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Cotheal v. Blydenburgh

Henry Cotheal and David Cotheal v. Jeremiah W. Blydenburgh

Cotheal v. Blydenburgh, 5 N.J. Eq. 17 (1845)
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Court
New Jersey Court of Chancery · State Appellate Courts
Decided
June 15, 1845
Citations
5 N.J. Eq. 17
Cited by 0
Headnotes
A., living in New-York, sells to B., also living in New-York, a tract of land in New-Jersey, and takes his bond for part of the consideration money, with seven per cent, interest, and his mortgage on the lands convoyed, to secure the payment of the bond. The mortgage is not usurious. The exchange of the papers in New-Jersey, at the proper record office, will not make the mortgage usurious 5 they having been executed and acknowledged in New-York, and a sufficient reason for not exchanging them there, being shown.
Summary
This was a bill for the foreclosure of a mortgage. The complainants had sold to J. W. Blydenburgh, a tract of land in this state, and taken his bond for a part of the consideration money, with seven per cent, interest, and his mortgage on the lands sold, to secure the payment of the bond. Both parties resided in New-York, and the papers were executed and acknowledged there, but were exchanged in this state, at the clerk’s office of the county in which the lands are situated. A moitgage on the same lands, from Blydenburgh to Wads-worth, a witness in the cause, was executed and acknowledged in New-York, at or about the time when the mortgage to the complainants was executed and acknowledged. Wadsworth testified, that he met Blydenburgh at the complainants’ office in New-York, a few days after the mortgages were acknowledged, for the purpose of having the mortgages delivered, and of Blydenburgh’s getting his deed. That at this time, there was a proposition made as to the exchange and delivery of the papers. That one of- the complainants' objected to delivering the deed, unless he could be sure that the mortgage to them was put on record before the mortgage to the witness. That he was present at a subsequent- interview between the same parties, or some of them, in relation to the same subject,at the office of Mr. Feltus, a counsellor at law in New-York,who acted as> counsel for the complainants ; and that' at' this interview it was understood that Blydenburgh and one of the, complainants should meet,- with their papers, at the place of record in New-Jersey, the next day, for the purpose of having the papers recorded in- the .proper order.- That it was agreed that the witness’s mortgage should be second. The defence set up by the answer is, that the mortgage was usurious. The cause was heard on the pleadings and proofs.

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Opinion of the Court

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The Chancellor.

This is not the case of a borrower and lender residing in New-Jersey, making a contract for the loan of money, and going into New-York to exchange the papers, .arid reserving seven per cent, interest,.. All the parties to this contract resided in New-York at th.e time it was made. The bond and mortgage both truly state the parties, obligor and obligees, and mortgagor and mortgagees, ás of the city of New-York; The papers were executed in New-York, the mortgage is acknowledged in New-York. It is clearly a New-York transaction.

A., residing in New-York, lends B., also residing in New-York, a sum of money, and takes his bond for it payable in one year, at New-York interest, seven per cent. To securer the.bond, the borrower gives the lender a mortgage on lands in New-Jersey. It would be- a singular application of the lex loci *19 reí sitae,, to say, that because this New-York contract is secured by a mortgage on lands in New-Jersey, where the legal interest is six per cent, only, it is void for usury, or even to say that the lender shall receive only New-Jersey interest: 3 Atk. 727, Stapleton v. Conway.

Another ground relied on by the defendant was, that the bond and mortgage, though executed, witnessed and acknowledged in New-York, were actually delivered at the clerk’s office in New-Brunswick, New-Jersey, and not in New-York. I do not see that the mere fact of the exchange of the papers in some place out of New-York, deprives it of the character of a New-York contract. But in this case, the reason why it was done is manifest. It was done by arrangement between the parties, and by the advice of the complainants’ counsel, in order that the complainants might be sure that their mortgage found its right place on the record.

As to the rate of interest in New-York, it is sufficiently proved in the case, if it were necessary to prove it. But it was not necessary. The defence is usury by the law of New-Jersey. This defence cannot be made in relation to a New-York contract.

The defence is overcome by showing that this was a contract not subject to the New-Jersey statute. If the contract was usurious in New-York, it was for the defendant to show it, in pleading and proof.

The complainants are entitled to the relief sought by their bill. The usual reference -will ba ordered.

Order accordingly.

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