Court Opinion

ID: 5183521
Source: CourtListenerOpinion
Date Created: 2022-01-06 04:45:20.600675+00
Date Added: 2024-06-11T08:26:39.482144
License: Public Domain

Follett, J.:
A mortgagor owning the fee of the land covered by an usurious mortgage may maintain an equitable action to have the mortgage *329surrendered and the record thereof canceled as a cloud upon his title. (Morse v. Hovey, 9 Paige, 197; Hartson v. Davenport, 2 Barb. Ch. 77; Williams v. Ayrault, 31 Barb. 364; S. C., sub. nom. Williams v. Fitzhugh, 44 Barb. 321; affd., 37 N. Y. 444 ; 5 Trans. App. 61; Tyler Usury, 435 et seq.)
The cases of which Minturn v. Farmers’ Loan & Trust Co. (3 N. Y. 498); Allerton v. Belden (49 id. 373) and The Town of Venice v. Woodruff (62 id. 462) are types, are not in point. These cases simply hold that the maker of a promissory note or of a bond is not entitled to maintain an action to cancel the obligation without alleging some special circumstance, because his defense to an action on the note or the bond is an adequate remedy.
In case an action is brought to foreclose a recorded mortgage against the mortgagor, who is the owner of the land mortgaged, he may set up as a counterclaim that the mortgage is void for usury, and is a cloud on his title, and ask that it be canceled. (Equitable Life Assurance Society v. Cuyler, 12 Hun, 247; affd., 75 N. Y. 511.)
In the case at bar usury as a defense or as a ground for affirmative relief is not well pleaded. The allegation that the mortgagor received but $2,200 on the mortgage of $2,800 is not sufficient to present an issue that the mortgage is usurious. (Booth v. Swezey, 8 N. Y. 276.) The answer contains no information why or for what consideration the sum of $600 was reserved. The allegation that the sum of $28 was reserved on the false statement that it was charged as a commission for procuring the loan does not amount to an allegation that the mortgage was usurious. (Morton v. Thurber, 85 N. Y. 550; Guggenheimer v. Geiszler, 81 id. 293.) It is not alleged in the answer that the mortgagee retained the sums mentioned for the purpose or with the intent of exacting more than the legal rate of interest for the loan, or that the mortgagor permitted the mortgagee to retain those sums for the purpose or with the intent of paying more than the legal rate of interest for the loan. When usury is pleaded as a cause of action, as' a counterclaim, or as a defense, it must be set out with such certainty and precision that it appears on the face of the pleading that an usurious contract has been entered into. (National *330Bank v. Lewis, 75 N. Y. 516; 27 Am. & Eng. Ency. of Law, 1040; Boone’s Code Pleading, § 67, and cases cited.)
The judgment should be reversed and a new trial graúted, with costs to abide the event.
All concurred.
Judgment reversed and a new trial ordered, with costs to the appellant to abide the event.