Den ex dem. Wilkinson v. Dodds — 1 Johns. Cas. 158

Majority

p. 195

*Den, ex dem. Wilkinson against Dodds.

Headnote

An absolute deed of conveyance of real estate upon trusts, was not allowed to be set aside on the ground of usury.

This was an action of ejectment, for a lot of land in the city of New York.

The cause was tried before Mr. Justice Kent, at the New York circuit, in March last. The plaintiff proved that his lessor was in possession of the premises for one year and upwards, before the defendant came into possession, and that the defendant claimed to hold under or through the lessor. Upon this evidence the plaintiff rested his cause; and the defendant moved for a nonsuit insisting that he ought not to be put on his defence, which motion was overruled.

• The defendant then produced and proved a certain indenture, bearing date the 7th day of February, 1797, made between the lessor of the plaintiff, and Elizabeth his wife on the one part, and William Fosbrook on the other part, purporting to be a deed of trust, and reciting three several mortgages, one bearing date the 5th January, 1796, made by the lessor of the plaintiff to the defendant of the premises, for securing the payment of 400Z. and interest, on the 15th day of May next, one other mortgage bearing date the 14th June, 1796, of the premises, for securing the payment of the further sum of 600Z. and interest, on the 4th day of December then next, and another indenture of mortgage bearing date the 1.8th day of August, 1796, for securing to the defendant the further sum of 300Z. with the interest, on the 4th day of December next, as well of the premises as of twenty-five feet square, adjoining the rear end thereof, as also of the equity of redemption of another lot of land, which was subject to the payment of 500Z. by a prior mortgage to William Alexander. “ In consideration of which said several mortgages, and of the sum of 10s. by the said William Fosbrook to the said lessor of the plaintiff paid, «fee. the said lessor of the

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plaintiff, did by the said first mentioned indenture, [*159] grant, release, and convey to the said William *Fosbrook, for ever, (subject, nevertheless, to the mortgage aforesaid to theisaid William Alexander,) all and singular, the premises, &c. in the said several, mortgages described, upon trust, and that Fosbrook, his heirs and assigns, should permit and suffer the lessor of the plaintiff (by and with the approbation and consent of the defendant, his heirs and assigns, in writing, but hot otherwise,) at any time before the 1st day of May, then next to contract and agree with any person or persons whomsoever, either publicly or privately, for the sale in fee simple (subject to the said mortgage debt of 5001. and interest, so due to the said William Alexander as aforesaid,) of all the premises aforesaid, or any part thereof for cash, and that the said Fosbrook, his heirs and assigns, should and would ratify and confirm such contract and agreement, on receipt of the purchase money. And in case the lessor of the plaintiff should not make- and conclude any such contract for the sale of the whole of the' said premises before the said 1st day of May then next; then upon trust that the said William Fosbrook, his heirs and assigns, at any time thereafter, and on or before the 20th day of May then next, should sell and dispose of the said premises, or such part thereof as should not be contracted for as aforesaid, subject to the said mortgage debt of 5001. and interest so:due to the said William Alexander, at public vendue, for the best price or prices that could be had for the same, and the moneys arising from the sale of the premises aforesaid, either by the contract of the lessor of the plaintiff or otherwise, after satisfying the costs of the same indenture, and of such sales, he the said William Fosbrook, his heirs and assigns, should and would apply in the first plage to the payment of the three several mortgage debts first mentioned, and the interest thereon, unto the defendant, his executors,- administrators and assigns, and in the next place to the payment of the sum of 2061.15s. due to the defendant on a judgment, and of a sum of 251. due to John Sleght &. Go. for shingles; and after payment of the said several sums respectively, the

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surplus money, if *any, arising from such sales, [*160] should be paid to the lessor of the plaintiff, his executors, administrators or assigns.” It was again moved by the counsel on the part of the defendant, that the plaintiff should be called to produce further evidence, or be non-suited.

The plaintiff then called on the defendant to produce the. three several mortgages made by the lessor of the plaintiff and recited in the aforesaid deed of trust, and the defendant having refused to produce the same, the plaintiff offered William Alexander as a witness, to prove that the mortgages, which were part of the considerations of the said trust deed were usurious, and made to secure the payment of money lent to the lessor of the plaintiff at usurious interest, and also to prove that the trust to pay John Sleght & Co. 251. for shingles, (which it was admitted was not a usurious debt,) was fulfilled by the trustee. The plaintiff also offered to prove that all the premises mentioned in the trust deed, had been sold and conveyed by the trustee, in pursuance of the trust, to Quinten Millen, who had become a nominal purchaser, but in fact, had purchased for the benefit of the defendant, and had accordingly conveyed the premises to the defendant; to produce which conveyance the plaintiff had given the defendant notice.

Upon this, the judge at the trial ruled, that admitting the proofs offered by the plaintiff) the considerations expressed in the deed of trust were sufficient to sustain it, and showed a title out of I he lessor of the plaintiff, and, therefore, ordered the plaintiff to be called, and a nonsuit to be entered.

Evertson, for the plaintiff,

moved to set aside the non-suit, on the ground, that the considerations of the conveyance to Fosbrook, except as to the debts due to Sleght & Co. were usurious, and the conveyance, therefore, void, and that the debt to Sleght & Co. had been paid, and the trust being so far executed, no legal consideration remained to uphold the conveyance.

*Burr, for the defendant,

contended that the con- [*161]

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veyance was valid and not within the statute against usury, but that if it were within that' statute, the consideration, so far as it was founded on the debt due to Sleght & Co., • was not usurious, and being-good-in part, it was sufficient to support the conveyance; which could not be avoided by a partial and subsequent execution of the trust.

We áre of opinion, that the consideration of the deed of trust was sufficient, and' that it was not a conveyance within the statute against usury. That statute applies to contracts and assurances by way' of security- for-existing debts only. This was not a security, but an absolute conveyance upon trusts, and Operated as a payment or satisfaction of the debts mentioned in it, which debts,' upon the performance of the trusts, would be discharged and extinguished. It was an act done in execution of the previous contracts by which the usurious debts Were created, and nothing but the trusts remained for the benefit of the grantor.. An act of this nature cannot be rescinded on the ground of usury If that were permitted in the case óf an absolute conveyance, or a conveyance upon trusts, the consequences would be extensively injurious. No man could be safe in his title' to real property, if the question of usury might at any time be opened to impeach the consideration and validity of the deeds under which he claimed.

It is obvious that the doctrine to this extent could not be toleratéd.^[1]

Motion denied.

(a) (a) In Reading v. Weston, 7 Conn. R. 143,409, Hosmer, JV, says: “ The law invalidates not only ‘ all bonds and contracts,’ made', for the payment, of usury, but ‘ all mortgages and .assurances.’ An absolute deed is both a contract and an assurance, (2 Bl. Comm. 294,) and therefore is within the letter of the law. That it is within the. object of it is equally unquestionable. The act was made to prevent usurious oppression in every case, regardless of the force or form of a transaction) with whatever garb it may be clothed, and whatever device it may assume; Lowe v. Waller, Doug. 736; Jestons v. Brooke, Cowp. 793, 796; Masser v. Dauling, 2 Str. 1243; Tate v. Wellings, 3 T. R, 521, 538; Rich v. Topping, 1 Esp. 176; Atkinson v. Scotty 1 Bay, 303 ; Carter, q. t., v. Brand, 1 Cam. & Nor. 28 , 5 Rep. 69,(b) Many evasions of the statute have been attempted, but the courts have uniformly'supported *199 its spirit, by stripping off every disguise, however plausible or specious, and unveiling the corrupt transaction. Absolute conveyances, both of land and personal property, have been invalidated on proof of usury ; Bro. tit. Usury, pi. 1; Carter v. Clay, Cole’s case, 1 Leon. 307; Peterson’s case, Cro. Eliz. 104; Doe d. Davidson v. Barnard, 1 Esp. 11.” And in Mitchell v. Preston, 5 Day, 100 , it was determined that an absolute deed of land made to secure a usurous loan, was void. But in Flint v. Sheldon, 13 Mass, R. 443 , 446, et seq., it was held that a deed purporting an absolute conveyance of land, could not be avoided or controlled in its construction by an averment, or by parol evidence of usury. The same doctrine has been sanctioned in IVIaine; Hale v. Sewell, 7 Greenleaf, 435; see Richardson v. Field, 6 id. 35, 37; Chandler v. Morton, id. 379. Though the general rule forbids that an absolute deed shall be shown by parol evidence to have been given as a mortgage, (Webb v. Rice, 6 Hill, 219 ; Cowen & Hill’s Notes, 1431,2, et seq.,) yet when this is necessary to unmask the vice of usury, the case constitutes an exception; Cowen & Hill’s Notes, 1447, where many American authorities are cited.