source: Caselaw Access Project

author: Per curiamdelivered by Spencer, J.

license: Public Domain

text:
    John Bush, Appellant, against Peter W. Livingston, and John Townsend, Respondents.
    A security made on agooc!, and bona Jide consideration, cannot be impeached on account of a usu-z~ious transfer. Therefore, where a inortgage is assign. ed to a third person, who pays what is due on it to the mortgagee, the mortgagor canswt avoid it in the hands of that third per-eon on account Of an agreement to repay him a sum, exceeding the money paid, and legal interest, though the excese will be denied, and cniy the money actually paid, and lawful in-tel-eat allowed. cause come befrn e this court on appeal from an interlocutory order, and the whole merits of the case appear, the court will make a final decree, and direct the chancellor to carry it into ef~
    FROM the pleadings, and cases delivered in this cause, the facts appeared to be these. Livingston, in the years of `96 and `98, borrowed of one Evertson, the two several sums of 3,000 dollars and 2,793 dollars, on mortgage. The clay of redeniption having elapsed, and Livingston being further indebted to Evertson, for interest and some other matters, amounting, with the above principal sums, to 6,222 dollars, .Evertson demanded payment. In consequence of this, Livingston arranged with him to pay 5,600 dollars cash, and give his notes for the residue. This being acceded to, Livingston applied to Bush to advance the 5,600 dollars to Evertson, agreeing to repay it in 90 days, with a douceur of 400 dollars; the money thus advanced, and the doucew' to he secured by an assignment from Evert-son of the two mortgages, and their concomitant bonds; each of the several assignments to express 3~000 dollars to be the consideration paid by Bush to Evertson. These transactions being thus concluded, Bus/i gave to Livingston the following receipt: "Received this day, an assignment of one mortgage, hearing date the 4th day of June, 1796, given by P. W Livingston to Nicholas Evertson, aiid of another, bearing date the 30th day of January, 1798, also given by the said Livingston to said .Evertson, tog~ ther with the bonds accompanying the same, which bonds and mortgages I acknowledge myself to hold, of the said Livingston, as security for the payment of six thousand dollars, in ninety days from this date, and upon payment of said sum, I hereby agree with said, Livingston to procure the said bonds and mortgages to be cancelled. In witness, See. 22d July, 1799, . John Bush.”
    The money not being paid, Bush, in September, 1800, filed his bill to foreclose, against Livingston and several of his judgment creditors, stating, among other things, “ that Peter W. Livingston applied to the said John Bush, and requested him to lend the said Peter W. Livingston a sum of money, and offered to secure the repayment thereof by procuring an assignment from the said Nicholas Evertson to the said John Bush, of the said bonds and mortgages.” The bill also set forth, that the assignments of . the mortgages were made “ for a full and valuable con™ sideration, paid by the said John Bush to the said Peter W. Livingston, and by him to the said Nicholas Evertson, as by the said assignments, indorsed on the said indentures of mortgage, and ready to be produced as the court shall direct, and to which he for greater certainty refers himself, may appear.”

      Livingston put in his answer, and after admitting the mortgages, demand of payment by Evertson, and his own inability, added, that “ being urged by his necessities, he applied to the complainant, John Bush, to borrow a sum of money, to pay off the said bonds and mortgages, or the greater part thereof, whereupon she saidJohn Bush, taking advantage of his necessities, offered to loan him 5,600 dollars for ninetf days, if he, this defendant, would agree to repay th~ same at the expiration of that time, and to allow and pay, for the use and forbearance thereof for that time, four hundred dollars, to which this defendant, i~nder the pressure of his necessities, agreed." The answer then went on, and set forth the contract for the ad~ vance, in the manner already stated, averring the doz&. ceur of 400 dollars to exceed the legal interest, for the ninety days, of the sum lent; that, therefore, the secu~ r~ties were void in the hands of the appellant, and praying to have them decreed to be given up to be cancelled.
    In support of the answer, Livingston examined Evertson as a witness, and he deposed, that the sum paid to him by the appellant, was no more than 5,600 dollars, which he considered as a loan from Bush to Livingston ; but, that as to any further consideration for the assignment of the mortgages, he was ignorant, though he acknowledged that he drew up the receipt given by Bush to Livingston on the execution of the assignment of the mortgages.
    After publication had passed, and the cause, as between Bush and Livingston, was ready for hearing, Livingston became a bankrupt, and Townsend being duly appointed his assignee, Bush, in February, 1803, filed a supplemental bill, making him a party.

      Townsend, in his answer, admitting himself assignee of the estate and effects of Livingston, craved the 'benefit of the pleadings and proceedings on the part of Livingston, and insisted on the several matters therein offered and insisted on by Livingston, as a defence and bar to the complainant’s claim, which matters, he added, “ he was informed and believed were true.”

      The cause, as against Livingston, came to a hearing upon the pleadings and proofs; as against Townsend, upon bill and answer, when the chancellor made a decretal order, directing an issue to determine whether the assignment to Rush was an usurious contract, or one bona fide made. As, however, no specification was made of the evidence to be read on the trial of the issue, and the counsel for the parties could not agree on what should be adduced, application was made for directions as to the proofs to be used, upon xvhich his honour the chancellor was pleased to order, “ that the parties have leave to read in evidence the complainant’s bill of complaint, the answer of the defendant, Peter W. Livingston, the mortgages in the pleadings mentioned, and the assignments thereof, with the exhibits and proofs taken and used at the hearing of this cause in this court, saving to the parties just exceptions to the said defendant’s answer, so far as the same is not an answer to the matters alleged in the said bill of complaint; and further, that the said parties respectively be allowed to offer any additional, or other evidence, which may be pertinent to the' issue so to be tried.”
    From this order the complainant appealed, contending, that it ought either to have designated what specific parts of the bill, mortgages, &c. should be read in evidence, or have left it at large to the supreme court, to determine what should be so used ; because, from the manner in which the order was expressed, it was referred to the supreme court to determine what should be deemed an allegation in the bill. He also insisted, that whatever might be the decision on this point, still, as the court now had the. whole case before them, they would, of course, dc~. cree definitively on the matter, and that, theref'ore, he had a right to suggest and in~ist on whatever might be deemed material, to show that he was entitled to a decree of foreclosure, which this court might pio~ flounce, and remand the cause to chancery, mere'y to carry such decree mt2 effect.
    The respondents, on the other hand, urged, that the order alone, being appealed from, this tribunal had only to decide, whether the chancellor, on ordering a feigned issue, has power to direct what proofs are to be offered ; and, if he has, whether such power was, on the present occasion, legally exercised ?
    On the cause being brought on, the chancellor thus assigned his reasons.
    Mr. President, the bill in this case, after stating the mortgage and assignment, and alleging that the latter was for a full and valuable consideration to the appellant, contained no particular interrogatories, but merely required the respondents to make true, distinct and perfect answers, upon their corporal oaths, to the matters and things in the said bill set forth.— The respondent, Livingston, stated the assignment to have been made for a usurious consideration. This appeared to me pertinent to, and a direct answer to one of the objects of the general interrogatory.
    This part of the answer cannot be reconciled to the testimony of Mr. Evertson, and it was, therefore, a proper subject for an issue.
    That the bill might have been so drawn as to avoid this consequence, as was strongly urged, could not vary the result. The answer contained a precise negation of the allegation on the part of the appellant,
      that the assignment was made, for a full and valna'~le considen~tion; and, I take it, I could not decrLe against this answer, on the testimony of one witness contradicting it. I, therefore, directed an issue, to try whether the assignment was a usurious, or a lona fide contract. -- -

    The certain effect of sending the matter to a jury, without the answer, unless the allegation of the respondent could be effectually supported aliunde, Would be a verdict disaffirming the answer.
    But the intent of the issue is to refer to a jury, whether the greatest degree of credibility is to be attached to the answer, or to the deposition. If either party have any auxiliary evidence, that may cause the one, or the other to preponderate ; but to compare, they must, of course, be contrasted and weighed.
    The circumstances of the case, and the rule to be observed, appear, to me, too clear to admit of doubt.
    It was said, there was no general rule on the subject ; but the rule is well established, that if a case be sent to a jury, on the ground of the evidence being in equilibrio, the answer must be sent, as well as the evidence in the cause.
    Withdraw the answer, and the scale must, in a moment, kick the beam, for then, there is nothing to form an equipoise.
    But it was said, that the allegations of the defendant were in avoidance, and so not evidence. This, I conceive, has been already answered, and, therefore,~
    I, therefore, sent the answer to the jury, as part of -the matter on which they were to de~ermine~

      Benson, for the appellant. The permission given to read the answer of Livingston, in evidence, on the point in issue, that is, whether the contract were usu-ri°us or not, was improper; because, that part only of an answer can be adduced in testimony, which is an answer to the allegations of the bill. Whatever goes in avoidance, even of that which is admitted, must be proved. Gilb. L. Ev. 52. As, therefore, the bill did not allege usury, but the defendant insisted on it, in avoidance of the securities alleged to have been entered into, the circumstances creating the usury, could not legally derive any support from the answer. This doctrine is sanctioned in Barn. Ch. Rep. 373, where it is said, that, on an injunction bill, “ if a plain equity be-set forth by the bill, and admitted by the answer, but endeavoured to be avoided by another fact, the injunction shall always be continued till the hearing.” The same principle is to be found in 2 Eq. Ca. Abr. 247. It is no argument against this, to urge, that the bill states the assignments to have been made “ for a full and valuable consideration.” They are words of course, the addition of counsel, and mere surplusage ; for it was not necessary to do more than state the execution of the deeds, and pray a foreclosure. Besides, the expression itself is used with a reference to the indorsements on the mortgages, and cannot, therefore, be deemed a substantive allegation. We also contend, that, in the present instance, the chancellor had no right to order an issue. This is a power to be exercised only in cases of doubt, where the question is on the credibility of witnesses, or on which side circumstances preponderate. Here, there could be no hesitation* The answer of Livingston
      was inadmissible on the point of usury, and Evertson, his own witness, who cannot, therefore, be discredited by him, says, he knew not of any. But, admitting that Livingston's answer is to be received as testimony ; it does not contain any fact amounting, in judgment of law, to usury, so as to affect the securities in the hands of the appellant. The statute against usury applies only to original contracts between borrower and lender, upon which securities are given. The maxim, therefore, is, once usury and always usury ; but if not usury in its inception, it can never become so afterwards. It follows, that subsequent discounts or purchases at an under value, however unconscientious, can never taint the original contract. But however this may be, as all the transactions relating, both to the original contract and the assignment, are fully before the court, and as it is not pretended that any further light can be thrown oil the subject, the tribunal, before which the cause is now brought, will decide on the whole case, without referring it back to an examination, which will serve only to bring it here again. In Le Guen's case the same thing was done, and it is no more than the ordinary course of the court.

      Riggs & Hoffman, contra.
    To determine wheter the answer of Livingston ought to have been ordered to be read as evidence, it is only necessary to recur to the practice of the court of chancery, and the circumstances of the case. As to the first; whatever is stated in the bill must be answered, though not interrogated to; for were all the interrogatories, which are usually annexed to a bill, totally emitted, still every part must be answered; because what it sets forth is deemed an allegation. Thus, a defendant is under the necessity of answering, on oath, what is contained in the bill; and the plaintiff ^as tiie advantage of purging the conscience of his adversary. But when he has done this, he cannot take a part of the answer which suits his purpose, and reject the residue, under a pretence, that the matter in his bill to which it applies, was surplusage, and needed not to have been answered. Here a consideration was set forth, on which the assignment of the mortgages was made. The defendant, Livingston, was therefore called on, either to admit the consideration as stated, show some other, or deny it altogether. Hehasshown it tobeusurious, and had the cause, with respect to him, gone to trial on bill and answer, it would have been complete evidence. There was, however, a witness examined, and as the chancellor might apply for the assistance of a jury, to aid his determination, it was indispensable to order the answer to be read in evidence, for otherwise there would have been nothing to oppose to, or explain the testimony of Evertson, and the verdict must necessarily have been according to his depositions. It was requisite that Livingston's answer should be read in testimony on another ground. The cause, as between Bush b? Torvnsend, went to trial on bill and answer; all, therefore, that he says,he believes to be true, and what he refers himself to, must be received as truth. The answer of Livingston he expressly mentions, adding, that he had been informed and believed “ the matters therein contained were true.” Besides, when Totvnsend was, by the supplemental bill, made a party, Livingston became a substantial witness. That the chancellor can direct an issue only where the testimony clashes, is not correct. In 2 Vern. 554, the answer of the defendant was directed to be read in evidence, merely to enable to draw an inference~ The truth is, that, in n-iost cases, it is discretionary in the chancel~ br, whether he will send the cause to a jury or not, and that there is no settled practice on the subject, except where an answer denies, what one witness affirms. Then, indeed, an issue is ordered of course, because, on such occasions, the rule is, that chancery cannot make a decree. Lord Milton v. Edgworth and others, 6 Bro. Pa. Ca. 580. Pember & ux. v. Mathers. 1 Bro. Ch. Rep. 52. The principles on which courts of equity proceed, when they order an issue at law, are fully laid down by Lord Kenyon, in 7 D. & E. 667. if, says he, "a court of equity direct an issue to be tried, it may modify it in any way it thinks proper. One of the rules of courts of equity is, that they cannot decree against the oath of the party himself, on the evidence of one witness alone, without other circumstances; but, when the point is doubtful, they send it to be tried at law, directing that the answer of the party shall be read on the trial; so they may order, that a party shall not set up a legal term on the trial, or that the plaintiff himself shall be examined, and when the issue comes from a court of equity with any of these directions,, the courts of law comply with the terms on which it is so directed to be tried.” As to matter of avoidance being to be proved, that we do not deny. The nature, however, of an avoidance is to be seen. It is something subsequent and dehors that which is admitted or alleged. As if a debt be acknowledged, but it be added “ you released it,” or “I paid it.” There the release, or payment, being matter of avoidance, must be proved. The answer is not by way of avoidance of that which is admitted, but of showing it to be otherwise than stated, and was, therefore, proper testimony. Not only the answer, but the very bill may be ordered to be read in evidence. 1 Morg. Ess. 111. 1 Ch. Ca. 65. The chancellor, therefore, had the power to order the issue directed, modifying, as he pleased, tjie evidence to be used, and, though the reading the answer is confined to the allegations of the bill, that part relating to the consideration of the assignment was proper, because it was alleged to have been bona ji.de. The circumstances of this case render it pécuIiarlv a matter for jury reference. Bush is stated to have paid but 5,600 dollars to Evertson, and the consideration mentioned, in the assignment itself, is 6,000 dollars. It ought, therefore, to have been left to a verdict of twelve men to ascertain whether the extra 400 dollars was not a usurious forbearance for 90 days. That it was so, seems almost confessed. Bush sets forth, that Livingston applied to him to borrow money ; Livingston admits it to bé a loan, and Evert,son asserts, that he thought the 5,600 dollars were lent by the appellant. When all parties thus call the transaction a' loan, it cannot be pretended it was a purchase. It is said, however, if the primitive contract was not usurious, no subsequent matter will make it so.' True, as between the original parties. But what is the contract here ? The mortgages ? No. The debt created between Livingston and Bush to pay off those mortgages, and for which the assign, xnent was to be the security. Bush takes the mortgages, not on the original valid consideration, but on one that was foreign to them, new, and tainted. Itis strange that the securities shall s~ancl good for a consideration, which, if they did not exist, would be illegal. It has been ruled, that the security was void, though the debt remained, but never till now argued that the debt was void and the security good. This would be an easy mode of slipping through and evading the ~tatute. V'7herever there is a borrowing and lending, it is within the act, and it is not in the wit of man to frame a contrivance to take the transaction out of its operation. Cowp. 115. 776. Doug. 740. In 5 Bac. Abr. 419. old ed. p1. 6, there is a case which shows that usury may taxe place upon a security onginally good, and be insisted upon, between the parties themselves. The indorsor of a note for 200 pounds, which had three months to run, passed it to the plaintiff, for the consideration of 197pounds; at the end of that time, another note at three months, for 200 pounds was given, and 3 pounds more paid. It was by Lee, C. J. referred to a jury, to determine whether the transaction was a loan or a purchase; they determined it to be the former, and it was held usury. This authority does away all idea of a purchase, and establishes, that a new security for a debt originally legal, if compounded with a usurious receipt of interest, is bad for the whole, as against the borrower,. But though the subject of usury or not, has been entered into, this court can pronounce only on that which is appealed from ; the order and its contents.

      Harison and Benson in reply.
    We do not deny the power of a court of equity to send a case to a jury. But it is not an ad libitum power, and, when exercised must be for the determination of a fact,- not a matter of law. Here the simple question was, whether, on. the circumstánces detailed, the transaction were usurious or not. This being an inference of law, ought to have been made by the chancellor. He -eouid not contemplate the addition of Livingston's testimony as a witness, because, to render it admissible, he must have released the surplus of his estate, and the contingency of such an event was, in itself, sufficient to prevent any measure being taken upon the expectation of it. Besides, the issue is, in fact, to try whether the defendant, or his own witness, is to be believed. There is no instance of such an order. Allowing, however, that it was correct to send this cause to a jury, that could not be directed to be used as evidence before them, which was not so in chancery.— The answer would not, even there, have been testimony to establish the usury; for, as containing new matter, in avoidance, it must have been proved by something extrinsic. For, what avoids, needs not be subsequent. Any circumstance which destroys the otherwise legal consequence of a thing, whether it be cotemporaneous, concurrent or subsequent, is matter of avoidance. Thus, infancy and usury are avoidances, but the former is not a subsequent matter, and the latter takes place in the formation of the contract it avoids, at the very time it is created; yet each, if relied on, must be proved. On this point, the rule in equity, is the same as at law. In both, the defence must be strictly made out by evidence. This principle is found in Tate v. Wellins, 3 D. & E. 531. Because, as is laid down in 5 Bac. Abr. old ed. 420, pl. 7, “ a court will, not easily avoid a bond, and the corrupt agreement ought to be specially and particularly set forth, and the quantum of interest, otherwise the plaintiff can never tell what to answer.” It
      is not possible to vacate the securities in the hands of the appellant, on the score of usury, unless it be shown to have existed in the original transaction between Livingston and Evèrtson, for it is in right of the latter that Bus/i now claims. He can recover from Livingston no more than is due in virtue of the primitive contract, which cannot be impeached by an ex post facto agreement between Livingston and the assignee of Evertson. Neither in law nor in equity, is the plea of usury a favourite. By each tribunal the money actually paid is deemed in conscience due, and endeavours are invariably made by both, to give back the principal and legal interest, though they may deny the surplus or excess. In a case in 4 D. & E.

       it was una voce laid down, that if an instrument can, by any reasonable construction, be considered not usurious, the court was bound to do so. As, therefore, in this case, the whole merits are before the court, and the securities held by the appellant were given on a bona fide consideration, we ask for a final decree.

       Allen v. Crobcroft.

       Evertson v. Rhodes.

       Bauerman v. Radenius.

       Woollet v. Roberts.

       Floyer v. Edwards.

       Jestons v. Brooks.

       Lowe v. Waller.

       Massa v. Danling, 2 Stra. 1143.

       Le Grange v. Hamilton, 4 D. & E13.

   Per curiamdelivered by Spencer, J.

The appellant’s counsel have insisted on the argument,

1st. That so much oí Livingston's answer as charges the appellant with usury, is not evidence, and is to be proved aliunde.

2d. That the order of the chancellor, in leaving at large, what part of the answer was to be read, is therein erroneous.

3d. That if Livingston’s answer is 'to be received as evidence, in toto, the charge of usury is not, in law, established.

4th. That an issue ought not to have been directed in consequence of contradictions, between Livingston and his own witness, Evertson.

5th. That the whole merits of the case being be» fore this court, it will decide thereon definitively* and remit the cause to be carried into execution';

The counsel for the respondents have combatted these propositions, and insisted,

1st. That, independent of Livingston’s answer, the fact of usury is made out.

2d. That from the state of proceedings, in relation to Townsend, the charge of usury is established;

3d. That from Livingston’s bankruptcy he can now be rendered a competent witness, and, therefore* an issue ought to be directed.

' In investigating this cause, several of the points raised will not be examined, as a decision on them would be superfluous, from the view I have taken of the subject. It appears to me, from the authorities I have consulted, that, admitting Livingston’s answer in relation to the usury to be evidence, and to stand uneontradicted, I still must maintain, that there existed no usury as applicable to the bonds and mortgages assigned to the appellant; and that, whether the answer is or is not evidence, still, that with respect to the excess of the 5,600 dollars paid by the appellant to Evertson, the testimony of the latter, and the admissions in the bill, show that the appellant cannot recover it.

I now proceed to examine whether the transactions stated in Livingston’s answer, will, under the notion of usury, deprive the appellant of his right to hold the mortgages assigned to him as a security for 5,600 dollars, and the legal interest which has since accrued thereon. In the research I have made, I have met with no authoritjY'or even dictum, that a security for the payment of money, in its inception uncontaminated with usury, can, by an ex post facto agreement for a receipt of a greater sum than the statute allows for forbearance, be rendered usurious. In the case read by the respondents’ counsel, from 5 Bac. Abr. 419, pl. 6, there was a renewed obligation, in which the usury and the bona fide debt were consolidated, and there it was held to be usurious. But this case is not law, as wall, I think, be hereafter shown.

The first essential to usury is, that there be a loan. Hawkins, in 2 vol. 373, sec. 1, says, “ that it is a contract, on the loan of money, to give the lender a certain profit for the use of it upon all events, whether the borrower make any advantage of it or not, or the lender suffer any prejudice.” It is true, that it may take place in relation to the rent of lands, or the sale of goods, but, as applicable to this case, an inquiry into usury of that kind cannot be necessary.

It is true, that the appellant, Livingston, and the witness, Evertson, speak of the money paid by the former to the latter, as a loan from Bush to Livingston. The transaction, however, must decide that point, and not the expressions and language of the parties. Bush says, that Evertson having demanded payment of his debt, Livingston applied to him, and requested him to lend him a sum sufficient for that purpose, and offered to secure the repayment thereof, by procuring an assignment to Bush from Evertson ; and that, accordingly, on the 22d of July, 1799, the assignments were made in due form of law. Livingston states, that, being urged by his necessities, he applied to Bush to borrow a sum of money to pay off the bonds and mortgages, and that Bush, taking advantage of his necessities, offered to loan him 5,600 dollars for ninety days, if he would allow him for the forbearance 400 do1Iars~ to which he consented. That it was then agreed between Bush, Evertson and himself, that Bus/i should pay Rvertson 5,600 dollars to~ wards satisfying him for the amount due on the bonds and mortgages, and that Livingston should secure to Evertson what should remain due for principal and interest, Evertson assigning to Bush, to secure him the repayment of the 5,600 dollars, and also the 400 dollars, in pursuance of which agreement, the bonds and mortgages were assigned. Evertson deposes, that he understood and believed the 5,600 dollars paid him by Bush was a loan from Bush to Livingston, and his reason for so believing was, that the money was paid at the request of Livingston for his .--ole benefit. The transaction between Bush and Livingston was substantially this: Bush,'to gain 400 dollars for ninety days forbearing of 5,600 dollars, advanced the latter sum to Evertson for Livingston, upon good and valid securities, and took the assignments as for 6,000 dollars.

As between Evertson and Bush, there can be no question that the latter became invested with all the right of the former to the sum then actually due on the bonds and mortgages. In fact, this payment was not a loan to Livingston, because Bush paid it to Evertson, as the consideration of his assignment. If Evertson himself, without the interv ention of Bush, had exacted 400dollars, or any other sum,fromLivingston, for forbearance for a limited period, such exaction, however usurious, would not invalidate the bona fide securities. In the case of Pollard v. Scholy, Cro. Eliz. 20, Pollard sold to Scholy two oxen for 6l. 6s. 8d. payable at All Saints next; on the same day Scholy required a longer time ; Pollard gave him to the first of May, paying to him for forbearance, three quarters of wheat, which amounted to more than the legal interest. In debt for the 6/. 6s. 8d. the defendant pleaded this in avoidance of the contract. The opinion of the justices was, “ that the statute does not make the contract void which was duly made, but doth only avoid all contracts for usury, and this last contract is void, being against the statute, but the first was good, being made bona fide. In 2 Hawk. 377, sect. 17, is this case—“A. was fairly indebted to B. in 1,125/. and on A. desiring time to pay it, B. insisted that 150/. should be added to the debt, as he would have nothing to do with interest. Accordingly, A. gave him five acceptances for these two sums, payable within fourteen months, and it was held, that the bona fide debt subsisted, unimpeached by the subsequent'usurious transaction.” A reference to the reporter, from whom the antecedent decision is taken, fully justifies the summary of the case in Hawkins. The same principiéis recognised in 7 Mod. 119. Sir T. Ray. 196. 4 Burr. 2253. and in Vin. Abr. Tit. Usury, H. pl. 6, it is laid down, “ that if the first contract is not usurious, it shall never be made so by matter ex post facto A The case of Ferral v. Shaen, 1 Saund. 294, is also to the same effect, that a bond, which was good when made, is not avoided by a subsequent usurious contract for delaying the day of payment.

All these authorities proceed on the wording of the statutes against usury. They forbid the taking more than the rate of interest prescribed, and declare all assurances, &c. whereby more shall be" reserved, or taken, to be void. Now if, in this case, the bonds and mortgages in their creation were valid, if no more interest was reserved than the law allowed, how can they, conformably to this statute, and the universally concurring expositions of it, become void ? If the mortgages and bonds cannot be affected by the charge of usury, much less can the assignment, for the reason, that this is an act between Evertson and Bush. Evertson was capable of parting with his interest in these securities, and Bush of taking it. Evertson has assigned, for an adequate consideration, all his right to the bonds and mortgages, and this cannot be impeached on the pretence of usury between Bush and Livingston ; because, as Livingston is not a party to the assignment, he cannot complain that it is an assurance by which he is bound to pay more than the sum then due on the mortgages.

I think the appellant not entitled to recover more than the 5,600 dollars, and the interest, on two principles, independently of Livingston’s answer. 1st. When Evertson made the assignment, Livingston, as is,proved by Evertson, gave him two promissory notes for the balance beyond the 5,600 dollars paid him by Bush. These notes were accepted by him as a payment of so much, to wards the mortgages and his account, and have since been actually paid in full. The assignee of all chases in action, excepting bills of exchange and notes, takes them subject to all the equities between the original parties. Bush, therefore, though assignee, nominally, for 6,000 dollars, can exact no more than Evertson could, and clearly, by transactions between Evertson and Livingston, before or at the time of assignment, no more, as between them, than 5,600 dollars could be collected oh the * bonds and mortgages. But 2dly, from the appellant’s state of his own case, in connection with the testimony of Evertson, it appears, evidently, that the appellant availed himself of the necessities of Livingston to obtain more than legal interest; and, to use the expressions of Lord Mansfield, "though the transaction itself may not amount to usury, yet it was taking a hard and unconscionable advantage." In the case of Floyer v. Edwards, Cowp. 116, it was held that money, thus claimed, should not be recovered in an action for money had and received. In a court of equity, whose peculiar jurisdiction it is to relieve in cases of fraud, and whose maxim it is, that he who woidd have equity, must do equity, I think there can be no doubt, that, apart from the consideration of usury, the appellant ought not to recover beyond the 5,600 dollars and the interest. To this I conceive him well entitled. The principles I have advanced, and the conclusions I have drawn, lead to the most equitable and righteous result. The appellant obtains the money really advanced, with interest, and the respondent is relieved from the advantages attempted to be taken of his distresses by the appellant.

It will be observed, that I have abstained from any inquiry into the correctness of the chancellor’s order, in point of form ; because, in my opinion, the issue, if correct in form, would have been upon a point wholly immaterial. The respondents could never have made out more than Livingston alleges, and on his allegations, taking- them for true, my opinion has proceeded, so far as respects the question of usury.

There remains only one point necessary to be considered ; that is, whether this court will finally decide the cause ? In the case of Gouverneur & Kemble v. Le Guen, this court, on an appeal from the order oI the chancellor, directing an issues finally decided the cause, and directed the complainant's bill to be dismissed. It did so on precedents fr~m the pro~ ceedings of the House of Lords, in England, on appeals from chancery, and because the whole merits of the case were before the court. When it is considered that there can be no further proofs in the cause, that the whole merits have been discussed and reviewed, that it will save litigation and expense, I am myself contented to be bound by the precedent which has been made. In my opinion, the order appealed from ought to be reversed, and an order entered, that the chancellor decree the respondents to pay the appellant, by a time to be limited, 5,600 dollars, with interest, from the 22d of July, 1799, with costs, in the court below to be taxed, or that the respondents be foreclosed their equity of redemption.

Judgment of reversal accordingly.

Hallet and Bowne against Jenks.

IT was ruled, that a cause cannot be set down for # hearing, till cases are delivered.

       See Turner v. Hulme, 4 Esp. Rep. 11, a note given for the liberation of a defendant under Arrest, on a usurious note though for the amount of the very usurious note, cannot be impeached for the usury of the first note, where a third person joins in the second note,

        Gray v. Fowler, 1 H. Black. 462, S. C.

         The Queen v. Stwel.

        Rex v Allen.

         Abrahams v. Bunn.


author: Per curiam, delivered by Thompson, J.

text:
      Amos Wetmore, Appellant, against Hugh White, and Hugh White Junior, Respondents.

      By a sale of mills, the water of the raceway, will pass as an incident. If the waterin a stream be nwn~ ed by two persons, whose lands are on opposite sides, & they agree to erect mills on the landof one, and turn the whole stream to the mills ; it is an appropri~ ation of the water to the mills, and if they be held jointly, or in common a release of the right of one te. nant in the mills, will pass his right in the water also. Payment of consideratioi~ money, possession and making improvements, take a case out of the statute of frauds, and will entitle to a decree, for a specific performance.

      THE appellant being seised of 250 acres of land, on the east side of the Sag/zquate creek, in TY/zitestown, together with a moiety of the soil tinder water, and the respondent, Hugh White, the father, being scised of 300 acres on the west side, with the other moiety of the bed of the creek, entered, in the year 1787, into a verbal engagement, to divert, on their joint account, for the use and purpose of mills to be. erected, the water of the stream to such spot in the grounds of either, as should, in the opinion of one John Beardsley, be most proper for the site of a mill. In pursuance of this agreement, B~ards1ey examined the ground on both sides of the creek, and fixed upon a place in the lands of the appellant. Having thus ascertained where the erection should be made, H'~t-more, White senior, and Beardsley, on the 13th of May, 1788, executed a written agreement, to build a grist-mill, on Wetmore's land, a few rods north of his house; he and White, to " own" each one-fourth of the mill, in consideration of furnishing all materials, &c. and constructing the dam to turn the water of the creek; Beardsley to "own" the other two-fourths, on doing the carpenter's work, &c. Upon these terms the mill and dam, being in the course of the year 1788, completed, it was, about the time when they were finished, verbally agreed between the same parties, to build, adjoining to the grist-mill, a saw-mill, to be supplied with water in the same manner, and to be" owned" in equal proportions by the three. rI~1lis also being carried into cffect, the mills were used and
      enjoyed according to the preceding agreements, for about three years; when, being very much out of repair, Beardsley, in 1791, in consideration of 600 dollars, by release, duly transferred his interest in them, to the appellant, who, under a parol contract, when they were totally unfit for use, shortly after purchased from Hugh White, the father, his proportions, for 187 dollars, and paid the money, but received no conveyance of the shares White held in the property, nor was any thing said of the right to the water of the creek.
    On concluding the antecedent transactions, the appellant took down the saw-mill, which had become perfectly useless, and rebuilt it entirely. He also, after thoroughly repairing the grist-mill, added a pair of new mill-stones, and peaceably enjoyed both mills, for the space of one year, when they were accidentally burnt down.
    Immediately after their being thus destroyed, the appellant, at a very great expense, and without any opposition or molestation from the respondents, rebuilt the mills, and continued in the use and occupation of them, and the uninterrupted enjoyment of the water of the creek, until August 1797, when the respondent, Hugh White, the father, threatened that he would cut down the dam, and deprive the appellant of the use of the water, unless he would become a Presbyterian, and join the congregation under the charge of the reverend Bethuel Dodd, and would also build a dam and turn one-half of the water of the creek over a meadow contiguous to the Saghquate, and adjoining to the dam erected for the use of the mills; which meadow, on the ¿5th of April, 1794, the respondent, Hugh IFkite, had, in consideration of blood and natural aíLcdon, conveyed, with a moiety of the Waters of the creek, to his son, Hugh White, junior, the other respondent.
    In September and October, 1797, the dam across the creek was, to the great injury of the mills, at three several times cut through, and the water permitted to escape.
    On the 5th December, 1797, the appellant filed a bill in chancery, stating the antecedent circumstances, with a prayer for a writ of injunction, to restrain the respondents from molesting or disturbing him in the enjoyment of the mills, mill-dam, and the water of the Sagquate creek ; that he might be quieted in his possession of them, and for such further, and other relief, as the court might please to direct.
    To this bill, the respondents, on the 3d of August, 1798, put in their joint and several answers, in which they admitted the situation of the lands of the appellant, and respondent, Hugh White, the father; the parol engagement to erect the mill-dam and mills; the written engagement; the sale by White, of his shares in the mills ; the payment of the consideration money; that there was a preliminary conversation between him and the appellant, about securing, in some proper manner, the water of the creek for the mills when erected; and a continued necessity, for several years after the sale to the appellant, of the mills, for the accommodation oí the public : that they were burnt down and rebuilt, &c. but the answer denied, that the right or privilege in the waters of the creek, had ever been parted with to the appellant, or that he had paid any consideration for it; or, that he had any right to appropriate the waters of the creek to the use of the mills; or to maintain the dam for turning the water from its usual course. The answer a*s0 set forth, that 205 dollars and 40 cents, had, besides some other contingent chare-es, been paid bv . ° 1 ^ White, the father, as his proportion of the expenses £or pupc|;ng. the mills, and that he had sold his interest in. them, for only 182 dollars 50 cents, at a time when they were in such repair, and in which they continued for a considerable time afterwards, as to be able to do business as well as at any time since their erection. That soon after their destruction, White, the father, ap he believed, in a conversation with the appellant, explained to him the nature of the contract for the sale of the mills, and.then utterly denied the appellant’s right to the water; that the appellant had never requested a conveyance of the right of water, and had, from a consciousness of his having none, erected at his own expense, a temporary dam, below that for the use of the mills, in order to turn the water into the respondents’ meadow, the want of which, in consequence of the upper dam, annually injured the crop of hay, and could not be compensated for, by even 1,500 dollars; they also insisted on the statute of frauds.
    The testimony, the essence of which is given in the decision"of the court, in general corroborated the facts in the bill, and from that given by two of the witnesses, it appeared, that the understanding of the parties at the time of the first parol agreement was, wherever the mills were built, “ there the -waters were to go.” That Beardsley considered the right to the water, as perpetually annexed to the mills, and never entertained any -apprehension of its being liable to be taken away.
    The cause having been heard, his honour the chancellor, dismissed the appellant’s bill with costs, from which decree he now appealed, and his honour thus assigned his reasons.

      Mr. President. The appellant deduces his equity from two sources : 1st. A parol contract relating to the saw-mill; and, 2d. A written contract relating to the grist-mill.
    It is necessary, in the first place, to determine the extent of the parol contract, as arising from the admissions and proofs of the parties.
    From the terms of the bill, it would appear, that the appellant intended to avail himself of both the written and parol contracts, as forming one general connected arrangement, of the whole interests, in the subject of controversy.
    It states, that it was agreed between the appellant, John Beardsley and Hugh White, senior, to complete a grist and saw-mill, for their joint use, and at their joint expense, on the land of the appellant.—That John Beardsley, was to have one-half of the grist-mill, and the other parties, each one-fourth ; and that each of the parties was to have one-third of the saw-mill, each contributing a proportional share of the expense. That Beardsley should allow, to the appellant, a reasonable compensation for his land, 1 and a like compensation to the respondent, Plugh White, senior, and the appellant, for the use of the water.

    The respondents admitted, that it was agreed to build, the mills, and that the interests were to be in the proportions stated in the bill. But they deny that any contract was entered into, respecting the water, or that Beardsley had a right in it, or paid for it.
    The only witness who has any knowledge of the parol contract, between the parties, is Beardsley and, if his testimony is in direct opposition to that Part t^e respondents’ answer, which he was required to make, by the terms of the bill, it might neutralize the answer, but can have no effect beyond that, unless aided by other evidence or circumstances. But all the circumstances developed, tend to corroborate the answer.

      Beardsley's testimony is very indistinct, from a want of discrimination, as to the object to which it applies. He confounds the grist and saw-mills; the paról and written agreements; and I found it impracticable, from his relation, to distinguish satisfactorily, what part was intended to apply to the written, and what to the parol contract. The same confusion is discernible as to time ; and, whether he speaks of contemporaneous transactions, or those which took place at different periods," cannot be discovered.
    Mills are generally calculated for duration. But those constructed by the parties, were so slight, that the appellant alleges, that, at the time he purchased of Beardsley, which, it appears, was in October, 1790, and probably, not more than two years after they were finished, (for the contract for this erection, was not made till May, 1788) they were already out of repair, and in a ruinous state at the time the respondent, Hugh White, senior, sold his interest in them, which it appears was early in 1791.
    From the permanency of the object of association, on which much reliance was placed by the appellant’s counsel, no important result can, therefore, be deduced, in favour of the construction they contend for.

      Another circumstance, which throws some light on the subject in controversy, is, the different mode of conduct observed between the appellant and Be~rdilcy, relating to the common interest, as far as respected that portion which the appellant contributed towards the common undertaking, and that which re~ lated to the property of Hugh White, the father~
    On the 18th of March, 1789, the appellant executed to Beardsley, an indenture for the undivided half of his land, intended for the accommodation of the mills, with express covenants for the diversion of the wrater in his own land, for there is nothing in the conveyance, indicating the claim of right to dispose of a privilege of that nature, in the land of the respondent, Hugh White, the elder; and, on the 9th of October, 1790, Beardsley, by indorsement on that conveyance, regrants the premises to the appellant. — - This indorsement is confined to the subject of the former grant merely, and is evidently calculated only to revest the title derived under the conveyance.
    There is no evidence of any application for a similar grant to the respondent, Hugh White, the father, and though the relationship, which existed between him and the appellant, has been urged as a reason for inducing an unusual confidence between the respondent, Hugh White, senior, and the appellant, that consideration would not apply to Beardsley, who, in his deposition, alleges, that he supposed the appellant “ trusted to the honour and integrity of the defendant, Hugh White, senior, and considered the parol agreement as abundantly sufficient.” He was, however, more interested in the arrangement than either of the other parties, and he gives no reason for his own conducts
    Both the appellant, and Beardsley, appear to have peen fuHy apprised of the necessity of securing their reciprocal rights by conveyance ; and, that it was re* sorted to, in one instance, and unattended to in another, is a circumstance, which, unexplained as it is, has a strong appearance of a mutual reliance, on the advantages each possessed, to apply them to, or with-them from, the common object of pursuit, The one party owned the land, on which the mills were erected; the other, so much of the water, as contributed essentially to the value of the mills, though not so much of it, as by withdrawing the water, to render the mills totally useless.
    Upon the whole, I do not think a parol agreement is made out in proof, admitting the evidence to be competent to sustain it, variant from, or enlarging the written contract and the parol contract, admitted by the answer, relating to the saw-mills. It is, therefore, unnecessary to examine the influence of the> statute of frauds and perjuries on the case.

      2d. As to the written contract.
    This has no words evincive of the intent of the parties to perpetuate this joint interest, beyond the duration of the mill, which was the object of it. It recognises the land, on which it was to be built, as the land of the appellant, divides the contracting parties, by describing the appellant and the respondent, Hugh White, senior, as of the one part, and Beardsley of the other part, and thus, by opposing the interest of the latter, to that of the former, shows, that so far as respected the grist-mill, the most intimate union of interest existed between the appellant and the respondent, Hugh White, the father; and that the confidence which the}' had in each other, could have no influence on Beardsley.
    The mills erected in consequence of the written agreement, were destroyed by fire ; and Hugh White, senior, declares in his answer, that he informed the appellant, before he rebuilt them, that the water was his; and that he had not sold it. This is an answer to the matter stated in the bill, to which he was interrogated, and of consequence available to him, to rebut the deductions, which might be otherwise made, from his tacit acquiescence in the rebuilding of the mills.
    The subsequent conduct of both the appellant, and the respondent, Hugh White, senior, is an exposition of this intent; for, upon the purchase of White's share in the mills, by the appellant, instead of procuring a conveyance from White, for the rights necessary for his own accommodation, he is content with a mere verbal relinquishment of the share held by White, the father, in the mills. This is perfectly consistent with the views of the parties, if the contract was to operate merely to extinguish the rights acquired by the contract, by the respondent, White, senior, in the land of the appellant. But if the appellant’s object were to acquire or perpetuate privileges in the land of the respondent, White, the father, the grant by him executed to Beardsley, and by Beardsley to him, show that he must have" been acquainted with the proper mode of securing it.
    I am persuaded, from the whole tenor of the transaction, that the parties, at the time of the contract, contemplated only a temporary establishment and
      accommodation, to remove the inconvenience to which their remoteness from mills exposed them; that the conveyance from the appellant to Beardsley, cannot be admitted to aid the construction of the con. tract between the parties to it, as it does not appear that the respondent, Hugh W/dte, the father, had any agency in, or was pri~y to it; and, that the better construction is, that the reciprocal interests of the parties were to he affected merely, while the principal objects of their enterprise, the mills, endured; that, those destroyed, it ceased to operate.

    . I was of opinion, therefore, that the appellant’s bill ought to be dismissed with costs.

      Platt, for the appellant. The equity of the appellant does not arise, entirely from the written and subsequent parol agreement, but also from the original parol contract for the erection of the mills, and appropriation of the water. That there was such an antecedent contract, serving as a substratum for the whole, and influencing the future acts of the parties, is proved not only by the testimony, but by the answers of the respondents ; and, though Beardsley be one of the witnesses whose evidence shows this, yet no objection can be made to his competence, for they have made him their own. Besides, his assignment was a mere quit-claim.
    These parol agreements having been in part executed, are uniformly held to be without the operation of the statute of frauds. 1 Fonb. 176 to 190. 1 Pow. on Cont. 295 to 299. 2 Vern. 455. 1 Bro. Ch. Ca. 417. 2 Stra. 783. 3 Atk. 407. 7 Bro. Pa. Ca. 21.

      It cannot be argued that the agreements intended to convey only a temporary interest, during the existence of the mills then constructed. The mere circumstance of turning the stream into an artificial and new bed, by digging a canal, negatives such an idea. Suppose the mills had been burnt down the day after their erection, would it have put an end to the contract ?

    The establishment was in its-nature permanent.—• It partook of the quality of the fee on which erected; the water was an appurtenance inseparable from it; it was like soul and body.
    That it was intended to be a permanent establish^ ment, is evinced by the acts of the parties. They are inconsistent with any other intention; and, it is a principle, that where a contract is not definite, but money laid out on it, the court will infer the terms, from the acts. 1 Pow. on Cont. 297. 2 Eq. Ca. Abr. 48. 5 Vin. 523. 2 Vern. 373. The water was indispensable for the mills, and every thing essential to the use of a thing granted, must necessarily pass- with it. 1 Saund. 322, 3.

    It is also settled, that where a contract is dubious, the strongest construction sháll be against the seller. 1 Pow. on Cont. 395. 5 Rep. 7 b.

       Plowd. 140. 161. 171. 289. Co. Litt. 197 a. 267 b. Roll. Abr. 228.
    These authorities establish, that the respondent sold the waters of the creek. To them may be added 2 Eq. Ca. Abr. 685. pl. 5. 679. pl. 5. Talbot's cases, 252. 262. 1 Pow. on Cont. 302. 2 Vern. 363. 2 Ves. J. 440. which show, that as the conveyance to Hugh White, junior, was voluntary, it cannot prevail against a previous bona fide purchaser, for a valuable consideration; and, that at all events, as he was a purchaser with notice, the appellant’s claim cannot be affected by the grant to the son.
    Had he intended to have relied on the deed, it ought to have been pleaded. Wyatt, 324, 335. 2 Atk. 240. 2 Eq. Ca. Abr. 681. pl. 2. As to the statute, it applies to hereditaments.

      Gold and Henry, contra.
    The contract was confined to the first mill erected, and the very written contract relied on, is not set forth by the bill, in luec verba, and if that proved be different, the bill ought to be dismissed. 2 Ves. 299. 5 Ves. J. 452. In this, there is no mention of any agreement whatever, as to diverting the water, building a race-way, &c. The original parol agreement, can never be in issue. It was nothing more than a preliminary conversation, leading to the agreement, and was, when that was concluded, resolved into it.
    Any agreement as to the water, is expressly denied, and if only one witness contradict the answer, no decree can be founded upon it. As to Beardsley, his testimony must be totally discarded. It is inconsistent and incredible ; besides, being to uphold his own acts, it is totally inadmissible.
    If a plaintiff claim lands by a parol agreement, no witnesses can uphold it, for their testimony is inadmissible. None, aliunde the answer can be received. 2 Bro. Ch. Ca. 566,7. Where there is a written J contract, no parol evidence is admissible; to alter or vary it, but only to rebut an equity. 2 Vern. 34.
      Bunb. 65.

       2 Atk. 383. 1 Bro. Ch. Ca. 93 514. 3 Bro. Ch. Ca. 168. 1 Ves. J. 241 S. C. 1 Ves. J. 326. 402. 3 Bro. Ch. Ca. 388. S. C. 4 Bro. Ch. Ca. 437. 3 Ves. J. 34.§ 5 Ves. J. 688¶.
    The doctrine of part performance has rendered the statute of frauds almost a dead letter. Except we be tied down by authorities that govern in this country, we ought to resist it. In England it is admitted to have been carried too far, and to support it, the facts ought to be of the most unequivocal nature. 3 Ves. J. 381. 712. 4 Ves. J. 720. Amb. 586. 1 Pow. on Cont. 308. 309. 1 Fonb. 174, 5. Remaining in possession, is not such a fact as to be conclusive. The acts must be of such a nature, that the purchaser would otherwise be a loser. Here the appellant is more than compensated by his profits from the mill. We, therefore, contend, that the agreement insisted on, is not clearly shown; that part performance is not proved, and that the contract, such as it was, is, from the testimony, variant from that of the bill. To decide the establishment to be permanent, and the appellant entitled to the water, will be to make a new agreement, for both parties.

      Fan Fechten, in reply. The answer, if viewed attentively, will be seen to admit the original parol agreement. With this, the written contract is perfectly consistent. The bill stated the substance of the agreement, and that was sufficient. The cause was submitted in the court below, on this simple ques, tion, whether the establishment were permanent or not. To state more than was necessary to show that, is not, by any rule of law or equity, ever required. Dormer v. Fortescue, 3 Atk. 124 and 132. The written agreement disproves a material allegation in the answer, and so is admissible. It is also admissible to illustrate the views of the parties. If the defendant admit the agreement in his answer, he cannot, after-wards, insist on the statute of frauds.
    So much water was, from every principle, to be turned off to the mills, as was done in the first instance. This was concurred in, afterwards, by both parties; therefore, then,' no pretence for avoiding the contract, or excluding testimony on the ground of .uncertainty.
    The agreement to build, was confessedly executed. White does not pretend he ever explained his restrictive idea of the contract, till after the sale to the appellant. What interest did the parties think they had; what had they, in law, in the mills under the first executed agreement ? It must have been a fee. This they all imagined, and the respondent, White, the father, permitted the appellant, under this idea, to go on expending money on the property, without ever undeceiving him. This was a fraud.
    The relief for the appellant must be, 1st, a perpetual injunction; or, 2d, a conveyance, by the Whites, of their interests. The acquiescence of the respondents since 1791, is evidence of a permanent establishment.
    The matters contended for by the appellant, the water, &c. are incidents to the mill, not realties.— The sale of the interest in the mills passed them of course.

       Pyke v. Williams.

       Whitbread v. Brookhurst.

       Earl of Aylesford's case.

       Only v. Walker.

       Newton v. Newton & Lee.

        Halfpenny v. Ballet.

        Pomfret v. Ricroft.

        Dowman’s case

        Browning v. Beston.

        Throckmorton v. Tracy.

        Hill v. Grange.

        Chapman v. Dalton.

         Mansell v. Mansell.

         Dafforne v. Goodman.

        Taylor v. Stibbert.

        Brewerton v. Gamul.

        Legal v. Miller.

        Leg v. Haverfield.

         Whitchurch v. Bevis.

         Cokes v. Mascal.

         Binstead v. Coleman.

         Parteriche v. Powlet.

        Irnham v. Child.

        Ackroyd v. Smithson.

       Hare v. Shearwood.

        Brodie v. St. Paul.

        Jordan v. Sawkins.

         Mason v. Garainer.

         Pym v. Blackburn.

        Jackson v. Cator.

         Wills v. Stradling.

        Forster v. Hale.

        Gunter v. Halsey.

   Per curiam, delivered by Thompson, J.

The only question litigated between the parties is, touching the right to the waters of the Saghquate creek, for the use of the mills,- now owned and occupied by the appellant. A brief statement of some of the facts, thrown into the case, but not controverted, may afford some assistance in ascertaining the truth with respect to those in dispute. It is admitted, that, in the year 1788, the appellant was seised of the lands on the east side' of the Saghquate creek, together with an equal moiety of the creek itself. That Hugh White was seised of the lands on the west side of the creek, together with the other moiety of the creek, and that being so seised, they, together with one Beardsley, built a grist-mill and saw-mill upon the land of the appellant. That a canal was dug for the purpose of diverting some of the waters of the creek to those mills. That the parties continued to occupy them jointly, according to their respective proportions therein, for about three years, when the appellant purchased out the shares of his copartners. The purchase from Hugh White was by parol only, and upon this the-controversy between the parties arises, presenting the following questions for examination. 1st. Whether the appellant ever acquired any right to the waters of the Saghquate creek, for the use of the mills ? 2d. If so, whether that, was a temporary or a permanent right ? 3d. Whether, the purchase being by parol, the respondents can avail themselves of the statute of frauds to avoid it ?

The evidence appearing in the case, is partly written and partly parol, as to the applicability of which, to the subject matter of complaint in the appellant’s bill, some little difficulty and confusion arises. The written testimony, the article of agreement, appears not to have had for its object, the securing of the water to be diverted from the Saghquate creek. It was between White, Wetmore, and Beardsley, and was solely for tile purpose of providing for the building of the mills, and fixing the proportion of the respective partic~ therein. The matter of complaint by the appellant's bill, is not for a violation of the articles of ~tgreement, but for an interruption in the use. of the waters of the Saghquate creek, This written agreement might be admissible, as illustrative of the views and intentions of the parties in erecting the mills, and, some measure, explanatory- of the testimony of some of the witnesses; but the right to divert the water must depend upon some other evidence. The bill of complaint, so far as it may refer to the articles of agreement, is to be considered as a history of circumstances leading to the main subjects of inquiry; the right to the use of the water, and the purchase by Wetmore, from TP72ite. The appellant alleges, that he purchased the shares of TVhite. in the mills, to`gether with the pr~viIege of the water, but reposing confidence in the integrity and uprightness of White, he omitted to take a conveyance therefor. This is the subject matter of the complaint, to which most of the testimony on both sides is pointed, and which the appellant alleges was not secured by writ~ ing~

The parol evidence on this subject, Cannot be viewed as explanatory of the written agreement, or as a preliminary conversation leading to a contract consummated by the instrument in writing; but relating, to a distinct and independent subject. An examination, therefore, into the original contract, respecting the water, in connection with the sale of the mills, and a decree bottomed thereon, would not, I think," be travelling out of the case, ora violation of the principle,- that the decree must be secundum allegata et probata.

That there was a contract made between White and Wetmore, relative to diverting the water to the mills, is manifest from the testimony in the cause, the acts of the parties, and the confessions of White. The extent of that contract will be hereafter examined. To establish this contract, there is the united, and uncontradicted testimony of three witnesses.

■Lemuel Leavenworth, who was examined both on the part of the appellant and respondents, says, the parties went in the first place, to view the spot where the mills are at present situated; they then viewed the land on White's side, and it was agreed, in conversation, that wherever the mill was erected, “ there the water should go." That John Beardsley, was to determine where the place should be ; and that he determined in favour of the place where the mills now are. To the respondents’ interrogatories, he answered, that he knew of a verbal contract, for appropriating the waters of Saghquate creek, to the use of the mill or mills, to be erected on the same. Amos Wetmore, declared, that he had heard Hugh White say, that wherever the mills should be built, there the water should go. John Beardsley swore, that it was agreed between Hugh White and Wetmore, that wherever the mills should be built, there the water should go. In conformity to this agreement, we find the parties digging a canal, building a dam across the Saghquate creek, and turning the water to the mills.

White, in his answer, I think, impliedly admits, that there had been a contract relative to the water; though he says, the particular plan “for securing it" had not been matured, or carried into effect; evidently, I conceive, alluding to its not having been reduced to writing.

If, then, there was an agreement to divert the natural course of this creek, the object clearly was for the use of the mills. The same reason that existed at first, for turning the water, would continue to exist as long as the mills remained. By a sale of the mills, generally, I should, therefore, incline to think the water would pass as an incident to them, without any special provision. A contrary inference would be against every reasonable intendment. Supposing the water thus diverted, had been the only water to supply the mills, would there have been a doubt as to the intention of the parties ? The quantity of water cannot materially alter the case; and, indeed, it was not denied on the argument, but that the appellant had acquired a right to the use of the water, co-extensive with the duration of the mills first built.

But it is not necessary to say, the right to the water passed, as an incident to the mills, in the sense above-mentioned ; or, that the appellant acquired this right, at the time he purchased the mills. It was, I think, amply secured by a prior contract; and this will account, for the language of some of the witnesses, and the guarded expressions in the respondents’ answer.

Anna Barnard, a witness on the part of the respondents, testified, that she was present at the time of the sale, and that White sold “ his right and interest” in the mills, and delivered up his right to the mill and mill-irons, but does not recollect that any thing was said respecting the waters of the creek. The reason of this, probably, was, because the parties considered the use of the waters provided for by the former contract, made before the mills were erected. Hugh White, in his answer, admits that he sold his shares in the mills, to the appellant, for the consideration of seventy-live pounds, and that the purchase-money has been duly paid. But says, “ at the time of his relinquishing his shares, no mention was made of any right, interest or privilege, in the waters of the said creek, nor was any such right or privilege included in the said contract ofsale, of the said mill.” With truth, probably, he might so declare, because it was not necessary to say any thing on the subject, or include it in the sale, it having been provided for by another agreement. This he does not undertake to deny. He only says, the plan was not matured and carried into effect; by which I understand him to mean, as I before observed, that no writings were entered into j deeming them necessary to mature and perfect the contract.

I the more readily adopt this construction of this part of the answer, because it reconciles it with the evidence. For, if White meant to be understood, that no contract whatever, had at any time been made, respecting the water, he stands contradicted by three witnesses. I consider the effect of this agreement, as an appropriation of the water to the use of the mills ; that it thereby became, in some measure, an appurtenance to them; and that, under such circumstances, a grant of the principal subject would pass the water, as an incident.

The next inquiry is, whether this contract vested a permanent, or only a temporary right to the use of the water ? If I am correct in the construction given to 'White’s answer, it is not such a denial of the contract, as to bring it within the rule of equity, making it necessary to establish it, by the testimony of more than one witness. That rule can only be applied to cases, where the answer is a clear and positive denial of the fact. 1 Fez. 66. But admitting the answer to be a direct denial of any contract, respecting the water; I should not consider it, under the circumstances of the case, as coming within that rule. It is impeached by the testimony of several witnesses, and there are other facts and circumstances, corroborating the testimony of Beardsley on this subject. 2 Atk. 19. 3 Atk. 407. 1 Vez.97. If Beardsley’s testimony is to be received as competent evidence, upon which to ground a decree, under the above rule, it establishes, beyond all possibility of doubt, a permanent right in. the appellant to the water, for the use of the mills. Beardsley being acquainted with'the whole transaction, leading to, and attending the building of the mills, gives a very minute account respecting the business, arid declares most unequivocally, that the agreement was, that the water diverted from the main, channel of the creek, was to be for the supply of the mills for ever. In this he stands, in some measure corroborated by the testimony of Leavenworth and Wetmore, who say, that it was agreed, that wherever the mills should be built, there the water should go. The latter declared also, that when White sold his right and title in the mills to the appellant, he supposed the use of the water perpetually was intended likewise to be sold.

It is said, however, that Bearcisley has so contra-dieted himself, with respect to the consideration paid by Wetmore to White, for the water, that he is unworthy of credit. This allegation, I do not think well founded. In his answer to the appellant’s interrogatories, on this first point, he says, that White was to have one-fourth part of the mill, on account of his allowing the water to be turned from the main creek, for the use of the mill forever, and for digging, draining and turning the water; and, in consideration of other things mentioned in a certain written contract. In his answer to the respondents’ interrogatory, he says, the consideration that Wetmore paid White, for the use of the water was, that the waters overflowed the lands of Wetmore, and that White was to have one-fourth part of an acre of land forever, with the mills erected thereon; one-fourth of the grist-mill, and one-third of the saw-mill, and that he supposed the said contract was completely finished and carried into effect.

The latter examination is more full and circumstantial than the former, but is not, I think, so essentially variant, as to discredit the witness. There is, to me, internal evidence arising from the nature of the establishment, and the acts of the parties, fortifying the conclusion, that it was the intention of the parties, that so much of the water of the Saghquate creek, as was necessary for the use of the mills, should be permanently appropriated to that object. A contrary conclusion, would lead to great doubt and uncertainty. If the appropriation was considered as coextensive with the necessity that at first existed for mills at that place, its termination would depend upon mere matter of opinion. If, with the duration of the mills first erected, doubts might arise to what extent repairs might be made, for the purpose of continuing the old mills; and to say, that they should be suffered to go to decay, without any repairs, would be doing violence to the understanding of the parties. Public accommodation, and private emolument, were probably the primary inducements for building the mills, and diverting the water ; the same reasons, for any thing that appears, now exist for their continuance.

The conduct of White, in not disclosing to Wet-more, at the time of selling the mills, his claim of restoring the water to its original channel, his sleeping so long upon this claim, and permitting the appellant to expend his money, in repairing and rebuilding the mills, were unconscientious, and form strong grounds for the interposition of a court of equity. 2 Atk. 83. It is true, the respondent, Hugh White, swears, that he verily believes, he apprised Wetmore of his claims, before the mills were taken down or destroyed. This, I do not think entitled to much weight. If the fact would warrant it, he ought to have sworn positively, and not merely as to his belief. Besides, it is rendered highly improbable by his acquiescence for five years together. Much was said on the argument, respecting the injury, which the diversion of the water would occasion to the respondents’ meadows, and, much of the testimony in the cause was pointed to that object. This testimony is vague, uncertain, and, in my opinion, irrelevant. If testimony of this kind was proper at all, as furnishing a clue to the intent and understanding of the parties, it should have been confined, io the time when the contract was made; and on that subject, we have the estimation of White himself; for it appears, from the testimony of Beards ley, that he considered the water of so little use to him, and the establishment of the mills so unpromising, in point of profit, that he offered to give the appellant and Beardsley the use of the water forever, together with a barrel of pork, if they would build a grist-mill and saw-mill alone, and he to have no concern with them.

The appellant’s claim, resting altogether upon parol contracts, it becomes necessary to examine, whether any obstacle to relief is interposed by the statutes for the preventions of frauds. I think there is not. It is an established rule in equity, that a parol agreement, in part performed, is not within the provisions of the statute. 1 Fonb. 182, and the cases there cited. 3 Atk. 4. To allow a statute, having for its object the prevention of frauds, to be interposed in bar of the performance of a parol agreement, in part performed, would evidently encourage the mischiefs the legislature intended to prevent. Money laid out in improvements, is considered a part execution of a contract. Pow. on Contr. 296. So, also, possession, delivered in pursuance of an agreement, is such a degree of performance, as to take a contract out of the statute. Ibid. 299. Payment of the consideration money, has always been held as a part performance. 3 Atk. 4.

The case before us, I think, clearly falls within these rules. The consideration money has been paid, possession taken, and valuable improvements made. I can therefore see no objection against granting the appellant such relief, as will quiet him in the permanent enjoyment of the water, for the use of the mills, to the extent the same was used and enjoyed, at the time he purchased them from the respondent, Hugh White. This is sufficiently certain and definite, for a decree for a specific performance.

I am, therefore, of opinion, that the decree of the court of chancery ought to be reversed.

Judgment of reversal unanimously.

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