Case Name: Richards v. Ludington
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1891-05-15
Citations: 14 N.Y.S. 510
Docket Number: 
Parties: Richards v. Ludington.
Judges: 
Reporter: West's New York Supplement
Volume: 14
Pages: 510–511

Head Matter:
Richards v. Ludington.
(Supreme Court, General Term, First Department.
May 15, 1891.)
Usury—Action to Recover Back—Assignee for Benefit of Creditors.
As the action authorized by 2 Rev. St. N. Y. (6th Ed.) 1164,1165, to be brought by the borrower of money at unlawful interest to annul the contract for the loan ana to recover the securities received by the lender therefor, is specially restricted to the borrower, the controversy is wholly between him and the lender; and his assignee for benefit of his creditors should neither be substituted for him as plaintiff nor joined as defendant.
Appeal from special term, New York county.
Action by Paul Morse Richards against Charles H. Ludington. Plaintiff having, after the action was brought, made an assignment for benefit of his creditors to Edgar A. Tredwell, defendant moved that the assignee be substituted as plaintiff in the action. The motion was denied, but an order was made thereon that the assignee be made a party defendant, and that the summons and complaint and all proceedings in the action be amended accordingly. From this order plaintiff and his said assignee appeal.
Argued before Van Brunt, P. J., and Lawrence and Daniels, JJ.
Thos. J. Keigharn, for appellant. Amasa Richard Angell, for respondent.

Opinion:
Daniels, J.
The plaintiff has brought this action to set aside an agreement made by him with the defendant for the loan of money, and to obtain a return of collaterals held by way of security for the loan, on the ground that it was made for a usurious rate, and reservation of interest. Two days after the action was begun the plaintiff made a general assignment for the benefit of his creditors, and soon afterwards the defendant made the motion resulting in this order. Its object was to substitute the assignee as plaintiff, but that was denied, and he was directed to be joined as a defendant. From that order both himself and the plaintiff have appealed. This action has been brought under a statute of this state authorizing the borrower of money at an unlawful rate of interest to maintain an action to annul the contract for the loan, and to recover money, goods, or things in action, received by the lender as security for the loan in violation of the act; and that action may be maintained by the borrower without the payment or the offer to pay any part of the principal or interest of the loan. 2 Rev. St. (6th Ed.) 1164,1165. The right to maintain it has been specially restricted to the borrower. Wheelock v. Lee, 64 N. Y. 243. The controversy is wholly, therefore, between himself and the lender; and no other person can, as this action is presented by the pleadings, be either a necessary or proper party to it. To substitute the assignee for the borrower would at once have defeated the suit, and to add him as a defendant would be of not the least service to the defendant in the way of aiding him in his defense to it. The effect would be to delay its progress by requiring the complaint to be framed anew, and a further and useless attribute added to the action, which could be of no benefit to the plaintiff or the defendant. In this respect the case is within the principle followed in Chapman v. Rories, 123 N. Y. 532, 26 N. E. Rep. 3. Ho beneficial result to any one can legally follow from the order, and, as both the assignee and the plaintiff object to it, the order should be reversed, with $10 costs and the disbursements, and the motion denied. All concur.