The Elements of Commercial Law; Containing a Concise and Logical Exposition of the Rules Relating to Business Transactions a Practical Text-Book for Use in Schools (Paperback)

This historic book may have numerous typos and missing text. Purchasers can download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated.1899 Excerpt: ... CHAPTER LIX. MORTGAGES OF REAL PROPERTY. 811. In general.--These securities are important, as they enable investors in land to give safe security for the unpaid price, or to borrow money for the purposes of business, or for the improvement of the estate, upon the stable and permanent security of the land itself. They afford a safe form of investment for the funds of the provident and saving, and are a favored form of investment for funds held in trust. 812. Definition and general nature.--The conveyance of an estate or property in land by way of pledge to secure the payment of a debt, such conveyance to become void upon payment being made, constitutes a formal mortgage of real property. The party giving the mortgage is called the mortgagor, the party to whom it is given is the mortgagee. At common law a mortgage was strictly a conveyance upon condition subsequent, and passed the legal title to the mortgagee, subject to be defeated and revested in the mortgagor upon payment of the mortgage debt strictly at the time agreed upon. Upon failure by the mortgagor so to pay, the estate became absolute in the mortgagee, though its value was far greater than the debt and interest, and even though the mortgagor's default was due to necessity, accident or mistake. The harshness of this rule led equity, at an early day, to treat the condition of forfeiture as in the nature of a penalty, and to hold that, as the conveyance was intended as a mere pledge to secure the payment of the debt, it was enough if it 1 effected that purpose. The mortgagor might, therefore, redeem the land in equity by paying the debt and interest within a reasonable time. This right to redeem in equity was known as an equity of redemption, and from it grew the practice of filing bills...