Scott v. Field

BRIOKELL, C. J. The action is founded on the amenda-tory statute approved March 1, 1881 (Pamph Acts, 1880-81, p. 32), subjecting a mortgagee, or the assignee or transferee of a mortgage, having received “satisfaction of the amount secured by such mortgage,” to a penalty of two hundred dollars, if, for three months after request in writing by the mortgagor, he fails to enter satisfaction of such mortgage upon the margin of the record thereof, unless, when such request is made, or within said three months, there is a pending.suit between the parties involving the fact, whether such mortgage has been satisfied. It will be observed, the statute materially changes the pre-existing statute, forming sections 2222-23 of the Code of 1876. First, a request in writing is now essential to place the mortgagee, transferee, or assignee in default, and subject him to the penalty; a verbal request was sufficient under the former statute. Second, the penalty can not be incurred, if, when the request is made, there is between the parties a suit pending, involving the fact of satisfaction, or if there is, within the period of three months thereafter, the commencement of suit involving the fact. The pendency of such suit prevents the incurring of the penalty, whether the suit is well or illy founded, and whether it is instituted by the mortgagor, or by the mortgagee, or transferee, or assignee. Either may institute a suit, which will involve the fact. The mortgagor may resort to equity for a redemption, or for a cancellation of the mortgage and a reconveyance; or the mortgagee may file a bill for foreclosure, or may sue at law for the recovery of the mortgage debt, or if the subject of the mortgage is land, and the mortgagor is in possession, may sue for the recovery of the possession; or-if the subject is chattels, may sue in trover or detinue for their recovery; and these remedies, legal and 422 equitable, he may maintain concurrently. The pendency of any of such suits is a fact which prevents, absolutely, the incurring of the penalty; but under the former statute, that was not the force and operation of such a suit, whatever effect, as matter of evidence, in determining the good faith of a refusal to make the entry of satisfaction, could have been accorded to it. The former statute subjected only the mortgagee who had received satisfaction to the penalty, if there was refusal to make the acknowledgment thereof upon the record. The assignee or transferee of the mortgage was not in any event liable to the penalty.—Grooms v. Hannon, 59 Ala. 510. The changes wrought by the amendatory statute are obvious, and there is no reason or room for a construction which will ex-tend them beyond the plain signification of the terms in which they are expressed. The second instruction requested by the appellant affirms that, if the mortgagee does not, within three months after the request to enter satisfaction, commence a suit which involves the fact, and at the time of the request there is not such a suit pending, he is estopped from denying the fact of satisfaction in an action for the recovery of the penalty. The statute is not capable of a construction which will sustain this proposition. The penalty can not be incurred, in any event, unless there has been payment of the mortgage debt, or, in the words-of the statute, which are equivalent, “ of the amount secured by the mortgage.” If there has not been payment of that amount, there is no duty of entering satisfaction imposed by this statute. The purpose of the statute is, that there shall be upon the record an acknowledgment of equal publicity with the record itself, that the mortgage is satisfied; that it is not longer an available security, or an incumbrance upon the title of the mortgagor. The institution of suit involving the fact of satisfaction, if the fact is matter of dispute, of which each party is cognizant, is not more the duty, moral or legal, of the one party than the other. It would seem, if there was real, honest disputation of the-fact, that it would quicken the diligence of the mortgagor in resorting to appropriate remedies for a cancellation and reconveyance, or for redemption, settling the controversy, quieting his possession, and removing the cloud from his title. The neglect of the mortgagee to institute suit does not subject him to the penalty, which can not be incurred, unless payment of the mortgage debt has been made, and the burden of proving that fact rests upon the mortgagor claiming the penalty. The like proposition is embodied in the third instruction requested by the appellant. There was no error in the refusal of these instructions. The statute is penal and must be strictly construed.—Grooms 423 v. Hannon, supra. It is not intended that the penalty shall be paid by a mortgagee, or transferee, or assignee, who, in good faith, having, as he may suppose, real, substantial grounds for a contestation of the fact of satisfaction, refuses to make the entry. — 2 Jones’ Mort. § 991. "Whether the refusal is in good faith, because of room for substantial doubt, the jury must' determine, if there be evidence tending to show it. But he can not refuse from mere wantonness, nor can he withhold the entry, that he may compel the mortgagor to submit to an unjust, illegal exaction. The evidence tends to show that intentional usury infected the mortgage debt. If that be true, and the mortgagor had fully paid the principal before making the request that satisfaction be entered — if of that fact there was no real ground of contestation, no reason for substantial doubt, the mortgagee could not withhold the entry, because the nominal amount of the debt was not paid. The real amount secured by the mortgage was the just debt, that which the mortgagor was legally liable to pay. The circuit court, of consequence, erred in the affirmative instruction given the jury; and for the error the judgment must be reversed and the cause remanded.