O.C.G.A. § 7-4-11 (2019)

Annotations

Law reviews. For note discussing whether a holder in due course takes free of claims of violations of the usury laws, see 12 Ga. L. Rev. 814 (1978).

JUDICIAL DECISIONS Defense of usury is personal to debtor, and may not be urged save by borrower or borrower’s privies. Clark v. Kaiser Agric. Chems., 156 Ga. App. 251, 274 S.E.2d 648, 1980 Ga. App. LEXIS 3019 (1980); Plowden v. Peoples Fin. Corp. (In re Pair), 14 B.R. 732, 1981 Bankr. LEXIS 2779 (Bankr. N.D. Ga. 1981). Plea of usury is personal and because the usury laws protect the debtor, not the debt, the parties’ various rights concerning the debt belongs to them only so long as they remain within a lender-borrower relationship. Lindenberg v. First Fed. Sav. & Loan Ass’n, 528 F. Supp. 440, 1981 U.S. Dist. LEXIS 16202 (N.D. Ga. 1981), aff’d, 691 F.2d 974, 1982 U.S. App. LEXIS 24143 (11th Cir. 1982). Counterclaim or separate suit unnecessary. - Usury is a defense and need not be asserted as a counterclaim or in separate suit. Williams v. First Bank & Trust Co., 154 Ga. App. 879, 269 S.E.2d 923, 1980 Ga. App. LEXIS 2428 (1980). Before defense raised, obligation to pay indebtedness prima facie valid. - Defense of usury is a matter personal to the debtor and, before the debtor has made such defense, the debtor’s obligation to pay the indebtedness infected with usury is prima facie valid. Napier v. Jordan, 52 Ga. App. 585, 183 S.E. 854, 1936 Ga. App. LEXIS 189 (1936). Borrower cannot use usury statute to take advantage of own wrong. Eiberger v. West, 247 Ga. 767, 281 S.E.2d 148, 1981 Ga. LEXIS 880 (1981). Estoppel can lie to bar defense of usury. Eiberger v. West, 247 Ga. 767, 281 S.E.2d 148, 1981 Ga. LEXIS 880 (1981). Failure to plead usury results in an estoppel to rely upon it as a defense. Clark v. Kaiser Agric. Chems., 156 Ga. App. 251, 274 S.E.2d 648, 1980 Ga. App. LEXIS 3019 (1980). One failing to set up defense of usury is concluded by judgment. Clark v. Kaiser Agric. Chems., 156 Ga. App. 251, 274 S.E.2d 648, 1980 Ga. App. LEXIS 3019 (1980). Failure to raise defense of usury precludes attack levy of execution. - Debtor who has had the debtor’s day in court will not be heard to attack levy of

execution on ground that the debt was infected with usury. Wilkinson v. Holton, 119 Ga. 557, 46 S.E. 620, 1904 Ga. LEXIS 275 (1904); Clark v. Kaiser Agric. Chems., 156 Ga. App. 251, 274 S.E.2d 648, 1980 Ga. App. LEXIS 3019 (1980). Advertisement of collateral not tortious when defense not raised. - Fact that after creditor has advertised property for sale for payment of a usurious debt, the debtor, in a bill in equity to enjoin sale, sets up usury and shows that the debtor has paid all that the debtor was legally liable for, and obtains a judgment against the creditor for an amount which debtor overpaid, does not so relate as to give any tortious character to the creditor’s original act in advertising property for sale. Napier v. Jordan, 52 Ga. App. 585, 183 S.E. 854, 1936 Ga. App. LEXIS 189 (1936). Creditor of insolvent may attack claim of another creditor as usurious. - While plea of usury is a personal one which can be set up by a debtor only, when the debtor is insolvent and there is a fund in court to be distributed, equity will allow one creditor to suggest usury as to claim of another, and compel usurious creditor to write off usury and receive only principal and legal interest. Stone v. Georgia Loan & Trust Co., 107 Ga. 524, 33 S.E. 861, 1899 Ga. LEXIS 105 (1899). Under former Civil Code 1895, § 2878 petitioning creditors in bankruptcy may attack validity of deed by which alleged bankrupt has conveyed to another creditor a valuable part of the bankrupt’s estate on the ground that it was usurious, and the court of bankruptcy has power to enjoin the sale of property by the grantee pending adjudication of the question. In re Miller, 118 F. 360, 1901 U.S. Dist. LEXIS 8 (D. Ga. 1901). Assignee of bond for title can attack conveyance to usurer. - Assignee of bond for title can attack in equity a conveyance to one who had advanced money to complete purchase for usury. First Nat’l Bank v. Rambo, 143 Ga. 665, 85 S.E. 840, 1915 Ga. LEXIS 571 (1915). Creditor of a party who makes a conveyance tainted with usury is a

privy. Stone v. Georgia Loan & Trust Co., 107 Ga. 524, 33 S.E. 861, 1899 Ga. LEXIS 105 (1899). RESEARCH REFERENCES Am. Jur. 2d. 44B Am. Jur. 2d, Interest and Usury, § 183. C.J.S. 47 C.J.S., Interest and Usury Consumer Credit, § 351. ALR. Right of junior mortgagee to attack senior mortgage for usury, 59 A.L.R. 342; 121 A.L.R. 879. Right of surety or guarantor to avail himself of defense of usury, 70 A.L.R. 359. Survival of claim for usury against estate of usurer, 78 A.L.R. 451. Who other than borrower may avail himself to latter’s right to recover back

usurious payments or penalties therefor, 82 A.L.R. 1008; 134 A.L.R. 1335. Validity, construction, and effect of express agreement releasing cause of action or defense based on exaction of usury, 99 A.L.R. 600. Estoppel to assert usury against innocent purchaser of usurious instrument, 110 A.L.R. 451. Statute denying defense of usury to corporation, 63 A.L.R.2d 924. Right of attachment or judgment creditor, or officer standing in his shoes, to attack older lien or security interest for usury, 70 A.L.R.2d 1409.