La Farge v. Herter

By the Court, Gridley, J.

When this cause was last tried, it was supposed by the circuit judge, that the supreme court in granting a new trial, (see 3 Denio, 155,) had held that neither the levy on Herter’s property, nor the taking of Herter’s bond and mortgage, professedly in payment of the judgment, constituted in law a satisfaction of the judgment, either absolute or conditional. This supposition was founded on the fact that the case disclosed evidence of such levy, and of such bond and mortgage given for the amount of damages due the plaintiff in the judgment, the payment of the costs to the plaintiff’s attorney, and a full discharge endorsed on the execution. Now if this evidence was sufficient to prove a satisfaction of the judgment either absolute or prima facie, and conditional only; that is, until a resort to the bond and mortgage had been had, and had proved ineffectual; it is difficult to see why a new trial was granted. But in an interview with the learned judge who delivered the opinion granting the new trial, he assured one of the members of this court, that the question of a satisfaction, either absolute or sub modo, was not passed upon by the court.

We are not under the necessity of controverting the decision of the late supreme court in regard to the rights of Dillenback, as surety of Herter, notwitstanding the principle asserted in the opinion, in its application to a case like this, has been much shaken, if not substantially overruled, by the decision in Bangs v. Strong, (10 Paige, 11: S. C. 7 Hill, 250.) While we yield to that decision, to this extent, however, we are no longer embarrassed by the views which we had supposed must have been adopted by the "court in relation to the satisfaction of the judgment.

There must, therefore, be a new trial, for the error of the circuit judge in following what he mistakenly regarded as the ruling of* the supreme court. If the facts proved on the trial showed either a conclusive or merely a prima facie bar to the judgment; and whether upon the evidence it was the duty of the judge to decide the question as one of law, or to submit it to the jury as one of fact; in either case the judge erred, and there should be a new trial. Looking to the facts disclosed in the case, we have no doubt that the evidence tended strongly to prove an unconditional satisfaction of the judgment.

I. Though we are to regard the rights of Dillenback as a surety, so far affected by the recovering of the judgment, as to prevent the giving of time to the principal from operating as a discharge of his liability on the judgment; yet the fact that though both were liable, the judgment was still a debt, that as between Dillenback and Herter, the latter was bound to pay, should not be overlooked, when we are considering whether the judgment was satisfied by the surrender of the levy on Herter’s property, and the taking of the bond and mortgage by the plaintiff. In Frisbie v. Larned, (21 Wend. 450,) it was held that the acceptance of the note of a third person, from one of the members of a firm, endorsed by him, together with the payment of the balance of the account against the firm, in cash, was an accord and satisfaction of the demand against the firm, in the absence of any agreement that such note was received merely as collateral security. In the same case it was held that a judgment confessed by one of the members of a firm was a satisfaction of the copartnership debt. By the principle of this authority, fortified by the opinions of President Gardiner and Senator Lott, in Waydell v. Luer, (3 Denio, 410,) the case at bar is distinguished from that of Cole v. Sacket, reported in 1 Hill, 516, if that were now held to be law. For the mortgage creating a specific lien on real estate ample to secure the debt, in addition to the promise of Herter, evidenced by his bond, forms a sufficient consideration for the agreement to accept such bond and mortgage in satisfaction of the judgment. What then is the evidence of such an agreement in this case? It consists of the surrender of a levy, which had been made on Herter’s personal property, sufficient to satisfy the judgment, and the taking of a bond and mortgage on Herter’s»farm for the amount, and a receipt signed by La Farge as of so much money received on the judgment—the payment in cash of the attorney’s and sheriff’s costs by Herter, and a receipt on the execution in these words: “ This execution is satisfied. Jno. Clarke, att’y.” All this, with the fact that the debt belonged to Herter to pay, as between him and Dillenback, of which fact La Farge was aware when he took this bond and mortgage, and the actual receipt at different times of part payments on the mortgage, would seem to be strong evidence for a jury to find an agreement that the new securities should be taken in satisfaction of the judgment, especially against Dillenback.

II. But suppose we are wrong in this view of the subject, there can be no doubt that before the plaintiff could resort to the judgment against Dillenback, he should have made an unsuccessful effort to collect the bond and mortgage; or at least should have brought them into court and cancelled them. This was always necessary, when a creditor sought to recover on an original debt for which his debtor had given his own promissory note. (1 John. Rep. 34. 8 Id. 149, 202. 10 Id. 104, 306. Chitty on Bills, 198.) In this case there was no evidence before the court to show that the money due was not collectable on the bond and mortgage.

III. It is true there was an offer to show that the bond and mortgage were void for usury, and that Herter had declared his intention to resist the payment of them on that ground. But, though the question does not arise on this motion, it may on a future trial, and we would therefore express an opinion that it does not lie in the mouth of La Farge, to set up his own illegal conduct, and to allege that his own bond and mortgage are void for usury; and elect to treat them as void for that reason. It is the victim of the usury, and not the usurer himself, that can set up against a contract that it is usurious and void. The general rule is, that neither party to an illegal contract as a plaintiff or actor, is allowed to prove his own guilty participation in the illegal act which renders it void. And the case of the borrower, on an usurious contract, is an exception to this rule. (See Cowen & Hill’s Notes, 1447, note 962, and also note 967, p. 1445.) It is true there are cases where a party is remitted to an original debt, for which he has received a security that has been prosecuted and pronounced void by the judgment o.f the court. This, however, is not such a case. There has been no trial, and non constat, that Herter will plead usury to his bond and mortgage; or if he does, that he will be able to establish it on trial. And most assuredly Dillenback has done nothing to estop him from insisting that La Farge should exhaust his remedy upon those securities. Whether a judgment pronouncing these securities void for usury, will enable La Farge to resort to Dillenback on the judgment, we are not now called on to give an opinion, but wq are clear that nothing short of that will enable him to do so.

There must be a new trial.