Battenhausen v. Bullock , 1880 Ill. App. LEXIS 324 ( 1881 )

Bailey, J.

Battenhausen, the appellant, claims a reversal of the decree in this case upon the three following grounds, which will be considered in the order in which they are here stated:

1. The assignees of the notes and mortgage from Battenhausen to Bnnyan, were necessary parties to the suit.

2. Ho amount.of indebtedness being disclosed by the deed of trust, said instrument created no lien as against said Battenhausen.

3. The release proved was prima facie a discharge of the lien of the deed of trust, and no evidence having been offered to impeach it, the complainant was not entitled to a decree.

It is manifest that the first of these propositions cannot be sustained, for the simple reason that it is wholly unsupported by any evidence appearing in the record. There are, it is true, averments in an unsworn answer, that for a part of the purchase-money of the land in question, Battenhausen executed to Runyan certain notes, and secured the same by a mortgage on the land; and the amended answer which Battenhausen asked leave to file' during the hearing, and which was also unsworn, contained an averment that said note and mortgage were, prior to the commencement of the suit, assigned by Runyan to Eiehberg Brothers, and were still held by them. But apart from these mere averments, the record is barren of evidence in relation to the notes and mortgage. An answer in chancery, when not under oath, performs the office of a mere pleading, and affords no evidence of the truth of the facts therein alleged. It follows that there was no evidence before the court showing or tending to show that the alleged notes and mortgage were outstanding in the hands of any parties not before the court, or even that any such notes and mortgage had ever existed. Ho attempt was made in any form to establish by proof the existence of any parties not before the court, having any interest in the subject-matter of the litigation, and we cannot reverse a decree by reason of a matter which rests merely in averment, and is wholly unsupported by evidence.

The state of the record bearing upon the second point urged by the appellant is very much like the foregoing. An attempt is made to invoke the doctrine, that under our recording act, a mortgage or deed of trust, given to secure an ascertained • debt, which wholly fails to disclose the amount of the debt secured, is no notice of an incumbrance to a subsequent bona fide purchaser of the land for value. A number of decisions in other States apparently supporting this doctrine are cited, but we are not called upon to determine whether such rule prevails in this State, since the record before us makes no case for its application. The answer, it is true, avers sufficient facts to show that Battenhausen was a subsequent purchaser of the land in good faith for value, but no attempt whatever is made to support these averments by proof. The only evidence in the case in relation to the rights of Battenhausen is found in the stipulation of the parties, that Battenhausen obtained title to said lands from Runyan, subsequent to the execution of the deed of trust, and prior to the date of the release. The circumstances under which the title was obtained, or whether any consideration was paid, is not shown ; nor are any facts made to appear by which it can be seen that Battenhausen was a bona fide purchaser. In the absence of all evidence on these questions,the court below very properly declined to apply the rule contended for. The most serious question in the case relates to the effect which, under the evidence, must be given to the release.

It may be proper here to notice a point made by counsel for appellee in their argument, viz: that no sufficient foundation was laid for the admission in evidence of a certified copy of the record of the release, and that we should now hold that it was improperly admitted. Some evidence was offered bv way of laying a foundation for the admission of such copy, under the provisions of section 36 of the statute in relation to conveyances, and the court holding such preliminary proof to be sufficient, allowed such certified copy to be read in evidence. As the appellee has assigned no cross-errors, he is in no position to call in question the correctness of this decision. The statute provides that when a proper foundation is laid, a certified copy of a record of this character may be read in evidence “with like effect as though the original of such deed, conveyance, or other writing, was produced or read in evidence.” R. S. 1874, Chap. 30, Sec. 36. For the purposes of this appeal, then, the certified copy must have the same force as though the original release had been produced.

What force must, under the evidence in the case, be given to the release? While the bill charges that no directions had been given to the trustee to execute the release, and that its execution was wholly unauthorized, and had either been forged, or produced by some fraudulent representation or device, no evidence, beyond the mere fact that the note was unpaid, was offered in support of any of these allegations. The certificate of acknowledgment proves its execution by the trustee, and there is no evidence beyond what may be derived from the fact that the note is outstanding, tending to show that such execution was without authority from the party secured.

Under these circumstances, what are the legal presumptions?

The statute providing for the manner of releasing mortgages and deeds of trust of record is as follows: “A mortgage or trust deed of real or personal property may be released by an instrument in writing executed by the mortgagee, trustee or his executor, administrator, heirs or assignee of record, and such instrument may be acknowledged or proved in the same manner as deeds for the conveyance of land.” R. S. 1874, Chap. 95, Sec. 9.

Here the release was executed and acknowledged in due form by the party authorized by law to release the deed of trust, and the doctrine supported by the general current of the authorities seems to be that such release is prima facie valid. In Flower v. Elwood, 66 Ill. 438, the court say: “ The cancellation of a mortgage of record is prima facie a satisfaction and discharge, but it may be proved to have been made by accident, mistake or fraud.” In Weir v. Mosher, 19 Wis. 311, a satisfaction of a mortgage by an executor of the mortgagee was held to be prima facie valid, although it turned out that the mortgage debt was not in fact paid.

In Miller v. Wack, Saxton, N. J. 204, the court in discussing the question of the effect of a release as evidence of the cancellation of a mortgage say: “Of what use would the cancellation of a record be if the mortgagee might at any time afterwards set up the cancelled mortgage, prove its original existence and contents, and then call upon the mortgagor or purchaser, or subsequent mortgagee or judgment creditor, to prove the fact of the lawful payment and satisfaction of the mortgage ? ” After holding that the cancellation is not con-elusive evidence, but is liable to be investigated in a proper way, they continue: “ nevertheless, it is evidence, and evidence, too, of a very high character, and sufficient to sustain the rights of all parties interested, unless the party setting up the canceled mortgage shall show some accident, mistake or fraud; and this must be shown satisfactorily on his part.” In like manner, the Supreme Court of Massachusetts, in Welch v. Priest, 8 Allen, 165, in discussing the same question, say: “ The implication is very strong that a release by deed ■ acknowledged and recorded, is a complete conveyance of the mortgagee’s title. And we think sound policy requires that it should be so regarded. It is as important to be able to ascertain from the registry the existence or continuance of a mortgage, as of any other legal estate. Hot unfrequently the whole or part of an estate held in mortgage is released or conveyed when the debt is not paid.” See, also, Trenton Banking Co. v. Woodruff, 1 Green, N. J. 117; Barnes v. Camack, 1 Barb. 392.

The mere fact that the debt is outstanding and unpaid at the time the release is executed, cannot, of itself alone, be regarded as presumptive evidence o fraud, or as tending to establish accident or mistake. We know from ordinary observation, that the release of a part or all of the mortgaged premises while the debt is unpaid, or even before .it matures, is not an unusual occurrence. It is frequently done by way of substituting new securities, or of carrying out some other new arrangement between mortgagor and mortgagee, and is in no way inconsistent with perfect good faith, or a full knowledge and understanding of the nature and effect of the instrument at the time of its execution.

The allegations of the complainant’s bill, if proved, would undoubtedly be sufficient to sustain the decree. The allegations tending to impeach the release, however, are entirely . unsupported by evidence, and the decree, so far as it relates to that subject, is erroneous. As to all the questions which we have been called upon to consider in this case, the record seems to be remarkable alike for its fertility of allegation and its barrenness of proof. We may be fairly warranted in the conclusion that the real rights of the parties have not yet heen presented to the court.

The decree will be reversed and the cause remanded for further proceedings.

Reversed and remanded.