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CHAPTER IV.

MORTGAGORS AND MORTGAGEES, PLEDGORS AND
PLEDGEES, AND PERSONS HAVING A LIEN.

I. Mortgagors and Mortgagees.*

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A LEGAL mortgage is a security created by means of a transfer, by a debtor to creditor, of the legal ownership of real or

personal estate, subject to be defeated on the discharge of the debt. (Sm. Law of Prop. 340.)

CAP. IV.

Legal mortgage defined.

and mort

estate and rights.

So long as the mortgagor remains in Mortgagor's possession, the mortgagee's estate is not ab- gagee's solute, even at law. For by the stat. 15 & 16 Vic. c. 76, s. 219, 220, if an ejectment be brought by the mortgagee, and no suit be pending in any Court of Equity for redemption or foreclosure, the payment of principal, interest, and costs shall, except in certain

* On this subject (which is but slightly noticed here, as being more peculiarly connected with Equity and Conveyancing), the student is referred to Smith's Law of Property, and to the works therein cited.

TIT. II.

CAP. IV.

PART III. cases, be deemed a satisfaction of the mortgage, and the Court may compel the mortgagee to reconvey the estate. But when the mortgagor has ceased to be in possession, and there has been a default in payment of the money at the stipulated time, the estate of the mortgagee becomes absolute at law. Yet his estate is in equity treated as a mere security for the principal and interest and costs properly incurred in relation to the mortgage, and follows the nature of the debt. And although, where the mortgage is in fee, the legal estate descends to the heir of the mortgagee, yet, in equity, it is deemed a chattel interest and personal estate, and belongs to the personal representatives as assets.

The mortgagee is entitled to enter into possession of the lands, and, after notice to the tenants, to recover the rents and profits, unless there is some agreement to the contrary; and if the security is insufficient, he may fell timber, and sell it, and apply the produce towards the liquidation of his debt; but, with this exception, he may not commit waste. He may grant leases, subject to the equity of redemption, and avoid, by ejectment, without notice, any leases that have

been made by the mortgagor, without his concurrence, subsequently to his mortgage. He must, however, account for the rents he receives, and pay an occupation-rent for such part as he may keep in his own possession.

The mortgagor is not entitled to the possession in respect of his equitable estate, unless there is some special agreement to that effect, but he holds it solely at the will of the mortgagee, who may generally at any time, without giving any prior notice, recover the same by ejectment against him, unless he is ready to pay principal, interest, and costs, or against his tenants under a tenancy created subsequently to the mortgage, and not confirmed by the mortgagee; and he is not even entitled to reap the crop. But so long as he continues in possession by the permission of the mortgagee, he is entitled to take the rents and profits in his own right without rendering any account whatever to the mortgagee, though the mortgaged property may have become an insufficient security.

PART III.

TIT. II.

CAP. IV.

by memoran

posit.

A person may create an equitable, though Mortgage not a legal, mortgage, by a mere memoran- dum or dedum or a mere deposit of deeds. (Sm. Law of Prop. 343-4, 358, 372.)

PART III.

TIT. II.

II. Pledgors and Pledgees.

A pledge of personal chattels differs from a

CAP. IV. mortgage; for a pledge only passes a special or

Difference between a

qualified property or ownership to the pawnee,

pledge and a with a power of sale in case of

mortgage.

Suing the pawnee.

Transfer of possession.

non-payment at the stipulated time; and the pawnor retains the general property or ownership, and may transfer it both at law and in equity; whereas a mortgage passes the general property or ownership to the mortgagee, though conditionally. (Sm. L. C. 194; Broom Com. 786; Sm. Law of Prop. 374.)

The pawnor may sue the pawnee for the debt, though he retain the pawn; for the pawn is only a collateral security. (Sm. L. C. 194.)

Transfer of the possession of the chattel to the pawnee is essential. (Sm. L. C. 196.) If the pledge is made to a pawnbroker, pawnbroker. and is not redeemed at the expiration of a

Sale of pledges by a

year and a day, the pawnbroker may then sell it by auction; unless the pawnor give a notice to the contrary; in which case the sale must be postponed for three months. But if, before the sale, the pawnor or his assignee tender the principal and interest due, together with the expenses (if any)

incurred, the chattel must be returned. PART III. (Broom Com. 785; Sm. L. C. 196-7.)

TIT. II. CAP. IV.

perty

If stolen property has been pledged with Stolen proa pawnbroker or any other person who had pledged., no knowledge of the theft, the owner may sue the pledgee. (Add. Torts, 199; Rosc. Evid. 635.)

Any person showing probable grounds for suspecting that his goods have been unlawfully pawned, may have a search warrant, and regain them, if so pawned. And the sale of them by any pawnbroker in London, or within two miles of it, will not alter the property. (2 Ste. Com. 72; Rosc. Evid. 635.)

III. Persons having a Lien.

Liens are either legal or equitable.

A legal lien is the right of a person to re- Legal lien. tain property of which he has the lawful possession, until a debt due to him has been

satisfied. (Sm. Merc. Law, 563, 570; Cross on Lien, 2, 30-8.)

An equitable lien is a hold upon property Equitable for the satisfaction of a claim attaching thereto,

under an express charge or contract or constructive trust. (Sm. Law of Prop. 337.)

lien. •

legal liens.

There are two species of legal liens, namely, Two kinds of particular liens and general liens.

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