Mitchell v. Burnham

Appleton, J. A mortgage is a conditional conveyance of land, designed as a security for the payment of money, the fulfillment of some contract or the performance of some act, and to be void upon such payment, fulfillment or performance. To constitute a mortgage it is not necessary that there should be any collateral or personal security for the debt secured by the mortgage. Smith v. Peoples’ Bank, 24 Maine R., 185. The deed, Benjamin H. Harnden to Benja — 300 — min Harnden, of the 16th of May, 1844, by which provision is made for the support of the latter and of his wife and children, must be regarded as a mortgage, though in fact no bond may have been given. It appears that Benjamin Harnden brought a writ of entry upon this mortgage, and recovered judgment thereon on the second Tuesday of October, 1851, upon which, subsequently, a writ of possession issued, under which an entry was made by him on the premises sought in this bill to be redeemed. After the rendition of judgment, and entry under the writ of possession, the mortgagee on the 2d of May, 1853, conveyed his interest in the mortgaged premises by deed which was duly recorded. The complainant, through various mesne conveyances, having acquired the equity of redemption on the 13th of January, 1855, called on the defendant, Burnham, for an account of the rents and profits, which she declined to render; he therefore caused a tender to be made of an amount much exceeding that for which the conditional judgment had been rendered, and costs and interest thereon, and left the same in her hands. It does not seem to be contested that the sum then tendered was amply sufficient. As the mortgage had been assigned to, and as the title to the same appeared of record to be in her, the complainant, after such demand, refusal to account, and tender, has brought this bill for the purpose of redeeming the mortgaged premises. The defendant, Burnham, against whom the bill was originally commenced, sets up by way of defence in her answer, the fact that she had, previously to the demand upon and tender to her, parted with all her interest in the mortgaged premises to Jane Osgood, upon whom the demand to account and to whom the tender should have been made, and that the complainant had notice of all these facts, and that consequently the bill cannot be maintained against her. It may be conceded that if there was a valid assignment and transfer of the mortgage, and the complainant had due — 301 — notice thereof, his demand for an account of the rents and profits, and his tender should have been made to such assignee, and his bill brought against her, though the deed of assignment may not have been recorded. The fact of notice to the complainant, which is asserted in the answer, is a material fact in determining the rights of the parties. The complainant, by the existing law of this state, is a competent witness, and he most explicitly denies all notice of the transfer of the mortgage. No rule can wisely be established by which any judgment is peremptorily made of the trustworthiness of testimony in advance of its utterance, and in entire ignorance of its truth or falsity. Any such rule, if established, would afford about as safe a guide for the action of the court in judicial investigations of fact as the oracular utterances of the astrologer would for the conduct of life. The old rule of equity, that the answer of the defendant when responsive to the bill, is to be taken as true unless disproved by two witnesses or by a witness and corroborative circumstances, rests only on ill considered precedents, and wants the greater and more imposing authority of sound and enlightened reason. Its extension therefore is not to be favored. It existed when the complainant was not a witness. But now both parties being witnesses, causes must be determined by a careful comparison of their testimony, if they are the only witnesses, as in the case of a conflict of proof between witnesses who are not parties. The relative trustworthiness of the parties is to bo determined by the tribunal before which the issue is raised. In the present case there is no proof that the assignment was recorded. The attorney for the complainant, in his testimony, states that after a careful examination of the records, he was unable to find any deed of assignment from the defendant, Burnham. If it had been recorded, and the record had been overlooked, it could have been easily shown. If not recorded, the complainant could only know by information of others. The defendant, Burnham, does not allege that she ever gave information to the complainant or to his coun — 302 — sel of the assignment of the mortgage. There is no proof that he had notice thereof from any other source. The de. fendant does not assert that 'she ever gave notice or that any one else did, to her knowledge. The complainant denies it. Anxious to redeem, and having able counsel to aid him, he would not be likely to make a demand upon, or a tender to a person whom he knew had parted with the mortgage to be redeemed, nor would his counsel advise him so to do. The facts on proof, and the circumstances of the case, satisfy us that the complainant had no notice of the transfer of the mortgage to Jane Osgood, as is asserted in the answer. The important question therefore arises whether the owner of an equity of redemption can legally make a demand upon or a tender to, or bring a bill in equity to redeem against the mortgagee or the assignee of such mortgagee, in whom the title to the mortgage appears of record, notwithstanding the mortgage may have been assigned, if he be in fact ignorant of such unrecorded assignment. In other words, is the assignment of a mortgage to be recorded, and is a demand upon and a tender to the mortgagee of record or the assignee of record, binding on the estate so far as to authorize the court to sustain a bill against him, and to compel the negligent assignee to release or discharge the mortgage, as the legal consequence of his neglect to have his assignment recorded? A mortgage is an estate upon condition defeasible upon the performance of the condition according to its legal effect. Erskine v. Townsend, 2 Mass. R., 493. An assignment of a mortgage is a deed by which the interest of the mortgagee is transferred. A Court of Chancery will undoubtedly interfere to protect equitable rights not recognizable at law. By the common law, to enable an action to be maintained, the assignment must be by deed. Parsons v. Wells, 17 Mass. R., 419; Warden v. Adams, 15 Mass. R., 233; Peoples’ Bank v. Smith, 24 Maine R., 191. But as the mortgage is an interest in real estate, the assignment of a mortgage is the assignment of an interest in real estate, and must be recorded. — 303 — The assignment should be recorded equally with the mortgage. If not recorded it is in the power of the mortgagee and his successive assignees, by not recording the several assignments, to entirely defeat all attempts of the owner of the equity to redeem. The assignment not being recorded, he cannot know of whom to demand an account or to whom to make a tender, if it be necessary to make the same to an assignee of an unrecorded assignment. By a secret assignment, all efforts to redeem may be successfully prevented. As the assignment of a mortgage is a deed, it should be recorded like any other deed. It is apparent that such was the-intention of the legislature. By E. S., ch. 125, s. 28, mortgages may be discharged by deed of release or by causing satisfaction and payment to bo entered on the margin oi the record, under the hand of the person authorized to dis charge it. The record should show such authority. Unless the various assignments by which the state of the title can be shown to be in the person by whom the dischargo is made, are to be recorded, it will not appear that the person discharging the mortgage had authority to do the act undertaken to be done. The due protection of the public requires that the assignment of a mortgage should be recorded equally with the mortgage thereby assigned. The defendant, Burnham, having the apparent title to the mortgage, by the records, and the complainant having no notice of any transfer, the bill to redeem was properly brought against her. The law seems well settled that payment to a mortgagee is good before notice of an assignment. James v. Johnston, 7 Johns. R., 417. In this case there was no notice by record, and there is no proof of notice in any other mode. Payment to an assignee is uniformly upheld in law as well as in equity, if made to the original payee without notice of transfer or assignment. Where a claim is assigned the assignee well knows that the contract was not made originally with him, and that the maker does not and cannot know without notice that payment is to be made to any person other than the one — 304 — with whom the contract was made. It has been repeatedly held that payment of a bond by the obligor to the obligee after the latter had parted with it by assignment to a third person, but before notice given thereof to the obligor, was good, and discharged the obligor from paying it again to the assignee. Hodgdon v. Naglee, 5 W. & S. R., 217; Brindle v. McIlvarin, 9 S. & R., 74. Such is the unquestioned law between the original parties to a mortgage or any other contract. If there be an assignment and notice, the assignee stands in the place of the assignor, and consequently payment may rightfully be made to such assignee, and may continue to be made to him as to the original party until a new assignment is made and notice thereof is given. It follows, therefore, that if the mortgage was assigned by the defendant, Burnham, still the complainant might well make a payment to her, and should equitably be protected in such payment until there should be notice to him of an assignment by her. The demand upon the defendant, Burnham, and the tender to her of the amount due, in the absence of all notice that she had parted with her interest in the mortgage, must be upheld. As all the prerequisites to the successful maintenance of the bill haye been established as against the defendant, Burnham, it is not to be defeated by the allegation of an unrecorded assignment of which the complainant was ignorant. The alleged assignee of the mortgage has been made a party. The bill, as amended, denies the existence of the alleged assignment. The proofs in the case show no such assignment. No exhibit thereof has been made. The defendant, Osgood, by permitting the bill to be taken, as confessed against herself, thereby admits that there is no deed of assignment under which she claims any rights adversely to the complainant. The conditional judgment having been entered in the action Hamden v. Harnden upon the mortgage, the plaintiff, to be entitled to redeem, must pay such further sums, if any, — 305 — as have since accrued. Mann v. Richardson, 21 Pick. R., 355. The mortgage was given to the mortgagee, and for himself and others, for whose benefit he must be regarded as holding the mortgage in trust. It is asserted that all whose interests were secured by this mortgage have deceased. If so, the bill is properly between the present parties — otherwise, the cestui que trusts, if any should be made parties, so that no rights of theirs are injured or lost. The master to whom the amount between the parties is to be submitted, and by whom the amount to be paid is to be determined, if there is anything due, may likewise ascertain whether there are any persons protected by the mortgage and interested in its conditions still living, other than the parties to this litigation. Upon the coming in of the master’s report, a final decree, such as the equitable rights of the parties may require, will be entered up. Tenney, C. J., and May, J., concurred in the result.