A. Where a mortgage is recorded and it either states on its face, or it is otherwise obvious from a reading of the mortgage, that its purpose is to correct or modify a previously recorded mortgage and both mortgage deeds purport to secure the same indebtedness, a subsequently recorded discharge of the later recorded mortgage is deemed to be a sufficient discharge of both mortgages, even though the discharge does not make specific reference to the first recorded mortgage. A recorded discharge which makes reference only to the first recorded mortgage shall not, however, be deemed a sufficient discharge of the later re-recorded mortgage.
B. Where a mortgage deed is re-recorded for the purpose of correcting a deficiency in the execution, attestation or acknowledgment of a previously recorded mortgage, a subsequently recorded discharge which makes reference to the re-recorded mortgage shall be deemed a sufficient discharge of both instruments. A recorded discharge which makes reference only to the original mortgage may or may not constitute a sufficient discharge of the re-recorded mortgage depending on the mortgagee’s intent.
C. Where a Mortgage Modification Agreement has been recorded which makes reference to a previously recorded mortgage and purports to modify that mortgage in one or more particulars, a recorded discharge which makes reference to the original mortgage deed but not to any subsequent Modification(s) shall be deemed sufficient to discharge the mortgage as modified. A recorded discharge which makes reference only to a modification agreement without making reference to the original mortgage shall also be deemed a sufficient discharge of the mortgage which was modified, absent affirmative evidence of record that the mortgagee did not intend to discharge the original mortgage.
Comment 1. It is not uncommon for a title search to disclose a recorded mortgage which is then followed by another recorded mortgage which makes reference to the earlier mortgage and states that its purpose is to correct some error or omission in the first document or it is otherwise obvious that such was the purpose of the re-recording of the mortgage. If this later recorded mortgage has been duly executed, attested and acknowledged, it is a substitute mortgage for the earlier mortgage. Thus, a subsequent discharge which makes reference only to the first recorded mortgage is not sufficient to evidence a discharge of the substituted mortgage. It may be that the intention of the releasor was to clear the record of the original mortgage and to leave in force the substituted mortgage. This is essentially a question of fact which cannot be determined from the records. In order to clear title the substituted mortgage should be expressly discharged of record.
Comment 2. There is a significant difference between a corrected mortgage that changes the original mortgage in a substantive aspect and one that is merely re-recorded to correct an error in execution, attestation or acknowledgment. In the former case, the corrected mortgage is indeed a substitute mortgage, and the rule set out in section A of this Standard is logical and appropriate.
Comment 3. Section C of this Standard intends to make its provisions consistent with those of Standard 18.2, entitled to Irregularities and Discrepancies in Discharges of Mortgages and Other Documents regarding the inadvertent reference in a mortgage discharge to a mortgage modification rather than to the mortgage itself. Under both that Standard and this one, such a discharge is given full recognition as a discharge of the entire mortgage. Indeed, it is difficult to conclude otherwise, since the concept of releasing a mortgage modification is virtually unknown in our practice. Universally, a mortgagee seeking to reverse the effect of a modification would do so by means of a new modification, and not by a discharge of only the modification sought to be rendered ineffective. Thus, a reference in a mortgage discharge to a modification, rather than to the mortgage itself, reasonably can only be seen as an inadvertent error, and the instrument is entitled to be given effect as a discharge of the mortgage in its entirety.
September 26, 2008 This standard was added.