Mullen v. Russell

Beck, J. l. usury: confession of judgment. Usury taints a contract, whatever form it may be made to assume, and the courts will refuse to enforce it when the infirmity is properly pleaded. The , , I ,. statute in terms forbids the receipt by the creditor of usurious interest. The law cannot be violated by devices intended to conceal the true nature of the contract and the intention of the parties. The petition alleges that the confession of judgment in this case was made for the purpose of avoiding the statute; that it was adopted as a device whereby the law would be brought to the aid of the usurer to enforce the contract. This the law will not permit. Judg [388] ments are not of such solemnity that they will not he set aside when they owe their existence to an intention to violate the law — when they become instruments to defeat the very purpose of statutes. We are, therefore, of the opinion that the confession of judgment, being entered with the purpose of aiding in the violation of the usury law, must be regarded, as between the 'parties to the usurious contract, void so far as the amount in excess qf the sum the plaintiff may lawfully recover is concerned. This conclusion is not in conflict with Twogood & Elliott v. Pence, 22 Iowa, 543, and Troxel v. Clarke, 9 Iowa, 201. In these cases it was held that confessions of judgment upon ■usurious contracts are valid. But the judgments were not taken as devices to cover the usury — were not intended as instruments to defeat the law. They were properly held valid. The distinctions between these decisions and the case before us are obvious. The petition shows that plaintiff paid a sum greater than the principal of the indebtedness. Defendant can under the law receive no more. Code, Sec. 2080. Plaintiffs are required to pay or tender him no further sum in order to obtain the relief prayed for in the petition. ■ In our opinion the demurrer was erroneously sustained. Beveksed.