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William Wait.

A treatise upon some of the general principles of the law, whether of a legal, or of an equitable nature, including their relations and application to actions and defenses in general, whether in courts of common law, or courts of equity; and equally adapted to courts governed by codes (Volume 4) online

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Online LibraryWilliam WaitA treatise upon some of the general principles of the law, whether of a legal, or of an equitable nature, including their relations and application to actions and defenses in general, whether in courts of common law, or courts of equity; and equally adapted to courts governed by codes (Volume 4) → online text (page 75 of 107)
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588. But a payment upon a bond and mortgage made by the mort-
gagor to the mortgagee, after an assignment ^thereof by the latter,
when made in good faith, without notice, actual or constructive, of
the assignment, is valid. Van Keuren v. Corkins^ Q^ N. Y. (21
Sick.) 77.

§ 13. Correcting, reforming, etc. A mortgage, the release whereof
is obtained by fraud, will be reinstated both as against the mortgagor
and a purchaser from him with notice of the mortgage, if no new
rights have intervened in favor of the purchaser since the release.
Ellis V. Lvndley, 37 Iowa, 334 ; Steblins v. Howell, 4 Abb. (K. Y.)
App. Dec. 297 ; 1 Keyes, 240. So, too, if the release is given through
mistake {Bruse v. Nelson, 35 Iowa, 157) ; or the release be dependent
upon a condition which had not been fulfilled. Wood v. McClughan, 4
T. & C. (N. Y. ) 420. But when a mortgage has been once paid, and the
lien discharged, the parties cannot restore the lien, to the prejudice
of third persons who - are their incumbrancers. Angel v. Boner, 38
Barb. 425. Yet a purchaser of real estate incumbered by a mortgage
whose deed from the mortgagor was subject to the mortgage, which
the said purchaser, by a clause in the deed, assumed and agreed to pay
as part of the consideration, and who had, subsequently, actually paid
the mortgage to the mortgagee, may, nevertheless, having taken an
assignment thereof in blank at the time of payment, reissue such mort-
gage to his creditor in payment of a debt, by filling up the blank in
the assignment with such creditor's name, so as to bind the lands in
the hands of a subsequent purchaser from him with warranty. Kel-
logg V. Ames, 41 N. Y. (2 Hand) 259. In a late case where the com-
plainant was induced to exchange with the defendant mortgages, in
part for bonds, upon false and fraudulent representations of the de-
fendant as to the value of the bonds which proved to be worthless, the
defendant knowing at the time of the agreement for the exchange that
the complainant would not make it without just such assurances as to
their value as defendant made, and the mortgages being thereupon can-
celed and the defendant thus securing a title to the property upon
which they were a lien, free from the incumbrance of the mortgages,
it was held that the incumbrance of the mortgages should be re-
established. Stover V. Wood, 26 N. J. Eq. 417.

§ 14. Cancellation. When the debt is satisfied by the mortgagor,
he is entitled to have the bond and mortgage delivered up to him and
canceled. Matter of Coster, 2 Johns. Ch. 503 ; Knox v. Johnston, 26
Wis. 41. A mortgage is discharged by the payment of the debt, though
the discharge is not entered upon the record. McNair v. Picotte, 33



548 MORTGAGE.

Mo. 57; Merrill v. Chase, 3 Allen, 339; Eatfidd v. ReynoMs, 34
Barb. 612 ; Perkins v, Sterne, 23 Tex. 561. But the taking of a new
note and mortgage, merely as collateral or additional security of a debt
already secured by note and mortgage, does not operate as an extin-
guishment or satisfaction of the debt, evidenced by the old note and
mortgage, unless superior equities have intervened. Clssna v. Haines,
18 Ind. 496 ; Flower v. Elioood, 'o^ Bl. 438. Nor does the surrender
of a note secured by a mortgage and the taking of a new note for the
balance due operate as a discharge of the lien. Lippold v. Held, 58
Mo. 213 ; Swan v. Yaple, 35 Iowa, 248. But a voluntary giving up
and satisfaction of a mortgage, and taking the note of a third party in
lieu thereof, is a relinquishment of the mortgage lien and a surrender
of the mortgage. Mattix v. Weand, 19 Ind. 151. But if the mortgage
is procured to be delivered up by the fraud of the mortgagor, it will
be reinstated. Grimes v. Kimball, 3 Allen (Mass.), 518. Where the
mortgagee purchases the mortgaged premises, and receives a deed in
fee simple, paying a part of the consideration, by the delivery of the
note which the mortgage was given to secure, to the maker, such mort-
gage is thereby paid off and extinguished, and has no effect either in
law or in equity, although it may appear uncanceled on the record.
Jennings' Lessee v. Wood, 20 Ohio, 261.

Equity will keep an incumbrance alive or consider it extinguished, as
will best serve the ends of justice and the actual and just intent of the
party. Goulding v. Bunster, 9 Wis. 513 ; Champney v. Coope, 32 N.
Y. (5 Tiff.) 543 ; S. C, 34 Barb. 539. The right to the money secured
by a mortgage being personal, either one of several mortgagees can
receive the same and discharge the right to recover it of the mortgagor.
People V. Keyser, 28 N. Y. (1 Tiff.) 226. The entering of a discharge
of a mortgage by the mortgagee does not of itself discharge the debt,
but the security only. Sherwood v. Dunibar, 6 Cal. 53. But any act
which discharges a note secured by a mortgage discharges also the
mortgage. Sherman v. Sherman, 3 Ind. 337 ; Fisher v. Otis, 3 Penn.
(Wis.) 78.

A mortgage is not extinguished by the performance of an agreement
by a mortgagor to pay the mortgagee a sum equal to the amount of
his debt, if he would assign the mortgage to the mortgagor's attaching
creditor as security instead of the attachment. The mortgage can be
enforced by the creditor, although for a temporary purpose he had
re-assign cd it to the mortgagee, who afterward assigned it back again.
Sheddy v. Oeran, 113 Mass. 378. A mere stranger who voluntarily
pays off a mortgage, but who fails to take an assignment, and allows
the mortgage to be canceled and discharged, cannot afterward come



MORTGAGE. 549

into equity, and, in the absence of fraud, accident or mistake, have the
mortgage re-instated and liimself substituted in the place of the mort-
gagee. Quy V. Du Uprey^ 16 Cah 195,

Satisfaction and discharge by payment of a mortgage, made and held
as collateral security for the payment of a previous mortgage, is a pay-
ment upon the principal debt, for prima facie there is nothing else
upon which the money paid could apply. Prouty v. Eaton, 41 Barb.
409. And the discharge of a mortgage of record, and the possession
of the instrument, with the accompanying bond, canceled, by one not
the mortgagor, but the owner of land charged with its payment, is
prima facie evidence of the payment by such holder, Braman v.
Bingham, 26 K. Y. (12 Smith) 483. A release of a mortgage, pro-
cured under a promise to pay, is inoperative until the mortgage debt is
paid. Hale v. Morgan, 68 111. 244.

It will be presumed that a mortgage has been satisfied, or become
barred by lapse of time, where the mortgagor and his assigns have held
and enjoyed the mortgaged estate for more than seventy years, and no
claim under the mortgage had been set up. Atkinson v. Patterson, 46
Yt. 750. But the mere recovery of a judgment on sci. fa. to fore-
close a mortgage will not extinguish the relation of mortgagor and
mortgagee, nor discharge either the note or mortgage. RocTcvoell v.
Servant, 63 111. 424. The mortgage was discharged, where the owner
thereof made an unwritten agreement with the mortgagor, to satisfy it
if he would discharge a disputed claim of an estate, of which the
mortgagor was sole beneficiary, by will, against a third person ; and the
latter, with approval of the executor of the estate, gave a receipt
for the claim, and released the executor from, and indemnified him
against all liabilities of the estate. Griswold v, Griswold, 7 Lans,
(N. y.) 72; 52 N. Y. (7 Sick.) 631. But a verbal agreement to
release a mortgage, to be sustained, should be established beyond
reasonable doubt, and where the evidence on such point is con-
flicting, the appellate court will not mterfere with the judgment
of the court below. Stevenson v. Adams, 50 Mo. 475. A court
of equity may set aside the cancellation of a mortgage, upon satis-
factory proof that it was pi'ocured by fraud or done by mistake,
Dudley V. Bergen, 23 N. J. Eq. 397. And a judgment creditor may
entertain proceedings to cancel a mortgage on the creditor's property.
Merrick v. McCausland, 24 La. Ann. 256. And a receiver, authorized
to execute upon payment formal satisfaction and discharge of mort-
gages in his hands as such officer, has authority to receive payment of
the amount secured by, and to satisfy a mortgage, although the same be
not due at the time. Hermann v. Glarkson, 64 N. Y. (19 Sick.) 171.



550 MORTGAGE.

An agreement by a mortgagee to go into partnership with the mortgagor
and to cancel a mortgage held on the premises where the business is to
be carried on, as the mortgagee's share of the capital, if abandoned
before the next payment of interest becomes due, does not amount to
an agreement to extend the time of payment of the interest so as to
save a forfeiture of credit incurred by the non-payment of interest.
Fausel v. Schabel, 22 N. J. Eq. 126.

When a mortgage or deed of trust is duly recorded, the person whose
property is incumbered thereby is entitled, upon fidly paying and satis-
fying the debt, to secure which such mortgage or deed of trust was given,
to have satisfaction of the same entered upon the margin of the record.
And a mortgagee or trustee who fails or refuses, when duly requested,
to enter up such satisfaction, or to execute a deed of release, is liable
in damages to the party aggrieved. Verges v. Gihoney, 47 Mo. 171 ;
Sherwood v. Wilson, 2 Sweeny (K. Y.), 684. A mortgagee who has
recovered costs on final decree, in a foreclosure suit to which he was a
party defendant, cannot be required to cancel or release his mortgage
until such costs are paid. Lewis v. Gonover, 21 N. J. Eq. 230.

Where a vendor agreed that upon a mill of certain dimensions being
built on a lot sold, he would accept poKcies of insurance on it for the
amount of another mortgage collateral to one given on the property
sold, and he did accept such policies, he cannot decline to enter satis-
faction on such other mortgage, because the mill was not of the dimen-
sions contracted for. Swain v. Seamens, 9 Wall. 254.

ARTICLE lY.

VALIDITY OF MORTGAGE.

Section 1. In general. A mortgage to secure the payment of a sum
of money may be upheld, although there is connected with it no other
obligation or contract of the mortgagor, or of any other person to pay
the same. Brookings v. White, 49 Me. 479. And a mortgage to
secure all existing debts, without specifying them, is not invalid for
want of certainty in the amount secm'cd. Mich. Ins. Go. v. Brown,
11 Mich. 265.

Tliough at law a mortgage cannot operate on property not in ex-
istence at tlic time tlie mortgage is executed, courts of equity will en-
force Hpecific execution of contracts, and give relief in numerous cases
of agreements relating to lands and things in action, or to contingent in-
terests or expectancies, upon tlie maxini tliat equity considers tliat done
wliicli, being agreed to be done, ought to be done. Sillers v. Lester,
48 Miss. 513 ; St&oena v. Buffalo, etc., B. B. Co., 45 IIow. (N. Y.)



MORTGAGE. 551

Pr. 104; Pierce v. Milwaukee^ etc., R. B. Co., 24 Wis. 551 ; 1 Am.
Eep. 203 ; Morrill v. Noyes, 56 Me. 458. So, a mortgage upon
an existing railroad may be extended to rolling stock to be subse-
quently acquired, if an intent to acquire such stock and to bold
it subject to the mortgage is sufficiently expressed. Morrill v. Noyes,
56 Me. 458; Weetjen v. St. Paul c& Pacific R. R. Co., 4 Hun
(N. Y.)> 529 ; Piarce v. Milwaukee, etc., R. R. Co., 24 Wis. 551 ; 1
Am. Rep. 203. A mortgage, given when the mortgagor has but
an inchoate title, may become fully operative on maturity of the
title. Crorrypton v. Pratt, 105 Mass. 255. But a mortgage executed
on land acquired under the pre-emption laws of Congress, in accord-
ance with an agreement made by the pre-emptor before such acquire-
ment, is void, except in favor of a hona fide purchaser for value.
Woodbury v. Dorma/ix, 15 Minn. 338.

An instrument ■ should be given the effect intended by the parties.
So, a mortgage executed to the commissioner of a school fund, after
the abolition of the office, but to secure a loan from that fund, will be
sustained upon the ground that the mortgagor was estopped from de-
nying the official character of the grantee. Floyd Co. v. Morrison,
40 Iowa, 188. So, too, where an execution of a power is defective
through mistake, but the object sought by the execution has been ob-
tained, equity will interfere to protect the party furnishing the consid-
eration for which the power is executed from loss by reason of the de-
fect. Beatty v. Clark, 20 Cal. 11. The validity of a mortgage, or
the remedy upon it, is not affected by the fact that the remedy at law
upon the note which accompanied the mortgage was barred by the
statute of limitations. Powell v. Smith, 30 Mich. 451.

To avoid a mortgage alleged to be given to compound a felony, it
should appear, 1st, that there was an agreement to compound a felony ;
2d, that the mortgage was the result of that agreement, and 3d, that
the mortgagee knew of the illegal consideration, at the time of taking
the mortgages. Earl v. Clute, 2 Abb. (N. Y.) App. Dec. 1; 1 Keyes, 36.

Equity will not permit a cotemporaneous agreement, as to cut wood
for timber, at pleasure, to be abused to the prejudice of the mortgage
creditor. Emmons v. Hinderer, 24 N. J. Eq. 39. Possession to oper-
ate as notice should be inconsistent with the title. Staples v. Fenton,
5 Hun (N. y.), 172. Where a deed is made to a married woman and
" her body heirs," as the legal effect of the deed is to give her a life
estate, and there is no restriction of alienation, it is competent for her,
by uniting with her husband, to mortgage her estate and release her
homestead, and such a mortgage creates a valid lien upon her interest
in the land. Hosmer v. Carter, 68 111. 98.



552 MORTGAGE.

Where a State officer, without authority of law, loans the money of
the State, taking a mortgage on real property to secure the money
loaned, the mortgagor cannot deny the validity of the mortgage;
neither can his grantees. StaU x. Shaw, 28 Iowa, 67.

A mortgage, given by a pre-emptor upon the land pre-empted before
the entry, is void, as forbidden by section 13 of the act of congress of
Sept. 4, 1841. Brewster v. Madden, 15 Kan. 249. •

Where one cultivates a farm under a contract that he is to receive
one-half of the crops, after deducting from his half all advances made
by the owner in furtherance of its cultivation, he has no interest or
share in the crop upon which he may give a mortgage lien to third
persons, except what remains of the one-half after paying advances
made by the owner. McGee v. Fitzer, 37 Tex. 27.

A mortgage, made during the civil war, in the State of Alabama, is
viiKd and enforceable in the courts of that State acting under the con-
stitution and laws of the United States, notwithstanding it may have
been based uj^on a loan of . confederate treasury notes. Scheihle v.
Bacho, 41 Ala. 423.

A mortgage of the equitable title, made by the vendee in possession
under a contract of purchase, and recorded, has as full force and effect
against a subsequent mortgagee as it has against the original vendor.
Philly V. Sanders, 11 Ohio (N". S.), 490.

§ 2. Defects iu exeeutiou. An unacknowledged mortgage is a
valid security in the hands of a mortgagee, except as against hona fide
purchasers or incumbrancers without notice. Vichery v. Dickson, 62
Barb. 272; Ilashill v. Sevier, 25 Ark. 152; Moorey. Thomas, 1 Oreg.
201. But a feme covert mortgagor must acknowledge or the mort-
gage will not be good even between the parties. Perdue v. Aldridge,
19 Ind. 290. Though a mortgage subscribed by but one witness, where
the statute requires two, may be upheld and enforced in chancery.
Moore V. Thomas, 1 Oreg. 201.

A mortgage, like any other deed, to be valid and operative, must
not only ])e signed and sealed, but it must be delivered by the maker
and accepted ])y the mortgagee, or by some one legally acting for him.
Freeman v. Peay, 23 Ark. 439. But a deed of trust given to secure
a note for money loaned is valid, even though the note was never in
fact delivered by the borrower to the lender, if the indebtedness existed
for which the note was to have been given. Eacho v. Cosby, 26 Gratt.
(Ya.) 112.

A mortgage given to secure the payment of borrowed money, and
dated on a secular day of the week, may be enforced, in Missouri,



MORTGAGE. 553

though tlie note was mado and executed and the money was bor-
rowed on Sunday. Gwinn v. /Simes, 61 Mo. 335.

A mortgage in which the name of the mortgagee is left blank, but
otherwise correct, delivered to one as collateral security for a loan, is of
no validity and effect, and is not admissible as evidence of the debt.
Chauncey v. Arnold, 24 N. Y. (10 Smith) 330.

§ 3. Defective description. A mortgage is not invalid, as to third
persons, on account of uncertainty in the description of the debt in-
tended to be secm-ed, when, upon the ordinary principle allowing ex-
trinsic evidence to apply a written contract to its proper subject-matter,
the debt intended to be secured may be shown, as between the parties.
Gill V. Pinney, 12 Ohio (N. S.), 38 ; Slieafe v. Gerry, 18 N. H. 24:5.

A mortgage of lands, described as parts of different sections, without
stating the township or range, is void for uncertainty. Boyd v. Ellis,
11 Iowa (3 With.), 97. It is void also if it do not state in what county
or State the land is situated, or at what particular land office it is sub-
ject to entry. Coclvran v. TJtt, 42 Ind. 267. A description by a
known meridian will prevail over that by a county. Sichnon v. Wood,
69 111. 329.

The unintentional misstatement in a mortgage of the number of the
city lot on which it is given, does not invalidate it between the parties,
or as to subsequent incumbrancers with notice of the misstatement.
Mervin v. Murphy, 35 Tex. 787. But where, by mutual mistake of
the parties to a mortgage, the description of the property intended to
be covered by the instrument contained the clause, "being the same
premises described in a deed from Alpheus G. Fuller to Holmes
Amidon, dated," etc., "and recorded," etc.; and the premises described
in said deed from Fuller to Amidon were not the premises intended
to be mortgaged, the record of the mortgage is not notice to a subse-
quent purchaser of what was intended to be conveyed by the mortgage.
Simmons v. Puller, 17 Minn. 485.

Where the description in a mortgage states two east and west Hues,
to run at "nearly right angles" to a certain section line, it merely im-
plies that the east and west lines of the section do not run due north
and south ; and there is no uncertainty in the description which would
render the mortgage void. Teetshorn v. Hidl, 30 Wis. 162.

An act of mortgage declaring the object mortgaged to be the mort-
gagor's entire interest in a parish named, giving the number of acres,
and mentioning the river near which it lies, and by which it is bounded,
with a reference to certain titles of the mortgagor to be found in the
office of the recorder of mortgages for the parish, sufficiently describes
the property. National Bank v. Barrow, 21 La. Ann. 396.
YoL. lY.— 70



554 MORTGAGE.

Where the description of the granted premises in a mortgage is im-
perfect, but authority is given in the mortgage to the recorder to insert
the portion omitted, when obtained, this authority is equivalent to a
power of attorney to the recorder to make such addition, and a subse-
quent incumbrancer cannot object that the recorder executed the au'
thority conferred upon him. Harshey v. Blackmarr^ 20 Iowa, 161.

§ 4. Contrary to statutes or public policy. Where an original
bargain is contrary to the policy of the law, a deed in the nature of a
mortgage, to secure its performance, will not be enforced in a court of
equity. Gilbert v. Holmes, 64 111, 548.

§ 5. Capacity to mortgage. A lessee of premises who puts a
dwelling-house thereon by permission of the owner of the fee, and
with the right to move off the house at the expiration of the lease if
the lessee complies with the lease, has such an interest in the realty, as
he may convey by mortgage. Eagar v. Brainerd, 44 Yt. 294. So, a
person who erects improvements on real estate, under a parol contract
for its purchase, thereby acquires an interest in the land to the extent
of such improvements ; and this interest may be mortgaged. White v.
Butt, 32 Iowa, 336.

A married woman, in Indiana, may bind herself by her mortgage
to keep the mortgaged premises free from legal taxes and charges.
Jones V. Schuhneyer, 39 Ind. 119.

§ 6. Consideration. The validity of a deed of mortgage depends
on the genuineness of the debt which the mortgage is given to secure,
and not upon the description of the debt contained in the deed, nor
upon the form of indebtedness, whether by note or otherwise.
Hodgdon v. Sham,non, 44 N. H. 572. So, where a mortgage described
the mortgage debt as a note of $1,000 when no such note had ever been
given, but the mortgagor was indebted to the mortgagee for goods sold
to the amount of $756, and the latter had agreed to furnish additional
goods up to the sum of $1,000, and the mortgagor had offered to give
him security for tlie whole, and made this mortgage for that purpose,
the mortgage was held void as against a subsequent attaching creditor.
Bramhall v. Flood, 41 Conn. Q^.

If the consideration of a mortgage is made up of several distinct
transactions, some of which are illegal, and that part of the considera-
tion whicli is legal can be separated, with case and certainty, from the
illegal, the mortgage is valid for that part of the consideration free
from illegality. Feldm/m v. GambU, 26 N. J. Eq. 494. The indorse-
ment of a note by one not a party thereto, and the execution of a
mortgage by liim to secure the note, must have a new consideration,
if the indorsement is made and the mortgage executed after the mak-



MOKTGAGE. 555

ing of the note ; but, if they are cpteraporaneons with the making of
the note, the consideration for the note is sufficient. Davidmn v.
King, 51 Ind. 224.

If a member of a copartnership gives a mortgage to a lona jule
mortgagee, to secure his individual debt, upon lands purchased with
partnership money, and for partnership purposes, but deeded to the
partners, as individuals, the mortgage will be protected in equity, and
will have a priority even over the creditors of the firm. Hiscock v.
Phelps, 49 N. T. (4 Sick.) 97 ; Mingus v. CoTidit, 23 N. J. Eq. 313.
Otherwise, if the mortgage is given to secure an antecedent debt, and
the mortgagee parts with no value, in reliance upon its security, or if
he takes the mortgage with notice of the facts. In such case he takes
the mortgage subject to all equities superior to his own, of any person
or persons interested in the lands. Lewis v. Anderson, 20 Ohio St.
281 ; Hiscock v. Phelps, 49 N. Y. (4 Sick.) 97 ; Mingus v. Gondii, 23
N. J. Eq. 313.

Where the rights of creditors do not interfere, a father may make a
voluntary provision for his child, and a mortgage to a trustee for this
purpose is deemed an executed contract, which is as valid, against his
heirs, as a transfer for full pecuniary consideration would be. Buck-
Ivn V. Bucklin, 1 Abb. (N. Y.) App. Dec. 242; 1 Keyes, 141.
Where a mortgage purports on its face to have been executed to
secure the payment of ten thousand dollars, according to the condition
of a certain bond, and it appears that no such bond was ever executed,
that fact is not of itseK fatal to the claims of the mortgagee, and
parol proof may be received to sustain the mortgage. Baldwin v.
Raplee, 4 Ben. 433.

A mortgage given to secure a note which was in fact made in con-
sideration of Confederate notes cannot be enforced. Seuseneau v.
Saloy, 21 La. Ann. 305. And a mortgage given by an heii' on her in-
dividual property to secure her one-fifth part of an annuity created
by her father for the purchase of a lot of slaves, of which she in-
herited the one-fifth, is accessory to the principal obligation — the price
of slaves — and cannot be enforced. Lefevre v. Raydel, 21 La. Ann.
663.

A mortgage may be given to indemnify the mortgagee for becoming
surety or indorser. His liability forms a suflicient consideration.
And such mortgage will be vahd as against subsequent purchasers or
incumbrancers. TJhler v. Semple, 20 IST. J. Eq. (5 C. E. Green) 288.

A. mortgage given without consideration, for the purpose of having
it sold by the mortgagee to raise money for the mortgagor, is not avail-
able against subsequent lien-creditors from its date, but only from



556 MORTGAGE.

the time money was advanced upon it, and accordingly, an assignee^



Online LibraryWilliam WaitA treatise upon some of the general principles of the law, whether of a legal, or of an equitable nature, including their relations and application to actions and defenses in general, whether in courts of common law, or courts of equity; and equally adapted to courts governed by codes (Volume 4) → online text (page 75 of 107)