17 N.Y.S. 171 | N.Y. Sup. Ct. | 1891
This is an appeal from a decision in an action of foreclosure. Two questions were submitted to the jury,—the first, whether the mortgage was usurious; the second, whether David McBride, grantee, assumed payment of the mortgage as part of the consideration. The jury found the first in the affirmative, the second in the negative. The learned justice adopted these findings as correct, and decided in favor of the defendants. It seems hardly necessary to add anything to the careful opinion written by him. But the amount involved is considerable, and the points in the ease have been strongly presented on both sides. We will therefore state our views.
The bond and mortgage in question were executed November 9, 1867, by Hiram D. Witherill to Samuel F. Vilas, now deceased, for $8,000, payable in installments,—the last in 1871,—with interest at 7 per cent. The property mortgaged was the Witherill Hotel. The testimony of Mr. Wever is that, when Witherill applied to Vilas for the loan, Vilas objected on the ground that money was worth more than 7 per cent, and that he could not make the loan unless he had more than the legal rate; that they then agreed that the manure from the house should be called worth $100 per year, and that so long as Vilas carried the mortgage he should have the manure from the house as extra interest. The hotel was opened in 1868. It was proved that Vilas did have the manure, year after year, and that it was in fact worth $100 per year. In 1881, one Velsey kept the house, and Vilas claimed the manure as his right,—said he had it all along; but Velsey refused to let him have it unless he paid $50 per year, which he did for one year. The plaintiff urges that as the house was not then finished, and the manure would not be in existence until the house was finished, and as Vilas was to have it only as long as he carried the mortgage, the contract was not usurious. The proof, however, establishes that this was intended as an additional compensation for the use of the money, and it was actually received for many years. Where a contingent advantage is reserved to the lender without putting capital or inter
The next question is whether, when Witherill sold the premises to McBride, the latter agreed as part consideration to pay this mortgage. On the face of the deed, he did not. Witherill gave a warranty deed. The consideration expressed therein was $20,000. No mention of the mortgage is made in the deed. No paper other than the deed was executed between the parties. The amount actually paid by McBride to Witherill was $6,000. The mortgage in question had' been, or was then, reduced to $7,000 of principal by a payment of $1,000 by Witherill or Mrs.. Witherill. There was another mortgage on the premises of $7,000. That also is not mentioned in the deed. It is very evident, then, that, so far as the deed goes, the land was not taken as subject to any mortgage, and the purchaser assumed the payment of no mortgage. Of course mortgages were in fact upon the land. But the deed was a warranty deed, which bound Witherill to protect the title. If the deed had stated that the land was taken subject to the mortgage, then, of course, no eviction by virtue of such mortgage would be a breach of the covenant of warranty. Belmont v. Coman, 22 N. Y. 438. We do not see, therefore, why Witherill would not be liable on his covenant of warranty, should the defendants be evicted under a foreclosure of this mortgage. Hence it would seem that paroi evidence showing that McBride took as subject to the mortgage,.and, still more, evidence showing that he .assumed its payment, would vary the effect of the written instrument. See Marsh v. McNair, 99 N. Y. 174, 1 N. E. Rep. 660; Wilson v. Deen, 74 N. Y. 536; Estabrook v. Smith, 6 Gray, 579. There are some cases in this state holding that the agreement of the purchaser to pay the mortgage may be shown by paroi. Taintor v. Hemmingway, 18 Hun. 458, affirmed, 83 N. Y. 610. It will be seen, however, in that case, that the conveyance was made, in terms, subject to the mortgage. So that the agreement by paroi of the purchaser did not vary the terms of the written instrument. The same facts existed in Murray v. Smith, 1 Duer, 412, where a similar doctrine was held. Such evidence was held to be only proving what the actual consideration was. It would seem that a different case must be presented when the .grantor gives a warranty deed without mentioning the mortgage. Such is the view of Berdan v. Sedgwick, 40 Barb. 359, affirmed, 44 N. Y. 626. In the present case, however, the question does not arise. The learned justice allowed the plaintiff to give evidence tending to show an oral agreement on the part of McBride to pay the mortgage. On conflicting evidence the jury found that he made no such agreement. Their verdict and the decision of the learned justice are sustained by the evidence. The testimony of Mr. Wever, who negotiated the sale for Witherill with McBride) is positive. He says McBride declined absolutely to assume any mortgage of any name or nature on the property; that he (Wever) urged him hard to do this, but he positively declined. He insisted on a warranty deed, and declined buying subject to the mortgages. He said there was usury in the mortgage, and stated how it came to be so in regard to the manure. He said he wanted to take all the rights that Witherill had to defend against either or both mortgages. If he bought Wit'herill’s rights he would give $6,000; otherwise, he would give less. The opposing testimony is the statement of Mr. Newton, that McBride told him that he had bought the property subject to this mortgage, which he assumed and expected to pay. The jury were justified in placing more confidence in the testimony of the man who negotiated the contract than in the testimony of a witness to