82 N.J. Eq. 469 | New York Court of Chancery | 1913
The mortgage which complainant seeks to foreclose was executed by the mortgagor to a straw man as mortgagee wholly withput consideration. So long as it remained without a consideration it was necessarily void, either in the hands of the mortgagee or the assignee of the mortgagee, as an assignee would take subject to existing defences of the mortgagor. Magie v. Reynolds, 51 N. J. Eq. (6 Dick.) 113.
'But the mortgage was not in fact delivered to the mortgagee. It was delivered by the mortgagor to her agent for the defined purpose of having the agent, in her behalf, sell it for an amount less than the obligation which it represented; the plan being to have the agent of mortgagor cause the straw mortgagee to make an assignment of the mortgage and its accompanying bond to such purchaser as the agent should procure.
Until money was actually paid for the mortgage and reached the hands of mortgagor or her authorized agent no consideration whatever supported the mortgage. It follows that the contract of the mortgagor for the payment -of money—which contract is embodied in the bond and mortgage—first received vitality as a contract when it was purchased by complainant at a discount; prior to that time it was a nudum factum. It thus appears that
The rule touching credits for interest paid upon a usurious .contract is that credit shall be given the debtor for the amount of illegal interest paid by him and not for all interest which has been paid. Kohn v. Kelly, 76 N. J. Eq. (6 Buch.) 132. Kohn v. Kelly was subsequently affirmed by the court of errors and appeals for the reasons stated in this court. 77 N. J. Eq. (7 Buch.) 273.
I will advise a decree for the amount paid by complainant less the amount of interest which has been paid to him by the mortgagor in excess of the legal rate on the amount paid for the mortgage. No costs can be recovered.