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Purchase Of Note Constitutes Usurious Loan, Anon

Washington Law Review

Defendant applied for a loan to an investment broker to whom he gave a mortgage and a promissory note payable to, and subsequently endorsed in blank by, a third party. The broker, whose name appeared on neither instrument, then sold the 6,000 dollar note at a six per cent discount to plaintiff after deducting a commission of 890 dollars. Defendant received only 4,750 dollars for his note. Plaintiff did not know that his money constituted the original consideration for the note, which bore ten per cent annual interest. After defendant's default, plaintiff brought this action to foreclose the mortgage. The …