We have already defined a mortgage debt as an interest in land of a personal nature (s); and in accordance with this view, it was held that judgment debts against the mortgagee were a charge upon his interest in the mortgaged lands (t). But it was afterwards provided (u), that where any mortgage should have been paid off prior to, or at the time of, the conveyance of the lands to a purchaser or mortgagee for valuable consideration, the lands should be discharged both from the judgment and crown debts of the mortgagee. And by a still more recent statute, to which we have already referred (x), the lien of all judgments, of a date later than the 29th of July, 1864, has been abolished.
Repeal of the usury laws.
Mortgages to trustees.
Judgment debts a charge on mortgagee's interest in. the lands.
(o) Sec Follett v. Moore, 4 Ex. Rep. 410.
(p) Stat. 17 & 18 Vict. c. 90.
(q) 3 Atk. 734; 2 Ves. sen. 258; 3 Yes. jun. 631.
(r) Petty v. Styward, 1 Cha. Rep. 57; 1 Eq. Ca. Ab. 290; Vickers v. Cornell, 1 Bear. 529. (s) Ante, p. 403.
Mortgages are frequently transferred from one person to another. The mortgagee may wish to be paid off, and another person may be willing to advance the same or a further amount on the same security. In such a case the mortgage debt and interest are assigned by the old to the new mortgagee; and the lands which form the security are conveyed, or if leasehold assigned, by the old to the new mortgagee, subject to the equity of redemption which may be subsisting in the premises; that is, subject to the right in equity of the mortgagor or his representatives to redeem the premises on payment of the principal sum secured by the mortgage, with all interest and costs.
During the continuance of a mortgage, the equity of redemption which belongs to the mortgagor is regarded by the Court of Chancery as an estate, which is alienable by the mortgagor, and descendible to his heir, in the same manner as any other estate in equity (y); the Court in truth regards the mortgagor as the owner of the same estate as before, subject only to the mortgage. In the event of the decease of the mortgagor, the land mortgaged "will consequently devolve on the devisee under his will, or, if he should have died intestate, on his heir. And the mortgage debt, to which the lands are subject, was until recently payable in the first place, like all other debts, out of the personal estate of the mortgagor (z). As in equity the lands are only a security to the mortgagee, in case the mortgagor should not pay him, so also in equity the lands still devolved as the real estate of the mortgagor, subject only to be resorted to for payment of the debt, in the event of his personal estate being insufficient for the purpose. But by a recent act of parliament (a) it is now provided, that when any person shall, after the 31st of December, 1854, die seised of or entitled to any estate or interest in any land or other hereditaments which shall at the time of his death be charged with the payment of any sum of money by way of mortgage, and such person shall not, by his will or deed or other document, have signified any contrary or other intention, the heir or devisee, to whom such lands or hereditaments shall descend or be devised, shall not be entitled to have the mortgage debt discharged or satisfied out of the personal estate or any other real estate of such person; but the land or hereditaments so charged shall, as between the different persons claiming through or under the deceased person, be primarily liable to the payment of all mortgage debts with which the same shall be charged; every part thereof, according to its value, bearing a proportionate part of the mortgage debts charged on the whole thereof; provided that nothing therein contained shall affect or diminish any right of the mortgagee to obtain full payment of his mortgage debt either out of the personal estate of the person so dying as aforesaid or otherwise; provided also, that nothing therein contained shall affect the rights of any person claiming under any deed, will or document made before the 1st of January, 1855. This act, having given rise to many doubts, has been explained by another act (b), which provides (c), that in the construction of the will of any person who may die after the 31st of December, 1867, a general direction that the debts, or that all the debts of the testator, shall be paid out of his personal estate, shall not be deemed to be a declaration of an intention contrary to or other than the rule established by the act, unless such contrary or other intention shall be further declared by words expressly or by necessary implication referring to all or some of the testator's debts or debt charged by way of mortgage on any part of his real estate. It is further provided (d), that the word " mortgage" shall be deemed to extend to any lien for unpaid purchase-money upon any lands or hereditaments purchased by a testator.
Transfer of mortgages.
Equity of redemption is an equitable estate.
(t) Russell v. M' Culloch, V.-C. Wood, l.Jur., X. S. 157; 8.C. 1 Kay & J. 813.
(u) Stat. 18 & 19 Vict. c. 15, s. 11; Greaves v. Wilson, Rolls, 4 Jur., N. S. 802; 8.C. 25 Beavan, 434.
(.x) Stat. 27 & 28 Vict. c. 112, ante, p. 85.
(y) Sec ante, p. 157 et Seq,
The mortgage debt now primarily payable out of the mortgaged lands.
(z) See Yates v. Aston, 4 Q. B. 182; Mattew v. Blackmore, 1 H. & N. 762; Essay on Real Assets, p. 27.
(a) Stat. 17 & 18 Vict. c. 113, commonly called Locke King's Act; see Essay on Real Assets, pp. 36, 106.
The equity of redemption belonging to the mortgagor may again be mortgaged by him, either to the former mortgagee by way of further charge, or to any other person. In order to prevent frauds by clandestine mortgages, it is provided by an act of William and Mary(e), that a person twice mortgaging the same lands, without discovering the former mortgage to the second mortgagee, shall lose his equity of redemption. Unfortunately, however, in such cases the equity of redemption, after payment of both mortgages, is generally worth nothing. And if the mortgagor should again mortgage the lands to a third person, the act will not deprive such third mortgagee of his right to redeem the two former mortgagees (f). When lands are mortgaged, as occasionally happens, to several persons, each ignorant of the security granted to the other, the general rule is, that the several mortgages rank as charges on the lands in the order of time in which they were made, according to the maxim qui prior est tempore, potior est jure (g) But as the first mortgagee alone obtains the legal estate, he has this advantage over the others, that if he takes a further charge on a subsequent advance to the mortgagor, without notice of any intermediate second mortgage, he will be preferred to an intervening-second mortgagee (h). And if a third mortgagee, who has made his advance without notice of a second mortgage, can procure a transfer to himself of the first mortgage, he may tack, as it is said, his third mortgage to the first, and so postpone the intermediate incumbrancer (i). For, in a contest between innocent parties, each having equal right to the assistance of a Court of Equity, the one who happens to have the legal estate is preferred to the others; the maxim being, that when the equities are equal, the law shall prevail. A mortgage, however, may be made for securing the payment of money which may thereafter become due from the mortgagor to the mortgagee. Where a mortgage extends to future advances, it has been decided, that the mortgagee cannot safely make such advances, if he have notice of an intervening second mortgage (k).