Case Name: Hartley, Executor, &c., v. Harrison et al.
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1861-12
Citations: 24 N.Y. 170
Docket Number: 
Parties: Hartley, Executor, &c., v. Harrison et al.
Judges: 
Reporter: New York Reports
Volume: 24
Pages: 170–177

Head Matter:
Hartley, Executor, &c., v. Harrison et al.
Where land is conveyed subject to a usurious mortgage, which the grantee assumes to pay, the mortgagee acquires a right to an appropriation of the land for that purpose, which cannot be divested without his assent.
Held, accordingly, that a subsequent arrangement between the parties to the deed, whereby, as between them, it became a mere quitclaim, was inoperative to open the defense of usury to the grantee.
Quaere, however, whether the personal liability assumed by the grantee is not discharged by the release of his grantor. So held in the Supreme Court, and the question not passed upon by this court.
Appeal from the Supreme Court. Action for the foreclosure of three mortgages upon-the same premises. The referee, before whom the cause was tried, found these facts; Two of the mortgages executed by Henry Harrison and wife to the plaintiff’s testator, in regard to which alone any question was made in the case, were executed upon a usurious agreement for the loan of money. Subsequent to the execution of these mortgages, Heniy Harrison and wife conveyed the land in fee to Joseph Harrison, by deed with warranty, containing, among other' things, the following provision: “ This conveyance is made subject to the payment of the said mortgages, which the party of the second part assumes and covenants to pay as a part of the purchase-money of the said premises.” The grantor covenanted that the amount due on the three mortgages did not exceed a specified amount.. After issue was joined in the cause the defendants, Henry and Joseph Harrison, intercharged releases to each other of the covenants made by them respectively, and also covenanted that the agreement contained in the deed in respect to the mortgages was annulled, and that such conveyance should have the same effect as if such agreement was not contained therein. The referee held that the releases and covenant were inoperative to authorize the grantee of the land to avail himself of the defense of usury — that the relations of the parties to the premises which had been appropriated as the fund for the payment of the mortgage could not be changed without the assent of the plaintiff. He accordingly ordered judgment directing the sale of the land for the payment of the mortgages, but that neither Henry Harrison, the mortgagor, nor Joseph Harrison, his grantee, were personally liable for any deficiency that might arise upon the sale. The judgment having been affirmed at general term in the seventh district, the defendants appealed to this court.
2?. Peshine Smith, for the appellants.
John K. Porter, for the respondent.

Opinion:
Mason, J.
The rule is a familiar one that when the owner of land mortgages it to secure the payment of a debt, and afterwards sells and conveys the equity of redemption subject to the lien of the mortgage, and the purchaser assumes the payment of the mortgage as a portion of the purchase-money, the latter becomes personally liable for the payment of the debt of the former to the holder of the mortgage. (Russell v. Pistor and Wife, 3 Seld., 171, 173, 174; Halsey v. Read, 9 Paige, 446; Marsh v. Pike, 10 Paige, 595, 597; Cornell v. Prescott, 2 Barb. S. C., 16; Blyer v. Monhalland, 2 Sandf. Ch., 478; Ferris v. Crawford, 2 Denio, 595.) The law is well settled in this state'that the purchaser who takes a conveyance of the premises from the mortgagor, subject to the lien and payment of a mortgage, cannot set up the defense of usury against such mortgage and thus obtain an interest in the land which the mortgagor never agreed or intended to transfer to him. (Post v. Dart, 8 Paige, 641; Shufelt v. Shufelt, 9 Paige, 145; Cole v. Savage, 10. Paige, 591; Ferris v. Crawford, 2 Denio, 598; Morris v. Floyd, 5 Barb., 130; Sands v. Church, 2 Seld., 347.) The principle upon which these proceed is, that the mortgagor may, if he thinks proper to do so, waive the usury and elect to affirm the mortgage by selling and conveying his property subject to the lien and payment of such mortgage, and the purchaser, in that' case, takes the equity of redemption merely and cannot question the validity of the mortgage on ground of usury. It follows, therefore, that Joseph Harrison cannot set up this defense of usury unless the release of Henry Harrison to him, of the covenants and agreements contained in the deed to him executed after the issues in this cause were joined, shall be held to have the .effect to'discharge him from his liability and authorize him to assert this defense. How, this release cannot have any such effect. Henry Harrison could not, upon any principle, release Joseph from the liability which he was under to the plaintiff in consequence of his taking a conveyance of the premises subject to the payment of this mortgage. His liability to the plaintiff was fixed the moment he received the conveyance, and it was not in the power of Henry Harrison to release him from it, and this land in his hands became the primary fund for the payments, and neither he himself nor Henry, so far as regards the plaintiff's rights, could discharge him from it or release the land from the lien of these mortgages. This liability when once created was irrevocable, and neither Henry nor Joseph could avoid it. (7 Paige, 615, 639, 640, 641; 5 Seld., 83; 2 Denio, 45; 4 id., 97.) If I am correct in the views abóve expressed, it follows that the judgment of the court below is correct and should be affirmed.
All the judges concurred in this result except Comstock, Oh. J. They, however, disclaimed any intention to pass upon the question whether the releases were not valid and effectual to discharge the grantee, Joseph Harrison, from any personal 'liability to the mortgagee for the payment of the mortgages.