Summary
In Bissell v. Kellogg, 60 Barb. 617, it was held that the foreclosure by advertisement of a mortgage tainted with usury will not operate to convey a good title except to a bona fide purchaser at the advertised sale, and this can be prevented by giving notice of the usurious character of the mortgage at the time of the sale.
Summary of this case from Bonacker v. WeyrickOpinion
Argued January 13, 1875
Decided June term, 1875
W.F. Cogswell for the plaintiffs. J.H. Martindale for the defendant.
It may be assumed that the judgment in the suits commenced by Kellogg for the foreclosure of the Lampson mortgage, claiming due upon it $4,000 and interest, conclusively established, as to parties and privies, that the mortgage involved in the present controversy is usurious and void. The plaintiff Bissell was neither a party nor privy in that proceeding, and is neither bound by the judgment nor can he assert any right by virtue of the estoppel created by it. The plaintiff Adams conveyed the premises covered by the mortgage in the present case to Jackson, on the 22d of December, 1859, and he to Mitchell, on the 28th of April, 1860. Kellogg commenced his action of foreclosure on the 13th of June, 1860, and Mitchell, who then owned the property now in dispute, was not made a party to that action; and he conveyed to Bissell on the 19th of November, 1866. It is thus obvious that the judgment entered upon the report of the referee was erroneous and cannot be sustained. The plaintiff Bissell having purchased the equity of redemption, was entitled to show, if he could, that the defendant's mortgage was usurious, and we assume that he could have done so on a new trial. But he was obliged, or at least elected to come into a court of equity for relief, and he must do equity as a condition for granting him a favor. He was not a borrower, and the statute of 1837 does not relieve him from the burden. ( Peet v. Bk. of Utica, 7 Hill, 391; Schemerhorn v. Tallman, 14 N Y, 93.) The Supreme Court permitted him, on payment of $1,000, with interest from the 14th of August, 1858, to have the defendant's mortgage for $2,050 declared usurious and void, and canceled of record. This offer he declined, and reserving his right of appeal to the Court of Appeals, allowed his complaint to be dismissed. We think the Supreme Court accorded him every right to which he was entitled, and the offer thus made he declined to accept; and as the plaintiff Adams appears to have no interest in the controversy, the judgment of the General Term of the Supreme Court dismissing the complaint is affirmed, with costs.
All concur.
Judgment affirmed.