MATTHEWS V. WARNER.
for doubt that the complainant has forgotten the real facts of the transaction. The plea and the answer are a' bar to the suit in law and in fact, and the complainant's bill must be dismissed, with costs.
MATTHEWS 'D. WARNER
(Oircuit Oowrt, D. MlU8achusetts. March I, 1881.)
MORTAGOR-SEPARATION OF RELIEF.
A, mortgagor is not entitled to equity upon, the ground that the mortgage has been separated' from the outstancHng ana unpaid notes which it was given to'secure.
2. USURY-EQUITABLE RELIEF: One !Who seeksrelief.in equity upon the. ground offer t!>,repay the money actualo/lent. .,
3. B.um---S.um---FOREIGN STATUTE.
.A statute of New York, which authorizes a borrower to obtai:n a cancellation of securities without IiayIiiiffit, upon the grbundof nsury,' out of the state" in dealitigwith l\' bond: cannot bind a <lou;t of. and mortgage made and delivered the stat".
4. lIUSBA1'i:l> AND WIFE
1 ". , ",
I .· ' ;
In Equity. W. 'Abbott and J. S. Abbott, for complainant: E. R. lIoar and J. B. Warner, for·defehd'ants'. LOWELL,' C. J.' This bill, filadill December, 1871; alleges ihatthe plaintiff, Virginia B; Matthews, of New York, was, on the first of January, 1877, and for a long time before and .after,the owner of 150 bonds of the Memphis & Little, Rock Railroad, and of 50 bonds of the Carolina Central Railroad, of $1,000 each, giving the numbers; that they were her sep.arate property; that some person to her unknown, and without her consent, authority, or knowledge, placed these bonds in the hands of Warner & Smith, of Boston, the defendants; that Wal'ller & Smith, as the plaintiff is informed. and be-
lieves, claim to hold the bonds as ,la",fuUy pledged to them to secure 80me debt or demand to her unknown, and intend to sell at auetioll ; that the. defendants sometimes claim that the bonds were pledged to them by the ph1intiff's husband, Edward l\Iatthews; but, if so, he had no authority so to pledge them, and that the defendants, when they received the bonds, knew that they were her property; and that if these bon.ds were 80 received by the defendants it was without consideration, or upon ,a contract void in law; that the defendants have refused to surrender the bonds to the plaintiff. The defendants answered that they held a bond of Ed ward Matthews for $250,000,secl1red by mortgage upon real estate in the city of New York, as security for the notes of Nathan Ml,ttthews, a brother of Ed",al'd, exceeding $200,000; that Edward was desirous of obtainmg a surrender of this bond and mortgage, and delivered to them the railroad bonds, March 6, 1877, inconsideration of such surrender. They state fully the circumstances of' this transaction, and annex to their answer a written agreement between them and Nathan and Edward Matthews conc.erning the same. They allege that Edward Matthews is the real party plaintiff, and that the title of Virginia B. Matthews is nominal and colorable. The plaintiff amended her bill, and set up the same facts in respect to the exchange of the railroad bonds for the 'bond and mortgage which had been stated in the defendants' answer, and averred that the bond and mortgage were given as securityfor certain notes of Edwa'rd. Matthews ,were void for usury by the laws, of New York, were delivered and negotiated j that the h.eld the bond and mortgage as trustees for <me Thomas Upham and his creditors j that before the for the exchange was made, .Na.thanMtttthews falsely represented to that Thoma.s 'Upham'" or the defendants, held $200,00,0 of the notes of Edward, for which ,the .bond and mortgage were given as collateraJ.; that, when the was made, the defenda.nta and their attorney falsely made a similar. statement: whereas, in fact, the defendants, a,s his trustees, held the bondand:plor,tgage as, security for th",not,es
MATTHl'!JWS V. WARNER.
of Nathan, only excepting 'bne note, of $5,000', 'which been indorsed by Edward for the of Nathan, which was not one of the :ii6tes intended to secured by said bond and mortgage ; that Edward was induced by these false representations to assent to the transfer of the bond and mortgage to Upham, and to the exchange of the railroad bonds for this origiIial security. It repeats that the whole transaction was void for usury, and adds that the mortgage had become of no value (meaning by the depreciation of real estate) before the exchange was made. To the amended bill an appropriate answer was filed, denying fraud and knowledge, and insisting on the validity of the ttarisactiOl'l. The evidence tends to show that the bonds in controversy were, at one time, the property of Edward Matthews,"and, excepting 50 of the & Little Rock bonds, the title to which is not traced, were /tpart ofa larger number by'him assigned to his brother, Watsbn Matthews, in trust for Mrs. Matthews,bis wife, the now plaintiff, as security for an indebtedness, the amount of which is not stated, of the husband to the wife, and that they were afterWll,rds sold at auction: by the trustee, and bought 'in byJ.BrandonMatthews, the, plaintiff's SOWfor her account. All this time the bends were in the hands of pledgees, .and there was no delivery of them to Mrs. no notice to the holders, but the ttansfers were on paper onlY.'A:fterwards, by someperson un:known, a part ot .the Car9lina Centra.l btn:idB were redeemed, and were' put in the safe of a deposit company which was hired by Mrs; , Matthews, and of which ahe and her son had keys, but her' husband had none. Other'bonds: 'were placed in the same' sanifrom'time to time. Edward wished to 'sell or pledge, any of these bonda he did so, his son ing them on demand. Others were afterwards substituted, an4then againnsed as Edward's occasions might amiso on. .,i'I,) j' Where the' money came !from thlit, Edward had botrowed,J of his wife does not a,ppear; and there is no the bonds were her separate property, except as thai is to be inferred from' the that they were herB.
Mrs. Matthews was not examined as a witness. Books which were kept for her by the clerk of Mr. Matthews are not produced. The witnesses, except to the paper title, are Edward Matthews and his son, who, having given these bonds to the defendants, testify that they had no authority to do so. lt was not seriously denied, in the argument of the counsel who closed the case, that the facts show full authority for Edward Matthews to deal with all the bonds in his wife's safe as he chose; nor could it be denied. with any hope of success. It seems,then, that the witnesses who testified to the want of authority must have intended to say merely that there was no express authority. There was as much right to take the bonds out of the safe as there ever was to put them in. To my mind the evidence proves more than a right by Edward to use the bonds. It proves that they were his for all purposes for which he chose to use them. The case, therefore, must be decided upon the ameJ1ded bill, which alleges th'at, considered as a contract and dealing with Edward Matthews himself, the defendants have no title. The contention from this point of view is' that Edward Matthews was induced by the fraud of his brother to consent, as he did consent, in writing, to the assignment of the bond and mortof the fraud; gage to Upham, and that Upham had or that the mortgage was void because it was given to secure notes tainted with usury; or that, being given to secure certain notes, it was of no value when separated from them. It is clear that Upham had lent a great deal of money to Nathan Matthews, and that he held valuable securities for its repayment,which he surrendered 'in exchange for the bond and mortgage of Edward Matthews; and that he had no notice or knowledge of any dealings between the brothers which would injuriously affect his title. Upon the preponderance of evidence I find that Edward made the mortgage with that it was to be used to secure whatever debts Nathan owed Upham; or that it was so made and assigned that Uppam had, as against Edward, the right to believe so. The alleged fraud does not attack the mortgage itself, but
mly the assignment of it to Upham. It was given, according to this theory, to secure certain notes, and the fraud con!listed in a false statement that Nathan would assign with it .. corresponding amount of the notes; whereas, he, in fact, aegotiated those notes to other persons, thus creating a double liability. But the mortgage itself, having been lawfully given for the notes, unless avoided by usury, stands as .their security. Edward Matthews is in bankruptcy, and the 'notes' are still outstanding, unpaid, to a greater an;lOunt than $200,000. Therefore, the only persons who can at present complain that the mortgage has been separated from the notes are the holders of them. Neither Edward Matthews nor his wife have an equity apart from these holders; and, if they can maintain a bill, can only do so by making these persons parties, and by asking for a wholly different relief from that which the plaimiff now asks. Were the bond and mortgage wholly void, from the beginning; for usury? If they were, I should incline to think Edward Matthews estopped to showit; but, at all events, one who asks relief in equity on this ground, must first offer to repay the money actually lent. As a general proposition this is admitted; but thete is a statute in New York which authorizes the borrower to obtain such a surrender, in equity, without payment. This statute is so strictly construed that it has been held not to apply to an assignee in bankruptcy of the borrower, (Wheelock v. Lee, 15 Abb. Pro [N. S.] 64; S. C. 64 N. Y. 242;) nor to a purchaser of an equity of redemption of land upon which is an usurious mortgage, (Bissell V. Kellogg, 65 N. Y. 432.) It seems to me, however, that if a. borrower pledges the property of a third person for his debt, that person must be so far identified with the borrower as to have all his rights at law.and in equity. If I say that Mrs. is only a nominal holder for her husband, bound by his,obligations in respect to the property, how can I refuse her the same rights which he would have to the same property? However this may be, the statute of New York, which authorizes a borrower to obtain a cancellation of securities w:thout payment, cannot bind a court of equity out of the v.6,no.5-30
state, and does not undertake ·to do so. Y,Then a comes into equity in Massachusetts, or in the circuit court, he must do equity, as understood by the court in which he sues. If, then, the defendants held the notes for which the bond and mortgage are said to have been given, and if they were so given, there could be no redemption without payment. . For these reasons the complainant is not entitled to the relief which she seeks. Bill dismissed, with costs.
(District Oourt, S. D. Ohio.
April 7, 188.1.)
ST. § 824.-JURY TRIAL. In a case which had been twice tried to a jury and the jury had each time disagreed, and at a subsequent term the case was dismissed, held, '. that under section 824 of the Revised Statutes, an attorney's docket fee of only five dollars is taxable.
The ·qrial before a jury," in said section, applies only to cases in which a controvcrsy is tcrminated by a verdict of a jury and a judgmcnt thcreon.
COSTS-ATTORNEY'B DOCKET FEE......;.}mv.
2. SAME-" TRIAL BEFORE A JURY"-OONSTRUCTION.
Motion to Retax Costs. Bateman cf; Harper,for motion. J. F. Follett and Thos. Millikin, contra. SWING, D.J. Peter Schwab was adjudicated a bankrupt, aud plaintiff was appointed his assignee; and brought this suit to recover from the defendant assets1bf the estate of the bankrupt. In 1874 the case was submitted toa jury, which failed to agree and was discharged. In 1875 the case'was again submitted to a jury, which, also failing to agtee, was discharged; and in 1880 the p1aintiff came and dismissed his case. Upon such dismissal the costs were taxed against the plaintiff, including a docket fee of $20,
.Reported by MCdSrs. Florien Giauque and J. C. nati hal'. of the