In the United States there are two theories as to the nature of a mortgage: One is that the mortgagee has an estate; the other, that he has only a lien. This difference is the result of the history of mortgage securities.11 At common law the estate of the mortgagee became absolute on default of payment by the mortgagor.12 This often resulted in injustice to both parties,-to the mortgagee, because he had no remedy to recover the balance of his debt, if the mortgaged property was inadequate; and to the mortgagor, because the value of the estate mortgaged was often greatly in excess of the amount of the debt secured. This inequality in the law was remedied by the courts of equity. They recognized a right in the mortgagor to redeem by paying the amount due, with interest; that is, the real intention of the parties to give a security was effectuated.13 This right was termed an "equity of redemption." The mortgagee could cut off the mortgagor's right of redemption by appearing in court, and having a day set when the mortgagor must redeem, or lose the right to do so.14

The Equitable or Lien Theory.

In courts of equity the mortgagee's interest becomes absolute only after the foreclosure of the mortgagor's equity of redemption. The mortgagor's equity of redemption is recognized in all of the states: In some states the mortgagee is, as at common law, regarded as the owner,15 while in others, either by statute or decisions of the courts,

11 See Digby, Hist. Real Prop. (4th Ed.) 282, and 1 Jones, Mortg. (5th Ed.) § 1, for a description of the obsolete viviuin vadium, and the Welsh mortgage.

12 1 Jones, Mortg. (5th Ed.) § 4.

13 Id. § 10.

14 Id. § 1538.

15 Toomer v. Randolph, 60 Ala. 356; Welch v. Phillips, 54 Ala. 300; Knox v. Easton, 38 Ala. 345; Kannady v. Mccarron, 18 Ark. 166; Chamberlain v. Thompson, 10 Conn. 243; Carroll v. Ballanee, 26 111. 9; Nelson y. Pinegar, 30 111. 473 (but see Barrett v. Hinckley, 124 111 32, 14 N. E. 863); M'kim v. Mason, 3 Md. Ch. 186; Ewer v. Hobbs, 5 Mete. (Mass.) 1; Brown v. Cram, it is held that the mortgagee has no estate in the mortgaged premises, but only a lien on them for the security of his debt16 In these states the mortgagor is considered the owner. Neither theory is entirely consistent, because both mortgagor and mortgagee are constantly recognized as having rights of ownership which they are permitted to defend in the courts.17