Hartson v. Davenport — 2 Barb. Ch. 77

Majority

p. 77

Hartson vs. Davenport.

Headnote

If a mortgage is usurious, and is a cloud upon the title of the mortgagor, he has a right, under the act of 1837, to come into the court of chancery for the purpose of having the mortgage cancelled. But that will not entitle him to an injunction, to prevent the mortgagee from trying the question of usury, before a jury, in a suit at law upon the bond; unless a discoveiy is necessary, or some other obstacle exists to the making of the defence at law.

Where a party, by a slip, has lost the opportunity to set up a mere technical or unconscientious defence, and comes to the court for a favor, which it is necessary should be granted to enable him to set up such a defence, the court of chancery will require him to do equity, as a condition of granting the favor asked.

This was an appeal, from an order of the vice chancellor of the. seventh circuit, allowing the complainant to amend his bill. The object of the bill was to have a bond and mortgage, which were alleged to be usurious, given up and cancelled. And the bill contained a prayer for an injunction, restraining the defen dant from proceeding in a suit at law upon the bond. It appeared from the bill that the complainant had conveyed a small portion of the mortgaged premises to another person; and the defendant demurred to the bill on the ground that

p. 78

such person was not -made a party. The complainant thereupon applied for leave to amend his bill, by making such purchaser-of a part of the premises a party to the suit. The vice chancellor allowed the amendment, upon payment .of the cqsis of the -demurrer,, and the costs of opposing the motion.

R. B. Van Valkenburgh, for the appellant,

insisted that as it was an injunction bill, and showed upon its face that the • purchaser- of a part of the premises was .a necessary party, he should have been made a party in the first place. He also insisted that as the object of the bill was to set aside and cancel a mortgage, ,as being usurious, the complainant should not be permitted to amend his bill upon any other terms than that of paying the amount loaned, with legal interest thereon.

J. A. Collier, for the respondent, was stopped by the court.

said, that although an injunction was prayed for, it was evident that no injunction could properly be granted, on this bill, to restrain the suit at law upon the bond; that the bill, if true, showed that the complainant had a perfect defence at law, and no discovery was asked for; and that, in such cases, this court should never interfere by injunction .to stay the suit which had been commenced at law, upon the bond, and to compel the plaintiff in that suit to come into this court to -litigate the question of usury. He said, however, that if the mortgage was usurious, and was a cloud upon the title of the complainant, the latter had a right, under the provisions of the act of 1837, to come into this court for the purpose of having the mortgage cancelled; but that would not entitle him to come .here for. an injunction, to prevent his adversary from trying the question of usury , before a. jury, in the suit at law upon the bond; unless a discovery was necessary, or some other obstacle existed to-the making of the defence there.

In reference .to .the terms upon which the vice chancellor had allowed ¡the complainant to amend, .the chancellor said -that .the decision appealed from was right; that where a party,-by a

p. 79

slip, had lost the opportunity to set up a mere technical or unconscientious defence, and came to the court for a favor, which it was necessary should be granted to enable him to set up such defence, the court would require him to do equity, as a condition of granting the favor asked; that, in this case, however, the refusal of the amendment would not deprive the complainant of the power to get rid of the usurious security, but would merely subject him to the uselesss expense of filing a new bill, without any benefit whatever to the adverse party.

The order appealed from was, therefore, affirmed, with costs.