EARL v. CLUTE

EARL v. CLUTE. December, 1864. To avoid a mortgage on the ground that it was given to compound a felony, it should appear, 1. That there was an agreement to compound a felony; 2. That the mortgage was the result of that agreement; and, 3. That the mortgagee knew of the illegal consideration, at the time of taking the mortgage Evidence that the mortgagee had admitted having knowledge of the illegal consideration after he 'took the mortgage, is not competent, as against an assignee of the mortgage. James Earl sued Derrick Clute, Jr., in the supreme court, to recover the possession of a horse. The defendant set up that the plaintiff had given a chattel mortgage on the horse to one Van Hyning and others, who had assigned the mortgage to Thomas J. Clute. That the plaintiff had failed to make the payments required by the mortgage, and that thereupon Thomas J. Clute, by virtue of a power contained in the mortgage, had taken possession of the horse and sold him to the defendant. On the trial, the plaintiff, to avoid the mortgage, adduced evidence to show that it had been made to secure the mortgagees against liability on a note given by them to one McCarty, to compound a criminal charge of perjury against James Emmet Earl, son of the plaintiff. It was shown that the plaintiff had recovered a judgment against McCarty for fifty dollars, in an action in which the son of the present plaintiff was a witness; and that immediately afterwards McCarty caused the arrest of the son of the plaintiff on a charge of perjury in his testimony. That thereupon the plaintiff had made the mortgage in question for the amount of the judgment and costs, to Van Hyning and the others, on condition that they should make a note for a like amount to McCarty, the purpose being, as the plaintiff now alleged, to compound the criminal charge. The evidence showed that the parties were all together after the arrest of plaintiff’s son, and were advised by McCarty’s lawyer that they could not settle a criminal prosecution. The defendants advanced to Earl some money—about ten dollars— which was included in the mortgage, with which Earl paid the costs of the prosecution. One of the mortgagees, Close, called as a witness for plaintiff, testified that he was asked by Emmet Earl to sign a note in favor of McCarty, and that on being asked by witness if the object was to settle the erimminal charge, Emmett Earl replied, No. Culver (the attorney) says it can’t be settled; but that he owed McCarty for a judgment against him, and Culver says that I have a right to pay that back. The note and the mortgage were then executed together, and the money handed to the constable, and after that the matter was dropped. The witness Close testified that he had no expectation or thought as to whether the prosecution would be stopped by the giving of the note. Other evidence, excluded under exception, is sufficiently stated in the opinion. At the close of the evidence a motion to nonsuit the plaintiff was granted. In another action arising out of the same facts, the supreme court had treated the mortgage as void. Fellows v. Van Hyring, 23 How. Pr. 230. Judgment for defendant was given in the present action. Compare Conderman v. Hicks, 3 Lans. 108 ; S. C., as Conderman v. Trenchard, 58 Barb. 165; S. C., 40 How. Pr., 71; Porter v. Havens, 37 Barb., 343. For the application and limitations of the rule settled in the leading case of Page v. Cagwin, referred to on this point in the opinion, see Worrall v. Parmalee, 1 N. Y. (1 Comst.) 519; Booth v. Swezey, 8 N. Y. (4 Seld.) 276; Brown v. Mailler, 12 N. Y. (2 Kern.) 118 ; Tousley v. Barry, 16 N. Y. 497; Foster v. Beals, 21 N. Y. 247; Gandolfo v. Appleton, 40 Id. 533 ; Beach v. Wise, 1 Hill, 612 ; Christie v. Bishop, 1 Barb. Ch. 105; Jermain v. Worth, 5 Den. 342; Ely v. Kilborn, 5 Den. 514; Brisbane v. Pratt, 4 Den. 65; Smith v. Webb, 1 Barb. 230; Sort v. Smith, 5 Id. 283; Allen v. Way, 7 Id, 585; Westlake v. St. Lawrence Co. Ins. Co., 14 Id. 206; Seeley v. Engell, 17 Id. 530; Smith v. Schanck, 18 Id. 344; Jones v. East Soc. M. E. Ch., 21 Id. 161; Burlingame v. Robbins, 21 Id. 327; Schenck v. Warner, 37 id. 258; Osborn v. Robbins, 37 Id. 481; Peck v. Crouse, 46 Id. 151; Johnson v. Hicks, 1 Lans. 150; Bullis v. Montgomery, 3 Lam. 255; and see Jermain v. Denniston, 6 N. Y. (2 Seld.) 276; Gardner v. Barden, 34 N. Y. 433. This decision was reversed in 40 N. Y. 221. [MAJORITY — Hogeboom, J.] The súfreme court, at general term, affirmed the judgment, the following opinion being rendered: By the Court. Hogeboom, J. The plaintiff offered to prove by William B. Harris, that one Fellows stated to Van Hyning (one of the mortgagees) before the assignment of the mortgage to Clute, that he had a mortgage upon the property in question, and asked Van Hyning if he did not know that the mortgage in question was given to settle and drop the criminal prosecution against James Emmett Earl; to which he replied he did. This evidence was objected to by defendant’s counsel as not competent in this action, and the objection was sustained by the court, and the evidence excluded. To which the plaintiff’s counsel duly excepted. This exception is not well taken. In the first place, it was not material to this issue, whether Fellows had a mortgage upon the property in question; and as this evidence was properly excluded, the whole exception, being general, must fail. Again, as to the residue of the evidence, the offer was to show an admission by one of the mortgagees, that before he had made the assignment to Clute,—not before he took the mortgage,—he knew it was given to settle a criminal prosecution. Knowledge acquired at so late a period could not invalidate the mortgage. Besides, Van Hyning himself was a competent witness, and his admissions improper testimony. The true question was, whether the mortgage was in fact given for an illegal consideration; not whether he had said so. Paige v. Cagwin, 7 Hill, 361. John K. Porter, for plaintiff, appellant; That the mortgage was void, cited, 3 R. S. 5 ed. 9G9, § 18; Perkins v. Savage, 15 Wend. 412, 416; DeGroot v. Vanduser, 20 Id. 395; Peck v. Briggs, 3 Den. 107; Loomis v. Cline, 4 Barb. 453; Gray v. Hook, 4 N. Y. 449; Dewitt v. Brisbane, 16 Id. 508. The mortgagees had knowledge. Tracy v. Talmage, 14 N. Y. 162, 175. The intent is proved by circumstances. Van Neste v. Conover, 20 Barb. 547; People v. McCann, 15 How. Pr. 521. That the case should have been submitted. to the jury, the defense to the note being perfect. Story on Gontr. § 569, 575; Chitty on Contr. 570, 582; Bush v. Lathrop, 22 N. Y. 535. The admission of one of the conspirators was competent. Moers v. Morro, 29 Barb. 361; Cuyler v. McCartney, 33 Id. 165. T. J. Glute, for defendant, respondent; Cited 5 How. Pr. 425; Tracy v. Talmage, 14 N. Y. 162. The motion for a nonsuit was also properly disposed of. There was no sufficient evidence that there was any agreement to compound a felony; still less, that the mortgage was the result of such an agreement to compound a felony; still less, that the mortgagees had knowledge that the note which the mortgage was given to secure, was tainted by such an illegal purpose. All which were essential to make the mortgage invalid, even as against them. The evidence was insufficient to warrant a verdict for the plaintiff, or to be submitted to the jury for that purpose. The judgment of the circuit court should be affirmed. The plaintiff appealed to this court. The Court affirmed the judgment, for the reasons assigned in the foregoing opinion of Hogeboom, J., a majority of the judges adopting the same. Judgment affirmed, with costs.