Bullowa v. Orgo , 12 Dickinson 428 ( 1898 )

Pitney, V. C.

The first point raised by the demurrers is that the agreement of Orgo to guarantee the sales made by him on account of the complainants, is void under the statute of frauds, because not in writing. But I think the law is the other way, and that the agreement was not within the statute of frauds. The bill distinctly alleges that Orgo was to receive a certain commission, agreed upon between them, as his compensation for selling and guaranteeing. • This makes the contract an original one between Orgo and the complainants in consideration of a benefit and advantage to him, Orgo, therefor. The presumption is that he received a greater commission on the sale as consideration for his guarantee than he would have received if the sales had been made without the guarantee. It is quite unnecessary that the precise amount which he received on account of his contract of guarantee, as distinguished from his services in making sales, should appear. He was, in fact, to receive a consideration, and that consideration is the basis of his promise tb guarantee the debts. In fact, it was the ordinary del credere commission, which, as is well settled, is not within the statute of frauds.

The next point taken was that the deposit of the title deed, under the circumstances alleged in the bill, did not constitute an equitable mortgage, because the debt for which it was deposited was not the debt of Bilancia but that of Orgo.

There are two answers to this. In the first place, the allegation is that a distinct sum of money was due from Orgo to the complainants, which was covered by the conditions of the bonds. That being so, the giving of the bonds made that debt the debt of Bilancia. He acknowledged himself indebted, first in the sum of $1,000, and afterwards in the sum of $2,000, if a certain condition was not fulfilled. That condition was not fulfilled and thereby his debt became at once fixed.

In the next place, I am unable to assent to the doctrine that an equitable mortgage, by depositing title deeds, may not be created in order to secure the debt of a third person. The authorities are not so.

It was faintly argued by the demurrants that the deposit of title deeds with an agreement to execute a legal mortgage, did not constitute an equitable mortgage. But the authorities are the other way. Edge v. Worthington (Lord Kenyon, M. R.), 1 Cox Ch. 211, decided in 1786; Ex parte Kensington, 2 Ves. & B. 79 (at p. 83) (Lord Eldon); Hockley v. Bantock, 1 Russ. 141 (Lord Gifford, M. R.); Keys v. Williams, 3 Younge & C. Exch. 55 (at p. 61) (Lord Abinger, Chief Baron); In matter of Howe, 1 Paige 125 (at p. 130) (Chancellor Walworth); 1 Jones Mort. § 163.

No point was made on the insufficiency of the contract to execute a legal mortgage which accompanied the deposit of the title deed, on the ground that no date was fixed for the payment of the money. In the absence of express contract, the presumption would be that the giver of the mortgage should have a reasonable time in which to pay the money, and in this state one year has become so generally the ordinary time that I think the courts ought to presume, in the absence of express contract, that one year was the time in the minds of the parties.

Another point taken by the demurrants is that the complainants have a complete remedy at law; that as between them and Orgo their remedy is simply an action at law. This view was attempted to be met by the complainants by an allegation in their bill that the accounts were complicated and proper for the action of a court of equity. If the case depended upon that allegation I should doubt its sufficiency. I am inclined to the opinion that the bill should set out more in detail the facts showing the complications which render it proper for a court of equity to intervene. But a complete answer to the objection is that the bill is one to foreclose an equitable mortgage given by the defendant Bilancia to secure an exact sum of money alleged to be due, and admitted by the demurrers to be due, from Orgo to the complainants, and to secure which Bilancia gave his bond and after-wards the equitable mortgage on the land mentioned.

The demurrers are overruled, with costs, with leave to the defendants to answer within thirty days upon payment of costs. The answer annexed to the demurrer of Orgo may stand as his answer.