EQUITY OF REDEMPTION. The estate or interest which the mortgagor retains in mort gaged property. In strict legal theory, the ex pression has reference only to the right of the mortgagor to eompel the redemption of the mort gaged property after forfeiture and after the title of the mortgagee has become absolute at law; but in practice the term is employed by lawyers as well as in popular speech to denote the residuum of interest left in the mortgagor after the making of the mortgage.
The legal effect of mortgaging property, whether real or personal, is to vest a defensible title in the mortgagee, which, upon default of payment, becomes an absolute title at The common-law tribunals maintained the legal effect of the transaction with rigorous consistency, re quiring the mortgagor to perform the condition of payment, upon which the conveyance had been made, to the letter. If he made his payment at time time and place specified, his title revived and the property became his again without a recoil veya nee. If he made default in payment on the 'law day,' the forfeiture was absolute and he was still liable to pay the debt in addition to losing the property. It was one of the earliest and greatest triumphs of the equity system to pre serve to the unfortunate debtor the right to re deem his property, notwithstanding his default, by the subsequent payment of the debt with in terest.
This innovation, which destroyed the legal ef fect of the forfeiture which had been incurred, was stoutly resisted by the common lawyers of the time, Sir Matthew Hale, when Chief Justice, declaring from the bench that by the growth of such equities the heart of the common law was eaten out. lint the justice and humanity of the relief thus extended to the debtor were too ob vious to permit a return to the system of for feitures, and it soon became a recognized head of equity jurisdiction. Under this salutary sys tem the mortgage has, both in law and equity, come to be considered merely a superior sort of lien, the mortgagor's equity of redemption rep resenting for most purposes the real and sub stantial ownership of the mortgaged property. As such it may be eonveyed, encumbered, or de vised by the mortgagor; or it may be transmitted by descent to his heirs. It is liable for the debts of the mortgagor, like the rest of his property, and is, in the United States, subject to (lower and curtesy.
Being thus an alienable estate, an interest in it may be acquired by any one to whom any estate or interest therein is granted, as a tenant for years. a subsequent mortgagee or other ineum
bran•er, the grantee of an easement, etc., as well as the heirs, devisees, and assignees of the mort gagor. Any person having such an interest has an equal right to redeem with the mortgagor himself. The mortgagee is not precluded from becoming the owner of the equity of redemption or of any interest therein by a purchase in gond faith from any person having the right. The usual effect of such a conveyance to the mort gagee is to extinguish the equity and convert his defensible title into an absolute title, though this result may be avoided if the intention of the parties or the interests of justice require that time equity be kept. aliva.
Originally the equitable right of redemption was unlimited in point of time, and this is still the ease so long as the relation of mortgagor and mortgagee continues, unless it be cut off by the process known a- foreclosure ,q.t.;, instituted by a t ill rn e prof ess snows in :•tate. as . t • -lir,: to distin guish it fre.i pr receding for the sale of t: 1 pr mis s. to xthich the nal le c f f i, s n h, s al- t t me to be applied) • a- t : 'tog the right or equity u r 1 1't n add of converting the mort gap_t •u 1 to 1 estate into an absolute one.
tither an process of foreclosure, there is, as i• id a A e. no way in which the right of re lc/. • •an be abridged so long as the rela ti n t i o•t2agt r and mortgagee continues. But if tl i • rt at ion is terminated by the mortgagee's ae‘et,. Ignition of the land, without any recognition of the mortgage. for the statutory crud of limitation. the equity of redemption I lay also be cut off by lapse of time. This period is usually twenty yea but in sonic jurisdictions a shorter period of limitation of ten or twelve years is provided by statute for extinguishing an equity of redemption by the adverse possession of the mortgagee. In the absence of statutes of limitation the equity tribunals have in some cases refused to recognize the right to redeem where the mortgagor or other party claiming the right had neglected for an unreasonable time to exer cise it.
Popularly the expression equity of redemption is often employed to denote the value of mort gaged property over and above the amount of the mortgage debt with the interest that may be due thereon. See CHANCERY EQI TITY FEITURE ; VORTGAGE ; HEDEM PTION : and consult I he referred to under the article on