Humphrey v. Sears , 2 Wis. 201 ( 1853 )

By the Court,

Whxton, J.

This is a bill in equity, ' filed for the foreclosure of a mortgage ; the mortgage d ebt is alleged in the bill to be three hundred dollars, besides the interest. The defence interposed in the plea of the defendants, is usury.

"We do not desire to comment - at length upon the testimony which was introduced to establish or disprove the alleged usury, as we have concluded to reserve the decree, and send the case again to the Circuit, for an error of the judge, growing out of another matter. It is evident from the testimony, that the .decree is for a greater sum than is due upon the mortgage. The testimony of the witness, Bowen, introduced by the complainant, to disprove the alleged usury, shows, that Humphrey, the mortgagor, owed him about $250, which was secured by a mortgage ; that upon calling upon Humphrey for payment, a conversation was had between them about a note which Sears held against Bowen and one Estee, the amount of which is not stated. In that conversation, it was proposed by Bowen, that if Humphrey would get up this note, Bowen would receive it of him as so much money on his mortgage debt. Afterwards, Humphrey told Bowen that he had seen Sears, and he was willing to make the exchange, that is, to substitute a mortgage from Humphrey to him, in place of the note which he held against Bowen and Estee.

In the same conversation, Humphrey told Bowen to draw a mortgage for $300, at twelve percent, interest. It appears further, from the testimony of Bowen, that when Sears saw the mortgage for $500, he objected to it, telling Humphrey that he had only agreed to let him have $250, and that a conversation was had- between Sears and Humphrey upon-the subject, in the course of which Sears said he was expecting to receive some money, and if he got it, he would let Humphrey have it. The conversation resulted in an offer on the of Sears to let Humphrey have the additional if he would pay him twenty-five per cent, interest for it, and an acceptance of the offer by Humphrey. Bowen was then directed by Sears to alter the mortgage, so as to make it correspond with this arrangement; but upon > being told by Bowen that this would make the mortgage void for usury, Sears withdrew his offer. At this time some one said, if they were going to do anything of that kind, they must do it between themselves. They then had further conversation, and finally concluded that Sears should give Humphrey his note for $50, at twelve per cent, interest, but that -it-should be left with the mortgage, and if Scam got the money he would let Humphrey have the $50 ; if not, the note was to be given up, and the amount endorsed upon the mortgage. It appears that the note was drawn and left with the mortgage, in pursuance of this arrangement.

If this conduct of these parties ■was not a mere cover for usury, it is evident that the decree is for too much ; as the testimony pretty clearly shows, that Humphrey received, at the time he gave the mortgage for $300, only the sum of, $250, and there is no testimony to show that any further sum was after-wards received by him ; nor is there any testimony to show that the note for $50, which was drawn by Sears in favor of Humphrey, but left in the possession of Sears, was ever delivered to Humphrey. So that the result of the testimony is, either that the drawing of the mortgage for $50 more than wras received by the mortgagor, upon the promise of Sears that he would advance that sum afterwards, or endorse it upon the mortgage, together with the drawing of a note by Sears for that amount in favor of Humphrey, but keeping it iu his own possession, were facts of a trick or artifice to cover up and conceal usury, or else that the decree should have been for the sum of $250 only, and the interest upon it, that being the sum which Avas actually received by the mortgagor, according to the testimony.

We have so much 'doubt upon the subject of usury, that we have concluded not to make a final decree in the case, but to send the casé again to the Circuit, in order that the question may there be decided Wc have adopted this course with less hesitation, on account of the imperfect manner in which the testimony is reported. The. decree must therefore be reversed, and the cause remanded for further proceedings.