Irvine v. Barrett , 2 Grant 73 ( 1853 )

The opinion of the court was delivered by

Lewis, J.

— This was a proceeding to ascertain the amount due on a bond of the 29th of December, 1841, given expressly “ to secure the payment of a former bond and mortgage, of the 30th of March, 1836, with interest.” This bond was, therefore, merely a collateral security, and the sum to be recovered on it, is to be governed altogether by the amount of the principal debt. That depends upon the rate of interest to be allowed, and the rule for the rate is furnished, by the law of the place where the contract was to be performed. The bond and mortgage were given in pursuance of a decree of the vice-chancellor of the Eighth Circuit of the State of New York, and were filed of record, and approved of by that court, on the 20th of April, 1837. They were given to securp the payment of a sum of money due to Rufus Weatberbee, in bis life-time, and payable in consideration, inter alia, of tbe conveyance agreed to be made by Weatberbee to Irvine, of certain lands in New York. Tbe mortgage was upon lands in New York, and was made payable, with tbe bond, to Barrett, tbe guardian appointed by tbe vice-chancellor of tbe Eighth Circuit of New York, in execution of a decree of specific performance, made by him in that State. Barrett, tbe guardian, to whom tbe bond and mortgage were made payable, resided in tbe State of New York, and when be accepted tbe trust, under tbe appointment of tbe court of that State, gave bond to obey tbe orders and direction of that court, in relation to tbe trust. Where a contract is made with tbe government, it is, in contemplation of law, made at tbe place where its principal powers are to be exercised. 7 Pet. 449; 6 Id. 172. And’ where a security is given in pursuance of a decree of a court of justice, it is to be construed according to tbe intention of tbe tribunal, which directed its execution, and is in contemplation of law made and to be performed, at tbe place where tbe court exercises its jurisdiction. Dig, 45, 1, 52. If tbe lands bound by such security are located there, if the person to whom tbe money is made payable, resides there, and is appointed by tbe court to receive it, and pay it out under its directions, and if tbe money is in part consideration of tbe conveyance of tbe mortgaged premises, made in pursuance of tbe decree of specific performance, pronounced by tbe same court, tbe contract must be performed according to tbe law of tbe place where tbe court exercises its jurisdiction. Tbe original indebtedness was without interest. The credit, according to tbe terms of tbe contract, bad expired on tbe 1st of July, 1835. Tbe decree of tbe court directed tbe money to be secured by bond and mortgage with annual interest. Tbe bond and mortgage were given on tbe 30th of March, 1836, after tbe original credit bad expired, and they were filed and approved on tbe 20th of April, 1837, more than two years after the debt, by tbe terms of tbe original contract, was due. That contract was with Weatberbee himself. Tbe bond and mortgage was given to Barrett, tbe guardian of bis heirs. Under these circumstances, tbe original contract is extinguished by tbe decree, and a new indebtedness is created, payable at a different time, to a different party, and with an express contract for annual interest, where there was no contract for interest before. We have no doubt, that tbe interest payable under that decree, and secured by the bond and mortgage given in pursuance of it, is to be calculated according to tbe rate allowed by tbe law of New York. Tbe bond given in this State, being but a collateral security for tbe former, is to be governed by the law which controls tbe principal indebtedness. In this particular, the instructions of the Court of Common Pleas were correct.

We have examined the other errors assigned, but cannot perceive that the, plaintiff in error has any just cause of complaint.

Judgment affirmed.