Mortgage (law)

“ THE MORTGAGOR IS LIABLE AS A DEBTOR.—The mortgagor is bound as a debtor ordinarily by a bond or promissory note in which he expressly agrees to pay the amount of his debt. It is perfectly possible that the debt secured by the mortgage should not be represented by such an instrument, but should rest merely in oral agreement or should be contained in a covenant in the mortgage deed itself, but it is usual and desirable to have a separate obligation. The fact that the debtor has given the mortgage does not in any way limit the rights of the mortgagee as an ordinary creditor. ”

“ The proposition confounds the nature of the principal obligation with that of the accessory contract of mortgage. That the divisibility of a debt does not necessarily import the divisibility of the mortgage securing it is unanimously held by the civil-law writers. 'Under the theory of the law, the indivisibility of the mortgage has no reference to the nature of the principal obligation. ”

“ INCIDENTS TO MORTGAGE.—If the mortgagor wishes to convey his interest, he transfers the estate by deed exactly as if it were unmortgaged, except that the conveyance is stated to be subject to a specified mortgage, and it is sometimes added "which the grantee assumes and agrees to pay." It is desirable for the seller that the grantee shall assume and agree to pay the mortgage while it is desirable for the buyer that he shall buy the premises merely subject to the mortgage without assuming it. ”

“ The words of the mortgage require the debtor to pay, or cause to be paid the money for which the land is mortgaged, on or before a certain day, to redeem it from the mortgage; yet, if any body-mortgagor, friend, or stranger, pay the mortgage money on or before, or after the day, it is all-sufficient to redeem the land. A treasurer's deed conveys the tract sold to the purchaser. The law gives the owner two years to pay, or cause to be paid the redemption money. A stranger, within the limited period, pays the purchase money and per centage, the owner not knowing any thing about it. ”

“ The conditions of such new mortgage shall be the same, so far as practicable, as those of the original mortgage and shall be subject to the approval of the court. If such new mortgage is given, the mortgagee shall not be paid from the proceeds of the sale and the amount payable as the purchase price shall be held diminished in the amount of the new mortgage indebtedness.
(d) No rights under a mortgage of a vessel of the United States shall be assigned to any person not a citizen of the United States without the approval of the board. ”

“ Courts of equity have in modern times relieved against such forfeitures, and, in favor of a mortgagor, have extended the time for redemption. But such courts, as fully as courts of law, have always regarded the legal title to be in the mortgagee until redemption, and bills to redeem are entertained upon the principle that the mortgagee holds for the mortgagor when the debt secured by the mortgage has been paid or tendered. ”

“ But these very authorities also establish the fact that this rule is founded solely upon a technicality. A mortgage is a sale upon condition; and, as before stated, by the rule of the common law there can be no sale of a thing not in existence, and which is not at the time the property of the seller. ”

“ Until a general power granted to corporations has been exercised, the terms and conditions under which it may be exercised are subject to legislative control. It may change or modify them as it sees fit, and the law in force at the time the mortgage is executed, with all the conditions and limitations it imposes, is the law which determines the force and effect of the mortgage. That law, in this case, was the law of 1877, which subordinated the mortgage to the lien of subsequent judgments for claims of the nature of those held by appellees. ”

“ The intention of the legislature to carry out this distinction between the personal liability of the debtor and the liability of the land, and to preserve the latter in full force, unaffected by the discharge of the debtor, is clearly declared by the act. The act says, in so many words, that a mortgage, valid by the law of the State, shall not be impaired by any thing in the act. ”

“ If the mortgage for the future indebtedness can be sustained as a valid instrument for that purpose, the entire surplus will be absorbed for its payment, excepting such portion as may be first payable to McCormick, by reason of the fact that he took his mortgage without notice of the one to the bank. It is contended that the mortgage to the bank, so far as it applies to future advances, is invalid, because a mortgage of that character is prohibited by the national banking law. ”

“ One act says that the deeds and other conveyances not recorded in pursuance of it shall be void, thereby rendering it necessary to record the deeds referred to in the city register's office, under this law; if applicable, we are not only not entitled to recover, but the mortgage under which we claim is void, whatever the value of the premises, while the second law, or the one relating to 'mortgages,' in terms declares that the mortgage first recorded shall have preference in all courts of law and equity whatever. ”

“ The husband may release the mass of his property from this legal mortgage, by executing a special mortgage in the manner required in the preceding section, for dotal effects.' Thus, it appears that a legal mortgage on all the husband's property exists until a special mortgage is executed according to the foregoing provisions, and the law does not contemplate a legal and a special mortgage existing at the same time And the legal mortgage of the wife, to affect third persons, must be recorded in the office of mortgages for the parish where the property lies. ”

“ The prayer of the guardian was that he be authorized to negotiate, for the purposes stated, a loan of not exceeding $200,000, and to pay usual and reasonable commissions and brokerage therefor, upon such terms and for such time as shall be approved by the court and allowed by law; the mortgage to rest upon certain premises belonging to the minor, the metes and bounds of which are given in the petition of the guardian. The authority asked for was given, and a loan in gold for $175,000 was negotiated with the appellant. ”

“ The assignment should be recorded in the same way as the original mortgage, the assignee paying the fee.
REDEMPTION OF MORTGAGES While the rule as to the redemption of mortgages remains the same in some localities that it formerly was, the law in most places is now more lenient.
Now the mortgagor who has failed is usually given by law an extension of time in which to make good the payment of principal and interest. ”

“ A mortgage to affect third persons must be inscribed in the mortgage office, and to preserve its original rank as to them, it must be reinscribed before the expiration of ten years from the original inscription. The policy of the law is to make an investigation of liens easy and simple, and therefore, except for legal mortgages in favor of minors and married women, no search for mortgages in the mortgage office is required for a greater period than ten years prior to the date of search. ”

“ Under an ordinary mortgage, the borrower must pay at all events and his personal liability survives the loss of his vessel. Under bottomry, the risk is shifted. In consideration of this risk, the lender is permitted to charge a high rate of interest without violating the law of usury. Rates of interest as high as 25 per cent. and higher have been upheld, and while in some cases the courts have ordered a reduction in the rate when it was regarded as clearly extortionate, the strong inclination of the courts is to carry out the bargain as made by the parties. The bond must be in writing. ”

“ Thus, a mortgage on land is personal property, also the shares of stock in a corporation, although the corporation may be organized to engage exclusively in the ownership of real property, is personal property. Where a person dies leaving a will, his real property goes directly to the persons to whom he leaves it in the will. In the case where he dies intestate, his real property passes directly to his heirs at law, who are designated by statute. ”

“ Even without record or delivery it is good between the parties, but it is not good in case of bankruptcy against the trustee in bankruptcy of the mortgagor, nor is it good against attaching creditors if there is no bankruptcy.
MORTGAGES OF FUTURE GOODS.—An agreement is sometimes made to make a mortgage of goods which do not at the time exist, or are not at the time defined. This is especially common in regard to a stock of goods. A wants to borrow money on his stock of goods in his shop. His stock may be worth $25,000 and A has not capital enough to get along without mortgaging it. ”

“ A RECONVEYANCE IS NOT NECESSARY ON PAYMENT OF THE MORTGAGE.—If a mortgage is regarded as a mere lien to secure a debt, it is obvious that a payment of the debt discharges the lien, and the title already vested in the mortgagor becomes free from any incumbrance. ”

“ Upon request of the mortgagee, the mortgagor is required to disclose in writing, before the execution of any preferred mortgage, the existence of any maritime lien prior to the mortgage, that is known to the mortgagor, and, without the consent of the mortgagee, the mortgagor is forbidden, after the execution of the mortgage and before the mortgagee has had reasonable time to record the mortgage and have the necessary endorsements made, to incur any obligations creating liens on the vessel other than those for wages, for general average or for salvage. ”

“ This last point is especially important since the validity of a corporate mortgage as security for a loan of money depends upon whether the mortgage was authorized and given in all respects pursuant to statute of the State involved. As these corporate mortgages not only are given as security for a single loan of money but also furnish security often for very large amounts of bonds, the matter of the authority of the directors and the [Pg 222] validity of the mortgage becomes of great importance. ”

“ Mortgage—After-acquired Property.—A mortgage purporting to cover “all moneys to which the mortgagor might during the continuance of the security become entitled under any will or other document,” will be enforced in equity as to a share of a testator’s residuary estate to which the mortgagor became entitled after the date of the mortgage, on the ground of specific performance of a contract. — In re Clarke, 35 Ch. D. 109.
Murder—Death Caused by Neglect.—Defendant was the husband of the deceased, who was weak, feeble, and unable to walk. ”

“ In 1916, section 230 of the New York Lien Law was amended to the effect that a mortgage, pledge, or lien on stocks or bonds given to secure the repayment of a loan is, if not recorded, absolutely void against creditors unless such securities are delivered to the mortgagee or pledgee on the day the loan is made. ”

“ But while that may be true as a general doctrine, it cannot apply when a state has authorized and confirmed an assessment and a mortgage of it as security for bonds that the public is invited to buy, and has provided in terms for a collection by a receiver appointed in equity if there should be a default. There is no longer any legislative act to be done, and there is no usurpation of powers in following the course provided by state law. ”

“ There is in every State a recording act by virtue of which unrecorded mortgages are made invalid against subsequent purchasers and sometimes against attaching creditors. Though an unrecorded mortgage is, as between the parties, as effective as if recorded, it is of vital importance promptly to record every mortgage in the Registry of Deeds in the county where the land lies. ”

“ That whatever may be the rule in an action to enforce the mortgage in an action for conversion, the question of the existence of the property claimed to have been converted is not concluded by the covenants of ownership and warranty as to existing property. ”

“ To simplify and make uniform the procedure on petition to sell and to mortgage real estate. "In addition to the above bill, it was decided to introduce a bill to define the liability of executors and administrators for money on deposit in banks in case of failure thereof." ”

“ In the opinion the court said: 'But there are features engrafted on this mortgage which are not only to the prejudice of creditors, but which show that other considerations than the security of the mortgagees, or their accommodation even, entered into the contract. Both the possession and right of disposition remain with the mortgagors. They are to deal with the property as their own, sell it at retail, and use the money thus obtained to replenish their stock. There is no covenant to account with the mortgagees, nor any recognition that the property is sold for their benefit. ”