Mortgaged property

“ Section 2313 provides that no mortgage or sale of personal property shall be valid against any other persons than the parties thereto, unless the possession of the mortgaged property be delivered to and retained by the mortgagee, or unless the mortgage, or a copy thereof, be filed as required by the statute, except as otherwise provided therein. ”

“ It is conceded that in such case as the present one, where the mortgaged property is insufficient to pay the debt, the mortgagee has the additional equitable right to have a receiver appointed to take possession, and in the end, if necessary, the rents and profits will be appropriated to pay the deficiency. ”

“ RIGHTS OF MORTGAGOR AND MORTGAGEE IN MORTGAGED LAND.—Even though the mortgagor is regarded by the law as having no [Pg 312] longer the legal title to the premises, but only an equity of redemption, his interest is regarded as real estate and descends on his death according to the laws governing real estate. The mortgagee's interest, on the other hand, is regarded as personal property since the debt which the mortgagee is intended to secure is personal property, and even a legal title to the real estate held by the mortgagee is held merely for security, and is an incident to the debt. ”

“ Or put in another way, we are no more concerned with whether the mortgagor is, strictly speaking, a debtor on the mortgage, than we are with whether the benefit to him is, strictly speaking, a receipt of money or property. We are rather concerned with the reality that an owner of property, mortgaged at a figure less than that at which the property will sell, must and will treat the conditions of the mortgage exactly as if they were his personal obligations. ”

“ While from the fact that the property mortgaged is a stock of goods in a store, possession of which is left with the mortgagor, there may be an implication that sales at retail by him were contemplated, yet express authority is given to the mortgagee to take possession at the first sale, and before the maturity of any one of the secured notes. ”

“ The company argues that uncontradicted evidence shows the fair market value of the mortgaged properties to have been less than the principal of the debts and that therefore the interest paid was not income within the meaning of the act. A mortgagee who, at foreclosure sale, acquires the property pursuant to a bid of the principal and accrued interest is, as purchaser and grantee, in a position no different from that of a stranger who acquires the property on a bid of like amount. ”

“ Permission of the owners of the adjoining lands is not required, but as these mortgages are sometimes sustained for a very long time, the contract is concluded in the same ceremonial manner as contracts for the sale of lands. It not unfrequently happens that a mortgaged piece of land remains so long in the hands of a single family that it comes to be regarded as its property, and the original transaction is in all good faith forgotten. ”

“ In England, after day of payment past and foreclosure, the land is absolutely in mortgagee without any possibility of recall; it ceases to be a pledge, and becomes to all intents and purposes the absolute property of the mortgagee. In Pennʃylvania, there is no such thing as foreclosure, the land mortgaged never ceases to be a pledge; a legal estate never vests in the mortgagee, nor can he by any possibility become owner of the land, unless he purchases under the execution. ”

“ Stat., sect. 5075, admitted the complainant as a creditor of the general estate only for the balance of the debt after deducting the value of the mortgaged property, to be ascertained by agreement, sale, or in such other manner as the bankrupt court might direct. ”

“ Under this levy or seizure the mortgagee proceeded to sell the mortgaged premises, after appraisment, advertisement, and all other legal pre-requisites, in several distinct lots, according to their separate enumeration in the mortgages and appraisement, and in as minute divisions as the nature of the property would admit or the law allow. ”

“ 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. ”

“ There is therefore but a small proportion of landlords who have the means of making expensive improvements, unless they do it with borrowed money, and by adding to the mortgages with which in most cases the land was already burthened when they received it. But the position of the owner of a deeply mortgaged estate is so precarious ”

“ The right to dispose both of the possession and estate follows necessarily from the ownership of the property, and, this being so, no valid objection can be urged against incorporating the contract and power in the same instrument with the mortgage. ”

“ The American cases sustain the rule that so long as the mortgagor is allowed to remain in possession he is entitled to receive and apply to his own use the income and profits of the mortgaged estate; and, although the mortgagee may have the right to take possession upon condition broken, if he does not exercise the right he cannot claim the rents. If he wishes to receive the rents, he must take means to obtain the possession. ”

“ May a mortgage be taken as a security for future advances, and be a lien on the property to the extent of the sum or sums provided for in it?
The cases which affirm the doctrine that a mortgage may be given to secure future advances, or future liabilities, are very numerous. ”

“ A mortgage by a railroad company which covers, in the terms of the two mortgages in suit, its engines, cars, and machinery, carries not only the cars, engines, and machinery in existence at the date of the mortgage, but such as take their place, or are subsequently added to them by the company, and are in existence at the time of the foreclosure. This kind of property is necessarily undergoing constant wear and consequent destruction ”

“ To redeem property which has been sold under a mortgage for less than the mortgage debt, it is not sufficient to tender the amount of the sale. The whole mortgage debt must be tendered or paid into court. ”

“ It is enough to say that the provisions quoted by appellants do not sustain their contention. They quote article 1874 of the Civil Code, in force at the time the mortgage was given, as confining a mortgage contract to real property and to rights in real estate which can be alienated according to law. ”

“ I don't fancy the mortgagees get much income from the property, though I suppose they try their best. Perhaps, strictly speaking, I can hardly call the property mine since the mortgagees took possession. The mortgages however are undoubtedly mine. ”

“ In others, the mortgagee’s rights are limited to such as the rules of equity prescribe, and may not be enforced by a suit at law. In yet others, the mortgagee’s interest is not deemed an estate at all, but is here only to be enforced by the sale of the premises as a means of paying the debt. ”

“ In all the cases hitherto considered, the legal title, or other legal right of property, it has been assumed, was acquired at the time of the purchase. But he who advances money on the faith of a legal title that he already has, is equally entitled to protection. Thus, a first mortgagee, who makes subsequent advances in ignorance of a second mortgage, has priority as to those advances over the second mortgagee. [28] He is in the same position as if he had surrendered his first mortgage and taken a fresh conveyance of the legal estate to secure the whole of his advance. ”

“ If that property is already subject to mortgages or other liens, the general mortgage does not displace them, though they may be junior to it in point of time. It only attaches to such interest as the mortgagor acquires; and if he purchase property and give a mortgage for the purchase-money, the deed which he receives and the mortgage which he gives are regarded as one transaction, and no general lien impending over him, whether in the shape of a general mortgage, or judgment, or recognizance, can displace such mortgage for purchase-money. ”

“ Mortgages of personal property are much more informal in their execution than similar transfers of real estate. The transfer is a complete change of ownership title, with similar conditional clause, relative to payment, to that of a mortgage deed. ”

“ If by this is meant that, after the sale of the property, the mortgagee is bound primarily to proceed against the mortgagor personally for any deficiency, the position is inconsistent with the doctrine of the cases above cited, in which it is assumed that the purchaser, who has agreed to pay the mortgage, is the principal debtor, and the mortgagor is surety. ”