Case Name: George P. Merwin, Appellant, v. Vittoria Romanelli, Respondent, Impleaded with United States Carriage Company and Others, Defendants
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1910-12-30
Citations: 141 A.D. 711
Docket Number: 
Parties: George P. Merwin, Appellant, v. Vittoria Romanelli, Respondent, Impleaded with United States Carriage Company and Others, Defendants.
Judges: 
Reporter: Appellate Division Reports
Volume: 141
Pages: 711–713

Head Matter:
George P. Merwin, Appellant, v. Vittoria Romanelli, Respondent, Impleaded with United States Carriage Company and Others, Defendants.
Second Department,
December 30, 1910.
Usury — foreclosure of usurious mortgage — when mortgagor not estopped by affidavit that mortgage is valid.
A mortgagor defending a suit of foreclosure on the ground of usury is not estopped from taking that defense by her affidavit stating that the bond and mortgage were valid legal obligations at the time of the assignment of the mortgage to the plaintiff, if, in fact, it appear that the original mortgagee was merely acting as a dummy for the plaintiff, who had full knowledge of the usury before the transfer.
Usury affects every action taken to consummate the transaction, and those who are parties to the usury cannot avail themselves of an alleged estoppel induced for the sake of giving apparent validity to the transaction.
Arpead by the plaintiff, George P. Herwin,- from- a Judgment of the Supreme Gourd in favor of the defendant Yittoria Eomanelli, entered in the office of the clerk qf the county of Kings on the 26,th day of January, 1910, upon the decisión of the court rendered after a trial at the Kings County Special Term.
J. Stewart Ross [Effingham L: Holywell with him on the brief], for .the appellant. "
Heetor McG. Curren,, for the respondent. .

Opinion:
"Woodward, J.:
This action was brought for the foreclosure of a mortgage upon real property located in the borough of Brooklyn. The mortgage was executed and delivered on the 22d day of Hatch, 1907, by the, defenda'nt, Yittoria Eomanelli, to one Saverio Gallo, but it. clearly appears from the evidence that Gallo was merely the 'dummy for the plaintiff in this action, and that the mortgage in-question,.given for $1,350, was delivered upon the actual payment of but $900, the sum of $450 having "been retained by Gallo for alleged commissions, but in reality for the benefit off the plaintiff, to whom the bond and mortgage was subsequently • transferred., after the defendant had executed an affidavit stating that the bond and mortgage were valid legal obligations at -the -time of such delivery. The defense of usury was pleaded, and the learned court at Special Term has found the facts substantially as stated above, giving Judgment fop the .defendant. "
The.plaintiff appeals from the judgment and urges that as the defendant had given an estoppel certificate, knowing that the plaintiff was to receive an assignment of the bond and mortgage, she is not in a position to urge the defense pleaded. This would probably be so if the certificate had been given to an innocent third party, but the evidence discloses fairly, we believe, that the plaintiff had full knowledge of the usurious transaction, and was a party,thereto. A plaintiff thus situated was not misled by the false statement made to complete the usurious transaction, and considerations of public policy forbid that the law should be defeated by any such device: The authorities cited in behalf of the plaintiff go no farther than to hold that a certificate of estoppel is conclusive where the defend ant has taken an assignment relying upon the certificate, a condition which could not exist in this case if the usury was established, for the evidence disclosed that the plaintiff was the real usurer, and was familiar with the entire transaction. Usury affects every action taken to consummate the transaction, and those who' are parties to the usury cannot be permitted to avail themselves of an alleged estoppel introduced for the sake of giving apparent validity to the transaction.
The judgment appealed from should be affirmed, with costs.
Hirsohbero, P. J., Jenks, Burr and Rich, JJ., concurred.
Judgment affirmed, with costs.