text:
    LEWIS F. R. GREGORY v. RICHARD STILLWELL AND PETER P. BROWN.
    1. Bill for specific performance, and injunction thereupon. Extension of time far making payments. Injunction dissolved on answer.
    2. As a. general rule, an injunction will not be dissolved without the answer of the defendant on whom the gravamen of the bill rests. But if tbe ansY.-ering defendant is able from Ms own connection with the subject matter and consequent knowledge, to lay the facts before the court which show that the complainant has no equity, the injunction may be dissolved without the answer of such other defendant.
    The bill, exhibited by Lewis F. R. Gregory, June 8th, 1816, states that Ebenezer B. Gregory, by two deeds, one dated September 27th, 1839, and the other dated November 6th, 1839, sold and conveyed to the complainant several tracts of land in the township of Jefferson, county of Morris, and the township of West Milford, county of Passaic; three of which are described in the bill, one situated at New Foundland, in the township of West Milford, county of Passaic, and the other two situated at New Foundland, and each partly in Morris and partly in Passaic county; and that, by virtue of the said conveyances, the complainant entered into and possessed the said lands and premises. That there is on the premises a valuable forge and iron works m full operation. That on the 12th November, 1839, Richard Stillwell recovered-a judgment, in the Supreme Court of this state, against the said Ebenezer B. Gregory, for $350.88 damages and $33.26 costs, and that thereupon a fi. fa. was issued to the sheriff of Passaic, under which the said lands were sold and bought by Stillwell, on the 25th August, 1840, for $10, and a deed therefor made accordingly, by the sheriff to Stillwell. That Stillwell, by virtue of the said deed, claimed to have title to all the said tracts, as well the part thereof situated in Morris, as the part thereof situated in Passaic. That the complainant, for the purpose of quieting the said claim of Stillwell, and of procuring a complete and proper title for the said premises, proposed to Stillwell to buy of him all his right and title thereto; and that it was therefore agreed between Stillwell and the complainant, that Stillwell would sell and convey to the complainant all his right to the said lands, when the complainant should .pay him the amount of his said judgment against E. B. Gregory, and the costs and sheriff’s fees thereon, and the amount due on a note which Stillwell then held against E. B. Gregory, for $325, dated December 21si, 1838, with the interest thereon. That Still-well was about entering into an article of agreement with the complainant accordingly, when Peter P. Brown proposed to Still-well to make a lease of the premises to the complainant for a certain rent, and to insert therein a clause for the sale and conveyance of the premises to the complainant on the terms aforesaid. That Stillwell, on such suggestion, preferred that form of agreement; and that the complainant being told it was, in effect, the same thing as an ordinary article of agreement for sale, assented to it. That thereupon, an agreement in writing between Stillwell and the complainant was executed, to the tenor and effect following: (setting out the agreement.) It is dated September 2d, 1840, and witnesseth that Stillwell agrees to lease to the complainant for one year, the Carthage forge in Passaic, together with one lot of 10 acres, one lot of lO-J acres and one lot of 6 or 7 acres situated in Passaic and Morris counties, (being the lots described in the bill,) together with all the interest said Stillwell has in said lands and forge in and about said Carthage forge; and that the complainant agrees to pay therefor to Stillwell, $102.50, the receipt whereof is acknowledged in the agreement; and Stillwell further agrees with the complainant, that he will sell and convey to the complainant all the right, property, claim and demand that he then had or might thereafter have to any lands that were then in the possession of Gregory, the complainant, when said Gregory paid him the amount of his judgment against E. B. Gregory, and a note for $325 which he held against E. B. Gregory ; and Stillwell agrees that the $102.50 then paid as rent, and $51 paid by the complainant to the -sheriff of Passaic, be counted and allowed as so much paid on the said judgment; and the balance due on the said judgment the complainant agreed to pay in four months from the date of the article; and the said note and the interest thereon he agreed to pay in June, 1841. And Gregory agreed, that if default was made in the said payments, he would deliver up to Stillwell the possession of the forge and premises, pond and pondage. And Stillwell further agreed to contest the suit in chancery then commenced by A. Bell, and, if possible, prevent Bell from foreclosing on said forge lots; and if it was necessary for Stillwell to answer Bell’s bill, Gregory agreed to be at the expense of the answer. The bill states that the said article is now, as the complainant is informed and believes, in the custody of said P. P. Brown. That at the time of executing the said agreement, he, the complainant, paid to Stillwell the said $102.40, and to the said sheriff the said $51. That just before the next payment became due on the said agreement, it was represented to Stillwell, at the request and on the behalf of the complainant, that the complainant could not, without great difficulty, make the said payment by the time it would beeomé due; and that Stillwell replied, as the complainant is informed and believes and charges, that it was of no consequence that the payment should be made when due ; that he did not need the money ; and that any other time would answer his purpose quite as well; and that the complainant could have his own time for payment, or words to that effect. That the complainant, relying on such extension of time for making the said payment, did not prepare to meet the same when due. That afterwards, on or about June 1st, 1841, and before the last payment became due, Stillwell was applied to, on behalf of the complainant, in relation to the conveyance of the premises to the complainant, pursuant to the said agreement; and that Stillwell then said that the complainant liad not complied with the agreement, and that he, Stillwell, would not fulfill it on his part; that he had had trouble enough about it and would have nothing more to do with it, or words to ¿hat effect. That it was then, on the behalf of the complainant, represented to Stillwell that the complainant was informed that he, Stillwell, had conveyed, or agreed to convey, his interest in the premises to the said Brown; and that Stillwell, as the complainant is informed and believes, denied it. That Brown, on being inquired of, on behalf of the complainant, also denied that Stillwell had agreed to convey his right in the premises to him, Brown. That at the time'of the execution of the said agreement, Brown was present arid advised Stillwell about it; and that after the agreement was executed, Brown took the charge and custody of it, and had full notice and knowledge of its contents. That the complainant has since been informed and believes and charges, that Stillwell, on the same day the agreement between him and the complainant was executed, contracted with said Brown to sell him the said premises; and afterwards, on or about November 1st, 1841, conveyed the same to said Brown, by deed of that date, or some other. That the complainant has since applied and requested him to fulfill the said agreement between the complainant and Stillwell, and to convey the premises to the complainant on the terms mentioned in the said agreement ; and that the complainant was and still is ready and willing, and that he offered to said Brown, to fulfill the agreement •on his part, and to pay him the amount due on the said agreement, on his making to the complainant a conveyance of the premises in the same manner as Stillwell had agreed to convey the same; but that Brown wholly refused so to do, and claims to hold the right and title in and to the said premises. That on .the 26th October, 1841, Robert Morrell recovered a judgment in the Circuit Court of Passaic against said P. P. Brown and H. Brown and Henry M. Brown, for $215.95, damages and costs. That on the 30th October, 1841, the executors of A. Schuyler recovered a judgment in the same court against said P. P. Brown fur $144.73; and that there is a suit pending in the said court in favor of Elizabeth Boyd against the said Brown, in which judgment may be rendered, &c. That said judgments are encumbrances on the premises; and that, by reason thereof, Brown has rendered himself unable to convey to the complainant the said premises in the same maimer as Stillwell might and ought to have done. That the complainant, by himself and his ten;auts, has been in the peaceable possession and enjoyment of the premises and the forge and works thereon since the time of executing the said agreement, and still is in such possession and enjoyment-. That Brown, on or about November 20th, 1845, commenced an ejectment in the Circuit Court of Passaic against John B. Vanderen and Elias Sergeant, to recover the possession of the said premises, and that the complainant was permitted to appear to the said action, to defend the same, as landlord. That neither Stillwell nor Brown, nor any person for them, ever demanded from the complainant payment of the money, the time for paying which was so extended by Stillwell, or gave any notice of rescinding the said agreement. The complainant charges that Stillwell never intended to fulfill ihe said agreement, but, the day of executing it, sold his interest in the premises to Brown j and that Stillwell and Brown both endeavored to conceal their agreement from the complainant till the time of making the said payment had elapsed. That the said agreement between Stillwell and the complainant was meant'and intended -as an agreement for the sale of the premises, and has been considered and acted upon as such to the present time. That no mention lias been made to- the complainant by Stillwell or Brown, or any person for them, or either of them, of any rent being due from the complainant for the premises, or of the complainant being merely a tenant ol‘ the premises, but that the possession of the complainant has been, under and by virtue of his prior title and of the said agreement, in the character of a purchaser, and that the complainant lias, ever since the execution of the said agreement, used the premises as his own, and made great improvements thereon, and done all the repairs to the forge j and not only the small repairs, which it is customary for tenants to make, but also the large repairs, that is to say, such as cost over $5, which it is customary for the landlord to make, and has expended, in and about the premises, more than f400; and, among other improvements and repairs, has put in new hot-blast pipes, a new hammer wheel, and a new anvil. The bill prays a specific performance of the said agreement and a conveyance of die premises, on the complainant’s paying the residue of the purchase money, with the interest thereon, and an injunction against the further prosecution of the ejectment.
    The injunction was granted.
    Peter P. Brown put in an answer to the bill. Stillwell did not answer.
    The answer of Brown states that he supposes it to be true that E. B. Gregory executed and delivered to the complainant the two deeds stated in the bill, and says that the record of the deeds shows that they were both acknowledged November 15th, 1839, and recorded December 5th, 1839. He admits that Still-well, on the 12th November, 1839, recovered against E. B. Gregory the judgment stated in the bill, and that, on a fi. fa. issued thereon, the sheriff sold the premises, so far as they were within the county of Passaic, to Stillwell, and executed and delivered to him a deed thereof; and he says that, at the said sale, the sheriff sold other lands, which were bid off by one Samuel S. Gregory, the father of the complainant, for about $51, but that he has heard, and supposes it to be true, that the deed for the same was made out by the sheriff to the complainant; that the said judgment of Stillwell was on a note from E. B. Gregory to him, for $325, and that Stillwell held another note against E. B. Gregory, for the further sum of $325, both of which .notes were secured by a mortgage given by E. B. G. to Slillwell, on the property described in the deeds from E. B. Gregory to the complainant. He insists that, by virtue of the sale to Stillwell, he acquired all the equity of redemption of E. B. Gregory in the lands lying in Passaic, and that, thereby, all the right of the complainant to the lands lying in Passaic was extinguished, as the judgment of Stillwell was prior to the conveyance to the complainant; but he admits that Stillwell claimed a right to the property lying in Morris, by virtue of his said mortgage. He admits that Stillwell, after the said conveyance from the sheriff to him, was applied to by the complainant to purchase the property, but he denies that the complainant made the appplication for the purpose of quieting any title he had to the property in Passaic, so bought by Stillwell, for, he says, all the title the complainant previously had was extinguished by the sheriff Asale. He says that Stillwell, after his purchase at the'sheriff A sale, proposed to him, the defendant, to sell to him the said property for the amount of his (StillwellA) claim against E. B. Gregory ; that he stated to Stillwell that he thought the property was worth the amount, and that he would be willing to buy it at that price, but that he thought Stillwell ought to give the complainant, or some of the Stillwell family, the right to purchase it, and give them a ehanee to pay for it; and that ¡10 advised Stillwell to do so, and declined making the purchase on that account; but that he then agreed with Stillwell, that if he, Stillwell, would sell to the complainant, and give him a chance to pay for it, and the somplainant should not comply with the terms, that, on the complainant’s failure to pay, he, the defendant, would bay the property, and that the defendant and Stillwell entered into an agreement to that effect. That, thereupon, Stillwell and the complainant entered into a verbal agreement. That the plan of leasing the property for a year was proposed by Stillwell’s counsel, and he, the defendant, approved it; and it was agreed upon by all parties. That, after this conversation, Stillwell came to him and wished him to go with him to see the complainant and have the agreement concluded. That this defendant did so; and the complainant’s father, Samuel S. Gregory, drew up the agreement, and it was then signed by both parties ; but if was ,uot under seal; aud the agreement was then placed in his hands for safe-keeping, and is yet in his possession. The answer thou gives a copy of if. The substance of it is set out in the bill. He insists‘that, by the agreement, no sale was made, but that it only gave the complainant a privilege of purchasing, if he should determine to do so, by making the payments at the times mentioned ; and that, in the meantime, and until he paid, lie was to remain as tenant of Stillwell, aud that if he did not pay, he would surrender the property. He admits that he has heard, and believes that the complainant paid Stillwell the §102.50, and says that nothing more has been paid on the said agreement; but he has heard, and believes that the complainant paid §51 to the sheriff of Passaic for the property bought by S. S. Gregory at the sheriff’s sale, and conveyed to the complainant by the sheriff, that being paid for a different property, and whioh he was bound to pay at the time of making the agreement aforesaid. He says he lias never heard that any person had applied to Stillwell for the complainant, or for any other person, or in any way, to obtain a postponement of the time of payment under said agreement, or that Stillwell said it was of uo consequence, &c., (in the words of the bill,) and says he does not believe that Stillwell made any such promise, or had any such conversation as is stated in the bill; and he insi.-ts that, if any such-'promise was made, it being without his knowledge, cannot affect -him, he being a bona fide purchaser without notice. He says that he has never heard that, on or about June 1st, 1841, or at any other time, Stillwell was applied to on behalf of the complainant, in relation to the conveyance of his right and interest in the premises to the complainant under the said agreement, or of the conversation of Stillwell respecting the same, save by the bill; or that Stillwell had been applied to to know if he had sold to this defendant; nor does he recollect that he was asked by the complainant, or any person on his behalf, as to his having bought the property, or of his having agreed to buy it; but that, after the times of payment had expired, he informed the complainant that he had bought the property, or had agreed to buy it, and that the complainant made no objection to it. He admits that, after the time of payment to be made by the complainant, in case he chose to take the property, had expired, Stillwell informed him that the complainant had not complied with the agreement, and that he, Stillwell, considered the article void, and that this defendant must take the property; to which the defendant agreed, the defendant considering that the complainant was unable, by reason of his embarrassed circumstances, to take the property ; that he had abandoned the agreement, and that it was at an end; and this defendant admits he bought the property-from Stillwell, and that the same was conveyed to him by deed dated August 12th, 1843, acknowledged and delivered the same day, and recorded September 19th, 1843. He says that, up to the date of the recording of said deed, the complainant had not, so far as this defendant knows or believes, applied to Stillwell for a deed, or tendered any money to him for a deed under said agreement ; nor had the complainant, before that time, applied to this defendant for a deed, or tendered any money to him, or notified this defendant that he claimed any right under the said agreement; although this defendant had long before informed him that he, this defendant, had bought the right of Stillwell in said property ; and that the complainant never did so till June, 1846, a few days before filing his bill, when the complainant asked this defendant for a deed for the forge property, stating that he was ready to fulfill his contract with Stillwell; but that he showed no money to this defendant; and this defendant declined giving him a deed, considering that he had no right to the property. He says, that after the failure of the complainant to pay and after this defendant had agreed to take the property from Still-well, he applied to his counsel to bring ejectment to recover from the complainant the possession of the lands lying in Passaic, and was advised by his counsel that the complainant was entitled to notice to quit; and'thereupon the defendant, as assignee of Still-well, although before he had received his deed, caused a notice to be served on the complainant, as follows ; “ You are hereby required to quit the premises held under me, now in your occupation, on the 2d September next, that being the end of a year’s occupation, or you will be held lo be a trespasser and liable to all the consequences. Dated June 1st, 1843. Signed Peter P. Brown, assignee of Richard Stillwell.” That the said notice was directed to the complainant, and served on him June 6th, 1843. He says that at the date of the agreement the complainant lived with his father, S. 8. Gregory, within 200 yards of the forge, and continued to live with him, at that place, till the spring of 1844 or 1845. That after the said notice had been served on the complainant, and while the complainant so lived with his father, his father applied to this defendant to purchase of him the said property, and, as an inducement to this defendant to sell, stated to him that the said notice to quit was not, in some respect, legal or in due form, and lhat this defendant would have difficulty in getting the complainant out of possession. That said S. S. Gregory repeatedly called on this defendant to buy said property, and this defendant finally agreed to sell to said S. S. Gregory all the property conveyed to him by Stillwell for $1000. That the sum included a private debt of said S. S. Gregory to him, after deducting $500, which this defendant gave up to said S. S. Gregory; and this defendant also assigned to him certain notes or judgments amounting to between $500 and $700, they not being of much value to this defendant, though of some value to said S. S. Gregory. That thereupon this defendant sold and conveyed the said property to the said S. S. Gregory, by deed dated September 1st, 1843; and the defendant believes, and then believed, that said S. S. Gregory was acting in this matter with the knowledge and approbation of the complainant ; and that, after this sale by this defendant to said S. S. Gregory, the complainant, had notice of such purchase, and that he then stated that his father had purchased the forge property, but that he did not believe his father would be able to pay for it. He says that since he gave the said notice to quit, the complainant has never set up any claim to the property, or ever called on him, till June as aforesaid. That S. S. Gregory, after receiving the said deed from this defendant, entered into possession of the premises, and leased the same, or that part thereof being the forge property, to Foster Landing, by lease under seal, dated September 6th, 1843, who held it under said S. S. Gregory and paid rent to him'; and that he continued over a year as tenant to said S. S. Gregory. Then said S. S. Gregory worked the forge himself for some time, and in June, 1845, he leased it to John B. Vanderen, who has ever since then been in possession, under the said lease from S. S. Gregory, and has paid the rent to him. That said last-mentioned lease was for one year. That both Landing and Vanderen, by their said leases, agreed to pay S. S. Gregory three hundred of iron for every ton of iron made in said forge, as rent; and that S. S. Gregory has never paid this defendant one cent on said purchase. That S. S. Gregory, on the day he received his deed from this defendant, executed a bond for $1000 and a mortgage on the same property to this defendant to secure the consideration money, and, he having failed to pay, this defendant foreclosed the said mortgage and obtained a decree for the sale of the property. That an execution was issued under the said decree, and- the property sold by virtue thereof, and this defendant bought it and received the deed therefor; and, after receiving the said deed, brought an ejectment against the said Vanderen, the tenant under the said S. S. Gregory, and against E. Sargeant, a workman in possession of the forge, who was employed by said Vanderen. And this defendant denies that the complainant has been in possession of said property all the time since the date of said agreement, but insists that, since the said sale to S. S. Gregory, he, the said S. S. Gregory, has been in possession, by himself or his tenants, as before stated. That Vaucleren and Sargeant entered into consent rules in the ejectment, and the cause was noticed for trial at the term of March, 1846. That at that term the complainant was admitted to defend the suit as landlord, on condision that he should pay the costs of the term and enter into consent rules in 30 days, or judgment should be entered as of March term. That the complainant’s attorney afterwards refused to exchange consent rales; and, at the June term, consented that judgment should be entered, and it was entered, accordingly, against the said Vauderen and Sargeant. He admits the judgments stated in the bill to have been entered against him; but says they have been satisfied. He admits the complainant made some repairs, and put some improvements on the said forge; bat what amount ho has expended the defendant cannot say; but he says that the said forge works are not now in any better condition than they were at the date of said agreement, taking them altogether.
    On this answer, a motion was made to dissolve the injunction.

      A. S. Pennington, for the motion.

      William Halsted, contra.
   The Chancellor.

As a general rule, an injunction will not be dissolved without the answer of the defendant on whom the gravamen of the bill rests. Bat if the answering defendant is able, from his own connection with the subject, and consequent knowledge, to lay facts before the court which show that the complainant has no equity, the injunction may be dissolved without the answer of such other defendant. The equity shown by the bill did not rest on the extension of time for payment alone. The extension alleged would not have been sufficient to authorize an injunction. The only extension of time alleged in the bill related to the first payment. But, at about the time when the second payment became due, the first still remaining unpaid, the complainant, as charged in the bill, applied to Stillwell in relation to the conveyance, and Stillwell then said that the complainant had not complied with the agreement, and that he,. Stillwell, would not fulfill it on his’ part. Here, then, was án end to the extension of time. . This was in June, 1841, and the bill was not filed till June, 1846. But the bill stated that’, notwithstanding this answer of Stillwell; the complainant had been permitted to remain in possession four years and upwards, before the ejectment was brought, and that he had expended in improvements upwards of $400; that Stillwell held the property sometime after June, 1841, and then conveyed it to Brown, who had full knowledge of the agreement between Stillwell and the complainant, but that neither Stillwell nor Brown ever asked rent from the complainant, and that the complainant was considered as remaining in possession, not as tenant, under the leasing part of the agreement, but as purchaser, under the other part of the agreement. This brings the equity of the bill within the reach of Brown’s answer. Stillwell conveyed to Brown in August,'1843, and Brown swears that on the 1st of September, 1843, he sold and conveyed to S. S. Gregory, the father of the complainant, and with whom the complainant had lived ; and that thereupon S. S. Gregory went into possession of the premises and leased the satne, or a part thereof, being the forge propei’ty, to Foster Lauding, by lease dated September 6th, 1843; and that in June, 1845, he leased to Vanderen, who has ever since been in possession under the said S. S. Gregory; and Brown denies that the complainant has been in possession since he, Brown, conveyed, as aforesaid, to S. S. Gregory. Brown further states that, when he sold to S. S. Gregory, he took his bond and mortgage for the purchase money, and that S. S. Gregory made default of payment; and that he, Brown, foreclosed the mortgage, and obtained the decree for the sale of the premises; and that the same was sold accordingly; and that he bought them at the sale; and that his action of ejectment, which was restrained, was founded on the deed he obtained for the premioes under the said decree. This is a part of the case which the bill did not give, and which can hardly be supposed to have been unknown to the complainant. As to the repairs and improvements, the bill does xxot state when they were made. If they wex’e made after the deed from Brown to S. S, Gx’egoi’y, the making them would go to show the probable truth of the statement made by Brown, that the deed from him to S. S. Gregory was made with the approbation of the complainant; and to show that the deed from Brown to the complainant’s father was probably for the complainant’s benefit. Again, the complainant had the use of the property three years before the conveyence from Brown to S. S. Gregory. How much was done, in the way of repairs and improvements, within that period, aud how much after the deed to S. S. Gregory, we are not informed.

Injunction dissolved.


source: Caselaw Access Project

author: The Chancellor.

license: Public Domain

text:
    JOHN P. OUTWATER AND OTHERS v. ABRAHAM I. BERRY AND OTHERS.
    1. Sale of real estate by a trustee set aside.
    2. Supplemental bill, nature of.
    3. Process on the original bill should be served before a supplemental bill js filed.
    4. Circumstances under which the want of subpoena on the original bill was held not to be good ground of general demurrer to the supplemental bill.
    5. A general demurrer bad in part will be overruled.
    On the 26th January, 1844, John P. Outwater and others, stockholders of “ The New Barbadoes Toll Bridge Company,” for themselves and all other the creditors and stockholders of the said company who should come in and seek relief by and contribute to the expense of the said suit, exhibited their bill, stating the incorporation of the said company by an act passed February 16th, 1816, and setting out the provisions of ihe act and of the several supplements thereto. Thát, by virtue of the last supplement, the corporation continued, and the road and bridges of the company continued to be used as a line of public travel, and the company continued to keep up their toll-gate aud to collect the tolls. That the company had not compkted their road and bridges on the 18th February, 1843, as required by the last supplement, and that the time for completing the same has not been further extended by any act of the legislature; and that, by reason thereof, the act of incorporation ceased and became of no effect, and the corporation became dissolved on the said 18th February, 1843. That the company, at the time of its dissolution, as aforesaid, were seized and possessed of considerable real and personal estate, and that large sums of money then were and still are due to it, and that the affairs of the company then were and still are in an unsettled state. That, at the time of said dissolution, George Van Riper was, or pretended to be, president of the company, and John A. Berry, Evander Berry and George Bell were, or pretended to be, directors thereof, and Abraham I. Berry was, or pretended to be, treasurer of the company; but how appointed, respectively, except as afterwards stated in the bill, the complainants know not, and have no means of discovering ; nor have they been able to discover who the other directors And officers of the company were at the time of the dissolution, if any such there were. That John A. Berry and Abraham I. •Berry, both before and at the dissolution, and from thence hitherto, had, or pretended to have, the entire control and management of the affairs of the company; that they began to exercise such entire control in May, 1837; that during the whole of that period they collected all the tolls, averaging from $1200 to $2000 a year, without accounting for a dollar, and have proceeded therein a3 if they were the only parties interested in the company; and that they refuse to come to any account. That when said John and Abraham assumed such control, one D. K. Allen was treasurer of the company, and' had in his hands about $1000 of the money of the company; and that said John, with the consent of said A.braham, took the said money from Allen and appropriated it to their use, and applied it in the purchase of stock of the company. That the said John did not take a transfer of the stock, so purchased, in his own name, but only proxies; that he also transferred stock to the names of others, who paid nothing for it, and did not pretend to own it; and, after such transfer, took their proxies for the same. That this was done to secure to himself as large a number of votes as possible. That this whole scheme was devised by the said John and Abraham, with the fraudulent intent of securing to themselves the exclusive control of the affairs of the company; and that it did so. That during the period they had such control, the said John transferred stock to persons who did not pay for, or pretend to own it, solely with the view to elect such persons directors. That said nominal directors were the relations of said John, and that said Evander Berry and George Bell resided and still reside in the State of New York, and took no interest or concern in the affairs of the company. That said John and Abraham, while they had such control, suffered the road and bridges of the company to go to decay, by reason whereof travelers met with accidents and losses. That before the dissolution, a suit was brought in the Supreme Court against the company by C, G. Jabin, for injuries sustained by him while traveling the road, during the time the said John and Abraham had such control and management; in which action a verdict for §357 was recovered against the company, in January, 1843; on which verdict judgment was entered, March 1st, 1843, after the dissolution of the company, with §77.84 costs. That a fi. fa. was issued on the judgment, returnable to February Term, 1844, which was levied on so much of the road and bridges of the company as are situated in the county of Hudson. And the complainants insist, that such judgment, execution and levy, after the dissolution of the company, were irregular and illegal. That the said John and Abraham have not, nor hath either of them, accounted for the said money so received from Allen, or any part of it. That on she 17th of February, 1843, there was recorded in the clerk’s office of Bergen, a deed dated February 15th, 1843, purporting to be made by the company to Abraham I. Berry, stating that the said act would become void on the 18th February, 1843, by reason of the road ami bridges not being completed, and that it was doubtful whether the trustees of dissolved corporations, designated by the act entitled “ An act for the relief of creditors against corporations,” have power, after the dissolution of such corporations, to sell and convey their real estate; and that it was equitable and just that, on the dissolution of the company, their real estate should be fairly sold, and the proceeds thereof paid and distributed to the creditors and stockholders, in the manner and order mentioned in said act; and conveying to said Abraham all the lands and real estate of the company and their rights and franchises, in trust, until the dissolution, to permit the company to receive the tolls, and after the dissolution, in trust to sell the same, in such parcels, at such times, and in such manner as may be directed, from time to time, by the persons who may, at the time of the dissolution, own a majority of the stock, and to pay the proceeds to such person or persons as by the act last mentioned aré declared to be the trustees of said company when dissolved ; to be by them appropriated as the other property of dissolved corporations is in said act directed to be appropriated by such trustees; he, the said Abraham, first retaining the expenses of the sales and of executing the trust; which deed was signed by George Van Riper, the seal of the county being affixed, the acknowledgment stating that he had signed and sealed it by the order of the directors.
    The bill denies this, and charges that the said deed was fraudulent, and was made for the purpose of enabling the said John and Abraham to have, notwithstanding the dissolution of the company, the entire control and enjoyment of the property of the company. That the said John and Abraham, since the dissolution, have kept, and still keep up a toll gate, ana collect tolls, and apply the money to their own use. That they refuse to account, or show the books of the company. That since the 1st of January, instant, (January, 1844,) advertisements have been posted up in two or three places in the county of Bergen, that the said Abraham, as trustee of the company, will sell at public auction, on the 5th of March, 1844, at, &c., all the right and title to the road, real estate, bridges, and fixtures of the company. The bill prays an account; and that the complainants may be paid what is due to them; and that the said deed may be declared to be fraudulent and void; and that a receiver may be appointed, &c.; and that the defendants may be enjoined from receiving any of the debts, and from conveying or encumbering any of the property of the company, and from collecting any tolls, and from exercising any of the franchises granted by the said acts of the legislature.

      On this bill, an order was made, dated January 26th, 18 44, that the defendants show cause, on the 10th February, 1844, why an injunction should not issue and receivers be appointed; and that notice of the hearing be given by service of a copy of the order on such of the defendants as reside in this state.
    The application for an injunction and receivers was resisted, and on the hearing, the affidavits of John A. Berry and Abraham Berry were read in opposition; and the Chancellor, on the 12th April, 1844, made an order refusing the application, and directing the complainants to pay to the defendants, John A. Berry and Abraham I. Berry, their costs in opposing said application.
    After the filing of this bill, the sale of the road and bridges, as advertised as aforesaid, was adjourned to April 25th, 1844; and on that day, the said Abraham, acting as trustee under the said deed, struck off and sold the same to the said John A. Berry for $910.
    On the 30th August, 1845, a supplemental bill, or bill so called, was filed, stating the contents of the original bill and the proceedings thereon; and stating that, since the filing of the original bill, the sale, as advertised in the manner stated in that bill, was adjourned to April 25th, 1844, and that on that day the said Abraham exposed the said road and bridges for sale, at public auction, under the following conditions of sale, giving a copy of the conditions of the sale.
    The 3d condition was, “ Ten per cent, of the purchase money to be paid in cash at the close of the sale, and the residue upon the delivery of the deed.”
    The 4th was, the deed to be delivered in 30 days, and would be a deed of bargain and sale, with covenants against the acts of the grantor.
    The 5th was, that any purchaser neglecting to pay at that time, should forfeit what he had before paid and his right to the purchase, and be liable to make good any loss on a re-sale.
    That few persons attended on the day of sale. That two individuals, whose names are not known to complainants, were evidently hired by the said John and Abraham, or one of them, to attend, and were paid for their attendance by their direction, or that of one of them, as the complainants are informed by the toll-gatherer, and believes, out of the funds of the company. That when the property was put up for sale, and. the conditions read, the said Abraham having refused to permit the said Peter to see the conditions before, the said Peter told the said Abraham that he came there intending to bid, but was not prepared to pay ten per cent, in cash down, and requested an adjournment for a fortnight, which was refused. That the complainant, John P. Outwater, then- asked said Abraham if he would take the joint note of him and Peter Outwater for the ten per cent., payable in two weeks; and the said Abraham refused. That said Peter then offered to bid for said road and bridges $6000, and give such joint note for the ten per cent., payable in two weeks, and to comply in all other respects with the terms of the sale; and that this also was refused by the said Abraham. That said Abraham then put up the property for sale, and struck it off to the said John -A. Berry, his father, for $910.
    The bill charges that the sale was a mere form, and fraudulent, being designed to carry the appearance of fairness without intending that any other person than the said John, or some person acting in concert with said John and Abraham, should become the purchaser. That the note of P. Outwater and John P. Outwater for the ten per cent., or the entire $6000, or a much larger sum, was good, and so known to be by said Abraham and John. That John A. Berry, as the complainants are informed and believe, did not pay the ten per cent, on his purchase at the time of the sale. That the complainants, or one of them, as late as six months after the sale, was informed by the said Abraham that the said John had paid nothing on the said pretended purchase.
    The bill charges that Abraham has made a deed to John for the property, but that the deed has not been recorded, to their knowledge. That after said property was so struck off to the said John, the said Peter Outwater offered to give $6000 for it, but the offer was refused by the said John.
    This bill prays that the defendants therein named, being the same defendants named in the original bill, may answer not only the supplemental, but the original bill also j and that the said deed made by Abraham to John A. Berry be set aside as fraudulent and void, and made for an inadequate price j and that John A. Berry may be restrained from conveying and encumbering the property; and that the deed made by the presiden i and directors of the company to the said Abraham E. Berry, im trust, may be given up and canceled, as fraudulent and void j and that the affairs of the company may be settled up, under the provision of the acts of the legislature, by the president and directors or managers of the corporation at the time of its dissolution, as trustees for said corporation, under the direction of a master, or by a master, under the directions of the court, and the property sold and the debts collected, and divided fairly among the stockholders, after paying the debts of the company, if there are any, and the costs and expenses.
    The bill prays an injunction and a subpoena against the said defendants.
    The subpoena issued on the filing of this bill was returned ser veil on George "Van Riper, John A. Berry and Abraham I. Berry ; the other defendants being’ returned not found.
    To this bill Abraham I. Bony and John A. Berry have filed separate general demurrers.

      P. D. Vromn, in support of.the demurrers.

      William Pennington, mntra.

   The Chancellor.

Several grounds were taken in support of the demurrer. One was, that there was no guarantee that the second sale should yield as much as the first j that the complainants made no offer to secure the amount brought at the sale which has been made. On the facts stated in the bill, and which the demurrer admits, no such offer or guarantee can be necessary. The bill states that a bid of $6000 was offered, and an unquestionable note, payable in two weeks from the day of sale, for the ten per cent, on that sum, the residue to be paid accord - ing to the conditions of sale. That this was refused, and the property was struck off by Abraham I. Berry, acting as trustee for the company, to his father, John A. Berry, for $910. The bill states that the ten per cent, was not required from the said John, and that he has never paid it, nor any part of the purchase money. The application to set aside such a sale, is very different from the ordinary application to open biddings. There was nothing urging the trustee, or justifying him in selling at such a sacrifice in the face of such an offer. I am of opinion there is nothing in the objection.

Another ground taken in support of the demurrer was, that the second bill goes on principles opposite and hostile to the ease made by the original bill, and does not accord with the original bill. The first bill seeks to set aside the deed made by the president and directors of the company to Abraham I. Berry as trustee for the company, with power to sell for the benefit of the company; and the second bill seeks to set aside the sale made by the trustee, after the filing of the original bill, on the ground that such sale was improperly and fraudulently made. I can perceive no hostility between the prayers of the two bills.

The second bill prays, also, that the trust deed to Abraham be set aside. This, it was argued, was incongruous. It does not so strike me. The trust deed to Abraham, and the sale made by him, may both be set aside; or the trust deed held good and the sale by the trustee under it be held void. The bills, taken together and considering one as supplemental to the other, seek, the first, to set aside the trust deed, and the second, to set aside the deed made by the trustee. Both may prevail, or the second may prevail though the first should not. I do not see that the mere introduction of a prayer in the second bill that the trust deed be set aside produces any fatal incongruity.

The other ground taken in support of the demurrer was, that no subpoena was ever served or issued on the original bill; that the complainants were therefore out of court, and not in condition to come in by supplemental .bill. It is true that subpoenas in the original suit should be served before a supplemental bill be filed. Mitf. Pl. 62, margin, note E.

If the second bill in this case is to be considered as strictly a supplemental bill, the questions to be decided would be, first, whether the want of subpoena in the original suit can be taken advantage of by general demurrer to the supplemental bill; and, second, whether the course taken by the defendants under the original bill and the proceedings had thereon were not equivalent to an appearance by the said John and Abraham to the original rill, or sufficient to prevent these defendants from taking advantage of the want of subpoena in the original bill, by general demurrer to the supplemental bill On the filing of the original oill, an application was made for an injunction. The Chancellor appointed a day for the hearing of the application, and directed notice to be given to these defendants. At the hearing they resisted the application, and put in their several affidavits in opposition to it. The Chancellor denied the application, with costs j and the defendants took an order that the complainants pay to them, John A. Berry and Abraham I. Berry, their costs in opposing said application, to be taxed ; and in the taxed costs they were allowed for a copy of the bill.

The second bill states the contents of the first bill, and the proceedings under it on the application for an injunction, and adds the new matter of the sale by Abraham, and prays that the defendants may answer both bills. The defendants John and Abraham demur generally to the second bill. No case was cited, nor have I been able to find any, in which, under such circumstances, a demurrer was allowed for want of a subpoena on the original bill. In this case no useful purpose would be served by allowing the demurrer on this ground ¡ and I am strongly inclined against it. I find a note of the case of Ogden t>„ Gibbons, in which it is said that Chancellor Williamson inclined to the opinion that a general demurrer was to be considered as a waiver of all defects in the service of a subpoena. It seems to me that, in all propriety, the objection should have been made early, and in another way ; and that it should not be allowed to prevail when, after the lapse of several terms, the cause is brought to a hearing on a general demurrer.

But there is another view of the ease on which, as it appears to me, the demurrer must be overruled. The first bill was filed to set aside the trust deed made to Abraham, After that bill was filed, Abraham, as trustee, conveyed the property to John A.; and the second bill seeks to set aside this conveyance from Abraham to John A. It is only in one respect that the second bill can be considered as supplemental. If, in order to set aside the deed from Abraham to John, it be essential that the trust deed to Abraham be set aside, then the second bill may be considered as supplemental. In pursuing the first bill, to set aside the trust deed to Abraham-, his conveyance to John A., after the filing of the first bill, occasioned an imperfection in the proceedings which it was proper to remedy by a supplemental bill. But if the trust deed to Abraham is good, there is nothing in the second bill of the character of a supplemental bill. In that case, it would be a sufficient bill for the purpose of setting aside the deed from Abraham to John. If the origina,! bill was dismissed because no subpoena was issued on it, would this second bill fall altogether ? Would the effect be anything more than that that part of it which asks that the trust deed to Abraham be set aside would fall, and be left for another suit ? So far as the second bill goes for the setting aside of the deed from Abraham, to John, it is a new case, not necessarily connected with the first bill; for, though the trust deed should be held good, the deed from Abraham to John might be set aside. The new matter of the second bill, that is to say, the deed from Abraham to John, may be tried and decreed upon, and the matter of the first bill, that is, the trust deed to Abraham, be left entirely untouched and remain the.subject of a distinct suit. If no decree could be made on the new matter stated in the second bill without decreeing that the trust deed to Abraham was void, then, unless the defendants were properly brought in under the first bill, the suit could not proceed. But the deed from Abraham to John may be void and the trust deed to Abraham may be good. At most, then, this second bill could only be demurrable so far as it relates to the matter of the first bill. But the demurrer is general to the whole bill, and being, as it seems to me, bad in part, it is bad in whole, and must be overruled.

Demurrer overruled.


text:
    JACOB CUMMINS v. GEORGE WIRE.
    1. A bond and mortgage declared usurious under the pleadings and proofs.
    2. The payment and receipt of usurious interest is prima facie evidence of a prior usurious contract.
    3. It was agreed that C. should lend W. §2000, on interest, and that W., for the loan, should give C., before receiving all the money, a wagon, of the value of $100, over and above the legal interest; and that to secure the repayment of !.he §2000, with legal interest, W. should give C. a bond and mortgage. Held, usurious.
    4. A purchaser of lands at sheriff’s sale on judgment and execution at law, subject to all prior legal encumbrances, can take advantage of usury in a mortgage of prior date to the judgment. Semble, that a subsequent judgment creditor can take advantage of usury in a prior mortgage.
    5. A mortgagor, a defendant in a foreclosure suit, the mortgaged premises having been sold by the sheriff under judgments and executions at law against him, is a good witness, in the foreclosure suit, for a judgment creditor or such purchaser at sheriff’s sale, defendants in the foreclosure suit, to show usury in the mortgage. -
    6. A paper purporting to be a certified copy of an order and of the signature of the Chancellor thereto, for the examination of the defendant in a suit, was sent by the clerk to the solicitor of the defendants, but, by some oversight, the original draft of the order had not been presented to the Chancellor for his signature. Held, that the court might receive the testimony if the party examined was not interested.
    On the 12th April, 1844, Jacob Cummins exhibited his bill for the foreclosure of a mortgage, dated April 1st, 1841, executed by George Wire and his wife to him, to secure the payment of a bond of the same date, executed by Wire to him, and conditioned for the payment of $2000 on or before April 1st, 1843, with interest from the date thereof. The mortgage was recorded on the 8th April, 1841. The bill then states several judgments against Wire, and among them a judgment of Marsh and Willis and a judgment of Magie and Sanderson, and states that, on or about February 1st, 1844, Wire and wife executed a mortgage on the same premises to Amos D. Kennedy, to secure the sum of $3822.03. The judgment creditors and subsequent mortgagee are made parties defendants, with Wire and wife.
    To this bill the defendants Marsh and Willis, on the 7th De cember, 1844, filed an answer, setting forth that, since the exhibiting of the bill, they, in connection with Magie and Sander-son, two other of the defendants, have become the purchasers of the mortgaged premises, at a public sale thereof by the sheriff of Warren, on the 28th May, 1844, by virtue of certain executions issued out of the Common Pleas and Circuit Courts of Warren against Wire.' That the conveyance was made by the sheriff to Magie and Sanderson, and is held by them for the joint benefit of themselves and these defendants. They admit the execution and delivery of the bond and mortgage, and say they have been informed and believe that, before the making of the mortgage, and about in March, 1841, Wire, being somewhat embarrassed in his affairs, applied to the complainant to lend him $2000; and that it was then corruptly agreed, contrary to the statutes in such case made and provided, by and between the complainant and Wire, that the complainant should lend Wire $2000j and should forbear and give day of payment till April 1st, 1843, and that Wire, for the loan of the said $2000, and the giving day of payment thereof as aforesaid, should give and pay the complainant, before receiving the whole of the $2000 from the complainant, a wagon or carriage to be of the value of at least $100; also, that Wire should pay the complainant interest on the said sum so agreed to be loaned, at the rate of six per cent, per annum, from the said 1st of April, 1841, until the time of payment thereof as aforesaid; that for securing to the complainant the repayment of the said $2000, with interest, Wire should execute his bond, conditioned for the payment of the $2000, by him to the complainant, with interest, on the 1st of April, 1843, which bond was to be secured by a mortgage on the real estate of Wire, or some part thereof, to be executed by Wire and his wife to the complainant. That in pursuance of the said corrupt agreement, the complainant lent Wire various sums, at different times, in all amounting to $2000; but that before the whole $2000 was lent and advanced to Wire by the .complainant, Wire, in pursuance of the said corrupt agreement, paid to the complainant, and the complainant received from him, :a wagon or carriage of the value of at least $100, for the loan of the said sum of $2000. That they have been informed and ■believe that, for securing the repayment of the said $2000 on ihe 1st of April, 1843, with interest, Wire, in further pursuance of the said corrupt agreement, on or about April 1st, 1841, executed his bond in the penal sum of $4000, conditioned for the payment of $2000 on the 1st of April, 1843, with the interest thereon ; and that, as a further security for the said payment, Wire and his wife executed and delivered to the complainant a mortgage, bearing even date with the said bond; and they charge that the bond and mortgage so as aforesaid executed and delivered to the complainant by the said Wire for the purpose aforesaid, are the same bond and mortgage set forth in the complainant’s bill. That the value of the said wagon so agreed to be given and paid, and which they charge was given and paid by Wire to the complainant, for the said corrupt and unlawful purpose, and the interest of the said $2000, so reserved'and made payable to the complainant by the condition of the said bond, and secured by the said mortgage, exceeds the rate of $6 for the forbearing of $100 for one year, contrary, &e., by means, Ac., they say, the said mortgage was and is wholly void.
    Magie and Sanderson have also put in an answer, in which they state the purchase of the premises since the exhibiting of the bill, at sheriff’s sale, as stated in the answer of Marsh and Willis; and admit the execution of the bond and mortgage to the complainant. They state, that before the making of the mortgage, and about in March, 1841, Wire applied to complainant to lend him $2000; and that it was then corruptly agreed by and between the complainant and Wire, contrary, Ac., that the complainant should lend Wire $1900, and should give day, Ac., till April 1st, 1843, and that Wire, for the loan of said $1900, and for giving day of pay men! as aforesaid, should pay the complainant $100; also that Wire should pay the complainant interest on the said $1900 at the rate of six per cent, per annum, and should also pay interest at the same rate on the said $100 so agreed to be given and paid by Wire to the complainant, from April 1st, 1841, till the time of payment thereof. That in order to secure to the complainant the repayment of the $1900 and the payment of the $100, so agreed to be paid by Wire to the complainant, with the interest thereon, it was further agreed that Wire should give to the complainaut a bond, in the penal sum of $4000, conditioned for the payment of $2000, with interest thereon, on the 1st of April, 1843, which bond was to be secured by a mortgage, &c. That in pursuance of said corrupt agreement, the complainant lent Wire various sums, at different times, amounting in all to $1900; that to secure the repayment thereof on the 1st of April, 1843, with the interest thereon, and also to secure the payment of the said $100, to be paid by Wire to the complainant for and in consideration of the said loan, with the interest thereon, on the said 1st of April, 1843, Wire, in further pursuance of the said corrupt agreement, on or about April 1st, 1841, made and delivered to the complainant his bond, in the penal sum of $4000, conditioned for the payment of $2000, with the interest thereon, on or before April, 1843; and that further to secure, &c., Wire and wife executed and delivered to the complainant a mortgage bearing even date with the bond ; and that the bond and mortgage so made are the bond and mortgage ^et forth in the bill. That the $100 so agreed to be paid by Wire to the complainant,.and the payment of which, with the interest thereon, was so secured, with the interest on the $1900, so loaned, and which was also secured by the said bond and mortgage, exceeds the rate of $6, &c.; by reason whereof, &c., the said mortgage was and is void. There is exhibited on the part of the complainant a receipt dated April 2d, 1841, signed by George Wire, acknowledging the receipt from Cummins of......................................... $1081 48 and Christian Schmuch’s note for........................ 33 22 and George Mitchell’s note for............................ 60 00 and Samuel Bell’s note for................................. 5 30 and Cummins’ own note for............................... 820 00 in all $2000, in full compensation for a mortgage made to him,. •Cumtnins, by Wire, for $2000, made the first day of April, 1841.
    ■The complainant, instead of the usual replications to the answers, put in special replications, under oath — a novel and irregular proceeding — in one of which replications he says he admits hé did '.lend Wire, at different times before and at the time of executing the bond and mortgage, various sums of money, and in notes and obligations against good and solvent men, in all amounting to $2000, and not to the sum of $1900 only, as is charged in the answer of Magie and Sanderson ; but denies that before the whole sum of $2000 was lent as aforesaid, Wire paid him, and he received from Wire $100, or any other sum of money, nor agreed to receive any sum of money, nor the said Wire agree to pay any sum of money, for the forbearance of payment, nor for the loan of the said $2000. And he denies ever receiving from Wire, on the said bond and mortgage, for the said $2000, so loaned, any sum of $100, or one cent more than the interest of six per cent, per annum ; nor did ever bargain or agree to receive anything more than at the rate of six per cent, for the said $2000 so loaned as aforesaid ; and he admits that Wire did offer him a carriage, after he had so loaned him the said $2000 as aforesaid, but which he absolutely refused to receive, and never did receive, nor any other property whatever.
    In his replication to the other answer, he says he admits he did lend to Wire, at different times, before and at the time of executing the bond and mortgage, various sums of money, and in notes and obligations against good and solvent men, in all amounting to $2000 ; but he denies that before the whole sum of $2000 was lent and advanced, Wire paid to him and he received from Wire a wagon or carriage of the value of $100, for the loan of the said $2000 as aforesaid, or any wagon or carriage of any value whatever for the loan of any sum whatever. He denies ever receiving from Wire, on the said bond and mortgage for the said $2000 so loaned by him as aforesaid to the said Wire, any carriage, wagon, or any other property whatever, or one cent more than the interest at the rate of six per cent, per annum; nor did he ever bargain or agree to receive anything more than at the rate of six per cent, per annum for the said sum of $2000, so loaned as aforesaid. He admits that Wire offered him a carriage after that he had so loaned him the said $2000 as aforesaid, but which he absolutely refused to receive and never did receive.
    Testimony was taken on both sides.

      Theodore Little opened the argument on the part of the defendants.
    He cited 2 Cowen 412; 3 Harrison 325; 8 Cowen
      669 ; Greenl. Ev. 542; 2 Hill’s Rep. 522; 8 Paige 639; 16 Mass. Rep. 118; 14 John. Rep. 435; 6 Gill. & John. 18; 3 Edw. Ch. Rep. 614, 638 ; 12 Mass. Rep. 32; Halst. Dig. 234; 1 Green’s Ch. 104, 405; 4 Pet. Rep. 205, 228.

      William Halsted, for complainant.
    He cited 1 Paige Ch. Rep. 429; 12 Gill. & John. 379; 10 Ib. 44 ; 9 Ib. 83 ; 1 Hoff. Ch. Pr. 485; Gresl. Eq. Ev. 161, 242, 3; 3 Atk. 401; 2 Br. Ch. 330; 3 John. Ch. Rep. 612; 18 Ves. 517; Ambler 592; 3 Ves. 220, 4 ; 2 Ves. & Beam 401 and note ; 20 John. Rep. 142 ; 14 East 56, 565 ; 3 Wheat. 193, note; 5 Paige 638 ; 1 Smith’s Ch. Prac. 344; 3 Paige 240; 8 John. Rep. 84; 4 Day 37, 114; Gould’s Plead. 90, 91, see 66; 4 Paige 526 ; 3 Wend. 573; 10 Wheat. 392 ; 1 Campbl. Rep. 165; 5 Coke 120; 1 Gallison’s Rep. 425; 7 Conn. Rep. 413; 7 Halst. 79.
    Asa Whitehead, in reply.
   The Chancellor.

I will first inquire whether the usury, in the manner and form in which it is set up in either of the answers, is sustained without the testimony of Wire. The answer of Marsh and Willis charges the usury thus : that before the making of the mortgage, and about in March, 1841, Wire applied to the complainant to lend him $2000, and that it was then corruptly agreed, by and between the complainant and Wire, that the complainant should lend Wire $2000, and should give day for payment till April, 1843 ; and that Wire, for the loan of the said $2000 and the giving day as aforesaid, should give and pay the complainant, before receiving the whole of the $2000, a wagon of the value of $100; also, that Wire should pay the-complainant interest on the said sum so agreed to be loaned, at six per cent., from the said 1st of April, 1841, until the time of payment thereof as aforesaid ; and that, to secure the repay-ment of the $2000, with interest, Wire should give his bond for, &c., and secure it by his mortgage, &c.; and that, in pursuance of the said corrupt agreement, the complainant lent Wire various sums, at different times, in all amounting to $2000; and that, before the whole $2000 was lent and advanced, Wire, in-pursuance of the said corrupt agreement, paid to the complain-ant, and the complainant received from him, a wagon of the value of $100 for the loan of the said sum of $2000 ; and that, for securing the repayment of the said sum on the 1st of April, 1843, with interest, Wire, in further pursuance of the said corrupt agreement, on the 1st of April, 1841, gave his bond and mortgage, &e.; which are the same bond and mortgage set forth in the complainant’s bill. The charge is shortly this, that it was corruptly agreed that Cummins should lend Wire $2C00 on interest, and that Wire, for the loan, should give Cummins, before receiving all the money, a wagon of the value of $100, over and above the legal interest; and that, to secure the repayment of the $2000, with legal interest, Wire should give his bond and mortgage; that in pursuance of the agreement, Cummins lent the $2000, in various sums, at different times, and that, before the whole was advanced, Wire gave, and the complainant received the wagon; and that, to secure the repayment of the $2000, with interest, Wire gave his bond and mortgage.

That a wagon, of the value of $100, was delivered by Wire at Cummins’ residence, is proved by several witnesses.

James Frashe says that Cummins and Wire came to Wire’s carriage shop, not far from the 1st of April, 1841, and looked at the bodies and the gearing.. That after Cummins left, Wire showed him a body and gearing to be fiuished for Cummins. That it was finished that spring, and that he, the witness, by Wire’s direction, delivered it to Cummins, at his residence. That it was delivered about six weeks after Cummins was at the carriage shop, as before stated.

Simeon A. Cummins, a son of the complainant, sworn on the part of the complainant, proves the delivery of the wagon, and that it was delivered by Frashe. He thinks it was delivered the last of July or 1st of August.

An effort has been made on the part of the complainant, to shew that the wagon was not received by him. I forbear making any particular remarks as to this effort; it is, perhaps, sufficient for me to say that it should not receive the favor of the court. It must be taken as a fact in the cause that the wagon was received by the complainant.

On what account was it delivered by Wire and received by the complainant? The complainant, in a special replication pút in by him, under oath, a novel proceeding at this day, admits that' Wire did offer him a carriage, after he had so loaned him the said $2000, as aforesaid, but which, he says, he absolutely refused to receive, and never did receive. Having reached the conclusion that this wagon was received by Cummins, this sentence is sufficient to show that it was received in consideration of this loan.

What was the amount of the loan? The evidence, exclusive of Wire’s testimony, shows that the amount of the loan was $2000. We have, then, a loan of $2000, secured by the bond and mortgage, to be paid with interest, and the delivery by Wire and the reception by Cummins of a wagon, of the value of $100, in consideration of the loan.

When was the wagon delivered, in reference to the time when the money was advanced ? The answer says it was delivered before all the $2000 was advanced. The special replication admits that Wire did offer him a carriage after he had so loaned him the said $20C0, as aforesaid. These words “so” and “ aforesaid,” refer to the statement of the loan previously made in the said replication. The statement is thus: he admits he did lend Wire, at different times, before and at the time of the execution of the bond and mortgage, various sums of money, and in notes and obligations against good and solvent men, in all, amounting to $2000. Wire’s receipt of April 2d, 1841, exhibited by the complainant, shows that Wire received from Cummins :

Cash...........................................................'.$1081 48

Christian Smuck’s note for..........................'........ 33 22

George Mitchell’s note for................................... 60 00

Samuel Bell’s note for....................................... 5 30

and Cummins’ own note for................................. 820 00

We have no testimony as to the precise time when this note of Cummins for $820 was paid.

Jacob A. Hays, a witness sworn for the complainant, says he had the large note, (that is, Cummins’ note to Wire,) in his possession; he thinks it was for about $800. Wire sent him to collect money, and gave him this note against Cummins, among others; that he called on Cummins, and that, in a day or two, Cummins came up to Warrenville, and saw Wire; and he thinks they then talked about this note. He says that, as far as he recollects, this was before the wagon was got and before this note was paid.

This is all we have in testimony as to whether the wagon was delivered before this note was paid. But when the complainant, in order to meet another view of the case, and to show that the whole amount of the $2000 was lent on the 1st of April, 1841, is driven to produce a receipt of Wire which shows that he, Cummins, gave Wire his note for $820 of it, and does not show when this note was payable, or when the $820 was paid; and when it is shown that Wire sent a man with this note to Cummins to get the money for it, and that he did not pay it to the messenger, but in a day or two afterwards went up to see Wire; that shortly after the 1st of April a body and gearing were directed to be finished for Cummins, and that it was delivered, as some of the testimony shows, within six weeks thereafter, other testimony putting it a month or two later; I think it would be asking too much to ask the court to permit these securities to stand because there is a want of precise proof that the wagon was delivered before all the money was advanced. If it was not, there would be very little of substance in the variance; for, whether the wagon was delivered a few days before or a few days after the whole money was advanced, is substantially of no importance. And though courts have been astute in defeating the defence of usury — I think quite enough so — yet I believe no ease can be found in which a complainant, who, by his own proof, shows that he did not advance all the money when the securities were taken, but gave his own note for four-tenths of it, and does not show when that note was payable, nor when paid, and who is shown by testimony to have received a wagon, of the value of $100, in consideration of the loan, beyond the interest, and within some short time after the date of the secuities, has been permitted to sustain them on the ground that the proof is not precise that he received the wagon before he paid all the money. If he felt driven to this ground, he had it in his power to give, proof in opposition to the facts and circumstances proved affording a fair presumption that the money was not ail paid till after the wagon was delivered.

The testimony of Dennis and of Barton and Drake cannot be overlooked, in considering whether the defence made by this answer is made out. Dennis says the complainant told him he had let Wire have the money, and that he understood the complainant to say he got something for it, he can’t say whether $100 or $200.

Barton swears that, in May or June, 1841, Cummins .called at his house and asked to see the law in regard to usury, and said he had loaned Wire some money, and that people said he had taken usury, and that Wire would swear him out of it; that he, Barton, read to Cummins the section concerning usury, and that Cummins then said, “If Wire saw fit to make him a present, what business was it to anybody,” or words to that effect.

Jacob Drake, sworn for the complainant, on his cross-examination, after an evasive answer or two, says he thinks the complainant told him that Wire had given or offered him something like $100, for the sake of getting some money, but that he would not ask it of him the way things turned out.

There is but one other question remaining to be considered for the purpose of determining whether the defence set up by this answer is made out, excluding the testimony of Wire. The answer charges a previous corrupt agreement to give and receive the wagon. That the loan agreed for was $2000; that a wagon/ of the value of $100 was given by Wire and received by Cummins, in consideration of the loan, I cannot doubt. That the wagon was delivered before all the money was advanced, (if it be at all necessary that such prior delivery should be proved,} must, I think, under the evidence in the cause, be considered as-proved. Was the wagon delivered and received on a corrupt agreement made between the parties at the time of or previous to the loan ? On this part of the case, I think the doctrine sanctioned by our Supreme Court, in 2 Har. 497, and 3 Har. 325, that the payment and receipt of usurious iuterest is prima facie evidence of a prior usurious contract, is the true doctrine. If this be not so, the statute against usury might as well be struck from the statute book. If courts are to permit themselves to be-blinded by a pretence that what was given, for a loan, beyond legal interest, was a present made by the borrower to the lender, after the money was lent, without any agreement or stipulation therefor before, the law against usury is little better than a dead letter.

I am of opinion that the usury as set up in the answer of Marsh and Willis is proved, excluding the testimony of Wire.

Assuming, for the present, that Wire’s testimony is admissible, we will next examine whether the usury, in the manner and form in which it is set out in the answer of Magie and Sander-son, is proved. This answer states that before the making of the mortgage, and about in March, 1841, Wire applied to Cummins for the loan of $2000, and that it was then corruptly agreed between them that Cummins should lend Wire $1900' and give day, &c., till April 1st, 1843 ; and that Wire, for the loan of said $1900 and the giving day as aforesaid, should pay Cummins interest on the $1900 and on the $100, at 6 per cent., from April 1st, 1 841, till the time of payment thereof; and that, to secure the $1900 and the $100, with the interest thereon, Wire should give the bond and mortgage. That, in pursuance of the said corrupt agreement, Cummins lent Wire various sums, at different limes, amounting in all to $1900 ; that to secure the repayment thereof aud interest thereon, on the 1st April, 1843, and the payment of the $100 to be paid by Wire to Cummins, in consideration of the said loan, with the interest thereon, on the same 1st April, 1843, Wire, in further pursuance of the said corrupt agreement, on or about April 1st, 1841, gave his bond and mortgage, &e.

The answer is, substantially, shortly this: that Wire agreed to borrow and Cummins agreed to lend $1900, and that, for the loan, Wire agreed to give, aud Cummins agreed to receive Wire’s bond and mortgage for $2000, with interest thereon; and that the loan was made and the securities given according to the agreement.

Wire testifies that when he first applied for the money, he proposed to Cummins if he would raise him $1900, by or about the 1st April, he, Wire, would give Cummins his bond and mortgage for $2000; that the sum agreed upon was $1900; and Cummins said he would try and raise the money; and that Cummins did raise for him, in money, together with Cummins’ note, $1900, on or about April 1st, 1841; and for which he, Wire, gave his bond and mortgage, the mortgage being executed by his wife also, for $2000, with interest thereon. That he received but $1900.

There can be no doubt that this proof sustains the defence set up in the answer of Magie and Sanderson ; and this proof is entirely consistent with, and is corroborated by the other evidence in the cause, aside from that which relates to the wagon; .and the whole testimony of Wire, including his statement of the transaction in relation to the wagon, is entirely consistent with all the other testimony, in the cause, in reference to the usury. And here I may be permitted to advert again to the complainant’s special replication. I think it is well calculated to show how very hard is the way of the transgressor; and to impress upon us the truth that if shallow devices are to be permitted to succeed in-overcoming the defence of usury, great elasticity of conscience, and great injury to the cause of morals will be the result. In the first part of the replication he resorts, to a literal denial, (an improper mode of answering,) or rather an attempt at a literal denial; for he fails even in this before he gets through. He denies that before making of the bond and mortgage, and about in March, 1841, Wire applied to him for the loan of $2000, or some other sum, and that it was then corruptly agree4 between them that he should lend and advance Wire $1900, and that he should give day, &c., to Wire, till April 1st, 1843, and that Wire, for the loan of the said $1900 and the giving day as aforesaid, should give and pay to him $100; also that Wire should pay him interest on the said $1900 at six per cent., and should also pay interest at the same rate on the said sum of $100, so .agreed to be given and paid by Wire to him, from the 1st of; April, 1841, until the time of the payment thereof; that in order to secure to him the repayment of the said $1900 agreed to-be paid as aforesaid, to him by Wire, with the interest thereon, it was further agreed that Wire should make and deliver to him the bond of Wire for $2000, and the mortgage, &c. Now, this, ■denial is all in one connected clause, the different parts of which are connected by copulatives; and if his denial is true as to any one part, it is true as to the whole.

This answer charges a part of the agreement to have been that, in order to secure to Cummins the repayment of the $1900 and the payment of the $100, Wire should give his bond and mortgage for $2000.

The denial is thus: he denies that in order to secure the repayment of the $1900 it was agreed that Wire should give his bond and mortgage for $2000. All this replication amounts to nothing, and a little less.

But the parts of the replication to which the remarks above made in relation to it particularly referred, is the next succeeding clause of it; it is as follows: He admits that he did lend and advance to Wire at different times, before and at the time of executing the bond and mortgage, various sums of money, and in notes and obligations against good and solvent men, in all amounting to $2000, and not to $1900 only, as charged in the answer of Magic and Sandford. This is evidently a well-studied sentence; and I am very clear that the complainant would be unwilling to have it considered as an oath that before and at the time of the execution of the bond and mortgage he lent and advanced, at various times, in money and notes and obligations, $2000. It is evident that the sentence was framed in view of the fact testified to by Wire, that, some two or three weeks after the bond and mortgage were delivered, Cummins came to him and said lie was dissatisfied about the bond and mortgage, and gave him $100 in notes of other persons, to make up the $2000. Hence the sentence is, that he did lend and advance, at different timas, before and at the time of executing the bond and mortgage, various sums of money, and (did lend and advance) in notes, &o., (without saying when or how much,) in all amounting to $2000.

The next half of this paragraph is of the same character. It denies that before the whole sum of $2000 was lent and advanced — that is, before he made up the additional $100 as aforesaid— he agreed to receive, or Wire agreed to pay, $100, or any other sum of money, for the loan or forbearance of payment of the said sum of $2000.

Now, this is not the charge. The charge is that, before the $1900 was advanced, Wire agreed to pay, and he agreed to receive, $100 for the loan and forbearance of payment of $1900.

He closes his replication by saying he admits that Wire did offer him a carriage, after he had so loaned to Wire the said sum of $2000 as aforesaid, but which, he says, he absolutely refused to receive, and never did receive.

I have disposed of this part of his statement before, and have •shown that, under the testimony in the cause, he did receive it. His conscience, perhaps, was satisfied, so as to allow him to say he did not receive it, by the fact that his son Nelson took the horse from before the wagon and put the wagon into the wagon-house, and the wagon was called Nelson’s. But did the father or the son ever pay anything for it? This device is puerile. He received the wagon.

The ease, then, as it stood when the bond and mortgage were executed, is clearly proved as set up in defence by the answer •of Magie and Sandford. It was a loan óf $1900, and the taking, therefor, a bond and mortgage for $2000, and interest thereon. This is clearly usurious.

But it was said, in argument, that Cummins afterwards repented, and went to Wire and gave him notes of other persons to the amount of $100, and this made up the loan to the $2000. If it was not for the wagon affair, I should be called upon to consider the case in view of the decisions which were produced on the argument on this subject of penitence. But, at least, a court should be satisfied that the repentance was sincere, and sincerely acted upon. A mere change from $100 in money to a wagon of the value of $100 is not proof of repentance. The case, then, stands on its first ground — the ground on which it stood when the bond and mortgage were delivered; and if Wire’s testimony is admissible, the defence, in the manner and form in which it is set up in the answer of Magie and Sander-son,' is made out. If Wire’s testimony is not admissible, then the defence, in the manner and form in which it is set up in the answer of Marsh and Willis, is made out.

It appears to me that Wire’s testimony is admissible. This is a proceeding in rem. The costs will be paid from the pro-seeds of the sale of the property, if the complainant succeeds; there would be no decree against Wire for costs. That ho is a defendant in the suit is no objection to his being sworn, if he is not interested in the event of it, and interested on the side of the party calling him. Is he interested, and, if so, on which side? Is ho interested to defeat the mortgage ? Hot unless the iecree against the mortgage which might be procured by his testimony could avail him in an action against him on the bond. But it could not. If interested at all, then, it is not to sustain ¿he mortgage, that the mortgage debt or a part of it may be paid out of the property. The benefit which has accrued to him from the amount paid by the purchasers of the equity of redemption would remain the same.

Wire’s testimony being considered admissible, can it be held that both answers are sustained ? It may be said that if the agreement was, to take a bond and mortgage for $2000, and interest thereon, on advancing $1900, which is the agreement as set forth in the answer of Magie and Sanderson and proved by Wire, it could not be an agreement to lend $2000 and take a bond and mortgage for that sum, on an agreement between them that Wire should give Cummins a wagon of the value of $100, which is the agreement as set forth in the answer of Marsh and Willis. This would be so if there had been but one agreement, and there had been no substitution ol another agreement for it. But where the original agreement, as first executed, is for securing $100 more than is advanced, and afterwards the lender, (at his own suggestion,) advances the additional $100, and takes a carriage of the value of $100, it must be considered in the same light as if the original agreement was to lend the $2000 on bond and mortgage and take such carriage for doing it. Both answers are sustained.

The next question is, can these defendants, or either of them, take advantage of the usury? These defendants were made parties defendants as judgment creditors. After the filing of the bill, and before their answers were filed, they became purchasers of the lauds at a sale thereof by the sheriff under judgments and executions at law, subject to all prior legal encumbrances.

It was held in De Wolf v. Johnson, 10 Wheaton 367, that the purchaser of an equity of redemption cannot set up usury in the mortgage; and, on the authority of that case, it was so decided by our Court of Errors, in the case of Ward v. Plume. Afterwards, a case in which I was concerned, as counsel, the case of Mathews against Roberts and Ogden, came up before our Court of Errors, and the subsequent case of Lloyd v. Scolt, 4 Peters 205, 229, was produced, overruling the case of De Wolf v. Johnson; and our Court of Errors sustained the defence made by the purchaser of the equity of redemption. I am not disposed to question the authority of that decision. But it was said, in argument, that when the bill was filed, these defendants were only judgment creditors, and that they should not be permitted, after the bill was filed, to put themselves in a better position to make the defence by purchasing, the equity of redemption. I do not see that this is a sound position. Nor do I see any reason why a judgment creditor, as such, may not make the defence. He has a lien on the property ; and for that reason is made a defendant in a foreclosure suit. He may redeem. Has he not an interest in the land sufficient to authorize him to question the validity of any prior lien ? Why is he made a defendant, if he cannot question the mortgage? Cannot a subsequent mortgagee set up usury in the first mortgage ?

In the case of Green v. Kemp, 13 Mass. 415, Woods, after mortgaging the premises to Green for $1000, released and guaranteed to Kemp all the right in equity of redeeming which he had in the premises, for $100. The court, in that case, said that Kemp had no title in the land before redeeming, for he bought only a right to redeem, and therefore he could not be permitted to avoid the mortgage for usury. But the court, in the same case, say that if he had bought the land he might avoid a previous usurious mortgage, though he had notice of the mortgage before he purchased.

In this case Magie and Sanderson bought the lands at a sheriff’s sale on a number of executions, including an execution of their' own, for $2700, the highest bid, and received the sheriff’s deed therefor in the usual form, subject to all legal prior encumbrance. I am of opinion that such a purchaser can set up usury in a mortgage existing on the premises at the time of the sale. Í am of opinion, also, that when a bill is filed to foreclose, and judgment creditors are made parties, and before the time for answering comes, one of the judgment creditors, a defendant in the bill, buys the property at sheriff's sale under the executions at law, he may, in his character of purchaser, set up usury in the mortgage

In th.s view of the case, the bill must be dismissed. It will be dismissed without prejudice to the rights of Amos Kennedy, the subsequent mortgagee mentioned in the bill, whatever those rights may be.

The objection made to the examination of Wire as a witness, on the ground that no order for his examination was signed, canik t bo allowed to prevail under the circumstances. A paper purporting to be a certified copy of an order for the examination of Wire, and of the signature of the Chancellor thereto, was sent by the clerk to the solicitor of the defendants ; but by some oversight the original order was not presented to the Chancellor for bis signature. These orders are very much of course. A party examined as a witness between other parties is examined subject to all exceptions; and he may he objected to at the hearing, if interested, though the objection has not been previously made.

Bill dismissed.

Cited in Brolasky v. Miller, 4 Hal. Ch. 790; Brolasky v. Miller, 1 Stock. 811, 815; Andrews v. Stille, 8 C. E. Gr. 479.


text:
    ADAM KINNAMAN v. JOHN HENRY AND RICHARD HENRY.
    1. In May, 1817, J. purchased land of K. and paid part of the consideration money and gave K. a mortgage on the land for the residue. J. sold parts of the land, and K. released these parts from the mortgage.
    2. In August, 1821, judgments were recovered, in favor of other persons, against J., on which executions were issued and levied on that part of the mortgaged premises still held by J., “subject to prior encumbrance.”
    3. In October, 1822, pending a suit in this court by K. against J. for the foreclosure of the mortgage, J. and his wife re-conveyed that part of the mortgaged premises which he still held, and which had been levied on as aforesaid, to K., in payment an,d discharge of the mortgage, and K. took possession of the land; the registry of the mortgage, however, was left uncanceled. Afterwards the sheriff sold, under the said levy, and H. became the purchaser; H. when he so bought, having knowledge of the foregoing facts. Held, that H. was not entitled to the land free from the mortgage debt; but that K. must be considered in the light of a mortgagee in possession, and H. as only entitled to redeem on payment of the mortgage debt.
    4. It is of the utmost importance that defendants be held to the established rules for answering.
    5. It is not sufficient for a defendant to say he has no knowledge of a fact charged in the bill.
    The facts are sufficiently stated in the opinion of the court.

      William Ualsted, for complainant.
    He cited 6 John. Ch. 393, 5; Walker’s Ch. Rep. 261; 2 Ves., Jun., 437; 16 Ves. 249; 3 Paige 421 ; 5 Binney 134; 12 John. Rep. 190; 1 John. Ch. 298, 394; 4 Ib. 7; Story’s Eq. Pl., page 803, 812; Cooper’s

      Pl. 315; 8 Ves. 87; 5 Dana 85; 3 Halst. Rep. 282-3.

      Peter D. Vroom, for defendants.
    He cited 2 Cowen 246; 1 Watts and Sey. 485.
   The Chancellor.

In May, 1817, Adam Kinnaman sold to James Johnson two tracts of land in the township of Mansfield, then a part of Sussex county, for $2900 ; received $1000 of the consideration money, and took his bonds and a mortgage on the same land for $1900, the balance of the consideration money. Johnson, in December, 1817, sold a part of each tract to one Fitzer, which Kinnaman released from the mor I gage. The mortgage to Kinnaman was recorded on the day of its date. At the term of August, 1821, of the Common Pleas of Sussex, .Lewis Johnson recovered a judgment against James Johnson, for about $584; and at the same term of the said court, William Weller obtained a judgment against James Johnson and the defendant Richard Henry, for about $1140. Executions were issued on these judgments. The execution against James Johnson alone was levied on a farm in the township of Mansfield, “said to contain 160 acres,” (which included the lands bought by James Johnson of the complainant,) and also on a lot in the township of Greenwich, “said to contain 10 acres,” “all subject to prior encumbrances.” The execution against James Johnson and Richard Henry was levied on a farm in Mansfield, (I take it to be the same farm which was levied on by virtue of the execution against Johnson alone,) and on a house and lot in the village of As bury, in the possession of Richard Henry, and also “on a lot of laud in the same township, said to contain 30 acresj likewise on one other lot in the township of Mansfield, said to contain 20 acres, bounded by lands of Thomas Schureman and others, all subject to prior encumbrances.” On the 8th October, 1822, pending a suit in this court brought by Kinnaman for the foreclosure of the mortgage so given by James Johnson to him, Johnson and wife reconveyed to Kinnaman, in payment of the mortgage debt, the two tracts so bought of Kinnaman and mortgaged to him, (except the parts thereof which had been sold and conveyed by Johnson to Fitzerand released by Kinnaman.) and Kinnaman thereupon gave up to Johnson the bonds and' mortgage, and took possession of the lands so reconveyed, and has been in possession ever since. The deed of reconveyance was recorded April 10th, 1823. The mortgage to Kinnaman remained uneanceled of record. Afterwards, the sheriff sold the property levied on by virtue of the said executions, including the lots so mortgaged and reconveyed to Kinnaman, and made a deed therefor to the defendant John Henry. Henry, when he bought at the sheriff’s sale, knew that Kinnaman had sold these lands to Johnson, and that Johnson gave Kinnaman a mortgage thereon for.the residue unpaid of the consideration money, and that Johnson had reconveyed the lands to Kinnaman in discharge of the mortgage debt, and that Kinnaman thereupon took possession, and was in possession at the time of the sheriff’s sale. The question is, whether the purchaser at the sheriff’s sale acquired a title to these lots free and unencumbered. If, on the facts as thus stated, he did not, the decree in the case must be for the complainant; and it. will be unnecessary to go into a more particular detail of the evidence in the cause.

At the time of the levy of the executions, the mortgage was recorded, and was the prior lien. Of this fact the purchaser at the sheriff’s sale was chargeable with notice. The levy was subject to the mortgage; Johnson’s equity of redemption only was levied on. Before the sale by the sheriff, Johnson had reconveyed the lands to the mortgagee in discharge of the mortgage debt. At the time of the sheriff’s sale, Johnson, the defendant in the execution, had no interest whatever in the lands. What interest in the land, then, could be sold on the execution against Johnson levied on his interest while he had an equity of redemption in it? Could a greater interest than Johnson ever, at any time, had in the lauds, be sold on an execution against Johnson ? Certainly Johnson’s reconveyance to Kinnaman gave Johnson no greater interest in the land than he had before. That act deprived him of all interest in the land, instead of adding to or increasing his interest that had been levied on.

It was said, in argument, that the levy was on the land subject to the mortgage, and that if, at the time of the sheriff’s sale, the mortgage was paid, the purchaser at that sale bought the land„ and, there being then no mortgage on it, he got it unencumbered. This would be so if he paid off the mortgage and held the land, or if he had paid off the mortgage and conveyed the land to a third person; bur it is not so when he conveys the equity of redemption to the mortgagee, and gives up possession to the mortgagee, in discharge of the mortgage debt. The interest he thus conveys is simply his equity of redemption, the interest that had been levied upon. To say that if, after a levy on a mortgagor's equity of redemption, he conveys it to the mortgagee in discharge of the mortgage, the whole esiate in the land, as well the interest of the mortgagee as that which the mortgagor had at the time of the levy, may be sold under such levy, is a proposition which cannot be maintained.

The equity of the complainant’s case does not rest on the idea that Johnson got the bonds and mortgage by promising to pay the judgments, or by misrepresentations that he had paid them, or on the idea that the understanding was that he had paid off the judgments. The complainant cannot be subjected to the loss of his estate in the lands because, on receiving a conveyance of Johnson’s equity of redemption and the possession, in dis« charge of his prior lien, he did not insist that the subsequent Hens should be first paid off.

The complainant must be considered in the light of a mortgagee in possession, and the purchaser at the sheriff’s sale as having no other interest in the lands than the right to redeem them, on payment of the amount of the mortgage debt, and interest, less the value of the rents and profits since the complainant has had possession.

I have a remark to make in reference to the answer filed in this cause.

In several respects it is open to animadversion. I have had occasion to remark before that it is of the utmost importance that defendants be held to the established rules for answering. One of these rules is, that it is not sufficient for a defendant to say he has no knowledge of a fact charged in the bill. He must answer as to his knowledge and information. This rule has not been observed in the answer in this case.

Reversed, 2 Hal. Ch. 624.