Court Opinion

ID: 9299234
Source: CourtListenerOpinion
Date Created: 2022-12-02 17:05:49.750446+00
Date Added: 2024-06-11T17:13:37.160558
License: Public Domain

STORY, Circuit Justice.
This is a suit brought upon a mortgage, and the only question, which arises upon the facts agreed by the parties and the report of the auditor is, for what sum the judgment is to be entered. Nothing can be more clear, both upon principle and authority, than that, at the common law, a mortgage bona fide made, may be for future advances, and liabilities for the mortgagor by the mortgagee, as weE as for present debts and liabilities. I need not do more upon such a subject than to refer to the case of U. S. v. Hooe, 3 Cranch [7 U. S.] 73, and Conard v. Atlantic Ins. Co., 1 Pet [26 U. S.] 448.
The only point requiring consideration is, whether the fourth section of the statute of mortgages of New Hampshire of the 3d of July, 1829 (Laws N. H., Ed. 1830, tit. 105,) has in this respect changed the common law in regard to mortgages of lands in that "state. It is argued by the defendant’s counsel, that the legislature intended, by the first proviso of the fourth section, to require, not only that the defeasance should be in writing, but that it should contain such certainty as to the money to be secured, or other thing to be done, as would supersede the necessity of any resort to parol evidence to ascertain the extent or amount of the mortgage. It does not appear to me, that this is the true or reasonable exposition of the language. The words of the first proviso are,. “That no title or estate in fee simple, &c., of any lands, &c., shaU be defeated or encumbered by any agreement whatever, unless such agreement or writing of defeasance shall be inserted in the condition of said conveyance, and become part thereof, stating the sum or sums of money to be secured, or other thing or things to be performed.” Now, if we were to give to these words the restricted construction contended for, one effect would be, that the statute would defeat all mortgages, given as indemnity to sureties and others upon bonds and agreements; for it could not appear in certainty upon such mortgages, what loss or injury the surety or other person would sustain, as that must depend upon future contingencies. So, if a father should receive from a son a mortgage to provide suitable maintenance and support for him during his Ufe, the conveyance would, upon this same construction, be void; for it would be utterly impossible, with certainty, to ascertain, what money would from time to time be required for such maintenance and support, or what loss or damage the breach of the condition might occasion. It must depend upon future events. There is a large class of cases, which would be in this very predicament, occurring familiarly in the community. Upon the same ground also, no mortgage would be good, given to secure “all debts due” to the mortgagee, or indeed any debt the amount of which was not specifically ascertained and stated in the condition. It does not appear to me, that the legislature had any such broad prohibition in view. • It would Impose great inconveniences and embarrassments in the common transactions of life. The whole language of the proviso is perfectly satisfied by considering it to require the nature and extent of the claim, for which the mortgage is given, to be so far set forth, as to leave no doubt as to its identity. In short, that the statute meant to require, that aU mortgages should be in writing, and constitute a part of the conveyance, by which the estate was to pass. This was in itself most reasonable; as it would enable creditors in all cases to ascertain, whether an estate granted was absolute or conditional, and would cut off many of the temptations to create secret, undefined trusts, or fraudulent and collusive securities. But when a mortgage is to secure a present debt, or a present liability, its true character is just as well ascertained, as if the specific sum were pointed out. Indeed, if the sum were stated, or the other thing to be performed were set forth, still it would be necessary to ascertain by parol evidence, what portion of the agreement had been performed or money paid since the giving of the mortgage. If a mortgage were to secure the payment of a certain bond or note, contemporaneous with or antecedent to the conveyance, it would still be necessary to resort to parol evidence to ascertain the exact sum due thereon at the time of the mortgage, or afterwards, when it was sought to be enforced. I cannot, therefore, adopt the construction contended for. The present mortgage, in my judgment, falls directly within the first proviso of the fourth section of that act; for the condition of the mortgage does state “the sum or sums of money to be secured, or other thing or things to be performed,” in perfect compliance with the requisitions of that proviso.
The second proviso, in the same section, is in substance that “no title or estate, &c., in. any lands, &c., which shall hereafter be conveyed in mortgage, as aforesaid, shall be held by the mortgagee for the payment of any sum or sums of money, or the perform-*242anee of any other thing, the obligation or liability to the payment or performance of which shall arise, be made, or contracted after the execution or delivery of such mortgage.” Now, it seems to me,'that the legislature have here expressly intended to cut off all mortgages for the payment or security of any moneys or other things, which were not contracted for, or the liability for which did not attach at the time of the execution of the mortgage. It seems to me, therefore, very clear, upon the words and intent of the act, that no mortgage can be valid for any future advances or accounts between the parties, which were not a matter of right and positive obligation between them at the time of the mortgage. A mere provision for prospective advances or accounts, resting in the discretion of the parties or either of them, would seem to be the very mischief against which the second provision is aimed. Whether the enactment be founded in a wise public policy, or not, is a question with which this court has nothing to do. The judgment must, therefore, be restricted to the items of the account whieli were contracted for and delivered before the date of the mortgage. The two items of account, reported by the auditor, under the dates of the 7th February and the 5th of May, 1835, and also the due-bill of the 29th of October, 1834, must be rejected. Judgment ought to be given for the other items and interest. The district judge concurs in this opinion; and, therefore, let the conditional judgment be entered accordingly. If the sum, for which the judgment is to be entered, is less than five hundred dollars, the plaintiffs are not entitled to costs. The defendant is not entitled to costs in a case of this sort; for the defence is grossly inequitable, and contrary to the positive agreement of the defendant.