Knight v. American Investment & Improvement Co.

Citations

• 73 Wash. 380
• 132 P. 219
• 1913 Wash. LEXIS 1609

Syllabus

<p>Usury — Consideration — Extension of Time — Unlawful Exaction. A contract to stay proceedings in a mortgage foreclosure, and extend the time for payment to one year and give partial releases of the property, is an evasion of the usury statute and void, where it was provided that the mortgagor should pay therefor $550 per month for each and every month the mortgages should remain unpaid, not exceeding $5,000 in all, which was almost treble the lawful interest; since the principal consideration of the contract was the extension of time of payment and tainted the entire transaction.</p> <p>Same — Consideration—Forbearance. The fact that the foreclosure suit was ready for trial and plaintiffs lost their place on the calendar was but an incident to the forbearance, and not a lawful consideration for the exaction.</p> <p>Same — Conditional Contract — Risk or Loss. The fact that the contract provided that it “shall be void” in case the mortgaged property was ordered sold by a receiver in a case then pending, does not render the contract lawful, since the contingency did not put in peril any part of the principal or interest that could be lawfully reserved.</p> <p>Same — Personal Defense — Privity. Usury exacted from a corporation may be set up by a stockholder holding nine-tenths of the capital stock, where he had signed the usurious contract and stood in the relation of a surety, and was, in the broad sense, a privy.</p> <p>Crow, C. X, Morris, and Mount, JX, dissent.</p>