Case Name: Daniel J. Terwilliger, Resp't, v. Sarah F. Beecher and Joseph Beecher, App'lts
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1890-11-28
Citations: 34 N.Y. St. Rep. 380
Docket Number: 
Parties: Daniel J. Terwilliger, Resp’t, v. Sarah F. Beecher and Joseph Beecher, App’lts.
Judges: 
Reporter: New York State Reporter
Volume: 34
Pages: 380–382

Head Matter:
Daniel J. Terwilliger, Resp’t, v. Sarah F. Beecher and Joseph Beecher, App’lts.
(Supreme Court, General Term, Third Department,
Filed November 28, 1890.)
Usury—Subrogation to lien eor purchase money.
Defendant Sarah Beecher applied to plaintiff for a loan to purchase certain real estate, which he agreed to make for a bonus over legal interest. He took an assignment of her bid, paid the purchase price and took a deed of the property, which he then conveyed to her and took back a mortgage which included the bonus. In an action to foreclose said mortgage, Held, that the same was void for usury, and that he was not entitled to be subrogated to an equitable lien for the purchase money, as every step taken by him and every act performed was in pursuance of theusurous contract.
Appeal from a judgment entered in Ulster county upon the decision of the court upon a trial by the court without a jury.
Action to foreclose a mortgage. Defense, usury. The court held the mortgage to be void for usury, but held that the plaintiff was entitled to be subrogated to the equitable lien for the purchase money, and that the defendants might, redeem in thirty days, failing which, judgment to be entered to foreclose the lien. The defendants failed tó redeem, and judgment for the sale of the premises to satisfy the lien, interest and costs was entered as directed. The court, upon the request of the defendants, found the following facts:
First. That on or about August 9, 1884, the plaintiff being applied to by defendant, Sarah F. Beecher, for a loan of $1,800 to enable her to purchase some real estate and for other purposes, made and entered into an agreement with her whereby he was to furnish her said sum with the agreement that she was to pay him for the use of such sum $75.00 besides six per cent, interest per annum.
Second. That on said August 9, 1884, she bought such real estate and signed the terms of sale therefor at the price of $1,550, and plaintiff paid for her twenty per cent, of the purchase price, $310, and took her note therefor.
Third. That on the day when defendant, Sarah F. Beecher, was to take deed for said place, about August 28, 1884, plaintiff induced her to assign her bid to him. on his agreement to take deed and to convey the same to her right away.
Fourth. That thereafter, about September 22, 1884, plaintiff conveyed same premises to defendant, Sarah F. Beecher, and took from her the mortgage set forth in the complaint herein, to secure the sum of $1,800.
Fifth. That the plaintiff paid for defendant on account of said loan for the real estate $1,550, and to her only the sum of one hundred and sixty or sixty-two dollars, and for her for drawing papers, etc., five dollars.
Sixth. That the consideration named in deed to said Terwilhger was $1,550, and in deed to defendant $1,625.
Seventh. That such taking of title by plaintiff and deeding by him to defendant, Sarah F. Beecher, was a cover and device by plaintiff in an attempt to evade the usury laws and the transaction as completed was really a loan of $1,800 as planned on August 9th, 1884, whereby plaintiff agreed to loan $1,800 to the defendant and was to receive seventy-five dollars for such loan in addition to six per cent, interest per annum.
The court refused to find that the defendants are entitled to judgment dismissing complaint; but decided that respondent is entitled to be subrogated to the purchase money paid on the sale of the property and required the appellants to pay that amount, $1,550, with interest, in all $1,898.26, within thirty days or in default thereof the respondent to have judgment of foreclosure and sale, the collateral mortgage to be delivered up. The respondents not paying the amount, judgment of foreclosure and sale was entered, with costs. From that judgment this appeal is taken.
Wm. D. Dickey, for app’lts; A. S. & W. F. Gassedy, for resp’t.

Opinion:
Landon, J.
If the plaintiff can trace his title to the lien for the purchase money without resorting to the usurious contract then the lien is valid; otherwise not Perkins v. Hall, 105 N. Y., 539; 8 N. Y. State Rep., 14.
In that case prior valid "liens were paid by the mortgagee in pursuance of the terms of the usurious mortgage and it was held that the liens so paid would be, if revived, the fruits of the usurious contract and therefore could not be revived. In Baldwin v. Moffett, 94 N. Y., 82, the prior lien was paid as part performance of the usurious contract and hence all right to it sprang from usury, and it could not be revived. In Patterson v. Birdsall, 64 N. Y., 294, the plaintiff a junior incumbrancer paid the prior incumbrance and took a new mortgage for both with usury added. The new mortgage being adjudged void, it was held that since the plaintiff as junior incumbrancer could redeem the prior incumbrance he could thus trace title to it without recourse' to the usurious contract; and he was allowed to enforce it. These cases illustrate the rule. We think under the findings of fact made by the trial court the plaintiff cannot trace title to any equitable lien apart from the usurious contract. Every step taken and every act performed was in pursuance of the usurious contract, and as the so called equitable lien had its origin in and sprang from it, it cannot be free from the taint of the corrupt agreement which produced it.
Judgment reversed, new trial granted, costs to abide the event Learned, P. J., and Mathak, J., concur.