Foreclosure

A proceeding in chancery by which the mortgagor’s right of redemption of the mortgaged premises is barred or closed forever. The modern significance of the term, as applied to mortgages, is that of a sale under a judgment of foreclosure, and not the judgment itself; Slchler v. Look, 93 Cal. 600, 29 Pac. 220. This takes place when the mortgagor has forfeited his estate by non-payment of the money due on the mortgage at the time appointed, but still retains the equity of redemption; in such case, the mortgagee may file a bill calling on the mortgagor, in a court of equity, to redeem his estate presently, or, in default thereof, to be forever closed or barred from any right of redemption. In some cases, however, the mortgagee obtains a decree for a sale of the land under the direction of an officer of the court, in which case the proceeds are applied to the discharge of Incumbrances, according to their priority.

See Hart v. Ten Eyck, 2 Johns. Ch. (N. y.) 100; Palmer’s Adm’rs v. Mead, 7 Conn. 152; Gilman v. Hidden, 6 N. H. 30; Anonymous, 2 N. C. 482; Higgins v. West, 5 Ohio 554; Quint v. Little, 4 Greenl. (Me.) 495; 1 Washb. R. P. 589; Dan. Ch. Pr. 1204.

In an action to foreclose a mortgage, there is no occasion for an entry for breach of condition; Cook V. Bartholomew; 60 Conn. 24, 22 Atl. 444, 13 L. R. A. 452. Where, before beginning suit to foreclose for default in paying interest, the defaulted interest was paid and accepted, such acceptance is a waiver of any claim of forfeiture on account of the default; Smalley v. Ranken, 85 la.

612, 52 N. W. 507.

Strict Foreclosure

When the property is of less value than the mortgage debt and the mortgagee is willing to take it for his debt, the court may decree a strict foreclosure, unless there are other encumbrancers, purchasers of the equity of redemption or creditors to object; Farrell v. Parller, 50 111. 274; Flagg V. Walker, 113 U. S. 659, 6 Sup. Ct. 697, 28 L. Ed. 1072; if the mortgagor is insolvent and there are no other encumbrancers; Hollis V. Smith, 9 111.

App. 109. See note in 19 L. Ed. 864; 20 L. R. A. 370.

Such a decree must find the amount due and allow time for payment and redemption; it cannot be final in the first instance; Clark v. Reyburn, 8 Wall. (U. S.) 818, 19 L. Ed. 354. Strict foreclosure Is usually by a bill in equity praying the foreclosure, by which the court, through a master, ascertains the redemption shall within a prescribed time pay that sum and redeem the property, he shall be forever barred; 4 Kent 180; 2 Washb. R. P. 248. It has been spoken of as a harsh remedy; Bolles v. Duff, 43 N. T. 469. It can only be resorted to under peculiar circumstances; Jefferson v. Coleman, 110 Ind. 615, 11 N. E. 465. It would not generally be allowed without the mortgagor’s consent; Caufman v. Sayre, 2 B. Mon. (Ky.) 202. It exists in Maryland; Dorsey v. Dorsey, 30 Md. 622, 96 Am. Dec. 617; Wisconsin; Kimball v. Darling, 32 Wis. 675; and New Jersey; Parker v. Child, 25 N. J. Eq. 41; it is said to be unusual in North Carolina; Green Crockett, 22 N. C. 390. It is held that the mortgagor’s equity of redemption can only be barred by his own agreement, by estoppel, or by judicial sale; Appeal of Winton, 87 Pa. 77. That it is not recognized as a practice, see Browne v. Browne, 17 Fla. 607, 35 Am. Rep. 96; Gamut v. Gregg, 37 la. 573; Davis V. Holmes, 55 Mo. 349; First Nat. Bank v. Min. Co., 8 Mont. 32, 19 Pac. 403; Kyger v. Ryley, 2 Neb. 20; in some of these states the subject is regulated by code. In Massachusetts the practice is usually by way of entry in possession, or by writ of entry, or under the powers contained in the mortgage. Usually a considerable period is allowed for redemption. In Maine there is proceeding by writ of entry and the mortgagor has three years for redemption. A strict foreclosure will not be granted to cut off the right of a second mortgagee where he was not a party; Moulton v. Cornish, 138 N. Y. 133, 33 N. E. 842, 20 L. R. A. 370; but the decree may direct that, unless within a prescribed time he shall notify the purchaser of his intention to redeem, he shall be barred; Moulton V. Cornish, 1,38 N. Y. 133, 33 N. E. 842, 20 L. R. A. 370. See Horr v. Herrington, 22 Okl. 690, 98 Pac. 443, 20 L. R. A. (N. S.) 47 and note, 132 Am., St. Rep. 648. As to the subject generally, and also as to Railway Foreclosure, see Mortgage.