Pennsylvania. Supreme Court.

Reports of cases adjudged in the Supreme court of Pennsylvania, in the Eastern district [Dec. term, 1835 - Mar. term, 1841] (Volume 6) online

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payment to be secured by his note, payable at ninety days, together
with the bond and mortgage of John Gilder, Esq., the complain-
ant, upon the house and lot, No. 409 Chestnut street; which sum



532 SUPREME COURT [March Term,

[Gilder v. Merwin.]

the defendants agreed to lend him, provided the security was found
to be sufficient and satisfactory. The defendants having through
their officers made inquiry into the value of the property, and the
sufficiency of the title of the complainant to the premises proposed
to be mortgaged, and being satisfied with the same, and with the
personal responsibility and property of the complainant, agreed to
make the loan of the said sum, payable in their certificates, which
were then equivalent to cash, payable at their maturity. That on
or about the 17th of January 1839, the said Joseph E. West
received from these defendants several certificates under the seal of
*5331 ^ ie * nst i tut i n ' signed by Peter Fritz, then *president, and
* N. P. Poor, then cashier, dated on the said 17th of January
1839, certifying that he the said Joseph E. West, was entitled to
the sum stated in each certificate (and which sums together amounted
to $11,000) on deposit in the Philadelphia Savings Institution, to
be paid to his order on the 27th of April 1839, without grace; and
on the same day, viz., on the 17th of January 1839, the said West
gave his promissory note to the defendants, bearing that date, at
ninety days, for the said sum of 11,000, and delivered to them
the bond of the complainant bearing the same date, in the penal
sum of $22,000, conditioned for the payment of $11.000, in three
months from the date, together with a mortgage executed by the
complainant in the usual form, reciting the said bond, and mort-
gaging to the defendants "all that certain lot or piece of ground
with the buildings and improvements thereon erected, situate on
the north side of Chestnut street, between Delaware Twelfth and
Thirteenth streets, in the city of Philadelphia, containing in front
or breadth on the said Chestnut street, twenty feet and a half, and
in length or depth 150 feet to Clover street," &c.. and reciting
that it was "the same premises which Joseph E. West, of the state
of New Jersey, gentleman, by indenture, bearing even date there-
with, but executed immediately before that indenture of mortgage,
and intended to be recorded, granted and conveyed unto John
Gilder (the complainant), his heirs and assigns in fee."

The defendants expressly and absolutely denied that they in-
formed the complainant after the execution of the mortgage, that
it was expected his bond would accompany the mortgage or gave
him any such information; and they denied that any mortgage
executed by the complainant was produced or offered to them before
the execution of the bond; but on the contrary, they expressly
averred that the bond and mortgage of the complainant were pro-
duced to them together, according to the usual course of business;
the said mortgage reciting as they have already stated that the
bond had been executed by the complainant; and they had no
knowledge or information of any wish or intention on the part of
the complainant not to execute a bond or other personal obligation;



1841.] OF PENNSYLVANIA. 533

[Gilder v. Merwin.J

and they averred that they would not have made the said loan if
they had not expected to receive and had not received the said
bond or personal obligation of the complainant.

They alleged that they knew nothing before or at the time of
the said loan of $11,000, of its ultimate destination, nor into
whose hands the money was to be paid by West, nor whether the
complainant or Mrs. Merwin was to receive the same or any part
thereof; nor had they since had any knowledge in respect to the
same, except so far as is stated in the complainant's bill.

They denied that it was expressly understood between West and
them, or in any way understood or agreed, that the bond and mort-
gage executed by the complainant were collateral securities or
*guaranties for the payment of the note given by West, at rscoj.
the time of the execution thereof, or at any other time ; but ^
they averred that the said bond was received and taken by them as
an absolute undertaking by the complainant for the repayment of
the money lent, and that the said mortgage was received and taken
by them as security for the payment of the said bond.

The answer further stated, that they knew nothing of the bond
alleged in the bill to have been executed by West to the complain-
ant, nor of any declaration of trust executed by the complainant,
except so far as they were informed by the bill ; and they had no
knowledge of the circumstances stated in the bill respecting the
delivery of the deed to Mrs. Merwin ; but they were informed and
believed that it appeared from an examination of the records in
the office for recording deeds for the city and county of Philadel-
phia, that the deed recited in the mortgage to have been made by
West to the complainant for the mortgaged premises had never
been recorded ; and they submitted that if the title to the premises
be in any way affected by reason of the delivery of the said deed
by the complainant to Mrs. Merwin, and the neglect of the com-
plainant to have the same recorded, the complainant is answerable'
therefor to them.

They admitted that when the note given by West, on the
17th of January 1839, fell due, he applied for a continuance of
the loan, which they agreed to ; and they paid at maturity, the
amount of the certificates which had been issued in the name of
West ; and on or about the 20th of April 1839, received from West
his note at thirty days, bearing that date for the same sum of
$11,000; and when the last-mentioned note became due, West
again applied for a continuance of the loan, which was also agreed
to, and gave his note, dated the 23d of May 1839, at forty-five
days, for the same sum of $11,000; which note remained unpaid
in the hands of the defendants ; and they admitted that they did
not consult the complainant with respect to the continuance of the
loan ; but they insisted that they were not bound to communicate
6 WHARTON 34



534 SUPREME COURT \MarcJi Term,

[Gilder . Merwin.]

with him or obtain his consent thereto, because they averred that
the bond and mortgage of the complainant were given for the pay-
ment of the debt absolutely and without any reference to the notes
given by West; and they believed that the complainant had full
knowledge of the continuance of the loan, and of all the transac-
tions between them and West.

They denied that the loan was made or continued at an usurious
discount or usurious interest, and that the interest or discount
received by them on the transaction amounted to $3000, or any
similar sum; and they submitted that if there was anything of an
usurious character in the contract between them and West, they
were not bound to discover the same ; and that by the rules of
equity, a complainant cannot have relief in respect to any such
alleged usury, unless he tenders or brings into court the money
*COK-I *actually lent, with lawful interest thereon ; and further, that
J this complainant is not entitled to relief in this court from
such alleged usury, or upon any other ground, after confessing
judgment in the District Court, as admitted in his bill, and after
the lapse of time that has taken place ; and they prayed the same
benefit of this defence as if they had demurred to this part of the
complainant's bill.

They admitted that on the 27th day of September 1839, the said
loan remaining unpaid, they, through their counsel, sued out a
scire facias upon the mortgage of the complainant, from the Dis-
trict Court for the city and county of Philadelphia, which was
duly served and returned, as appears by the records of the court ;
and a copy of the mortgage was duly filed, for the purpose of
obtaining judgment, according to the act of assembly ; when the
objection was taken that the year had not expired as required by
law, and no further proceedings, as they were informed and believed,
were -had in that suit.

They admitted that on the 24th day of October 1839, they
executed to William Gill, Robert Bell and William P. Lawrence,
an assignment of certain securities and other property and effects,
including the bond and mortgage of the complainant, in trust for
the benefit of the special and transient depositors in the institution;
and that the said William Gill, Robert Bell and William P. Law-
rence, accepted the trust ; and the said bond and mortgage were
delivered to them for the purposes of the trust.

The answer then averred, that since the time of the said assign-
ment the defendants had no concern in or control over the said bond
and mortgage, and no knowledge of the transactions respecting the
same that may have occurred since that time, excepting so far as
they were informed by the said bill ; and they were therefore not
able to make answer relative to matters inquired of in the com-



1841.] OF PENNSYLVANIA. 535

[Gilder r. Merwin.J

plainant's bill that may have occurred since the time of the said
assignment.

They submitted that all the matters in the bill, were matters
that may be tried and determined at law, and with respect to
which the complainant was not entitled to relief in equity ; and
they prayed the same benefit of this defence as if they had
demurred, &c.

This answer was signed by Robert Bell, President, and Wm.
P. Lawrence, Secretary, and was sworn to by Peter Fritz, who
swore that he was President of the Philadelphia Savings Institu-
tion, from February 1838, to May 1840.

The answer of Gill, Bell and Lawrence, the assignees, denied
that they or either of them had any personal knowledge of the
transactions mentioned or referred to in the complainant's bill as
having occurred prior in time to the assignment to them, except
that they had been informed and believe that the bond and mortgage
of the complainant were taken at the time they bear date, by the
Philadelphia *Savings Institution, in the usual course of r*^ofi
their business ; the bond as an absolute engagement or obli- ^
gation on the part of the complainant for the payment of the
money therein mentioned, with the interest thereon, as therein
stated, and the mortgage as security for the payment of the bond
according to the terms thereof.

They admitted that on the 24th of October 1839, an assignment
was made to them by the Philadelphia Savings Institution of cer-
tain securities and other property and effects, including the bond
and mortgage of the complainant, in trust for the benefit of the
special and transient depositors in the said Institution, and that
they accepted the trust and received from the Institution the bond
and mortgage of the complainant for the purposes of the trust:
and they averred, that they received the said bond, and took the
same as a personal obligation and liability on the part of the
complainant, and without any notice or knowledge of any of
the circumstances stated in the bill, in respect to West and Merwin,
to have occurred prior in time to the assignment, and without any
notice or knowledge of any alleged or supposed defence either in
law or equity on the part of the complainant to the payment of the
bond or of any part thereof.

They admitted that they had been informed and believed that on
or about the 23d of November 1839, an agreement was entered
into between their counsel and the counsel of the complainant for
the entry in the District Court in the usual form, of an amicable
action of debt upon the bond of the complainant ; and that by the
same writing it was agreed that judgment should be entered on the
same day for the sum of $22,000, b e mg the penalty of the bond :
but whether the counsel for the complainant was ipecially or par-



536 SUPREME COURT [March Term,

[Gilder v. Merwin.]

ticularly authorized to enter into the agreement at or before the
date thereof, they severally had and have no knowledge, except so
far as is stated in the complainant's bill ; and they submitted that
the allegation in the bill, of the want of any such express or pre-
cedent authority, did not entitle the complainant to any relief in
this court, inasmuch as they would have been entitled, in the
regular course of the District Court, to a judgment on the bond on
the 23d of November 1839, without any agreement on the part of
the complainant or his counsel, on filing a copy of the bond, which
was done, as they were informed, &c. ; and because the complainant
had asserted to and ratified the judgment at various times and in
various ways, &c.

They admitted that their counsel obtained a writ of fieri facias
upon the judgment from the said District Court, under which a levy
was made upon the premises mentioned and described in the mort-
gage, and that the premises were condemned by the sheriff's jury,
and a return made accordingly, and that after the return, a writ of
venditioni exponas was obtained by their counsel from the District
Court; and under the authority of which the premises were adver-
tised to be sold by the sheriff.

j^rorr-i *The defendants, Bell and Lawrence, answered, that a
J short time previous to the day on which the sheriff's sale
was to take place, the complainant called at the office of the Savings
Institution, as they understood him to say, for the purpose of
settling the debt, and proposed that the assignees should waive their
claim of interest and receive the principal amount of the debt.
Being anxious to get possession of funds for the purpose of making
payments to the depositors, many of whom were needy and clamor-
ous, th'e defendant, Bell, after consulting with their counsel, in
respect to the costs and expenses of the suit, told Mr. Gilder, the
complainant, that if he would pay the sum of $11,250, the whole
claim for interest and costs should be remitted. The complainant
appeared to the defendant, Bell, to be perfectly satisfied with this
proposal, and left him with the remark that it would be settled in a
day or two, or words to that effect. The complainant called again
at the office of the Institution, previous to the sheriff's sale, and
informed the defendants, Bell and Lawrence, that he would give
the assignees post notes of the Tenth Ward Bank of New York in
payment of the debt ; to which the defendant, Bell, replied that he
had never heard of such a bank ; and requested the complainant
to show the notes. The complainant said that he had not any of
them with him, and that the defendants had better inquire about
them. Inquiry was made by the defendant Bell, who was cautioned
not to receive them. The complainant, as the defendants believed,
remained in the office waiting the result of the inquiry ; and on
learning it, the complainant stated that West had the notes, and



1841.J OF PENNSYLVANIA. 537

[Gilder v. Merwin.]

that he was to get them from him (West). The complainant did
not, during the said conversation, speak of his being the agent or
representative of West: and the defendants averred that it was
afterwards stated in the newspapers that the notes with which the
complainant offered to pay the debt had been fraudulently issued,
and that West was one of the parties by whom the notes were
issued, and the public were cautioned by advertisements in the
newspapers against taking them.

The defendants denied that West ever called upon them in rela-
tion to the bond and mortgage, or ever made any offer to pay them
in post-notes of the Tenth Ward Bank of New York, or in any
other notes of that bank, or of any other bank or in any way what-
ever ; and they also denied that they ever had any conversation
with West on the subject of the debt or of the bond and mortgage.

The answer then stated, that they were advised that there was
not and is not any such equity as that alleged in the bill, to require
that the mortgaged premises should be exhausted before resort
should be had to execution against the complainant's other proper-
ty ; but on the contrary they submitted that the bond is the principal
or primary debt, and the mortgage security for the payment of the
same, and that the courts of this state have uniformly refused to
require the party holding a bond and mortgage to resort to the
*mortgaged premises in the first instance. And they insisted r*coo
that if under ordinary circumstances they could be required l
to exhaust the mortgaged premises before proceeding upon the bond,
yet as in consequence of the complainant having neglected to cause
the deed to him to be recorded, and of his having improperly deliv-
ered the deed to Mrs. Merwin, difficulties and obstacles had been
thrown in the way of obtaining satisfaction out of the mortgaged
premises, the complainant was not entitled to the benefit of such
alleged rule, nor to the interposition of a court of equity, or of any
other court to prevent the obligees on the bond from obtaining the
fruits of their judgment.

They denied that they knew that the complainant was not inter-
ested directly or indirectly in the money received by West, or had
any knowledge upon the subject of the original consideration of the
bond and mortgage, at the time they were assigned to them.

They denied any knowledge of the rule alleged by the complain-
ant to have been made by the District Court, save as they were
informed by the bill, nor whether any express authority was given
by the complainant to his counsel to sign any statement of the
cause of action ; but they were informed, and believed, that an
application had been made by the complainant to the District
Court to open or set aside the judgment ; and they were advised
and therefore insisted that the regularity and validity of the judg-
ment were entirely within the province of the District Court, and



538 SUPREME COURT [March Term,

[Gilder v. Merwin.]

that, after the length of time that had elapsed, and the various
proceedings that had been had upon the judgment, it was to be
considered as ratified and confirmed by the complainant, if any
such ratification and confirmation were necessary ; and that neither
the District Court nor this court, if it had jurisdiction, would now
interfere.

They admitted that the mortgaged premises were exposed to
public sale by the sheriff under the writ of venditioni exponas, and
that they were knocked down to West for the price or sum of

$11,750; and that one Griswold was the second bidder;

and the defendants, Bell and Lawrence, were the third bidders ; that
West and Griswold refused to comply with the terms of sale ; and
the defendants, Bell and Lawrence, averred, that they refused to
take the property, because it was then discovered that the deed
to the complainant had not been recorded, owing to the negligence
of the complainant and his improper delivery of the same to the said
Mary Merwin.

The defendants, Bell and Lawrence, averred, that after the said
sale they had several conversations with the complainant on the
subject of the bond and judgment, and that the complainant, in
those conversations frequently expressed a hope that the assignees
would deal leniently with him, asserting that it was a hard case for
him, or to that eifect ; to which they replied that it was a harder
case for the poor depositors whose money had been lent to the In-
#rqq-| stitution *on the belief that they were secured by his and
- other bonds and mortgages, and who were now daily begging
a few dollars to supply the necessaries of life ; and the complainant
said in answer to this remark, that he was doing all he could to
settle it. And the complainant did not in any conversation with
either of them as they severally averred, allege or pretend, that the
judgment on his bond was confessed without his knowledge and
consent, or that he was not personally liable on the said bond ; but
the defendants, Bell and Lawrence, averred, that in his conversa-
tion with them he merely asked for time and indulgence, and alleged
as one reason for giving him time, that he expected to be able to
arrest West in some proceeding that he stated he intended to insti-
tute against him, and expected to be able to get from him money
to meet the amount of the judgment against him (the complainant).
They admitted that their counsel sued out a writ of scire facias
upon the mortgage against the complainant, with notice to the terre-
tenants, to the term of June 1840, of the District Court, in the
name of the Philadelphia Savings Institution to their use, and that
the complainant and the said Mary Merwin as terre- tenants had
appeared by their respective attorneys, and that the said Mary
Merwin filed an affidavit of defence in substance as stated in the
above complainant's bill ; and that pleas had been entered as stated



1841.] OF PENNSYLVANIA. 539

[Gilder c. Merwin.]

in the bill ; and that the attorney for the complainant had since
entered a plea of non est factum for him.

The defendants, Bell and Lawrence, further averred, that their
counsel obtained a rule from the District Court to show cause why
an order should not be made upon Mrs. Merwin to produce on the
trial of the scire facias, the deed for the mortgaged premises alleged
in the complainant's bill to have been delivered by him to her, and
that on the hearing of the rule she was exam ned in open court, and
stated on her affirmation that she had never agreed with the com-
plainant that the premises in question should be encumbered for
the benefit of West ; that she had never to her knowledge executed
any deed authorizing the complainant to mortgage the premises ;
and that she never had in her possession and never heard of any
deed from West to the complainant, containing her authority or
directions to convey the premises to her.

The defendants admitted that in consequence of the difficulties
that had arisen in respect to the proceedings to obtain satisfaction
out of the mortgaged premises, they had given instructions to their
counsel to proceed upon the judgment against the complainant ; and
they had been informed and believed that their counsel did apply
to the District Court and obtained a rule to show cause why the
levy upon the mortgaged premises should not be set aside, and gave
notice to the counsel for the complainant, and that on the return
of the rule, no opposition was made thereto by the counsel for the
complainant, and that the rule was made absolute by the District
Court.

*They admitted that certain attachments in execution had r^^n
been issued out of the District Court at the suit of certain '
alleged creditors of the Philadelphia Savings Institution, but inas-
much as the assignment to them was made before the issuing of any
of the attachments, they were advised that the said attachments had
no validity or effect upon the bond and mortgage of the com-
plainant, &c.

The answer of Peter Fritz stated, that in the answer of the Phila-
delphia Savings Institution, was contained all his knowledge upon
the matters inquired of in the bill : that he had no knowledge upon
the said matters further than was stated in their answer ; that he
intended by their said answer, with his affidavit thereto, to be con-
sidered as answering for himself to the said bill as well as for the
said institution ; and he adopted the statements and averments in
the said answer as his own, and prayed that they might be taken
and received as his personal answer to the bill, as if he had joined
in the answer at the time of making and filing the same.

The respondent further averred, that he had conversation with
the complainant between the time of the renewal of the notes of
West by the Philadelphia Savings Institution and the time of con-



540 SUPREME COURT [March Term,

[Gilder v. Merwin.]

fessing judgment on the bond, viz., before the 23d of November
1839 ; that the said conversations were on the subject of the notes
of West, for which the complainant admitted his liability ; and from
his conversations with the respondent, he was satisfied that Gilder
knew before the time of confessing judgment, all the circumstances
in relation to the transaction between West and the Philadelphia
Savings Institution, and especially the fact of the notes having been
twice renewed. The respondent was satisfied that these conver-
sations were previous to the 24th day of October 1839, because on
that day the assignment was made of the bond and mortgage to
Messrs. Gill, Bell and Lawrence ; and he (the respondent) took no
part in relation to it after that day.

The motion now made was to dissolve the injunction so far as



Online LibraryPennsylvania. Supreme CourtReports of cases adjudged in the Supreme court of Pennsylvania, in the Eastern district [Dec. term, 1835 - Mar. term, 1841] (Volume 6) → online text (page 61 of 75)