Russell v. Reed

Vanderburgh, J. This is an action in equity, brought for a perpetual injunction to restrain the foreclosure of a mortgage, on the ground of an alleged fraudulent alteration thereof by the defendant. There were special findings of fact by a jury, upon which judgment was,ordered by the court in plaintiff’s favor, and from a subsequent ■order denying a new trial defendant appeals. As respects the alteration of the instrument, the jury find that it was changed, and the amount secured materially increased, after the •execution thereof, without the consent of the plaintiff, and that it was given to secure $1,700, evidenced hy four notes. But it is not found by whom the alteration was made, nor by whom the notes, which are not •described, were executed. These findings are, however, supplemented by further findings by the court, to wit, “that the plaintiff’s allegation that the mortgage in controversy was fraudulently altered and changed by defendant is not sustained by the evidence, and is not true. ” The negation of this allegation of the complaint of course adds nothing to plaintiff’s case, and there are no other findings on the subject. The theory of the court, as stated in its decision, (but not properly part of the findings,) is that the defendant altered the mortgage through an honest mistake of his legal right to do so. But such a state of facts is not within the issues, and is not supported by any evidence in the case. The complaint alleges that the plaintiff and her husband executed the mortgage in question to secure four promissory notes, and that the defendant fraudulently altered it “by adding two other notes, ■of about $400 each ; thereby increasing the indebtedness secured by said mortgage about $800.” The answer, denying inconsistent allegations, states that the plaintiff executed the six promissory notes therein specifically described, and which were also inserted in the mortgage, and no others, and that the mortgage was given to secure such notes, and was not in any particular altered by the defendant or any one after it was executed. It was important that these issues should be passed on by the trial court, and that the facts embraced therein should be specifically found under the evidence in the case. It is manifest that no satis [378] factory disposition of the case can be made upon the findings as they stand. For aught that appears thereby, the alleged alteration may have been made by a stranger; and, if so made, without the privity of the defendant, would be spoliation merely, and would not' deprive the defendant of his right to have the instrument restored and enforced as originally executed. Ames v. Brown, 22 Minn. 257. But the unauthorized and material alteration of a mortgage by the mortgagee, or with his privity, after execution, unexplained, is presumptively fraudulent, and vitiates the instrument. It is a lien only, and not a conveyance of the title. It remains executory until foreclosure, and, like other contracts, its enforcement may be defeated by such alteration. Waring v. Smyth, 2 Barb. Ch. 119, (47 Am. Dec. 299;) Marcy v. Dunlap, 5 Lans. 365; Meyer v. Huneke, 55 N. Y. 412. The ease went to trial, without objection, upon the issues as made by the pleadings as they stand, embracing the merits of the controversy between the parties. It was too late, after the trial, to insist that the complaint is insufficient for lack of an offer to pay the original consideration secured by the mortgage; and it will be time enough to determine upon what conditions the court will render a decree in plaintiff’s favor when the facts are ascertained and found. The judgment ordered is not warranted by the facts found, and there must be a new trial. Order reversed.