Ovsiovitch v. Federal Tool & Manufacturing Co.

Backes, V. C.

Shortly before the defendant corporation was declared insolvent it borrowed from Charles Karsh $2,000, and gave him its promissory notes aggregating $2,500, with interest at six *86per cent., and secured the notes by a chattel mortgage on its machinery, tools of trade, &c. The receiver sold the chattels free and clear of the mortgage encumbrance, and Karsh now petitions to he paid the amount of the notes out of the proceeds. That the notes and mortgage were given on a usurious bargain is 'admitted, but Karsh claims that usury cannot be set up in defence by the receiver because of…