Wendlebone v. Parks

Lowe, J. The points made by the demurrer demanding notice are, that the transaction between the parties was in effect a purchase and sale of the note from Parks to Yeile, that the latter knew it was usurious, and that the facts as pleaded show an attempt to evade the usury law. The facts as stated will not allow this construction. If they were merely colorable to cover a usurious transaction, that may be shown. But we must accept them as pleaded. The averment is, that there was no negotiation whatever [548] with Parks for the sale and transfer of the note to Yeile; the contract was made with Wendlebone himself, who, being pressed by Parks for the money on the note, applied to Yeile through Newcomb, his agent, for a loan of money to pay the debt. This contract was made, not with Parks or at his instance, but with the plaintiff and at his request, for his benefit and to enable him to pay a debt due Parks. It is not pretended that this contract was tainted with usury. The money being advanced under this contract, the debt was paid, and the note and mortgage delivered up by Parks; the plaintiff, instead of taking them up and executing new secureties for the money he had borrowed, allows them to remain in the hands of Yiele as the evidence and security of his new indebtedness to him. This is no usurious transaction. Purser v. Anderson et al., 4 Ed. Ch., 17. The foundation of plaintiff’s present indebtedness is the loan under his contract with Yeile. The note and mortgage are only the security, and inasmuch as they were obtained by Yeile from the plaintiff himself in contemplation of a loan, and not from Parks, equity will regard them in the same light as new securities given directly to Yeile, and it will not permit the defense of usury, with or without notice, to be set up by the party at whose procurement alone the paper is held as a security for an honest claim. Doy v. Perkins et al., 2 Sandf. Ch., 359; Kenry v. Talbot, 4 Bibb., 39; Kemp v. McPherson, 7 Har. & J., 320; French & Davis v. Rowe & Hyde, 15 Iowa, 563. The law does not prohibit a man from paying usury if he chooses; and if he should borrow money to pay a usurious debt, the lender, even with notice of the fact, cannot be affected by the usury in the original debt, for the reason that he stands in 'no relation to the usurer by privity of contract, assignment, or otherwise. [549] The demurrer in this case should have been overruled. The order sustaining the same is reversed and the cause remanded. Reversed.