foreclosure

To shut out; to bar. Used of the process of destroying an equity of redemption. 1 Washb. Real Prop. 589; Daniell, Ch. Pr. 1204; Coote, Mortg. 511; 9 Cow. (N. Y.) 382. A proceeding in chancery by which the mortgagor's right of redemption of the mortgaged premises is barred or closed forever. In the more comprehensive sense which modern usage requires, any proceeding by which mortgaged property is applied to the payment of the mortgage debt, and the equity of the mortgagor therein barred. As so defined, foreclosure is divided into: (1) Strict foreclosure, being foreclosure by a proceeding in chancery, by which the equity of redemption is barred within a certain time, and the title of the mortgagee becomes absolute. (2) By entry, by the act of the mortgagee taking possession either by his own peaceable act, or under writ of entry. (3) By sale, being by an action for the judicial sale of the mortgaged property, and the application of the proceeds to the payment of the mortgage debt. Sometimes called "foreclosure by action." (4) By advertisement, being a sale under a power of sale in the mortgage, notice thereof being given by advertisement. Sometimes called "foreclosure under power of sale." The two first-named varieties are practically unused in the United States, though they exist in a few states.

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.

A process in chancery by whifch all further right existing in a mortgagor to redeem the estate is defcated and lost to him, and the estate becomes the absolute property of the mortgagee; being applicable 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. 2 Washb. Real Prop. 237. Goodman v. White, 26 Conn. 322; Arrington v. Liscom, 34 Cal. 376, 94 Am. Dec. 722; Appeal of Ansonia Nat. Bank, 58 Conn. 257, 18 Atl. 1030; Williams v. Wilson, 42 Or. 299, 70 Pan. 1031, 95 Am. St. Rep. 745. The term is also loosely applied to any of the various methods, statutory or otherwise, known in different jurisdictions, of enforcing payment of the debt secured by a mortgage, by taking and selling the mortgaged estate. Foreclosure is also applied to proceedings founded upon some other liens; thus there are proceedings to foreclose a mechanic's lien.

— Foreclosure decree. Properly speaking, a decree ordering the strict foreclosure (see infra) of a mortgage; but the term is also loosely and conventionally applied to a decree ordering the sale of the mortgaged premises and the satisfaction of the mortgage out of the proceeds. Hanover F. Ins. Co., v. Brown. 77 Md. 64, 25 Atl. 989, 39 Am. St. Ren. 386,

— Foreclosure sale. A sale of mortgaged property to obtain satisfaction of the mortgage out of the proceeds, whether authorized by a decree of the court or by a power of sale contained in the mortgage. See Johnson v. Cook, 96 Mo. App. 442, 70 S. W. 526.

— Statutory foreclosure. The term is sometimes applied to foreclosure by execution of a power of sale contained in the mortgage, without recourse to the courts, as it must conform to the provisions of the statute regulating such sales. See Mowry v. Sanborn, 11 Hun (N. Y.) 548.

— Strict foreclosure. A decree of strict foreclosure of a mortgage finds the amount due under the mortgage, orders its payment within a certain limited time, and provides that, in default of such payment, the debtor's right and equity of redemption shall be forever barred and foreclosed; its effect is to vest the tide of the property absolutely in the mortgagee, on default in payment, without any sale of the property. Champion v. Hinkle, 45 N. J. Eq. 162, 16 Atl. 701; Lightcap v. Bradley, 186 111. 510, 58 N. E. 221; Warner Bros. Co. v. Freud, 138 Cal. 651, 72 Pac. 345.

The process mortgagor.

A process in chancery by which all further right existing in a mortgagor to redeem the estate is defeated and lost to him, and the estate becomes the absolute property of the mortgagee; being applicable 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. 2 Washb. Real Prop. 2387. The term is also loosely applied to any of payment of the debt secured by a mortgage, — by taking and selling the mortgaged estate, Foreclosure is also applied to proceedings founded upon some other liens; thus thera are proceedings to foreclose a mechanie’s lien.

The process of barring the equity a mortgagor; forfeiting the mortgagee's title.

In equity practice. The process of barring the equity of redemption of a mortgagor, by filing a bill for that purpose, called a bill of foreclosure. 2 Barbour's Chanc. Fr. 171, 186. 2 Crabb's Beal Frop. 918. 4 Kent's Com. 180.