Gleason v. Hamilton — 52 N.Y. St. Rep. 882

Majority

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Lucius Gleason, Resp't, v. Fannie M. Hamilton, App'lt.^[1]

(Court of Appeals,

Filed June 6, 1893.)

Headnote

Foreclosure—Alteration of mortgage.

The alteration of the terms of a mortgage made by an attorney who had no power as agent of the mortgagee to make such alteration, of which alteration the latter was wholly ignorant until the commencement of the action of foreclosure, has no effect to bind the mortgagee, and he can enforce the mortgage as it was originally executed.

Appeal from judgment of the supreme court, general term, fourth department, affirming judgment of foreclosure and order denying new trial.

Action for foreclosure of a mortgage for $30,000. The condition in the mortgage as recorded was as follows : “ This grant is intended as the security for the payment of any and all notes made by the El Oro Mining Company, and indorsed by William T. Hamilton and William N Thompson, and now held and owned by the party of the second part; and of any and all renewals of said notes; and also to secure said second party from all loss by reason of his liability as indorser upon any and all notes made by said El Oro Mining Company, and indorsed by said Hamilton and Thompson, and any and all renewals thereof; also any and all other notes or drafts made or indorsed by said Hamilton, now or hereafter owned by said second party, or on which he may be liable as indorser.” Defendant in her answer alleged “that said plaintiff altered, or caused to be altered, said mortgage in a material part after her signature was affixed thereto, and he had obtained possession thereof, by inserting at the end of the condition thereof the following words: “ Also any and all other notes or drafts made or indorsed by said Hamilton, now or hereafter owned by said second party, or on which he may be liable as indorser.” Said clause was inserted in said mortgage without the knowledge, request or procurement of the plaintiff after said mortgage had been executed and delivered; and plaintiff did not learn of its insertion until after the commencement of this action.

William G. Tracy, for app’lt; Louis Marshall, for resp’t.

in order to sustain this judgment it were necessary to maintain the finding that the mortgage was reaclcnowledged, and thus assented to by the defendant after the alteration was made, we should be unable to do it.

We think the case is wholly without evidence to sustain sucti finding. There is nothing to sustain it but the alleged promise of the husband of defendant that he would have it reacknowledged, and the declaration of the notary out of court that he had taken a reaclcnowledgment of the mortgage. It may be assumed that Mr. Doheny supposed it had been reacknowledged, and that he is

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correct when he says the notary told him that it had been. The declaration of the notary made out of court did not bind the defendant in any way, and was not competent evidence against her for the purpose of showing the fact of reacknowledgment. When the alteration had been proved, and it appeared to be a material one, the burden rested upon the plaintiff of showing that the alteration had been made with the consent of the defendant, and that the mortgage had been thereafter reacknowledged. Tillou v. Ins. Co., 7 Barb., 564 ; Acker v. Ledyard, 8 id., 514.

There was no proof whatever of such assent or reacknowledgment.

Striking out such finding and also the verdict of the jury upon the same proposition, there yet remains enough in the case to justify and demand our affirmance of the judgment

We ought not to reverse it and send the case back for a new trial when there is sufficient evidence, wholly uncontradicted and perfectly credible, to prove beyond any doubt that the plaintiff ought to recover. The plaintiff was wholly ignorant of the alteration attempted to be made in the mortgage, and so remained until after the commencement of this action. The action itself is brought to foreclose thp mortgage for non-payment of paper which, confessedly, it was originally given to secure. The attorney, who wrote in the addition to the mortgage as it originally was executed, had no power as agent of the plaintiff to make any alteration in the instrument by which its validity should be avoided. While the high character of the attorney who directed the addition might render it entirely plain that there was no intention of making any fraudulent alteration, and while the evidence seems to pretty clearly show there was not, in fact, the slightest wrongful intent in directing the alteration, and that it was done for the purpose of thereafter securing the assent of the defendant to the alteration, yet no such assent was secured, and this act of the attorney for the plaintiff cannot properly, as we think, operate as if it had been an alteration made in a material part of the mortgage by the plaintiff himself, or by his attorney or agent, with his knowledge, or by his authority expressed or implied.

The act of the attorney did not and ought not to bind the plaintiff in this case.

Many cases have arisen since the decision of Pigot's Case, 11 Rep., 27, where it was held that a material alteration made by a stranger to a deed, and without the privity of the obligee, did, nevertheless, invalidate the instrument. As late as the years 1843 and 1844, this decision was treated with respect by the English courts. Davidson v. Cooper, 11 M. & W., 778, 798; S. C., in Exchequer Chamber, 13 id., 343.

But there has been, since that period, a departure from this rule even in England, see Aldous v. Cornwell, 3 Q. B., L. R., 573, A. D. 1868, while in our state the cases referred to in the opinion delivered in the general term in this case, and those cited in the briefs of counsel before this court, show that when an alteration is not made by a party to the instrument and in a material mat

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'ter, the alteration is of no effect, and the original validity of the instrument remains. Casoni v. Jerome, 58 N. Y., 315 , 321; Smith v. Kidd, 68 id., 130, 141; Martin v. Ins. Co., 101 id., 498; Town of Solon v. Bank, 114 id., 134; 23 St. Rep., 138 .

In Vermont the same rule obtains. Bigelow v. Stilphens, 35 Vt., 521 .

So, also, in other states. Robertson v. Hay, 91 Pa. St., 242 ; Hunt v. Gray, 35 N. J. Law, 227 ; Nickerson v. Swett, 135 Mass., 514 ; Brooks v. Allen, 62 Ind., 401 .

Upon this view of the character and effect of the alteration, we think it clear that the judgment ought to be affirmed in spite of the error contained in the finding alluded to. The ground upon which we place our affirmance is wholly unaffected by the evidence or finding in regard to a reacknowledgment, or by any alleged errors in the admission or rejection of evidence. It is based upon controlling facts in the case, which are not substantially denied, and which in any event are proved by overwhelming evidence.

Upon the ground that the plaintiff was not in any manner responsible for the attempt, unknown to him, to enlarge the liability of the mortgagor by the proposed alteration, and because the plaintiff seeks only to enforce the mortgage as it was originally executed, we affirm the judgment appealed from.

Judgment affirmed, with costs.

All concur, except Andrews, Ch. J., not voting.