Virginian-pilot. (Norfolk, Va.) 1898-1911, 1899-04-13
COURT DECISIONS.
Notes of Cases Recently Decided,
Which are of Interest to
Our People.
DlGESTED BY ". B. MARTIN,
Exclusively for Virginian- Pilot.)

N~NAeoANCiy LUZ ID
M. K. & 7. TRUST CO. V. KRUMsEIG
Supreme Court Of the United States.
January 3. 1899.
A CONTRACT TO PAY $500 IN
MONTHLY INSTRUMENTS, AND
j PROVIDING THAT IN CASE THE
CONTRACTOR DIED THE UNPAID
] 1NSTALMENTS SHOULD BE RE-
LEASED. IS VOID AS A COLORA-
BILE DEVICE TO COVER USURY,
THE CONSIDERATION OF SAID
, CONTRACT BEING $3.50 PAID TO
THE CONTRACTOR.
The LAW OF MINNESOTA PRO
V1DING THAT A USURIOUs CON
TRACT is VOID MAY BE EN-
foRCED IN THE FEDERAL
COURTS, AND UNDER THAT LAW
THE CONTRACT MAY BE CAN
CELLED WITHOUT REPAYMENT
81, OF THE MONEY LOANED.
The appellee sued to enjoin the en-
1orcement of mortgage. The lower
court enjoined it's enforcement and de.
CARED 1t and the notes secured therein
vold. The appellant appealed to the
supreme Court. The appellee borrow
ed from appellant company $3.50. and
IN consideration thereof executed ten
notes Ior $3.50 each, payable in month
~ instruments of $50 each, with n
proviso that in case of his death ~
ne was not then in default, all the
deDt remaining unpaid at that time
should be released. He also agreed TO
pass, anu did pass, u medical exami-
na.ioh required by the company. The
appellant claimed that the Sl,97O paid
appellee and interest on it and the cost
to 1t of its guaranty to cancel the loan
on appellee's death was sufficient
consideration for the notes and mort
gage.
The court says:
osury is, of course, merely n statu-
tory onence. and Federal courts in
te".ihs win such question must look
10 tne laws of the State where the
transaction took place. and follow the
construction put upon such laws In the
state courts. Section 2217 General
Statutes of Minnesota OF 1894. provides
.nat whenever it satisfactorily an
pears to court that any con-
veyance. contract has been taken
In violation of the provisions of This
act. the court shall declare the same
VOID, and enjoin proceedings thereon
The books contain many cases
where artful contrivances have been
resorted to- whereby the lender is to
receive some other advantage or thing
VI V"iue beyond the repayment OF the
loan with legal interest. 1t has been
frequently held that to constitute
usury, where the contract la fair on
us race there must be an intention
knowingly to contract for or to take
usurlous interest. but mere ignorance
OF the law will not protect n party from
the penalties of usury The precise
cn1rlctor ~
present parties is not clear 1t has
some features of a loan of money: in
olher respects it resembles a contract
OF insurance, but our examination OF
It's various provisions and of its legal
import has led us TO accept the con-
ciuslon OF courts below, that the scheme
embedded in the application notes and
mortgage. was merely q colorado de-
wee TO cover usury. CThe court here
quotes from a case decided by the Su
preme Court OF Minnesota, and pro-
ceedsJ. Similar views are expressed in
the subsequent case of Mathews "
Missouri. Kansas and Texas Trust Co.
"here the supreme Court of Minnesota
again reached the conclusion that the
notes and mortgage, forming a con-
tract between the same trust comBaHx
ana one Matthews. were usurious and
void.
me next question is one not free
from difficulty. Can borrower of
money upon usurious interest success
iuiiy seek the aid of Il court of equity
In cancelling the debt without maxine
an ofier 10 repay the loan with lawful
interest? Undoubtedly the general rule
rs mat courts of equity have a discre-
ton on this subject. and have pre-
scribed the terms on which their now
ers can be brought into activity. But
what. IN such case, is held to be the
law by the courts of the State of Min
nesota! Under the statutory provision
already cited. the Supreme court ~
Minnesota has repeatedly held that a
plaintnf suing to cancel n Minnesota
contract for usury need not offer to
repay the money loaned. Rut n lie
strenuously argued that Federal courts
in the exercise of their equitable iuris.
oiction' DO not receive any modifica-
ton from the legislation of the states
or the practice of their courts having
similar powers, and that consequently
no act of the Legislature of Minnesota
could deprive the Federal courts Sit