IN SENATE,

January 11, 1830.

REPORT

Of the Comptroller on the petition of George McClure, relative to a mortgage, &c.

STATE OF NEW-YORK,

COMPTROLLER'S OFFICE.

The Comptroller, to whom has been referred by the honorable the Senate, the petition of George McClure, relative to a mortgage executed to the people of this state by Benjamin S. Brundage,

RESPECTFULLY REPORTS:

That by an act of the legislature of the 28th March, 1820, the Comptroller was directed to loan, upon bond and mortgage, to George McClure, the sum of seven thousand five hundred dollars; according to the terms of the said act, the interest at the rate of seven per centum per annum, to be paid annually, and the principal to be paid in five equal annual payments; the first payment of principal being due at the expiration of six years from the date of the mortgage.That in accordance with the direction of the said act, the loan was made, and on the twenty-eighth day of April, 1820, the said George McClure and wife executed a mortgage, as collateral to which, he executed a bond, for the payment of the money loaned as required by the act, to the amount of six thousand five hundred dollars, and on the 5th day of May following, a second mortgage was executed for the remaining one thousand dollars, and all the money was paid to him. That no payment of interest or principal was made upon either of the said mortgages, until the 27th of April, 1826, when the said George McClure paid one hundred dollars. That previous to that time, and on the 19th February, 1825, the legislature passed an act, entitled "An act for the relief of George McClure. That this [No. 19.]

1

act authorised the said George McClure, under certain regulations contained therein, to sell certain parts or parcels of the premises mortgaged by him to the state, and to take bonds and mortgages for the purchase money of such sales, payable to the people of the state, and to transmit the same to the Comptroller; and made it the duty of the Comptroller to credit the principal of the debt due from the said George McClure, with the amount of the principal of the bonds and mortgages he should so procure and deliver at this office, when the one-third of the money secured upon such bonds and mortgages should be paid into the treasury of the state, and not before; provided that the Comptroller and Surveyor-General should be satisfied that the said bonds and mortgages were good and ample securities for the respective sums secured thereby; and that the parts of the mortgaged premises sold, had been sold at their full value. This act contained the further condition that the said George McClure should, within five years from and after the 1st day of May, 1825, pay the interest then due upon his loan, in five equal annual payments, and should also pay annually the interest that should thereafter accrue; and upon these conditions, suspended the collection of the debt for five years; but, upon the forfeiture of these conditions, made it the duty of the Comptroller to procced to the foreclosure of the mortgages.

Subsequent to the passage of this act, the said George McClure filed in the Comptroller's office, the following bonds and mortgages, to wit:

One dated 28th March, 1826, executed by Israel Morris, to secure the payment of......

$420 00

One dated 1st May, 1826, executed by Benjamin S. Brun

dage and wife, to secure the payment of........... One dated 22d July, 1826, executed by Henry Wells and wife, to secure the payment of.....

4,390 00

4,000 00

These mortgages, with bonds collateral to them, are found on the files, and entered upon the books of this office, accompanied by certain certificates and other evidences that they were taken or intended to be taken pursuant to this act, but the Comptroller and Surveyor-General do not appear to have done any thing, by way of expressing their assent to the sufficiency of them as security for the sums for which they were given, or to the fact that the premises covered by the mortgages were sold for their full value and according to the act. No principal monies have been yet paid upon either of the

mortgages, and the principal of McClure's loan has received no credit on account of them. The interest due upon the loan at the time of the passage of the act of 1825, has not been paid, nor has the interest which has accrued since that time, except the payment, on the 27th April, 1826, by McClure, of the one hundred dollars as above mentioned; a payment, on the 20th April, 1827, by Israel Morris, upon his mortgege of $29.40 of interest, and the following payments of interest by Henry Wells and others, upon the mortgage given by him, to wit:

1827, June 13, cash........... $145 00
1828, May 26, do

1829, Aug. 18, do

384 00

25 00

On the 14th April, 1827, the legislature passed an act amendatory of the act last above mentioned, and by it authorised McClure to sell in the manner directed in and by the act of 1825, such further parcels of the premises mortgaged by him to the state, as should be sufficient to pay off the interest due upon his loan. By this act the mortgages which had been taken were declared to be as valid and effectual as though the interest upon the loan had been paid as required by the act of 1825. This act also made it the duty of the Comptroller, in case any payments of principal or interest should not be made within three months after the same should become due, upon any of the bonds and mortgages taken, or to be taken, by the said George McClure under either of these acts, to proceed, by suit upon the bond, or by foreclosure of the mortgage, to collect such monies due. But the last section of this act of 1827, declared that the act should not "be carried into effect, unless the Comptroller should be of opinion, on a full investigation of the subject, that it is for the interest of the state."

Nothing appears to have been done under this act, either by the Comptroller or by Gen. McClure, nor does the Comptroller even appear to have expressed an opinion, whether or not it would be for the interest of the state to carry this act into effect.

On the 21st day of April, 1828, the legislature passed an act extending the time of payment of the monies due, or to become due, upon the bond and mortgage of Benjamin S. Brundage, until the 1st day of May, 1829, which act, the Comptroller is informed, was passed with the consent of Gen. McClure. Nothing had, at the time of the passage of this act, and nothing has yet been paid into the treasury upon Brundage's mortgage.

Under date of 13th July last, Gen. M'Clure wrote requesting the foreclosure of Brundage's mortgage. The situation of this loan, and of all these mortgages, was then investigated, and the investigation suggested to the Comptroller doubts whether the act of 1827, above referred to, could be considered as in force, nothing having been done under it, and the Comptroller not having determined that it would be for the interest of the state to carry it into effect. If these doubts were well founded, then it became a question whether all these mortgages taken by Gen. M'Clure, under the act of 1825, were not invalid and ineffectual, he not having fulfilled the conditions of that act, by the payment of the interest which was then due, as required, and not having paid annually the interest thereafter accruing, as also required, in as much as if the act of 1827 was to be considered as never having been in force, then the declaration contained in it, that these mortgages should be effectual, notwithstanding the failure of payment of interest, must also be considered as never having been made.

Under these doubts, as to the validity of these mortgages, the Comptroller informed Gen. M'Clure that he could not direct the foreclosure of any of them, at the risk and expense of the state, but that the bond and mortgage executed by Brundage would be handed to the Attorney-General, with instructions to obey any directions Gen. M'Clure might give in relation to them, provided he would make such arrangements as to the costs as would indemnify the Attorney-General and save the state harmless from expense. General M'Clure acceded to this proposition, and the bond and mortgage was delivered to the Attorney-General with instructions accordingly, who, as the Comptroller is informed, has received from General M'Clure security for the costs, and is proceeding under his directions to foreclose the mortgage and to prosecute the bond.

Had there been no doubts as to the validity of these mortgages, the Comptroller can not see what benefit could be promised to the state from their foreclosure, or how the state or any individual, could, with propriety, bid any thing at the sale of the lands covered by them, as no title could be acquired from such sale, while the prior mortgages, executed by M'Clure to the state, and covering the same premises, should remain in force and unsatisfied. The foreclosure of those prior mortgages would seem to him to be the only mode which the state should adopt, to enforce the collection of the monies due to it by a sale of the mortgaged premises.

In the mortgage executed by Brundage, is found a clause, following the description of the lands, in these words :

"And also have granted, bargained and sold, and by these presents do grant, bargain and sell, for the consideration aforesaid, unto the said party of the second part, and their assigns, all and singular the goods, chattels and machinery hereinafter particularly described, mentioned and expressed, that is to say, two carding machines, one picking machine, three shearing machines, one dying kettle, one blue vat, one screw and press plate, and two ten plate stoves in the possession, use and occupation of the said parties of the first part, now being." "To have and to hold," &c.

After the power of sale and conveyance of the lands covered by the mortgage, is found a covenant in the following words :

"And the said parties of the first part, for themselves, their heirs, executors, administrators and assigns, do also covenant and agree to and with the said party of the second part, and their assigns, that in case default shall be made in the payment of the said sum of four thousand three hundred and ninety dollars, and the interest to grow due thereon, or of any part thereof, as aforesaid, at the times above limited for the payment thereof, as aforesaid, it shall and may be lawful for the said party of the second part, and their assigns, with any person or persons as they shall think fit to enter and come into any premises of the said parties of the first part, wherein the aforesaid goods and chattels are or may be held, placed or kept, and there to fetch and carry away the same, and to sell and dispose of the said goods and chattels for the best price which they can obtain. And out of the monies to arise by such sale or sales of the above mentioned and hereby granted premises, goods and chattels, or such part or parcel thereof, as may be by them sold as aforesaid, to pay and retain to them the aforesaid sum of four thousand three hundred and ninety dollars, together with the interest to grow due and payable thereon as aforesaid, or such part thereof as may be and remain due and unpaid at the time or times of such sale or sales, as aforesaid, rendering the overplus monies (if any there be) to the said parties of the first part, their heirs, executors or administrators, after deducting the costs and charges of such vendue and sale as aforesaid, and all charges touching the said sale or sales of the said premises, goods and chattels as aforesaid."