[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 567
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 568 The greater part of the defendant's answer consists of statements of the difficulties between himself and Duryea. If his statements are correct, the transactions between Duryea and himself are usurious. This question will be determined in the action he has brought against Duryea. The statements are not material to the determination of the present controversy. Admitting that his debts to Duryea were usurious and could be avoided, it is equally certain that they might be confirmed by the defendant, and could be paid by him or by his direction. When he states, therefore, in his answer, that he directed the plaintiff to make the conveyance to Duryea in payment of his usurious debts, that the plaintiff did so convey, and received in return the mortgage in suit for the residue of the purchase-money, which was justly due to him, he gives to the plaintiff an impregnable title to his mortgage. All the authorities hold that when the plaintiff, having no connection with the usury, has, by the defendant's direction, conveyed to his assignee, and received a mortgage for the money justly due him, the usury between the defendant and assignee cannot be set up to defeat the mortgage. (Pratt v. Adams, 7 Paige, 615;Murray v. Judson, 5 Seld., 73; Cole v. Savage, 10 Paige, 583; Hartley v. Harrison, 24 N.Y., 171; Mason v. Lord,40 N Y, 476; Williams v. Tilt, 36 N.Y., 319; Post v. Dart, 8 Paige, 639.) The equities between the two defendants must be settled between them; they cannot be urged to defeat or to delay the plaintiff's right to have his money.
We come to the question, were the portions of the answer indicated properly stricken out by the court? The plaintiff alleges in the complaint, that on the first day of November, 1865, there was due and payable as interest on said mortgage the sum of $150, and that the same remaining unpaid for the space of more than thirty days, he declared his option that the whole amount should be payable. *Page 570 In answer to this allegation, the defendant averred, upon his information and belief, that Duryea had paid or secured that interest, or some part thereof, or that the plaintiff had agreed to extend the time of payment, and that this action was brought by collusion between the plaintiff and Duryea, for the purpose of harassing and impeding the defendant in the prosecution of his action against Duryea. These allegations were material. On the motion to strike them out as false, the plaintiff swore positively that the statements, and each of them, were entirely false. In reply, the defendant set forth that Duryea had endeavored to induce him to discontinue the action against him, and in the latter part of November, 1865, had threatened him that the plaintiff would proceed to foreclose his mortgage and turn out defendant; that plaintiff never made any personal application to him for the interest or in any way communicated with him, although he well knew the position of his matters with Duryea; that the assignment of the mortgage to McKee was recorded on the 15th day of December, 1865, and that this suit was commenced on the same day; that McKee has since assigned the said mortgage to the father of said Duryea. The answer then details certain boasts of Duryea; states that he put his case over one term, and refused to take short notice of trial at another term; and from the facts and circumstances set forth, he believes that there is or was some understanding or agreement between the plaintiff and Duryea in relation to the bringing and prosecution of this action. Passing by the question whether a combination between the plaintiff and Duryea to enforce the legal rights of the former in aid of the latter can constitute a defence, I am of the opinion that there is not enough in the papers to present that question. The plaintiff testifies positively that the fact is otherwise. The defendant endeavors to sustain his allegation by various statements and circumstances, confined in their influence to Duryea alone. The only circumstance with which the plaintiff is connected, is that the suit was commenced on the same day on which the *Page 571 assignment to McKee was recorded. The others are of the actions or proceedings of Duryea alone, quite disconnected with the action or interest of the plaintiff. Taking in its full force everything set up by the defendant, it does not legally tend to establish the defence. A verdict or judgment founded on such evidence could not be upheld. It shows simply that there is no defence to the present suit. The court has exercised its power of deciding that there is no question for a jury to pass upon; that it is a mere pretence, and should be stricken out as sham. This they had a right to do, and I cannot say that the power was unwisely exercised. (The People v. McCumber, 18 N.Y., 315.)
Objection is taken also to that portion of the order striking out as frivolous the residue of the answer. It is said, first, that the answer puts in issue the fact that the mortgage is due, and that this is a material issue. The plaintiff alleged that the bond contained the interest and default clause before set forth, and it was afterward alleged that the mortgage contained the same interest clause. It was then insisted that in consequence of this default and the option of the plaintiff, the whole principal had become payable, and the plaintiff demanded a judgment for the whole amount. In his answer the defendant "denies that the said bond and mortgage contained any condition or clause whereby in case of default in the payment of interest for the space of thirty days, the principal sum was to become due immediately, as alleged in said complaint, as by reference to the record of said mortgage will more fully appear." This is a denial that both of the instruments contain the clause in question. It is not a denial that one of them contains it. Accordingly, the defendant's counsel now argues that, being a subsequent encumbrancer, he is only bound by what is contained in the mortgage, by which the real estate is affected, and that the contents of the bond are not important to him; that it is to him as an unrecorded conveyance. This reasoning is fallacious. The bond and the mortgage together constitute but one instrument. The latter refers to the former as affording particular evidence *Page 572 of the terms of payment. Such reference incorporates into the mortgage all the terms and conditions of the bond, and all owners or claimants of the real estate are informed that they must consult the bond as well as the mortgage, if they wish to ascertain the precise terms of the burden imposed upon the land.
It is said, also, that the answer remaining contained a general denial, and could not, for that reason, be held to be frivolous. This is not correct, inasmuch as the defendant had previously and specifically admitted the allegations of the execution of the bond and of the mortgage, which allegations were coupled with the statement that the bond contained the interest clause. The only denial was of their joint effect. This was an admission as to the bond, which was not affected by a general subsequent denial. The material allegations of the complaint were all admitted, after the order to strike out took effect.
It is said that Emily Whittaker should have been made a party, and that the allegation to that effect was material and prevented a judgment as frivolous. To sustain a foreclosure suit, the mortgagor is a necessary party, and generally the only necessary one. Others may be joined if it is desired to cut off their interests, as a wife, a subsequent purchaser or subsequent mortgagor. They are not indispensable parties. The action is good without them, and the only effect of their absence is that their interests are not affected by the proceeding. Such was the condition of Mrs. Whittaker if her husband was a subsequent purchaser or holder. If the defendant had any interest whatever in the premises, it was that of a subsequent holder or encumbrancer. The plaintiff's mortgage was by defendant's assent prior to any other interest. It was for the purchase-money, and entitled to payment in advance of any possible claim the defendant might have. Upon the whole case, I think the order and judgment were right. Mr. Whittaker must contest his matters with Mr. Duryea in his suit with him. There is no reason to apprehend that he cannot obtain full redress in that action. Certainly there is no *Page 573 reason why a just and honest claim of the plaintiff's should be mixed up and embarrassed by the difficulties of a controversy to which he is not a party.
The judgment and order should be affirmed with costs.