Greene v. Tyler & Co.

• Decision Date: 24 July 1861
• Citation: 39 Pa. 361
• Court: Pennsylvania Supreme Court
• Parties: Greene <I>versus</I> Tyler & Co.

39 Pa. 361

Greene versus Tyler & Co.

Supreme Court of Pennsylvania.

July 24, 1861.

ERROR to the Common Pleas of Schuylkill county.

The opinion of the court was delivered, July 24th 1861, by WOODWARD, J.

It is impossible to discuss or even comprehend the questions raised upon this record, without first extricating the essential facts from the intricacies of the papers that were given in evidence. And as chronology is the surest guide to the truth of history, I propose to explain the transactions that led to this controversy in the order of the date of the papers.

September 1st 1852. Joseph S. Silver, acting for himself and other owners, leased to Johanan Cockhill, for a period of twenty years, a right to mine coal from three certain veins in Schuylkill county, known as the Big Tucker Veins. The rent reserved was graduated at from ten to thirty cents per ton, and Cockhill was to have a drawback of rents to the amount of $12,000, by way of compensating him for the improvements he was to make.

January 13th 1853. Cockhill assigned this lease to F. Tyler & Co., who, it would seem, undertook to advance the money for making the improvements necessary to the working of the veins. Same day they gave him a separate paper in the nature of a defeasance, whereby they agreed to reconvey the leasehold to Cockhill on his paying their advances and interest, and also twelve and a half cents per ton on all coal mined under the lease so long as the advances remained unpaid. A proviso required Cockhill to mine not less than sixteen thousand tons in 1853 and 1854, or to pay twelve and a half cents the ton for the deficiency.

Probably at the same time these papers were executed, though the date named was 12th January 1853, Cockhill drew on Silver in favour of F. Tyler & Co. for $12,000, or such proportion thereof as might become due to him under the above condition in Silver's lease.

April 5th 1854. Reassignment by F. Tyler & Co. to Cockhill of the said lease, with the assent of F. W. Hughes, who had succeeded to Silver's rights, subject, however, to an express covenant of Cockhill to perform all the conditions of the lease, and in addition thereto to pay F. Tyler & Co. twelve and a half cents the ton for every ton of coal mined, in addition to the rents stipulated for in the lease.

On the same day, 5th April 1854, there was acknowledged a mortgage of the leasehold, dated the 4th April 1854, from Cockhill to F. Tyler & Co., reciting the lease, its assignment and reassignment, and conditioned for the payment of a debt of $12,000, with interest, and twelve and a half cents the ton for all coal to be mined by Cockhill from the "Big Tucker Veins" under said lease.

April 4th 1854 (probably of even date with above mortgage). All the partners constituting the firm of F. Tyler & Co., executed a paper under their respective seals, agreeing to enter satisfaction on a "certain mortgage" (presumed to be that above mentioned), "whenever the said sum of $12,000, with interest thereon, is fully paid."

April 3d 1855. F. Tyler & Co. filed of record a statement under their signatures, "claiming that there now remains actually due and unpaid upon the said mortgage from the said Johanan Cockhill to the said mortgagees, the sum of $11,173.76, with interest from 1st January 1855." This sum was claimed as constituting "the amount of their interest in the property mentioned and described in the said mortgage."

February 21st 1856. Cockhill mortgaged the same leasehold estate to Robert C. Greene to secure a debt of $1330, with interest.

December 6th 1856. Cockhill confessed a judgment in the Common Pleas of Schuylkill county to F. Tyler & Co., on their mortgage, for the sum of $9217.43, on which a levari facias issued the same day.

December 23d 1856. The sheriff sold the estate to F. Tyler & Co. for $9500, which moneys they claim to appropriate to their mortgage. Robert C. Greene also wants to take out of the money in court the amount of his mortgage.

April 2d 1859. The court awarded the following issues: — 1st. To ascertain how much has been paid on the mortgage by Cockhill to F. Tyler & Co.

2d. To ascertain how much is due on said mortgage.

3d. What portion of said mortgage is founded upon usurious consideration?

The jury found $9045.82 due to F. Tyler & Co.

Greene took his writ of error, and his counsel have assigned fifteen errors to the rulings of the court in admitting evidence and answering points.

The general question seems to have been, what was the sum of the real, bonâ fide indebtedness of Cockhill to F. Tyler & Co. on his mortgage to them? This would depend necessarily, first, on the amount loaned him on the faith of the mortgage, and next on the amount of payments they had received. As to the first question the testimony of Cockhill himself was very explicit. He said: "I received $10,000. I drew on Tylers as I wanted it; the last draft makes $10,000, less one cent. This is the whole loaned me. The $12,000 was made by my allowing them twelve and a half cents per ton for what coal I was to mine during the years 1853 and 1854. I did not mine that amount. It was the estimate of twelve and a half cents per ton for the two years before the mortgage was given. I considered the twelve and a half cents a bonus. They held my lease as collateral security for the money I loaned. They were to have no other interest in the mines. They gave no consideration for the twelve and a half cents per ton except the loan or use of the $10,000."

It would seem from this evidence that the actual loan was $10,000, and, deducting the payments made by Cockhill, the balance would be exhibited which Tyler & Co. would be entitled to receive out of the proceeds of the sheriff's sale.

But the learned judge held, that although the contract was usurious between the parties as to the twelve and a half cents the ton, yet the plaintiff in this issue could not set it up or have an abatement of the principal sum secured by the mortgage. He added, "if Cockhill did not plead the usury as a defence to the payment of the mortgage, the plaintiff in this issue cannot do it." Then as to the payments, he stated that the plaintiff claimed them as applicable to the actual loan and interest, the defendants as applicable to the account of twelve and a half cents a ton, and referred it to the jury to make the application under the rule of law, stated in these words: "Where a debtor owes a creditor on several accounts, and makes a payment, he may appropriate it to either account, but upon his failure to designate to which the payment shall be applied, the creditor has the right to make an appropriation to either, and on failure of both parties to make a specific appropriation, they may at any subsequent time make it by mutual agreement, if not in fraud of creditors."

The answers to the points were consistent with these views, and the consequence was that some $4500 of Cockhill's payments were applied to the twelve and a half cents bonus account, leaving the genuine mortgage-debt nearly large enough to absorb the whole proceeds of the sheriff's sale.

As to the first of the above propositions of the court, that Greene, though a mortgage-creditor, could not question the validity of the prior mortgage on the ground of usury, we find it impossible to concur with the learned judge. Ever since the Act of 16th June 1836, feigned issues have been granted in questions of distribution at the instance of any person interested, to try any fact in connection with such distribution which shall be in dispute. The statutory words, "any person interested," mean judgment or other lien creditors: Smith v. Reiff, 8 Harris 365. In Reigart's Appeal, 7 W. & S. 267, such a creditor was said to have a right to an issue and trial...