Union National Bank v. International Bank

Citations

• 123 Ill. 510
• 14 N.E. 859

Syllabus

<p>1. Usury—who may amail of it as a defence—as to ajumor mortgagee, or subsequent purchaser from the mortgagor. The right to set up usury as a defence is personal to the debtor. If any one is injured by the usury it is he, and if he chooses to perform the contract or to waive the defence of usury, no one else has a right to say he shall not do so. It is for him to elect. Those who are in privity with the debtor, it is held, may also set up the defence. There is no privity either in contract or estate between the mortgagor in a usurious mortgage and the mortgagee in a junior mortgage.</p> <p>2. When the mortgagor, however, conveys his equity of redemption by deed, the grantee will then be in privity of estate with him iñ the mortgaged premises,—that is, he will then occupy the same relation toward them that the mortgagor before did; and thereafter the mortgagor will have no interest, whether the usurious mortgage shall be enforced or defeated, and the grantee will have the right, at his election, to interpose the defence of usury.</p> <p>3. But a second mortgagee whose mortgage has not been foreclosed, and who has not been let into possession under his mortgage, can not interpose the defence of usury, in the indebtedness secured by a prior mortgage, to a bill for the foreclosure of the prior mortgage.</p> <p>4. In this State a junior mortgage conveys no interest vested by a prior one, and in case of usury, under our statute, in the senior mortgage, the junior mortgage can only confer a lien upon the mortgagor’s equity of redemption,—that is, a right to redeem from the prior mortgage, if the mortgagor shall not pay the debt secured by the junior mortgage on or before maturity.</p> <p>5. So when the mortgagor in an usurious mortgage gives a second mortgage, which is merely a lien, his right to elect whether to interpose the defence of usury is not cut off, and while he has such right of election it can not be exercised by the second mortgagee. A junior lienholder has