Opinion
12-04-1899
YEAREANCE v. BLAKE et al.
Ernest Koester and Addison Ely, for complainant. J. W. Miller, for defendants.
Bill by Margaret Yeareance against John J. Blake and others to declare the liability of a surety. Decree for complainant.
Ernest Koester and Addison Ely, for complainant.
J. W. Miller, for defendants.
PITNEY, V. C. (orally). I do not care to hear you, Mr. Ely.
The case presented, either by the proofs, or very frankly and properly admitted by counsel, is this: Mrs. Yeareance was the owner of some real property in Rutherford, Bergen county, and she agreed to convey it to Mr. John J. Blake for $13,000, of which $11,000 was to be cash, and $2,000 mortgage; subject, however, to a first mortgage for $11,000, to be given by Mr. Blake to the Howard Savings Institution at the delivery of the deed. Mr. McDonald is the counsel for that institution in regard to passing titles to real estate. Naturally, therefore, the whole transaction occurred in his office. But Mrs. Yeareance was not willing to take the simple bond of Mr. Blake, secured by his second mortgage on the land conveyed, subject to a mortgage for the amount ($11,000) that Mr. Blake borrowed from the Howard Savings Institution, and she insisted that he must give her further security. The result was that the usual papers were executed. The deed from Mrs. Yeareance—and her husband, I suppose, if she had one—to Mr. Blake was dated the 26th of December, 1895, and a bond and mortgage for $2,000 given by Mr. Blake to Mrs. Yeareance to secure that sum, in one year, with interest, and they were all ready for delivery in the office of Mr. McDonald. But Mrs. Yeareance, as I said, was unwilling to accept that second mortgage for $2,000; whereupon Mr. Willis was offered as surety for Blake, and it was agreed that he should execute something in the shape of a bond and mortgage to Mrs. Yeareance to secure it. Thereupon this paper was executed, a copy of which is annexed to the bill. It is dated December 27, 1895, one day later than the deed and the actual consideration money bond and mortgage of $2,000, and it purports to be executed by Mr. Blake and Mr. Willis to Mrs. Yeareance in the penal sum of $4,000. The condition is this: "That if the above-bounden John J. Blake, his executors and administrators, shall well and truly pay, or cause to be paid, unto the above-named Margaret Yeareance, her executors, administrators, or assigns, the just and full sum of $2,000, on the twenty-sixth day of December, in the year of our Lord eighteen hundred and ninety-six, in manner provided in the condition of a certain bond made by the said John J. Blake to the said Margaret Yeareance in the penal sum of $4,000, conditioned for the payment of $2,000, dated the 26th day of December, 1895, payable one year after the date thereof, and which this bond is given to secure, then this obligation, shall be void; otherwise, to remain in full force and virtue. And the above-bounden John J. Blake and Thomas Willis hereby pledge all their lands and tenements in the county of Bergen and state of New Jersey as security for the payment of the above obligation. Signed, sealed, and delivered in the presence of Frank Koch;" and then acknowledged before Frank Koch, a commissioner of deeds, in the ordinary way. That paper was handed by Mr. Willis to Mr. Blake, and carried by him to Newark, and was there ready to be delivered when the papers were exchanged,—when the title was passed, about January 2, 1896, the mortgage made to the Howard Savings Institution for the money advanced by it for part of the consideration money to Mrs. Yeareance, and the deed delivered by her to Mr. Blake, and these two instruments delivered back to Mrs. Yeareance. The transaction was a single one. It was part and parcel of the delivery of the deed, and this joint bond was given to secure apart of the consideration for the conveyance of that land.
The case, then, stands just in this wise: That Mr. Willis became security for Mr. Blake to Mrs. Yeareance for $2,000, for the part payment of the consideration of the conveyance of the land which she conveyed to Mr. Blake, and he (Willis) pledged his lands In Bergen county to pay that $2,000.
Now, on that statement of facts, it seems to me difficult to imagine what argument can be made against it. No point is made that the instrument, if otherwise valid, is not good as an equitable mortgage on the lands described in the bill.
But Mr. Miller has presented to the court a learned and ingenious argument to show that Mr. Willis is not liable on the paper, and I will try to state it. He says that although this bond is under seal, and in a court of law in old times the consideration, except in cases of fraud in its execution, could not be inquired into, yet by statute that is changed, and the consideration may be inquired into in a suit at law. But it always could be inquired into in equity. I do not understand that the act in question has done Mr. Miller any good, or any harm, in this case. And it was frankly admitted, in the first place, by Mr. Ely, in opening his case, that Mr. Willis was a mere surety. But, unfortunately for him, he is a surety in a bond under seal, and it is to pay a sum of money justly and honestly due from the principal debtor. But, argues counsel, the condition is to pay it according to the conditions of a certain other bond. But, I answer, that is merely to show how and when it is to be paid. I will read the condition over again: "That if the above-bounden John J. Blake, his executors and administrators, shall well and truly pay unto the above-named Margaret Yeareance, her executors, administrators, or assigns, the just and full sum of $2,000, on the 26th day of December, in the year of our Lord eighteen hundred and ninety-six,"—then follows, "in manner provided in the condition of a certain bond," etc. It is to pay the money. That is what he went security for. But he has to pay it according to the condition of the other bond; that is, according to the terms of the other bond. It is, after all, a positive obligation to pay a sum of money.
But now, the ingenious argument addressed to me is that, because it mentions and refers to a bond dated one day before, but not yet delivered, it becomes, not only a collateral obligation, but also an obligation entered into subsequently to pay a previously existing debt, and that, therefore, it is void. Well, I must confess that, if that is the law, I never heard of it. The argument made no impression on my mind. If that were the fact of the case, it would make no difference, to my mind. The obligation is to pay a debt, and this gentleman entered into that obligation with his eyes open, and signed this bond with a seal.
Now, the law which allows you to go behind a seal does not allow you to discharge an obligation of that kind. It does not reduce the solemnity of the transaction in the least. It only allows you to go behind, and to show a failure of consideration,—to show the actual consideration. Now, in this case, the actual consideration is perfectly clear and good; and, if the surety in this case cannot be held, it is difficult to imagine a case in which a surety can be held. The counsel's argument goes the length of showing that no surety can be held.
I may be a little stupid this morning, but I cannot see the least defense in this case. I am, of course, very sorry for Mr. Willis, but people sometimes are obliged to pay surety money, and it may be that, if he has to pay this, it will be a good lesson to prevent him from going surety for his neighbor again; but certain it is, on the proven facts, that Mrs. Yeareance never would have parted with the title to her property if she had not received this bond, and I can see no reason why she should lose the benefit of it. I will advise a decree for the complainant.