Mabee v. Crozier

Bockes, J.:

The evidence in support of the alleged usurious agreement is not of the most conclusive character. It must be accepted, however, we think, as sufficient to sustain the finding of the learned judge. On 'the whole, the preponderance of evidence is in favor of the finding. The question then is,'whether effect must be given to the agreement made between the parties on the settlement and withdrawal of the former suit. It was then agreed that the defense of usury set up against the bond and mortgage should be waived, and under no circumstances be interposed or taken advantage of to defeat their enforcement.

It can hardly be claimed that a contract made between parties to a usurious agreement, that the usury should not be insisted on to invalidate it, can be binding. If such a contract may be enforced, the statute against usury may be- easily evaded. This result cannot be permitted on principle. If usurious, the contract is absolutely void, and no agreement between the parties to it can give it vitality,, nor can any valid binding contract be engrafted upon it. The taint of usury permeates all transactions based upon it, and all are void *266.alike. The bond and mortgage, if usurious, was not rendered valid '.by tbe new agreement. They still remained usurious and void. 'This second agreement was like giving a new security for the payment of the usurious loan, or a new promise to pay the debt. In such case all contracts growing out of the usurious agreement áre •alike, void. This rule of law is quite too familiar to require the •citation of authorities. This is not like the case of a settlement of a disputed claim. The agreement was to waive the usury. There was no concession that usury did not in fact exist; on the contrary, the very agreement not to -insist upon it presupposed its actual existence.

But it is urged that the agreement operated to defeat the defense * "by way of estoppel. But here was no representation or assurance that usury did not in fact exist. Besides, an estoppel has its foundation in good faith, in -the belief of the party to whom assurances are made of their truthfulness. In this case the agreement to waive the usury was between the parties to the usurious contract. The fact as to the alleged usury was known to both parties. There is no ground on which to base an estoppel.

Tbe judgment must be affirmed, with costs.

Learned, P.. J., and Follett, J., concurred.

Judgment affirmed, with costs.