Mahn v. Hussey , 28 N.J. Eq. 546 ( 1877 )

The Chancellor.

The pleadings disclose the following state of facts : The complainant, on the 2d of March, 1868, lent to the defendant, Hussey, $4,500, taking his bond and a mortgage executed by him and his wife for $5,000, with interest. On the 29th of December, 1868, the complainant lent to Hussey $1,000 more, on like bond and mortgage; and in March, 1873, he lent to him $1,500, the payment of which, with the amount of the former loans, was secured by a bond and mortgage for $7,500, and interest on the premises described in the former mortgages, which were then cancelled. The principal on this last mortgage, which is the mortgage in suit, was made payable on the 1st of July, 1878., and the interest semi-annually, with provision that if default should be made in the payment of the interest for thirty days, the principal should, at the option of the mortgagee, immediately become due. On the first loan of $4,500, it was agreed that the complainant should receive a premium of $500, which was included in that mortgage. The answering defendants, by their answer, set up the defence of usury, and they insist that the mortgage in suit is so affected thereby that not only is the whole of the interest forfeited, but the bill must be dismissed, because no interest has ever been recoverable on the mortgage, in consequence of the usury, and, therefore, there has been no default; and, if no default, the principal is not due, and will not be due until the 1st of July, 1878. The mortgage in suit was given to secure the payment of three several and distinct loans by the mortgagee to the mortgagor, Hussey. On the first of these a premium was taken, but none on either of the others. The second and third loans were neither of them usurious. The first was. To that the forfeiture should be confined. Crippen v. Heermance, 9 Paige 211. Ho interest is recoverable in respect to the amount of that mortgage, and the interest received by the mortgagee on the, $500 premium must, with the premium, be deducted. Bedle v. Wardell, 10 C. E. Gr. 349. Interest is recoverable on the rest of the amount of the principal, that is, on $2,500. According to the bill, no interest has been paid since the 1st of January, 1875, and the complainant elected that the principal should at once become due, by reason of the default. If, in fact, no interest whatever were recoverable on the mortgage, that fact would not relieve the defendants from the consequences of the default. The default would still exist, notwithstanding the fact that the interest is not recoverable by suit. The principal of the mortgage, less the amount of the premium, is due. The complainant is entitled to costs.