National State Bank of Newark v. Boylan.

has been paid, twice its amount may be recovered back, provided the action has been begun within two years. An entire scheme of protection, involving a policy peculiar to it, is thus given to a borrower. In case the interest has been paid, twice the amount of the usurious rate may be recovered, and in all other cases, the bank forfeits all right to the interest.

At common law, if the borrower were oppressed, as he was supposed to be, by the usurer, and paid the usurious rate, he could recover it, because, although in pari delicto, he was a victim. The United States statute gives an action in such a case of a peculiar kind, which makes the borrower whole and enforces the policy of the statute.

At common law, if he had not paid the usurious interest, and then, on demand, voluntarily paid it with the principal due, in the absence of some statutory action he could not recover the excess of interest back. Under the United States statute the interest being forfeited, if the borrower voluntarily pays it, without something more, but for the action to be brought within two years, the borrower cannot recover it back.

So that we see the statute by a way of its own provides for all the cases in which a borrower may be protected, just as did the common law, and in such a form, that to me it seems clear, that the particular provisions are meant to include all the consequences to be attached to a violation of the provision that says a bank shall take the interest of the particular State and no more (Farmer's, &c. Nat. Bank v. Dearing, 1 Otto, 29; Palen v. Johnson, 50 N. Y. 49; Smith v. Marvin, 27 Id. 137; Wheaton v. Hibbard, 20 Johns. 290). The reasoning of Palen v. Johnson is to be applied in this case, and the United States statute takes hold of the right of action, under the general prohibition, and regulates its exercise, just as in that case the statute took hold of the right under the

National State Bank of Newark v. Boylan.

section declaratory of the common law and regulated its exercise.

Palen v. Johnson is a precedent to allow advantage being taken by demurrer of a limitation of this kind, instead of by pleading the statute of limitations.

On general principles it seems to me clear, that, if, especially when all circumstances of oppression are wanting, the borrower chooses to pay voluntarily, his action is confined to the statute.

There are some parts of the counter-claim which refer to interest received within two years. There is

a doubt raised, whether part of the counter-claim, being on this point good, a demurrer will lie to the whole counter-claim. It is unnecessary to decide this at this time, because I find a fatal objection to the whole counter-claim.

It is based upon an objection peculiar to the defendant John Boylan, individually. This is not proper matter for a counter-claim, unless (there could be, under the pleadings, a several judgment against him. There could not be, because the complaint is upon a judg ment against him and another jointly. Without at all deciding that if this judgment were against an indorser and a maker of a note, it is joint, there is no allegation of the answer that such is the character of the judgment, or that the defendant is liable thereon as a surety. The answer says that if the plaintiff have any claim against him, it is only on his liability as surety, but this supposition or possibility does not refer to the judgment pleaded, for the defendant denies that there was such a judgment, by denying any knowledge of its execution or any information sufficient to form a belief as to its existence (Perry v. Chester, 12 Abb. Pr. N. S. 131; Bathgate v. Haskin, 59 N. Y. 533).

The demurrer should be sustained with costs with leave to amend within twenty days upon payment of costs. No amendment should be permitted, however,

Hauselt o. Vilmar.

which includes in a counter-claim sums paid for alleged usurious interest, both before and after the commencement of the two years specified by the statute, but they may be separately stated, so that the question of law may be clearly settled.

There was no appeal, and defendant amended his

answer.

HAUSELT v. VILMAR.

N. Y. Superior Court; Special Term, April, 1877.

ASSIGNMENT FOR BENEFIT OF CREDITORS.

An assignment for the benefit of creditors is not a fraud upon one creditor, even though it operate to give the whole property to another.

It is not fraudulent to deprive a creditor of a resort to his debtor's property, if the disposition actually made of it is proper, although this disposition is in fact made to prevent an execution being levied on the property conveyed.

The proximity in time of the assignment to the issuing of execution is immaterial.

If, before an assignment, a creditor gains a right to a preference, an assignment that would have the effect of destroying that right is fraudulent as to it.

Mere falsehood or deception does not give a cause of action. It must be shown that injury has been done by it.

Where a debtor said that if he had time, and if there should be no judgment or execution to break up his business, he could pay everybody, and his creditors did not think it an impossibility, and there was a common negotiation in the interest of the creditors and the debtor to see if he could not give security and go on with business, but a judgment having been obtained against him, he made a general assignment of his property for the benefit of creditors;-Held, that the general delay, induced by the debtor's acts and promises, was not fraudulent.

Hauselt v. Vilmar.

Action to set aside an assignment.

This action was brought by Charles Hauselt and J. T. Schroeder against Frederick Vilmar and Charles F. Tag to set aside an assignment on the ground that it was made to hinder, delay or defraud the plaintiffs, who were judgment creditors.

The plaintiffs commenced suits against Vilmar, in December, 1875, on certain notes and bills of exchange which he had repeatedly promised to pay. After the suits had been commenced he obtained delay by promises to pay, and negotiations for a settlement were continued after entry of judgments on February 2, 1876.

On the 17th of the same mouth, he obtained orders to show cause why a stay of execution on the judgments should not be granted.

The motions were heard on the 28th of the month, and Vilmar claiming that he had a defense upon the merits, a reference was had to ascertain the facts, and the motions were adjourned.

The reference was concluded on the next day, February 29th, but the report was not ready. Bankruptcy proceedings were threatened by the defendant before the referee, and on the next day the motions coming on, a further adjournment was opposed by plaintiffs on the ground of these threats of bankruptcy, which, if taken, would render their judgments nugatory. The counsel for Vilmar assured the court that no proceedings in bankruptcy would be taken. The court adjourned the motion for another day.

Upon the same day there was filed in the county clerk's office an assignment of all Vilmar's property to the defendant, Charles F. Tag, dated February 28, 1876.

The motions for vacation of the judgments were denied, and the referee reported adversely to Vilmar. On appeal from the order denying motion to vacate the

Hauselt v. Vilmar.

judgments it was held that the claim of Vilmar that he had any defense to the suits was a sham, and that it was equally sham that the judgments had been fraudulently entered.

The assignee, Charles F. Tag, accepted the trust, but, as alleged, left Vilmar in full possession and control of the business, with apparent title and actual power of disposition of any or all of the stock. The sale of the stock was continued without cessation before filing the bond or schedules by the assignee. The nominal value of the stock, which was unincumbered, was $60,000; the actual value upwards of $30,000. The assignee at private sale sold the whole, excepting those sales made by Vilmar, which were just sufficient to pay his weekly stipend without realizing any thing for the creditors, to one Stiastny, for $10,250, who retained Vilmar in charge of the business on a salary of from $15 to $20 per week. The assignee allowed Vilmar to remain rentfree in the house he owned, and the furniture of which it was alleged had cost $5000, and to sell and dispose of the furniture.

It was claimed by the defense that this furniture belonged to a Mrs. Nieman, who resided with Vilmar.

Lewis Sanders, for plaintiff.-I. The actual intent to hinder or delay, "proved as a fact," avoids the assignment (Nicholson v. Leavitt, 6 N. Y. 516, and 10 Id. 598; Van Nest v. Yoe, 1 Sandf. Ch. 9, 10; Dalton v. Currier, 40 N. H. 237). Courts should confine themselves to the words of the legislature (Everett v. Wells, 2 Scott N. R. 531; Potter's Dwarris Stat. 144; McCluskey v. Cromwell, 11 N. Y. 602).

II. A debtor cannot use the process of the court to suspend and restrain execution upon a judgment to which there was no defense, and under cover of the stay make a general assignment (Jaques v. Greenwood, 12 Abb. Pr. 232) The intent of the assignee was imma