Case ID: ny-sup-ct_95/html/0101-01.html
Source: Caselaw Access Project
Author: {"author": "Wabd, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

George F. Tillotson, Appellant, v. Alvin E. Nye and John V. Hartter, Respondents.
    
      Complaint stating no ccmse of action, dismissal of — compound interest —defense of usury.
    
    Where a complaint fails to allege a cause of action a motion, to dismiss the same, made on the opening of the trial, should he granted.
    "When a borrower has compounded the interest, a promise by him to pay such compound interest is valid and binding- if supported by a consideration.
    If the defense of usury exists to a mortgage such defense should be interposed in the action brought to foreclose the same.
    Appeal by the plaintiff, George F. Tillotson, from a judgment of the Supreme Court in favor of the defendants, entered in the office of the clerk of the. county of IVIonroe on the 20th day of December, 1894, upon the decision of the court rendered at the IVIonroe Equity Term, dismissing the • plaintiff’s complaint, with notice of an intention to bring up for review upon such appeal said judgment, and an order made at the IVIonroe Equity Term on the 9th day of December, 1894, and entered in said clerk’s office dismissing the complaint.
    The action was brought to obtain an adjudication that certain mortgages made by the plaintiff to the defendant Alvin E. Nye be set aside on the ground that they were usurious.
    
      W. E. Edmonds, for the appellant.
    
      W. A. Sutherland, for the respondents.
   Wabd, J.:

The judgment in this case dismissed the complaint “on the opening,” with costs. What the opening was does not appear in the papers before us, but the counsel seemed to assume upon the argument that the complaint was dismissed because it did not allege a cause of action, and, if it did not, the appellant’s counsel admitted the judgment should be sustained. In such a case a-motion to dismiss the complaint on the opening is proper. (Sheridan v. Jackson, 72 N. Y. 170.)

The complaint set forth the giving of three mortgages; the second mortgage embraced certain items of interest that had accrued on the first mortgage with the interest computed on the accrued interest, or what is usually termed compound interest.

Upon the execution of the second mortgage the first mortgage was satisfied and discharged.

The third mortgage contained, with other considerations, an amount of compound interest which was computed on the accrued interest of the second mortgage. Upon the last two mortgages an action of foreclosure was instituted in the County Court of IVIonroe county, in which the plaintiff was made a party. lie did not defend the action, but attended the sale and forbade it.

Compounding the interest and promising to pay it by the borrower is valid and binding if supported by a consideration. (Young v. Hill, 67 N. Y. 162.)

The complaint shows a consideration for each mortgage. The ground of this action is that the mortgages are void for usury on account of the compound interest inserted therein and should be set aside, but the complaint does not allege any fact which would constitute usury or make the mortgages void. Besides, if the defense of usury existed to these mortgages it should have been interposed in the action in which the mortgages were foreclosed. (Bartholomew v. Yaw, 9 Paige, 165; Moses v. McDivitt, 2 Abb. N. C. 47; Thompson v. Berry, 3 Johns. Ch. *395; affd., 17 Johns. 436; Vilas v. Jones, 1 N. Y. 274.)

If the foreclosure had been defeated for usury in the mortgages the judgment in that action would have amounted to the destruction of the mortgages and been available as a defense whenever an attempt should be made to enforce them.

The judgment should be affirmed, with costs.

Lewis, Bead ley and "WerNEr, JJ., concurred.

Judgment affirmed, with costs.