CASES ARGUED AND DETERMINED IN THE Court for the Trial of Empeachments AND THE CORRECTION OF ERRORS OF THE STATE OF NEW-YORK, IN FEBRUARY, MARCH, AND APRIL, 1818. DAVID DUNHAM, appellant, ANTHONY DEY, respondent. A deed pur Porting to be an absolute сов veyance of land, but, in fact, in THIS was an appeal from the Court of Chancery. The respondent, in his bill in the Court below, stated that Matthias and William Ward were copartners in the business of book-sellers, before, on, and after the 27th of January, 1810, on which tended as a seday, M. Ward was seised of fifty lots of ground in the ninth curity for a ward of the city of New-York, containing each 25 feet by 100. gage. (a) That M. Ward gave to the appellant a deed of conveyance for A party can these lots, which was absolute on the face of it, but was intended in equity, aonly as a security, or for some temporary purpose understood gainst a mortgage given for not obtain relief a usurious debi, without offering to redeem, on payment of the principal and legal interest. Where a mortgage is given as security for the payment of promissory notes, which are from time to time renewed, the renewal is not to be deemed an extinguishment of the original debt, so as to affect the con tinuance of the security. A person who takes a conveyance of land, with notice of a prior unregistered mortgage, is not a bona fide purchaser who can gain a priority by having his deed first recorded. (b) Where a person conveyed all his property, real and personal, without any particular description in the body of the deed, but in a schedule annexed, certain lots, previously mortgaged by the grantor to D. D., were described as "lots of ground in Stuart street, the title to which is in D. D.," it was held that this was notice to the grantee of the prior mortgage to D. D., which had never been recorded, and that therefore, the grantee could not, by having his deed first recorded, obtain a priority. (a) Vide Brown v. Bean, 3 Wendell's Rep. 203. Rep. 246. Clark v. Henry, 2 Cowen, 321. (b) Jackson v. M'Chesney, 7 Cow. Rep. 360 on v. Van Valkenburgh, 8 Cowen, 260. VOL. XV. 55 Lane v. Shears, 1 Ibid. 433. James v. Morey, 2 Cow. Berry v. Mutual Ins. Co., 2 Johns. Ch. Rep. 603. Jack 433 IN ERROR. between them, and was never registered as a mortgage. ALBANY, DUNHAM V. DEY. That on the 27th of July, 1810, a *writing, bearing date on that day, February, 1818. was made and executed under the hands and seals of M. Ward and the appellant, reciting that M. and W. Ward were indebted to the appellant in the sum of 10,000 dollars, on three promissory notes, payable six months after date, and dated respectively the 24th, 25th, and 26th of July, 1810; the conveyance from M. Ward to the appellant, that M. and W. Ward had deposited with the appellant certain notes of R. Bache and Co., and declaring that if the notes of M. and W. Ward should be regularly paid, the conveyance and the notes of R. B. and Co. should be given up, otherwise they were to remain as security, and the appellant might sell the lots and collect the money on B. and Co.'s notes; but this writing was never registered. That on the 17th and 25th of June, 1811, M. and W. Ward made and delivered to the appellant their other notes, each for 3,333 dollars and 33 cents, and which were received by his agent, M. B. Edgar, on account of the notes given by them in July, 1810, but the latter notes were still retained by the appellant; that at the same time they paid the appellant the interest due thereon, and, in addition thereto, a large sum, by way of usury, on the substituted notes, which last, when they fell due, were taken up by the respondent. The bill further stated, that M. and W. Ward, by indenture of the 11th of May, 1812, conveyed and assigned to the respondent all their estate, real and personal, (except wearing apparel, household furniture, and certain specified debts,) in trust for the benefit of their creditors, and a part of the property so conveyed was the right and interest of M Ward in the fifty lots contained in the deed to the appellant and that, afterwards, by a deed of the 16th of November, 1812, M. Ward executed another conveyance of those lots, upon the same trusts, for the more clear description of the said lots, and to confirm the title of the respondent therein; and that on the 19th of November, 1812, the respondent gave a written notice of the conveyance to the appellant, requesting him to give up his deed to be cancelled, to release his right in the land, and to give up the three promissory notes of M. and W. Ward to be cancelled. The bill further stated, that between the 27th of January, 1810, and the day of the date of the assignment from M. and W. *Ward to the respondent, M. and W. Ward had various dealings with the appellant, by exchanging notes, upon which transactions the appellant, taking advantage of their necessities, extorted from them, under the name of commissions, or some other name, but in fact for usury and unlawful interest, contrary to the statute, 2,000 dollars or upwards, for which the appellant became and was accountable to M. and W. Ward, before and at the time they made the assignment of their estates in trust to the respondent, and for which the appellant, in consequence of that assignment, became accountable to the respondent. The bill prayed that the appellant night deliver up the said deed of the [* 557] 27th of January, 1810, and release to the respondent all pretence IN ERKOR. of right in the said fifty lots, and account with the respondent, ALBANY, for what the appellant had received for usury or unlawful in- February, 1818. terest from the said M. and W. Ward, as stated in the bill. The appellant, in his answer in the Court below, denied that the deed from M. Ward, to him, was made on any usurious or illegal contract, or that the purposes of it were fulfilled on the 27th of July, 1810, or were yet fulfilled. The answer stated, that on the 27th of January, 1810, M. and W. Ward applied to the appellant to advance them three promissory notes for 10,000 dollars, payable six months after date, which he agreed to do, and accordingly advanced them three notes, each for an equal portion of that sum, dated the 24th, 25th, and 26th of January, 1810, payable six months after date respectively, whereupon M. Ward conveyed to the appellant the beforementioned fifty lots, by a deed of that date, which was absolute in its terms, but was intended only as security for the notes so advanced; that on the 25th of July, 1810, M. and W. Ward applied to the appellant to renew the notes, which he did, by giving their notes for the same sums, dated the 26th, 27th, and 28th of July, payable in six months; and thereupon they gave the appellant their three notes, two for 3000 dollars each, and one for 4000 dollars, dated the 24th, 25th, and 26th of July, payable six months after date, left the deed in his hands, and also deposited with him three notes of R. Bache and Co., of which two were for 1408 dollars 42, cents each, and the other 1408 dollars, 41 cents; that the difference in the *dates of the notes given by the appellant, and those taken from M. and W. Ward, in exchange, was to enable the appellant to collect the latter notes before his fell due, or to sell the fifty lots to raise the money; and that M. and W. Ward took up the notes which they had given to the appellant in January, and which he had lodged in the bank for collection; but that the notes given in July, being lodged for collection in the bank, were left unpaid, the Wards having previously failed, and were taken out of the bank by the appellant, and retained by him, with their consent. The appellant admitted that the deed of the 27th of January, 1810, was never registered as a mortgage, but that it was recorded as a deed, on the day it bears date; and also, that the defeasance had never been recorded. He stated, that after the notes of M. and W. Ward, given in July, 1810, had become payable, M. Ward proposed to the appellant, to raise for him, on his notes, 10,000 dollars, to put him in cash to that amount, and prevent a sale of the lots; in consequence of which M. and W. Ward gave to him three notes, one dated 25th of May, 1811, for 3333 dollars 33 cents, at sixty days, for which they received from him his note for the same amount, dated the 28th of May, at sixty days; another note, dated 12th of June, 1811, at ninety days, for 3333 dollars 33 cents, for which they received his note for the same amount, dated the 15th of June, 1811; and a third DUNHAM V. Dey. [* 558] ALBANY, DUNHAM V. DEY. IN ERROR. note for 3333 dollars 33 cents, dated the 24th of June, at thirty days, which he received to meet his note given to them payable February, 1813. at five months from the 25th of February, then last; on which notes, money was raised by M. Ward, who gave the respondent the proceeds; but he denied that he received from them any notes of the 17th and 25th of June, as mentioned in the bill. He also alleged, that at the time the proposition to raise money on the respondent's notes was made, M. Ward agreed that the notes given in July, 1810, should be retained by the respondent, until the lots should be sold, or the loan or debt discharged, because they corresponded with the notes described in the defeasance, and the deed and defeasance were also to remain in force till the debt was paid; but he denied that the notes of the 25th of May, 12th and 24th of June, 1811, were given by the Wards, or received by the respondent, in lieu of the notes of July, 1810, on which latter notes they paid all the interest that had accrued; and he admitted that the notes given by M. and W. Ward, in May and June, 1811, had been paid. He admitted that he had received from them commissions, varying from one half to two and a half per cent., but denied all extortion and usury. [* 559] The receipt before alluded to, signed by M. B. Edgar, was in the following terms : "New-York, June 17th, 1811. Received from M. and W. Ward, their two notes, viz. 25th May, sixty days, thirty-three hundred and thirty-three dollars. 12 June, 90 days, same amount, being on account of their three notes, 24, 25, 26 July, 1810, at 6 ms., for 10,000. D. Dunham, p. M. B. Edgar." On the back of the receipt there was this endorsement: "25 June, received note 30 days, $3333 33. M. B. Edgar." The assignment of the 11th May, 1812, from M. and W. Ward, to the respondent, contained a grant of "all the estate and property of the said Matthias Ward and William Ward, either joint or several, and both real and personal, and whether in possession, reversion or remainder, (the wearing apparel and household furniture of the parties respectively excepted,) and the several debts and demands due to the said Matthias Ward and William Ward, either jointly or severally, whether mentioned and described in the schedule hereto annexed, marked B. or otherwise, and more particularly the stock in trade, now in the house called the City Hotel, in the said city of New-York, or the wareroom in the rear of the same. To have and to hold, &c." In the schedule referred to, there was the following clause :"Lots of ground in Stuart street, the title to which is in name of David Dunham, given as collateral security to pay certai notes." The deed of conveyance of those lots, of the 16th No vember, 1812, from M. Ward, to the respondent, referred to the description of them as given in the schedule to the assignment DUNHAM V. The testimony in the Court below, taken on the part of the IN ERROR. respondent, fully established the fact, that a commission of two ALBANY, and a half per cent. had been received by Dunham from the February, 1818. Wards, on the several exchanges of notes before mentioned. The transaction, however, was not regarded by the chancellor as usurious, who did not notice it in his decree, but ordered a conveyance of the lots in question to be executed by the appellant to the respondent, and that the appellant pay the costs of suit. For the decree of the chancellor, and the reasons on which it was founded, see 2 Johns. Ch. Rep. 188—196. DEY. T. A. Emmet, for the appellant, contended, that the question Feb. 2-6th. of usury could not be discussed on the present appeal. If the respondent considered the decree of the chancellor erroneous in that respect, he might have entered a cross appeal, and thus brought the subject before the court; but, not having done so, all discussion must be confined to the other points on which it has been sought to invalidate the deed from Ward to the appellant. The deed of the 27th of January, 1810, was an absolute conveyance, and vested an absolute title in the appellant: it was not until the following July, that a defeasance was executed, and, consequently, in all the intermediate time, it could have been recorded no otherwise than as a deed. Had the execution of the conveyance and the defeasance been simultaneous, they would have been, in fact, but one and the same disposition of the property, and no more than equivalent to a single instrument, containing both a grant and the condition on which the estate of the grantee was to be devested, and the transaction could be regarded no otherwise than as a mortgage. (Powell on Mort. 6, 7.) But where the defeasance, as in this case, is subsequently executed, it cannot vary the nature of the original deed, as between the parties themselves. It is an agreement, or trust, which may be enforced; but, as to third persons, the deed continued an absolute conveyance; nor does it, as the chancellor supposed, relate back to the original deed: the law gives it no such relation, (Cotterell v. Purchase, Cases temp. Talb. 61.) and the parties themselves never intended it to be retrospective. The instrument, on the face of it, was only prospective: the appellant might have sold and conveyed an absolute and irredeemable estate, and it was in the contemplation of the parties, that he should have that power. There was no actual possession of the lots, and the law will, of course, deem the possession to be in him who has title. The respondent was not a bona fide purchaser. Indeed, it no where appears, except in the schedule of the assignment from M. and W. Ward to him, that he was a creditor; and that assignment and schedule are not evidence against the appellant; but if he were a purchaser for valuable consideration, he is not, therefore, necessarily, a bona fide purchaser. As a trustee for [*561] |