## Facts

- Jeffrey Towers, Inc. (petitioner) brought a special proceeding in New York Supreme Court, Westchester County, seeking an order compelling satisfaction and discharge of record of a mortgage under RPAPL § 1921.
- The mortgage at issue was a purchase-money mortgage given in connection with the sale of approximately five acres off Central Park Avenue in Yonkers, New York.
- The mortgage secured a bond obligation of $225,000, and the petitioner tendered that principal plus $3,712.50 in interest as the amount due.
- The mortgagees (respondents, including Irma Straus and Lillian Romm) did not dispute that the tender represented the full amount due on the bond secured by the mortgage.
- Respondents nevertheless refused to provide a satisfaction, asserting they could keep the mortgage open of record to secure additional, non-monetary promises set out in a rider to the mortgage benefiting adjacent land the sellers retained.
- The rider obligations included commitments by the mortgagor to (i) install a sewer main across the mortgaged parcel to service the mortgagees’ retained property, (ii) construct an “alternate driveway” to service the retained property, and (iii) consent to zoning-related applications affecting the retained property; the papers also referenced a construction-related obligation.
- The petitioner relied on an express prepayment clause in the mortgage and argued that, upon tender of principal and interest, it was entitled to a satisfaction and discharge of record.
- The petitioner also asserted it was willing to perform the sewer work but could not obtain a permit from the City of Yonkers because the mortgagees had not filed (despite request) an application needed for the permit process.

## Issues

1. Whether a mortgage may be held open of record, after tender of the full principal and interest due on the bond, to secure performance of unliquidated, collateral undertakings such as promises to construct a sewer and driveway and to consent to zoning applications.
2. Whether, given an express prepayment clause and a tender of the conceded amount due, RPAPL § 1921 requires the mortgagees to provide an absolute satisfaction and discharge of the mortgage of record.

## Decision

- The court granted the petition under RPAPL § 1921 and directed that the mortgage be cancelled and discharged of record upon payment/tender of the admitted amount due (principal and interest).
- The court rejected the mortgagees’ position that the mortgage could remain open as security for the rider’s collateral, non-monetary promises.
- The court treated the prepayment right as effective upon tender of principal and interest, so that interest would not continue to accrue merely because the mortgagees refused to issue a satisfaction based on collateral obligations.

## Legal Principles

- RPAPL § 1921 authorizes a mortgagor (or successor) who has paid the mortgage debt to seek a court order compelling execution and recording of a satisfaction and discharge when the mortgagee refuses.
- A mortgage is ordinarily security for a definite debt evidenced by the bond or note; it is not properly used as an indefinite lien to secure open-ended, unliquidated performance obligations unless the instrument clearly makes those obligations part of the secured debt in a way consistent with mortgage law.
- Collateral covenants related to development or improvements that benefit other property retained by the mortgagee do not, without more, justify withholding satisfaction of a purchase-money mortgage after the secured debt has been paid.
- An express prepayment clause granting the mortgagor the right to pay principal and interest and end the lien must be given effect; a mortgagee may not nullify that clause by refusing discharge on the ground that separate promises remain unperformed.

## Conclusion

*Application of Jeffrey Towers, Inc.* holds that when the mortgagor tenders the full principal and interest due on a purchase-money mortgage, RPAPL § 1921 permits the court to compel satisfaction and discharge of record, and the mortgagee cannot keep the mortgage open simply to secure collateral, unliquidated development-related promises set out in a rider that primarily benefit the mortgagee’s retained adjoining land.


Application of Jeffrey Towers, Inc., 57 Misc. 2d 46, 291 N.Y.S.2d 41 (1968)