2020 New Mexico Statutes
Chapter 47 - Property Law
Article 1 - Conveyances and General Provisions
Section 47-1-40 - [Construction of "mortgage covenants".]

In a mortgage or deed of trust by way of mortgage of real estate "mortgage covenants" shall have the full force and meaning and effect of the following words and shall be applied and construed accordingly: "the mortgagor for himself, his heirs, executors, administrators and successors, covenants with the mortgagee and his heirs, successors and assigns that he is lawfully seized in fee simple of the granted premises; that they are free from all encumbrances; that the mortgagor has good right to sell and convey the same; and that he will, and his heirs, executors, administrators and successors shall, warrant and defend the same to the mortgagee and his heirs, successors and assigns forever against the lawful claims and demands of all persons."

History: 1941 Comp., § 75-138, enacted by Laws 1947, ch. 203, § 13; 1953 Comp., § 70-1-38.

Application of the doctrine of after-acquired title to mortgages. — As a general rule, the after-acquired title doctrine is applicable in favor of a mortgagee of property based on mortgage convenants unless particular circumstances warrant non-application. Rabo Agrifinance, Inc. v. Terra XXI, Ltd., 2012-NMCA-038, 274 P.3d 127, cert. denied, 2012-NMCERT-003.

Where defendant granted plaintiff a mortgage on property at a time when defendant owned an undivided fifty percent interest in the property; the mortgage was granted with "mortgage covenants"; defendant later acquired the remaining undivided fifty percent interest in the property; and in its foreclosure action, plaintiff claimed that its mortgage lien covered one hundred percent interest in the property, the district court erred in ruling that the after-acquired title doctrine did not apply without considering whether defendant breached the mortgage covenant of ownership of the property by granting the mortgage on property to which defendant had a defective title that ought to be cured through an after-acquired title. Rabo Agrifinance, Inc. v. Terra XXI, Ltd., 2012-NMCA-038, 274 P.3d 127, cert. denied, 2012-NMCERT-003.

Scope of the covenant "with mortgage covenants". — The language "with mortgage covenants" purports to convey the entirety of the mortgaged premises listed in the mortgage. The presumption can be overcome by an express statement in the mortgage to the contrary. Rabo Agrifinance, Inc. v. Terra XXI, Ltd., 2014-NMCA-106, cert. denied, 2014-NMCERT-010.

Title conveyed by "with mortgage covenants" under the doctrine of after acquired title. — Where the landowner granted a mortgage on land in which the landowner owned an undivided fifty percent interest; five years later, the landowner received a warranty deed to the property that gave the landowner one hundred percent ownership in the land; the mortgage purported to convey the landowner's interest in the land "with mortgage covenants"; and the lender sought to foreclose the mortgage on the landowner's one hundred percent interest in the land on the basis of the after acquired title doctrine, the grant of the mortgage "with mortgage covenants" purported to convey a one hundred percent interest in the property and pursuant to the after acquired title doctrine, the undivided fifty percent in the land that the landowner acquired after the execution of the mortgage inured to the benefit of the lender. Rabo Agrifinance, Inc. v. Terra XXI, Ltd., 2014-NMCA-106, cert. denied, 2014-NMCERT-010.

Am. Jur. 2d, A.L.R. and C.J.S. references. — 59 C.J.S. Mortgages § 104.