Case Name: George F. Tillitson, App'lt, v. Alvin E. Nye et al., Resp'ts
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1895-06-21
Citations: 68 N.Y. St. Rep. 529
Docket Number: 
Parties: George F. Tillitson, App’lt, v. Alvin E. Nye et al., Resp’ts.
Judges: 
Reporter: New York State Reporter
Volume: 68
Pages: 529–530

Head Matter:
George F. Tillitson, App’lt, v. Alvin E. Nye et al., Resp’ts.
(Supreme Court, General Term, Fifth Department,
Filed June 21, 1895.)
1. Usury — Compound interest.
Compounding the interest, and promising to pay it, by the borrower, is valid and binding, if supported by a consideration.
2. Same — When interposed.
If the defense of usury to a mortgage exists, it must be interposed in an action in which the mortgage is foreclosed, and cannot subsequently be made the basis of an action to set it aside.
Appeal from a judgment, dismissing the complaint at the opening of the case.
W. E. Edmonds, for app’lt; W. A. Sutherland, for resp’t.

Opinion:
Ward, 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 seems 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 Monroe county, in which the defendant was made a party. He 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; affirmed, 17 Johns. 436; Vilas v. Jones, 1 N. Y. 274. If th.e foreclosure was defeated for usury in the mortgages, the .judgment in that action would have amounted to the destruction of the mortgages, and been availableias a defence whenever an attempt should be made to enforce them.
The judgment should be affirmed, with costs.
All concur.