19 F. Cas. 1286 | U.S. Circuit Court for the Northern District of Illnois | 1874
When a creditor seeks to prove a debt against the estate of a bankrupt, he stands in the position of a plaintiff in a suit at law seeking to enforce such claim. In re Pittock [Case No. II,189].
By the 3d section of the act of the legislature of this state, approved January 31, 1S37, regulating rates of interest to be paid, which act was in force at the time of the transaction in question, any agreement to pay a greater rate of interest than ten per cent, works a forfeiture of all interest. Sess. Laws 1S57, p. 40.
The supreme court of this state has construed this statute, holding that if the party who took usury is seeking to enforce his claim by suit, he forfeits all interest. Snyder v. Griswold, 37 Ill. 216; Cushman v. Sutphen, 42 Ill. 256.
It is very clear to me that Mr. Lawrence must be held by this court to be in the same position as if he had brought suit to recover this demand for $3,000 money loaned, to which the assignee may set up any defense that Prescott could have set up if bankruptcy had not intervened.
The defense of usury can be pleaded so long as any part of the debt for which the usury was paid, or agreed to be paid, remains unpaid. Farwell v. Meyer, 35 Ill. 40; Booker v. Anderson, Id. 66; Saylor v. Daniels, 37 Ill. 331; Parmelee v. Lawrence, 44 Ill. 405.
In the light of the rules laid down in these cases, there can be no doubt that the facts in this ease show that Lawrence has given $1,500 for usurious interest on this $3,000 loan, and that the same should be applied to the extinguishment of the principal debt. This case is widely different from those eases where a debtor has sought relief in a court of equity from a usurious contract. In such cases, the courts, acting upon the principle that he who seeks equity must do equity, have generally required the payment of interest at the rate fixed by law where there was no special contract. Here the party seeks to enforce a contract on which he has received a large amount of usurious interest, which the debtor or his assignee may set off against the debt.
The exceptions to the filing of the register, so far as this $3,000 demand is concerned, will be sustained, and an order entered that the sum of $1,500 be deducted therefrom, leaving the claim fixed by the finding of this court on the facts at $1,S00 instead of $3,-300.
