Gilmore v. Gale , 33 N.H. 410 ( 1856 )

Sawyer, J.

This case comes before us upon an agreed statement of facts, and the only material question in the case is, whether the mortgage given by John S. Colburn to Ebenezer Colburn, and assigned to the plaintiffs, has become invalid and ineffectual to hold the property mortgaged, as against the attachments made by the creditors of John S. Colburn, the mortgagor, by reason of the neglect of the mortgagee or of the plaintiffs, holding the mortgagee’s interest, to render an account on oath of the amount of the mortgage debt.

It may be assumed, upon the facts stated, that the mortgage was duly executed and recorded, as required by the statute, to give a mortgagee’s lien upon the goods as against third persons ; that it was made in good faith, to secure a just debt from John S. to Ebenezer Colburn; that it was duly assigned by Ebenezer to the plaintiffs, as collateral security for the payment of whatever debt might be due from John S. Colburn to them, and that at the time it was so assigned it was, and from that time down to the 22d of August, when the plaintiffs made claim to the goods under it, it continued to be a valid, subsisting mortgage in their hands, unless invalidated by the demand for an account on oath of the amount of the mortgage debt, and the failure of Ebenezer Col-bum, or of the plaintiffs, or both, to render such account. The facts that the assignment of the mortgage from Ebenezer to the plaintiffs was not recorded, and that the date of one of the notes, delivered upon the assignment as one of the mortgage notes, does not correspond with the description in the condition of the mortgage, are immaterial. The plaintiffs, at least, cannot object either to the want of such record or to the variance between the true date of the note and that given as its date in the mortgage.

When the goods were attached on the 16th of June, they were the property of the debtor, John S. Colburn, subject to the mortgage, and as such they were hable to be attached at the suit of his creditors. Such attachment would continue to be valid, as an attachment giving the officer the right to the possession of the goods until the holder of the mortgage should elect to interpose his claim to them, and insist upon his rights as mortgagee. If, upon such claim being made, the attaching creditor should determine to maintain his attachment, upon the ground’ that the mortgage was fraudulent as to creditors, or invalid for want of execution according to the statute requirements, or because it had been discharged by payment of the mortgage debt, or otherwise, he might, of course, treat it as a nullity, and it would be optional with him to demand of the holder an account on oath of the amount of the mortgage debt, or not, as he might deem advisable. If the account should be demanded, and it should not be given, then the creditor would be at liberty to waive all questions as to the invalidity of the mortgage on other grounds, and rest upon that which the neglect to render the account would furnish; or he might set up any or all of these grounds of defence against the claim under the mortgage, at his pleasure.

If, on the other hand, the account demanded should he given, the other questions would still be open to him, as though the account had not been demanded.

If, however, upon a just and true account being given, no sufficient answer could be made by him on other grounds to the claim set up under the mortgage, then the only legal mode in which he could maintain the attachment would be by paying or tendering to the holder of the mortgage the amount of the mortgage debt, and thus effecting a release of the mortgage-lien; and it is for this purpose — in order to enable the creditor to make a tender of the exact sum for which the goods are held under the mortgage — that the statute requires such account to be rendered on oath, upon demand of the creditor or officer making the attachment.

The 15th section of chap. 184 of the Revised Statutes, 369, provides that goods mortgaged may be attached as the property of the general owner ; “ the attaching creditor or officer paying or tendering to the mortgagee, or holder, the amount for which said property is holden, to be ascertained in the mode prescribed in the following section,” which is as follows, sec. 16, of the same chapter: “ Such creditor or officer may demand of the mortgagee, or holder, an account on oath of the amount due upon the debt or demand secured by the mortgage, and the officer may retain the property in his custody until the same is given without tender or payment; and if such account shall not be given within fifteen days after the demand, or if a false account shall be given, the property may be holden discharged from the mortgage.”

The attachments being made on the 16th of June, a demand in writing was forwarded by mail to tbe mortgagee on the 26th. This, however, did not come to his hands until after he had assigned the mortgage to the plaintiffs, which was on the 15th of July. It is unnecessary to consider whether the demand made on the mortgagee, and his neglect to render the account, would be sufficient to discharge the mortgage lien as to him. The question is not between him and the attaching creditors ; and it is immaterial, in the determination of this case, how the parties might have stood in case no assignment had been made by Ebenezer, the mortgagee, and the creditors were endeavoring to maintain their attachment against his claim under the mortgage. The question here is, how do the plaintiffs stand as the holders of the mortgage from the time of the assignment on the 15th of July, in this contest between them and the attaching creditors, under the demand made upon them on the 20th, and their account rendered on the day following ?

That the creditor or officer making the demand should be held to a strict compliance with all the substantial requirements of the statute, where the consequences of a failure by the other party to comply with the demand are of so serious a character as the forfeiture of the mortgage lien, would seem to be but reasonable. Before he should be at liberty to ask that it should be held in his favor that such a forfeiture had been incurred, he should be required to show that he had strictly fulfilled all the prerequisites prescribed by the statute for such a result, Farr v. Dudley, 1 Foster 372.

But a literal compliance is not to be exacted where substantially the same thing is done which the statute requires. The statute requires a demand “ of an account on oath of the amount due upon the debt or demand secured by the mortgage.” The demand, however, need not be in the very words of the statute. It is enough if the words used in the demand to describe the account required, do in fact designate the same account as that described in the statute. In the 15th section the creditor or officer is required to tender “ the amount for which the property is holden,” and that amount is to be ascertained in the mode prescribed in the 16th section; and that mode is by demanding an account, not in the same words, of the amount for which the property is holden, but “ of the amount due upon the debt or demand secured by the mortgage ;” and it is obvious that precisely the same thing is meant by the two forms of expression. The demand made upon the plaintiffs was for “ an account under oath of the amount of the debt or debts, demand or demands, secured by the mortgage.” This can be understood to mean nothing more or less than the account intended by the statute. To speak of an account under oath of the amount of the debt secured by a mortgage, must convey to every mind the same idea as if either form of expression contained in the statute had been adopted.

The demand, then, upon the plaintiffs being in conformity with the statute, it was their duty to have rendered the account demanded ; such account as would have informed the officer of the sum claimed to be due upon the debt secured by the mortgage, in order that that sum might have been paid or tendered in discharge of the mortgage lien. It is clear that the account rendered by the plaintiffs was not such account. It does not purport to be such. It is a statement merely of the amount due from John S. Colburn to them, for which the mortgage and mortgage debt had been assigned as collateral security. Such statement could in no way contribute to inform the attaching creditors of the sum, as claimed by the holder of the mortgage, necessary to be paid in order to discharge the mortgage lien on the goods attached. The debt due from John S. Colburn to the plaintiffs may be more or it may be less than the amount of the debt for which the goods are holden under the mortgage. If more, then clearly the creditor would not be required to tender that amount in order to extinguish the mortgage lien. If less, the payment of that amount would not have the effect to extinguish it, for it would still be valid for the unpaid balance.

The assignment to the plaintiffs gave them the right to receive payment of the entire mortgage debt, and to surrender up the mortgage and mortgage notes, though the amount might exceed the debt for which they held them as collateral. The receipt given by them upon taking the assignment contemplates the possibility of there being a surplus in their hands arising from the mortgage notes. They must then be presumed to know what amount was due upon those notes ; and if taking them into their hands, with authority to receive payment and surrender them to the maker upon payment of the amount due, there was further knowledge necessary to be obtained, in order to their being fully informed of the amount due, then it was their duty upon demand •made to have obtained that information, or to have given the account upon such information as they had, qualifying their oath to the account in accordance with the facts. In the statement which they furnished, mention is made of the notes and mortgage given by John S. to Ebenezer Colburn, and assigned to them by Ebenezer, amounting to $1200. It is apparent that this expression, “ amounting to $1200,” was used only as descriptive of the mortgage, and was not intended nor could it reasonably be understood by the creditors or officer as designed for an account of the amount of the debt secured by the mortgage.

There was then no such account rendered by the plaintiffs as the attaching creditors had the right to demand and did demand. Consequently, the officer was at liberty to hold the goods, as against these plaintiffs, discharged from the mortgage; the proceedings of the officer in making the sale were not a conversion of their property, and according to the agreement of the parties there must be

Judgment for the defendant.