Pike v. Crist

Citations

• 62 Ill. 461

Syllabus

<p>1. Usury—under guise of liquidated damages. Where promissory notes, made up of several prior notes and dealings between the same parties, were made payable thirty days after date at ten per cent interest, and if not paid at maturity, twenty per cent after maturity, as liquidated damages, and it was shown that in the beginning of the dealings between the parties it was understood that the payee was to pay twenty per cent interest for all moneys loaned to him, if not paid in thirty days; that when the last notes were given payable in thirty days, the payee had agreed to let. them run for a year; that at least three of the previous notes merged in these, were drawn in the same form; and it appeared, by the admissions of the payee, that this was a form adopted by him to obtain twenty per cent interest, without violating the statute, as he supposed: Held, that the twenty per cent expressed to be liquidated damages was not such in good faith, but a mere device to cover up an usurious transaction.</p> <p>2. Same—where a purchaser may set up usury. Where a purchaser of land from a mortgagor received a deed of warranty which, after reciting that it was subject to certain mortgages, contained this clause: “ all three of which mortgages the above grantee assumes and agrees to pay, except any usurious and illegal interest in the same: ” Held, that, as under this clause, the right of the mortgagor to an abatement of the usury entered into the consideration of the purchase as an element of the price, the grantee had the right to question the validity of the mortgages in respect to usury.</p> <p>3. Same—interest allowed when purged. Where a part of the principal of notes secured by mortgages was composed of usury, and an usurious rate of interest was expressed on the face of the notes under the guise of liquidated damages if not paid at maturity, the circuit court, after finding the sum actually due after deducting the usury, allowed but six per cent interest on that sum from t