Ackley v. Finch , 7 Cow. 290 ( 1827 )

Curia, per Woodworth, J.

. . _ This is a writ of error to the Washington common pleas. Finch declared in trover for a chaise and harness. It appeared that an execution was levied on his property, in 1813, for about $120. An agreement was made between him and Ackley, that Finch should assign to Ackley a judgment bond against David Smith, and deliver to Ackly the chaise and harness, as his property absolutely, and allow his demand; and that he, Ackley, would advance the $120. Ackley paid $120; which, together with his demand, was $206 55. He gave up his notes, and discharged his account against Finch; who assigned the bond, and delivered the property to Ackley, as his own. The latter then said, if you pay me the $206 55, with interest, on or before the first of March next, (1814,) I will receive it and re-deliver you the property. Smith’s bond was about $250. The plaintiff proved that the defendant admitted that $10 extra-interest was included in the $206 55, and that he had received the amount of Smith’s bond, though not until after the 1st March, 1814. In March, 1815, the plaintiff demanded the chaise and harness, which the defendant refused to deliver.

*The defendant gave in evidence an arbitration bond, dated in December, 1814, between the parties, submitting all matters and differences to three arbitrators, so as their award, or that of any two of them, he made at a certain time specified. The award of two of the arbitrators, was produced, made within time. Tne plaintiff objected, that it did not appear that all three had heard the proofs and allegations. The court decided that the award was inadmissible ; because it did not appear on the face of it, that all the arbitrators met. The defendant offered to prove, that all ths arbitrators heard the proofs and allegations of the parties ; that two made the award, and the plaintiff accepted it, and received from the defendant the money awarded. The court rejected the evidence, and charged the jury that the plaintiff was entitled to recover.

If the plaintiff absolutely sold to the defendant the bond against Smith, with the chaise and harness, and received in payment and satisfaction, $120 in cash, and for the residue accepted, as cash, a demand of the defendant against the plaintiff, which demand was tainted with usury to the amount of $10, the only remedy of the plaintiff would be, to recover back, by action founded on the statute, the excess beyond legal interest. He cannot rescind the contract executed, and claim the property which he sold, although, in the payment received, he allowed, as part of such payment, an usurious demand. If A. holds a note against B., confessedly usurious, B. may successfully resist the demand and defeat an action ; but if he pays A. the full amount of his note, and takes it up, he cannot recover the whole back. So much as had been received for usury, would be recoverable. I, however, rather consider this as a mortgage. If the verbal agreement of the defendant was binding, then, on payment of the $206 55, by the 1st of March, 1814, the property was to be re-delivered. Ho payment was made by that time. After the condition forfeited, the mortgagee had an absolute interest in the thing mortgaged. This is the legal effect and operation of a mortgage of personal property. The case of Brown v. Bement & Strong, (8 John. 96,) is decisive on this point. If a mortgage, *and infected with usury, then I admit the transfer was void. The admission of usury by the defendant, is not contradicted. To show that all preceding questions and claims were merged, the defendant proved an award. If this is valid, the plaintiff cannot again draw in question whatever was within the submission, and was passed on by the arbitrators. The submission was general. There is no proof that this demand was not exhibited. If the mortgage was previous, the plaintiff’s right of action had arisen before the submission. He was not obliged to wait until the 1st of March. By reason of usury, the contract was void, and the right to recover back the property pledged, was immediate. The award was made in January, 1815, and must be considered as embracing all controversies between the parties then existing.

An award by two out of three arbitrators, is legally binding, if the submission authorizes it, and provided all have heard the proofs and allegations of the parties. In this case, the submission did authorize an award by two. On the face of the award, it did not appear whether all the arbitrators heard the cause, or two only; this was a fact necessary to be determined.

It is apprehended that no case can be adduced, showing the necessity of this fact appearing in the award itself. To prove it by parol, does ~ot cpiitravene any adjudged prin ciple in the exposition of awards. It neither impea~hes nor supports its merits; but supplies a fact not affirmed or denied by the award; and which perhaps it was not the duty of the,two arbitrators to notice. If, in this case, one of the arbitrators had not met, and. arbitrated with the other two, would it not be competent to prove it, and thereby show, what a defendant is always entitled to show in a court of law, that the award: is not within the submission ? The court ought to have received the testimony offered. Had it shown that all the arbitrators heard the cause, the award was valid; and the arbitrators having passed on all matters in difference between the parties, it comprehended, the previous claim; and ^therefore the plaintiff could not sustain his action. The, judgment of the court below must be reversed ; and a, venire tie, novo must he awarded by the Washington common pleas..

Judgment reversed.