Gillmore v. Woolcock

gy ¿/je Cowrt, * 1 Cole, J. This was an action to foreclose a mortgage given by tbe appellant to tbe respondent, to secure tbe payment of a promissory note mentioned in tbe pleadings. An answer was put in, wbicb was adjudged to be frivolous, and judgment was given for tbe respondent, for tbe amount due on tbe note. An examination of tbe answer will sbow tbat it is not frivolous, witbin tbe decisions of tbis court. Van Slyke vs. Carpenter, 7 Wis., 173; Grubb vs. Remington, id., 349; Farmers' & Millers' Bank vs. Sawyer, id. 379; Martin vs. Weil et al., 8 id., 220. After tbe discussion in tbe above cases of wbat will be deemed a frivolous pleading, it cannot be necessary or profitable to consider tbat question bere. Besides, we are of tbe opinion tbat tbe answer discloses a good and complete defense to tbe action, except for tbe principal sum loaned. Tbe defense is usury. Without stopping to analyse tbe answer, it is sufficient to say, tbat it alleges tbat a loan of nine hundred dollars was effected in 1858, upon an agreement tbat tbe appellant was to pay therefor interest at tbe rate of fifteen per cent, per annum. A note was given for tbe principal sum, drawing interest at tbe rate of twelve per cent. But still it is alleged tbat tbe loan was made on tbe consideration tbat fifteen per cent, interest was to be paid, and it is further averred tbat twenty-five dollars of usurious interest have already been paid on tbe contract. Now, if these allegations are true, it appears to us tbat it shows a usurious contract. It was suggested tbat because tbe note only drew a rate of interest for wbicb parties, under tbe statute, were permitted to contract, and there was no obligation to pay tbe excess, tbat therefore tbe note and mortgage were valid. But still, “ if tbe design of tbe whole transaction, and tbe inducement to it, are to lend money on usurious interest, tbe taint of usury affects tbe whole and every part of tbe contract; and no one portion thereof, although in form an independent contract, is made valid by tbe fact tbat, taken by itself, it is free from objection. Tbe very fraud consists in disguising usury by separating tbe contract into these parts.” 2 Parsons on Contracts, 390. “So if there be a note and a separate oral promise to pay usurious interest, [591] tbe note is void.” Ibid. See, also, Willard vs. Reeder, 2 McCord, 369; Lear vs. Yarnal, 3 A. K. Marshall, 419; Merrills vs. Law, 9 Cowen, 65; Macomber vs. Dunham, 8 Wend., 550; Hammond vs. Hopping, 13 id., 505. Witbin these authorities the contract set forth in the answer was usurious. At all events, it is plain that the answer was not frivolous, and the court erred in adjudging it to be so. The judgment of the circuit court is reversed, and the cause is remanded for further proceedings.