Rice v. Schneck

Headnote

Rice v. Schneck, 189 App. Div. 877 , affirmed.

Appeal from an order of the Appellate Division of the Supreme Court in the first judicial department, entered December 26, 1919, which reversed an order of Special Term denying defendant’s motion for judgment in his favor upon the pleadings and granted said motion. The action was brought to have certain agreements for the loan of money adjudged void upon the ground of usury and to recover certain stock pledged as collateral security for the payment of such loans together with the amount of interest paid in excess of six per cent per annum. The answer was substantially a general denial of .the allegar tions of the complaint. It set forth as a separate defense

the execution and delivery of a general release by the plaintiff to the defendant. Prior to the date of the execution and delivery of such release, an involuntary petition in bankruptcy had been filed in the United States District Court for the Southern District of New York. During the period between the filing of the petition in bankruptcy and the date of the order adjudicating the appellant a bankrupt, the said general release was given. The reply to the separate defense admitted the execution and delivery by the plaintiff to the defendant of an. instrument purporting to be a general release; but set forth the petition in bankruptcy against the plaintiff then pending, the subsequent adjudication in bankruptcy, the appointment of a receiver of the plaintiff’s property in such bankruptcy proceedings, the receiver’s qualification, the bringing of this action by the receiver in the name of the plaintiff, the bankrupt, pursuant to an order of such bankruptcy court, and further alleged that such general release was given without consideration and was null and void, and of no force or effect as against the receiver in bankruptcy.