Majority
p. 119Waring vs. Smyth and others.
Headnote
Where the holder of a bo'nd and mortgage, without authority from ’the Mortgagor, altered the condition thereof in two very essential particulars, to the disadvantage of the mortgagor: and after the refusal of the latter to ratify tlte -alteration, the mortgagee transferred the bond and mortgage to a third person, as valid and genuine securities, to secure the repayment of a loan of money to himself: Held that 'neither the’ássignee, nor any other person claiming title to" the bond arid mortgage • through "Or under the person committing the fraud, as the assignee' thereof,- could enforce the Collection of the'mortgage, in a court of equity; dgainst the mortgaged premises in the hands of the mortgagor, or of persons claiming title under him.The modern rule is, that the alteration of a bond, or other sealed instrument, in a material part, if made by a party claiming to recover upon such instrument, or by any person under whom he claims, renders the deed void. . _
But an alteration by a stranger,-without the privity or consent of the party interested, will not render the deed void, where the contents of the same, as it originally existed, can be ascertained.
The burthen of proof in such cases, however, is cast upon the party seeking to recover upon the deed, to show that the alteration was not made by him, nor by those ■under whom he claims, nor with his or their privity or consent.
A distinction is made between deeds which operate to convey the title to'property, and those which merely give a right of action. For where the legal title to real estate passes to the grantee, by the execution and delivery of the deed, a fraudu- ' lent alteration of the deed by him will not have the effect to revest the title in the grantor; in those cases where the statute of frauds requires a written conveyance to transfer the title.
In this class of cases, the estate which was vested in the grantee, by a genuine ánd valid deed, remains in such grantee, although he destroys or makes void the deed itself, by a forgery, or by a voluntary cancellation Of the deed which created that title. But the deed itself is avoided thereby, so that the grantee cannot recover upon the covenants therein, nor sustain áúy suit founded upon the deed itself as an existing and valid instrument.
Although the rule in England is that a mortgage in fee transfers the legal title to the land itself as a conditional fee, so that if the condition of the mortgage is not complied with, by the.payment of the money at the day, a reconveyance is necessary to vest the title of the land in the owner of the 'equity of redemption, though the debt is subsequenlly paid; yet in this "state the mortgager is corisidered the real "owner of the fee óf the mortgaged premises, except for the mere" purpose of protecting the mortgagee as the holder of a security thereon for the payment of Ms 'debt. And the" Only right the mortgagee has, in the land itself, is to take possession thereof, with the assent of the mortgagor, after" the debt has become due and payable, "and to retain "such possession until the debt is "paid.
In'this state, a mortgage is nothing but a chose in action; Or a mere lieh or security upon the mortgaged premises, 6s an incident to the debt itself. And where the mortgagee has released or discharged his debt, by an improper and voluntary"alter
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ation or destruction of the bond and mortgage by which it was secured, he ought not to be permitted to sustain a suit, in any court, for the recovery of his debt, (a)
(a) A material alteration of a deed or bond, after execution, avoids it. (Miller v Stewart, 4 Wash. C. C. Rep. 26 . Commissioners v. Hannion, 1 Nott & McC. 554 . Heffelfinger v. Shutz, 16 Serg. & R. 44 . Lewis v. Payn, 8 Cowen, 71. Penny v Corwithe, 18 John. 499 . Barrington v. Bank of Washington, 14 Serg. & R. 424 .) And it seems, from some of the authorities, that any alteration of an instrument, though immaterial, if made by the party claiming a benefit under it, avoids it, so far as respects remedy by action on it. (Nunnery v. Colton, 1 Hawks, 222 . Wright v. Wright, 2 Halst. 175. Lewis v. Payn, 8 Cowen, 71. Provost v. Gratz, Pet. C. C. Rep. 369. Morris v. Vanderen, 1 Dal. 67 . Jackson v. Malin, 15 John. 293 . Cutts v. United States, 1 Gall. 71 . Pigott’s case, 11 Co. 27. Hunt v. Adams, 6 Mass. 519 . And see Griffith v. Cox, Overt. Rep. 210. Bank of Limestone v. Penick, 5 Monroe, 31.) At all events, it is settled that if the instrument be altered in a material part, by the party claiming under it, he cannot recover on it (Newell v. Mayerry, 3 Leigh, 250 . Mills v. Starr, 2 Bailey, 359. Martendale v. Follett, 1 N. Hamp. Rep. 95. Cutts v. United States, 1 Gall. 71 . Hatch and wife v. Hatch, 3 Mass. 307 .) Thus, where, after the execution and delivery of an unattested bond, the obligee fraudulently, with a view to some improper advantage, and without the knowledge and assent of the obligor, procured a person who was not present, to put his name thereto as a subscribing witness, it was held that the obligor was thereby discharged. (Adams v. Frye, 3 Metc. Rep. 103 . Marshall v. Gougler, 10 Serg. & R. 164 . Babb v. Clawson, Id. 424.)
This was an appeal from a decree of the late vice chancellor of the second circuit; allowing a demurrer, and dismissing the complainant’s hill as to four of the defendants. The substance of the statements and charges in the bill was as follows: Previous to the 10th of May, 1836, N. F. Waring had lent or advanced to Charles Smyth, $3000; which the latter had promised to secure by a bond and mortgage upon lands in Jef
Yet an alteration which does not vary the meaning of an instrument does not avoid it, though made by the party claiming under it. (Nichols v. Johnson, 10 Conn. 192 .)
What is a material alteration.] If a bond be executed by B. as surety for A., to obtain an appeal from a justice’s judgment, and the justice refuses to accept it, and afterwards, without B.’s knowledge, the name of C. is interlined, as an obligor, who executes the bond, and the justice then accepts it, it is void as to B. (Oneale v. Long, 4 Cranch, 60 .) A bond to which a writing had been attached, which writing has been tom off, cannot be received in evidence after such mutilation. (Price v. Tallman, Coxe, 447.) So, if there is an interlineation in a material part of an appeal bond, which is not noted at the foot thereof, the bond will be defective. (Sutphin v. Hardenbergh, 5 Halst. 288. Shinn v. White, 6 Id, 187.) So, as to the most trifling alteration in a deed, after it has been acknowledged. (Moore v. Bickham, 4
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ferson county; and, as the complainant alleged upon information and belief, he agreed to make the bond and mortgage_payable on demand, and the interest payable semi-annually. On the 10 th ofMay, 1836, Smyth executed to N. F. Waring a bond of that date, conditioned to pay $3000, in jive years, with annual interest thereon. And on the same day Smyth and his
Binn. 1. Coit v. Starkweather, 8 Conn. 289 .) Accordingly, it has been held that a purchaser of land is not bound to accept a deed of bargain and sale, in which there is a blank left for the consideration money; although the grantors, after acknowledgment of the deed, have authorized an agent to fill the blank. (Moore v. Bickham, supra.) But where the principal in a bail bond, after the surety had signed it, but previous to delivery, erased the name of the sheriff as obligee, and inserted that of the constable who served the writ, at his suggestion, and in his presence, the alteration was held not to avoid the obligation of the surely; his consent being presumed. (Hale v. Russ, 1 Greenl. 334.) Neither is the insertion of the name of an obligor in the body of a bond, after he has executed it, a material alteration; for he would have been held had the name not been inserted. (Smithy. Crooker, 5 Mass. 538 . Stone v. Wilson, 4 McCord, 203 . Fulton’s case, 7 Cowen, 484.) A deed háving been signed, sealed, and delivered, with a blank left for the date, the grantee afterwards inserted the date; the deed was adjudged to be good; the date not being a material part thereof, and no evil design in filling up the blank appearing. (Whiting v . Daniel, 1 Hen. & Munf. 291.) But see Bell v. Quick, (1 Green, 312,) where the court held that although where the date of a bond is left blank, the bond may be good, yet that any alteration of an instrument after its execution, changes the deed ; and if made in the absence of the obligor, and especially of a surety therein, and without his consent and authority, renders it void. In that case it was proved by one of the subscribing witnesses that he filled up the date by the verbal authority and consent of the surety therein. But the court decided that it would not compel a party to receive a bond admitted to have been altered after its execution, and subject himself to the necessity of proving, and the hazard of being able to prove, and the question of its being competent to prove, the consent of the obligor to such alteration, when he comes to seek his remedy on the bond.
Declaration upon a bond executed to A. and assigned to the plaintiff. The bond produced in evidence had an assignment to B. endorsed upon it; which assignment had been stricken out, except the signature of the obligee; above which was endorsed an assignment to the plaintiff. The erasure of the former assignment was held not to produce a variance between the obligation and the proof; there being no evidence of misconduct in the transaction. (Drummond v. Crutcher, 2 Wash. 218 .)
If a seal has been affixed to a bond, and it be afterwards broken off, or defaced, by accident, the bond will not be avoided. (Palm. 403.) Nor will it be avoided by the tearing off, or defacing, of the seal, by the obligor, whether fraudulently or innocently, without the assent of the obligee. (Touchstone, ch. 4, § 6, 2. Cults v. United States, 1 Gallis, 69. United States y Spalding, 2 Mason, 478.) Nor by
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•wife -executed -anti, duly. 'acknowledged a * mortgage • upon', the Jefferson - county ‘‘lands,. conditioned to pay the '$3000 ' in-five years, with-.aimuál-mterest,--as- specified;in’ the- bond. 'Waring, without the consent of either-Smyth-or his - wife, -subsequently filtered the condition-both- of the bond and-the'mortgage; -so as to make the ’%3(M)0 secured thereby, * payable on demand, with
the-tearing tiff the seal by-a stranger. (Reesv.'Overbought Gowen, 746.) sit must bean intentional breaking tiff, or 'defacing, óf'the seal, by the party'toWhóm the other is'vbonnd,-in wider to -avoidthe-deed. (Touch,-ch. 4,- § 6; 2.) But-tho obligee cannot, by removing the seal-of-one-obligor to a several bond, render-such bond void -as to- the cither obligors. (Obllins-v. 'Prosser,-1 Barn, cf- Cfess.-’-682.)
-A testator having drawn-his-pen through "certain < words," in a memorandum- fora codicil - to "his will, leaving- them still legible,- and the scrivener " having inserted therein,, in the-testator’s presence, an d - with' his consent, ■ certain-"Other'Words-which Were expletives,-Whichhe-erased- After the testator’s -death, these-erasures -and-interlinoations were'held not to-vitiate the instrument. (Cogbills vs Cogbills, 2 Hen.sfy Murif.ASV) "And-Where thedegal effect -and > construction-of'an instrumetit’is-'nót rendered different by-an alteration,-the- making- of-such alteration- will not vitiate'ilie instrument. ■ (Jetckson-v. Matin, 15.'John. .293. Mdlin-v. Málin,H Wend. 659;) Accordingly, 'm'Brownv.-Pinkham, (18 Pick.llk,) it -v.-as'iicld, that in. a decd-óf-a parcel of land, on-'which were ,a -well ¡and -pump, 'an iñtedmeátion of the -Words “ with-pump and -Avéll of-water,’’--after the description of - the' land 'by -fnettis and bounds,-was -an immaterial-alteration ; inasmuch-as-the-effect óf-tlie-’deédwoüld’bé the■ same,’without’ those-words. ‘íníPringlev. MéPherson, (3 ’39ess«iz.!524,)-an ad» dition df words'-to-a -will,- by -interlineation ‘in the" testatot’s t han'd’wriimg, ’ alter -the . execution-thereof,-but at -a time-hot ascertained, by which -a bcqttest-'tif personal property was enlarged, was held’valid.
Attesting witneses to-a-deed are not-necessary; and when’théir.iiames afe erased, the party who wishes" to -avoid the- deed must prove that’the-érasure wasmade-áfter its -execution and "delivery. ’(Willccs-v.'-GaUlk, 5 <Harr. QJohn. 36;) ’But a- deed which is'-left-blank in-amateriid-patt—as.in-the name df-the -grantee—isvoid; "and cannot be set up by filling.ih'the-blank,.after execution. •(Hibblewhite vJMdMOrfi'ne, 6 Mees. <J- Weis." 20,0. Sec 9 Past, 354.) l.w llntch v.lhtlch, ( 9 Mass. 307 ,) a deed of land-was Idft’as an escrow,-to'be delivered-onlhe death df the grantor, and’was altered-by .the-tiepositary, at" the request of the grantee, after-thedcSth of'the’grantor, by changing, "in the-description of-the‘premises, ¡the given • name, dfa" third person from Joshua-to Joseph. It was héld -not to -vitiate ‘the-deed. See also 'Hdllv. Chandler,-{4 'Bingham, 123 ;) 12 'Moore. 316 ; and-Og-'Ze v.Gmhüm;(% 'Penn, -Rep. 132;) -eases where the alterations were held’to-be immaterial.
"¡Whether an-alteration is material is a question of daw ; -and it '-is-error ¡for the court to leave’it to’be "determined dry the’jury. (Stephens v..*QfáhUih, l¡ 'Scrg.pj-Rawlc, 508. Bowersv. Jewell, 2 'N.JTamp. Rep-543. Steéle-v. Speneer,4 Peters,'5521)
When alteration is made-by consent.] .Alterations-in a deed, -made-by conserit-nf
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Interest semi-annually. He afterwards, informed Smyth- of the alteration, and requested?him,to re-acknowledge the mortgage; hut he declined to do so. N.jF. Waring subsequently borrow,ed $3000 of the Long ,Island Insurance; Company, and gave his note for the.same;-the, payment of-.which note was guarantied by his father, the complainant in this cause. And at
-the parties, whether, such consenthe given before or after its. execution, will not' in- , yalidate.-yspeh deed. And such consent may. be proved by, parol. . (Speake v. Uni-Jed States, 9 Crunch, 28. -Barringlony. Bank of‘Washington, 14 Serg. $ Ramie, 423. Boardman v. Gore, 1 Stew. 517 . 'Camden Bank y.Hall, 2 Green. 583. Wooley v. Constant, 4 John. 54 . Kerwin's case, 8 Comen, 118. Coley. Parkin, 12 ’East,,471. .Hudson v. Revolt, 2 Moore,-Payne, 663. -Cokey.'Brummcll, 2 Moore, 495. Cuttsy. .United .Stales, 1 ¡Gall. 1\. Zouch v. Clay, 2 Lev. 35; ,1 Jfeiit. 185, S. C. ll Co. .27, a. Mar.kham v. Gonastqn, :Moor, 547.) Where the,previous decision.to the.contrary in.the samc case in £ro. E)iz.i626,.wasovcr.rulefi.
Consent, must, be groped, however, and p.ot conjectured, as a general, rule. (Barrington v. Bank of Washington, 14 Serg. <$• Ramie, 424,-5.) yet it-has been held that.jf blank spaces ,beJeft,,to bejfilled after.execution, the ¡consent of the party, executing that, they shall be afterwards filled,.is,to he implied. . (Wiley v. Moon, 17 Serg. Ramie, 438. Smith y. Croaker, 5 Muss. 538. 'Duycan y. Hodges, 4 J\ToCord,,239. Jpriiany.,Nei{sqn,’2:tyash.1l(>4!. Boardmqn y..Gore, i Stew:517. Bank v. Gurry, 2 Dana, 142 .) -The consent of an obligor,-to an alteration of the bond, given after the altqrat.ipn .is made, will .not repel-the plea of non.est factum. But.a consent given,before, or at the.time.of the alteration, .will'.be considered as a re-execution. (Qlqatop. v. Chambliss, 6 Rand,86. See Dccker's case, 6 Comen, 59.)
Presumption as to time,of making alteration; and by.whommade.] The presumption is.tli.at. a matcnai alteration, if made, wasmade.o/ier the,execution of the instrument; unless, the contrary he.proved. (Morrisy. Vanderen, 1 Dali..67. 'Prevost v-Qratz, P.et.C. C. Rep. 369. Johnson y. Duke.of Marlborough;2 Starkie's Rep 313. Henmany. Dickinson, 5 Ping. 183- Rutsee 12 Vin. Abr. '58, .contra.) In an actipn on abond,. against se.vetal obligors, ..where it appears that the name of one of them was erased from the bond, and the suit is brought against all except him, itdjes uppn the.qbligee.tp show-that;tlie erasure was .made with the.consent of the other patties. . (Barrington y. Bank of Washington., 14 .Serg. Ramie, 465.) A material alteration ,qf a deed qf .land, while 4p ,t]ie .possession of,the grantee, is prftna /qcie fraudulent, apd.is.presumed to have been made,by the grantee-himself. Neither he, nor any one claiming under.hirn .with ,notice of the .alteration, or.withqut having paid an adequate .consideration for -the land, can avail .himself of such deed in evidence; nor can he supply .the want qf it by parol evidence. (Chesley y. Frost, 1N. Hanip. Rep. 145.)
An intetlineation not noted, .and qf .different .ink from the rest qf the .instrument, must, it seems, be explained by him who .would .suppprt it .as genuine. (Jackson v.
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the same time he assigned the altered bond and mortgage to that company, as collateral security for the payment of his note; but without informing the complainant, or the officers of the company, that he had altered the condition of the bond and mortgage, after the execution of the same, and without authority.
Jacoby, 9 Cowen, 125.) So an erasure or interlineation in a material part of an instrument, of which no notice is taken at the time of execution, is a suspicious circumstance, which requires explanation by the party producing it; and the jury are to determine whether the explanation given is satisfactory. (Jackson v. Osborn, 2 Wend. 555 .)
Alteration how proved. 1 The fact of an erasure in a deed, though there be a subscribing witness to the deed, may be proved by any other person. (Penny r Corwithe, 18 John. 499 .) On the trial of the question whether an alteration in a will was made by the original draftsman, or by a stranger, evidence of other writings, proved by witnesses, and also of witnesses, is admissible, to show that the peculiarities of the alteration are such as the party frequently used in his ordinary handwriting. (Smith v. Fenner, 1 Gall. 170 .)
Alteration will not divest property once vested.] The alteration, defacing, or cancelling of a deed, will not have the effect, in any case, to divest property which has once vested by transmutation of possession. (Bolton v. Bishop of Carlisle, 2 H. Black. 263. Roe, d. Berkeley, v. Archbishop of York, 6 East, 90. Perrott v. Perroti, 14 Id. 431. Doe, d. Lewis, v. Bingham, 4 3. <j- Aid. 675. Moss.v.Mills, 6 East, 148. Hatch v. Hatch, 9 Mass. 307 . Anon., 3 Salk. 120. Holbrook v. Tirrell, 9 Pick. 105 . Gilbert v. Bulkley, 5 Conn. 162 . Jackson v. Anderson, 4 Wend. 474 . Jackson v. Page, Idem, 585. Withers v. Atkinson, 1 Watts, 236 .) Thus, if the grantee voluntarily destroys his deed, or fraudulently makes an immaterial alteration therein, his title to the land will not be impaired thereby. (Barret v. Thorndike, 1 Greenl. 73.) So, though a deed oí land be altered, even feloniously, after its execution, this does not avoid the title. (Jackson v. Jacoby, 9 Cowen, 125. Lewis v. Payn, 8 Id. 71.) But the alteration avoids the covenants in the deed; a valid deed being essential to these. (8 Cowen, 71. Withers v. Atkinson; 1 Watts, 236 .)
Where the subject matter of a deed lies in grant, however, (as,, rent or other incorporeal hereditament,) so that the estate cannot exist without deed, because it is of the essence of the estate, any alteration of the deed, material or immaterial, if made by the party claiming the estate, avoids the deed as to him, to all intents and purposes ; so that not only all remedy by action, but the estate itself, is gone. (Lewis v. Payn, 8 Cowen, 71. 1 Neis. Abr. 625. Toml. Law Diet. tit. Deed, III.) But where a rent was created by duplicate deeds, one being in the hands of each party, and the grantee of the rent altered his deed in a material part, it was held that neither the remedy nor the estate was destroyed ; for though his deed was avoided, yet both were originals, and the grantor’s deed supported the estate. (Idem.)
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When Smyth was called upon, by the Insurance Company, for the payment of the first six months’ interest, he objected to the alteration of the bond and mortgage. And the Insurance Company shortly thereafter filed their bill to foreclose the mortgage, and recover the amount of their loanj making Smyth and wife, N. F. Waring, and H. Waring the present complain
Alteration of instrument prevents a resort to original contract.] Where an agreement is reduced to writing, whether under seal or not, so as to merge the original promise, and the written agreement is so altered as to avoid it, the party cannot resort to the original contract. (Newell v. Mayberry, 3 Leigh, 250 . Wheeloch v. Freeman, 13 Pick. 165 . Mills v. Starr, 2 Bailey, 359.)
Alteration by a stranger.] Pigot’s case, cited in the text, decides that if a stranger, without the privity of the obligee, alters the deed in any point not material, it will not be thereby avoided. (S. C. also cited in Davidson v. Cooper, 11 Mees. tj* Weis. 799.) And the reason is that the law will not permit a man to take the chance of committing a fraud, and, when that fraud is detected, of recovering on the instrument as it was originally made. In such a case the law intervenes and says, that the deed thus altered no longer continues the same deed, and that no person can sustain an action upon it. And this principle is calculated to prevent fraud, and to deter men from tampering with written securities. (Broom's Leg. Max. 65.)
The old doctrine was that alterations, in a material part, by a stranger, without the privity of either party, avoided a deed. (13 Vin. Abr. 39, Faits (n.) Shep. Touch. 66, [68.] Cro. Eliz. 546.) But this doctrine was founded on the technical rule of pleading which allowed,the party, under the plea of non est factum, to avail himself of the objection; because it was not, at the time of the plea, his deed. This technical nicety and strictness, which avoids a deed'in the hands of an innocent person, because it has been altered by a stranger without his knowledge or consent, is contrary to the first principles of justice and common sense, and is not sustained by the modem decisions. (2 Black. Com. 309, n. 24. Henfree v. Bromley, 6 East., 309. See Master v. Miller, 4 Durn. <$• East, 320.) On the contrary, it is now settled that an alteration by a stranger, though it be material, will not render the instrument inoperative, if made without the consent of the party. (Lewis v. Payn, 8 Cowen, 71. Nichols v. Johnson, 10 Conn. Rep. 192 . Wilkes v. Caulk, 5 Harr, tyjohn. 36. Wright v. Wright, 2 Halst. 175. Jackson v. Malin, 15 John. 297 , per Platt, J.)
An alteration in a bond, by a clerk in the custom-house, after its execution, for the purpose of correcting it, but not affecting its construction, was held to be the act of a stranger, and immaterial; and that it did not avoid the instrument. (United States v. Hatch, Paine, 336.) Nor will an erasure of the names of the attesting witnesses to a deed, by a stranger, after its execution and delivery, avoid it; such witnesses not being required. (Wilkes v. Caulk, 5 Harr. <$• John. 36.). Neither will a deed be vitiated by an alteration made therein by the scrivener, at the grantee’s
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ant, and others/parties' defendant in that 'suit.- In that bill-'the bond ■ and mortgage- were stated • tó' have* been' executed* by Smyth and his wife, conditioned - for the- payment -of' $3(300 -oti demand, with- interest 'semi-aimtiallyl Smyth and-wife put- in an answer'to'the bill) denying the' executiidn of "the bond and-mortgage set forth in-the-bill) "but admittingthatthéy executed a bond and mortgage to N. F. Waring, payable in five years, with-annual interest;'- -The present - complainant/ H. -Wáíiñg, also put in an answ'er; That' cause was subsequently heard" upon- pleadings and proofs-as to him and Smyth and wife) and' upon the bill taken as confessed as to N.'F. Waring; arid others, who were-made- defendants. • A decféb "-was mtidé’ in -favor-of the Insurance Company, agáin'St'N. F. Waring, for the amount of the loan tó him, with interest and-costs, and'against the present ■ complainant • as' the guarantor' of the payment " of that-loan. The dóeréé also directed -the- bill" to be' dismissed as tó' Smyth and wife," but without prejudice tó the'rights' of N.= F. Waring, or his assignees," if "any. such righ ts existed, upon the' bond and mortgage as originally executed. It was further decreed, that- upon-the payment by H. Waring-to the-complainants of the amount which he was decreed to'pay inconsequence' of his guaranty, they should assign to him all tlieif iiiterest in the bond and mortgage.
suggestion", after the -death 'bf thS grantor,•’ changing,-according - to the truth* -of the case,the Christian tiáme’bf ené’tíf the-oWnerson tvhorrv th’e Iarid was-described as' adjoining. (Batchy.’Hutch,‘§ Máisi-307!) Ndt 'wiU 'art alteration of a peiimiary■ legacy,-in a will, by-'th'e Ifegat’éé ór-‘a stranger,-' avoid the-will'as'to'other bequest's: (Smith y. Fenner, 1 Gallic, 170.1- Not will thb-interlincátion-of a hew pecuniaty legacy in a will, by'the scrivener,* at thri testator’s request, and in- the presence óf one only of the-subscriBltig witnesses’, avoid the will;- (W'heeler'y. Beret; 7 Pick. 61 :)
The present complainant" was afterwards' compelled - to pay the amount of that decree;' And the-'Long IsIaridTnsitrátice Company and "Ni F. Waring".thereupon' assigned tó him" all their right- and interest in -the bond -and- mortgage, either as they-were at the time-oftheeriginal-execution, or as -they.were after the' alteration: Smyth died 'subsequently to -that decree and by his will devised all* óf liis real estáte tó his wife. This*
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bill was filed, against her, to-obtain; satisfaction of the bond and mortgage; and' ;the defendants Mann and A. &' W> Nottebohm and others were, made parties, as having some interest in the mortgaged premises, as purchasers, incumbrancers,' or otherwise, subsequent, to the mortgage. And .the complainant asked, for the-usual decree-of foreclosure and.sale of the mortgaged- premises, to satisfy the amount • due upon, the bond and mortgage, with interest.and- costs •; or- for such other relief as he might be entitled to,, upon the ¡case made by this bill.- C. A. Smyth, the widow* and. devisee of Charles Smyth, A. Mann, Jr. and A. & W. Nottebohm, put in-a general- demurrer for want of equity; ” which, demurrer was allowed by .the vice chancellor.
The following: opinion was delivered by the vice chancellor:
O. H. Rtggles, Y. C. Both tha bond -and mortgage were altered .in .material..parts, by. the obligee, while the securities were in his hands, and without the knowledge of the obligor at the time; and there is nothing in the complainant’s bill from which the obligor’s subsequent assent can be inferred. These alterations, beyond all doubt, rendered these securities void in law.. The authorities on this point. , may be found-in all the books, from Pigottls case, (11 -Co. 27,) to ’Lewis v. Payn, (8 Cowen,71.) And see Hurlstcn on Bonds,121. If.the alterations of this bond and mortgage were not fraudulent when they were made, they became so by the fraudulent use which was made of the altered instruments.- They were assigned by the mortgagee to the Long.Island Insurance Company as valid - instruments according .to thein purport, after-'theyhad been, altered, and after Mr. Smyth,,.the .obligor,- had. refused to sanction the alterations by a. re-acknowledgment.. And. the obligee covenanted ¡that the. mortgage debt of $3000 was due. The alleged mistake in the bond and .mortgage, by which they were made payable in five years, instead of being made payable on demand, does not help the complainant, Admitting ¡there was a mistake which equity would. have relieved against, the obligee had no right to take the matter into his own hands, and to rectify it himself, without the judgment of the proper court or
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the consent of the debtor. The bond and mortgage, as they were executed, formed the contract between the parties; and the rectification of a mistake in the writings cannot be made, by a court of law, under any circumstances, nor in a court of equity except on the clearest proof and most weighty caution. (1 Story's Eq. § 157.) Certainly a creditor has no power over the written contract of his debtor, to alter it at his pleasure, on a pretence, well or'ill founded, of a mistake in drawing the instrument. The bond and mortgage being both void by the alterations, the remaining question is whether the complainant has any such estate in the land, under and by virtue of the mortgage, as will enable him to sustain his bill and have a decree for a sale or a strict foreclosure. It seems. to me that he has not. A mortgage never gave to the mortgagee a right to the possession of the land before the condition was broken. There was no possession in the mortgagee in this case. In Jackson v. Welland, ( 4 John. Rep. 43 ,) Chief Justice Kent says, until foreclosure, or at least until possession taken, the mortgage remains in the light of a chose in action. That was a case at law, before the revised statutes, and in England and in this country mortgages are regarded as mere securities for money; giving nothing but a lien on the land, until condition forfeited at least. In courts of equity, this has always been the doctrine concerning mortgages; and they never have been regarded as any thing but securities. The revised statutes now put them on thé same footing, at law as in equity, for almost every purpose. No action of ejectment at law can be brought on a mortgage. (2 R. S. 312, § 57.) This statute sends a mortgagee into a court of equity for his remedy; where the mortgagee is never regarded as the owner of the land, but as having a mere security on it for a debt. ( 4 John. Rep. 43 .) The debt is the principal, the mortgage the incident only. The case of Lewis v. Payn, (8 Cowen, 71,) does not help the complainant. The doctrine of that case is, in substance, that where an estate is conveyed by deed, and becomes vested by the transmutation of possession, the cancelling of the deed does not divest the estate; because the estate cannot be divested by
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parol, or otherwise, without a deed from him in whom it has become vested. And so of things which lie in grant, as incorporeal hereditaments, commons, ways, rents, which do not pass except by writing. If a man become the owner by a deed of grant, the destruction of the deed is not a destruction of the thing granted; because the owner can only divest himself of his right to this kind of property by deed in writing. But in the latter case, the deed being of the essence of the estate, if the deed be fraudulently altered, it is gone, and the estate goes with it.
The mortgage, in the case now before the court, conveyed no estate by transmutation of possession. It conveyed no incorporeal hereditaments. It gave the mortgagee no seisin, possession, or right of possession, either at law or in equity, until after forfeiture and foreclosure, or sale. The interest of the mortgagee Xvas’ such as might be discharged and extinguished without deed. For instance, it might have been discharged by payment of the debt, or even by a tender and refusal, or by a voluntary cancelling of the bond.
If the obligee tear off the seal, with an intention to cancel the bond, the obligation will be destroyed. (Hurlst. on Bonds, 22.) Bonds, or other executory instruments, which are merely obligatory on the person, may have their effect defeated by an intentional cancellation of the deed by the obligee. (3 Preston on Abstr. 103.) The bond is the principal evidence of the debt; and whatever defeats that defeats the mortgage also, which is incident and collateral to the bond. A fraudulent alteration of the bond, by the obligee, in a material part, has the same effect as intentional cancellation. It annuls the bond. I know of no care in which the mortgage can be enforced, to collect a debt which is not due on the bond to which it refers.
Whether the estate of Charles Smyth, deceased, is or is not liable for the money loaned, is a question which need not be here decided. But if it is, it must be from the mere equity arising from the loan, and not on the ground of the validity of the securities. The bond and mortgage being void, the hen is gone. The mortgage is of the essence of the lien. Any act
p. 130The alteration of the mortgage, by N. F. Waring, did not divest his rights previously acquired under it. Upon the execution of a mortgage, the legal estate vests in-the mortgagee; subject to-be defeated on the performance of the condition, And nothing short of such performance can deprive him, or his - assignees, of that estate. But if the mortgagee’s rights under the mortgage became divested, -yet the complainant, under the circumstances of the case, is entitled to a decree for the-sale of the. premises in question, to satisfy the mortgage debt. The money was loaned to Charles Smyth, on an agreement by him to give a mortgage; and that agreement gives the complainant an equity superior to that of the defendants, which the court of chancery will enforce. The estate of Mrs. Smyth, as devisee, is subject to the payment of
in pais which invalidates the mortgage, discharges the. lien. The lien is not an estáte in possession, nor is it a right which requires a deed to transfer or discharge it. When the complainant lost his remedy on the mortgage, he lost his lien.
It cannot be said that the complainant is entitled to a decree for sale, on the ground of Smyth’s verbal agreement to give a bond and mortgage for the money; when the loan was made. If there was such an agreement it was performed; A bond and mortgage were given; but the complainant, by his own fault, has lost the benefit of the securities.
This is doubtless a hard case on the part of the. complainant. But a stern-rule of public policy stands between him and the relief he asks for. He claims under N. F. Waring, and stands in-his place as to his right to recover. Lord Kenyon, in Masters v. Miller, (4 T.R. 329,) says that the fraudulent alteration of a deed, by its owner, avoids it; so that no man shall-take the chance of committing a fraud without running the risk of losing by the event.
I perceive no mode in which the complainant can hold his lien on the lands in question, without infringing well-established principles, which prevail as well- in this court as in a court of law. The demurrer must therefore be allowed.
John A. Lott, for appellant.
p. 131the mortgage debt: and the rights of the other defendants who demur, as judgment creditors, are subordinate to the prior rights of Waring and his assignee.- The bond and mortgage, as set forth in the complainant's bill, in their present form, being forgeries, are void as against the mortgagors and their ¡representatives, and as against the land described in the mortgage. No lien has ever attached by the recording of the mortgage. And even admitting that the alteration did not divest and destroy the interest of the mortgagee, it certainly forever bars the claim of N. F. Waring, or his assignees, through that instrument. The complainant must rely wholly upon his equitable claim under the mortgage as first executed by Smyth and wife. (Lewis v. Payn, 8 Cowen, 71.) But the alteration of this bond and mortgage was in the most material part of these instruments, and was made by the party solely benefitted by the change. The bond is unquestionably absolutely void; and the mortgage, as merely collateral thereto and altered- in the same vitally important parts, would be void also. The mortgage is a mere security for the debt, and is only a chattel interest; the estate of the mortgagee cannot have existence but by deed; and where the estate can only be created by deed, and the deed is altered in a material part, after delivery, by the party possessing the estate, the deed is void, and the estate which he derived under it is gone. (4 Kent's Com. 159, 4th ed. Lewis v. Payn, 8 Cowen, 73.)
A. Mann, Jun. for respondents.
I do not find it stated in the bill, in this cause, whether the mortgaged premises belonged to Charles Smyth, at the date of the mortgage; or whether they belonged to his wife, so that his interest therein terminated at his death. Nor is it stated that either of the defendants who have demurred, claim to have a title or interest in the premises under him. It may not, therefore, be necessary to inquire whether there is any thing in the bill, from which it can be legally inferred that Charles Smyth ratified and assented to the alteration of the
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bond and mortgage. There is no pretence that it was ever ratified by his wife. Indeed, there was no way in which she could ratify the alteration, except by a re-acknowledgment of the mortgage. As to her, therefore, the alteration was a gross fraud, whether she owned the mortgaged premises in her own right, or had only an inchoate right of dower therein. And if her husband had himself consented to the making of the alteration, it still would have been a fraud upon the insurance company, to pass off the altered mortgage to them, as collateral security for their loan, as the true and genuine mortgage of Mrs. Smyth. I think, also, the vice chancellor is right in supposing that there is nothing in this bill from which it can be inferred that Smyth himself assented to this alteration; either before or after it was made. Indeed, the statement in the bill that Smyth declined to re-acknowledge the mortgage, because there was a misunderstanding between him and the mortgagee, shows that the latter could not have supposed that Smyth intended to ratify the alteration at that time, even so far as concerned himself. And he knew, or at least the law presumes he must have known, that Smyth could not ratify the alteration in the mortgage so far as related to the interest of his wife. Nor would Smyth’s previous promise, to give a mortgage payable on demand, with semi-annual interest, be binding upon her, even if it had been in writing, so as to be obligatory upon Smyth himself under the statute of frauds.
The case, -therefore, which is presented by the bill, is simply this: The holder of a bond and mortgage, without authority from either of the mortgagors, and without the knowledge of one of them, alters the condition of such bond and mortgage, in two very essential particulars, to their disadvantage; and after the one who is informed of the fact had declined to ratify the alteration, by a re-acknowledgment, the mortgagee passes off the bond and mortgage as valid and genuine securities, to secure the repayment of a loan of money to himself. And the question now to be considered is this: can the assignees of the person who has been guilty of this fraud, or any other person claiming title to the bond and mortgage under him, or them,
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as the assignee thereof, enforce the collection of the mortgage, in a court of equity, against the mortgaged premises, in the hands of the mortgagors, or in tj^e hands of persons claiming title under such mortgagors, or either of them 1
It was formerly held, that the alteration of a bond, or other sealed instrument, in a material part, even by a stranger, without the consent of the party whose rights were affected by such alteration, avoided the deed. (Pigott's case, 11 Coke's Rep. 27.) The modern and more sensible rule, however, is, that such an alteration, if made by a party claiming to recover on such bond or instrument, or by any person under whom he claims, renders the deed void; but that an alteration by a stranger, without the privity or consent of the party interested, will not render the deed void, where the contents of the same, as it originally existed, can be ascertained. (Rees v. Overbaugh, 6 Cowen's Rep. 746; Mathis v. Mathis, 3 Dev. & Bat. Rep. 60; Henfree v. Bromley, 6 East, 309.) I apprehend, however, that the burthen of proof in such cases, is cast upon the party seeking to recover upon the deed, to show that the alteration was not made by him, or by those under whom he claims, nor with his or then privity or consent.
A distinction is made between deeds which operate to convey the title to property, and those which merely give a right of action. For, where the legal title to real estate passes to the grantee by the execution and delivery of a deed, a fraudulent alteration of the deed, by such grantee, will not have the effect to revest the title in the grantor, in cases where the statute of frauds requires a written conveyance to transfer the title. (Doe, ex dem. Berkley, v. Archbishop of York, 6 East's Rep. 86. Mitler v. Mainwaring, Cro. Car. 397. Maginnis v. McCulloch, Gilb. Eq. Rep. 235. Morgan v. Elam, 4 Yerg. Rep. 375 . Doe, ex dem. Beauland, v. Hirst, 3 Stark. Rep. 60. Lewis v. Payn, 8 Cowen’s Rep. 71.) In this class of cases it is held, that the title to the estate, which was vested in the grantee by a genuine and valid conveyance, remains in the grantee, although lie destroys or makes void the deed itself, by a forgery, or by a voluntary cancelment of the conveyance which created that title.
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But the deed' itself is avoided thereby; so that the grantee cannot recover upon the covenants therein, nor sustain any suitf founded upon the deed as an existing and valid instrument.
In England it is still held, that a mortgage hi fee transfers-the legal title to the land, as a conditional estate; so that if the condition of the mortgage is not strictly complied with, by the payment of the money at the day, a reconveyance is necessary to vest the title of the land in the owner of the equity of redemption, although the debt is subsequently paid. It was upon this principle, I presume, that Lord Hardwick’s' remark in Harrison v. Owen, (1 Atk. 519,) was based. He there says that if a mortgagee cancels a mortgage, it is as much a release as cancelling a bond; but it will not convey or revest the estate in the mortgagor, for that must be done by some deed. The note of that case by Atkyns is very meagre; but it is stated more at length by West, from Lord Hardwick’s note book, under its proper title of Harris v. Owen and others, ( West’s Ch. Rep. 527.) It there appears that the case came before the lord chancellor, on an appeal from a decretal order of the master of the rolls, directing an issue, to try the question whether the bonds and mortgages, given to the testator of the complain ants, were cancelled by him. The bill was filed by the executors of the mortgagee, to obtain satisfaction of the bonds and mortgages; which were found cancelled at his death, although it was not pretended by the defendants that they were ever paid. The complainants insisted that they were entitled to a decree of foreclosure, although the mortgage deeds might have been cancelled by the mortgagee himself, and that the awarding of the issue was improper. But his lordship affirmed the decision of the master of the rolls; thereby deciding that the representatives of a mortgagee who had voluntarily cancelled or destroyed his mortgage, could not come into the court of chancery to foreclose to the equity of redemption of the mortgagor, or to have satisfaction of the mortgage debt; although the legal title of the mortgagee, to the mortgaged premises, was not divested by such cancelling.
Upon the principle of that decision, I am satisfied the bill in
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the present case could not be sustained, even England; where the mortgagee at law is considered as the legal owner of the mortgaged premises, even after the debt is paid or discharged. For if a voluntary destruction of the bond and mortgage, by cancelling, would discharge the debt, so as to deprive the mortgagee of the right to file a bill of foreclosure, in equity, where the mortgage, as well as the bond, is treated as a mere chose in action, or security for the debt, their voluntary destruction by a fraudulent alteration, without the consent of the mortgagors, must have the same effect.
The case is much stronger against the complainant in this state, where the mortgagor is, for most purposes, considered the legal as well as the equitable owner of the mortgaged premises, previous to foreclosure; and where a discharge of the debt leaves the legal title to the premises in the mortgagor, or those who have derived title thereto under him, as if no mortgage had ever been given. Before the adoption of the revised statutes, it was settled by the courts of this state, that the mortgagor was to be considered as the real owner of the fee, of the lands mortgaged, except for the mere purposes of protecting the mortgagor as the holder of a security thereon for the payment of his debt. (See Runyan v. Merscreau, 11 John. Rep. 534 .) And the revised statutes have restricted the legal rights of the mortgagee still farther; by depriving him of the power to bring a suit to recover the possession of the mortgaged premises, before a foreclosure. The only right he now has in the land itself, is to take possession thereof, with the assent of the mortgagor, after the debt has become due and payable, and to retain such possession until the debt is paid. The mortgage then is here nothing but a chose in action; or a mere lien or security upon the mortgaged premises, as an incident to the debt itself. And where the mortgagee has released or discharged his debt, by an improper and voluntary alteration or destruction of the bond and mortgage by which it is secured, he ought not to be permitted to sustain a suit, in any court, for the recovery of his debt, the basis of which suit must be the securities thus voluntarily destroyed or made void.
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N. F. Waring, the mortgagee, who was guilty of the improper acts of altering this bond and mortgage, and of then passing them off to the insurance company, as good and available securities, certainly would not himself have had the right to come into this court to foreclose the mortgage. And his assignees sit in the seat of their assignor, and are not entitled to any relief, against these defendants, which the assignor himself could not have claimed. The decretal order of the vice chancellor, which is appealed from, is therefore right, and it must be affirmed with costs.
Cases cited
- Jackson v. Osborn 2 Wend. 555 p. 124
- Jackson ex dem. Anderson v. Anderson 4 Wend. 474 p. 124