Case Name: Nichols v. Cosset
Court: Connecticut Supreme Court
Jurisdiction: Connecticut
Decision Date: 1791-08
Citations: 1 Root 294
Docket Number: 
Parties: Nichols v. Cosset.
Judges: 
Reporter: Connecticut Reports
Volume: 1
Pages: 294–295

Head Matter:
Nichols v. Cosset.
A mortgage taken in this state for 7 per cent, interest, to indemnify tke mortgagee against an obligation, given in New York for 7 per cent, is not unlawful.
Action of ejectment for land. The plaintiff’s title was a deed from his father George Nichols, dated 13th December A. D. 1784.
The defendant plead, that said deed was a mortgage, de-feasible upon said George’s paying a certain sum of money; that it was executed at "Waterbury in said New Haven county, and that there was secured by said deed interest at the rate of 7 per cent., which is more than lawful interest at the rate of 6 per cent, per annum by the corrupt agreement of said parties and by force of the statute entitled an act for restraining the taking of excessive usury, it is void.
The plaintiff traversed the deeds securing more than lawful interest; upon which the parties were at issue to the jury.
The facts upon the evidence were, that said George Nichols was indebted to the Messrs. Kays in New York by obligation, which bore an interest of 7 per cent, the lawful interest of New York; that he was pressed for the debt, and that the plaintiff took him off, and gave his own security to them, for said debt in New York, payable with the lawful interest of New York, and at Waterbury took a bond and mortgage of said George for the same sum and lawful interest of New York, and gave back to his father said George a writing; that upon his paying him a certain sum, less than the original debt and the interest, of that sum, at 7 per cent., he would give up said mortgage.

Opinion:
By Court and Jury.
This deed is not usurious within the statute, for although 7 per cent, is expressed in the mortgage, and the mortgage was given in this state, where 6 per cent, is the lawful interest only; yet this is a security to pay the plaintiff only what he was lawfully bound to pay for said George in New York.