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equity is shown." And to entitle a person to relief in equity, he must pay, or offer to pay, the debt and legal interest. A party praying an injunction to stay proceedings at law on a usurious contract must bring into court the money actually due upon the contract, with lawful interest. A mortgagor cannot obtain an injunction to restrain a sale under the power of sale in the mortgage, which was given to secure a note for money loaned, on the ground that the note is infected with usury, unless he tenders to the mortgagee the sum borrowed, with legal interest.

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§ 2465. Who may Plead Usury.-The defense of usury is personal to the party himself, his privies or representatives, and cannot be set up by a stranger to the transaction. Thus in an action by the indorsee against the maker of a note, usury between the indorser and indorsee cannot be set up; nor can creditors before judgment;" nor a second mortgagee or encumbrancer, as to a prior

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1 Allerton v. Belden, 49 N. Y. 378; Marks v. Morris, 2 Munf. 407; 5 Am. Dec. 481: Greer v. Caldwell, 14 Ga. 207; 58 Am. Dec. 553.

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Fanning v. Dunham, 5 Johns. Ch. 122; 9 Am. Dec. 283; Eslava v. Elmore, 50 Ala. 587; Anthony v. Lawson, 34 Ark. 628; Reitze v. Foeste, 30 Wis. 693; Tooke v. Newman, 75 Ill. 215; Hill v. Reifsnider, 39 Md. 429; Parnell v. Vaughan, 82 N. C. 134; Morgan v. Schermerhorn, 1 Paige, 544; 19 Am. Dec. 449; Williams v. Fitzhugh, 37 N. Y. 453; Baugher v. Nelson, 9 Gill, 299; 52 Am. Dec. 694; Welch v. Wadsworth, 30 Conn. 149; 79 Am. Dec. 236. See Morrison v. Miller, 46 Iowa, 84.

3 Rogers v. Rathbun, 1 Johns. Ch. 367; Mitchell v. Oakley, 7 Paige, 68.

Anthony v. Lawson, 34 Ark. 628. 5 Conwell v. Pumphrey, 9 Ind. 135; 68 Am. Dec. 611; Safford v. Vail, 22 Ill. 327; Ransom v. Hays, 39 Mo. 445; Loomis v. Eaton, 32 Conn. 550; Fenno v. Sayre, 3 Ala. 458; Cain v. Gimon, 36 Ala. 168; Cutchen v. Coleman, 3 Ind.

568; Farmers' Bank v. Kimmel, 1 Mich. 84; Clapp v. Hanson, 15 Me. 345; Drake v. Lowry, 14 Iowa, 125; Taylor v. Jackson, 5 Daly, 497; Gwynn v. Lee, 9 Gill, 137; Stanhope . Kempton, 30 Me. 118; Drake v. Chandler, 18 Gratt. 909; 98 Am. Dec. 762; McArthur v. Schenck, 31 Wis. 673; 11 Am. Rep. 643; Mordecai v. Stewart, 37 Ga. 364; Lehman v. Marshall, 47 Ala. 362; Pritchett v. Mitchell, 17 Kan. 355; 22 Am. Rep. 287; Lee v. Feamster, 21 W. Va. 108; 45 Am. Rep. 549; Stephens v. Muir, 8 Ind. 352; 65 Am. Dec. 764; Ladd v. Wiggin, 35 N. H. 421; 69 Am. Dec. 551; Stein v. Ind. Building Ass'n, 18 Ind. 237; 81 Am. Dec. 353.

6 Cowles v. McVickar, 3 Wis. 725; Armstrong . Gibson, 31 Wis. 61; 11 Am. Rep. 599; Conwell v. Pumphrey, 9 Ind. 135; 68 Am. Dec. 611. Contra, Lloyd v. Keach, 2 Conn. 175; 7 Am. Dec. 256.

7 Graham v. Moore, 7 B. Mon. 53; Carow v. Kelly, 59 Barb. 239; Mills v. Camly, 1 Bosw. 159.

mortgage or encumbrance;1 nor the purchaser of a mere equity of redemption. The right to avoid a claim for usury does not pass by an assignment; the assignee can only take advantage of the defense by a purchase of the property on which the security is a lien. A purchaser of land at an assignee's sale sold subject to a mortgage

Powell v. Hunt, 11 Iowa, 430; Pritchett v. Mitchell, 17 Kan. 355; 22 Am. Rep. 287; Ready v. Huebner, 46 Wis. 792; 32 Am. Rep. 749. In Pritchett v. Mitchell, 17 Kan. 355, 22 Am. Rep. 287, the court say: "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, Pennsylvania, Ohio, New York, Maryland, and New Jersey: Cole v. Bansemer, 26 Ind. 94; Greene v. Tyler & Co., 39 Pa. St. 361 (though under the present statute the opposite ruling seems to to obtain: Miner's Trust Co. v. Roseberry, 2 L. & Eq. Rep. 478); Union Bank v. Bell, 14 Ohio St. 200; Brooks v. Avery, 4 N. Y. 225; Post v. Dart, 8 Paige, 639; Banks v. McClellan, 24 24 Md. 62; 87 Am. Dec. 594; Cummins v. Wire, 6 N. J. Eq. 73. That he cannot, is affirmed in Alabama, Connecticut, Illinois, Iowa, Kentucky, Michigan, Missouri, Vermont: Cain v. Gimon, 36 Ala. 168; Fielder v. Varner, 45 Ala. 429; Loomis v. Eaton, 32 Coun. 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, 177; F. & M. Bank v. Kimmel, 1 Mich. 84; Ransom v. Hays, 39 Me. 445; Austin v. Chittenden, 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 Contracts, 122; Ladd v. Wiggin, 35 N. H. 421; 69 Am. Dec. 551; 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?'

2 Green v. Kemp, 13 Mass. 515; 7 Am. Dec. 169; Lee v. Stiger, 30 N. J. Eq. 610; Ferris v. Crawford, 2 Denio, 595; Wells v. Chapman, 13 Barb. 361. In 2 Jones on Mortgages, sec. 644, it is said that the correct rule is that the defense cannot be set up if the purchaser has assumed the mortgage or agreed to pay it: Hough v. Horsey, 36 Md. 181; 11 Am. Rep. 484; Cramer v. Leffer, 26 Ohio St. 59; 20 Am. Rep. 756; Conover v. Herbert, 24 N. J. Eq. 120; Reading v. Weston, 7 Conn. 143; 18 Am. Dec. 89; Stephen v. Muir, 8 Ind. 352; 65 Am. Dec. 764; Bridge v. Hubbard, 15 Mass. 103; 8 Am. Dec. 86; Ferris v. Crawford, 2 Denio, 595; Hartley v. Harison, 24 N. Y. 171; Freeman v. Ault, 44 N. Y. 50; McArthur v. Schenck, 31 Wis. 673; 11 Am. Rep. 643; Morris v. Floyd, 5 Barb. 130; De Wolf v. Johnson, 10 Wheat. 367. And that where he has not done so, he may set up the defense: Berdau v. Sedgwick, 44 N. Y. 626; Brooks v. Avery, 4 N. Y. 225; Cole v. Savage, 10 Paige, 583; Shufelt v. Shufelt, 9 Paige, 137; 37 Am. Dec. 387.

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cannot set up usury against the mortgage. A mortgagor of chattels after he has sold them cannot bring an action to cancel the mortgage on the ground of usury. A surety cannot avail himself of usurious interest paid by his principal on a non-negotiable note, in reduction thereof; nor can a surety who has given his own note in part payment of his principal's usurious note plead usury in an action upon his own note. One who satisfies a judgment by giving a note for the amount cannot, when sued upon the note, plead that usurious interest entered into the judgment.5

But it is held that judgment creditors may avail themselves of the plea of usury; or an assignee or trustee for the benefit of creditors; or a receiver; or an accommodation indorser; or the purchaser of real estate at a sale under a mechanic's lien as to a prior mortgage.10

§ 2466. Waiver by Borrower - Estoppel. The borrower, after the loan is made, may waive the forfeiture or penalty." A party to a bill or note may be estopped by

Nance v. Gregory, 6 Lea, 343; 40 Am. Rep. 41.

324.

James v. Oakley, 1 Abb. Pr.

3 Lamoille Bank v. Bingham, 50 Vt. 105; 28 Am. Rep. 490.

Culver v. Wilbern, 48 Iowa, 26; 30 Am. Rep. 385.

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Gipson v. Shanklin, 83 Ind. 147. Dix v. Van Wyck, 2 Hill, 522; Thompson v. Van Vechten, 27 N. Y. 568; Mason v. Lord, 40 N. Y. 176; Phillips v. Walker, 48 Ga. 55; Butler v. Meyer, 17 Ind. 77; Carow v. Kelly, 59 Barb. 239. Contra, Carmichael v. Bodfish, 32 Iowa, 418; Good v. Grant, 76 Pa. St. 52; McKinney v. Hotel Co., 12 Heisk. 104; Bensley v. Homier, 42 Wis. 631.

Beach v. Fulton Bank, 3 Wend. 573; Pratt v. Adams, 7 Paige, 639; Tamplin v. Wentworth, 99 Mass. 63; Corcoran v. Powers, 6 Ohio St. 19; Tiffany v. Boatman's Inst., 18 Wall. 375; Moore v. Jones, 23 Vt. 739; Pearsall v. Kingsland, 3 Edw. Ch. 195.

Contra, Nichols v. Bellows, 22 Vt. 581; 54 Am. Dec. 85.

8 Palen v. Johnson, 46 Barb. 21; 50 N. Y. 49.

Weimer v. Shelton, 7 Mo. 237; Dunscomb v. Bunker, 2 Met. 8; Warren v. Crabtree, 1 Me. 167; 10 Am. Dec. 51.

10 Knickerbocker Life Ins. Co. v. Hill, 6 Thomp. & C. 285.

11 An agreement to waive usury, and not to set it up as a defense, is void: Mabee v. Crozier, 22 Hun, 264. “After the loan has been made, and he is not under the necessity of borrowing or of forbearance, and when the remedy of the statute is fully in his own hands, and within his control, he is considered legally competent to waive it, and upon this point the rules of the court have been very severe and stringent, and that he must exercise his privilege with the utmost promptness and diligence, or otherwise no relief will be afforded": McArthur v. Schenck, 31 Wis. 673; 11 Am. Rep. 643.

his own acts or representations from setting up the defense of usury.' Where a person borrowing money on a mortgage covenants that it is a valid lien, and subject to no defense, he and his privies are estopped from setting up the defense of usury against it. A covenant by the mortgagee and affidavit by the mortgagor that the mortgage was valid has been held to estop them and those claiming under them from setting up usury against a bona fide purchaser. The lender cannot set up the usury to avoid the contract he has entered into. A corporation cannot plead usury in defense to a suit upon its own obligation.5

§ 2467. Usury must be Pleaded-Form of Plea.-The defense of usury must be specially pleaded; it cannot be made on the trial. It is not admissible under non assumpsit. The interest on a usurious contract may be recovered, unless the party affected by the usury sets up the usury in his answer, and tenders the principal sum. The usury laws of another state must be proved; the court will not take judicial notice of them."

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§ 2468. Evidence to Support Plea.-The defense of usury must be sustained by strict proof.10 Where the facts relied on are susceptible of a different explanation, usury is not proved." So a written contract will not be declared

1 Hungerford Bank v. Dodge, 30 Barb. 628; Mason v. Anthony, 3 Abb. App. 208; Strong v. Mfg. Co., 37 N. Y. Sup. Ct. 285. Representations by an accommodation indorser that note sued on was business paper held not to estop him from pleading usury: Truscott v. Davis, 4 Barb. 495.

2 Union Dime Savings Inst. v. Wilmot, 94 N. Y. 221; 46 Am. Rep. 137.

Real Est. Co. v. Seagreave, 49 How. Pr. 489. But see Payne v. Burnham, 4 N. Y. Sup. Ct. 678; 62 N. Y. 69.

Billington v. Wagoner, 33 N. Y. 31; La Farge v. Hester, 9 N. Y. 241; Draper v. Trescott, 29 Barb. 40,1.

5 Frazier v. Trow's Printing and Bookbinding Co., 24 Hun, 281. See ante, Title Corporations.

6 Morford v. Davis, 28 N. Y. 481; Bush v. Bush, 7 B. Mon. 53; Newall v. Nixon, 4 Wall. 572; Frank v. Morris, 57 Ill. 138; 11 Am. Rep. 4.

Frank v. Morris, 57 Ill. 138; 11 Am. Rep. 4.

8 Rock River Bank v. Sherwood, 10 Wis. 230; 78 Am. Dec. 669.

Klinck v. Price, 4 W. Va. 4; 6 Am. Rep. 268; Balfour v. Davis, 14 Or. 47. Frank v. Morris, 57 Ill. 138; 11 Am. Rep. 4.

11 Sujette v. Wilson, 13 Or. 514; Holladay v. Holladay, 13 Or. 523.

usurious upon its face where it is equally well open to a contrary construction.' Where usury is set up as a defense, proof of other usurious transactions on plaintiff's part in loans effected at or about the time when the note in suit was executed is not admissible. But where money is retained, and no reason or explanation is given, usury may be inferred."

1 Van Beil v. Fordney, 79 Ala. 76.
2 Ottillie v. Waechter, 33 Wis. 255.

8 Egbert v. Peters, 35 Minn. 312.

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