14 Johns. 435 | N.Y. Sup. Ct. | 1817
delivered the opinion of the court. In the case of Jackson, ex dem. Bartlett, v. Henry, (10 Johns. Rep. 185.) it was decided, that a bona fide purchaser, without notice, under a sale duly made pursuant to the statute, by virtue of a power contained in a mortgage, is not affected by usury in the original debt for which the bond and mortgage were given. The court there considered such a sale as equivalent to a foreclosure and sale under a decree of a court of equity, and that it could not be'defeated, to the prejudice of a bona fide purchaser, on the ground of usury. That case was likened to the case of a contract originally usurious between the parties, and which has been subsequently changed by a new contract founded on
The purchaser here was a party to the corrupt agreement upon which the mortgage was given, and bought, with his eyes open, a disputed title ; he has no superior equity, but stands even in a less favoured situation, than a bona fide holder of usurious negotiable paper, who, it is well settled, cannot recover upon it. The mortgage here forms a part of the defendant’s , title; and he, being fully apprised that the mortgage was void in law, stands in no better situation than if no foreclosure had taken place. He is not in as good a situation, as a bona fide assignee of an usurious mortgage, as to whom there is no question that the mortgage would be void.
Whether, in the case put in the argument, a purchaser under a judgment, recovered upon a usurious debt with notice of the usury, would acquire a valid title or not, is a. point not now presented for decision. Most probably he would; but there is a palpable distinction between that case and this. When a cause of action has once passed in rem judicaiam, the defendant and every other person is, for ever afterwards, precluded from availing himself of any pre-existing matter, w'hich might have been insisted upon1 in bar of the recovery. The original debt ceases to have a legal existence, being merged in the
Although a foreclosure under the statute is substantially equivalent to a foreclosure in equity, yet it is so only when a sale has been made to a bona fide purchaser. The 5th section of the statute, which declares the effect of such a sale, is in these words: “ that no sale of any lands made, or to be made, in due form of law, by any mortgagee or others thereunto authorized, by special power for that purpose, from any person entitled to the equity of redemption, shall be defeated to the prej udice of any bonafide purchaser thereof, in favour of, or for the benefit of, any persons claiming such equity of redemption.’’ Now, the defendant in this case is not a bona fide purchaser, inasmuch as the mortgage was given upon a corrupt and illegal contract, to which he was a party. A foreclosure of a mortgage under the statute is not founded upon any judgment or decree of any court. It is the mere act of the mortgagee, who cannot make that good and effectual, by a sale, which was, unlawful and void in its inception. We are, accordingly, of opinion, that the plaintiff is ■entitled to judgment.
Judgment for the plaintiff.