Lambert v. Hall

7 N.J. Eq. 410

• Court: New Jersey Court of Chancery
• Decided: December 15, 1848
• Status: Published

Opinion

The Chancellor.

Wm. Hall executed and delivered on the 1st May, 1841, to Hugh B. Ely, administrator &c., of Dr. John Wilson, deceased, a bond in the penal sum of $4000, conditioned for the payment of $2000, on the 1st of April thereafter, with lawful interest.

On the same day, William Hall and Catharine Ann his wife signed, sealed and delivered to the said Hugh B. Ely, administrator as aforesaid, a writing purporting to be a mortgage on lands therein described. This writing states, that, whereas the Said Wm. Hall, in and by a certain obligation under his hand and seal, duly executed, bearing even date therewith, stands firmly bound unto the said Hugh B. Ely, in the sum of-, lawful money, conditioned for the payment of--in like money, on the first day of April next ensuing the date thereof, with lawful interest for the same, as in and by the said recited obligation and the condition thereof, relation thereto being had, may more fully and at large appear. Now this indenture witnesseth that the said Wm. Hall and Catharine Ann his wife, as well for and in consideration of the aforesaid debt or sum of [blank,] and for better securing the payment of the same, with interest, unto the said Hugh B. Ely, in discharge of the said recited obligation, as of the sum of one dollar to them paid by said Ely, (the writing then conveys the premises therein described to the said Ely, and states that they are the same premises which the said Ely, by deed bearing even date therewith, conveyed to the said Wm. Hall, immediately before the execution thereof.) Provided, nevertheless, that if the said Wm. Hall, his heirs, &c., shall well and truly pay to the said Hugh B. Ely, his executors, &c., the aforesaid debt or sum of--, on the day and time herein before mentioned for the payment thereof, with interest for the same, according to the condition of the said recited obligation, this indenture and the said recited obligation to be void. This writing was signed and sealed in the presence of Ezekiel Blue, the subscribing witness, and was acknowledged before him as a Judge See.; and there is indorsed thereon, a certificate of the Clerk of the Co. of Hunterdon that it was received in his office on the 11th of May, 1841, and recorded in vol. 18 of mortgages, fol. 268 and 4.

The registry of the said writing in the Clerk’s office is as follows, viz:

Wm. Hall and Wife, to Hugh B. Ely, administrator &c. of Dr. John Wilson, deceased.

Mortgage deed made the first day of May, 1841, between Wm. Hall, of Lambertville, in Amwell township, Hunterdon county, and State of New Jersey, and Catharine his wife, of the one part} and Hugh B. Ely administrator &c. of Dr. John Wilson, deceased, of the other part. Whereas the said Wm. Hall, in and by a certain obligation under his hand and seal duly executed, bearing even date herewith, -stands firmly bound unto the said Hugh B. Ely, in the sum of--, lawful money &c., conditioned for the payment of-, on the first day of April next ensuing the date thereof, with lawful interest.

Now this indenture witnes seth &c., for all that certain &c., (describing the premises;) and it is the same premises which the said Ely, in a deed bearing even date herewith, granted and confirmed uilto the said Wm. Hall, immediately before the execution thereof. To have and to hold &c. Provided when paid to be void &c.

WM. HALL, [l. s.] CATHARINE ANN HALL, [l. s.] Sealed &e., in the presence of Ezekiel Blue.

Acknowledged May 7,1841, before Ezekiel Blue, Judge &c. Recorded May 1, 1841, 6 A. M.

There is now attached to the page on which this registry is made a writing of which the following is a copy : “ Whereas I, Wm. Hall, of Lambertville &c., did, on the first day of May last, execute a mortgage with bond and warrant of Attorney to Hugh B. Ely, administrator &e. of the estate of Dr. John Wilson, deceased, for the payment of $2000 on the 1st day of April next, with lawful interest. Now know ye who it may concern, that the said sum of $2000 was omitted being inserted in the said mortgage. I do hereby certify that the said sum of $2000 should have been so inserted ; and I desire that it may not lose its effect by the omission. Witness my hand, &c., June 28th, 1841.

W. HALL, [l. s,]

Thos. J- Shreeve, witness present.

On the 29th Jan., 1844, Wm. Hall gave a bond to Gershom Lambert, the complainant, for $3307,37; and to secure this bond the said Wm. Hall and Catharine his wife, on the same day, executed and delivered to the complainant a mortgage, of that date, on the same premises described in the said writing purporting to be a mortgage from the said Wm. Hall and wife to the said Hugh B. Ely.

On the 1st May, 1841, the said Wm. Hall and wife executed and delivered to Robert Ely, Smith Ely and others, a mortgage of the same premises to secure $2000; which was recorded prior to the complainants mortgage, and which has been assigned to Tunis Huff.

On 10th June, 1841, the said Wm. Hall and wife executed and delivered to Samuel W. Hall a mortgage of the same premises, to secure $3300, which was recorded June 11, 1841.

On the 29th December, 1842, the said Wm. Hall and wife executed and delivered to Sam’l D. Stryker and Jas. D. Stryker a mortgage of the same premises, to secure $2000; which was recorded prior to complainant’s mortgage.

After the execution and recording of the complainant’s mortgage, several judgments at law were recovered against the said Wm. Hall; by virtue of which and of executions issued thereon, the mortgaged premises were sold by the sheriff of Hunterdon to Jas. N. Reading and Hugh B. Ely, and conveyed by him to them.

Gershom Lambert exhibited his bill to foreclose his said mortgage given by Wm. Hall and wife to him on the 29th January, 1844, making Wm. Hall and his wife, Samuel W. Hall, Tunis Huff, Sam’l D. Stryker, Jas. D. Stryker, Jas. N. Reading and Hugh B. Ely defendants.

The bill states that the said mortgage to Hugh B. Ely, recorded May 11, 1841, was written on a printed blank, and does not contain any sum of money to be secured thereby, nor any time of payment; and that the registry thereof contains no sum of money to be secured thereby, nor time of payment.

That the complainant, or his agent who transacted the business of his mortgage for him, previous to the execution of his mortgage examined the records of mortgages for Hunterdon, for the purpose of ascertaining what incumbrances there were on the said premises, and found that the record of said Ely’s mortgage was as above stated; and being advised by his counsel that the said record was not according to the provisions of the statute in such case made and provided, and that said mortgage was not an incumbrance on the premises, he was induced to lend to the said Hall the said sum of $8,307 37, and take his said mortgage as security therefor. The bill charges, that the said Ely’s mortgage, though, as the complainant insists, it was no incumbrance, was paid off by Sam’l W. Hall, who is an uncle of the said Wm. Hall, and by the said Ely given up or transferred to the said Sam’l W. Hall. It appears clearly from the testimony taken in the cause, that the mortgage from Wm. Hall and wife to the complainant was not given to secure any money then lent or advanced, but to secure a precedent debt.

[The Chancellor then recites the evidence of Jos. Besson, Hugh B. Ely and Asher Lambert. And speaking of Lambert, the Chancellor goes on to say:]

This witness, in his cross examination, . after stating that he inquired of Besson for how much the Ely mortgage was given and the answer he got, and that he informed his father that he found Such a mortgage on the record, says : “ Neither of us took any advice before we took our mortgage. The reason was, I looked at the law relating to mortgages which says that the mortgage shall specify the amount of the mortgage money; and I judged from that. I informed my father what the law was about it.” The 5th section of our statute, entitled “ An Act to register mortgages,” enacts, that every mortgage shall be void against a subsequent judgment creditor or bona fide purchaser or mortgagee not having notice thereof, unless acknowledged or proved and recorded &c.

If a subsequent mortgagee has actual notice of a prior mortgage, his mortgage will be postponed to that prior mortgage, though that be not recorded.

I am of opinion, clearly, from the evidence, that the complainant is chargeable with actual notice that Wm. Hall had given a mortgage to Hugh B. Ely before he, the complainant, took his mortgage, independent of the certificate appended to the record of the Ely mortgage.

The complainant did not know or discover that the Ely mortgage was in blank as to sum till it was found to be so by his son in searching the records. The complainant advanced no money for the mortgage given to him. Hall proposed to give it to secure an old debt he owed the complainant, and the complainant could have no objection to taking it. He had full notice of the Ely mortgage, if it be a mortgage, i. e. he.had notice of the paper as it actually was.

The bill charges that the mortgage to Hugh B. Ely was paid off by Sam’l W. Hall, an uncle of the mortgagor, Wm. Hall, and by the said Ely given up or transferred to him.

The bond and mortgage from Wm. Hall and wife to Ely were exhibited in the cause. There is no assignment of them, or either of them, to Sam’l W. Hall or any other person. The indorsements of payments on this bond are as follows, viz :

- [$800] Received, May 6, 1844, of Samuel W. Hall, eight hundred dollars on account of this bond.

H. B. ELY, Adrn’r.

[$665J Received, May 21, 1844, of Sam’l W. Hall, six hundred and sixty-five dollars on account of this bond.

H. B. ELY, Mm>r.

[$929 09] Received, April 21, 1845, nine hundred and twenty-nine dollars and nine cents, balance in full on this bond.

H. B. ELY, Adm’r.

In response to the charge in the bill that the Hugh B. Ely mortgage has been paid &c., the answer of Sam’l W. Hall says, “ He admits he is an uncle of Wm. Hall, and that in May, 1844, he purchased of Ely the said bond and mortgage so given by his nephew, and that he has paid to Ely the full amount of the said bond, principal and interest. That the said bond and mortgage have been given up and transferred to him by the said Ely, and that he now holds the same as his own property.

The answer then proceeds thus : “ And this defendant further says, that the said bond and mortgage in his hands are in no wise paid off or satisfied to him by the said Wm. Hall or any other person. That the payments indorsed on the said bond as made by him to Ely were not made or received in extinguishment of the said bond, but as evidence that the consideration for the purchase money of the same was fully paid and satisfied by this defendant, who had become the purchaser and owner of the said bond and mortgage in good faith. And he submits that the said mortgage is a valid outstanding incumbrance upon the said premises, and is in equity entitled to be paid out of the same.’* He admits that on the 10th of June, 1841, Win. Hall and wife executed to him a mortgage qn the premises for $3,300, which was registered on the 11th of May, 1841, and which he alleges is an outstanding and valid mortgage. Hugh B. Ely, in his principal examination, says, he sold his mortgage to Sam’l W. Hall. In his cross examination he says, “ At the time I sold the mortgage to Sam’l W. Hall he came to me and said he wanted to pay off that mortgage, or that he was going to make a-payment; he wanted to take up that mortgage. He did not wish any receipt on his bond, but wished a loose receipt; and when he made the last payment he gave up the loose receipts and I gave him the bond and mortgage. My impression is that I did not assign the mortgagé.” Examined in chief again, he says : “ I do not remember the language used by Sam’l W. Hall, when he came to pay me money on the mortgage. I do not know what understanding there was between William and Samuel W. -Hall as to paying off this mortgage. There was nothing said by Sam’l W. Hall from which I could infer that this mortgage was to be cancelled or that it was not to be cancelled. My impression was that Sam’l W. Hall, in taking up this mortgage, intended to take my place. This I gathered from the whole transaction, and not from any thing in particular said at the time by Samuel W. Hall. There was a great deal said at the time which I cannot now particularly remember. At this time I wanted my money on the mortgage, and so had informed Wm. Hall.

Again Cross Examined. He says, “ when Sam’l W. Hall came there about this mortgage, I can’t pretend to state the language he used, but I understood from him that he came to take up or pay off this mortgage. He first, perhaps, asked me if I did' not hold such a mortgage against Wm. Hall, and said he had some money by him, and would pay that, and would have some more by and by and come over and pay it. He then said he would take loose receipts, and not have it receipted on the bond. This is all I récollect being said on this subject. Sam’l W. Hall did not tell me his views in this transaction; but I thought his object was to take my place.

In Chief Again. When I use the words “ pay or take up the mortgage,” being the words attributed to Sam’l W. Hall, I did not understand that the mortgage was to be canceled. There was nothing said like it or about it. My impression was that Sam’l W. Hall was going to take my place, but not from anything he said, that I can recollect.

The peculiarity of the answer of Sam’l W. Hall, in answer to the charge that this mortgage had been paid off, and the testimony of Ely on that part of the case, connected with the fact that the mortgage is receipted in full, the indorsement of the last payment in full not even mentioning by whom it was made, and no assignment of the bond and mortgage or either of them being made to Sam’l W. Hall, presents a case so singular, so utterly variant from the course which would naturally have been pursued by one intending to buy a mortgage and hold it as an existing instrument and lien, that 1 am constrained to say that, in my opinion, no such intention existed. No man of common prudence, intending to buy a mortgage, would pursue such a course. Again, the mortgage was in blank as to sum; no amount of money was mentioned in it. Can it be believed that any man about to invest money, his own money, unless he was otherwise secured for it, would not only run the risk of buying a mortgage blank as to sum,, but would buy it without taking an assignment of it or of the bond; and that, too, though there were payments indorsed on the bond, the last of which indorsements was a general receipt in-full, without stating by whose hands the money was paid, and therefore carrying the presumption that it was paid by the obligor himself 1 The indorsements made by Ely on the bond, particularly the last, shows that it was his understanding that the mortgage was paid off; and this is more consistent with his tsstimony as to what passed between him and Sam’l W. Hall than any other version of it.

A man is not at liberty to put a court to guess that he had a meaning different from what the facts fairly show according to all the rules of dealing between men of ordinary prudence, and on such a guess to make out an affirmative case for him.

The court is asked to declare, under the facts above stated, that when this bond and mortgage was paid off and receipted in full, in the manner stated, and no assignment of them or either of them taken, Sam’l W. Hall supposed and intended them to be, in his hands, subsisting instruments. I do not believe it. If he did, and loss accrues to him, it is fairly chargeable to his own folly or stupidity. To encourage such looseness and disregard for what prudence dictates to any man in reference to his rights and interests would fill the courts with controversies. True, it now appears, by the testimony in this cause, that the last money was also paid by him, or his hand; but this does not change the view taken as to his intention at the time. He paid it on the bond, and it was indorsed on the bond. The indorsement is of a gen eral receipt in full of the balance due on the bond; and he took no assignment or any thing else to show that he had any right or interest in the bond and mortgage. It can hardly be supposed that if he intended to keep this bond and mortgage alive, as securities for money of his own, he would have committed all his interest to the chance of proving by parol, at a future day, that the money indorsed as payment in full was paid by him.

This renders it unnecessary to consider in this suit, whether the writing given by Wm. Hall and wife to Hugh B. Ely, purporting to be a mortgage, is to be considered a mortgage, there being no sum mentioned in it. It is for the payment of (blank,) according to the condition of a certain bond, dated May 1,1841, given by Wm. Hall to Hugh B. Ely, payable on the 1st day of April next ensuing the date of said bond, with interest. I am inclined to think it should be considered a mortgage to secure the sum mentioned in that bond. The sum can be ascertained from the bond.

For the purposes of this suit, the Hugh B. Ely mortgage will be declared to be postponed to all the other mortgages.

It is possible that something may have occurred which might induce the Court to consider this bond and mortgage as still an existing security, in the hands of Samuel W. Hall, as against the purchasers at the sheriff’s sale. Sam’l W. Hall and the said purchasers are defendants in this cause; but their respective rights, as between them, could not well be submitted or adjudged in it. I am willing that, if the property shall sell for more than the other mortgages, the surplus bo brought into court, that the right to it, or enough of it to meet the Hugh B. Ely mortgage, may be contested between Sam’l W. Hall and the said purchasers.

I had gone thus far, when, at Dec. term, 1847, without reading the above, I stated to counsel that I was willing to hear any further testimony they might obtain, and which might throw light upon the question whether the bond and mortgage must not be considered as paid, or whether, in the present shape of the papers, the bond and mortgage are to be considered as subsisting instruments.

One further deposition has since been put in on the part of the defendant, Samuel W. Hall. It is that of Samuel Hall, a nephew of defendant and brother of Wm. Hall.

[The Chancellor here recites in full the testimony of Samuel Hall, and proceeds as follows:]

So much of this deposition as may be considered testimony, and not the impressions or opinions of the witness, is : he knows of Samuel W. Hall getting a -bond and mortgage from Ely. That Samuel W. Hall paid to Mr. Ely the amount of principal and interest due on the bond and mortgage, in three payments. Wm. Hall came and applied to his uncle to get the money to settle up this bond and mortgage. Nothing was said about the sum not being mentioned in the mortgage when William asked his uncle to pay it off. Mr. Hall, [Sam’l W. Hall] said he would pay it off from time to time as he could get the money.

The rest of the deposition, (except as herein after noticed,) consists of impressions or inferences of the witness, as follows : he (Samuel W. Hall,) took that mortgage in preference to taking a now one, because it was the first mortgage. His uncle took the bond and mortgage from Mr. Ely as security for the money which he had advanced for William Hall. He took it as security for the money, holding the property liable to him for the money. He mean’t to take up the bond and mortgage for himself. Such expressions as these can have no influence. The fact that the bond was indorsed as paid in full, the last indorsement not stating by whom that payment was made, is of itself much stronger than any such impressions or opinions of the witness. The remaining parts of this deposition to be noticed are as follows : witness was there the last time when his uncle took up the bond and mortgage. It was spoken then about an assignment on the bond and mortgage; but Mr. Ely. did not think it was necessary to make an assignment on them. Mr. Ely thought the face of the bond would be enough at any time to show he had paid the money. He thought his holding of it would be sufficient, and that it would not require an assignment.

Wm. Ely, in his testimony, says, that when Samuel W. Hall came to him he said he wanted to pay off the mortgage, or that he was going to make a paymént, he wanted to take up the mortgage. There was nothing said by Samuel W. Hall from which he could infer that the mortgage was to be canceled or that it wa's not to be canceled. When Samuel Hall came, witness understood from him that he came to take up and pay off the mortgage. He said he had some money by him, he would pay that, and he would have some more by and by, and come over and pay it. This is all he recollects being said on the subject. Samuel W. Hall did not tell him his views on the transaction.

The transaction as actually carried out was consistent with the language used by Samuel W. Hall: the payments were indorsed on the bond and the bond receipted in full.

It is difficult to imagine that, if Samuel W. Hall intended tbecome the assignee of the bond and mortgage, he would have allowed the bond to be receipted in full ; and quite as difficult to imagine that, if an assignment was spoken of, in such a way as to give Mr. Ely the idea that Samuel W. Hall intend-ed to become the assignee of the bond and mortgage and to hold them as subsisting securities, Mr. Ely should have thought that the indorsing of the bond as paid in full would make him such assignee.

Mr. Ely states no such thing in his testimony: and Samuel W. Hall in his answer makes no such pretension.

There is but a single remark in the testimony of Samuel Hall going to show that Samuel W. Hall said one word that indicated an intention of getting these papers in such way as to hold them as subsisting securities ; and this does not occur in the principal examination of this witness, and the witness fixes it, too, at the first time they went to Ely’s. The witness says, that his uncle said to Mr. Ely, the first time they were there, that he would take the bond and mortgage as security for the money he would advance. Mr. Ely makes no statement that he intended to take an assignment of the mortgage; or that he was ignorant that an assignment was necessary; or that he supposed that indorsing the bond paid by him was sufficient to put him in the position of an assignee. Indeed, the last indorsement does not even show that the money thereby credited on the bond, and paying it in full, was paid by him. To make out the case now set up by or for the defendant Samuel W. Hall, if the case-really was as now contended, for the purpose of overcoming the strong, not to say plenary proof, derived from the fact that the bond is indorsed paid in full, wo should have had, I have no doubt, an entirely different answer. The case as now contended for could not exist without a degree of ignorance in both Samuel W. Hall and Ely, nay, in Samuel Hall too, which the court are not at liberty to presume.

If the transaction was really intended to be an assignment, but took the shape it did from ignorance, the only way in which it could have happened, it woulc| have been so stated in the answer of Samuel W. Hall.

He does not put himself on this ground. Unless, therefore, we are at liberty, in the absence of any such ground taken in the answer, to presume that it was through ignorance, there is nothing to overcome the proof furnished by the indorsements themselves ; for if we presume, or take it for granted, that either of these three men knew that an assignment was necessary, the payments would never have been indorsed on the bond.

In the absence of any allegation of such ignorance, I cannot assume it; but must give effect to the transaction as it appears upon the papers. It would be dangerous, when a bond, by indorsements, is shown to be absolutely paid, for a court to set it up as a subsisting obligation. What do the court know of the motives of the parties at the time of the transaction, arising from relationship or from the state of dealings between them ? Many reasons may have existed why this uncle may have been willing to pay the bond; and dealings may have been had between him and his nephew since, founded on this very payment.

Would the court be safe now, in giving to a transaction an entirely different character from what the parties, by their own acts at the time, gave it 1 Safe in saying that a sum of money indorsed on a bond as a payment was no payment 1 That a receipt in full on a bond was no payment 1

Could an action at law be brought on this bond, receipted in full I I apprehend not.

Assumpsit might be brought for money paid at the request of Wm. Hall in discharge of his bond; but the mortgage accompanying the bond would not be a subsisting incumbrance. The indorsements on the bond, in this case, are, in my judgment, stronger evidences of what was the intention of the parties than anything to be derived either from the answer or the testimony in the cause.

In this view of the case, I think it unnecessary to consider whether a writing purporting to be a mortgage, but which contains no sum of money nor time of payment is a mortgage. An abstract of this writing was recorded. The abstract was blank as to sum and time of payment. A person seeing such an abstract would learn that some such writing existed. He would not know whether the omitting to fill the blank was a mistake of the recording clerk, or whether the writing itself, in the possession of the party holding it, was blank. If we suppose the abstract Sufficient to put him upon inquiry, and suppose him to have inquired and found that the writing itself was blank, and that the omission to fill the blank was a mistake in the execution of the mortgage, what is the effect 1 Or if he makes no inquiry, but the writing is in fact blank, in which case notice, if we suppose such an abstract or record sufficient to put him on inquiry, would be according to the fact, that is, notice of a mortgage blank as to sum, what is the effect 1 Is such a blank writing and the recorded abstract of such a blank writing a valid mortgage for the sum that was intended to be put in the mortgage 1

Our “Act to register mortgages” provides, that the recording clerk shall enter the names of the mortgagor and mortgagee, the date of the mortgage, the mortgage money and when payable, and the description of the lands mortgaged. And a supplement to the said act provides, that every mortgage shall be void against a subsequent judgment creditor or bona fide purchaser or mortgagee for a valuable consideration not having notice thereof, unless such mortgage shall be acknowledged, or proved, and recorded.

Under these sections, is the record of an abstract, without sum, of a writing purporting to be a mortgage, which in truth has no sum, notice of a mortgage for any sum whatever 1

The question is new, and perhaps there are difficulties in it. It is not the case of a mistake in the recording clerk. It is a case of oversight in the party taking the mortgage.

It, perhaps, would be considered his own laches, of a character from which a court might not feel bound or disposed to relieve him by any strained view of equity. On the other hand, it may be said that by inquiring of the holder he might learn that the mortgage was to secure a bond of even date with the mortgage and between the same parties, and that the bond contained the sum. Still the question recurs, is it a mortgage 1 It might on a bill in equity between the parties be established as a mortgage ; but is it a mortgage as against a subsequent mortgagee taking a mortgage before it is established in equity 1

I have not found it necessary in this case to decide this question.

The Ely mortgage will be postponed to the complainant’s mortgage and to the other mortgage.

Decree accordingly.