MORTGAGES,

A MORTGAGE is a deed conveying real estate to a creditor, as security for a debt. It conveys the property to him as fully and absolutely as though it were sold outright, with this difference that the debtor retains by the terms of the deed the right to pay the debt and redeem the property within a specified time. The person giving a mortgage is called the mortgagor; the person receiving one, the mortgagee.

A note is generally given by the debtor, and the mortgage is designed to secure it. In some of the States, a bond is given in place of the note. The words of the mortgage should state clearly which is given.

The mortgagee has a valid title to the property conveyed, and all the mortgagor owns in relation to it is the right to pay the debt and redeem the property. Hence, unless the deed expressly stipulates that the mortgagor may remain in possession of the property until the time for the payment of the debt arrives, the mortgagee has a perfect right to enter upon the property and take possession of it. It is, therefore, customary to include in mortgages a clause giving the mortgagor the right of possession.

In former years a mortgagor lost his right to redeem his property when the mortgage was unpaid on the day it became due. Now, however, the law secures to him three years after the expiration of the mortgage, in which he may pay the debt, with interest and costs, and redeem his property. This is called his equity of redemption. The mortgagor may sell his equity of redemption, of he may mortgage it by making a second or other subsequent mortgage of tha property, and it may be attached by creditors, and would go to assignees ar part of his property if he became insolvent.

As many persons object to lending money upon mortgages in which thic equity of redemption is reserved, it has become common of late years, to include in the mortgage a clause stipulating that if the money is not paid when it i due, the mortgagee may, in a certain number of days thereafter, sell the property (providing also such precautions to secure a fair price as may be agreed apon), and, reserving enough to pay his debt and charges, pay over the balance to the mortgagor. This is called a power of sale mortgage, and is an arrangement sanctioned by the law. It must be remembered, however, that the equity of redemption exists in all mortgages which do not contain the above express stipulation.

The three years of redemption begin on the day on which the mortgagee fore closes the mortgage, or, in other words, takes lawful possession of the property. If the mortgagee allows a dozen years to pass without foreclosing, he must reckon the three years of redemption from the day of foreclosure.

In foreclosing, he must make entry upon the property in a peaceable manner, in the presence of witnesses, or by an action at law. The mode of procedure is governed by the laws of the several States.

When a mortgagor wishes to redeem his property, he must make a formal tender of the debt due, together with interest and all the lawful charges of the mortgagee. He is entitled to such rents or profits as the mortgagee has actually received, or would have received had he used due diligence in collecting them.

It is usual for the mortgage to contain an agreement that the mortgagor shall keep the premises insured in a certain sum for the benefit of the mortgagee. Where no such stipulation is made, and the mortgagee insures the premises, he cannot recover the cost of the insurance from the mortgagor.

Should a mortgagor erect buildings upon mortgaged land, the mortgagee, on taking possession, becomes the owner of these buildings also. If, however, the mortgagee erects buildings upon lands on which he holds a mortgage, the mortgagor, upon redeeming the land, becomes the owner of such buildings without paying the mortgagee for them. Such matters may, and should always, be regulated by an agreement between the parties.

In some of the States it is usual to release a mortgage by a quit-claim deed from the holder of the mortgage to the holder of the property or of the equity of redemption. Another common practice is for the Register or Recorder of Deeds to write an acknowledgment of satisfaction, release, or discharge, on the margin of the record of the mortgage, which must be signed by the mortgagee or holder of the mortgage. Any instrument, or writing which plainly states that the sum or sums due upon such mortgage have been faithfully paid, will constitute a valid release of the mortgage. Such instrument must be duly signed, sealed, and recorded. A release of a mortgage takes effect from the time it is placed in the hands of the Recorder of Deeds, whose duty it is to record in a book kept for that purpose all proper releases or discharges, or satisfactions of this kind.

Form of Mortgage in General Use.

THIS INDENTURE, Made the first day of January, in the year of our Lord one thousand eight hundred and eighty-one, between Henry A. Steele, merchant, of the city of Richmond, State of Virginia, and Mary, his wife, of the one part, hereinafter called the mortgagor, and Alfred Howard, banker, of the city and State aforesaid, hereinafter called the mortgagee, of the other part.

WHEREAS, The said mortgagor seized of, or well entitled to, the inheritance in fee-simple, of and in the lands and premises hereinafter described and released; and having occasion to borrow, and take up at interest, the sum of ten thousand dollars, has applied to and requested the

said mortgagee to lend and advance to him the same, which he, the said mortgagee, has agreed to do, on having the re-payment thereof secured to him by a mortgage of the said lands, tenements, and hereditaments, in manner hereinafter mentioned.

NOW THIS INDENTURE WITNESSETH, That in pursuance of the said agreement, and in consideration of the sum of ten thousand dollars to the said mortgagor in hand paid by the said mortgagee at or immediately before the sealing and delivery of these presents, the receipt whereof the said mortgagor does hereby acknowledge, and of and from the same, and every part thereof, does acquit, release, and discharge the said mortgagee, his heirs, executors, administrators, and assigns, and every of them, forever, by these presents, he, the said mortgagor, has granted, aliened, released, and confirmed, and by these presents does grant, alien, release, and confirm (and the said Mary Steele, wife of the said Robert Steele, doth hereby release all her right of dower) unto the said mortgagee, Alfred Howard, his heirs and assigns, all that tract, piece, and parcel of land, hereditaments and premises, situate, lying, and being[Here insert a careful and accurate description of the property.]

TOGETHER, with all houses, buildings, rights, members, and appurtenances thereunto belong. ing, or in anywise appertaining; and all the estate, right, title, claim, and demand of the said mortgagor in, to, or upon the said lands and hereditaments, or any part thereof.

TO HAVE AND TO HOLD the said lands, tenements, hereditaments, and premises hereby released, or intended so to be, with their appurtenances, unto the said mortgagee, his heirs and assigns, to the only proper use of the said mortgagee, his heirs and assigns, forever.

SUBJECT, NEVERTHELESS, to the proviso for redemption hereinafter contained; that is to say, provided that if the said mortgagor, his heirs, executors, administrators, or assigns, shall pay unto the said mortgagee, Alfred Howard, his executors, administrators, or assigns, the full sum of ten thousand dollars of lawful money of the United States, without any abatement whatever, then these presents shall cease, and be void to all intents and purposes whatever. And the said mortgagor, his heirs, executors, and administrators, covenant with the said mortgagee, his executors and administrators, that he, the said mortgagor, his heirs, executors, or administrators, shall and will pay, or cause to be paid unto the said mortgagee, his executors, administrators or assigns, the said principal sum of ten thousand dollars and interest, at the times and in the manner hereinbefore appointed for payment thereof, without any deduction or abatement whatever, according to the true intent and meaning of these presents. And also shall and will, during so long as the said sum of ten thousand dollars, or any part thereof, shall remain due on security of these presents, pay, or cause to be paid, to the said mortgagee, his executors, administrators or assigns, interest for the said sum of ten thousand dollars, or for so much thereof as for the time being shall remain unpaid, after the rate of seven per centum per annum, on the first day of January in every year. And also that he, the said mortgagor, now has in him a good right to grant, release, and convey the hereditaments hereby released, unto the said mortgagee, his heirs and assigns, in manner aforesaid, according to the true intent and meaning of these presents. And further that it shall and may be lawful to and for the said mortgagee, his heirs and assigns, after default shall be made in payment of said sum of ten thousand dollars and interest, or any part thereof respectively, contrary to the proviso hereinbefore contained, peaceably to enter upon the said hereditaments, and to hold and enjoy the same, without any interruption, claim, or demand whatsoever. And moreover, that he, the said mortgagor, and his heirs, and all persons whatsoever, having any estate or interest in the premises, shall and will at all times hereafter, during the continuance of said sum of ten thousand dollars and interest, or any part thereof, on this security, upon every reasonable request of the said mortgagee, his executors, administrators, and assigns, but at the costs and charges of the said mortgagor, his heirs, executors and administrators, make and execute and perfect all such further conveyances and assurances in the law whatsoever, for the further and better conveying and assuring the said hereditaments hereby released, unto and to the use of the said mortgagee, his heirs and assigns; subject to the said proviso, according

to the true intent and meaning of these presents, as by the said mortgagee, his heirs and assigns or his or their counsel in the law, shall be reasonably desired or advised and required, and tendered to be made and executed.

And it is hereby further Provided, agreed and declared, by and between the said parties to these presents, that if default shall be made in payment of the said sum of ten thousand dollars, or the interest thereof, or any part thereof respectively, at the times hereinbefore appointed for payment of the same respectively, then and in any of such cases, and when and so often as any such default shall be made, the whole amount of the said principal money shall, notwithstanding any provision or condition of this mortgage to the contrary, immediately fall due and become payable, and it shall be lawful for the said mortgagee, his executors, administrators, or assigns, at any time or times after such default shall have been so made, without any further consent on the part of the said mortgagor, his heirs and assigns (without prejudice, however, to the right of the said mortgagee, his heirs and assigns, to foreclose the equity of redemption, or to maintain any action under the covenants hereinbefore contained), to make sale and dispose of the said messuages, land, and other hereditaments and premises herein before granted and released, or expressed or intended so to be, or any part or parts thereof, either together or in parcels, and either by public auction or private contract, with full power upon any such sale or sales to make any stipulations as to title or otherwise, which he or the purchaser shall deem necessary; and also with full power to buy in the said hereditaments and premises, or any part or parts thereof, at any sale or sales by public auction, or to rescind any contract or contracts for the sale of the same hereditaments and premises, or any part or parts thereof, and to re-sell the same hereditaments and premises which shall have been so bought in, or as to which any contract or contracts for sale shall have been rescinded as aforesaid, without being responsible for any loss which may be occasioned thereby. And, for the purposes aforesaid, or any of them, it shall be lawful for the said mortgagee, his executors, administrators, or assigns, to make and execute, or cause to be made and executed, all such agreements, deeds, conveyances, and assurances as he or his execators, administrators, or assigns, shall think fit. And it is hereby also agreed and declared, that upon any sale or sales which shall be made under the power of sale hereinbefore contained by the executors or administrators of the said mortgagee or by any other person or persons who may not be seized of the legal estate in the hereditaments and premises to be sold, the heirs of the said mortgagee, or any other person or persons in whom the legal estate of the same hereditaments and premises, or any part thereof, shall be vested, shall make such conveyances and assur. ances of the same, for the purpose of carrying the sale thereof into effect, as the person or persons by whom the same shall be made shall direct.

PROVIDED ALSO, and it is hereby agreed and declared, that the said mortgagee, his executors, administrators, or assigns, shall not execute the power of sale hereinbefore contained (if the sale or sales thereunder be by public auction) unless and until he or they shall have first given four weeks' notice of such sale, by publishing such notice at least once in every week for four successive weeks, in some newspaper published in the city of Richmond, Virginia.

PROVIDED ALSO, and it is hereby further agreed and declared, that upon any sale purporting to be made in pursuance of the aforesaid power in that behalf, the purchaser or purchasers thereof shall not be bound to see or inquire whether either of the cases mentioned in the clause or provision lastly hereinbefore contained has happened, or whether any money remains due on the security of these presents, or otherwise, as to the propriety or regularity of such sale; and notwithstanding any impropriety or irregularity whatsoever in any such sale, the same shall, as far as regards the safety and protection of the purchaser or purchasers thereat, be deemed and taken to be within the aforesaid power in that behalf, and to be valid and effectual accordingly, and the remedy of the said mortgagor, his heirs or assigns, in respect of any breach of the clause or provision lastly hereinbefore contained, shall be in damages only. And is hereby also agreed and declared, that, upon any such sale as aforesaid, the receipt

receipts in writing of the said mortgagee, his executors, administrators, or assigns, for the pur chase-money of the hereditaments and premises to be sold, shall be an effectual discharge o effectual discharges to the purchaser or purchasers for the money therein respectively expressed to be received, and that such purchaser or purchasers, after payment of all or a part of the purchase-money, shall not be concerned to see to the application of such money, or be answer. able for any loss, misapplication, or non-application thereof. And it is hereby further agreed and declared that the said mortgagee, his executors, administrators, and assigns, shall hold all and singular the moneys which shall arise from any sale which shall be made in pursuance of the aforesaid power in that behalf, upon the trusts following; that is to say, upon trust in the first place by, with, and out of the same moneys, to reimburse himself or themselves, and to pay or discharge all the costs and expenses attending such sale or sales, or otherwise to be incurred in or about the exercise of the said power of sale or in anywise relating thereto; and, in the next place, upon trust to apply such moneys in or towards satisfaction of all and singular the moneys which for the time being shall be due on the security of these presents, and then upon trust to pay the surplus [if any] of the said moneys unto the said mortgagor, his heirs or assigns, for his and their proper use and benefit. And it is hereby also agreed and declared that the aforesaid power of sale shall and may be exercised by any person or persons who for the time being shall be entitled to receive and give a discharge for the moneys which for the time being shall be due on the security of these presents.

PROVIDED ALWAYS, and it is hereby agreed and declared, that the said mortgagee, his executors, administrators, or assigns, shall not be answerable nor accountable for any involuntary losses which may happen in or about the exercise or execution of the aforesaid power or trusts, or any of them.

IN WITNESS WHEREOF, the parties above mentioned have hereunto subscribed their names and affixed their seals to two copies thereof, interchangeably at Richmond, Virginia, on the first day of January, in the year of our Lord one thousand eight hundred and eighty-one.

RECEIVED, on the day of the date of the within-written Indenture, from the within-named mortgagee, the sum of ten thousand dollars, being the consideration expressed in the same Indenture, to be paid by him to the within-named mortgagor.

Witness,

THOMAS A. STEELE. [SEAL.]

LAWRENCE WHITE,

THOMAS LACEY.

THIS DEED was acknowledged before me by Mary Steele, therein named, apart from her husband, to have been voluntarily executed by her, and that she was aware of the nature of the contents thereof.

Dated this first day of January, A. D. 1881.

Chattel Mortgages.

ALFRED LANE,
J. P. for Henrico County.

A Chattel Mortgage is a mortgage given upon personal property for the purpose of securing a creditor. Formerly, if the mortgagor remained in possession of the property, it was doubtful whether the mortgagee held a valid security.