The estate of the mortgagor in possession has been likened to a tenancy at will o• by sufferance. and as between himself and the mortgagee, the analogy is very close. At common law the mortgagee having the title could take possession at will, the sole right of the mortgage•. if the mortgagee exercised this right, being to redeem by payment of the mortgage indebtedness on the due date, but as to all others, the mortgagee in possession is clothed with substantial ownership. Ile is entitled to the rents, issues. and profits of the mortgaged property: he may sell or incumher it subject to the mortgage, and upon his death the property goes to his heirs at law.
In many States the mortgagee's common-law right to take possession of the mortgaged prop erty by (jeetment or other appropriate action has been cut off, and he can only secure possession of the mortgaged property through foreclosure.
Although the mortgagee holds the title to the mortgaged property, the la W recognizes that he holds it ass an incident to his claim against the debtor, which is personal property. The mort gagee's estate, therefore, in both real and per sonal property, is regarded as personal property only, and passes. upon his death, to his next of kin and not to his heirs.
In general. the mortgagee out of possession is in the position of one having a mere lien or personal claim against the mortgagor. But the mortgagee in possession of the mortgaged prop erty, who was at common laW substantially in the position of owner of the property, was compelled by equity to account for the rents, issues, and 1»-otits, and to apply them upon the mortgage indebtedness. TiliS is now the established rule.
Both the mortgagor and the mortgagee may freely assign their interests. It is not unusual for the assignee of the mortgagor to assume the mortgage indebtedness by the instrument of as signment, and it is the general rule that the mortgagee may enforce this undertaking either upon the theory of subrogation or that the mort gagee may sue upon a contract made for his benefit. For other incidents of the estates of
mortgagor and mortgagee, see CURTESY : DOWER; Fixruims; WASTE.
When several mortgages are given upon the same property they have priority in the order of their c•rcatbum unless otherwise provided. This rule may be varied by the operation of the va T1011, recording acts.
A mortgage may be extinguished by payment of the mortgage indebtedness, or by a legal tender of the amount due on the (lay when dine. Tender after that time had no effect at common law, and in equity the only effect was to prevent hitcrest accruing. A mortgage may also be terminated by a release of the mortgagor, or by a merger. if the merger is accomplished by a conveyance of the mortgaged property by the mortgagor to the mortgagee, the courts will scrutinize the trans action with the greatest can.. and if there appear to have been any unfairness or undue influence on the part of the mortgagee, will allow the mort gagor to redeem. See NIEncEn.
A mortgage is extinguished by the final judg ment. or dceree in an action to foreclose the mortgaged property or in an action to redeem it from the uuo•tgagee. See EQUITY or nEDEMPTION.
Courts have always f:n•ored the nmo•tgagor's right to redeem, and at any time before the ex tinction of the mortgage will allow him to compel a cancellation and surrender of the mortgage upon payment of the mortgage indebtedness with interest, and, as an incident to the redemption, will compel the mortgagee to account for rents or other income which he has received from the mortgaged property. Consult :.tones, Treatise on tlae Law of llortgayes of Meal Property (Sth Boston, I 89 I), and of PITSCM ff I I It Boston. 189 t ; Pingrey, Trealisc on the Lou• of Chat t? 1 llortyages 1.1erAey City, 18911; Oa the Late of l/o•tquqe.s of heal /'r•opertr/ (Jersey ('ity, 1593) the referred to under II ti. num.:wry.