Deeter v. Crossley

Dillon, Ch. J. 1. Mortgage: failure to enter satisfaction. — The section of the statute (Rev. § 3670) upon which this action is founded, provides, that, U whenever the amount due on any mortgage is Pa^ ^Ie mortgagee, or those legally acting for him, must acknowledge satisfaction thereof in the margin of the record of the mortgage. If he fails to do so within six months after being requested, he shall forfeit to the mortgagor the sum of twenty-five dollars. Under the statute it is the duty of the mortgagee “ whenever the amount due on the mortgage is paid off, to acknowledge satisfaction thereof on the margin of the record of the mortgage.” The duty to enter satisfaction arises as soon as the amount due is fully paid. Whenever the amount is fully paid, the mortgagee must enter the satisfaction of record. But the failure to discharge this duty, is not enforced by a penal sanction, until a request shall be made, and there shall be a failure for six months thereafter to comply therewith. The object of the statute is obvious. The record of the mortgage is constructive notice to the world of the existence of the debt and incumbrance. When this is paid, the statute has provided for a satisfaction on the record, so that the world may also know the fact of payment. Unsatisfied mortgages of record tend to affect the pecuniary standing and credit of the mortgagor in business circles. In view [183] of these considerations, the reasonableness of the statute requiring the mortgagee to acknowledge payment of the debt in as public a manner as the mortgagor had acknowledged its existence, is apparent. The very frequent neglect of mortgagees upon receiving payment to satisfy mortgages of record, was the origin of the penalty provided by the section of the statute under consideration. ' Under this section we hold that the penalty is incurred if the mortgagee shall fail “ within six months after being requested ” to enter the satisfaction. Subsequent entry of satisfaction, even if entered before suit brought for the penalty, is no answer to a forfeiture which has been made complete by a failure for the space of six months to comply with the mortgagor’s request. We are, therefore, of opinion against the position assumed by the defendant’s counsel, viz.': that actual cancellation of the record is a complete defense to the action even though, before suit was brought, the defendant had allowed six months or more to elapse, after request, without acknowledging satisfaction of the mortgage. 2. — satisfaction must be express. We cannot concur with the learned judge of the District Court in his opinion, that plaintiff having eonveyed the land mortgaged to the defendant, this is a defense to an action for the penalty. Iiis honor so held, because such a conveyance operated as an extinguishment and satisfaction of the plaintiff’s mortgage of record. But a conveyance by a mortgagor to the mortgagee of the equity of redemption does not necessarily have the effect to satisfy and discharge the mortgage debt, and hence does not necessarily operate as a satisfaction of the mortgage of record. Whether it has such an effect depends upon the interest of the mortgagee and the intention of the parties. Wickersham v. Reeves, 1 Iowa, 113; Wilhelmi v. Leonard, 13 id. 330; Lyon v. [184] McIlvane, 24 id. 9; 1 Hilliard Mort. 480, 81, 84, and cases cited. It thus appears, that it is not universally true that a conveyance by mortgagor to mortgagee operates as a satisfaction of the mortgage. And it should be remarked that the conveyance in question in this case does not contain any recital or statement that it was intended to discharge the mortgage. For reasons derivable from the object of the statute as before expressed, we think the plaintiff was'entitled to an express satisfaction of record, in addition to the presumptive one arising from the subsequent conveyance. As to the mode of satisfaction, the statute says it must be entered on the margin of the record. This we think contemplates an express satisfaction. If, instead of a satisfaction on the margin, the mortgagee should execute, properly acknowledge, and place of record a satisfaction-piece identifying the mortgage and declaring it to be satisfied, we need not deny that this would be a sufficient defense to an action for the penalty. This would be an express satisfaction, and perhaps would answer fully the purpose of the statute. But that purpose is not answered by the mere recording of a subsequent deed from mortgagor to mortgagee, containing no allusion to the mortgage. The judgment of the District Court is reversed, and the cause remanded, with directions to enter judgment on the finding of facts, for the plaintiff. Iieversed.