Court Opinion

ID: 6139493
Source: CourtListenerOpinion
Date Created: 2022-02-05 14:32:21.680141+00
Date Added: 2024-06-11T08:54:34.365522
License: Public Domain

The majority of the court being of opinion with the Chancellor, for the reasons he assigned, it was ordered that the DECREE BE AFFIRMED.
Spencer, J. contra. The questions arising in this cause, are principally—1st. What is the legal effect of the indorsement made on the bond and mortgage, given to Coll M‘Gregor by Robert Cochran and nine others, whereof Ker is not one, in these words, “ I acknowledge and accept of George “ Ker, Esq. in lieu of the share which Robert Cochran holds “ in the within bond, and look to said Ker for his proportion “ accordingly. New-York, 24-th Februaiy, 1796 ?” 2d. Whether, from posterior transactions, the appellants have lost their right to insist on the mortgage as a security, as well for the nine-tenths, as for the one-tenth part of the money thereby secured', and due from Cochran, provided the above indorsement did not, in judgment of law, operate to discharge Coch*83Tan's share due on the mortgage ? I shall consider the first question independently of the alleged understanding of the parties. This, for three reasons—1st. Because this is not a controversy between the original parties to that transaction (M‘Gregor and Ker), but between the assigneeof he former and Ker. When this assignment was made to Swartwout, by M‘Gregor, it was for the whole sum expressed in the mortgage. The indorsement, to be sure, was on it; and by the true exposition of that indorsement, was his interest and right acquired in it to be determined, without reference to any conception of the parties, as to the operation of that indorsement. 2d. Because parol evidence, substantially to vary or impugn an agreement in writing, even as between the • same parties, cannot be admitted; much less between one of the parties and a third person, who has acquired a right under such agreement. 3d. Because, whatever M‘Gregor might say in relation to his understanding of the intent and operation of the indorsement, ought not to be regarded; he having, for a full and valuable consideration, assigned the mortgage as due in toto.; his subsequent declarations to the contrary, would evince that he had been guilty of a fraud in that assignment, and this would justly derogate from his testimony. If the rule, that, in assignments of choses in action, the assignee takes them subject to all the equity between the parties, does obtain upon the assignment of a mortgage, and of which perhaps there is doubt, still it cannot reach a case of this kind, where the parties wholly relied on a written stipulation, and must be bound by its construction. The indorsement will not admit of a literal construction. Cochran held no share in the bond, but was held by it to the payment of the sum expressed. M‘Gregor accepted Ker in lieu of Cochran, in the within bond, and was to look to him for his proportion accordingly. It is to be recollected, that the indorsement was both on the bond and mortgage in the same words; and it is to be presumed, because universally the case, that the mortgage had reference to the bond; and no reason can be assigned why, when the indorsement was made on the mortgage, Ker should be accepted in lieu of Cochran, as to his liability on the bond only, if the parties had intended that M‘Gregor was to renounce the real security he held. The expression of the one, is the exclusion of the other, especially when this indorsement is made on the mortgage, and refers *84to a bond. If collateral facts, existing- at the time of the transaction, be resorted, to, and if we are to imagine M‘Greg0r actuated by his interests, these considerations would unite in evincing that it could not have been his intention to wave the security he had, but merely to substitute Ker for Cochran, so far only as regarded personal responsibility. But in making up my opinion on this point, I put out of view these •circumstances, and look to the words of the indorsement, as the only true indicia of the intention of the parties. The agreement only extends to the bond, and I cannot say, in contradiction to that, the parties meant the mortgage. Have --subsequent transactions varied the case so far, as that either the debt has been forgiven, the bond discharged, as respected Cochrari?s proportion of the debt, or the mortgage reduced by as much as that proportion-? The respondents rely much on the exhibition of an account by M‘Gregor, against Ker, in June, -1796, wherein he charged the latter with Cochran’s proportion of the bond and -mortgage, and also upon the" execution of a bond by Ker and his wife, to Miss Fotheringham, by the directions of M‘Gregor, as a further security from Ker, for Cochran’s proportion of the debt in the bond and mortgage, payable at a shorter period, and at a different rate of interest than was required by the bond and mortgage given by the respondents Originally "to M"‘Gregor. These -transactions are relied on in two points' of view: first, as evidence that Cochran was-discharged from his liability ; and, secondly, as an extinguishment of the debt so due from Cochran. As regards the first, I am clearly of opinion that the indorsement on the bond and mortgage did not, in law, exonerate-Cochran from his liability. In the case of Rogers v. Payne, 2d Wil. 376, an action of covenant was brought ^or ^le non-payment of a sum of money, the defendant pleaded a discharge, in the nature of a "release withoufdeed, in satisfaction of all demands. -Upon demurrer, it was objected for the plaintiff, that the plea was ill; for that a covenant to pay money, which is by deed, .cannot be discharged without deed, and of that opinion was 'the court, and gave judgment for the plaintiff. If, then, the indorsement only affected the bond, -and if -that could not, in law, be discharged without payment or release, it follows, that the indorsement can in no Way have effect. As respects the extinguishment, nothing can be more clear or better- settled, than that, to extinguish *85‘"a debt, something of a higher nature than the debt to be extinguished must be given. To give one bond, for a debt secured by another, is no extinguishment. Had the bond given by Ker and wife to Miss Fotheringham been paid, the case indeed might have been materially changed; but after the assignment of the bond and mortgage by M‘GregOr to Swartwout, and after notice from the latter to Ker, the bond to Miss Fotheringham was, at the instance of McGregor, given up, can-celled and burnt; and when Ker might and ought to have regarded the notice from Swartwout, that the whole mortgage -was his, and he alone entitled to be paid, he proceeded to enter into other arrangements to pay M‘Gregor; and now insists on such payment, made, as I conceive, in his own wrong. Had M‘Gregor retained the bond given to Miss Fotheringham, after it was in his custody, and then insisted on Ker’s providing differently for the payment of it, the case would have been very different from what it is '; but that bond was destroyed, Ker then was at liberty to have refused payitag M‘Gregor by so much as the amount of Cochran’s share came to; this he "did not, 'though he had notice-; but aftei-wards, at a different time, satisfied IvFGregor; 'first, by a sale to him of lands at 100 per cent, more than they cost him-; and subsequently, by assigning another bond and mortgage. I have paid due attention to the authority cited by the respondents’ counsel, and I agree with him, that a mortgage may be discharged by parol, or may be forgiven, because it is not a conveyance of land within the statute of frauds; but this mortgage has never been discharged, or forgiven, or paid, until after it was assigned. I agree further, that the payment of the money will draw the land after it, provided the payment be to the right party. A bond, however, cannot be so discharged. On the whole, it appears that the appellants or respondents must lose so much as the share of Cochran amounted to. The appellants gave a’full consideration for the mort.gage; the respondent Ker has paid to the amount of Cochran’s share, but he so paid it to a person not having a right to receive it, with full notice not to pay him ; he paid it, too, without any legal necessity, consequently he ought to pay it again, and to the right person. I am of opinion, that the decree ought to be reversed, and that the appellants be permitted to insist on a foreclosure, as well for the amount of Coch-ran’s.proportion of the debt, as the .residue of the mortgage, -