MORTGAGE (OF, al 01'1(giqe, orguge. Fr. marl. from lat. mortuns, dead, from Mori, Skt. Mar, to die + /mac, 1l L. rntliunn, ',wailful, from e:oth. wadi. Cvr.
arelnir Eng. tr,,I„ Lat, rose, pledge, Lit h. eudati, to redeem a pledge). :Moe gage is the conveyance or transfer of property, either real or personal as security for the payment of a debt or the performance of a legal obligation.
The debtor or obligor may, and usually retain possession of the property mortgaged— the validity of tlo security not depending upon possession as in the case of pledge (q.v.) and common-law lien (q.v.) This method of securing performance of an obligation was known to the ancient law: and under the civil law the dis t inetion was well settled between hypo/hero, in which the property given as security remained in the possession of the debtor, and rignus. in the property given as security was sur rendered to the creditor.
Some writers have attributed the origin of the common-law mortgage to the civil law, while others assert that it grew out of the commondaw conditional gift. However this may be, the giv ing of security by mortgage first became of im portance at common law after the passage of the statute ()Oa Empfons (IS Edward 1.), by which the restraints on alienation of lands held in were removed. 'Mortgages were then in form eonditional grants, a form of gift or limitation peculiarly adapted to the giving of security without necessarily changing the possession of the seeurity. At common law the owner of real estate might grant to another ally estate in fee with the right on the part of the grantor or his heir. to upon the property and revest the title in the grantee or his heirs upon the happening of a specified condition.
)(y making the condition of rei:ntry the pay ment of money or the performance of an obliga tion due from the grantor to the grantee, all the essentials of a common-law mortgage were created. Upon payment of the sum due when due, the cowl it ion of the grant or conveyance happened and title was thereby revcsted in the grantor or mortgagor, lint if the mortgagor failed to pay the mortgaged debt when due, performance of the condition thereafter became impossible, the mortgagor thereby lost all claim upon the mort gaged properly.
Equity early exercised its jurisdiction to miti gate the harsh operation of the common-law rifle relatino. to conditional conveyances by al lowing the mortgagor who had failed to perform his obligation upon the due date tor the law day. as it was called 1 to redeem the mortgaged prop• era' upon payment of the sum due with interest, ltut ns a means- of limiting this equitable right of the mortgagor, equity also gave to the mortgagee the right to cut off the right of redemption by foreclosure. whiela was an equitable suit asking a indieial declaration that the right to redeem had been forfeited.
The moth lav of then. combines both lerml and equitable doetriaws; and many of its peeulialities, both of form and substance, will be explained by reference to the historical developian.nt of the law. While the mortgage in modern practiee may. for most purposes. lit' only as a lien created in favor of the mortgagee, it is still in forma eonveyanee vest ing the title of the property in the mortgagee, and in the absenee of statute. it is generally the rule that no mortgage valid at law con be created without a conveyance.
II is usual In incorporate in the mortgage a clans,' pro% bling for the deka-lance of the line upon payment of the mortgage indebtedness, but, as will appear, even that is not essential. In some States statutes have been passed autlio• iziug a mortgage which is not a conveyance in form. but which for all practical purposes has the smile effect as the common-law mortgage as modified by equity. One important consequence arising from tlw fact that at common law the mortgagee acquired a title was that his mortgage was valid against an innocent purchase• of the for value without notice of the mort gage, which could not have been the result had the mortgage been a mere lien or right in perso nae, against the mortgagor. See EQUITY ; FRAUD.