Court Opinion

ID: 5550781
Source: CourtListenerOpinion
Date Created: 2022-01-10 21:35:22.224286+00
Date Added: 2024-06-11T08:34:53.394706
License: Public Domain

The Assistant Yice-Chancellok.
At first blush the defendant’s claim for the seven hundred dollars, appears to be unconscionable if not usurious; but I am convinced, on reflection, that the claim must be allowed.
1. As to the alleged usury. In order to constitute usury, there must be either directly or indirectly, a loan or forbearance of money, or some other thing. (Blydenburgh on Usury, 84 to 86, and the cases there cited.) Here there was no forbearance, because Righter was the creditor; and there was no loan, because first, the money received by Righter, was a payment made and applied upon a security which he held against Stall; and second, it was never to be repaid by Righter to Stall. So far from its being a loan by Stall to Righter, it was a payment which actually extinguished so much of a debt which Stall owed to Righter, payable at a future day.
If Righter had sold this bond and mortgage, to the witness, Mr. Soule, for instance, at-a discount of $700, receiving from Mr. Soule $1400, in cash, and his notes on time for the balance; no one at this day, would question the legality of the transaction.
If Righter had been in the same urgent need of $2500, in May, 1843, and had agreed with Stall, that he would receive that sum in full of the mortgage, and Stall had paid it to Righter, and obtained his discharge of the mortgage ; I do not think any effort would have been made to set aside the discharge, and re-instate the mortgage for the sum deducted.
This transaction does not differ in principle, from those which I have supposed.
2. The complainant claims that there is no good or sufficient consideration for the agreement to indorse $700, on the bond and mortgage, and that it was unconscionable.
On this point, I think the consideration was undoubtedly valid, and sufficient to support the agreement.
By the terms of the bond and mortgage, no principal fell due till two years from the time when the $1400, was paid, and it then was to become due in annual instalments of $300, each, *611and when the agreement was made, there was no interest yet due. There was about $200, of interest falling .due on the 1st of May, 1843, and the residue of the $1400, was therefore to be purely an advance of principal. The payment of $1200, at that time, which could not be exacted except in equal amounts, two, three, four and five years thereafter; was in contemplation of law a benefit to the creditor, and the raising and paying it, an injury to the debtor, which formed a valuable consideration.
It appears that Righter was then liable to be prosecuted in respect of the Pettit mortgage, for $1400, and a suit had been commenced against Pettit, for the debt which Righter was bound to pay.
He thought it was better for him to obtain the $1400, by discounting $700, on a security due to himself, but payable at a distant period, than to raise it by selling other property at a sacrifice, or by making a loan. It is impossible for the court to say that he was not correct in his judgment of the matter, or to weigh the extent of its benefit to him, or its injury and inconveniences to Stall. The parties themselves settled the question by the agreement made at the time, for the allowance of the sum of $700.
This court has no more right to disturb or remodel their contract, than it would have had, if in order to raise the same $1400, Righter had sold Stall for cash, a farm worth $2400, on a sale upon a long credit, and for which he had been offered that price.
I entertain no doubt but that the whole $2100, is to be allowed as a payment on the bond and mortgage : on the 6th day of May, 1843. '
The question as to its application remains to be adjusted.
As to this, the year’s interest then accrued on Stall’s mortgage, with five days interest on the $2100, must first be discharged, and the residue must go in discharge of the principal of the bond and mortgage. On the balance of principal, the complainant is of course entitled to the annual interest from May 1, 1843.
Then as to the principal discharged, shall it go in exoneration of the earlier or the later payments of principal, as secured to be paid by the bond and mortgage 1
The parties did not stipulate on this point, the defendant gay.® *612no direction about it, nor did the mortgagee make any specific application at the time.
The court must therefore apply it as justice to the interest of both parties requires.
I think the sum of $1882 29, paid towards principal, must be applied rateably to the exoneration of all and each of the instalments of principal which were provided for in the bond and mortgage. This may be readily done by computation. When this bill was filed, one of the reduced instalments of principal was in arrear, and two year’s interest on the whole unpaid principal, viz. $1198 71. Another instalment of principal fell due on the 1st of May last.
In regard to costs, both parties are in the wrong in this litigation. The complainant claimed too much, while the defendants denied that any thing was in arrear. In order to do as exact justice as possible, I will give to neither party costs against the other to this time. The decree will settle the precise amount due, and in arrear, and the sums payable in future. If the defendant omit to pay the sum in arrear, with interest, within thirty days after the service of a copy of the decree on his solicitor, the decree will direct a sale by a master of so much of the mortgaged premises as will pay the sum in arrear, with interest and the complainants costs subsequent to its entry. It will also provide for an application by petition by the complainant, for an order to sell, whenever future payments become due and remain in arrear.(a)

 The following statement made in conformity to the opinion, principle adopted in the application of the payment. * illustrates the
1842, May 1, Bond and mortgage, .... 3843, May .1, Interest 1 year, ..... 6, “ on the 2100, from May 1, till paid, 5 days, . $3081 . 215 67 2 04 •st .6, Sum paid, per agreement, 3298 71 . 2100 Balance of principal, May 1,1843, . $1198 71
*613Balance of principal, May 1, 1843, Last payment was to be, . Then As 3081: 81 : : 1198 71 ; Gives as the last payment rateably, on a principal of $1198 71, the sum of $31 12. Whole principal, . . . 1198 Last payment, . . . .31 Leaves the 10 instalments, and each of the ten is Then for the amount in arrear, 1846, May 1, Interest 3 years on $1198 71, Instalments due May 1, 1845, and 1846, two of 116 76, each, Add interest on the 233 52, till date of decree, Total i n arrear, $1198 71 $81 71 12 (say 31 11) $1167 60 $116 76 251 73 233 52 485 25 e