Section 58 of TPA : Section 58: Mortgage , Mortgagor , Mortgagee , Mortgage-Money And Mortgage- Deed Defined

Explanation using Example

Imagine Sarah needs to borrow $50,000 to fund her new business. She owns a piece of land, which she uses as collateral to secure the loan. She goes to a bank and enters into a mortgage agreement. Sarah is the mortgagor and the bank is the mortgagee.

In Sarah's case, she opts for a simple mortgage. She does not hand over possession of her land to the bank but agrees that if she fails to repay the loan, the bank can sell her land to recover the debt. The mortgage deed states this clearly.

Alternatively, if Sarah had agreed that the bank could sell her land if she defaults, but she could buy it back once she pays off the debt, this would be a mortgage by conditional sale.

If Sarah had allowed the bank to take possession of the land and collect rent from tenants until the loan was repaid, this would be an usufructuary mortgage.

Had she transferred the land to the bank with an agreement that the bank would transfer it back after she repays the loan, it would be an English mortgage.

If Sarah lived in a specified city and simply handed over the title deeds of her land to secure the loan, it would constitute a mortgage by deposit of title deeds.