Canandaigua Natl. Bank & Trust Co. v. Palmer

In Canandaigua Natl. Bank & Trust Co. v. Palmer (119 AD3d 1422, 990 N.Y.S.2d 747 [4th Dept 2014]), where the motion court had declined to apply the doctrine of equitable mortgages on the ground that an equitable mortgage is available only where the secured property is erroneously described, the Fourth Department explained that "the availability of an equitable mortgage is not dependent upon the nature . . . of the error, but rather upon the existence of a clear intent between the parties that certain property be held, given or transferred as security for an obligation" (id. at 1424). It reiterated that: "An equitable mortgage may be constituted by any writing from which the intention so to do may be gathered, and an attempt to make a legal mortgage, which fails for the want of some solemnity, is valid in equity. While a court will impose an equitable mortgage where the facts surrounding a transaction evidence that the parties intended that a specific piece of property is to be held or transferred to secure an obligation . . ., it is necessary that an intention to create such a charge clearly appear from the language and the attendant circumstances. . . . The availability of an equitable mortgage is not dependent upon the nature . . . of the error, but rather upon the existence of a clear intent between the parties that certain property be held, given or transferred as security for an obligation" (Canandaigua Natl. Bank & Trust Co. v. Palmer, 119 AD3d at 1423-1424.)