Michigan Compiled Laws

Mich. Comp. Laws § 438.5 (2026)

Holder in due course; recovery.

✓ current as of July 2026

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Revised Statutes of 1846

R.S. of 1846

438.5 Holder in due course; recovery.

Sec. 5.

In any action brought on any bill of exchange or promissory note payable in money, and to order or bearer, originally given or made for or upon any usurious consideration or contract, if it shall appear that the plaintiff became, in good faith the indorsee or holder of such bill of exchange or promissory note, for a valuable consideration, before the same became due, then and in such case, unless it shall further appear that the plaintiff, at the time of becoming such indorsee or holder, had actual notice that such bill or note was given for or upon a usurious consideration or contract, he shall be entitled to recover thereon, in the same manner, and to the same extent as if such usury had not been alleged and proved.

History: R.S. 1846, Ch. 34 ;-- CL 1857, 1316 ;-- CL 1871, 1634 ;-- How. 1596 ;-- CL 1897, 4864 ;-- CL 1915, 5995 ;-- CL 1929, 9237 ;-- CL 1948, 438.5

Notes of Decisions

Cited in 3 cases, 1983–1986 · leading case: Paul v. U.S. Mut. Fin. Corp., 389 N.W.2d 487 (Mich. Ct. App. 1986).

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Paul v. U.S. Mut. Fin. Corp., 389 N.W.2d 487 (Mich. Ct. App. 1986). · cites it 2× “Therefore, pursuant to MCL 438.5; MSA 19.3, defendant took the promissory note free of a usury defense.”

Fed. Deposit Ins. Corp. v. Stone, 578 F. Supp. 144 (E.D. Mich. 1983). · cites it 2× “Mich.Comp.Laws Ann. § 438.5. The statute requires actual knowledge and there is no evidence that the F.”

Allan v. M & S Mortg. Co., 359 N.W.2d 238 (Mich. Ct. App. 1984). “On the other hand, innocent lenders would not be subject to claims of usury by borrowers who were in business, but merely did not engage in corporate formalities.”

Annotations are extracted automatically from the opinions in the Syfert caselaw corpus and ranked by authority, recency, and treatment. Dots show Syfertize treatment of the citing case itself.