Kohn v. Kelly

| New York Court of Chancery | Jun 8, 1909

Leaming, Y. C.

The single question here presented is whether our statute against usury entitles defendant to a deduction from the amount actually loaned of all interest which has been paid by him, or only entitles him to a deduction of the amount of illegal interest paid by him.

I am unable to consider this an open question in this state. In all cases in which the subject appears to have been directly considered the view has been uniformly adopted that the statutory deduction from the amount actually loaned of interest already paid is of the interest which has been paid in excess of the legal rate. Pond v. Causdell, 23 N. J. Eq. (8 C. E. Gr.) 181; Bedle v. Wardell, 25 N. J. Eq. (10 C. E. Gr.) 349; Terhune v. Taylor, 27 N. J. Eq. (12 C. E. Gr.) 80; Mahn v. Hussey, 28 N. J. Eq. (1 Stew.) 546; Boyd v. Engelbrecht, 36 N. J. Eq. (9 Stew.) 612; Pfenning v. Scholer, 43 N. J. Eq. (16 Stew.) 15; Hintze v. Taylor, 57 N. J. Law (28 Vr.) 239.

In Lowenthal v. Myers (not reported) I ordered an interest payment credited on the principal of a usurious mortgage, and the court of errors and appeals appears to have affirmed that part of my decision. 72 A. 80" court="N.J." date_filed="1909-03-03" href="https://app.midpage.ai/document/lowenthal-v-myers-8268939?utm_source=webapp" opinion_id="8268939">72 Atl. Rep. 80. The language of the statute touching interest payments already made was not brought to my attention in that case, and I think it reasonable to assume that the appellate court made a similar oversight, for I am entirely satisfied that the latter court would not have intentionally departed from its former views without some expression of the reasons for so doing.

I will advise a decree for complainant for $5,000, less the interest payment made in excess of the legal rate, and without costs.