Baldwin v. Moffett

Dwight, J.:

The plaintiff’s theory of this case is, that he advanced the money to pay the Appleby mortgage at the request of Sherman, the mortgagor, and took the fifteen bonds in payment of the money so advanced and of the loan of $750 previously made by him to Sherman, in security for which he already held two of the fifteen bonds. This theory seems to have been devised to meet the 'doctrine of Patterson v. Birdsall (6 Hun, 632; S. C., 61 N. Y., 295), which is relied upon to support the plaintiff’s contention on this appeal. Unfortunately, this theory is not supported by the findings of the referee or the proofs on which they are based. The facts are clearly established, — they are not in dispute, — and they support no other theory of the case than that the-plaintiff paid his money for the bonds, upon the condition merely that out of it the agent of the mortgagor should satisfy the Appleby mortgage and cause it to be discharged of record. These are the very terms of the plaintiff’s letter to Sherman’s agent. He had no thought of purchasing the Appleby mortgage, nor as was the case in Patterson v. Birdsall (supra), did he propose to take a new security in lieu of the incumbrance to be discharged. His single purpose was to invest in the second mortgage bonds, which were to be made a first lien by the discharge of the prior mortgage. In the case of Patterson v. Birdsall, the plaintiffs already held and had paid the consideration for the subsequent incumbrance, and so had a right to redeem the land from the lien of the prior incumbrance and be subrogated to its security. They proposed to do this and to take a new mortgage to cover the amount of both the existing liens. The money which they advanced was advanced to pay off the prior incumbrance and for that purpose alone. In this view and for this reason, the payment of the prior incumbrance was regarded as a transaction separable from the usurious agreement for the new mortgage.

In this case the money of the plaintiff was not advanced for the purpose of paying off the prior mortgage, but for the purchase of the new mortgage bonds. . His requirement that the money should be used by the mortgagor to pay off the prior mortgage was merely a condition of his purchasing the bonds. The payment of .the prior mortgage was in -no sense his act, nor the money employed his money; it had become the money of the mortgagor, subject only to the condition that it should be employed in the manner specified. The condition would have been equally fulfilled if the mortgagor had employed other money for the purpose, or had procured the discharge of the prior mortgage by the substitution of other security.

The plaintiff, by his own use of the money, had obtained all he had bargained for, viz.: the new mortgage bonds, to be rendered the first lien by the discharge of the prior mortgage. That discharge was expected to operate only to advance the lien of the new mortgage; it was not intended to give him any interest in the old one. To give it that effect would be to make his money do double duty. If the purchase of the bonds had not been usurious, he could not have held both the old mortgage and the new bonds. The effect would have been, as has been said, merely to advance the lien of the second mortgage, and he would have taken the bonds for what they were worth with the first mortgage discharged. This he does now; he takes the bonds for what they are worth; unfortunately for him, they are void for usury, and because they are so, they derive no aid or advancement from the discharge of the prior mortgage. The condition under which he paid his money for them, has been performed, but it is of no avail to him, for the reason that the bonds themselves are void in his hands. This seems to us to be the whole of the plaintiff’s case, and if it is so, his action cannot be maintained.

The judgment dismissing the complaint should be affirmed.

Smith, P. J., and Hardin, J., concurred.

Judgment affirmed, with costs.