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upon whom the burden of taxation is most oppressive, cannot escape.”
There has been some very wild guessing respecting the mortgage indebtedness of the country, and as wild conclusions drawn from such an assumed total. The Committee on Mortgage Debtors of the late General Assembly of the Knights of Labor (November, 1889) reported* that “though we find no reliable figures concerning the mortgage indebtedness of the country, yet enough is well known to prove beyond a doubt that it is frightfully large and dangerously burdensome." Reference is then made to some“ widely published figures in the New York Times and other leading journals, both east and west,” which credit seven western States with $4.521,000,000 of mortgage incumbrance. The report then proceeds to state, that "these statements have been criticised and vehemently disputed by interested parties on the one hand, and partially verified on the other. Striking out one half of the amount to cover errors and silence criticism, we still find the figures and conditions confronting us most appallingly. As a fruitage of these conditions, the mortgage debtors in many places are unable to longer pay the interest on loans, and are utterly without hope of ever being able to pay the principal. This condition is not confined merely to the States named. It exists in city and country in nearly every State in the union. One leading orthodox authority places the mortgage indebtedness of twenty-three States at one-fourth of the value of the value of their entire real estate.”
That such estimates as those cited are exaggerated, the statistics of valuation given in the United States census returns for 1880 make pretty elear. The assessed valuation of the real estate in the fourteen western States is placed at $4,584,048,000 and that of all the thirty-eight States in the union at but little less than thirteen thousand million dollars. As a matter of fact, there are practically no statistics available on which to base reliable deductions of this nature. In the few western States where this line of investigation has been attempted, the results obtained are far from satisfactory, even where the official records of mortgages have been collated. A calculation of the supposed existing indebtedness from the mere record of mortgages is misleading, to say the least. To
See official minutes published by the General Secretary-Treasurer, Philadelphia.
obtain the correct number of outstanding mortgages would require the search to be extended back a generation, in order to eliminate those discharged and foreclosed ;* and this would not determine the amount still due on mortgages in force, for there is no record of past payments, which are well known to be considerable and to vary according to locality and class of mortgages.
It would also be misleading to conclude simply from a fairly correct estimate of total mortgage indebtedness, however large, based upon the number and amount of mortgages, that the condition of things was bad, and “that a very large proportion of the people seem to be in a financial rut, and are unable to extricate themselves," as it has been expressed. A large amount of the borrowed capital invested in productive industry would have to be first eliminated, and nearly the whole of the vast bulk of so-called purchase-money mortgages, given for property when purchased, or the deferred payments of borrowers in our numerous and rapidly increasing co-operative building and loan associations. This latter class of debtors is large and, where these enterprises flourish, constitutes a considerable portion of the total mortgages : the Bureau returns in 1888 showed 5.304 borrowing members of the New Jersey associations, which had over $14,000,000 invested on bond and mortgage. But, excepting these obligations, it cannot generally be learned from the official records which mortgages have been given to secure purchase money, and which for money borrowed. Nor can it be certainly determined from the mere records, that any given mortgaged tract of real estate is farming land-it may be held for speculative purposes, or may be mining property, but at the same time there may be no indications on the face of the mortgage showing this, except, perhaps, its apparently inflated value, which again would not be an absolute test to-day, for land mortgaged in the early '70's, or before.
These and other modifying circumstances largely destroy the value of any estimates of the burden of existing indebtedness, determined by an inspection of the official records only. These must be supplemented by a personal enumeration of the real estate owners-a task which is to be undertaken, under a supplementary
It is generally admitted that a farm mortgage has a long life. · See correspondence from leading lawyers, infra.
act of Congress* as a part of the duties of the U. S. census enumerators in June, 1890. It is safe to say that these returns if obtainable will furnish extremely interesting and valuable information. The act appropriates the sum of one million dollars for the purpose, and provides :
That it shall be the duty of the Superintendent of Census, in addition to the duties now required of him by law, to ascertain the number of persons who live on and cultivate their own farms, and who live in their own homes, and the number who hire their farms and homes, and the number of farms and homes which are under mortgage, the amount of mortgage debt, and the value of the property mortgaged. He shall also ascertain whether such farms and homes have been mortgaged for the whole or part of the purchase money for the same, or for other purposes, and the rates of interest paid upon mortgage loans.
But these facts, having reference only to the ownership of and indebtedness on real estate, will tell but half the story of the burden of private recorded indebtedness. Chattel mortgages, those on personal property, are equally evidence of debt, and probably indicate to a greater extent than incunibrances on land whether the mortgages are becoming embarrassed. So with foreclosure executions, sheriff's sales, which mean that the owner has succumbed to the burden of the mortgage debt.
The same may be said of docketed judgments, which are all a lien on real estate. A judgment is enforceable against both the personal property and real estate of the debtor, it becoming a lien on the latter as soon as docketed, that is recorded in the county clerk's or supreme court clerk's office. It may be either a general lien, as in the case of a supreme court judgment, which covers the whole State, or a local lien, coextensive only with the county wherein docketed. It remains a lien on the land acquired by the debtor at any time within twenty years thereafter. Except in case of a purchase money mortgage, it is a lien superior to a subsequent mortgage. It is to be enforced first against the goods and chattels, and then against the real estate, all of which may be sold under the statute, except such as is exempted under the Homestead Exemption Act, of March 17, 1852,† that is, the lot and residence of the debtor, being a householder and having a family, to the value of one thousand dollars.
*"• An act to require the superintendent of census to ascertain the number of people who own farms and homes, and the amount of mortgage indebtedness thereon."
| Revisod Statutes, Ed. 1877, p. 1055, 153.
Previous to the act of May 2, 1885,* a chattel mortgage was simply filed, and so far as creditors, or purchasers or mortgagees in good faith, were concerned, was valid only for one year thereafter, unless a copy was refiled within thirty days next preceding the expiration of the year. Since then, such instruments, duly executed and acknowledged, are required to be recorded in the office of the clerk, or of the register, where in existence, of the county wherein the mortgagor, if a resident of the State, resides; and if not a resident, then in the clerk's office of the county where the mortgaged property may be at the time of the execution of the mortgage. Such a mortgage is valid against the creditors of the mortgagor, and subsequent purchasers and mortgagees, “from the time of recording thereof until the same be cancelled of record in the manner now provided by law for cancelling mortgages of real estate.” A chattel mortgage vests in the mortgagee or owner " the right to the possession of the chattels therein described, so far as may be necessary for the purpose of preventing the removal thereof out of the county wherein they did lie at the time of execution or delivery of such mortgage, and of recovering such chattels in case the same shall have been removed out of such county.” On default in payment, the chattels are forfeited and the title is absolnte at law in the mortgagee, who may proceed to sell them on due notice to the mortgagor. There is no statutory regulations as to the notice to be given. It should be such notice as will be likely to secure the best price practicable for the goods. The sale must be public, after due advertisement, and conducted with fairness and good faith. Sometimes a chattel mortgage is foreclosed in the same way as a real estate, but rarely.
A real estate mortgage is in the form of a deed of land, with a condition that, if a certified sum of money be duly paid, the deed shall become void, or as it is expressed in legal phraseology, "that then these presents, and the estate hereby granted, shall cease, determine and be void." The land is not transferred, and the only effect of the mortgage is to give the mortgagee a lien on the land, the equity, or right of redemption, still remaining in the mortgagor.
* Revised Statutes, Supplement (1836), p. 191, 8.
The debt is the principal thing and the land merely an accessory; the payment of the debt extinguishing the mortgage, when it may be discharged on the records, a statement to that effect being entered on the margin of the recorded instrument. It is necessary to record the mortgage in the office of the county clerk, or register, when there is one*, or it will be postponed to the lien of an honest, subsequently recorded conveyence or mortgage. It need not be recorded in full, but only an abstract of it "registered.” Section 17, page 705, Revised Statutes (1877) requiring the county clerk “to provide fit books, well-bound and lettered, for registering [on payment of his legal fees) all mortgages, and defeasible deeds in the nature of mortgages, of lands, tenements, and hereditaments, lying and being within his county, in which shall be entered the names of the mortgagor and mortgagee, the date of the mortgage, the mortgage money and when payable, and the description and boundaries of the lands, tenements and hereditaments mortgaged.” The date of receipt of the instrument must be noted at the foot or in the margin of the record.
A mortgage will be presumed to have been paid, if the mortgagee never entered on the land, and there has been no foreclosure nor payment of interest within twenty years. On the other hand, when there has been no default, it remains in force notwithstanding the expiration of the term as stated in the instrument. It has become the practice in cities to make this nominal term one year ; the actual life of a mortgage, as a general rule, being considerably longer. This is done to protect the mortgagee, especially in the matter of the payment of taxes on the mortgage, on account of which a deduction in the assessment value of his land may be claimed by the mortgagor from the assessor. The mortgagee is bound in such case to pay the tax on his mortgage and cannot recover it of the mortgagor.† Under the so-called “five-county act,”I applying to the counties of Hudson, Essex, Union, Bergen and Passaic, and the cities of Trenton, New Brunswick and Camden, the owners of mortgaged lands may agree not to apply for any deduction, and in case the deduction is claimed in violation of the
* In only Camden, Essex and Hudson counties. + 8 C. E. Green, 181.
April 17, 1876.