Vallé's Adm'x v. American Iron Mountain Co.

• Decision Date: 31 October 1858
• Parties: VALLÉ'S ADMINISTRATRIX, Appellant, v. AMERICAN IRON MOUNTAIN COMPANY et al., Respondents.
• Court: Missouri Supreme Court

27 Mo. 455

VALLÉ'S ADMINISTRATRIX, Appellant,

v.AMERICAN IRON MOUNTAIN COMPANY et al., Respondents.

Supreme Court of Missouri.

October Term, 1858.

1. Under the Revised Code of 1835 (R. C. 1835, p. 410), a mortgagee might, through an attorney in fact, acknowledge satisfaction of a mortgage on the margin of the record thereof; it was not necessary that such acknowledgment should be under seal, or that the agent should be authorized by instrument under seal.

2. Such an entry, except in giving notice, occupies no higher ground than an unrecorded release; a direct proceeding to set it aside is not necessary.

3. It was not necessary, under the Revised Code of 1835 (R. C. 1835, p. 410, § 13), in order to authorize an acknowledgment of satisfaction of a mortgage on the margin of the record thereof, that there should have been actual payment in money of the mortgage debt; it was sufficient that there was “full satisfaction” of the mortgage.

4. In a statutory proceeding to foreclose a mortgage, where the defendant sets up as a bar to the action an acknowledgment of satisfaction of the mortgage on the margin of the record thereof, the plaintiff may show in rebuttal that such acknowledgment was procured by fraud.

Appeal from Washington Circuit Court.

This was an action brought by the administratrix of the estate of Charles C. Vallé, deceased, to foreclose a mortgage. The petition set forth that said Vallé owned an undivided one-seventh of a tract of 20,000 arpens situate in St. François county; that said Vallé sold and conveyed his said interest to John L. Van Doren, defendant in this suit, for $30,000; that on the same day Van Doren mortgaged the same to secure said purchase money; that Van Doren paid no part of the purchase money; that the American Iron Mountain Company holds title under Van Doren with notice. The American Iron Mountain Company, in its answer, admitted the mortgage, but alleged that it had been paid and satisfied, and that satisfaction thereof had been entered by Mr. Frissell, attorney in fact of said Vallé, on the margin of the record. Said acknowledgment, as given in evidence, was dated October 8, 1838, and was as follows: “Charles C. Vallé acknowledges to have received $30,000, and the interest thereon, in full of the mortgage recorded on this and the succeeding pages, and hereby discharges John L. Van Doren of all liability hereby contracted. [Signed] Charles C. Vallé, by his attorney in fact, M. Frissell.”

The cause was tried by the court without a jury. The plaintiff asked the court to declare the law as follows: “1st, that the proof made by defendants that C. C. Vallé in his lifetime received stock in the Missouri Iron Mountain Company, under an agreement to enter the mortgage satisfied, will not sustain the allegation in defendant's answer that the said notes and mortgage were fully paid to him in his lifetime; 2d, that nothing less than an actual payment of the money secured by the mortgage, in accordance with the conditions thereof, will sustain the defense set up in the defendants' answer; 3d, that the paper writing purporting to be a power of attorney to Mr. Frissell, read by defendants on proof of the signature of C. C. Vallé alone, is not of itself sufficient in law to authorize the said Frissell to execute an express release of the mortgage, or to enter satisfaction on the margin of the record so as to operate as an extinguishment of the mortgage.” The court refused so to declare the law. Plaintiff took a non-suit.

Noell and S. T. & A. D. Glover, for appellant.

I. The power of attorney to Mr. Frissell and the entry on the margin of the record were not legally sufficient to discharge the mortgage. The paper was not under seal. An attorney in fact could not, under the act of 1835, make this entry. To authorize this statutory release, payment of the money is a prerequisite in all cases. (See 2 Co. 340; 3 Pen. & Watts, 405; 2 Shep. Touch. 323.)

II. The court erred in excluding plaintiff's evidence in rebuttal to show fraud in the arrangement for entering the mortgage satisfied. (2 Barr, 105; 18 Mo. 170). The evidence on the part of defendant showed that the defendant is not a bona fide purchaser without notice. (See, generally, 22 Mo. 85; 10 Watts, 397; 4 Paige, 127; 6 Johns. 109; 1 Pick. 347; 2 Root, 126; 4 Harr. & McHen. 219; 2 Ind. 413; 2 Dev. & Bat. 530, 388; 1 Green. Ch. 118; Saxt. 204; 3 Edwards, 427; 1 Hill, 307; 1 Edwards, 232; 24 Verm. 0; 8 Gill, 31; 10 How. Prac. 528; 1 Whar. 392; 1 Hill, 532.)

B. A. Hill, for respondents.

I. The mortgage was personal estate and passed to the executor. (3 Burr. 978; 3 Johns. Cas. 329; 7 Mo. 466; 3 Hare, 405.) A mortgage is but a security for the payment of the debt, and when that is paid or extinguished it can never be resuscitated. (11 S. & R. 223; 5 Hill, 276.) The delivery of the stock certificates by the Mo. Iron Mountain Co. to C. C. Vallé, in order to have the mortgage extinguished, and the surrender of the Van Doren notes to Frissell, the attorney of the company, was a payment of the mortgage. (See 31 Maine, 246; 1 Ohio, 469; 1 Cole, 187; 15 Verm. 374; 5 Metc. 310; 1 Halst. Ch. 32; 21 Pick. 230; 6 Barr, 230; 2 Har. & McHen. 917; 11 N. H. 474; 1 S. & R. 312; 1 Halst. 471; 2 id. 407; 4 Paige, 578; 3 Har. & McHen. 399; 8 Ohio, 22; 4 Kent, 193; 10 Ohio, 440; 3 Mass. 560; 11 Pick. 297; 16 Ala. 738.) There is no case made in the bill for the setting aside of the satisfaction of the mortgage; no issue made upon it. Fraud in the entry of satisfaction is wholly inconsistent with the bill for a foreclosure. The mortgage exists or it does not exist. If it exists, and is liable to foreclosure, there can be no charge of any fraudulent satisfaction of the mortgage, nor any claim made to set aside the satisfaction of the mortgage on the ground of fraud.

NAPTON, Judge, delivered the opinion of the court.

Two of the points made in this case relate merely to the forms which the proceedings assumed, and their decision either way cannot terminate the controversy, or, indeed, have any material effect upon the result. The plaintiff insists that under the answer put in by the defendants no proof is admissible but of actual payment of the mortgage debt, and that the court should have excluded all proof concerning the entry of satisfaction by the plaintiff's attorney upon the margin of the record, the power of attorney under which this entry was made, and the delivery of the notes secured by the mortgage to the plaintiff's agent. This testimony was, however, allowed notwithstanding the plaintiff's objections, and the plaintiff, in rebuttal, offered to show that this entire proceeding--to-wit: the delivery of the notes and entry of satisfaction--was brought about by the fraudulent and false representations of the mortgagor or his agents. This testimony was objected to as inadmissible under the pleadings, the petition being simply for a foreclosure under the statute, and based upon the idea of a legal title in the mortgagee, which, being shown prima facie to have been extinguished by the entry of satisfaction upon the mortgage, put an end to the proceeding in a court of law, and placed the plaintiff under the necessity, if he desired to avoid the effect of this entry on equitable grounds, of resorting to his proceeding in equity to have it set aside. In other words, as the distinction between equitable and legal actions is abolished here, the objection of the defendants substantially is that the plaintiff's petition should have anticipated this matter and set up the fraud, so that the defendants could have been prepared upon that point.

Before determining these questions, it may be well to look at the objections taken to the sufficiency or legality of the entry of satisfaction upon the record of the mortgage, since these objections affect the essential right of the parties. By the law of 1835 (R. C. 1835, p.______), under which this proceeding occurred, a mortgagee was authorized to acknowledge satisfaction of the mortgage upon the margin of the record thereof, at the request of the mortgagor, upon receiving full satisfaction of the mortgage. This acknowledgment of satisfaction on the record of the mortgage is declared by the law to have the effect of releasing the mortgage and barring all actions thereon, and re-vesting in the mortgagor, or his legal representatives, all title to the mortgaged property. The entry of satisfaction in this case was made by an attorney in fact of the mortgagee, and neither the entry nor the power of attorney under which it was made was under seal, nor was any money in fact paid; but the notes, to secure which the mortgage was given, were delivered up to the agent of the mortgagor. A technical release of a mortgage or a bond must be under seal; but courts of equity treat a mortgage rather as a simple chose in action, capable of being extinguished even by a parol release executed upon a sufficient consideration. (Ackla v. Ackla, 6 Barr, 228.) Our statute does not require the entry of satisfaction on the margin of the record of a mortgage to be under seal, and if an attorney in fact was authorized under the statute to act for his principal in a case of this kind at all, his authority, of course, need not be under seal, since the acknowledgment itself need not be in that form.

The statute of 1835 is silent in relation to the power of an attorney in fact; but the Revised Code of 1845 expressly authorizes the acknowledgment to be made by an attorney in fact. We do not infer from this circumstance that the power did not exist before the revision of 1845. It...