Isle of Wight Co. v. Smith — 58 N.Y. Sup. Ct. 562

Majority

p. 562

THE ISLE OF WIGHT COMPANY, Appellant, v. FREDERICK H. SMITH, Jr., Respondent.

Headnote

TTsu/rious agreement — a corpoi’ation cannot sue for the surrender of securities pledged by it as collat&ral th&reto.

Upon an appeal from a judgment, sustaining a demurrer to the complaint, in an action brought by a corporation to procure the surrender of certain securities, given to secure the payment to the defendant of a usurious loan:

Held, that the judgment should be affirmed.

That as the plaintiff was forbidden, by chapter 172 of the Laws of 1850, to interpose the defense of usury, in an action brought to enforce the payment of a loan, it could not accomplish by indirection what it could not do directly.

Southern Life Insurance Company v. Packer ( 17 N. Y., 51 ); Curtis v. Leavitt (15 id., 9) followed.

Appeal from a judgment, entered in the office of the clerk of the county of Queens on October 13, 1888, dismissing the complaint herein, and from an order made at a Queens County Special Term, held on September 1, 1888, which sustained a demurrer to the complaint herein and directed that the defendant have a judgment thereon, with costs.

Frederick Elder, for the appellant.

Thaddeus D. Kenneson, for the respondent.

This is an action brought to procure the cancellation and surrender of certain securities for the payment of a usurious loan made by the defendant to the plaintiff.

The defendant demurred to the complaint, and had judgment in his favor in the court below, from which the plaintiff has appealed. We find no principle which will justify a recovery in this action.

p. 563

The plaintiff is a corporation and could not interpose the defense of usury in any action brought to enforce the payment of the loan. (Laws 1850, chap. 172.) As, therefore, the interposition of such a defense would be unsuccessful, it follows necessarily that the same facts set up in a complaint in an action for affirmative relief can afford the plaintiff no greater relief. It cannot accomplish by indirection what it cannot do directly. Moreover, we think the question has been adjudicated in this State, and decided against the contention of the plaintiff. (Southern Life Ins. Co. v. Packer, 17 N. Y., 51 ; Curtis v. Leavitt, 15 id., 9.)

The judgment appealed from should, therefore, be affirmed, with costs.

Pratt, J., concurred.

Order sustaining demurrer to complaint affirmed, with costs.