Opinion of the Court. the circumstances proved in this case (and every case of the kind must depend very largely on its special circumstances), Elliott had a right to presume that the deed would conform to the written agreement, and was not guilty of such negligence or laches, in not observing the provisions of the deed, as should preclude him from relief. Neither Dickey nor the trustee was a party or a privy to the transaction between Sackett and Elliott, nor was the trust deed taken, or the debt created or extended, or anything else done by Dickey or his trustee, in reliance on any assumption of the debt by Elliott. As respects the trust deed, the parties to it and to the debt it secured occupied the same position when this suit was brought as when the deed to Elliott was delivered, no new rights having been acquired in reliance on that deed, and none which existed when it was delivered being sought to be impaired by the relief asked by Elliott. Elliott does not seek to interfere with the property he conveyed to Sackett. No circumstances exist on which laches can be predicated on the part of Elliott as to seeking a remedy. The fact that Elliott made two payments of the interest on the incumbrance is not inconsistent with his not having assumed the payment of the incumbrance. As owner of the property subject to the incumbrance, and desirous of retaining it so long as there was any value in the equity of redemption, he would naturally pay the interest to save a foreclosure. The principles applicable to a case like the present are fully set forth in the opinion of this court delivered by Mr. Justice Harlan, in Snell v. Insurance Co., 98 U. S. 85, and the leading authorities on the subject are there collected. Within those principles this is a case where, in the preparation of the deed to Elliott, there was, by mutual mistake, a failure to embody in the deed the actual agreement of the parties as evidenced by the prior written agreement. The meaning of that prior agreement is clear, and nothing occurred between the parties, after it was signed and delivered, to vary its terms, except the mere fact of the delivery of the deed, the terms of which are complained of and sought to be reformed. The deed did not effect what both the parties intended by the actual contract which Statement of Facts. they made, and the case is one for the interposition of a court of equity. The decree of the circuit court is reversed, with costs, so far as it dismisses the original bill, and so far as it adjudges that Dickey has any equities as against Elliott, and so far as it adjudges that Elliott assumed and agreed to pay the amount due on the mortgage to Dickey, and so far as it adjudges that Elliott shall pay to Dickey the amount found due to him and the costs of the suit, and so far as it provides for an application by Sackett for an order that Elliott repay to him any sum which he may pay on the debt due to Dickey; and the cause is remanded to the circuit court, with directions to enter a decree in the original suit granting the prayer of the bill with costs, and for such further proceedings in the original and cross-suits as may not be inconsist ent with this opinion. EWELL v. DAGGS. APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE Decided March 26th, 1883. Interest-Limitation—Mortgages— Usury. 1. If an action on the debt secured by a mortgage of real estate in the State of Texas is not barred by the statute of limitations, a suit on the mortgage itself is not barred, and this, whether the owner of the equity or a third person be the mortgage debtor. 2. A contract of a kind which a statute in Texas makes "void" for usury, is voidable only; and a repeal of the statute declaring such contracts void deprives the debtor of the statutory defence. 3. When the amount of the face of a note represents a principal sum and interest thereon at a rate higher than the legal rate, and nothing is said in the note itself about interest, the note after maturity will bear interest at the legal rate. On May 27th, 1856, James B. Ewell and his wife, having the legal title in fee to the premises, made and delivered to Statement of Facts. Daggs a promissory note of that date, payable three years after date to his order, for $3,556, and to secure the same executed and delivered to Daggs a deed of mortgage upon a tract of land in Guadulupe County, Texas, containing 1,653 acres, which mortgage was duly proved and recorded on June 5th, 1856. James B. Ewell acquired the legal title to this land on April 13th, 1854; but, in equity, it belonged to his brother, George W. Ewell, the appellant, for whom and with whose money it had been bought. The legal title was conveyed by James B. Ewell to his brother, George W. Ewell, on September 6th, 1856, the latter having no knowledge of the mortgage to Daggs, and Daggs having no notice, actual or constructive, of the equity of George W. Ewell. On March 9th, 1872, Daggs, being a citizen of Virginia, brought his action at law against James B. Ewell and wife, on the note, in the Circuit Court of the United States for the Western District of Texas, and recovered judgment against James B. Ewell, July 14th, 1873, for $3,530.93. The defence set up by James B. Ewell in that suit was usury, the actual amount of the loan having been $2,000, the residue of the note being interest on that amount until its maturity, at the rate of 20 per cent. per annum, compounded annually. A statute of Texas in force at that time on the subject of usury was as follows: "That all contracts or instruments of writing whatsoever, which may in any way, directly or indirectly, violate the foregoing provisions of this act by stipulating for, allowing, or receiving a greater premium or rate of interest than twelve per cent. per annum for the loan, payment, or delivery of any money, goods, wares, or merchandise, bonds, notes of hand, or any commodity, shall be void and of no effect for the whole premium or rate of interest only; but the principal sum of money or the value of the goods, wares, merchandise, bonds, notes of hand, or commodity, may be received and recovered." Payments had been made on the note prior to the commence Argument for the Appellant. ment of the suit to the amount of $1,745, which were allowed; but the usurious interest was not deducted, on the ground that the Constitution of Texas, which went into effect in 1870, and continued in force till after the recovery of the judgment, repealed all usury laws and prevented any defence on that account. The judgment not being paid, Daggs filed the present bill in equity January 14th, 1875, to foreclose the mortgage and sell the mortgaged premises, to which James B. Ewell and his wife, George W. Ewell, and the heirs of James B. Wilson were made defendants. The heirs of Wilson claimed title to a portion of the land under George W. Ewell, by virtue of a sale and actual possession prior to the date of the mortgage to Daggs. The decree established their title, and from that there was no appeal. As against George W. Ewell, however, it adjudged a foreclosure of the equity of redemption and sale of the remainder of the premises, in default of payment by him of the amount found due upon the judgment against James B. Ewell, and interest thereon at the rate of twelve per cent. per annum. From this decree George W. Ewell prosecuted this appeal. Mr. William Reynolds for the appellant.-I. The court erred in overruling the defence of the Statute of Limitations. In Texas, unlike most States, the mortgage is only an incident to the debt, and the mortgagor is the real owner, entitled to possession. Duty v. Graham, 12 Texas, 427; Perkins v. Sterne, 23 Texas, 561; Blackwell v. Barnett, 52 Texas, 326. Under the Texas Statute of Limitations the defence of George W. Ewell must be successful, unless the bringing of a suit against James B. stopped the running of the statute as to George W. That cannot be; because, in order to bind one by judgment in a suit to which he was not party, and by reason merely of priority in estate, he must have acquired his title post litem motam. Doe v. Derby, 1 A. & E. 783; Hunt v. Haven, 52 N. H. 162; Winslow v. Grindal, 2 Greenleaf, 64; Adams v. Barnes, 17 Mass. 365; Burleson v. Burleson, 28 Tex. 383. See Lord v. Morris, 18 Cal. 482, which holds that after VOL. CVIII-10 Opinion of the Court. the mortgagor disposes of the premises his personal liability becomes separated from the ownership of the land, and he can by no subsequent act create or revive charges on the premises. -II. The Supreme Court of Texas has held that the Constitution repealing usury laws did not legalize usurious contracts of a date prior to its adoption. Smith v. Glanton, 39 Texas, 365. See also Norris v. Crocker, 13 How. 429; Steamship Company v. Joliffe, 2 Wall. 450; Insurance Company v. Ritchie, 5 Wall. 541; Ex parte McCardle, 7 Wall. 506; Harris v. Runnels, 12 How. 79; National Exchange Bank v. Moore, 2 Bond, 170.-III. There was error in the computation of interest. The contract upon which this judgment was founded, being the mortgage note, did not "bear a specified interest greater than 8 per cent. per annum, and not exceeding the highest rate of conventional interest permitted," and therefore the judgment should not bear 12 per cent. interest. See note as set out by appellee in his petition, and also as recited in mortgage. Mr. J. Randolph Tucker for appellee. MR. JUSTICE MATTHEWS delivered the opinion of the court. He recited the facts in the language in which they are set forth above, and continued: Several defences were made in the court below, the overruling of which are assigned for error, and which we proceed now to state and consider in their order. 1. The first defence is the Statute of Limitations, as contained in article 4604, Paschal's Digest, as follows: "All actions of debt grounded upon any contract in writing shall be commenced and sued within four years next after the cause of such action or suit, and not after." It is admitted that the cause of action upon the note was not barred when the action upon it was commenced, the period of limitation not expiring till July 29th, 1872, excluding from the computation the interval between January 28th, 1861, and March 30th, 1870, as required by article 12, section 43 of the Constitution of Texas of 1870. |