Trusdbll v. Dowden

• Decision Date: 24 December 1890
• Citation: 47 N.J.E. 396,20 A. 972
• Parties: TRUSDBLL, v. DOWDEN.
• Court: New Jersey Court of Chancery

20 A. 972

47 N.J.E. 396

TRUSDBLL,

v. DOWDEN.

Court of Chancery of New Jersey.

Dec. 24, 1890.

(Syllabus by the Court.)

On motion to strike out part of the defendant's answer.

Robert H. McCarter, for plaintiff. Frederic W. Stevens, for defendant.

VAN FLEET, V. C. This action is founded on a bond and mortgage bearing date February 14, 1890, made by James C. McGeragle to the complainant, whereby McGeragle bound himself to pay $5,000, with interest, at the end of four months from the date of the bond and mortgage. The bill alleges that McGeragle subsequently, and on the 18th day of April, 1890, conveyed the mortgaged premises to the defendant, subject to the complainant's mortgage, and that the deed to the defendant contains a clause which reads as follows: "Said premises are conveyed subject to a mortgage for $5,000, dated February 14, 1890, and recorded in Book B 10, p. 488, which said mortgage is held as collateral security for the payment of certain promissory notes." The defendant has answered. He denies that the deed made to him is in fact what it purports to be on its face, but says, on the contrary, that it is only a mortgage. He says that it was understood between the grantor and himself, when the deed was executed, that he should hold the land described in it as security for a debt that the grantor owed him, and that, on the payment of the debt, he should reconvey the land to the grantor. If this averment is true, there can be no doubt that the deed is a mortgage, and that, if that fact shall be established on the final hearing, the court will be compelled to treat the defendant as a junior incumbrancer, and not as the owner of the equity of redemption. The part of the answer just adverted to sets up no defense. It is merely explanatory; but this explanation is immediately followed by a charge that the complainant's mortgage is usurious, and this charge is succeeded by a particular statement of the usury. With the suit in this condition as to parties, and without having the mortgagor before the court as a party defendant, the complainant applies upon notice given pursuant to paragraph 224 of the rules, for an order striking out so much of the answer as sets up the defense of usury. The ground of the application is that the defense of usury has been waived in such manner as to preclude the defendant from setting it up. The argument put forward in support of this view is this: that, inasmuch as the mortgaged premises were passed over to the defendant subject to the mortgage held by the complainant, all that the defendant took, by force of his deed, even though it was a mortgage, was merely such right and interest in the mortgaged premises as should be left after the complainant's debt of $5,000 was paid; in other words, that the court should hold that the effect of the act of the mortgagor, in passing over the mortgaged premises, expressly subject to the complainant's mortgage, even though they were passed over merely by way of mortgage, was to purge the complainant's mortgage of its usurious taint as against the defendant. If the defendant's deed is, in fact, a mortgage, and must be so construed and enforced, then it is undeniable that the mortgagor is an indispensable party to this suit. He is still the owner of the equity of redemption; and the complainant cannot, according to the established course of procedure in such cases, take another step in the...