
    Richard Hills versus Ephraim Eliot.
    Where a mortgagee makes a deed of assignment on the back of 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 the contract.
    The principle, that a trust estate cannot legally exist without a declaration in writing signed by the person holding the legal estate, does not apply to seciet trusts and confidences, created for the purpose of defeating or delaying creditors, which may always be proved by paroi; and, when so proved, will defeat the formal transactions which may have been adopted for such purposes by the parties.
    Usury must be pleaded to an action on a specialty between the original parties; but in a real action a purchaser may avoid a prior conveyance from his grantor, by giving usury in evidence on the general issue of nul disseizin.
    
    Where a mortgagee assigned her interest in the mortgaged premises, in consideration of a sum of money lent her, and promised orally to repay the money and interest, unless the assignee should receive the money from the mortgaged premises; she was held liable as the trustee of the assignee, to the amount of the money so promised.
    This action was brought to recover a moiety of certain tenements, which the defiiandant claims, as having been mortgaged by one Edmund Haynes, and as having come to his hands by sundry mesne assignments, which are set forth in the declaration.
    The cause was tried upon the general issue before Jackson, J., at the last November term, in this county; when it appeared that the said Edmund Haynes, on the 30th of June, 1802, by his deed of that date, mortgaged the whole of the said tenement to Catherine Williams and Margaret Williams, to secure the payment of $500 to the said Catherine, and $1000 to the said Margaret, in one year from that date. The demandant, who claimed under the said Catherine, produced an office copy of the said mortgage deed ; and the tenant objected to its going in evidence to the jury ; but, it being admitted that the original deed was in possession of the tenant, who holds all the estate which the said Margaret had in the said tenements, the judge allowed the said copy to be used. The note for $500, given by Haynes to said Catherine with the mortgage, was produced by the demandant. It was not a negotiable note ; but had on *it the indorsement of the said Catherine, and [*27] also of the assignee hereafter named.
    The demandant then produced a deed of the said Catherine, dated December 22d, 1804, for assigning her interest in the premises to one John Williams. This deed was objected to by the tenant, as not sufficient and effectual in law, even if duly executed, to convey the interest of said Catherine, and as not comporting with the declaration. But the judge overruled the objection, and the deed was filed in the case for the consideration of the Court. It contains a condition that the assignment shall be void, and the said note for $500 shall be redelivered to the said Catherine, on the payment by her of $500, with lawful interest, to the said John within two years. One of the subscribing witnesses, being called to prove the execution of the deed, testified, that, the said Catherine being desirous to borrow some money, the said John Williams agreed to lend her about $500 for two years at the interest of twelve per cent, a year, and to take this assignment as security; that the said Catherine promised to repay him that sum, with the usurious interest, unless he should receive the money from the mortgage ; in which case he was to retain the sum lent, with said usurious interest, and to pay over the balance, if any ; that the said Catherine did not give to the said John Williams any note for the said money lent, nor any security, except the said assignment and Haynes's note, which she indorsed as before mentioned, with an order to pay the contents to the said John Williams, but without expressing it to be for value received. The demandant’s counsel objected to the admission of evidence of usury in said assignment, under this issue ; which objection was overruled.
    The demandant then produced a deed from the said John Williams to him, bearing date the 5th of February, 1806, acknowledged on the 19th of April following, and registered on the 17th of June, 1807. This purported to be an absolute conveyance to the demandant of all the interest of the said John Williams in the [*28] premises. One of the subscribing witnesses to * this deed was dead. The deposition of the other was taken, to prove the execution and delivery of the deed.
    The tenant contended, that this was not a bona fide conveyance, and that the testimony of the said subscribing witness did not prove the deed to have been delivered at the time when it was signed. And he produced evidence to prove that the demandant had not received the deed, and had no knowledge of its existence, until some time after its date, and after the attachment, hereafter mentioned, of the said Catherine as trustee of the said John Williams; also to prove, that, when the demandant received the deed, he took the estate in trust for the said John Williams, and was bound to account with him for whatever he should receive by reason thereof.
    The tenant then produced the said original mortgage deed ; also a deed bearing date July 15th, 1807, of the executors of the last will of the said Margaret Williams to John Heard, assignee of the said Haynes, who had been declared a bankrupt, purporting to convey to the said Heard all the interest which the said Margaret had in the premises ; also a deed, bearing date November 16th, 1807, of the said Heard, as assignee of said Haynes to the tenant, purporting to convey to him all his interest in virtue of the last-mentioned deed, and as assignee of Haynes. He then produced the record of a judgment of the Supreme Judicial Court in this county, at the November term, 1806, between one Abraham Tucherman, plaintiff, and the said John Williams, defendant, and the said Catherine, as his trustee. The original writ in that suit was served on the said Catherine on the 21st of March, 1806 ; and in her disclosure, made in that case, she stated the transactions above mentioned between her and the said John Williams, excepting that she did' not state the agreement to pay usurious interest; but she stated in her answers that she had notice of the assignment from the said John Williams to Hills after the service of the trustee process upon her, and before judgment was rendered against her, namely ; some time in the summer following, so far as appears by her said answers. * The said [*29 ] Tucherman recovered judgment against the said John Williams for $ 1451.47, and had execution against his effects in the hands of the said Catherine.
    
    On the 23d of January, 1811, the said Catherine, by her deed of that date, released to the tenant all her right in the premises, upon an agreement that he should pay the sum, due on said mortgage, to the demandant or to the said attaching creditor, whichever of them should prove to have a legal right thereto.
    The demandant produced a release from said Tucherman to the said Catherine, of the judgment recovered as aforesaid against her as trustee of the said John Williams, which release bears date on the 28th of January, 1811.
    The counsel for the tenant contended, that the assignment by Catherine Williams to John Williams was void in his hands, on account of the said usurious contract; and that the said conveyance to the demandant was not bond fide, and that he held the premises in trust for the said John Williams, so that the assignment was also void as to him ; and secondly, that, if the said assignment by Catherine Williams was not void on account of usury, the said attachment of the debt due from her to the said John Williams, and for which she mortgaged the premises to him, did, under the circumstances of this case, defeat the said conveyance by the said John Williams to the demandant.
    The judge, intending to reserve these questions for the consideration of the whole Court, instructed the jury, that, if the facts testified by the said witness respecting the agreement between the said Cath erine and John Williams were true, the said assignment by her to him was void, in his hands, on account of usury ; but that the same would not be void on that account, as against a bond fide purchaser and grantee of the said John Williams; and that, if the jury believed the facts so testified, and were also satisfied from the evidence that the said conveyance to the demandant was not bond fide, and that he 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 debt, 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, oy 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 a verdict entered for the demandant.
    
      Alwin, 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 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 bona 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 oy 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 paroi, 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 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] diet 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 righi 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 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. 
      
      
        Warden vs. Adams, 15 Mass. Rap. 233.
     