HILLS VS. ELIOT.

held the premises in trust for the said John Williams, they should find a verdict for the tenant.

[*30] * As to the second point, the jury were instructed, that, if the said Catherine was legally bound to repay the money lent by said John Williams, as she was if the contract was not usurious, and if the other facts testified in that respect were true, and if the said assignment was only collateral security for that leht, then it was a debt attachable in her hands as trustee of the sa'd John Williams, and that the discharge of her said debt, sy means of said attachment, would defeat her assignment to the said John Williams, according to the condition therein contained; and that in this case also they would find a verdict for the tenant.

The jury returned a verdict for the tenant, which was taken subject to the opinion of the Court upon the foregoing report; and, if the Court should be of opinion that the demandant was entitled to recover, the verdict was to be set aside, and verdict entered for the demandant.

Aylwin, for the demandant.

W. Sullivan, for the tenant.

The opinion of the Court was delivered by

PARKER, C. J. It is obvious, from a consideration of the facts reported by the judge, that the title of the demandant is well maintained by evidence; and that it is, therefore, necessary for the tenant to impeach that title successfully, in order that he may retain his possession of the premises demanded.

There are three grounds upon which the tenant has attempted to defeat the title of the demandant.

First, he says, that no interest or title in the land passed from Catherine to John Williams, the assignment being only of the mortgage deed, and the notes of Haynes accompanying it, and not of the

estate.

But this objection was not much relied on; nor ought it to be; for the language of the deed of assignment sufficiently shows the intention of Catherine Williams to assign her interest in the land as well as the deed. And we can have no doubt, that, generally, when a mortgagee makes a deed of assignment upon the back of [*31] the mortgage deed, or by a separate instrument referring to it, the assignee is put in the place of the mortgagee, to all intents and purposes; unless a different intention is apparent from their contract. †

*

The next objection to the title of the demandant is founded on the usurious contract between Catherine and John Williams, which was

Warden vs. Adams, 15 Mass. Rep. 233.

HILLS VS. ELIOT.

proved at the trial, and would unquestionably avoid any assurance made to secure that bargain between the parties to it.

The counsel for the demandant has, however, argued, that, as the demandant was not party nor privy to that contract, the assignment to him by John Williams ought not to be prejudiced by it.

Whether he is right or not in this reply to the objection need not now be decided; provided another fact, which was submitted to the jury, and determined by them against the demandant, was sufficiently proved by competent evidence admitted at the trial; which fact so found is, that the assignment by John Williams to the demandant was not made bonâ fide, nor for a valuable consideration; but was made in secret trust for the benefit of John Williams, so that nothing passed out of him by that assignment against creditors or purchasers. The Court are of opinion, that the evidence objected to was rightly admitted by the judge, and that it fully warranted the verdict on this point. There was sufficient reason for the jury to presume that the deed of John Williams to the demandant was fabricated at a time subsequent to its apparent date, for the purpose of intercepting the trustee process mentioned in the report; and there was evidence of the acts and declarations of the demandant, tending to prove that he acted as the friend and trustee of John Williams.

As to the objection, that a trust of this nature cannot legally exist without a declaration in writing, signed by the party who holds the legal estate, this does not apply to secret trusts and confidences, created for the purpose of defeating or delaying creditors; which may always be proved by parol, and, when so proved, render wholly inoperative the formal transactions which [*32] may have been adopted for such purposes by the parties.

The case is to be considered, therefore, as if John Williams himself was the party now claiming to enforce his title derived from Cath erine Williams, under the assignment made to secure a usurious loan of money.

In this light another objection is presented, namely; that usury cannot be given in evidence under the general issue, but ought to have been specially pleaded.

It is, without doubt, generally true, that, to an action brought on a specialty, the party intending to avoid the contract, on the ground of usury, must set forth the matter in a special plea. But we think this

strictness applicable only to the original parties to the instrument; who are presumed to have full knowledge of the consideration, and may, therefore, be properly held to notify the other party of the intended grounds of defence. There seems also a technical difficulty in giving usury in evidence under a plea of non est factum, which does not apply to the issue in the present action, which is upon nul disseizin. But, however this may be between the parties to the

HILLS VS. ELIOT.

instrument intended to be avoided, we are of opinion, that a subsequent purchaser of a title from a grantor, who has already executed a conveyance to another, which, by statute, is void, is not holden to plead this matter, but may give it in evidence. He may not be apprized of such defence, until it is too late to plead it; and, when he offers to prove it, the adverse party may always have time given him to rebut such evidence.

No authorities have been cited by the counsel, or found by us, decisive of this point; but we think the principles of the common law, on which pleading is founded, fully justify this opinion.

Here there would be an end of the demandant's title; but, as another point was submitted to the jury, and we cannot discern

whether upon this or the one already discussed their ver[*33] dict was founded, it is necessary to examine the residue of the direction of the judge, and see whether it was cor rect; for, if it was not, a new trial must be granted.

This point grows out of the trustee process instituted by Abraham Tuckerman, in 1806, in which process he sued John Williams, and summoned Catherine Williams as his trustee. In her disclosure she admitted that she owed John Williams the sum for which the assignment before mentioned was given as security. The summons was served upon her in March, 1806, one month after the deed from John Williams to the demandant bears date; but before it was proved to have been delivered. In this process and disclosure she did not attempt to avoid the debt on the ground of usury, probably being willing that it should be recovered by the person instituting the suit. In November, 1807, judgment was rendered against John Williams for a large sum, and also against Catherine Williams for the goods, effects, and credits of John Williams in her hands, she having been adjudged trustee by the Court. Now, if she was rightfully adjudged trustee in that process, and has paid over to the judgment creditor the amount due to John Williams pursuant to the judgment, which she may be considered to have done by the transactions between her, the tenant, and the judgment debtor; then the assignment to John Williams, which was only a pledge for this debt, cannot be set up by him against her release to the tenant; nor by the demandant, because of the trust before mentioned.

The objection to this position of the case by the demandant's counsel is, that Catherine Williams was never the debtor of John Williams; that, having given no bond or note collateral to the assignment, that was not to be considered in nature of a mortgage; but as a conditional sale, to be void on payment of money as expressed in the condition; the assignee having no personal right of action for the money, as there was no covenant for payment in the deed. And this would be the true character of the transaction, were it not for the

BOND VS. HAYS, EXECUTOR.

verbal promise to pay, which was satisfactorily proved in the case. The cases cited, and especially that from the reading of the learned Judge Trowbridge on Mortgages [8 Mass. * Rep. [*34] 568], sufficiently establish the law to be, that, in a conditional sale like those above described, the grantor is not a debtor, and cannot be compelled to pay otherwise than by the land pledged. But this case is wholly different from a conditional sale; for here there was a direct and positive promise to pay; and, there having been a valuable and adequate consideration advanced, an action would undoubtedly have lain by John against Catherine Williams upon that promise.

The assignment must, therefore, be considered as a mortgage, collateral to the oral promise; and so Catherine was the debtor of John Williams, and the debt liable to be taken by the trustee process by his creditors. The direction of the judge, therefore, on this part of the case, was correct; and we are all satisfied that judgment ought to be entered upon the verdict.

NATHAN BOND versus JUDAH HAYS, EXECUTOR.

Assumpsit lies for one against his copartner, for money paid him, on a dissolution and adjustment of the concerns of the copartnership, more than was actually due.

ASSUMPSIT for money had and received, money laid out and expended, &c.

The cause was tried upon the general issue before the Chief Justice, at the last November term in this county, when the plaintiff proved that he, being a broker, and dealing in the exchange of bank notes and other mercantile paper, took from Henry Jackson, Esq., the defendant's testator, ten thousand dollars to be used and employed in the aforesaid business by the plaintiff, on the joint account of himself and the said testator, and for their joint profit and advantage; that for the capital thus advanced he gave two several promissory notes to the testator on interest; and it was agreed that he should settle his accounts, and pay over to the testator one half of the profits semiannually; that, accordingly, the plantiff rendered his accounts for several years successively, and paid over the testator's share of the profits, which were very large. This continued until the death of the said Jackson, when the connexion was * discontinued by his executor, who demanded of the plain- [*35] tiff the whole amount of the notes aforesaid, and interest

from the last dividend. The plaintiff then stated to the executor,

BOND US. HAYS, EXECUTOR.

that he paid over the profits on the actual state of the accounts at the time of each dividend, without reference to any losses which might arise upon debts due to him on account of the concern, and offered to pay $8000, reserving the balance until an adjustment should take place, and the exact amount of loss be ascertained. This was refused by the defendant, who threatened him with a suit upon the notes; to avoid which he paid the whole amount as above stated, and instituted this action to recover back the sum he had overpaid in the dividends, having regard to the debts supposed to be bad.

At a former term, auditors were appointed by consent of the parties, who, having examined the books and accounts, reported the sum due to the plaintiff on account of bad debts and other losses; and, their report having been read to the jury as evidence, and there being no evidence to impeach or contradict it, a verdict was returned for the sum so found to be due.

The defendant's counsel objected to the verdict ;- because, upon the evidence reported, the contract was usurious, and no action could be founded upon it; also, because this action would not lie on account of the partnership subsisting between the plaintiff and the defendant's testator.

Thatcher, for the plaintiff.

W. Sullivan, for the defendant.

Per Curiam. We cannot perceive any objection to the principles upon which this action is founded, or to the evidence which produced it.

*

As to the first objection made at the trial, but which has not been urged in the argument, that the contract, as proved, was usurious, because the defendant's testator, who advanced the money, secured the principal and legal interest by promissory notes, besides holding the plaintiff to pay over one half the profits; it is a sufficient answer, that, this action being for money had and received, [36] the plaintiff would be entitled to recover a larger sum than the verdict gives him, for the excess beyond legal interest which he has paid over to the defendant's testator. Possibly the ground of usury might have been a good defence against the notes of which the executor demanded payment, and which the plaintiff has honorably paid. He claims in this action nothing more than appears to be his due upon a fair statement of his accounts by auditors agreed upon by the parties.

As to the form of the action, we see no difficulty. If the common law principle should prevail, that one partner can maintain no action but account against his copartner, still, it would not follow, that, after the copartnership accounts are closed, an action of assumpsit will not lie for one who has paid over by mistake more than