A Concise History of the Common Law

CHAPTER 9. THE MORTGAGE

CHAPTER 9 THE MORTGAGE UMMARY EarlY Forml oj Gagt The Gage in Bratlon's Day Jewish Mortgages Littleton on Mortgages The ClassicalCommon Law Morlgage Statutes Mer.hant, Statutes Staple, Elegit EARLY FORMS OF GAGE PAGB 603 604 605 606 607 608 The development of the mortgage is an interesting example of the interplay between legal doctrine and conveyancing custom. The gage, which is the root idea ofthe transaction, is really a relic of the days when credit was not yet in existence.! It has been conjectured that in its oldest form the gage (in Latin vadium, and in modern English pledgeR) was payment, subject only to the option of the purchaser to substitute at a later time payment in a different kind. Under this arrangement the handing over of the gage settled the debt; the creditor could not demand the substitution of a different kind of payment, and the debtor had no way of recovering any excess value in the gage over the price which he could substitute later. According to this hypothesis, the primitive gage was capable ofdevelopment in two directions: first, the gage may become a slight object whose transfer is treated as a binding form in a contract for future payment; or, the transaction may take its modern aspect of security only for the future payment of the principal debt. Procedure, judicial and extra-judicial, probably assisted this transformation. The royal courts soon make a practice oftaking gages of litigants and security for their obedience, and the long history of the law of distress is really concerned with the compulsory taking of gages.3 Here we are particularly concerned with the gage of land, which appears in England as early as Domesday B()f)k. A century later Glanvill describes it,' first of all stating that if the king's court is to take notice 1 See Wigmore, The Pledge-Idea, Harvard Law Review, x. 321, 389, ibM.} xi. 18; and Hazeltine, G6.rchkhte t#J engllschen P/andrechls; Hazeltine, The Gage ofLand, Essays in AngloAmerican Legal History, iii. 636. I Remember that the mediaeval" pledge" (plegius) is almost always a person, not a thing. The Teutonic If/Jfd has come down to us by various routes as .. gage ", "engagement ", "wage ", "wager ", and" wedding ". a Distress is at least as old as II Cnut, 19 (1027-1034), and the distrainor held as a gagee only; the right of selling a distress to satisfy a debt occurs in a few late local customs, but did not enter the common law until 2 Will. & Mary, sess. 1, c. 5 (1690). , Glanvill. x. 6-12. 603 604 REAL PROPERTY of a gage it is essential that the gagee be in possession; otherwise, he says, the same land might be engaged to successive creditors, creating a situation much too complicated for royal justice to unraveJ.1 The gagee may hold in several different ways. For example, the land may be given for a term of years with a covenant that at the end of the term the debt must be paid; on default the gagee will be entitled to hold the property henceforth as his own. Or, on the other hand, the gift may be for a term of years without containing a covenant releasing the title to the creditor on default; in such a case it will apparently be necessary to obtain the judgment of the court before the creditor's title becomes complete. Another possibility was a charteraccompanied by an indenture which imposed conditions upon its effectiveness.2 As we have seen, the gagee is always in possession and receiving the profits of the land. If those profits are applied to the reduction of the debt, Glanvill tells us the transaction is just and lawful; if, however, the profits do not reduce the debt but are taken by the gagee, then the proceeding is usurious, dishonest and sinful, and is therefore called mortuum vadium, a mortgage.3 The mortgage is, nevertheless, legal as far as the king's court is concerned, but if the mortgagee dies, his property will be forfeit, like that of other usurers. This type of gage as described by Glanvill finally fell into disuse. Its obvious disadvantages were that the debtor was always out of possession; that although the gagee was in possession yet he was not protected by the petty assizes, and so if he were ejected he had no means of recovering his security; and worse still, the debtor himself might eject the gagee...