equitable mortgage

the effect of the purported contract of lease of January, 1919, was that of an equitable mortgage. The rentals to be paid were the installments of the amount due under the original contract from the Chemical Company for the amount of money which the government had advanced, less that which it had already received, and upon payment of the rental stipulated, the title was to revert to the Chemical Company, while the government reserved the power to take over the property in case of default or bankruptcy of the Chemical Company.

A lien upon real estate of such a character that it is recognized in equity as a security for the payment of money, and is treated as a mortgage. A transaction to which equity attaches the character of a mortgage, without regard to the intention of the parties. For example, a deposit of title deeds as security (Story, Eq. Jur. § 1020; 5 Wheat. [U. S.] 277), or the giving of an absolute deed as security (96 U. S. 332; 113 Mass. 149; 46 N. Y. 605). A mortgage upon a purely equitable interest in lands.

A lien upon real estate of such a character that it is recognized in equity as a security for the, payment of money and is treated as a mortgage. A mortgage of a merely equitable estate or interest is also so called. Such a mortgage may exist by a deposit with the lender of money of the title Tdeeds to an estate; Story, Eq. Jur. § 1020; Bisph. Eq. 161; 1 Bro. Ch. C. 269; 17 Ves. 230; Mandeville v. Welch, 5 Wheat. (U. S.) 277, 5 L. Ed. S7; 20 Beav. 607. They must have been deposited as a present, bona fide security; 1 Washb. R. P. 503; and the mortgagee must show notice to affect a subsequent mortgagee of record; Hall v. Mc Duff, 24 Me. 311; 3 Hare 416; Story, Eq. Jur. § 1020. Such mortgages are recognized in some states; Hall v. Mc Duff, 24 Me. 311; Williams v. Stratton, 10 Smedes & M. (Miss.) 418; Hackett v, Reynolds, 4 R. I. 512; but under the usual system of the registration of deeds are of infrequent occurrence. The doctrine is repudiated in many jurisdictions; Lehman, Durr & Co. v. Collins, 69 Ala. 127; Pierce v. Parrish, 111 Ga. 725, 37 S. E. 79; Gothard v. Flynn, 25 Miss. 58; Bloomfield State Bank v. Miller, 55 Neb. 243, 75 N. W. 569, 44 L. R. A. 387, 70 Am. St. Rep. 3S1; Harper v. Spainhour, 64 N. C. 629; Hackett v. Watts, 138 Mo. 502, 40 S. W. 113; on the ground that it would tend to embarrass lands with secret trusts; Lehman, Durr & Co. v. Collins, 69 Ala. 127; as coming in conflict with the statute of frauds, which provides that all agreements for the sale of land, etc., should be in writing, etc.; Williams v. Stratton, 10 Smedes & M. (Miss.) 41S; and as being contrary to acts for the recording of mortgages,. and for recording liens for public information; Shitz v. Dieffenbach, 3 Pa. 233. In Georgia the code declares that the delivery of title deeds creates no pledge; Davis v. Davis, 88 Ga. 191, 14 S. E. 194. When, however, a written agreement accompanies the deposit of the title deeds, such agreement may become the basis for an equitable lien; Woodruff v. Adair, 131 Ala. 530, 32 South. 515. No particular formality is necessary in order to make a valid mortgage between the parties thereto; Frick v. Fritz, 115 la. 438, SS; N. W. 961, 91 Am. St. Rep. 165. If the transaction resolves itself into a security, whatever may be its form, in equity it is a mortgage; Flagg v. Mann, 2 Sumn. 533, Fed. Cas. No. 4,847. A lien created by contract and not sufficient as a legal mortgage, will generally be regarded as partaking of the nature of an equitable mortgage; Kyle v. Belleuger, 79 the nature of the transaction, and give effect to it, as such, in furtherance of the ment of the parties, if there appears an intention to create a security; Wood v. Holly Mfg. Co., 100 Ala. 326, 13 South. 948. -if, Am. St. Rep. 50. The form of the writing is not important provided it sufficiently appears that it was thereby intended to create a security; Howard v. Iron & Land Co., G2 Minn. 298, 64 X. W. 896; and to the same effect, Higgins v. Manson. 11"; Gal 407, 58 Pac. 907, 77 Am. St. Rep. 192; Martin v. Rowen, 51 N. J. Eq. 452, 26 Atl. 823; Dulaney v. Willis, 95 Va. 006, 29 S. E. 324, 04 Am. St. Rep. 815; Hackett v. Watts, 138 Mo. 502, 40 S. W. 113. To place in the hands of another a deed to real estate, together with a written memorandum stating that the property is pledged to secure the other against loss from i Ing a surety for the owner, will create an equitable lien enforceable against the owner's assignee for creditors; In re Snyder, 138 la. 553, 114 N. W. 015, 19 L. R. A. (N. S.) 206. Such a mortgage has been said to exist in favor of the vendor of real estate as security for purchase-money due from the purchaser; in which case a lien is recognized in some jurisdictions; 15 Ves. 339; 1 Bro. Ch. C. 420, 424, n. It is occasionally spoken of as an equitable mortgage; Moreton v. Harrison, 1 Bland (Md.) 491, though it is doubtful if it is to be so considered. It is properly termed vendor's lien, which see. See also Lien.

A specific lien upon real property to secure the payment of money or the performance of some other obligation, which a court of equity will recognize and enforce, in accordance with the clearly ascertained intent of the parties to that effect, but which lacks the essential features of a legal mortgage, either because it grows out of the transactions of the parties without any deed or express contract to give a lien, or because the instrument used for that purpose is wanting in some of the characteristics of a common-law mortgage, or, being absolute in form, is accompanied by a collateral reservation of a right to redeem, or because an explicit agreement to give a mortgage has not been carried into effect. See 4 Kent, Comm. 150; 2 Story, Eq. Jur. § 1018; Ketehum v. St. Louis, 101 U. S. 306, 25 L Ed. 999 ; Payne v. Wilson, 74 N. Y. 348; Gessner v. Palmateer, 89 Cal. 89, 26 Pac. 789, 13 In R. A. 187; Cummings v. Jackson, 55 N. J. Eq. 805, 38 Atl. 763; Hall v. Railroad Co., 58 Ala. 23; Bradley v. Merrill, 88 Me. 319, 34 Atl. 160; Carter v. Holman, 60 Mo. 504. In English law, the following mortgages are equitable:
(1) Where the subject of a mortgage is trust property, which security is effected either by a formal deed or a written memorandum, notice being given to the trustees in order to preserve the priority.
(2) Where it is an equity of redemption, which is merely a right to bring an action in the chancery division to redeem the estate.
(3) Where there is a written agreement only to make a mortgage, which creates an equitable lien on the land.
(4) Where a debtor deposits the title-deeds of his estate with his creditor or some person on hls behalf, without even a verbal communication. The deposit itself is deemed evidence of an executed agreement or contract for a mortgage for such estate. Wharton.

Defined under Mortgage in Black's Law Dictionary.

A mortgage arising in equity, out of the transactions of the parties, without any deed or express eontract for that sp^ecic^ purpose. 4 Eenfs Com. 160. Thus, if a debtor deposits his title deeds with a creditor, it is evidence of a valid agreement for a mortgage, and amounts to an equitable mortgage, which is not within the operation of the statute of frauds. Id. ibid. Burtons Beal Prop. 484, pi. 1670. Cross on Lien, chap. x. Miller's Law of Equitable Mortgages, 1, et passim. 2 Crabb's Beal Prop. 848 — 855, §§ 2208—2208. White's Lead. Equity Cases, 440. Id. 465, (Am. ed.) note. In Pennsylvania, the validity of this kind of mortgage is not recognized. 3 Penn. St. (Barr's) B. 238. The mortgage of an equitable estate or interest. Holthouse. Miller's Law of Eq. Mortg. 1.