Trusdell v. Jones

23 N.J. Eq. 121 | New York Court of Chancery | 1872

The Vice-Chancellor.

The bill is filed to foreclose a mortgage dated April 1st, 1869, made by Henry A. Jones and wife to Samuel A. Meeker, one of the defendants, for $14,000, payable on the 1st of April, 1871. Soon after the mortgage fell due a parol agreement was made between Meeker and Jones for- the extension of the time of payment of the principal. It was agreed that the principal should not be payable till April 1st, 1872, and, as the consideration therefofi, Meeker took from Jones his note, dated April 3d, 1871, for $500, payable in fifteen months. On or about the 22d of the following July, Meeker assigned the mortgage to Trusdell, the complainant, who had no notice of the agreement, and took the mortgage as then due and payable. To his present bill Jones and wife have answered, alleging the above agreement, and insisting that by virtue of it the mortgage debt is hot yet due. There is no dispute about the facts, the only question being as to the validity and effect of the agreement.

This question I understand to be entirely settled by the judgment of the Supreme Court, in Nightingale v. Meginnis, 5 Vroom 461. A parol agreement had there been made between the holder and maker of a matured and protested note for the delay of one month. In addition to the legal interest, $10 had been paid by the debtor in consideration of the delay. This agreement was adjudged to be invalid, as without consideration, and the money paid treated as a payment on the note, under the statute against usury, approved April 12th, 1864.

The present case is within the scope and reason of that decision, and must be governed by it. The defendant, Jones, is entitled to have the note surrendered to him, or to have a credit on the bond for the amount of the note or its present worth. The purchaser of a mortgage takes it subject to the equities belonging to it when assigned. The equity of Jones being to have the note taken as a credit or payment on the debt, or given up as void, the complainant assumes the place of Meeker, and takes the bond and mortgage as they were chargeable in his hands.

The defendant, Meeker, having covenanted in the assignment deed to Trusdell that a certain sum was due upon the bond, should be allowed to avoid the credit on the same by giving up the note. Upon the reference to the master the defendant, Meeker, being summoned, may show that the note has been surrendered; otherwise its present worth must be endorsed as a credit on the bond.

I respectfully advise a decree in pursuance of the above.