New York Family Law Blog
This is an action by plaintiff, as mortgagor, of her premises at New York for a judicial declaration regarding the terms of a bond and mortgage signed October 28, 1966.
Plaintiff alleges in her complaint that the terms of this bond and mortgage should be limited to the amount of $7,500.00. The Department of Social Services as current holder of the bond and mortgage is seeking an amount in excess of $36,000.00 pursuant to plaintiff’s having received such payments for the support of herself and her family as a recipient of the Aid to Dependent Children program.
The parties agree that the only issue in this case is the interpretation of the following paragraph of the bond and mortgage executed October 28, 1966: “Witnesseth, that the mortgagor does hereby acknowledge herself to be indebted to the mortgagee in the sum of Seven thousand five hundred and no/100 ———— Dollars ($7,500.00)), lawful money of the United States, or so much (sic) as has been advanced or may be advanced by the mortgagee for the relief of the mortgagor or for the benefit of the mortgagor or on account of the mortgagor’s liability under the provisions of the Social Welfare Law of the State of New York, which the mortgagor, her heirs, grantees or assigns do hereby agree and bind themselves to pay to the mortgagee, his successors or assigns on the 1st day of December, 1967 except that before the expiration of a period of one year from the date hereof the mortgagor may redeem the same by the payment to the mortgagee, their successors or assigns, the amount expended by said mortgagee for the relief of the mortgagor, or for the benefit of the mortgagor or on account of the mortgagor’s liability under the provisions of the Social Welfare Law of the State of New York and for repairs and taxes on the hereinafter described property, and to secure the payment of which the mortgagor hereby mortgages to the mortgagee all her undivided interest in and to all that tract or parcel of land located in Franklin Square, Town of Hempstead, County of Nassau and State of New York.”
It is plaintiff’s contention that the word “thereof” was on the document at the time she signed it and if crossed out, it was not done so until after her signature. She also contends that it was her belief that the bond and mortgage was not to exceed the sum of $7,500.00, that she was so lead to believe by the defendants, and that she did not sign the bond and mortgage in the presence of a notary public thus rendering the instrument improperly acknowledged and not properly recordable.
The defendants assert that the language on the face of the mortgage, namely the crossing out of the word “thereof” clearly reveals that it was the intent of the parties that the mortgagor be liable for all moneys expended by the Department of Social Services on plaintiff’s behalf and that the bond and mortgage not be limited to the amount of $7,500.00. The Court has considered the threshold issue raised by plaintiff, namely that the bond and mortgage was improperly acknowledged and thus not recordable. However, as the Sobel case points out, the mortgage may still be valid as between the parties even without a valid acknowledgment. Moreover, both plaintiff and defendants have conceded the validity of the execution of the bond and mortgage in their agreed statement of facts.
Defendant County relies on ยง 106 of the Social Services Law to buttress their position that the language on the face of the mortgage reveals that it was the parties’ intent to hold the mortgagor liable for all amounts paid out by the Department of Social Services for her support and maintenance.
What is at issue is the intent of the parties regarding the maximum amount which would be a lien on the premises.
The Court has not been given any information as to what, if anything, the County had advanced in 1966 when she signed the mortgage. Assuming that she had received any sum less than $7,500.00, it would certainly have been reasonable for her to assume that that figure was inserted as a maximum.
Had there not been any numerical figure inserted in the instrument, the balance of the language would clearly indicate an open ended mortgage lien dependent on the amount actually advanced.
Moreover, if $7,500.00 was intended as an estimate of what would be in fact advanced, it was incumbent on the County, having inserted the figure of $7,500.00, to periodically review the file and increase the amount stated by the amounts actually advanced. Modern computer technology makes such a periodic review quite feasible.
It is the conclusion of the Court that by inserting the figure “$7,500.00” in the bond and mortgage, and then adding the language regarding future advances, the County created an ambiguity in the terms of the instrument.
Having drawn the bond and mortgage which is the subject of this lawsuit, the County is bound by the principle that an ambiguity in the document should be resolved against the drafter.
The Court is also mindful of the strict construction to be accorded those sections of Social Services Law which are in derogation of the common law which did not require a recipient of public assistance to repay the state for his care and maintenance.
Taking into account the ambiguity of the instrument as well as the probable understanding of the recipient at the time of the execution, the Court construes the bond and mortgage to be limited to the amount of $7,500.00.
In so limiting and defining the amount of the mortgage lien, the Court does not rule out any other remedies to which the County may be entitled to recoup a judgment for the difference between $7,500.00 and the $36,000.00 advanced.
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