Mortgage is valid despite two last names

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                                                             Potato or Potatoe – Does the “e” Really Matter?


          In yet another decision addressing a potentially defective mortgage recorded in Massachusetts, Judge Boroff ruled that where a Debtor regularly used two last names spelled differently, either was legally sufficient.  Therefore, a mortgage recorded under either spelling provided constructive notice to a Chapter 7 Trustee and the mortgage could not be avoided.   The decision is Steven Weiss, Trustee vs. JPMorgan Chase Bank, N.A., Adversary Proceeding Number 14-3001 issued on September 29, 2014.  

           The Debtor, Yvette Thibault filed a Chapter 7 bankruptcy proceeding on October 30, 2013.  The Petition indicated that the Debtor was also known as Yvette Thibeault.  The Debtor and her husband acquired their principal residence in 1964.  The deed recited their last names as Thibeault.  Thereafter the Debtor and her husband entered into a series of 6 mortgages (5 of the mortgages had been discharged prior to case commencement), 5 under the name Thibeault and 1 under the name Thibault.  The sole remaining mortgage on the property at case commencement used the name Thibeault and this was the mortgage that the Trustee sought to avoid.  The Debtor and her husband also recorded a “Certificate of Correction in Name of Owner of Real Estate” stating “our present name is ‘George and Yvette Thibault.’”   The Debtor’s drivers’ license listed the Debtor’s last name as Thibault.

           The Trustee urged the Court to find that the mortgage was defective because the mortgage was not recorded using the “legally correct” spelling of the Debtor’s last name, which in the Trustee’s view was Thibault – the name that appeared on the Bankruptcy Petition, on the Debtor’s drivers’ license and in the Certificate of Correction.  The Court disagreed, finding that under Massachusetts common law, “unless adopted for a fraudulent or nefarious purpose”, a person may be known by more than one name.  Because the Debtor regularly spelled her name with, and without, an “e”, both names were legally valid.  The Court cites a long line of Massachusetts cases for the proposition that “recording under any name by which a person is known constitutes constructive knowledge of the instrument” and, therefore, the mortgage in question, containing a correct spelling of one of the Debtor’s two last names, could not be avoided by the Trustee.

       My sense is that a key fact in the case was that the surnames on the challenged mortgage matched the surnames on the Deed.  Indeed, in footnote 7 of the decision, the Court notes that its decision should not lead to “mischief” (e.g. debtor’s claiming multiple names) because M.G.L. ch. 184, Section 25 provides that “an instrument is ‘recorded in due course’ only if ‘so recorded in the registry of deeds . . . as to be indexed in the grantor index under the name of the owner of record.’” The lesson for counsel is clear – carefully review source documents to be sure spellings are accurate and for any hint that a party may be known by more than one name.

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