Wilson v. Knight

MANNING, J.—

Although there is evidence on the subject, it is so conflicting as not sufficiently to prbve that defendant, Knight, was informed until long after the first mortgage to him, that of February, 1872, was executed, that the moneys of complainant which her husband, Sol. D. "Wilson, used in paying for the mortgaged lands, were moneys of her separate estate. The lands, themselves, were not bought for, or conveyed to her.

Upon the execution of that mortgage to Knight, he took a new note from Wilson alone, for the balance, payable at a future day, which the latter owed him, for lands, (which was much the larger part of the debt,) money lent, goods sold and usurious interest, and surrendered Wilson’s note for $2,500, for the lands, to which note one George, a solvent and responsible person, was a party as Wilson’s surety. This note had been somewhat reduced by partial payments. We-must, therefore, hold that Knight was a bona fide mortgagee-of the lands without notice of any interest Mrs. Wilson might claim therein. All of her money which had been used in paying for them, had been paid before.

The note secured by this first mortgage, was for $2,324; andi the balance of this sum reduced by partial payments, with the addition of some more usurious interest, constituted the-consideration of the note for $1,947 27-100, and mortgage of the same lands, to secure it, which were executed by both Wilson and complainant, his wife, in-March, 1873.

*178The fact that Wilson and his wife both signed this note and mortgage, (although her signature to the note did not bind her to anything,) is relied upon as evidence in addition to that which we have regarded as previously insufficient,— of Knight’s knowledge that Mrs. Wilson’s money had been used in paying for the lands, or that she had some interest in them. Whether this inference is correct or not, we need not inquire. By virtue of the mortgage of 1872, Knight, as we have seen, had acquired a lien superior to her interest or equity. And this lien must be considered as continued by the second mortgage and note, and not as extinguished by them. The object of making these was, to provide for a prolongation of the time, and the making of another crop, for the payment of the debt.

It follows that the right asserted by complainant can not be maintained, unless Knight’s title is invalidated or impaired by the usury in the transactions.

It is clear beyond any doubt, that a large part of the land and all of the improvements on it were paid for with money of Mrs. Wilson’s separate estate by her husband who was trustee df the same. This gave her a right higher than that of a mere creditor. Against her husband and any one who was not a bona fide purchaser from him, she was entitled to follow the trust moneys into the land, and to have it charged with a lien for their repayment. To what extent was Knight a bona fide purchaser or mortgagee ? Ought equity to protect him as such, in regard to that part of his claim which arose out of a violation of law ?

Our statutes do not as formerly they did, as well as those of other States, denounce as wholly void, an usurious contract for the loan of money, or for the forbearance to collect money due. They make it void only for all over and above the principal sum. That is a bona fide credit, and may be sued for and recovered according to law. And it seems to me that according to the principles of equity-law—and in a court of chancery, Knight should not be allowed to recover out of the land in controversy against the older equity of Mrs. Wilson, a eestui que trust, whose money had been put by her trustee into this land,—any more than the principal of his debt amounted to when usury began to be stipulated for and charged.—See Wells v. Morrow, 38 Ala. pp. 129-30; Perry on Trusts, §§ 836, 842.

But the courts generally, and this court especially, have so constantly held that the defence of usury was a personal privilege, and could not be set up by any person but the *179•debtor, or Ms personal representative, or his sureties,—that it is thought Mrs. Wilson cannot be allowed to make that ■objection. I, therefore, yield reluctantly, ^nd without elaboration, a view that I consider more in accordance with the principles by which courts of equity are usually guided.

Let the decree of the chancellor be affirmed.

Stone, J., not sitting.