Ely v. Carnley

Woodruff, J.

I concur in the opinion of the first judge, that where there has been no forfeiture on the part of the mortgagor by non-payment of the mortgage debt within the period limited by the condition of the mortgage, the statute is imperative and unrelaxing in its requirement that a true copy shall be filed before the expiration of the term of one year from the filing of the original, and that non-compliance cannot be excused so as to obviate the effect thereof declared by the statute, by proving that the failure was a mere clerical error. This excuse is no better than proof that the failure arose from the forgetfulness or neglect of the clerk employed to bear the copy to the proper office, or from an honest mistake, by filing the copy in the wrong office, or other unintentional failure to comply with the statute. The clerical error in the copy filed, however, must, I think, be in some material particulars, and not in such as have no effect upon the nature or effect of the instrument, or the rights of the parties under it. The accidental omission in the copy of words not affecting the sense, or of words which the intelligent reader must readily supply, ought no more to impair the effect of filing the copy, than the omission to make the copy with the same capital letters, or to use figures invariably instead of words, if figures only are employed in the original, or the like immaterial deviations.

But the error of inserting a widely different sum in the copy as the mortgage debt, is not, I think, of this latter description. The statute, in the use of the term “ true copy,” plainly means that the copy shall be at least substantially correct, and no part *505of the mortgage is more plainly matter of substance than the amount of the debt secured.

The design of the legislature was to enable creditors and purchasers to learn the precise condition of the property found in the possession of the mortgagor, and they were not bound, when they found the two papers on file, to speculate upon the question whether what purported to be a copy of a mortgage for $646 19, was in fact intended to be a copy of an original on file for $546 19, or to inquire whether in truth there was not some other original mortgage for $646 19. The probability that they would suspect a mistake is very strong, but to hold that the vitality of the original mortgage was continued upon that ground, would, I think, be a dangerous tampering with the explicit declaration in the statute, that such original shall cease to be valid unless a true copy be filed.”

I am, however, not satisfied that even if the mortgage has become due, and the day for payment has passed, the necessity of filing such copy, with the statement required by the act, no longer exists, if the property continues in the possession of the mortgagor. I recognize the rule that the title of the mortgagee becomes absolute by such default of the mortgagor; but it should be observed that the requirement of the statute is not that the statement to be filed with the copy should specify the amount due to the mortgagee, or that he claims as mortgagee, but it is that a statement shall be filed “ exhibiting the interest of the mortgagee in the property thereby claimed by him by virtue thereof.” While the mortgagor is not in default, the proper mode of exhibiting the interest of the mortgagee is by stating the amount unpaid. And after default, I apprehend that the statement should show the default, and the consequent forfeiture, by which it will appear that the title has become absolute.

The object of the statute is to give creditors and purchasers notice of the mortgagee’s claim. Ilis title begins in a mortgage to secure the payment of the sum secured. At the end of the year a part of the sum may have been paid, or the whole sum may have been paid, or by reason of default, the title may have *506become absolute. Of the actual condition of the property-(still found in the mortgagor’s possession, with all the indicia of ownership), the creditor has a right to be informed, and the legislature intended that he should be informed by the prescribed statement, to wit, a statement exhibiting the interest of the mortgagee. I perceive no sufficient reason why his statement that his interest has become absolute, should not as well be deemed within the requirement of the statute, as that his interest has been modified by a partial payment.

If he takes possession on the happening of the forfeiture,, then, indeed, no statement or copy is necessary. The whole condition of things, to which the statute is applicable, is changed. The change of possession takes the case out of the-purview and design of the statute, and out of the range of the-evils against which the statute was intended to guard.

It is probably unnecessary, after having filed such a statement, to renew it at the end of another year, for the purposes of the statute are answered. He is no longer mortgagee, but' owner, and his interest in that respect has been declared and made known to all persons to be affected thereby. But in the first instance he was mortgagee, and nothing else, and if he continues to claim under the mortgage instrument, he is bound, I think, by the statute to make and file the statement showing every change in his interest under that instrument, whether it arise from partial payments or a total default and forfeiture. .

These suggestions of course apply alone to the mortgage to Mason. The original mortgage to Tweed appears to have been in full force when it was foreclosed, the year not having then expired.

In regard to the question also urged upon us, whether these mortgages ought not to be declared fraudulent upon the general ground that no sufficient reason is shown for suffering the property to remain in the possession of the mortgagor, I am satisfied with the finding of the referee, that the mortgages were made in good faith, for a valuable consideration, and without any intent to defraud creditors or purchasers. And where such was in truth the purpose and object of the parties, I cannot *507agree that a creditor may not receive a mortgage and suffer the debtor to retain his goods until he makes default in the payment of the mortgage debt; nor that a "humane delay in requiring immediate payment where the debt is payable on demand, if there was no other motive, warrants us in saying that the mortgage is itself fraudulent. The circumstances may all be laid before a jury or referee, but the question of fraud, in such case, is by the statute expressly made a question for the jury. (2 R. S. [197] § 4.)

We have given our impressions upon these questions, in compliance with the request of counsel^ though not necessary to the decision of the case.

Upon the ground that the indemnitors of the sheriff were improperly admitted as witnesses in his behalf, the judgment was set aside, the referee’s report opened, and the case referred, back, with liberty to either party to produce additional proofs. Costs to abide the event.