Court Opinion

ID: 3599722
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:46:29.447131+00
Date Added: 2024-06-11T07:45:34.016838
License: Public Domain

Assuming that the release, as between the parties thereto, took effect immediately, the same as if it had been duly acknowledged, the question remains whether a release of part of mortgaged premises is subject to the recording act.
In Decker v. Boice (83 N.Y. 215), it was held that while an assignee in good faith, and for a valuable consideration, of a recorded mortgage, gets no preference over a prior unrecorded deed or mortgage by reason of such record, when his assignor could not claim it on account of notice or any other equity, still as such assignee is a purchaser and his assignment is a conveyance under the recording act, if the assignment is recorded before the recording of such prior deed or mortgage, he thereby obtains a preference and an unrecorded conveyance is as to him void under said act.
The court, speaking through ANDREWS, J., said: "The remark has been made in some recent cases, following dicta in earlier cases, that the only purpose of the statute authorizing the recording of assignments of mortgages was to regulate the relation to each other of successive assignees of the mortgagee *Page 463 
of the same mortgage, but in none of them was this remark essential to the decision. * * * It is doubtless true that it was one object of the provision * * * to protect a subsequent assignee * * * of the same mortgage from being defrauded through a prior assignment not before required to be recorded, and of which he might have no notice. But this was not its only purpose. The assignee in good faith and for value of a mortgage, by recording his assignment, may gain priority over a prior unrecorded mortgage, although it could not be claimed by his assignor." See, also, Smyth v. Knickerbocker L. Ins. Co. (84 N.Y. 589).
If, therefore, the release came within the provisions of the recording act, the plaintiff was protected against it, because it was not placed upon record until after two successive assignments of the mortgage had been recorded. She was a purchaser in good faith and for full value without notice of the release, and acquired all the rights and title of her assignors and of their assignor.
The recording act requires all conveyances to be recorded and renders void all that are not recorded, as against subsequent purchasers in good faith and for a valuable consideration. (4 R.S. [8th ed.] 2469, § 1.) A "purchaser," as defined by a subsequent section, includes, among others, every assignee of a mortgage. (Id., § 37.)
It follows, therefore, that the plaintiff can successfully invoke the statute, provided said release is a conveyance within the meaning thereof. The same act further provides that the term "conveyance," as used therein, shall be construed to embrace every instrument in writing by which any estate, or interest in real estate, is created, aliened, mortgaged or assigned, or by which the title to any real estate may be affected in law or equity, with certain exceptions that do not apply to this case. (4 R.S. 2475, § 38.) It has been held under this section that a release of part of mortgaged premises is a conveyance by which the title to real estate may be affected, and that, unless recorded, it is void as against a subsequent assignee of the mortgage for value and in good faith whose assignment *Page 464 
has been recorded. (St. John v. Spalding, 1 T.  C. 483;Mutual L. Ins. Co. v. Wilcox, 55 How. Pr. 43.)
I think that a release is within the spirit, if not the letter, of the comprehensive definition of a conveyance quoted from the statute. It is an instrument in writing by which the title to real estate may be affected in law or equity, because it may prevent the transfer of the title under a foreclosure. It is in the nature of a satisfaction of the mortgage, so far as the premises released are concerned, and it has been held that a satisfaction-piece comes within the statutory definition. (Bacon v. Van Schoonhoven, 87 N.Y. 446.) The court in deciding that case said that a satisfaction-piece "is equivalent to a release of the mortgaged premises. Instruments creating liens by way of mortgage, being expressly declared to be embraced, for the purposes of this act, in the term `conveyance,' it is difficult to conceive any reason why instruments discharging such liens should not be included in the general definition."
While a release of the entire premises would utterly destroy the lien, a partial release destroys it pro tanto. If that which creates a lien may affect the title to real estate, that which extinguishes a lien may have a like result in that respect. The creation of a lien cannot affect title unless its destruction may also. If building up may have a certain effect, tearing down may also have an effect, by preventing that which might otherwise have taken place. Moreover, the release under consideration is in the form of a conveyance and has a granting clause, by which the party of the first part, for a consideration named, declares that he has "granted, released, quit-claimed and set over and by these presents doth grant, release, quit-claim and set over to the party of the second part, his heirs and assigns," the premises in question.
The learned trial court, however, decided the case upon the theory that the mortgage never attached to the five acres, because the deed of the entire tract, the mortgage back thereon, the deed of the five acres and the release thereof were all executed at the same time, were parts of the same transaction and *Page 465 
all of the parties understood that the part released was thereby exempted from the lien of the mortgage.
The complaint alleges the execution and delivery of the bond and mortgage and of the several assignments thereof and the recording of the same as stated. The premises, as described both in the complaint and the mortgage by metes and bounds, include the five acres. It is further alleged in the complaint, that "the mortgage was given for part of the purchase-money of the premises above described," referring to the entire tract. Clement Sweet and wife are the only defendants who served an answer. Without denying any of the allegations of the complaint, they allege that on May 1, 1873, Franklin Sweet and wife conveyed the five acres to said Clement Sweet, and that Francis Creed duly released the same from the lien of said mortgage. The defendants, therefore, stand upon the record as admitting, beyond the power of contradiction, that the mortgage was given to secure part of the purchase-price of the entire premises, and no amount of evidence, whether received with or without objection, would justify a finding to the contrary. Notwithstanding this the trial court found that the mortgage was not intended to cover the five acres and that they were never included in the plaintiff's mortgage, but were sold free from it before it was executed. Exceptions were duly taken to these findings, which are without any available evidence to support them, because, if for no other reason, the defendants had in their answer admitted that they were not true and they were hence estopped from asserting the contrary on the trial.
Besides, the very release read in evidence by them recites that the mortgage covered the lands purporting to be released. Its language is: "Whereas * * * by an indenture of mortgage * * * to secure the payment of the money therein specified," the mortgagor "did convey certain lands and tenements of which the lands hereinafter described are part, unto said mortgagee; and, whereas," the mortgagee "has agreed to give up and surrender the lands hereinafter described unto the party of the second part, his heirs and assigns, and to *Page 466 
hold and retain the residue of said mortgaged lands as security for the money remaining unpaid on said mortgage," etc. This was followed by a description of the lands released.
Thus, the defendants admit, both by their answer and their evidence, that the mortgage covered the five acres, and there is no evidence that is claimed to show the contrary, except the several instruments already mentioned, and the fact that they were all executed simultaneously.
The form of the transaction, moreover, shows that the parties did not intend the result found by the trial court, as otherwise no release would have been necessary. Until the delivery of the deed of the entire tract, Franklin Sweet had no title to the five acres that he could convey to Clement Sweet, and as soon as that delivery was made the mortgage, covering in terms the five acres, and given for the purchase-price thereof, attached as a lien. The conveyance of the 113 acres and the mortgage back thereon, must have preceded the deed of the five acres.
There is, therefore, no evidence tending to sustain the findings referred to, even if the defendants were not concluded by their answer.
I cannot find, in the record before us, sufficient evidence of acquiescence by the plaintiff in the trial of an issue outside of the pleadings to conclude her or to affect her rights in any way. She simply read in evidence the bond and mortgage, and the several assignments thereof, proved when and where each was recorded, and rested. The defendants read in evidence, without objection, the deed from Franklin Sweet to Clement Sweet. When they offered the release in evidence, it was objected to "as immaterial, and that execution and delivery thereof were not proven until June 8, 1882."
Clement Sweet was then sworn as a witness, and testified that he owned "the five acres in dispute and covered by the mortgage;" that he was present when the deed of the whole farm was given by Creed to Franklin Sweet, who paid $2,500 therefor, $500 in cash, and the balance by bond and mortgage; that he, the witness, paid $150 for the five acres, being part of *Page 467 
the $500 paid down on the farm. He was then asked if the release was delivered to him at that time, and the plaintiff objected to the question as immaterial, and because the release was not then attested or acknowledged. The objection was overruled, and the witness answered: "Yes, sir; deed of five acres also, and at same time I saw deed delivered to Franklin Sweet and bond and mortgage given to Creed. Have been in possession ever since." He was then asked if the execution and delivery of all these papers were simultaneous acts, made at the same time and place, and as parts of one and the same transaction. This was objected to by the plaintiff as calling for a conclusion of fact, and improper, but the objection was overruled and the witness answered: "Yes." The defendants then rested, and no further evidence was given by either party, except that certain assignees of the mortgage testified as to what they paid for it, and that they never heard of the release until this action was commenced. The deed to Franklin Sweet was not offered in evidence. As the plaintiff objected to substantially all of the evidence tending to show that the deeds, bond, mortgage and release were executed at the same time and as parts of the same transaction, I am unable to see how she can justly be held to have impliedly assented to the trial of a new issue, not formed by the pleadings. The only issue, according to the pleadings, was whether the five acres were duly released from the lien of the mortgage, which it was admitted covered them. The issue, which it is now claimed was tried without objection, was whether, owing to a tri-partite agreement, the mortgage ever attached to the five acres. The statement of what occurred upon the trial shows that the plaintiff attempted to protect herself, by timely objections, from the trial of any question outside of the pleadings. The evidence now relied upon to support facts found, but not alleged, and the exact opposite of which was expressly admitted by the pleadings, was received notwithstanding the plaintiff's objections thereto. The judgment appealed from rests upon facts diametrically opposed to the express admissions of both parties in their pleadings. *Page 468 
I am unable to concur in the conclusion that such a judgment should be affirmed, and accordingly vote for a reversal and a new trial.
All concur with POTTER, J., except FOLLETT, Ch. J., and VANN, J., dissenting.
Judgment affirmed.