Lead Opinion
A dеbtor is not required to avail himself of the statutes against usury, to avoid the payment оf a debt otherwise justly due, any more than of the statute of limitations; and the omission tо do either is not in itself the slightest evidence of an intent to defraud Ms creditors. It is rather evidence of a determination not to commit a fraud upon the lender for their benefit. This view disposes of the case. When the assignment was executed thе debtor had the right, as against the complainant, in good faith, to dispose of his property as he pleased. (Candee v. Lord, 2 Comst., 269.) He could have paid the usurious judgment. This is conceded; and if so, n.o good reason can be assigned why he could not apрropriate property for that purpose, and direct its application by a trustee. The assignment was not a contract with the holder of the judgment, or а mere security for that debt, but the setting apart of property for the paymеnt of a specified demand in the order designated. This is virtually assumed by the plaintiff, by insisting that the judgment creditor is not a necessary party to the suit.
The trust when created was irrеvocable. Neither the debtor, the trustee nor the cestui que trust, claiming as such, could avoid it. So much was determined in Pratt v. Adams (7 Paige, 615, 639, 640, 641).
Now if the assignment itself was usurious оn the ground that it provided for the payment of a usurious debt, as the plaintiff insists, it would be singular if the borrower (who in this case was the assignor), for whose protection the statute against usury was enacted, could not avail himself of its provisions, not only to rеsist the payment of the judgment, but as a ground of resuming the trust fund appropriated for its discharge,
*84 In a word, the contracts and securities avoided hy the statute are those arising from some agreement direct or indirect with the usurer or those standing in his place. They do not include trusts or other appropriations of propеrty made by the debtor without the agency of the creditor, subsequent to and indepеndent of the usurious contract, as a means of satisfying the debt after it has been incurred.
It must be remembered that we are not asked to determine whether a provision for a usurious debt may not in certain cases be evidence more or less cogent of a fraudulent intent on the part of the debtor, but whether the law will permit a trust for that purpose, to any extent, under any circumstances.
There is no force in the objection that the judgment was not confessed with all the formalities required by the Code. Should it be admitted that it was void as a judgment, the debt arising from the loan of money existed, and was a good consideration for the assignment. (7 Paige, 639.) The plaintiff has lost nothing by the irregularity, and has no right "to complain that by the assignment he has been deprived of an opportunity to take advantage of a technical dеfect in the rendition of the judgment, which the parties thereto have properly disregarded.
I think the judgment should be affirmed.
I. The judgment in favor of Sheldon, which is the preferred debt in the assignment, was rеgularly confessed according to § 383 of the Code. See Mann v. Brooks (7 How. Pr. R., 449), decided by Justice Cady, in point, and see also Park v. Church (5 How. Pr. R., 381).
II. The defence of usury is a personal defence, and was waived by the judgment debtor when he made the assignment and gave the preference. He had the same right to give the prеference as he had to pay the debt, and the same consequencеs follow, so far as the plaintiff is concerned,
*85
as if he had paid it. The plaintiff is а mere stranger to the judgment of Sheldon against Judson, and cannot insist upon its invalidity on thе ground of usury.
(Post
v.
Dart,
8
Paige,
639;
Shufelt
v.
Shufelt,
9
Paige,
137;
Bix
v.
Van Wyck,
The judgment should be affirmed.
Concurrence Opinion
orally dissented from the position taken by Willard, J., that the judgment was regular; being of the opinion that the Code "required a more specific statement of the consideration in a confession of judgment.
All the judges concurring in the positions assumed in the opinion of Gardiner, J.,
"Judgment affirmed.