Owens v. Miller

Nelson, J., delivered the opinion of the court. The original bill in this case was filed on the 4th of November, 1852. On the 28th of August, 1854, the complainant, by leave of the court, filed an amended bill against Miller & May-hew and Trowbridge; to this amended bill the defendants answered as they had done to the original bill, and on the 8th of September, i860, a second amended bill was filed. It will not be necessary to notice particularly the proceedings which were had under the original bill, as the questions for determination ¹⁵⁸ in -this case arise out of *the case made by the two amended bills.

The first amended bill raises several issues, all of fact. They arise upon the charges, first, that the two notes of $2,000 each, were either not loaned by Miller & Mayhew to Ford & Trowbridge as alleged, or if loaned, were never discounted or used by Ford & Trowbridge; that Miller & May-hew did not pay said notes, but if loaned, they were in fact returned to Miller & Mayhew; and that, if the notes were in. fact loaned and taken up, that Miller & Mayhew have been repaid by Ford & Trowbridge. The answers of Miller & May-hew negative these charges and declare upon oath, as the bill requires, that they did execute and deliver to Ford & Trow-bridge the two notes of $2,000 each, and receive in exchange four notes of Ford & Trowbridge for $1,000 each for them. That they did afterwards, at the request of Ford & Trow-bridge, discount the said notes for $2,000 each, at six per cent., and give Ford & Trowbridge the money for them, and so held them when they became due; and that they had never been taken up, or paid by Ford & Trowbridge.

Trowbridge, the other defendant, answers to the same effect. At this point the proceedings under the original and first amended bills seem to liave stopped. On the 8th of September, i860, as we have already remarked, a second amended bill was filed by complainant, in which it is charged that the deed to Alexander Fisher from Ford and wife, is absolutely null and void, for the reason that said deed is an absolute deed on its face, whereas it was designed to operate only as a mortgage, as shown by the written defeasances executed by Miller & Mayhew and Alexander Fisher at the time of the execution of the deed, which defeasances were not recorded with said deed. It is also charged, that at the time the deed from Ford to the complainant was made and delivered, he, the complainant, had no notice, actual or constructive, of the existence of the deed to Fisher or. of the defeasances executed by Miller & Mayhew and Fisher.

It is further charged that if the deed to Fisher were otherwise valid, it is void as ^having been made without 'consideration, or upon a consideration that has failed. The answers of Miller & May-hew to this second amended bill deny the charges set forth therein, insist on the bona Hies of the transaction with Ford, ¹⁵⁹ and aver that a full and valuable consideration was given by them for the said deed. They also insist that, at the time the deed from Ford to the complainant was executed and delivered, he, the complainant, had notice of the existence of the deed to Fisher and of the defeasances. rFhe issues raised upon the first amended bill are issues of fact. The first inquiry is, were the two notes of $2,000 each, loaned by Miller & Mayhew to the firm of Ford & Trow-bridge?

We think they were; the answers of Miller & May-hew, which are directly responsive to the charge in the bill, in connection with the testimony of the witness Hawkins, and the entire absence of rebutting proof on the other side, leave no doubt, we think, that the two notes for $2,000 each, were loaned by Miller & Mayhew to the firm of Ford & Trow-bridge; and we think it equally clear, looking to the same proof, that the said notes were used by Ford & Trowbridge by their having them discounted by Miller & Mayhew, and their obtaining the money for them. We find no evidence in the record that said notes ever were paid to Miller & Mayhew by Ford & Trowbridge. Tt is said, that these notes being accommodation notes and having been discounted by the drawers themselves, are void and Sauerwein v Brunner, 1 H. & G. 477, is referred to; that was a case which turned on the question of usury, and, we think, has no application to the case before us. In the absence of all authority to the contrary, we are unable to perceive why the drawer of an accommodation bill may not discount it, provided there is no usury or fraud in the transaction.

It is manifest from the proof that Ford & Trowbridge obtained from Miller & Mayhew the cash for the two notes, less the legal discount, and whether Miller & May-hew could or not sustain an action against them directly upon their endorsement *on said notes, they were in equity and good conscience indebted to them, and bound to pay, or provide for the payment of the debt. This objection we think cannot be sustained. The next charge is that the deed from Ford and wife to Fisher is absolutely null and void. This charge is based upon the provision in the Code of Pub.

Gen. Laws, Art. 64, sec. 1, which is in the following words: “Every deed conveying real estate or chattels, which by any other instrument or writing shall appear to have been intended only as ¹⁶⁰ a security in the nature of a mortgage, though it be an absolute conveyance in terms, shall be considered as a mortgage; and the person for whose benefit