3. Absolute Conveyance. It sometimes happens that a deed. absolute on its face is given by a debtor to secure his debt. A court of equity always treats such a deed as a mortgage and permits the debtor to redeem the property from such conveyance within the period of limitation by repaying the creditor principal and interest in full. To this end the court freely admits oral evidence to establish the true intent of the transaction; viz., that the deed was given only as a security, and to contradict the intent as it appears from the face of the instrument.

4. Recording Mortgages. The law requires mortgages to be recorded just the same as deeds, in order to charge subsequent purchasers and mortgagees with notice. As between the parties to the instrument, the mortgage is valid without recording, unless otherwise provided by statute. Memorandum of the book and page number of the official record is made on the back of the instrument when it is entered in the recorder's archives.

RELEASE OF MORTGAGE.

I,

Know all Men by these Presents, That I. Morse Ives, of

January .A. D. 191.3..., made and executed by William B. Smith

and Millie J. Smith, his wife

of the first part, to..:

Morse Ives

of the second part, and recorded in the Recorder's Office ofCounty, in the State of:

Cook

Illinois

in Book

10196

is, with the note.....accompanying it, fully paid, satisfied, released and discharged.

SEAL

SS.

Seal
Seal

H. L. Klein, a

name. is

Notary Public

in and for the said County, in the State aforesaid, DO HEREBY CERTIFY, That------ Morse Ives personally known to me to be the same person.....whose .subscribed to the foregoing Instrument, appeared before me this day in person, and acknowledged that... he signed, sealed and delivered the said Instrument as.. his free and voluntary act, for the uses and purposes therein set forth.

GIVEN under my hand and.
day of.

second

official .seal, this January ...A. D. 1915.

H. L. Klein

Notary Public.

376. Junior Mortgages.. Besides the first, the owner of the property may execute second and other subsequent mortgages, and all mortgages will take priorities according to their respective dates of execution where the various owners have notice of the existence of the other mortgages, otherwise they will take priority according to their respective dates of record. Upon foreclosure of the first, the surplus, if any, belongs to the second mortgagee, and if there is no surplus he gets nothing. If the second mortgagee forecloses first, he must do so subject to the rights of the prior mortgagee. Under the old English rule the owner of a first, or, say, third, mortgage might acquire these two interests and combine them into a first lien, thereby defeating an intermediate mortgage. This was called tacking mortgages together.

377. Release. Upon the payment of the debt or the performance of the mortgage obligation, the mortgage or the trust deed becomes void, and the mortgagor is entitled to a release of the mortgage or trust deed, as the case may be, in order that the same may be recorded and the title be discharged of the lien.

378. Assignment. If a mortgagee wishes to assign his interest under a mortgage, he must do so by an instrument in writing and under seal. If the debt is evidenced by notes, however, which are secured by a trust deed, the transfer of the notes is sufficient.

379. Foreclosure. If the debt is not paid when due, the mortgagee's remedy is to foreclose his lien. Foreclosure is a proceeding in equity whereby the creditor proves the amount of the debt including interest, solicitors' fees and all other charges provided for in the mortgage or trust deed, then the property is sold at judicial sale and thereby the equity of redemption is barred or cut off. If the property sells for more than the debt and all charges and costs, the remainder is turned over to the mortgagor or second mortgagee; if it sells for less, a deficiency decree or judgment may be entered up against the mortgagor for the remainder. All persons interested in the property must be made

parties to the foreclosure suit so that they can defend their interests if they wish, and that their rights may be cut off if they fail to defend or redeem. In several of the States a deed is not executed to the purchaser immediately following the sale, but a certificate of sale is issued to him and the mortgagor and others interested in the property are given a certain period in which to redeem from the sale by paying the amount for which the property was sold and interest to date.

If redemption is not made within this period, the deed is then executed and the foreclosure is complete.

A mortgage is a conveyance of land given as security for the payment of a debt.

Mortgages should be recorded the same as other conveyances.

Foreclosure is a proceeding in equity whereby the creditor proves the amount of his debt, the property is sold at judicial sale to satisfy the same and the mortgagor's equity of redemption is thereby cut off.

381. QUESTIONS

Discuss the rights of the mortgagor under the earlier common law and such rights at the present time. What is meant by "equity of redemption"? What may be mortgaged?

Distinguish between the primary obligation and the secondary obligation. Distinguish between mortgage and trust deed. In what form and manner should a mortgage be executed? What covenants are ordinarily found in mortgages?

How is absolute conveyance, given to secure a debt, treated in equity? What are the rights of junior mortgagees? How is the mortgagee's interest assigned? How is the property discharged of the lien? Enumerate and explain the various steps in foreclosure.

CHAPTER XLIX

TITLE

382. INTRODUCTION

383. REAL ESTATE CONTRACTS

384. DEEDS

385.

1. Elements of a Deed (1) In Writing. (2) Sufficient Identity. (3) Consideration. (4) Words of Conveyance. (5) Description. (6) Executed. (7) Delivered and Accepted. 2. Structure of a Deed—(1) Premises. (2) Habendum. (3) Tenendum. (4) Reddendum. (5) Conditions. (6) Covenants and Warranties.

(a) Description

(b) Recording

RECAPITULATION

382. Introduction. Title consists of the means whereby an estate, right or interest in real property is held by the owner or is transferred by or from him to another person. According to the manner in which it is acquired title is divided into two classes, (1) title by descent and (2) title by purchase. Title by descent is the title with which an heir is invested by operation of law in the inheritable estates held by his ancestor at death. Title by purchase includes all other means of acquiring title than by