the original creditor with all the creditor's rights against the one primarily liable for the debt, and especially with a right to the securities which the creditor may have for the debt. See Guaranty and Suretyship, Chapter XII, § 12. The rights of contribution and indemnity explained in the preceding subsection are usually enforced by applying the doctrine of subrogation. For example, in the case where the widow having a dower interest redeemed from a mortgage the court said she was entitled to contribution from the other owners. She had no way of enforcing this right directly, for there was no contract relation between the parties. All of them apparently had gotten their interests through the death of the mortgagor. Hence, the only way to enforce contribution would be by allowing the widow the rights which the owner of the mortgage had against the land. He had a mortgage on the land, so the court said the widow could enforce this against the land to the extent of the money rightfully due her. In general, any person entitled to redeem, who redeems, may be subrogated to the rights of the mortgagee against the land and against other owners of interests in the land, provided he is not primarily liable for the debt. Also, anyone who pays off the mortgage at the request of the one primarily liable, with the understanding that he is to have the benefit of the mortgage, has the right of subrogation; but if a stranger voluntarily pays the debt he has no such right.

§ 42. Marshalling securities. Suppose a debtor has two tracts of land. One man has a mortgage on both tracts to secure a debt, and another man has a second mortgage on one of the tracts. If the first mortgagee enforces his right against the land covered by the second mortgage, and exhausts the security, the second mortgagee will have nothing. Ordinarily, the first mortgagee has the right to enforce his lien as to any portion of the land. But there is a principle in equity that one who has two funds, out of which he can secure satisfaction of his debt, shall not by his election disappoint one who has only one of the funds to proceed against. This applies to the first and second mortgagees in such a case. While the first mortgagee may enforce

Gibson v. Crehore, §§ 39-40, above.

Bergein v. Brehm, 123 Ind. 160.

against the land covered by the second mortgage, if there is not enough left to pay the second mortgagee's debt, the latter is entitled to be subrogated to the first mortgagee's right against the other tract of land, provided it will not prejudice the mortgagor or any third person."

Section 6. Mortgage Foreclosures.

§ 43. In general. As has been previously stated (§ 1, above), foreclosure was allowed in order that the mortgagee might have a means of putting an end to the equity of redemp tion, and on foreclosure the right to redeem was cut off and the mortgagee got the land. This was called strict foreclosure. Now the decree for foreclosure usually orders a sale of the property and a payment of the debt out of the proceeds. Any surplus is turned over to the mortgagor. The mortgagee cannot get the land, unless he buys it at the sale. Strict foreclosure is not allowed except in special cases, because the land may be worth far more than the mortgage debt and the mortgagee is only entitled to the money due him.

§ 44. When right to foreclose arises. The owner of a mortgage has a right to foreclose as soon as the mortgagor fails to perform the obligation secured by the mortgage, usually when he fails to pay the debt when due. The mortgage, however, often provides that, if the interest on the debt is not paid when due, the whole debt shall immediately be due and payable and foreclosure may be had, or, it may provide that the right to foreclose shall accrue on failure of the mortgagor to pay taxes, keep up insurance on the premises, or on default of some other obligation calculated to affect the security for the debt.

§ 45. When right to foreclose is barred by lapse of time. We saw in a preceding subsection (§ 37) that when the mortgagee is in possession of the land the right to redeem may be barred by lapse of time. Likewise, if the mortgagee fails to exercise his right to foreclose his mortgage within a certain time, his right will be barred. When there is no express statute of limitations, equity usually declares the right barred after the

Andreas v. Hubbard, 50 Conn. 351.

lapse of the period within which actions for the recovery of land may be brought. After the lapse of this period, it is presumed that, since no effort has been made to enforce the mortgage, it must have been satisfied. This presumption that the mortgage was satisfied may be overthrown, however, by showing that within the period the mortgagor has acknowledged that the debt is unpaid, by making a payment or by some other act. The other right of the mortgagee-the personal right against the mortgagor-comes within various other statutes of limitations, and the action on it will be barred within the period provided for in the statute which applies. These statutes vary as to different kinds of obligations, and vary in different states. The time within which the personal action is barred is almost always less than that within which the right to foreclose will be barred. In most states the mortgage can be foreclosed after the right to sue the mortgagor personally is barred. In a New York case a mortgage had been given to secure a promissory note, and in that state the action on a note is barred six years after the right to sue arises, if there has been no acknowledgment of the debt meanwhile. A bill to foreclose the mortgage was started nineteen years after the note was due. Foreclosure was not barred in New York until after twenty years. There had been no partial payment or other act acknowledging the debt since it became due. The court held that, though the right to sue on the note had long been barred, the right to foreclose might be exercised at any time within twenty years and that foreclosure should be allowed." In a few states the mortgage is regarded as so much an incident of the debt that it cannot be enforced after the right to enforce the debt is gone. In an Illinois case, the debt was in the form of a promissory note, and actions on such notes are barred after ten years. A bill to foreclose the mortgage was filed more than ten years after the debt was due, and the court held that the mortgage, being a mere incident to the debt, could not be enforced after action on the note was barred.s

§ 46. Strict foreclosure. Strict foreclosure is a foreclosure by which the mortgagee gets the land free from the right of re

'Pratt v. Huggins, 29 Barb. 277.

Harris v, Mills, 28 Ill. 44.

demption. The decree provides that if the debt is not paid by a certain date the right to redeem shall be gone forever. Strict foreclosure is not allowed when the land is worth more than the amount of the debt, for it would result in the mortgagee getting more than he is entitled to. It is allowed in many states when the rights of the mortgagor will not be prejudiced. When the land is not sufficient to satisfy the mortgage debt, strict foreclosure may be had without injustice to anyone. By it the rights of the mortgagor and of persons who have junior liens can be cut off. A strict foreclosure satisfies the mortgage to the extent of the value of the land and the mortgagee can sue the debtor personally for any unsatisfied part of the debt.

§ 47. Foreclosure by entry and by writ of entry. Foreclosure by entry and by writ of entry are forms of foreclosure provided for in some of the New England states. The effect is similar to that of strict foreclosure, the mortgagee getting the land and the debt being satisfied to the extent of the value of the land.

§ 48. Equitable proceeding for sale of mortgaged premises. The usual method of foreclosing a mortgage is by a proceeding in equity, or a proceeding under some statute provided for the purpose, to sell the land and pay the debt out of the proceeds. The sale is made by a master in chancery or some other officer of the court, who gives the purchaser a deed to the land, pays the mortgagee the sum due him, applies the surplus, after deducting the costs, to any junior lien which may be on the land, and pays any remainder, after all claims are satisfied, to the mortgagor. A purchaser at a foreclosure sale in a "title theory" state gets whatever record title the mortgagor had when he made the mortgage. His title is good as to all persons whose rights were inferior to the mortgage. He takes subject to all rights superior to the mortgage which was foreclosed. Hence, when a second mortgage is foreclosed, the purchaser at the sale takes subject to the first mortgage and the first mortgagee may foreclose at any time. The purchaser knows this or can easily find it out, so of course he will bid only what he is willing to pay for the land subject to the first mortgage. In many states the statute gives a short period-from six months to two years usually-within

which persons entitled to redeem may redeem after foreclosure sale, the purchaser getting his deed after this time has expired. This is a purely statutory right and did not exist at common law.

§ 49. Mortgage with power of sale. It is often provided in a mortgage that, on default by the mortgagor, the mortgagee may sell the land without judicial proceedings. Such a "power of sale" is valid in most states, though there are a few states which refuse to allow a sale except by judicial proceedings. The power of sale makes the mortgagee the agent of the mortgagor to sell the land, and therefore the principles of the laws of agency apply. Death of the principal terminates an agency, unless it is what is called an "agency coupled with an interest." See Agency, Chapter II, § 28. In "title theory" states the mortgagee has an agency coupled with an interest, so, if there is a power of sale in the mortgage, the death of the mortgagor does not revoke the power to sell the land. The beneficial interest of the mortgagee, even in "lien theory" states, is generally held sufficient to satisfy this doctrine, though in a few states the power is terminated by the death of the mortgagor. All agree that there is such an interest that the mortgagor cannot revoke the power of sale during his lifetime. Statutes usually provide that the sale must be public, after proper notice of it has been given. In the absence of statute the sale may be private. Since a mortgagee selling under a power of sale is acting as agent of the mortgagor, he is not allowed to purchase at the sale, unless the mortgagor gives him permission; for an agent cannot himself purchase what the principal has given him power to sell, unless the principal consents. The purchaser, at a sale made under the power given in the mortgage, gets, in a "title theory" state, the title which the mortgagor had when he made the mortgage, because that title is in the mortgagee who makes the sale. Therefore, a purchaser takes free from all subsequent liens and is in as good a position as if he had bought at a foreclosure sale. The same result is reached in "lien theory" states, since the exercise of the power conveys the title as it was when the lien became effective.

§ 50. Sale under trust deed. When a trust deed is given to