Safe Deposit & Trust Co. v. Kelly

Opinion by

Mr. Justice Gbeen,

These cases were tried in the court below in exact conformity with the decision of this court in the case of Fleming v. Parry, 24 Pa. 47. The leading facts in that case were almost precisely similar to the leading facts of this. In both there was a mortgage and a bond given by the mortgagor to the mortgagee. In both the mortgagee executed on the record of the mortgage an acknowledgment of satisfaction in full of the mortgage. In both the mortgagee retained possession of the mortgage and also of the bond until death. In both the actions were brought by the legal representatives of the mortgagee ; in the Fleming case the action being debt on the bond, and in this case there being an action on the bond, and also a scire facias on the mortgage. The serious difference between the cases is that in the Fleming case there was literally no supporting testimony to show that the mortgagee intended to extinguish the debt by the entry of satisfaction of the mortgage, while here there was an abundance of the most convincing and satisfactory testimony to show that the entry of satisfaction was made for the very purpose of extinguishing the debt. In the Fleming ease the court below was of opinion that the entry of satisfaction on the mortgage extinguished the debt due on the bond, of its own force, whereas in this case the court below left the question of intent to extinguish the debt to the jury, with careful and precise instructions as to what must be found in order to determine that question. This court, in the Fleming case, held that the satisfaction of the mortgage did destroy the mortgage and all remedies upon it, and that whether the debt was intended to be thereby extinguished was a question of fact which the jury must determine upon all the evidence. The court below in the present case charged that the mortgage was extinguished by the entry of satisfaction, and directed the jury to find for the defendant in the action of scire facias, but left the question of extinguishment of the debt to the jury in the action on the bond. On this question the jury found for the defendant, and the verdict was eminently justified by the evidence. It thus appears that the very course directed to be pursued by this court in the Fleming case was actually pursued by the court below on the trial of this.

In the Fleming case, Mr. Justice Woodward, delivering the opinion, said: “ A bond and mortgage taken for the same debt, though distinct securities, possessing dissimilar attributes, and subject to remedies which are as unlike as personal actions and proceedings in rem, are, nevertheless, so far one that pajrment of either discharges both, and a release or extinguishment of either without actual payment is a discharge of the other, unless otherwise intended by the parties. . . . Had the mortgage been paid, the law would treat the bond as paid; and, satisfied on record, the mortgage, though not paid, was thenceforth gone, and all remedies on it. But was the bond also null? This depended on the understanding and intention of the parties, as a jury should deduce them from all the circumstances in proof. . . . The court relied much on the words used in satisfying the mortgage. They were substantially, but not exactly, the words prescribed by the act of assembly, but neither the debt nor the bond is mentioned. ‘I, Andrew Fleming, do hereby acknowledge to have received satisfaction in full of this mortgage.’ These words, signed and sealed by the mortgagee, were all-sufficient to put the mortgage out of existence, and sufficient, too, to satisfy the debt, if so intended. Prima facie they would indeed import extinguishment of the debt as well as the mortgage, and the burden of showing they were not so intended was on the creditor; but when he submitted evidence on that point, proper for the consideration of the jury, it was for them to decide whether the words had been satisfactorily explained, as intended only to wipe off the mortgage.”

It will be perceived that the question in this case, as in the Fleming case, was not a question of the gift of a bond, but a question as to the intended extinguishment of a debt, which was evidenced by a bond, for the security of which a mortgage was also given, and the mortgage was extinguished by a solemn entry of satisfaction on the record of the mortgage duly signed and sealed by the mortgagee. What was the effect of this entry of satisfaction? Did it extinguish the mortgage only or did it also extinguish the debt? If it was so intended it did have that effect, and so the court instructed the jury. On the trial considerable testimony was given by the defendant to show that the mortgagee did intend to extinguish the debt, and supposed she had done so. A clerk in the recorder’s office testified to the fact of the entry of satisfaction of the mortgage. It was written and attested by him, and signed and sealed by Mrs. Sheehan. There was not a particle of testimony to show that there was any mistake or misunderstanding about it on the part of Mrs. Sheehan. It was also proved that the wife of the defendant was the daughter of Mrs. Sheehan, and that the defendant had been the means of saving to his wife’s mother several thousand dollars by inducing her to withdraw, from an insolvent bank, a large amount which she had on deposit there, shortly before its failure, and that she always felt very grateful to him on that account. It was also proved by the testimony of Mrs. Parker, another daughter of Mrs. Sheehan, that, in a conversation with her mother about persons to whom she had loaned money, she spoke of Jim Kelly as one of them, and she testified as follows: “ She said she had held a mortgage against him, and she told me it was now satisfied; she says, ‘ about a year ago, perhaps not that long, I went down to the courthouse and with my own hand I satisfied that mortgage from all claim against Jim and Mary.’ She says, ‘ I feel this way,’ and I said to her, ‘ Why, don’t you think that is making fish of one and flesh of another? You are giving more to one than to the other children.’ She said, ‘ I am not; I have treated my children all the same, outside of yourself.’ Those were her very words, and then she told me how Jim came to get that money. ‘ I had it in Prager’s bank and he came to me one day and said, “ You take your money out of the bank, it is not safe.” ’ ... In a few days she went down and drew the money out. She said she hadn’t it out any length of time until the bank did break, and my father and her son George both had money in there at that time, and they lost it.” In another conversation about three weeks before her death she told the witness: “ Mary, I am glad in my heart that I have that affair of Mary’s settled. ... I am glad in my heart that I have settled that affair of Mary’s.” The witness, who lived with her mother at this time, also testified that Mrs. Kelly continued to pay the interest, but that her mother did not give receipts for the payments, and Mrs. Kelly was worried about it and wanted the receipts, but she would put her off with frivolous excuses, and one day she, the witness, said to her mother: “ ‘ You must give to those people- their receipts, they must have their receipts.’ ‘ Well,’ she said, ‘ some day I will get at it and fix it all right, but,’ she said, ‘ you know, Mary, that affair at the courthouse, receipts or no receipts, settles that for them.’ Q. Receipts or no receipts, everything is settled? A. Yes, sir, that is mother’s exact words. Q. Was there anything in those conversations, said by her as to whether or not, or do you know whether or not, she communicated the satisfaction of the mortgage to Mrs. Kelly or to Mr. Kelly ? A. No, sir, they knew nothing about it. Q. Did you say anything to your mother about it? A. I told her she ought to tell them. They came down there and seemed troubled — worried; they either wanted a settlement or they wanted their receipts. I says, ‘ You ought to tell those people,’ and she said, ‘ No, I won’t tell them at all; they will find out, and when they find out,’ she said, ‘it will be all the.sweeter to them.’ That is her exact words.”

It is impossible to believe this testimony and not believe that the act of satisfaction was intended by Mrs. Sheehan to be a complete extinguishment of the debt itself, and that she fully believed that result had been accomplished. A mere satisfaction of the mortgage as a lien would be of no value to her son-in-law, and daughter, if the debt remained, and it certainly would not be “ sweeter ” to them to know after her death that the debt still remained. This testimony also explains the fact that the old lady retained possession of the mortgage and bond after the entry of satisfaction, and received sums of money from her daughter as payments of interest, and also the payment of interest made after her death. She did not want them to know of it during her life, but to discover it after her death as a pleasant surprise. All of this and other testimony was submitted to the jury, with entirely correct instructions as to the effect it should, or might, have, as evidence, on the one hand, of an intended extinguishment of the debt, and, on the other, of an intention that the debt should remain.

There was other testimony corroborative of the foregoing. Another witness, Oliver C. Kelly, who had borrowed money of her, testified that she had asked him to pay not only the interest, but the principal also, of what he owed her, and in the conversation between them on this subject, “ she said she wanted to get her business straightened up, and she would like if I would straighten up so she would get her money together, all of it. ‘ Now,’ she said, ‘ Jim, I don’t expect there will be any trouble about his.’ She said, ‘ I have got his business fixed; there will be no trouble after I am gone.’ . . . She said she wanted to get her money all in if she could, and get her business straightened up. Her life was short, she said; she was getting old, but she said,. ‘ Jim does not need to bother, there will be no trouble about his after I am gone.’ That is as near her words as I can tell you.”

The jury evidently gave credence to the testimony, and found, under the charge of the court, that Mrs. Sheehan, when she satisfied the mortgage of record, intended to, and did, thereby extinguish and discharge the debt also. As this was an act which she was entirely competent to do, the legal effect upon the debt was the same as the legal effect upon the mortgage; an entire extinction of both was accomplished, and the retention of possession of the papers by her was of no more consequence than the retention of possession of the mortgage alone would have been after an entry of satisfaction. The authorities cited for the appellant upon the point that the gift of a chose in action is not complete without actual delivery, are not applicable. In all those cases the question is, has title been acquired, have those things been done which are necessary in order to pass the title out of the donor; if not, the gift is not complete and no title passes. But here the question is, has a right of action, already existing, been extinguished by a suitable act disclaiming the right. It is not a question of the acquisition of title to the bond by a gift of it, but whether the debt which is evidenced by the bond has been discharged. An act of discharge sufficient ‘to extinguish the mortgage has been performed by the entry of satisfaction. That act is sufficient to discharge the debt if it was so intended, and that such was the intention has been determined by the verdict of the jury upon testimony which was sufficient to support the verdict.

The foregoing considerations dispose of all the assignments of error except the sixth and seventh. As to the sixth the decJ larations offered were made after the satisfaction was entered and could not suffice to destroy the legal effect of that act. As to the seventh it relates only to comments of the court regarding

the omission of Mrs. Sheehan to enter the interest payments on the bond after the entry of satisfaction, and the circumstance that she had merely written them on a loose slip of paper. We see nothing wrong in those comments; the entire effect of them was to call the attention of the jury to the subject, but the whole matter was given to the jury, as we think quite properly, for their exclusive action.

Judgment affirmed.