Our next subject for consideration is a mortgage debt. The term mortgage debt is here employed for want of one which can more precisely express the kind of interest intended to be spoken of. Every person who borrows money, whether upon mortgage or not, incurs a debt or personal obligation to repay out of whatever means he may possess; and this obligation is usually expressed in a mortgage deed in the shape of a covenant by the borrower to repay the lender the money lent, with interest, at the rate agreed on. If, however, the borrower should personally be unable to repay the money lent to him, or if, as occasionally happens, it is expressly stipulated that the borrower shall not be personally liable to repay, then the lender must depend solely upon the property mortgaged; and the nature of his interest in such property, here called his mortgage debt, is now attempted to be explained. In this point of view, a mortgage debt may be defined to be an interest in land of a personal nature, recognized as such only by the Court of Chancery, in its office of administering equity. In equity, a mortgage debt is a sum of money, the payment whereof is secured, with interest, on certain lands; and being money, it is personal property, subject to all the incidents which appertain to such property. The Courts of law, on the other hand, do not regard a mortgage in the light of a mere security for the repayment of money with interest. A mortgage in Law is an absolute conveyance, subject to an agreement for a reconveyance on a certain given event. Thus, let us suppose freehold lands to be conveyed by A., a person seised in fee, to B. and his heirs, subject to a proviso, that on repayment on a given future day, by A. to B., of a sum of money then lent by B. to A., with interest until repayment, B. or his heirs will reconvey the lands to A. and his heirs; and with a further proviso, that until default shall be made in payment of the money, A. and his heirs may hold the land without any interruption from B. or his heirs. Here we have at once a common mortgage of freehold land (a). A., who conveys the land, is called the

A mortgage debt is a. personal interest in land in equity only.

The payment or repayment of money not exceeding 25l.................................

s.

d.

0

0

8

Exceeding 25l. and not exceeding 501.

0

1

3

"

50l.

"

100 l.

0

2

6

"

100 l.

"

150 l.

0

3

9

"

150 l.

"

2001.

0

5

0

"

200 l.

"

2501.

0

6

3

"

250 l.

"

300 1.

0

7

6

"

300 l.

"

For every 100l. and also for any fractional part of 100l. of such amount...................

0

2

6

(2) Being a collateral or auxiliary or additional or substituted security, or by way of further assurance for the above-mentioned purpose where the principal or primary security is duly stamped :

For every 100l. and also for any fractional part of 100 l. of the amount secured.........

0

0

6

(a) The following duties are imposed by the Stamp Act, 1870, stat. 33 & 34 Vict. c. 97 : -

Mortgage, bond, debenture, covenant, warrant of attorney to confess and enter up judgment, and foreign security of any kind :

(1) Being the only or principal or primary security for -

(3) Transfer, assignment, disposition, or assignation of any mortgage, bond, debenture, covenant, or foreign security, or of any money or stock secured by any such instrument, or by any warrant of attorney to enter up judgment, or by any judgment: mortgagor; B., who lends the money, and to whom the land is conveyed, is called the mortgagee. The conveyance of the land from A. to B. gives to B., as is evident, an estate in fee simple at law. He thenceforth becomes, at law, the absolute owner of the premises, subject to the agreement under which A. has a right of enjoyment, until the day named for the payment of the money {b); on which day, if the money be duly paid, B. has agreed to re-convey the estate to A. If, when the day comes, A. should repay the money with interest, B. of course must re-convey the lands; but if the money should not be repaid punctually on the day fixed, there is evidently nothing on the face of the arrangement to prevent B. from keeping the lands to himself and his heirs for ever. But upon this arrangement, a very different construction is placed by a Court of law and by a Court of equity, a construction which well illustrates the difference between the two.

The Courts of law, still adhering, according to their ancient custom, to the strict literal meaning of the term, hold, that if A. do not pay or tender the money punctually on the day named, he shall lose the land for ever; and this, according to Littleton (c), is the origin of the term mortgage or mortuum vadium, "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 is dead to him upon condition, etc. And if he doth pay the money, then the pledge is dead as to the tenant, etc." Correct, however, as is Littleton's statement of the law, the accuracy of his derivation may be questioned; as the word mortgage appears to have been applied, in more early times, to a feoffment to the creditor and his heirs, to be held by him until his debtor paid him a given sum; until which time he received the rents without account, so that the estate was unprofitable or dead to the debtor in the meantime (d); the rents being taken in lieu of interest, which, under the name of usury, was anciently regarded as an unchristian abomination (e). This species of mortgage has, however, long been disused, and the form above given is now constantly employed. From the date of the mortgage deed, the legal estate in fee simple belongs, not to the mortgagor, but to the mortgagee. The mortgagor, consequently, is thenceforward unable to create any legal estate or interest in the premises; he cannot even make a valid lease for a term of years (f), - a point of law too frequently neglected by those whose necessities have obliged them to mortgage their estates. When the day named for payment is passed, the mortgagee, if not repaid his money, may at any time bring an action of ejectment against the mortgagor without any notice, and thus turn him out of possession (g); so that, if the debtor had no greater mercy shown to him than a Court of law will allow, the smallest want of punctuality in his payment would cause him for ever to lose the estate he had pledged. In modem times, a provision has certainly been made by act of parliament for staying the proceedings in any action of ejectment brought by the mortgagee, on payment by the mortgagor, being the defendant in the action (h), of all principal, interest and costs (i). But at the time of this enactment, the jurisdiction of equity over mortgages had become fully established; and the act may consequently be regarded as ancillary only to that full relief, which, as we shall see, the Court of Chancery is accustomed to afford to the mortgagor in all such cases.