Court Opinion

ID: 3582797
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:33:35.892176+00
Date Added: 2024-06-11T15:47:01.846289
License: Public Domain

[EDITORS' NOTE:  THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 496 
[EDITORS' NOTE:  THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 497 
[EDITORS' NOTE:  THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 498 
The mortgage which the defendant seeks to impeach was for the payment of an antecedent debt. It was given to secure the precise sum legally due to the plaintiff. It represented the amount of certain outstanding demands, which he had purchased with his own means, and for his own benefit, from the creditors by whom they were previously held. His legal rights were in no manner impaired by the circumstance that he did this at the request of the defendant, and for the purpose of averting a forced sale of his property.
It is a misnomer, to speak of the transfer of a demand by one creditor to another, as a loan of money to the debtor, within the intent of the usury laws. It is true that the defendant originally applied for a loan of $10,000, but the application was declined by the plaintiff, who had not that amount at his command. He had only about $7,000, and this he was willing to lend; but his other means were in stocks of the Newark banks, which were purchased above par, and were worth more than they cost, and which he held as a permanent investment. He objected to selling these, as in the depressed condition of the money market at that time, they could not be converted into cash except at a depreciation of from five to ten percent. The defendant assured *Page 499 
him that his creditors would take these stocks at par, and induced him to agree, on that condition, to purchase their claims, and to accept a mortgage for the amount, if on examination he was satisfied with the proposed security. The creditors refused to accede to these terms, and the agreement, therefore, never became operative. If it had been carried into effect it would have been perfectly lawful, and a mortgage for the amount of the debts so purchased would have been a valid and binding obligation. (Vroom v. Ditmas, 4 Paige, 526, 532;Willoughby v. Comstock, 3 Edw., 424; United States Bank v.Waggener, 9 Pet., 378, 400.)
On the failure of the proposed arrangement, the plaintiff did not relinquish his purpose to aid the defendant. He devoted several weeks to the business, and made long and distant journeys, without reimbursement, except in a single instance, even of his traveling expenses. He purchased and took assignments of the outstanding claims, making up, by the discount on some of the purchases, for loss on others by the transfer of his stocks at less than par. He accepted a mortgage for the precise amount due from the defendant, payable five years from date with annual interest. Some ten years afterward, the defendant induced him to accept a substituted mortgage, embracing the unpaid balance due on the first, with a debt subsequently contracted of nearly $4,000; and when the latter came to be foreclosed the present defense was interposed. Its purpose has probably been accomplished in delaying for ten years the collection of a just debt. The referee finds, as matter of fact, that in none of these transactions was there any usurious intent, agreement or exaction. It would be a gross perversion of the statute to sustain a defense of usury, where no unlawful gain or advantage is either bargained for or secured by the creditor, and where no loss can be entailed on the debtor by fulfilling the terms of his engagement. The law applicable to the facts is clear. The defense is without merit, and the judgment should be affirmed with damages for delay.
All the judges concurring,
Judgment accordingly. *Page 500