The creditors acquired a power of sale

In ancient system of law a mortgage was really a pledge – the property being conveyed was default of payment. The transaction was effected either by delivery of possession or by conditional conveyance. In Roman law, the earliest type of security was the fiduciary, a conditional conveyance under which the property whatever its value, was forfeited in case of non payment. This was followed by pignus which was a transfer not of ownership but of possession without liability to forfeiture. Then the last stage was hypotheca, a form of pledge without delivery of possession under which the creditors acquired a power of sale. In Hindu and Mohammedan law mortgages went under similar process of evolution. A mortgage by conditional sale was a very early form of mortgage among Hindus. The unsufructuary mortgage with neither power of sale nor of foreclosure corresponded to the Roman pignus and the simple mortgage was latter development corresponding to the Roman hypotheca. Among Mohammedans the mortgage by conditional  sale was a device to evade the Islamic prohibition of taking interest. The development was slower than in the hindu law because interest not being added, the security was always sufficient. In England it seems certain that the original mortgage at common law was rather a pledge than mortgage. The transfer was not of title but of possession. The condition originally was one of defeasance, that on payment the grant determined and the land reverted to the mortgagor who was not entitled to re-enter. Subsequently, the condition became one of re conveyance on repayment as defined in CI. (e) of this section. After the common law mortgage became a mortgage by conditional conveyance; it was modified by three principles of equity.

• That equity looks to the essence of the transaction and that a mortgage is in essence a borrowing transactions.

• That the borrower is in need or protection and the condition that penalizes him is void.

• That the condition of forfeiture in default of payment on due date is a penalty. These equitable principles have been applied to the law of mortgage in India.

The last development of the law of mortgages in England is under the Law of Property Act,1925, by which the mortgages  is a lease and the condition has again become one of defeasance there being an end of the term when the money secured by the mortgage has been discharged.