Page:Federal Reporter, 1st Series, Volume 3.djvu/506

 m BE HOOLE. 4:99 �these payments above legal interest is applied to the pay- ment of the principal of the loan, then the debt bad been fuUy paid before the bankruptcy, and there was nothing due Lamed for which he could hold the policies as security. It is claimed by this petitioning crediter that the excess of inter- est paid should be thus applied; that nothing was, in fact, due Lamed; that the petition of the assignee and Larned's affidavit were, therefore, false, and the order entered thereon ehould be vacated. �On behalf of Lamed it is claimed that the arrangement or compromise made was made in good faith between him and the assignee; that it was made at the solicitation of the assignee himself ; that the assignee then knew ail the facts now disclosed; that to apply the excess of interest, as now claimed, would be in eSect enforcing the defence of usury agaist him by the assignee, when the assignee did not him- self set it np, and that he had a right to waive it ; that the only remedy of the creditors or the assignee was to bring a suit under the statute of New York for the excess of interest paid ; and, at any rate, that the assignee would bave had no right to recover by suit the excess of interest paid by the firm df John E. Hoole & Son, nor any right to go back of the time when that firm was dissolved, in applying the excess of interest to the liquidation of the principal ; that the remedy of the cred- itors, if the assignee bas been guilty of dereliction of duty in not setting up the usury, or in not coUecting and redeeming the assets of the estate as he was bound to do, is to dispute the set- tlement of bis accounts, charge him on accountwith what he has lost by bis negligence, or sue him on his bond for neglect of duty. It appears that the assignee gave bond in the sum of $25,000, with Larned as his surety. �It is unquestionably shown by the evidence that the assignee, who, during ail these transactions, was the book- keeper of the bankrupt, knew of the usurious character of the loans, and was familiar with ail the details of the trans- actions. It also appears that he firat suggested the arrange- ment* thàt was made about the surrender of the policies to Larnedt The ïûàtter was innegotiation for some time. The ����