Court Opinion

ID: 3679130
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:24:58.661287+00
Date Added: 2024-06-11T15:27:14.064227
License: Public Domain

The only question is whether a deed of trust is void which was made to secure several debts due to different individuals, some of which debts are usurious. It is not void. The estate passed, and is a security for the debts not tainted with usury. The declarations of trust only in reference to the usurious debts are void.
In Shober v. Hauser, 20 N.C. 222, it is held that a deed of trust made to secure a usurious debt is void; in that case there *Page 309 
was but one debt secured, which debt being usurious, the deed could only operate as an "assurance for a usurious debt," and was properly held to be void.
But in this case there are several debts due to different individuals; some of them are not tainted with usury, and are in no wise connected with those that are. The operation of the deed was to pass the legal estate, with a separate declaration of trust for each of the debts therein enumerated. There can be no reason why the declaration of trust in reference to one debt may not stand, and the declaration of trust in reference to another be held void. So if a deed contains a declaration of trust in favor of several debts, one of which is feigned, and there be no connection or combination between the creditors to whom the true debts are due and the grantor or person for whose benefit the feigned debt is inserted, there can be no reason why the declaration of trust in favor of the true debts may not stand and the feigned debt be treated as a nullity.
If a bond secures the performance of several covenants (430) on conditions, some of which are legal and the others void, it is valid so far as respects the conditions that are legal, provided they be separated from and are not dependent on the illegal. But if a contract be made on several considerations, one of which is illegal, the whole contract will be void. The difference is that every part of the contract is induced and affected by the illegal consideration; whereas in cases where the consideration is tainted by no illegality, but some of the debts are illegal, the illegality of such as are bad does not communicate itself to or contaminate those which are good, except where from some peculiarity in the contract its parts are inseparable or dependent upon one another. 1 Smith Leading Cases, 284; note to Collins v. Blanton, and the cases cited. Here the consideration which raised the use for the purpose of the conveyance is merely nominal. The debts secured are distinct, due to different individuals and in no way connected with or dependent on one another; the deed is valid so far as respects the good debts. It would be unreasonable and defeat the object of deeds of trust if they are to be declared void, and honest creditors deprived of their security for debts, because the debtor, without their knowledge or concurrence, may insert an usurious or feigned debt. No one would bid at a trustee's sale if he could be deprived of his title by showing that one of many enumerated debts was tainted with usury. The case of Harrison v. Hanent, 5 Taunt, 780, was relied on for the plaintiff. The case is not an authority against the conclusion above announced, but tends, we think, greatly to confirm its correctness. *Page 310 
The son of the defendant owed several debts to the plaintiffs, some of which were usurious, and wishing to get a further advance, agreed to draw three bills upon his father as a security for the whole. The bills were accepted, and the first paid; but, in a suit on the second, it was held to be void because it (431) was a security for the amount in which were included some usurious debts. Although it was urged that the amount of the first and second bills would not exceed the amount of the good debts, the reply was that if the plaintiff was allowed to recover he could apply the amount to the bad debts and sue the son on the good debts; that it was the same as if the son had given his note, with his father as security, for the whole debt. The contract was entire. The security was given as well for the illegal as the legal part; they are connected together and cannot be separated; which distinguishes it from this case. Here the debts are connected; one may be paid and another rejected. It is the duty of the trustee to pay the good and reject the bad ones. It is the same as if a separate deed of trust for each of the creditors had been executed.
PER CURIAM.                              Judgment affirmed.
Cited: Harris v. DeGraffenreid, 33 N.C. 93; Stone v. Marshall,52 N.C. 304; Palmer v. Giles, 58 N.C. 78; McCorkle v. Earnhardt,61 N.C. 301; Carter v. Cocke, 64 N.C. 242; McNeill v. Riddle,66 N.C. 294, 5; Morris v. Pearson, 79 N.C. 257, 262; Savage v. Knight,92 N.C. 500; Woodruff v. Bowles, 104 N.C. 207; Brown v. Nimocks,124 N.C. 417, 422; Sutton v. Bessent, 133 N.C. 564.