CHAPTER XXVI. TERMS FOR YEARS. 1. ORIGIN AND USES OF TERMS FOR YEARS. 1. What is the English doctrine as to terms for years attendant upon estates of inheritance? Terms for years occupy a very large space in English Jurisprudence. They were originally invented for the purpose of securing the payment of money lent on mortgage of the land, or the payment of jointures and portions for children, or other special trusts. Where the purposes of the term have been satisfied, if the instrument does not provide for its cesser, the beneficial interest becomes a creature of equity, to be disposed of, and moulded according to the equitable interests of all persons having claims upon the inheritance. It is governed generally by the same rules, to which the inheritance itself is subject; following the descent to the heir, and all alienations of the fee or any particular estate carved out of it. The trustee will hold the term for equitable incumbrancers, according to their priority; and from hence arises the advantages of attendant terms. A bona fide purchaser or mortgagee, who has a mere equitable title, may cure the defect by taking the assignment of an outstanding term, at least so far as to entitle himself to the legal estate during the term, in preference to any creditor, of whose incumbrance he had not notice, at or before the time of com pos pleting his contract. He may use the term to protect his session, or to recover it when lost. These attendant terms will not be permitted to deprive creditors of their just rights; but they will bar a claim of dower, where the assignment was actually made before the husband's death. When terms for years are created to raise portions for children, although the settler enters into a personal covenant to pay the portions, the real estate is considered as the primary fund. In this country we have instances of long terms of near one thousand years; but they are treated altogether as personal estate, and go, in a course of administration, as chattel interests, without any suggestion of their being of the character of attendant terms. Our registry acts, applicable to mortgages and conveyances, determine the rights and title of bona fide purchasers and mortgagees, by the date and priority of the record; and outstanding terms can have no operation when coming in collision with a registered deed. We appear to be fortunately relieved from the necessity of introducing the intricate machinery of attendant terms, which have been devised in England with so much labor and skill, to throw protection over estates of inheritance. Titles are more wisely guarded, by clear and certain rules, which may be cheaply discovered, and easily understood; and it would be deeply regretted, if we were obliged to adopt this complex and artificial a system as a branch of the institutes of the property law. Kent's Com., vol. 4, page 94. CHAPTER XXVII. MORTGAGES. 1. WHAT IS A MORTGAGE, AND ITS CHARACTER IN EQUITY. 2. WHAT MAY BE THE SUBJECT OF A MORTGAGE, AND HOW IT MAY BE CREATED. 3. INTEREST OF THE MORTGAGOR IN THE LAND AFTER BREACH OF THE CONDITION. 4. INTEREST OF THE MORTGAGEE IN THE LAND AFTER BREACH OF THE CONDITION. 5. WHO MAY REDEEM, AND HOW MAY THE RIGHT BE LOST. 6. THE PRACTICE ON BILLS OF FORECLOSURE. 7. MORTGAGES OF PERSONAL PROPERTY. 8. PRINCIPLES OF PRIORITY WHERE THERE ARE DIFFERENT MORTGAGES. 1. What is a mortgage, and how is it regarded by Courts of Equity?1 1 The following interesting sketch of the growth of the equitable jurisdiction, is taken from Mr. Coote's treatise, referred to in the text: "The absolute forfeiture of the estate, whatever might be its value, on breach of the condition, was, in the eye of Equity, a flagrant injustice and hardship, although perfectly accordant with the system on which, the mortgage itself was founded. No wonder then, that our Courts of Equity, pursuing the principles of the civil law, should, as they increased in power, attempt, by an introduction of those principles, to moderate the severity, with which the common law, followed the A mortgage is defined, by Chancellor Kent, to be the conveyance of an estate by way of pledge for the security of debt, breach of the condition. They did not, indeed, attempt to alter the legal effect of the forfeiture, at common law; they could not, as they might have wished, in conformity to the principles of the civil law, declare that the conveyance should, notwithstanding forfeiture committed, cease at any time before sentence of foreclosure, on payment of the mortgage-money; but leaving the forfeiture to its legal consequences, they operated on the conscience of the mortgagee, and acting in personam, and not in rem, they declared it unreasonable that he should retain for his own benefit, what was intended as a mere pledge; and they adjudged that the breach of the condition, was in the nature of a penal-* ty, which ought to be relieved against, and that the mortgagor had an equity to redeem, on payment of principal, interest, and costs, notwithstanding the forfeiture at law. No sooner, however, was this equitable principle established, than the cupidity of creditors, induced them to attempt its evasion, and it was a bold but necessary decision of Equity, that the debtor could not, even by the most solemn engagements entered into at the time of the loan, preclude himself from his right to redeem; for, in every other instance, probably, the rule of law, modus et conventio vincunt legem, is allowed to prevail. In truth, it required all the firmness and wisdom of the eminent judges, who successively presided in the Courts of Equity, to prevent this equitable jurisdiction from being nullified by the artifice of the parties. But those Courts, looking always at the intent, and not at the form of things, disregarded all the defences, by which the creditor surrounded himself, and laid down as plain and undeviating rules, that it was inequitable, the creditor should obtain a collateral or additional advantage, through the necessities of his debtor, beyond the payment of principal, interest, and costs, and they established as principles, not to be departed from, that once a mortgage, always a mortgage; that an estate could not at one time be a mortgage, and at another time cease to be so, by one and the same deed; and that a mortgage could no more be irredeemable, than a distress irrepleviable; and, by the same reason, Equity will let a man loose from his agreement, and even against his agreement, admit him to redeem a mortgage, and that whatever clause or covenant there may be in a conveyance, yet, if upon the whole, it appear to have been the intention of the parties, that such conveyance shall only be a mortgage, or, pass an estate redeemable, a Court of Equity will always construe it so. Thus, the harshness of the common law, was softened, without an actual interference with its principles, and a system was established, at once consistent with the security of the creditor, and with a due regard for the interests of the debtor." and to become void on payment of it. Mr. Coote, in his valua ble Treatise on the Law of Mortgage, with more especial reference, to its character in a Court of Equity, describes it, as "a debt by specialty, secured by a pledge of lands, of which, the legal ownership is vested in the creditor, but of which, the debtor and those claiming under him, remain the actual owners, until debarred by judicial sentence, or their own laches." Atcommon law, when the debtor failed to pay the money at the appointed time, the mortgaged property became the absolute estate of the creditor. But Courts of Equity, looking to the substance of the transaction, continued to treat the mortgage, as a mere security for the debt; the mortgager, as the real owner of the land; the legal estate, which the mortgagee had acquired, as a trust for his benefit, and the mortgage, personal assets. The debtor was declared to possess, what was significantly termed, an Equity of Redemption, or a right to redeem the estate, within a reasonable period, upon payment of the debt, and all equitable charges.1 The debt was regarded as the principal, the 1 It is a practice, common in some of the States, and said to be gaining ground in England, to add to the mortgage, a power of sale, in case of default, thus depriving the debtor of the right of redemption, and avoiding the delay and expense of a foreclosure, by bill in Equity. The validity of a sale, under such power, has been recognised in New York, Missouri, and Massachusetts, and is sanctioned by the opinion of Chancellor Kent, and by some of the later English authorities. Mr. Coote says, that they are not within any of the mischiefs to be guarded against by a Court of Equity; that they give nothing to the creditor, beyond his principal, interests and costs; and that they bestow on him no collateral and ulterior advantage. In Virginia, Mississippi, and probably other southern states, a different principle has, (we conceive with better reason,) been established, and a mortgagee is regarded as disqualified by his interest, from discharging the functions of a trustee. The principles which have been frequently declared, in reference to the powers and duties of trustees, in general, are utterly incompatible with the due exercise of those powers and duties, by the creditor. How can the mortgagee be expected to act impartially? It must frequently happen that, the time, the place, the manner of selling, will present questions of serious difficulty, and of great importance. The sum really due, may also admit of much controversy. On all these points, as well as many others that might be mentioned, the interests of the parties may be, and frequently are, at direct variance; and to refer |