S. C. 347 (25 S. E. Rep. 130); Forest Lawn Co. v. Hanley, 94 Wis. 23 (68 N. W. Rep. 413).

A mortgage given to secure a pre-existing debt is valid. Citizens' Nat. Bank v. Judy, 146 Ind. 322 (43 N. E. Rep. 259). A mortgage executed by a party who has been enjoined from transferring or incumbering his property, real and personal, until the further order of the court, is not valid as against the interest of the plaintiff, in whose behalf the injunction order was granted, in the hands of a party having actual notice of the injunction order at the time the mortgage was so executed. Scaman v. Galligan, 8 S. Dak. 277 (66 N. W. Rep. 458). A mortgage executed by one who has appropriated funds belonging to the mortgagee is based upon a valuable consideration where the mortgagee abandons his right of action by capias, gives an extension of time, and extinguishes the simple contract liability. Price v. Gray, N. J. Eq. (34 Atl. Rep. 678). An alteration of a mortgage by a loan agent who is merely authorized to loan money for the mortgagee, by increasing the amount of the debt, made without any fraudulent intent, and without the knowledge of the principal, does not invalidate the mortgage as against a subsequent mortgagee. Mathias v. Leathers, 99 Ia. is (68 N. W. Rep. 449). Where a note and mortgage are placed in the hands of a third person to be delivered to the mortgagee upon the payment of the consideration money therein mentioned, and the mortgagee refuses to accept the same, and advance such sum, no lien is created upon the land mentioned in said mortgage; and the assignment and delivery thereof by such third person to a stranger to the transaction, without the consent of the mortgagor, and without any indorsement thereof by the mortgagee, conveys no title to, or vests any interest in, said mortgage in the assignee. The mortgage in such case never becomes operative at all; it is void from the beginning. Bailey v. Gilliland, 2 Kan. App. 558 (44 Pac. Rep. 747).

Sec. 556.

Personal liability of mortgagor for debt not necessary. In the recent case of Cook v. Johnson, 165 Mass. 245 (43 N. E. Rep. 96), the supreme court of Massachusetts say: "It is well settled that there may be a mort.

gage without personal liability on the part of the mortgagor for the debt which the mortgage secures. Rice v. Rice, 4 Pick. 319; Campbell v. Dearborn, 109 Mass. 130 (12 Am. Rep. 671); Mills v. Darling, 43 Me. 565; Glover v. Payn, 19 Wend. 518; 1 Washb. Real Prop. (1st Ed.) 481, 482. The mortgagee may agree to look to the land for payment, and may remain liable to account to the mortgagor for any surplus which he receives over and above his debt, and the estate conveyed may continue subject to redemption, although the mortgagor is under no personal liability to the mortgagee."

Sec. 557. Equitable mortgages. When an instrument, as shown by its own terms, is designed by the parties thereto as a security for the payment of money, it may be enforced as an equitable mortgage, though wanting in the formal execution of it as a legal mortgage. An equitable mortgage may be created by an unsuccessful effort to make a valid legal mortgage, or by pledging specific property for the payment of a debt. Margarum v. J. S. Christie Orange Co., 37 Fla. 165 (19 So. Rep. 637). In determining whether a transaction constitutes an equitable mortgage, the criterion is whether, on looking through the forms in which the parties have put the result of their negotiations, the real transaction was in fact a security or a sale. If the transaction was intended to secure one party for claims against the other, it will be considered an equitable mortgage, and not a sale. Notes or other evidences of indebtedness are not necessary to render a transaction an equitable mortgage. If there is, in fact, an indebtedness or liability secured by the transaction, that is sufficient. Bradley v. Merrill, 88 Me. 319 (34 Atl. Rep. 160). Particular facts held insufficient to show an equitable mortgage. Iowa State Sav. Bank v. Coonrod, 97 Ia. 106 (66 N. W. Rep. 78).

Sec. 558. Construction of mortgages. A mortgage and the obligation which it is given to secure should be construed together. Cabbel v. Knote, 2 Kan. App. 68 (43 Pac. Rep. 309); Kansas Loan & T. Co. v. Gill, 2 Kan. App. 488 (43 Pac. Rep. 991). If there is a conflict between them as to

the amount of interest recoverable upon default of payment, the terms of the obligation control. New England Mortg. Sec. Co. v. Casebier, 3 Kan. App. 741 (45 Pac. Rep. 452). Where a bond, which is otherwise negotiable, in specific terms makes a mortgage given to secure its payment a part thereof the specifications in such mortgage become a part of the bond and its negotiability may be destroyed where the stipulations in the mortgage are such as to have that effect. Lockrow v. Cline, 4 Kan. App. 716 (46 Pac. Rep. 720). A stipulation binding the mortgagor to pay all taxes lawfully "levied and imposed upon said premises," does not render him liable for taxes which a subsequent statute directs shall be assessed against the mortgagee's interest in the land. Fuller v. Kane, 110 Mich. 549 (68 N. W. Rep. 267; 34 L. R. A. 308).

The mort

Sec. 559. Title and right to possession. gagor is the legal owner of the mortgaged premises against all persons except the mortgagee. Seaman v. Bisbee, 163 Ill. 91 (45 N. E. Rep. 208). Although a mortgage contains a power of sale it does not pass the legal title until such power is exercised, and until that time the mortgagor may convey the legal title to another. Team v. Baum, 47 S. C. 410 (25 S. E. Rep. 275; 58 Am. St. Rep. 893). A mortgagee in possession is entitled to be reimbursed for insurance premiums and taxes paid, with interest thereon. White v. Atlas Lumber Co., 49 Neb. 82 (68 N. W. Rep. 359). A statute (Mo. Laws, 1893, p. 210) restricting the rights of a mortgagee to growing crops as against a tenant will not be given a retrospective operation. Reed v. Swan, 133 Mo. 100 (34 S. W. Rep. 483).

Sec. 560. After acquired property. A mortgage by one who as an heir is entitled to receive a one-fourth interest in certain lands, of "all her interest, either in fee simple or expectancy or remainder, in the lands inherited by her," in which it is covenanted that the mortgagor is seized of a onefourth interest in the property described, was held not to embrace other interests in the same land subsequently purchased by the mortgagor at an administrator's sale thereof. Wheeler v. Aycock, 109 Ala. 146 (19 So. Rep. 497). A mort

gage given by a street railway company upon its real property "that it now owns, or that it may hereafter acquire, for use, or adapted to use, on or about its said lines of said railway," will attach to real estate subsequently acquired by such company for pavillion grounds which were adapted to and used in connec tion with its lines of railway, and parol evidence is admissible to show such facts. California Title Ins. & T. Co. v. Pauly, 111 Cal. 122 (43 Pac. Rep. 586). Iowa Code, § 1931, providing that "where a deed purports to convey a greater interest than the grantor was at the time possessed of, any afteracquired interest of such grantor, to the extent of that which the deed purports to convey, inures to the benefit of the grantee," does not apply so as to pass to a mortgagee lands included in his mortgage by mistake and to which the mortgagor had no title at the time of its execution, but subsequently acquired title thereto, where it appears that such mortgagee never had in contemplation or expectation the acquiring of any other or greater interest in the property than that owned by the mortgagor at the time he executed the mortgage. Cook v. Prindle, 97 Ia. 464 (66 N. W. Rep. 781; 59 Am. St. Rep. 424; see Vol. IV, § 275). Particular fact case in which it is held that a railroad mortgage extended to after-acquired property. Hawkins v. Mercantile Trust & Dep. Co., 96 Ga. 580 (23 S. E. Rep. 498).

Sec. 561. Mortgage to secure advances. A mortgage given to secure advances is valid. Hendon v. Morris, 110 Ala. 106 (20 So. Rep. 27). It may include a sum advanced before the mortgage was given for which a note was given at the time of the execution of the mortgage, Farabee v. McKerrihan, 172 Pa. 234 (33 Atl. Rep. 583; 51 Am. St. Rep. 374); and the fact that it does not state that it was given to secure future advances does not render it void as to creditors of the mortgagor, Dummer v. Smedley, 110 Mich. 466 (68 N. W. Rep. 260). A mortgage for future advances, although its purpose does not appear upon its face, is good if the amount of the advances is within the sum named as the amount secured. Reeves v. Evans, N. J. Eq. Atl. Rep. 477).

(34

Sec. 562. Deeds construed as mortgages. A deed by a debtor to his creditor accompanied by a contemporaneous agreement between the parties for a reconveyance of the property upon payment of the debt, constitutes a mortgage. Pritchard v. Butler, Idaho (43 Pac. Rep. 73);

Thorn v. Joy, 15 Wash. 83 (45 Pac. Kep. 642); Names v. Names, 48 Neb. 701 (67 N. W. Rep. 751). The true test, in determining whether a conveyance absolute in form should be treated as a sale or as a mortgage, is whether the relation of the parties towards each other, as debtor and creditor, continues. If it does so continue, the transaction will be treated as a mortgage, and the conveyance as a security only. Riley v. Starr, 48 Neb. 243 (67 N. W. Rep. 187). An absolute conveyance by a debtor to his creditor, though in fact made as security for a debt, transfers to the grantee the legal title to the real estate embraced in the instrument of conveyance. All that remains in the grantor is the right, on full payment of the debt, to demand and receive a reconveyance of the title to the property, and a reconveyance is necessary. First Nat. Bank v. Tighe, 49 Neb. 299 (68 N. W. Rep. 490). Citing, Gallagher v. Giddings, 33 Neb. 222 (49 N. W. Rep. 1126); Baird v. Kirtland, 8 Ohio 21; Hughes v. Davis, 40 Cal. 117; 1 Jones, Mortg. 339; Kemper v. Campbell, 44 0. St. 210; Loring v. Melenda, 11 Ohio 355. Where the grantee under such a deed is in possession, the grantor's equity of redemption may be defeated by a parol settlement defeating his right to an accounting. Stall v. Jones, 47 Neb. 706 (66 N. W. Rep. 653). Where the owner of incumbered real estate conveys it to another as security for moneys which he agrees to advance in the way of discharging the incumbrances the transaction will be treated as a mortgage. Lowe v. Turpic, 147 Ind. 652 (44 N. E. Rep. 25; 37 L. R. A. 233). Where an absolute deed to land is given, accompanied simultaneously with a bond or agreement of defeasance, the latter may, upon agreement and consideration, be surrendered and canceled, so as to vest the estate unconditionally in the grantee, by force of the first deed, providing the transaction is conducted with fairness, both as between the parties and as against the creditors of the mortgagor. Seawell v. Hendricks, 4 Okla. 435 (46 Pac. Rep. 557). Citing, Trull v.