Schumacher v. Falter

This was an action brought to recover the penalty provided by sec. 2256, Stats. 1898, for failure to discharge a mortgage which has been fully paid. Although that section does not provide, in terms, that the failure to discharge must be a wilful or malicious one, it is very evident that it was not enacted to punish honest mistakes. A statute in almost the identical language of our section has been construed many times by the supreme court of Michigan ; and the substance of the decisions in that state is that where there is no intentional wrong in the refusal to discharge, but, rather, a reliance in good faith upon some supposed legal right, the penalty will not be imposed, even though the supposed right may be found not to exist. Myer v. Hart, 40 Mich. 517; Huxford v. Eslow, 53 Mich. 179; Parkes v. Parker, 57 Mich. 57. In Burrows v. Bangs, 34 Mich. 304, Mr. Justice Cooley disposes of a claim to recover such a penalty as follows:

“But as there has been an honest difference between these parties regarding their rights, we do not thinlc the defendant is subject to the statutory penalty for not discharging the mortgage.”

*567The construction so given the statute is very reasonable, and we do not hesitate to adopt it. The merest reading of the testimony in the present case shows that the defendant, in refusing to discharge, was acting in the honest belief that his mortgage was still unpaid, and under the advice of counsel. Whether it has been paid or not depends upon a number of facts not made clear by the testimony in this case, and which should properly be determined either in a foreclosure, or in some other appropriate action. The defendant’s motion that a verdict be directed in his favor should have been granted. Under this view of the case, the finding of the jury cannot be held as res adjudicate or as settling any of the questions at issue between the parties regarding the supposed payment of the mortgage. It was not a case where any findings of fact should be made after it appeared that the defendant’s refusal was made honestly and in good faith. The judgment will be affirmed, because ultimately right, although the findings of the court and jury on which it was based are set aside as improperly made, in order that, in future litigation between the parties, neither side may be in any way affected by them.

By the Court. — Judgment affirmed.