Court Opinion

ID: 6952064
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:33:10.940706+00
Date Added: 2024-06-11T16:08:07.023824
License: Public Domain

Mr. Justice Breese delivered the opinion of the Court: The principal objection made by appellant, to the decree of the Circuit Court, is directed to the last clause of it. After decreeing that the appellant pay to appellee the sum of thirty-five hundred dollars, with interest from December 2,1858, at six per cent per annum, less the sum of three hundred dollars paid on the 20th of April, 1858, within twenty days from the entry of the decree; and that thereupon appellee surrender to appellant the notes and mortgages assigned to him by Hunt, Osborn and Bacon; and that Samuel B. Gridley convey to complainant, by deed of release, all interest acquired by him under a certain deed of trust,— it was further decreed that the title to the mortgage made by Hervey King and wife, to Claudius B. King and wife, be divested from them, and vested in Joseph 0. Glover, and by virtue of his conveyance to Cushman, to become vested in Cushman. This is the objectionable clause of the decree, and to understand the force of the objection, some facts must be stated. Joseph 0. Glover, on the 16th of October, 1858, had purchased, on an execution which issued on a judgment he had recovered against King and Brother, certain town lots in Ottawa. King and Brother were Claudius B. and Hervey King, and the lots were described as lot 2 in block 53, and lots 1, 2 and 3, in block 54 in the State’s addition, the fee of which was in Hervey King. On these lots, Hervey King had, in Hay, 1857, executed a mortgage to Claudius, to secure five notes, each of one thousand dollars, payable in one, two, three, four and five years, with interest at ten per centum per annum. This mortgage at the time of the negotiations with Cushman, Claudius King assigned to Cushman and the notes also, as part security for the loan of thirty-five hundred dollars. The sale of the lots to Glover was made by the sheriff on the 16th of October, 1858, when by the published notice it should have taken place on the 18th of that month. Appellant and appellee and Glover were cognizant of this fact, and-, had full notice of this irregularity. It was arranged between the Kings and Cushman on the 24th of Hay, 1863, Glover having obtained a sheriff’s deed for,the lots, that Cushman, to protect the securities given to him, and for the benefit of appellant and Hervey King, should buy Glover’s title thus acquired; which he did, by the payment of eight hundred • dollars, he, •Cushman, taking the conveyance to himself. Cushman now claims, that, by this purchase from Glover of his title acquired at the sale under the execution upon his judgment, he also acquired, the notes and mortgage given to Claudius B. King by Hervey King, to pay which these lots were pledged. How this can be, we are at a loss to understand, and have not been able to appreciate the argument of appellee’s counsel in this behalf. He quotes a part of the first section of chapter 57, in relation to judgments and executions, in support of his proposition. This section, after declaring what shall be subject to execution, provides, in the last clause, which he cites, as follows: “ The term ‘ real estate,’ in this section, shall be construed to include all interest of the defendant, or any person to his use, held or claimed by virtue of any deed, bond, covenant or otherwise, for a conveyance, or as mortgagee or mortgagor of land in fee, for life or for years.” Scates’ Comp. 603. This simply means, as we understand it, by this expanded phraseology,' that equitable interests or estates may be sold under execution. When Glover obtained his judgment against Claudius and Hervey King, the first named was mortgagee of the premises, of which the last named was the mortgagor. This statute was passed to enable a judgment creditor to sell upon execution the respective interests of the parties thus situated. The mortgage, as this court has repeatedly decided, was a mere incident of the note, and the statute could not mean, that the judgment should be a lien upon the note secured by the mortgage. It has never been understood, in such case, that notes so secured passed, by the sheriff’s deed of the property pledged for their payment, to the purchaser of the property. We cannot perceive how the sale to Glover, under his judgment against Claudius and Hervey King, passed the interest in the notes which Claudius assigned to Cushman, nor the mortgage either. Ho lien attached to the notes. Glover’s judgment was only $1,000, and the notes were for $5,000, which might be collected out of property of Hervey King, the maker, other than the lots. It would be unreasonable to hold, they passed to Glover for $800, the sum at which he bid off the lots. But no title really passed to Glover by his purchase at the sale, nor to Cushman by his purchase from Glover; for it is shown, Cushman had notice of the irregularity, and Glover, as plaintiff, was chargeable with notice, and the Kings knew it also; and, with the knowledge, the weight of the testimony clearly is, that the money paid by Cushman for this interest was as a trustee for the Kings, and for their benefit. A court of equity, independent of any agreement, would consider money advanced by a trustee, to purchase in an outstanding title, as an advance for the benefit of his cestui que trust, and not for his own use, giving him a lien on the property, until he was re-imbursed the advancement. The cases of Thorp et al. v. McCullom, 1 Gilm. 625; Pensonneau v. Blakely, 14 id. 16; Wickliff v. Robinson, 18 id. 146; Hitchcock v. Watson, id. 289, and Robbins v. Butler, 24 id. 432, cited by appellant’s' counsel, fully established the principle. After the best consideration we have been enabled to give to this case, we have arrived at the conclusions above stated. Cushman must surrender those notes and sureties pledged to him by King, on the payment by appellant to him of the sum of $3,500, and interest at ten per cent per annum from the time it was received; and also the sum of $800 advanced by Cushman to purchase in Glover’s title, and interest thereon at ten per cent per annum from the time Cushman made the advancement. We say ten per cent, because it appears that was the interest agreed upon for the money loaned, and we regard this advancement as so much money loaned. The cross error assigned by appellee is not tenable. The proof is quite strong, that the mortgages given by King to Hunt, Bacon and Osborn, were paid by King, through checks on Cushman, the fund being provided by Cushman at a usurious rate of interest, and of which Cushman took an assignment to himself. The weight of evidence is, that the $350 was for usurious interest, and ought not to be allowed. We have looked into the cases of Carson and Hard v. Ingalls, 33 Barb. 657, and Bush v. Livingston, 2 Caines’ Cases, 66, cited by appellee. The first case decides, when a bond is executed in pursuance of an agreement between the parties, void for usury, but which bond is given, not for money loaned at the time when either the bond or the agreement was made, or subsequently, but for a sum of money which had been advanced to the obligor, or to his firm, previous to the making of the agreement, it is not affected or rendered invalid by the usurious character of the agreement, especially when the agreement itself, on its face, shows that the money for which the bond was given was not loaned under or in pursuance of the agreement. The case in 2 Caines is of like import, and differs essentially from the facts here. The notes and mortgages, when executed to Hunt and the others, were not tainted with usury; it was the loan of the money from Cushman to discharge them that bears the taint, and the defense of usury is leveled at this transaction altogether. For the reasons given, we are of opinion, the decree should be so modified as to require Cushman to surrender up the securities he obtained from Claudius King, which were a lien on the lots bought of Glover, on his making the payments as above directed, and that appellee Cushman pay the costs of this court. Decree modified.