Gantt v. Grindall

Robessobt, J., delivered the opinion of the Court. Whatever conflict there may be in the testimony in regard to the payment of usury at the time the loan was made, there is none in regard to the fact that usury was paid by the mortgagor John M. Gantt, to the mortgagee and his administratrix from year to year as forbearance money. But the Code provides that the plea of usury shall not be available against a bona fide assignee without notice of such usury. Here Grindall the appellee is an assignee, and be says in his testimony that he had no knowledge whatever of the payment of usury by the appellant Gantt, at the time the loan was made, or of the subsequent payments by him of forbearance money. Whatever suspicious circumstances there may be surrounding the purchase and assignment of the mortgage to Grindall, they are not sufficient in the face of his sworn denial to prove notice either actual or constructive on his part of the payment of usurious interest to his assignors. If, however, he had been an assignee with notice and the excessive interest paid, together with the payments actually made on account of the mortgage debt, had amounted to a sum equal to, or greater than the debt itself, we do not agree with the Court below, that, even under such circumstances the appellants would not have been entitled to an injunction. We have decided under sec. 15, Art 64 of the Code, that the mere payment of usury will not entitle the mort [314] gagor to an injunction to restrain the sale of the mortgaged property upon default of payment of the mortgage, debt, because he may come into Court upon the report of the sale and claim an allowance for the usurious interest paid. But where it appears that the excessive interest and the payments made on the debt itself are equal to, or greater than the debt, the mortgagee would have no right to sell the property, because in law there is nothing due to him by the mortgagor. A Court of equity would not, of course, allow a mortgagee to sell when it appeared that the whole proceeds of sale belonged to the mortgagor. (Decided 27th June, 1878.) We affirm the decree however on the ground that Grindall is a bona fide purchaser without notice of the payment of usury by the appellant Gantt to the mortgagee.. Decree affirmed, and bill dismissed.