Case ID: dc_9/html/0364-01.html
Source: Caselaw Access Project
Author: {"author": "By the Court : Cartter, Ch. J., and Olin, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

PETER McNAMARA vs. JOHN R. CONDON, WM. H. WARD, AND JOHN ENNIS.
    In Equity. —
    No. 4113.
    I. When a new note has been substituted for one of five secured by a deed of trust on real estate upon an agreement that it is to take the place of the original in all respects, and that it is to be entitled to all the benefits of the trust-deed the same as the original note; it is held that the cestui que trust may enforce his rights on the substituted note the same as on the other.
    II. A sum of money paid for the extension and renewal of a note will not be appropriated by the court to the payment of the indebtedness where the bill of the complainant does not show a case of usury upon which relief is prayed.
    STATEMENT OE THE CASE.
    This cause comes here on an appeal by the complainant from a decree dismissing his bill.
    The complainant, in November, 1870, made and delivered to the defendant Condon five promissory notes, each for the sum of $1,800, payable in one, two, three, four, and five-years after date, and secured the payment thereof by deed, of trust upon real estate situate in the city of Washington. The defendants Ward and Ennis were the trustees named in the deed. The first and second notes^of the series were paid by plaintiff at maturity. On or about the 12th day of' February, 1874, a payment of $1,000 was made on the third note, which was indorsed on the back thereof. On the 24th of March, 1874, complainant asked the defendant Condon, to return the $1,000 and extend the payment of said third note until the fourth should become due, and agreed to allow him $300 for such return and extension. The defendant Con-don agreed to this, and gave the complainant $700, retaining-the $300 so stipulated for. At the time of this last agreement a new note for $1,800 was drawn as of date November 1, 1870, and it was in all respects like the third of said series-of notes, and was to be substituted therefor; and it was fur-
    
      ther agreed that such new or substituted note should take the place of the other, and should be considered secured under the trust-deed the same as the original note. The new note was given for the reason that the original one had the $1,000 indorsed, which had to be erased, as the money was returned to complainant. Instead of erasing the indorsement, a new note was written, to take the place of the old one. On the 1st of November, 1874, the third and fourth notes matured, and, nothing being paid on either of them, the defendant Condon ordered the property to be sold according to the provisions of the deed of trust. The trustees advertised the property for sale and the complainant, upon filing his bill, obtained a preliminary order to restrain such sale; and at the final hearing of the cause, at the June special term, 1875, a decree was passed dismissing complainant’s bill with costs, from which decree this appeal was taken.
    
      L. G. Hine for complainant:
    1st. The plaintiff should have been credited with the $300 paid to the defendant Condon at Biggs & Co.’s Bank, 28th of March, 1874.
    2d. This $300 plaintiff treats as a payment on account. Defendant Condon says that it was given in consideration of forbearance on the third note until the fourth fell due, November 1, 1874. On his (defendant’s) statement it was usury, and plaintiff is entitled to the same advantage of it as though he had specially pleaded the retention of said $300 as usury instead of as a payment.
    
      A. G. Riddle for defendants :
    It is made to appear that every allegation of the plaintiff’s bill is disproved directly. That every statement of the defendant’s answer is fully sustained, and as alleged.
    The plaintiff now abandons his claim to the $475 which, in his bill he says he paid on the fourth note, or the $350 or $375 which, in his deposition, he swears he paid, with such particularity of time, place, and amount. He borrowed $700 on the 28th of March, 1874, and was to pay $1,000 therefor on the 1st of November following. His only claim now is, that he should be allowed on this indebtedness this $300 ; that the third, or renewed, note for $1,800 actually was given for bat $1,500, and that $300 should be deducted from this note. He makes no such case as this. He does nob allege, or in any way show, that any part of this apparent debt was for excess of interest, or a purchase-price for time or forbearance, and can have no such relief. The decree of the court below was in every respect in accord with the law and facts of the case, and must be affirmed.
   By the Court :

We think the decree below was right. It is quite clear from the testimony that the new note was, by agreement of the parties, to be substituted in place of the third note of the series, and was to be entitled, in all respects, to the security and benefit of the deed of trust, as against the principal debtor, McNamara. The three hundred dollars retained by Condon cannot be treated as a payment. The purpose for which it was allowed might have constituted usury and nothing else. There is no case made which would justify the court in granting any relief on that ground.

The decree below must be affirmed.

Cartter, Ch. J., and Olin, J.,

dissented on the last point, holding that the $300 retained by Condon should be appropriated toward the payment of the amount due.