Trial by the court. Barthet v. Elias. The action was for the foreclosure of a bond and mortgage, dated January, 1875, made by Jacob Elias and wife to Lissack H. Simpson to secure $3,000, on January 18, 1880, and interest payable semi-annually, assigned to plaintiff, and containing the 30-day interest clause. The complaint sets forth a deed dated March 14, 1876, from Jacob Elias and wife to Raphael Elias, of the mortgaged premises, subject to the mortgage in suit, and a deed from Raphael Elias and wife to Cecilia Elias, of the same premises, also subject to the mortgage in suit. That default was made in payment of interest due July 18, 1876, for more than 30 days, and election of plaintiff that principal shall be due. The answer sets up the defenses of tender and usury. On the trial the defendant moved for judgment upon the ground of the affirmative relief demanded in the answer that the bond and mortgage be canceled on the ground of usury, to which there was no reply. SPEIR, J. [After stating the facts.]-The defense of usury does not seek to establish another claim counter to the plaintiff's claim. Within the meaning of the Code such a claim asserts simply that the plaintiff's claim is void in law and cannot be enforced. Whether there be usury in the transaction, it is pretty plain the defendants can not be allowed to prove usury in this case. The rule is too familiar and well settled, that when the owner of land gives mortgages 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. Slauson . Watkins. If the purchaser, by taking a conveyance of the premises from the mortgagor, subject to the lien, and payment of a mortgage, could set up the defense of usury against such mortgage, the purchaser would obtain an interest in the land which the mortgagor never agreed or intended to transfer to him. It is true the mortgagor may, if he think 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 such a case, takes the equity of redemption, merely, and can not question the validity of the mortgage, on the ground of usury. The defense of usury is a personal defense. It must follow, therefore, that the defendants, Cecilia Elias and Jacob Elias, can not set up the defense of usury, for they conveyed the premises in question to Raphael Elias, and he, and his wife, conveyed to the defendant, Cecilia Elias. In both cases the conveyances were made subject to the lien and payment of the mortgage in question. The attempt to get rid of the effect by conveying the premises to Cecilia Elias, by her assuming the mortgage, on the ground that it was a mistake, and executing another, leaving out the assumption clause, will not aid the defendants. The rights of the vendor became fixed the moment she took the deed, and it was not in their power to divest him of those rights. This is clearly decided by the court of appeals. [Some remarks on the question of tender, are omitted.] In SLAUSON. WATKINS it was held, at about the same time, by the same judge, that where the purchaser, a lawyer, under a contract by which he was to assume an existing mortgage, took a deed in the name of his wife, omitting the clause as to assumption, and she in turn conveyed to a third person without any such clause, leaving the grantor apparently solely liable, a court of equity would, on satisfac Slauson v. Watkins. tory evidence, compel him to pay the mortgage in exoneration of the grantor. Trial by the court. SPEIR, J.-The defendant, Watkins, entered into an agreement under seal to purchase a house, lot and furniture of the plaintiff on the 18th of April, 1872, for the sum of $35,000, and to pay $22,000 by the assumption of a mortgage on the premises-$3,000 in his notes, and $10,000 in bonds of Midland Railroad Co. The deed and a lease of the premises were executed about the same time, but the deed was dated back-and these papers must be taken and construed together, forming one transaction. It appears that the name of Watkins' wife was put in the deed as grantee, and the clause assuming the mortgage was omitted, without the knowledge of the plaintiff, as she claims. These two facts are denied by the defendant Watkins. For the purpose of this action in one aspect of the case it may not be important what the truth is as to this dispute. It is plain that Watkins recognized, in the clearest manner, his liability to pay the mortgage. He paid subsequently $2,000 on the mortgage and got an extension for the payment of $3,000 (the balance of an installment of $5,000) and paid interest on the mortgage. Mrs. Watkins conveyed the premises to one Mason Loomis, leaving out the assumption clause of the mortgage, and thus leaving no one liable for the payment of this mortgage on the record but the plaintiff. The only question in the case is, shall Watkins, in a court of equity, be compelled to assume this liability. He, solemnly, under his seal, agreed to do so as a part of the consideration of his purchase. He entered into possession and enjoyment of the premises, and I think the plaintiff is entitled to be released from the obligation to pay the mortgage. The defendant was, by profession, a lawyer, and was dealing with a married woman, not so conversant with the effect of such a clause in the deed as assumption of mortgages or other liens. Besides, the deed and papers were prepared under his direction and the transaction was carried through with great haste. In any aspect of the case I am at a loss to see how he can escape from his written contract, especially after attempting to carry it out. The plaintiff must have judgment. Earle v. Hammond. EARLE v. HAMMOND. N. Y. Supreme Court; Special Term, May, 1872. DEFENSES IN FORECLOSURE.-APPLICATION OF BONUS. Where the purchaser of a mortgage has received a bonus in excess of lawful interest paid by the borrower for consenting to an extension of the time of payment of principal, the borrower, when sued in foreclosure, is entitled to have such excess credited on the mortgage as a payment. Form of an answer setting up this defense. A certificate given by the borrower to the purchaser, at the time of the assignment of the mortgage, that it is a valid mortgage, &c., does not necessarily preclude this defense. Direct evidence that the purchaser knew that the bonus he received came from the borrower is not essential. Trial by the court. William P. Earle brought this action against William A. Hammond and others, to foreclose a mortgage on real property. The defendant, William A. Hammond, executed the mortgage in question, on certain real estate in in the city of New York, to one John J. Brown, about December 30, 1873, to secure the payment of $12,000 on June 30, 1874. The said John J. Brown assigned the same to Henry J. Burchell, for $12,000, on January 27, 1874. On July 23, 1875, the latter assigned the same to William P. Earle, the plaintiff, who gave him his check for $12,053.66, being the face of the mortgage with the accrued interest. At the same time, Earle received an affidavit made by the defendant William A. Hammond, declaring the said mortgage and bond good and valid and free from the taint of usury, and that there was no set-off or defense at the time the transfer to Earle was being negotiated. On the same or following day, Earle received from one Huntley, a broker, Earle v. Hammond. through whom the sale of the mortgage had been negotiated, $1020. The defendant, William A. Hammond, claimed that he paid this money to the plaintiff as a bonus to induce him to purchase the mortgage, in order that the payment thereof might be extended, and insisted that the judgment should provide for allowing him the amount so paid, with interest thereon from the time of payment thereof. The plaintiff disclaimed any knowledge of the fact that the $1020 came from the said defendant Hammond, but supposed it came from Burchell.* *The answer of the defendant William A. Hammond was as follows: The defendant herein, William A. Hammond, by this his answer, shows to the court: I. That on or about January 1, 1874, he executed to John J. Brown a bond, and on the same day a mortgage, which he presumes to be the same described in the complaint herein. [The answer then informally put in issue the allegation that the transfer was afterwards made to H. J. Burchill, as described in the complaint, but with the same effect it would appear as if defendant had denied information or knowledge sufficient to form a belief as to such allegations.] II. First, for a first defense: This defendant further shows that immediately after the purchase of said bond and mortgage by said plaintiff, as set forth in folio 11 of the complaint, and on the same day, to wit, about July 23, 1875, this defendant paid to said Earle, plaintiff, on account of said obligations, the said bond and mortgage, the sum of $1020, thereby reducing the principal sum due on said bond and mortgage to $10,980. III. Second, for a second defense: This defendant further shows that on or about January 1, 1876, he paid to the plaintiff above mentioned the sum of $420, as interest or forbearance on the said principal of $10,980. That on or about July 1, 1876, this defendant again paid to plaintiff as interest or forbearance the further sum of $420. That both these sums, in all $840, was paid plaintiff by defendant for the use and forbearance of the said $10,980, for and during the period of one year, and that the lawful interest on said principal sum was not more than $768.60. That a greater sum than at the rate of 7 per centum per annum was paid by this defendant and received by VOL. II.-24 |