Opinion
06-22-1931
SCARDONE v. SOZZI et al.
Tuso & Stanger, of Vineland, for complainant. Louis B. LeDuc, of Camden, for defendant F. W. Duckworth Bond & Mortgage Co. Gallaher & Yoeum, of Camden, for defendant Southern Steel Service Co. Joseph Varbalow, of Camden, for defendant Adele Jaster.
Syllabus by the Court.
A mortgage which has been discharged of record by reason of a forged warrant to cancel remains prior in incumbrance to a mortgage thereafter made and recorded.
Suit by Emilio Seardone against Josephine Sozzi and husband and others. Decree in accordance with opinion.
Tuso & Stanger, of Vineland, for complainant.
Louis B. LeDuc, of Camden, for defendant F. W. Duckworth Bond & Mortgage Co.
Gallaher & Yoeum, of Camden, for defendant Southern Steel Service Co.
Joseph Varbalow, of Camden, for defendant Adele Jaster.
INGERSOLL, Vice Chancellor.
This is a bill to foreclose a mortgage made by Josephine Sozzi and Frank Sozzi, her husband, to Emilio Seardone, dated March 17, 1928, to secure the sum of $3,000 at the expiration of one year, with interest at 6 per cent. This mortgage was duly recorded in the office of the register in Camden county in Book 330 of Mortgages, page 110.
On December 5, 1928, the said Josephine Sozzi and Frank Sozzi conveyed said land to the City Baking Company of Mt. Ephraim, N. J., which deed was duly recorded. Frank Sozzi was the president of said baking company.
On or about the 9th day of May, 1928, Josephine Sozzi and Frank Sozzi mortgaged said land to the F. W. Duckworth Bond & Mortgage Company, to secure the payment of the sum of $8,000. Other mortgages and judgments are set forth in the bill.
The answer of the F. W. Duckworth Bond & Mortgage Company is that the said Scardone's mortgage was discharged of record on the Sth day of May, 1928, by virtue of a certificate directing the discharge thereof, and duly recorded in the office of the register of deeds in the county of Camden.
The complainant contends that said warrant to satisfy is a forgery and without effect. It is unnecessary to go into the details of the testimony. I am satisfied that said warrant to discharge was and is a forgery. It has been the law for many years that cancellation of a mortgage on the record is only prima facie evidence of its discharge, and it is left to the owner making the allegation to prove the canceling to have been done by fraud, accident, or mistake. Such proof being made, the mortgage will be established, even against subsequent purchasers or mortgagees without notice, Heyder v. Excelsior Building Loan Association, 42 N. J. Eq. 403, 8 A. 310, 311, 59 Am. Rep. 49; Trenton Banking Co. v. Woodruff, 2 N. J. Eq. 117; Harrison v. N. J. R. R. Co., 19 N. J. Eq. 488, and Mr. Justice Knapp, speaking for the Court of Errors and Appeals in Heyder v. Excelsior Building Loan Association, supra, said: "Between a mortgagee whose mortgage has been discharged of record solely through the unauthorized act of another party, and a purchaser who buys the title in the belief, induced by such cancellation, that the mortgage is satisfied and discharged, the equities are balanced, and the rights in the order of time must prevail. The lien of the mortgage must remain despite the apparent discharge."
This reasoning was followed by Vice Chancellor Lane in Sterling Leather Works v. Schwarzwaelder on appeal of the Liberty Trust Company, 88 N. J. Eq. 378, 102 A. 841, 104 A. 895, affirmed by the Court of Errors and Appeals, opinion by Vice Chancellor Lane, same volume and page.
It follows, therefore, that the complainantis entitled to a decree adjudging his mortgage to be prior in lien to the mortgage made to the P. W. Duckworth Bond & Mortgage Company.