Court Opinion

ID: 7884269
Source: CourtListenerOpinion
Date Created: 2022-09-08 21:37:56.450931+00
Date Added: 2024-06-11T16:31:42.015712
License: Public Domain

The opinion of the court was delivered by
Brewer, J.:
Can a second mortgagee plead usury in a prior mortgage? Can he do it either to defeat, or postpone, the lien of such prior mortgage? Authorities are well divided on this question. That he can, is affirmed in Indiana, *358Pennsylvania, Ohio, New York, Maryland, and New Jersey. Cole v. Bausemer, 26 Ind. 94; Green v. Tyler & Co., 39 Penn. St. 361; (though under the present statute the opposite ruling seems to obtain; Miners Trust Co. v. Roseberry, 2 Law & Eq. Rep. 478;) Union Bank v. Bell, 14 Ohio St. 200; Brooks v. Avery, 4 Comstock, 225; Post v. Dart, 8 Paige, 640; Banks v. McClellan, 24 Md. 62; Cummins v. Wire, 6 N. J. Eq. 73. That he cannot, is affirmed in Alabama, Connecticut, Illinois, Iowa, Kentucky, Michigan, Missouri, and Vermont. Cain v. Gimon, 36 Ala. 168; Fielder v. Varner, 45 Ala. 429; Loomis v. Eaton, 32 Conn. 550; Adams v. Robertson, 37 Ill. 45; Powell v. Hunt, 11 Iowa, 430; Huston v. Stringham, 21 Iowa, 36; Carmichael v. Bodfish, 32 Iowa, 418; Campbell v. Johnston, 4 Dana (Ky.) 177; F. & M. Bank v. Kimmel, 1 Mich. 84; Ransom v. Hays, 39 Mo. 445; Austin v. Crittenden, 33 Vt. 553. These last two cases were not mortgage cases, but the decisions plainly indicate the judgments of the courts upon the question. See also, 3 Parsons on Cont. 122; Ladd v. Wiggin, 35 N. H. 421; De Wolf v. Johnson, 10 Wheat. 367; Green v. Kemp, 13 Mass. 515. We incline to the latter view, and to regard the plea of usury as a personal privilege. When the parties to a contract are willing to abide by its terms, why should one, not a party thereto, be permitted to interfere? If the debts were unsecured, no one would think that the second creditor had any right to interfere. The payor, by payment of the first note according to its terms, and without insisting on any plea of usury, might so diminish his means as to render himself unable to pay the second note, but still that would not give the holder of the second the right to restrain such payment. And the rule would be the same if the securities for .the two notes were separate and distinct. Why then should the mere giving of a single security for the two notes enable the holder of the second to interfere? And a mortgage with us, it will be borne in mind, conveys no estate in the land, but is simply a security for the debt. Chick v. Willetts, 2 Kas. 384. The second mortgagee, it is true, could increase the value of his *359security by diminishing the amount of the first lien; but he does so only by preventing parties who have made a contract, and are willing to abide by its terms, from complying with that contract. When the first mortgage was given, the land-owner had a perfect right to give it. The land stood charged with the lien as he placed it, and no one but he could question the validity of the lien for the entire amount. He still remains willing to abide by the terms of that contract; willing that the land should be held for the face of the note. The taking of the second mortgage was a voluntary matter. The mortgagee finds the property charged with a mortgage, pledged therefor as security for a specified amount, finds that the mortgagor intends that it shall be used in discharging that amount of indebtedness, and voluntarily takes the property thus burdened, as security for his own debt. It is with ill grace that he thereafter endeavors to prevent the mortgagor from complying with his first contract. Yet, even those who' are loath to break their own promises, are often willing that others shall, if thereby. their own interests are promoted. Surely, a man ought to have a right to say whether he shall keep his own promise or not. In the enactment of laws, usury laws as well as others, the legislature has regard to the general interests, the welfare of the majority. Its laws therefpre often bear hardly in individual instances. And while it may be generally true, that a limit to the amount to be paid for the use of money should be fixed, yet every dne knows that sometimes such amount is not what in justice and fairness ought to be paid. Men feel honorably bound to pay more than the law authorizes. While the law ought to protect the party from the clamps of the usurer, by permitting him to repudiate all but the legal interest, yet, if the bor-. rower feels in honor bound by the peculiar circumstances of his loan to pay the stipulated interest, it would seem as though no stranger to the transaction should be permitted to interfere.
The judgment will be affirmed.
All the Justices concurring.