Morse v. Hovey and Cloyes.

clare" usurious notes, &c., to be void, and decree them to be cancelled, whenever it shall appear by the defendant's admissions, or by proof, that the same are usurious. There was certainly no design in the act of 1837, to abridge the powers of this court in reference to usurious securities. It dispenses with the former equitable pre-requisite to relief in such cases; the payment or offer of the principal sum loaned with lawful interest. Upon such an offer, this court would have entertained this suit, previous to the passage of the law of 1837.

The Chancellor has pointed out in Perrine v. Striker, the powerful temptation which besets the usurer to commit perjury in these cases, when the whole of his loan, with interest and costs, is to be gained or lost by his own testimony. It surely cannot be the policy of the law to multiply these temptations, nor is it consonant to good sense to require a defendant at law to rely upon the testimony of a witness so strongly interested against him, when a disinterested witness is at hand.

In Norton v. Woods, (5 Paige's R. 249,) the Chancellor sustained a bill for relief, on the ground that it appeared from the bill that a valid defence existed to the suit at law, but of which the defendant could not avail himself there, because the only witness who knew the facts upon which that defence rested, and who was not interested in the matter in controversy, had had been made a party to the suit.

The same principle was enforced in Miller v. M'Can, (7 Paige's R. 460-1,) and I perceive no reason why it is not applicable here.

In Morse v. Hovey, (9 Paige, 197,) a suit relative to this same note, the demurrer was allowed, because there was no allegation in the bill showing that the complainants had not a perfect defence at law. Thayer was then liable on the note. In this bill, the allegation is sufficiently made, as I have already stated it. The complainants say in effect that they cannot rely upon the oath of Hovey.

I think they are not compelled to rely upon it, and that they are entitled to relief here, if they show that they can establish the usury by evidence which they cannot introduce in their

Morse v. Hovey and Cloyes.

defence on the trial at law. A mere bill of discovery would not enable them to obtain the benefit of that evidence.

In this case, I am not sure but that a discovery from Cloyes in this court is indispensable for the complainants defence to the suit at law. The note was made, and it matured before the passage of the act of 1837. It is therefore incumbent on the complainants to prove, either that Cloyes received the note after that time, or that if he received it before, he did not purchase it in good faith. The act of 1837 does not authorize the examination of the plaintiff at law, except "for the purpose of proving the usury." Both Cloyes and Hovey may be called and examined for that purpose, but can the defendants at law ask either of them any question in regard to the transfer of the note? Until the defendants at law show that the transfer is not bona fide, or was not made before the act of 1837, he cannot examine Hovey as a plaintiff. And if they call him as a witness to prove the usury, may he not demur to answering, because of the penalties imposed upon the offence? The saving clause in section 8, applies only to the testimony of the plaintiff.

The complainants have not stated in their bill that they cannot prove this branch of their defence otherwise than by the oath of Cloyes; and I will not, therefore, express any opinion on these questions.

The only remaining objection to the bill is, that it waives Hovey's answer on oath, while it insists upon the oath of his co-defendant, Cloyes.

The case of Bulkley v, Van Wyck, (5 Paige, 536,) is decisive against this objection. There the object of the bill was to show that certain property belonged to one of the defendants, and not to his children, and thus to subject it to the payment of the complainant's debt. The Chancellor held that the interests of the debtor, and those of his children, were separate and distinct, and that the complainant might require his oath and waive that of his children. (And see Stephenson v. Stephenson, 6 Paige, 353.)

Here there is no joint interest in the defendants. The note belongs entirely to the one, or to the other.

Hayden v. Agent of Auburn State Prison.

The demurrer must be overruled with costs, and the defendants put in their answer, &c., in twenty days.

The same order will be made in the second suit, which depends on the same questions.

HAYDEN V. THE AGENT of the STATE PRISON at AUBurn, in the suit of Russell v. WILLIAMS and others.

The levy of an execution upon sufficient personal property to pay it, is a satisfaction of the judgment as to junior incumbrances upon real estate; although in consequence of the sheriff's indulgence to the debtor, and the plaintiff's neglect to enforce it, the levy actually produces nothing to apply on the execution. In order to establish such constructive satisfaction, it is not necessary for the junior incumbrancer to show any positive interference or direction of the plaintiff in the execution, in the omission to proceed diligently upon the levy.

The consequence of the laches or negligence of an officer of the state, which occasions loss or injury to an individual, are to be borne by the state, in the same manner as individuals would bear them for similar laches or negligence.

This doctrine applied to the neglect of the agent of one of the state prisons, to enforce a levy on an execution in his favor, and the judgment held satisfied as to a junior lien on real estate.

Oct. 26; Nov. 10, 1843.

THE contest in this case was between judgment creditors of Ezekiel Williams, each of whom claimed the surplus which arose from the sale of the mortgaged premises, in the suit of Russell v. Williams. The judgment in favor of the agent of the state prison was the prior lien, but Hayden and Buck, who had the next judgment, insisted that the former was satisfied as to them. It was proved before the master on the reference relative to the surplus, that the former agent of the prison on recovering the judgment, issued an execution against Williams, which was levied on his personal property exceeding in value many times the amount of the execution. This property was suffered to remain in the possession of Williams after the levy,

Hayden v. Agent of Auburn State Prison.

and was sold off by him, or otherwise disposed of in the course of his trade, so that it yielded nothing to apply on the execution.

Hayden and Buck attempted to prove that the former agent directed or requested the sheriff to suspend active proceedings on the execution after the levy; and there was conflicting testimony on that point. The testimony is omitted because the court did not determine the point.

The master reported that the agent of the state prison was entitled to the surplus, and Hayden and Buck excepted to his report.

S. A. Goodwin, (one of the Inspectors of the state prison,) for the Agent.

P. G. Clark, for Hayden and Buck.

THE ASSISTANT VICE-CHANCELLOR.-There is conflicting testimony in regard to the direction or active interference of Mr. Polhemus, the former agent, in the stay of his execution, and I prefer to dispose of the case without determining that question.

Probably if the controversy had arisen on a levy upon the same goods by Hayden and Buck at the date of their judgment,` the execution of the agent of the prison would, on this testimony, have been held dormant, and to have lost its priority. And if the execution had thus become dormant, the judgment would be deemed satisfied as against the lien of the junior judgment, on the most latitudinarian construction of the rule of law on that subject.

But waiving these considerations, I have no doubt but that the levy was a satisfaction of the agent's judgment, so far that its lien upon real estate cannot be set up against a junior judgment. If the question were between the agent and the judgment debtor, it would be a different matter.

In Green v. Burke, (23 Wend. 490, 496,) the subject of satisfaction by a levy, received a very elaborate examination by Mr. Justice Cowen. But so far as I can discover, that case establishes no new doctrine on this point. Although the levy was held void, and therefore no levy, which was sufficient to

Hayden v. Agent of Auburn State Prison.

dispose of the motion for a new trial; the learned judge, fully met and decided the other point, viz., that if there were a levy, it did not amount to a satisfaction. The question arose between the creditor in the execution, and the debtor. It appeared distinctly on the trial, (where I assisted the plaintiff as counsel,) that the property levied upon, was given up to the debtor, by the officer who made the levy. This fact is alluded to at page 502 of the reported case. The case was therefore like that of Mickles v. Haskin, (11 Wend. 125,) and like Wood v. Torrey, (6 Wend. 562,) when it came up on the motion of Torrey. And the subsequent case of Ostrander v. Walter, (4 Hill's R. 329,) proceeded on the same principle. The rule which Judge Cowen contends for, in Green v. Burke, is this: A levy upon sufficient personal property on an execution, is a satisfaction, sub modo, and not absolutely. If the levy fail in whole or in part, without any fault of the plaintiff in the execution, he may go to his farther execution. Pro tanto, it is not a satisfaction.

Under this rule, I presume it would be considered the plaintiff's fault, if he suffered the sheriff to give indulgence to the debtor for more than a year after the return day of the execution, without proof of that express interference which is -requisite to show the execution to be dormant. The latter is quasi fraudulent. The former is negligence, not fraud. But without speculating upon the application of the rule laid down in Green v. Burke, I am satisfied to rest this case upon what appears to be the well settled doctrine on this subject; that a levy under the circumstances existing here, is a satisfaction of the judgment, as to junior incumbrances. The cases of Wood v. Torrey, (6 Wend. 562,) and The People v. Onondaga C. P., (19 Wend. 79,) are in point, and forcibly illustrate the distinction between its application to third persons, and to the defendant in the execution.

It is urged in behalf of the present agent of the prison, that the agent represents the state, and that no neglect of duty or laches of his can be urged to invalidate or discharge the claims. of the State upon its debtors. None of the cases cited for that purpose, support this proposition in its application to this transaction. One of these was the United States v. Kirkpat