Coor v. . Spicer

The only question presented for our consideration, is, whether a mortgage to secure a usurious debt, in the hands of a purchaser for value without notice of the usury, is void.

Except as otherwise provided by statute, a negotiable instrument, void as between the original parties by reason of any illegality in the consideration, was, nevertheless good in the hands of an endorsee for value and without notice. Henderson v. Stannon, 1 Dev. 147. Of course it might be otherwise provided by statute; and our usury statute, Rev. Code, ch. 114, did make void all instruments, the consideration of which, was usurious; and under the operation of that statute, innocent and meritorious holders were obliged to suffer. No doubt it was the consideration of that statute which misled his Honor ; and it was probably not called to his attention, as it was not to ours in the argument, that our statute, Rev. Code, ch. SO, sec. 5, provides that no conveyance or mortgage, &c., by reason *403 that the consideration shall be forbidden by law, it such purchaser at the time of his purchase have no notice of the unlawful consideration.

This statute, we think, embraces the case under consideration. The endorsees for value and without notice, are not affected by the illegality of the consideration of the note between the original parties to the mortgage, and consequently have a right to enforce payment by a sale under the mortgage.

The injunction ought to have been dissolved.

This will be certified. There is error.

Per Curiam. Error.