of mortgage; but in case of failure to pay, the property under the Common Law became the property of the mortgagee. The chapter on real property should be read to understand the nature of deeds and estates.

Equity of Redemption. The value of the property is almost always in excess of the debt, and the law has looked upon the forfeiture of this excess as a penalty, and a penalty is commonly regarded with disfavor by the law. The Common Law as it formerly stood, exacted the letter of the deed. The interest of the mortgagor in this excess seemed an interest which a court of Equity could, and did recognize and protect. This interest is called the "equity of redemption," and by virtue of it, under the earlier law, the mortgagor had the right at any time within twenty years to redeem the property by paying the debt with interest. Under foreclosure proceedings, or as the result of Statute Law, this right is, practically, never exercised.

An Estate. The courts have held this equitable interest to be an "estate" which may be conveyed, or devised by will, or go to the heir by descent. It is an estate under which the mortgagor retains possession or control, may lease, collect rents, and exercise substantially all of the functions of ownership; this is by virtue of the equitable title which rests in the mortgagor, while the legal title is held by the mortgagee. The mortgage now is held to be essentially a lien on the property. The law does not allow the mortgagor to part with this equity of redemption to the mortgagee at the time of executing the mortgage, nor at any later time, without consideration, and this a court, in many States, will insist shall be actual and real.

Foreclosure. Equity thus gives protection to the mortgagor, but it also looks after the interests of the mortgagee. The mortgage deed commonly contains a provision for "foreclosure" of the mortgage, under which a court of Equity arranges for a sale of the property for the payment to the mortgagee of all that is due him and for the return to the mortgagor of the excess, after the payment of proper costs and fees, so that a reasonably prompt remedy is provided. The equity of redemption, when this is done, ceases to exist.

In this country, in part through statutory enactments, Common Law jurisdiction is now exercised over these matters in many States.

ASSIGNMENT

Scope of Assignment. Under the Common Law, things not in possession, perhaps not fully in existence, could not be transferred or assigned. A court of Equity, however, will enforce such transfers or assignments in many cases.

A chance or possibility of acquiring an estate in lands is assignable. The share which a sailor will have in the profits of a voyage in fishing or whaling is assignable before the beginning of the voyage. A workman may assign his wages in advance unless some statute forbids. If a person agrees, for a consideration paid, to sell property at that time not acquired, a court of Equity will enforce the contract if the person later secures the property. A manufacturer assigns machinery not fully in existence to the purchaser who makes payment for it; when completed, creditors of the manufacturer attach it; the original purchaser will be granted the property.

Assignments for the benefit of creditors are regulated by statute in most States and will not receive attention here.

ACCIDENT AND MISTAKE

Accident Defined. When a document or paper is destroyed by accident, due perhaps to the "act of God," but certainly not due to the serious negligence or fault of the person entitled to its possession, and when the loss obstructs, or imperils the future assertion of rights dependent upon such possession, Equity may be called upon to give relief on account of this "accident." Where a construction bond, not in duplicate, is lost by accident a court of Equity may order a re-execution of the instrument, and similar action may be taken in case of a lost deed, or of other important documents. Where a penalty or forfeiture is provided for a failure to act or to respond within a definite period of time, if the failure has occurred through "accident" and without negligence or fault, Equity will give relief against the enforcement of the penalty or forfeiture, but not where a money payment only is involved. Cases may occur in engineering work where a failure to execute work at the appointed time would work forfeiture in some way, except that the element of accident intervened.

Negotiable Instruments. The loss of a negotiable instrument is a different matter, for that is good in the hands of any innocent holder for value, as will appear in a later chapter.

Mistake. Equity will also give relief in some cases of "mistake"; but this must be a mistake of fact, and not of law. A mistake as to the legal effect of an instrument is an apparent exception, and Equity will give relief in this case.

The mistake must be mutual, material, and not induced by negligence, if a writing is to be re-formed. The mistake may be due to failure to properly express what was intended in a deed or other writing; it may occur through misapprehension or ignorance of some important fact. A failure to write "with interest" in a note, when this was intended, has been corrected. When both parties intended an instrument to be under seal, an

omission to attach seals has been held to be a "mistake," to be rectified by a court of Equity. An agreement may, of course, be rescinded for fraud.

Engineer's Interest in Mistake. Engineers have a definite interest in the case where error appears on the face of an award, or where an arbitrator shows or admits circumstances constituting "mistake." The services of a lawyer are necessary in cases where accident and mistake are to be rectified and his advice thus becomes available before any action need be taken by an engineer.

FRAUD

Relief in Equity. Common Law often affords sufficient relief in many cases of fraud. Fraud vitiates a contract; fraud also constitutes a tort, and damages may be awarded at Common Law if a suit instituted is successful. While there is thus some measure of relief in Law, the remedies often fail to put the party in as good a position as before the fraud was committed, so that a court of Equity may properly assume jurisdiction. If a legal title has passed due to fraud, Equity may regard the holder of the title as a trustee for the benefit of the grantor, or may set aside the deed, as has been stated. A contract may be set aside for actual fraud, and also in the case of constructive fraud, where for instance one has taken advantage of another where confidential relations exist between them, as in the case of guardian and ward, attorney and client, trustee and cestui que trust; the decree of a court of Equity may go far to right the wrong and place the party aggrieved in a position nearly or quite as good as before the fraud was committed.

Fiduciary Character of Engineer. If an engineer unwittingly misleads a contractor as to matters preliminary to a contract, the relation of engineer to contractor is likely to be held by the courts to have sufficiently the fiduciary character to make it a case of constructive fraud, as has been suggested elsewhere.

ESTOPPEL

Definition. When A, by statement or action, has led B to do certain acts, a court of Equity will sometimes refuse to allow A to make a counter statement, however true it may be, when such a statement would lead to injustice or loss to B; even silence in some cases has the same effect as a positive act. This action is taken under the doctrine of estoppel. The point of view of some law writers is that the attempted action amounts to constructive fraud. When estoppel may be set up as a defence is a matter for the lawyer finally, but that such a remedy sometimes exists is a fact perhaps worth knowing.

NOTICE

Definition. Notice is of two kinds, actual and constructive. Actual notice is knowledge; constructive notice occurs where facts brought to a man's knowledge are such that a diligent, sagacious, and prudent man ought to make inquiry concerning them; a neglect to make such inquiry makes him liable for the consequences.

Examples. A general knowledge that property about to be bought by a man is in some way encumbered is constructive notice which requires inquiry on his part. Knowledge of unrecorded encumbrances has the same effect. An avoidance of inquiry may have, similarly, the effect of constructive notice, if clearly established by evidence. A general lack of caution, not connected with any specific matter, has not the same effect.

A person buying property under litigation has constructive notice, although he has no actual knowledge of such litigation; he buys subject to any decree against the party from whom he buys. In some States a formal statement of such litigation must be filed with the registry of deeds to constitute notice. A purchaser has constructive notice of the registration of instruments; not only of the fact of registration but of the contents of the instrument.

CONTRIBUTION, EXONERATION, SUBROGATION

Contribution. In the case of contract bonds or other debts where several parties, possibly sureties, are liable for a common debt and one pays the entire obligation, Equity will give to the one who pays, the right to recoup from the others their proportional share, under the name of " contribution."

Exoneration. In a similar way a surety who has paid a debt may look to his principal, perhaps the contractor, for reimbursement, probably including the costs of the suit, as "exoneration." It is likely to happen that the city or the railroad finds it more satisfactory to collect from the surety than from the contractor directly where both have signed the bond; the surety then needs a remedy against the contractor which the Common Law does not adequately provide.

Subrogation. Somewhat technically subrogation is the substitution of one creditor for another. In a broad sense, it is sometimes considered to be the means by which contribution and exoneration are effected. In a narrower sense, it is held to apply especially in the case where one surety, or the principal, has collateral security for the debt, in which case Equity will provide that the obligation be met by the one in possession of the securities.

RESCISSION, CANCELLATION

Rescission. There is necessity sometimes for setting aside some document or writing either because it was obtained by fraud or otherwise it ought not to stand. Such a case occurs when the legal title to lands has improperly passed by deed and where a money award will not set matters right. Resort must then be had to a court of Equity for "rescission" of the contract or deed. Any part performance by the plaintiff after discovering the fraud or wrongful act, seems to affirm the contract and is fatal to the suit. The maxim "He who seeks Equity must do Equity" finds application here. The plaintiff who asks rescission must tender everything he has received, so as to put the defendant in as good position as before, so far as possible. Where in the nature of things it is impossible to approximate to this, the court will refuse to interfere.

Cancellation. Somewhat similarly, a court of Equity will decree the "cancellation" of an instrument obtained by fraud or otherwise invalid, in cases where, while a good defence exists at present, the evidence of its invalidity might later be unavailable. This remedy is an extraordinary one, to be secured only under expert advice. A suit to clear title to land where some cloud exists on the title is a remedy of a similar sort.

To Perpetuate Testimony. There are other cases where the assistance of Equity may be asked in order to perpetuate testimony which may later become unavailable.

SPECIFIC PERFORMANCE OF CONTRACT

Specific Performance. Equity assumes jurisdiction in the case of contracts only when the Common Law remedy fails or is inadequate. In the case of a breach of contract the ordinary remedy is a suit at Common Law for damages, a favorable outcome resulting in a money award which in some cases is an inadequate remedy. A man secures from several owners contracts in writing to convey parcels of land to him; one of the owners refuses or otherwise fails to convey; all the parcels of land are necessary if the projected hotel, or business block, or church is to be built; it is impossible to secure a money award which will make the purchaser whole. In this case recourse is had to a court of Equity to secure specific performance of contract, a well recognized remedy of Equity. Specific performance of contract deals as a rule only with lands, real property rather than personal, although where the personal property is of a unique character it may apply even then. It applies also when the goods cannot be acquired in the open market if money damages are awarded. The remedy of specific performance is appropriate also in some cases where the damages cannot