This is an action to foreclose a second mortgage which is held by plaintiff June Gorrin. In support of her claim for relief, she alleges that defendants Robert and Dolores Higgins, being indebted to her in the sum of $11,000, executed on March 16, 1959 a bond and second mortgage in said sum, payable on September 16, 1959; that no payments have ever been made on said indebtedness, and that she has been obliged to make certain disbursements and advancements to preserve and protect the security interest which she holds.
Defendants filed an answer on November 15, 1961 denying the material allegations made by plaintiff, and set forth the following affirmative defenses: (1) the alleged indebtedness upon which this action was predicated is tainted with usury; (2) plaintiff is precluded from prevailing in this action by reason of the doctrine of "unclean hands"; and (3) one Irving Gollin and not plaintiff was the real party in interest and therefore the plaintiff lacked the status necessary to maintain this action.
On November 29, 1961, plaintiff moved, pursuant to R.R. 4:58-1 and R.R. 4:58-3, for summary judgment in her favor and against defendants, seeking, inter alia , an adjudication: (1) fixing the amount due on her mortgage; (2) barring and foreclosing defendants' equity of redemption; (3) directing that she be paid the amount due on the mortgage with interest and costs; and (4) ordering that the premises in question be sold according to law to satisfy the amount due to her.
Being satisfied that defendants were entitled to restate their supposedly meritorious defenses with greater particularity and specificity, I carried plaintiff's motion to a later date. Prior to hearing oral argument on the adjourned return date of the plaintiff's motion, defendants filed an amended answer setting forth the following affirmative defenses to plaintiff's right to foreclose the mortgage which she held: (1) defendants borrowed $10,000 for a period of six months, upon which interest in the sum of $1,000 was paid. Thus the mortgage of the plaintiff is tainted with usury and is void and unenforceable in a court of equity; (2) plaintiff is not entitled to any equitable relief since she failed to disclose the lender's true identity and the fact that the transaction was usurious; and (3) plaintiff has failed to join Irving Gollin, the true lender, who is an indispensable party, and, furthermore, plaintiff lacks the status to maintain this action.
It is elementary that a summary judgment should be granted with great caution and only if there is no genuine issue as to any material fact. See Home Owners Construction Co. v. Glen Rock , 34 N.J. 305, 311 (1961); Bouley v. Bradley Beach , 42 N.J. Super. 159, 168 (App. Div. 1956); Evening Journal Ass'n v. MacPhail , 45 N.J. Super. 184 (Law Div. 1957); and R.R. 4:58-3.
After considering the oral argument of counsel, the pleadings, affidavits and briefs filed in this matter, I am of the opinion that plaintiff is entitled, as a matter of law, to foreclose her mortgage. There is absolutely no question that defendant Robert Higgins did, in fact, receive $11,000 from either Irving Gollin or Nicholas Panepinto, attorney for Irving Gollin. Indeed, defendant admits the receipt of $11,000 in paragraph 7, page 2, of his affidavit of December 15, 1961. Furthermore, this fact is substantiated in the two affidavits of Panepinto, dated December 11, 1961 and January 22, 1962. Additionally, defendant admits that he borrowed $10,000, but that he was charged $1,000 in interest; and plaintiff admits that the interest charged,
i.e. , $1,000 was usurious, and she offers to give defendant full credit for this amount and ask for no further interest or costs.
In reaching the conclusion that plaintiff is entitled to foreclose her mortgage, I am not unmindful of the cases cited by defendant which hold that a court of equity will not enforce a usurious contract or mortgage. See Hudnit v. Nash , 16 N.J. Eq. 550, 559 (E. & A. 1862); Vanderveer v. Holcomb , 17 N.J. Eq. 87, 91 (Ch. 1864), affirmed 17 N.J. Eq. 547, 551 (E. & A. 1866); and Miller v. Ford , 1 N.J. Eq. 358, 364 (Ch. 1831). It is my opinion, however, that a comparison of the applicable language contained in the usury statutes at the time these cases were decided and the language contained in the present usury statute, inexorably leads to the conclusion that usurious mortgages may be presently foreclosed.
The first legislative attempt at regulation and control in the area of usurious transactions occurred in 1797 when the Legislature declared that:
"2. * * * all notes, bills, bonds, mortgages, contracts, covenants, conveyances, and assurances, which shall be made for the payment or delivery of any money, wares, merchandise, goods or chattels, so to be lent, on which a higher interest is ...