Mason v. . Lord

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 478 [EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 479 [EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 480 [EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 481 [EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 483 If the fact found by the judge, that Michael Dougherty loaned the $5,000 to the defendant, Lord, with which the latter redeemed the mortgage given by him upon the property in question to Herrick, from the executrix of the latter, is to be assumed as true by this court, there can be no question of the plaintiff's right of recovery, irrespective of the further fact found that such loan was usurious. The appellant's counsel excepted to the finding of the above facts. *Page 484 The case contains no evidence tending to establish them, but, on the contrary, the evidence shows that Dougherty, instead of loaning the money to Lord, agreed to purchase the property, and advanced the money to Lord with instructions to procure a conveyance of the property to him therewith from the executrix of Herrick. Nothing was said about a loan or the reconveyance of the property by Dougherty to Lord or the repayment thereof by Lord to him. The finding is not against the weight of evidence merely, but the finding of a fact against a party entirely without evidence. Relief against the former error could only be given by the General Term of the Supreme Court to which the appellant might appeal for the correction of errors, either of fact or law, committed by the judge who tried the cause, without a jury. An appeal to this court can only be taken upon the law. The question, then, is, whether finding a fact without any evidence to sustain it is an error of law. The statement of the question would seem to suggest the answer: A finding of facts must always be based upon evidence; and where none is given tending to show an affirmative fact, it is contrary to law to find such fact against a party traversing it. This is recognized in numerous cases in this court, where it has been held that a judge erred in refusing to direct a jury to find the non-existence of a fact when there was no evidence of its existence, and also in refusing to direct the finding of a fact when the uncontroverted evidence proved it. When the alleged error is a finding of fact contrary to the weight of the evidence, it is within the meaning of the Code providing for appeals on error of fact, of which this court can take no cognizance. When it is the finding of a fact without any evidence, or the refusal to find a fact proved by uncontroverted evidence, it is a legal error which is available in this court. It follows that, in finding the above facts, a legal error was committed which entitles the appellant to a reversal of the judgment unless it appears from the other facts, legally found, that this error could not have prejudiced the appellant. From the latter it appears that, although the *Page 485 assignment of the lease by Lord to Herrick was absolute upon its face, yet it was only a mortgage, having been made as a security for a loan of money by Herrick to Lord, and that this was known to Dougherty at the time he negotiated for the purchase of the property and advanced the money for that purpose to Lord. This fact being established, Lord, notwithstanding the apparent absolute assignment of the lease by him, continued the legal owner of the term and Herrick had only a lien thereon for the security of his debt. (Runyon v. Mersereau, 11 Johns., 534;Kortright v. Cady, 21 N.Y., 343; Merritt v. Burtholick, 36 id., 44.) Lord, thus being the legal owner of the lease, held an interest in the premises. The judgment, under which the plaintiff makes title, became a lien upon such interest at the time of the entry thereof, long prior to any negotiation by Dougherty for the purchase; Dougherty knowing that the assignment by Lord to Herrick was only a mortgage, nothing done by him, Lord, and the executrix of Herrick affected this lien. The most favorable view that can be taken of the interest acquired by Dougherty is that he, by purchase from the executrix of Herrick, acquired the same title held by Herrick under the assignment to him from Lord, and that this title was not in equity subjected to the lien of the judgment by reason of the reassignment of the lease by the executrix to Lord, for the reason that, under the circumstances under which such reassignment was taken, Lord took the same as trustee for Dougherty, such trust resulting from the advance of the money by the latter to the former, for the purpose of obtaining a transfer of the interest of Herrick to him. In this aspect of the case, Dougherty acquired precisely the interest of Herrick, as assignee of his mortgage interest, and the judgment continued a lien upon the legal interest of Lord in the term. This legal interest of Lord passed to the plaintiff under the sale and conveyance of the sheriff under the judgment, and became a valid title in the plaintiff, subject to the mortgage, if that was valid. But the fact was found that the mortgage was given to secure a usurious loan by *Page 486 Herrick to Lord. It is claimed that Lord could waive this invalidity of the mortgage. This is true as to his own rights and the rights of all acquired from him subsequent to such waiver. But the lien of the judgment had attached before anything done by Lord, that could possibly constitute a waiver. The judgment creditor having a lien upon the property has the right to avoid a mortgage prior to his lien by showing it usurious. (Dix v. VanWyck, 2 Hill, 522; Post v. Dart, 8 Paige, 632; Thompson v.Van Vechten, 27 N.Y., 568.) This right was also acquired by the plaintiff upon his acquisition of title under the judgment. The right is equally available against an assignee of the mortgage as the mortgagee himself. A mortgage not being negotiable by the law merchant, the assignee, acquires only the right of the mortgagee and takes subject to all available defences against the latter. The mortgage was thus shown to be void as against the plaintiff, irrespective of the question whether Dougherty knew its usurious character at the time of its purchase. There was, therefore, no title shown in Dougherty and he could not, therefore, have been in any way prejudiced by the finding that he loaned the money to Lord, which the latter paid to the executrix of Herrick upon the transfer of the mortgage by her, instead of paying it as purchaser of the property. The judgment must be affirmed with costs.