(b) An assignee takes the land subject to the mortgage.
(c) He does not become personally liable for the mortgage debt unless he expressly assumes it.
(d) In some states, when he does assume it, he may be sued personally by the mortgagee.
126. An equity of redemption may be transferred by operation of law, as:
(a) By descent.
(b) By sale on execution.
No Mortgage without an Equity of Redemption.
The mortgagor's equity of redemption is an inseparable incident of a mortgage. A mortgage cannot be created without an equity of redemption. An instrument having that effect would not be a mortgage, but an absolute conveyance, or a sale with a right to re190 As by specific bequests of his personal property. Hoff's Appeal, 24 Pa. St. 200. See Serle v. St Elvy, 2 P. Wms. 386.
191 Haven v. Foster, 9 Pick. (Mass.) 112; Lockhart v. Hardy, 9 Beav. 379. And see Duke of Cumberland v. Codrington, 3 Johns. Ch. (N. Y.) 229.
192 Hocker's Appeal, 4 Pa. St. 497; Gibson v. Mccormick, 10 Gill & J. (Md.) 65; Cope v. Cope, 2 Salk. 449.
193 Hocker's Appeal, 4 Pa, St. 497; Duke of Cumberland v. Codrington, 3 Johns. Ch. (N. Y.) 229.
194 Oneal v. Mead, 1 P. Wms. 693; Lutkins v. Leigh, Cas. t Talb. 63. See also, Evelyn v. Evelyn, 2 P. Wms. 659; Middleton v. Middleton, 15 Beav. 450, purchase. Nor can the equity of redemption be assigned to the mortgagee at the time the mortgage is executed.195 The mortgagee may purchase the equity of redemption at a subsequent time,196 but such transactions are carefully scrutinized by the courts.197
Rights of an Assignee.
After the execution of a mortgage the mortgagor may sell his equity of redemption as a whole or in parcels. So he may make successive mortgages.198 But in each case the transfer is subject to the previous mortgage.199 The mortgagee is a purchaser, to the extent of his claim, and as such is protected under the recording laws.200 He is entitled to have the whole of the mortgaged premises as security for his debt, and cannot be made to accept part of them as payment. Nor can a purchaser of the equity of redemption compel him to make partition.201
A purchaser of the mortgagor's rights, or, as he is usually called, an "assignee of the equity of redemption," though he takes the land subject to the mortgage, may acquire a paramount title, and set it up against the mortgagee,202 unless he is estopped by recitals in his deed.203 He may, however, in such case, show that the mortgage
195 Peugh v. Davis, 96 U. S. 332; Willets v. Burgess, 34 111. 494; Bayley v. Bailey, 5 Gray (Mass.) 505.
196 Ten Eyck v. Craig, 62 N. Y. 406; Phelan v. De Martin, 85 Cal. 365, 24 Pac. 725.
197 Phelan v. De Martin, 85 Cal. 365, 24 Pac. 725; Hinkley v. Wheelwright, 29 Md. 341; Peugh v. Davis, 96 U. S. 332; Oliver v. Cunningham, 7 Fed. 689.
198 Hodson v. Treat, 7 Wis. 263; Buchanan v. Monroe, 22 Tex. 537.
199 Kruse v. Scripps, 11 111. 98; Hartley v. Harrison, 24 N. Y. 170. As to leases of the mortgaged premises, see ante, p. 132.
200 Rowell v. Williams, 54 Wis. 636, 12 N. W. 86; Bass v. Wheless, 2 Tenn. Ch. 531; Moore v. Walker, 3 Lea (Tenn.) 656; Patton v. Eberhart, 52 Iowa, 67, 2 N. W. 954; Herff v. Griggs, 121 Ind. 471, 23 N. E. 279.
201 Spencer v. Waterman, 36 Conn. 342; Mcconihe v. Fales, 107 N. Y. 404, 14 N. E. 285; Carpenter v. Koons, 20 Pa. St. 222; Gerdine v. Menage, 41 Minn. 417, 43 N. W. 91; Daniel v. Wilson, 91 Ga. 238, 18 S. E. 134.
202 Knox v. Easton, 38 Ala. 345.
203 Such as, that he takes subject to the mortgage, or assumes the mortgage. Kennedy v. Borie, 166 Pa. St 360, 31 Atl. 98. But see Robinson Bank v. Miller, 153 111. 244, 38 N. E. 1078. Nor can the assignee deny its validity for failure of consideration, Crawford v. Edwards, 33 Mich. 354; Miller v. Thompson, 34 Mich. 10; Haile v. Nichols, 16 Hun (N. Y.) 37; or for has been paid by the mortgagor, or other matter in discharge.204 The mortgagor may covenant to pay the mortgage, but otherwise his assignee is not entitled to compensation from the mortgagor if the mortgage is enforced against the land.205 Nor is a purchaser from the mortgagor entitled to collateral security held by the mortgagee.206 An assignee of the equity of redemption does not become personally liable for the mortgage debt unless he expressly assumes its payment.207 When the grantee assumes the mortgage debt, the mortgagor becomes merely a surety for him, and, if he is forced to pay the debt, may collect it from his grantee.208 The mortgagee usury, Hartley v. Harrison, 24 N. Y. 170; De Wolf v. Johnson, 10 Wheat. 367; Cleaver v. Burcky, 17 111. App. 92; Frost v. Shaw, 10 Iowa, 491. But the mortgagor may confer on his grantee a right to contest the validity of the mortgage. Bennett v. Bates, 94 N. Y. 354; Magie v. Reynolds (N. J. Oh.) 26 Atl. 150.
204 Hartley v. Tatham, 2 Abb. Dec. (N. Y.) 333; Williams v. Thurlow, 31 Me. 392; Bennett v. Keehn, 57 Wis. 582, 15 N. W. 776.
205 Gerdine v. Menage, 41 Minn. 417, 43 N. W. 91; Gayle v. Wilson, 30 Grat. (Va.) 166.
206 Brewer v. Staples, 3 Sandf. Ch. (N. Y.) 579.
207 strong v. Converse, 8 Allen (Mass.) 557; Middaugh v. Bachelder, 33 Fed. 706; Comstock v. Hitt, 37 111. 542; Trotter v. Hughes, 12 N. Y. 74; Stebbins v. Hall, 29 Barb. (N. Y.) 524; Metzger v. Huntington, 139 Ind. 501, 37 N. E. 1084; Offut v. Cooper, 136 Ind. 701, 36 N. E. 273; Green v. Hall, 45 Neb. 89, 63 N. W. 119; Granger v. Roll (S. D.) 62 N. W. 970. Such is the effect of a clause providing that "the mortgagee assumes a mortgage," etc. Corning v. Burton, 102 Mich. 86, 62 N. W. 1040; Stephenson v. Elliott, 53 Kan. 550, 36 Pac. 980; Bur-bank v. Roots (Colo. App.) 35 Pac. 275; Grand Island Sav. & Loan Ass'n v. Moore, 40 Neb. 686, 59 N. W. 115; Wayman v. Jones, 58 Mo. App. 313; Williams v. Everham, 90 Iowa, 420, 57 N. W. 901. And see Lennox v. Brower, 160 Pa. St. 191, 28 Atl. 839; Williams v. Moody, 95 Ga. 8, 22 S. E. 30. But cf. Carrier v. Paper Co., 73 Hun, 287, 26 N. Y. Supp. 414; Hopper v. Calhoun, 52 Kan. 703, 35 Pac. 816. But not a provision that he takes "subject to the mortgage." Tanguay v. Felthousen, 45 Wis. 30; Moore's Appeal, 88 Pa. St. 450; Walker v. Goodsill, 54 Mo. App. 631; Lang v. Cadwell, 13 Mont. 458, 34 Pac 957. He may assume the debt by a parol agreement. Merriman v. Moore, 90 Pa. St. 78; Lamb v. Tucker, 42 Iowa, 118.
208 Flagg v. Geltmacher, 98 111. 293; Calvo v. Davies, 73 N. Y. 211; Alt v. Banholzer, 36 Minn. 57, 29 N. W. 674; Williams v. Moody, 95 Ga. 8, 22 S. E. 30. The mortgagor may take an assignment of the mortgage, and foreclose it against his grantee. 1 Jones, Mortg. (5th Ed.) § 768. He may do this without a formal assignment. Baker v. Terrell, 8 Minn. 195 (Gil 165); Risk v. Hoffneed not accept such an agreement between a mortgagor and his grantee;209 but, if he does accept, it constitutes a novation, and an extension of time given by the mortgagee to the grantee will discharge the mortgagor from personal liability, since he is merely a surety.210 When, however, it is expressed in a subsequent mortgage that the prior mortgage is assumed, the subsequent mortgagee does not become personally liable for the prior mortgage debt.211 In some states the mortgagee may enforce an assumption of the mortgage debt by an assignee of the equity of redemption.212
Assignment by Operation of Law.
On the death of the mortgagor the equity of redemption passes to his heirs according to the rules of descent of realty.213 If the mortgage is foreclosed in his lifetime, any surplus proceeds is personalty, and, on his death, goes to his personal representative. But, if the foreclosure is not until after his death, the heirs are entitled man, 69 Ind. 137. The mortgagor may bring an action against his assignee to enforce the promise before he has himself paid the debt. Rubens v. Prindle, 44 Barb. (N. Y.) 336.
209 Fish v. Glover, 154 111. 86, 39 N. E. 1081; Connecticut Mut Life Ins. Co. v. Tyler, 8 Biss. 369, Fed. Cas. No. 3,109.
210 Spencer v. Spencer, 95 N. Y. 353; Murray v. Marshall, 94 N. Y. 611; Calvo v. Davles, 73 N. Y. 211; Union Mut. Life Ins. Co. v. Hanford, 27 Fed. 588; George v. Andrews, 60 Md. 26; Travers v. Dorr, 60 Minn. 173, 62 N. W. 269. Cf., however, Cook v. Prindle (Iowa) 63 N. W, 187.
211 Garnsey v. Rogers, 47 N. Y. 233; Bassett v. Bradley, 48 Conn. 224. Even if the mortgage be in form an absolute deed. Pardee v. Treat, 82 N. Y. 385; Cole v. Cole, 110 N. Y. 630,17 N. E. 682; Gaffney v. Hicks, 131 Mass. 124.
212 l Jones, Mortg. (5th Ed.) § 755; Clark, Coot p. 513; Winters v. Mining Co., 57 Fed. 287; Trotter v. Hughes, 12 N. Y. 74; Osborne v. Cabell, 77 Va. 462. In some states the mortgagee can proceed only in equity. Willard v. Worsham, 76 Va. 392. In these states the mortgagor cannot release the grantee from liability without the mortgagee's consent. Gifford v. Corrigan, 117 N. Y. 257, 22 N. E. 756; Douglass v. Wells, 18 Hun (N. Y.) 88. But see Gold v. Ogden (Minn.) 63 N. W. 266. In other states the mortgagee is treated as merely subrogated to the mortgagor's security, and cannot sue the assignee directly at law. Keller v. Ashford, 133 U. S. 610, 10 Sup. Ct. 494; Booth v. Insurance Co., 43 Mich. 299, 5 N. W. 381; Crowell v. Currier, 27 N. J.'eq. 152; Biddel v. Brizzolara, 64 Cal. 354, 30 Pac. 609. In these states the mortgagor may release his grantee without the assent of the mortgagee. O'neill v. Clark, 33 N. J. Eq. 444.
213 See post, p. 478.
To the surplus. 214 An equity of redemption may be sold on execution,215 even by the mortgagee,216 but, in most states, not under an execution issuing on the mortgage debt.217 The same rules apply to equitable mortgages.218