilling the condition, and the mortga gee becomes the absolute legal owner of the land, or of such estate in it as was conveyed to him. He can then bring an action of ejectment against the mortgagor, if the mortgagor is in possession of the land, without giving him notice ; and he can do this even before default in pay ment, unless it is agreed by the mortgage deed that the mortgagor shall remain in possession till he makes default, and a clause to this effect is commonly inserted in the deed.
From the time of default being made, the several interests of the mortgagor and the mortgagee in the land must be con sidered as chiefly belonging to the juris diction of equity. When the mortgagee, by default of the mortgagor, has become the absolute legal owner of the lauds, the mortgagor possesses what is called the equity of redemption. This equity of redemption is considered by courts of equity as an estate in the land ; it may be devised by the mortgagor, and, in case of his intestacy, it will descend to his heir ; it may be sold, or it may be mortgaged; it is subject both to dower (in equity. by 3 & 4 Wm. IV. c. 105) and curtesy ; and it may be settled like a legal estate.