Hangover Joe's Holding Corp. (fka HJOE)

[james885]

"This stuff is too funny - the HJOE guys have learned a new word - Usury but are clueless about how it in applied to corporations in New York.

You surely must understand that Corporations can't use

Quote:New York General Obligations Law § 5-521. Corporations prohibited from interposing defense of usury

No corporation shall hereafter interpose the defense of usury in any action. The term corporation, as used in this section, shall be construed to include all associations, and joint-stock companies having any of the powers and privileges of corporations not possessed by individuals or partnerships.

What you posted and have failed to understand is that what you posted is about Real Estate and has nothing to do with Corporate loans."


The case you provided a link for has nothing to do with a corporation using criminal usuary as a defense. Since you seem to be having a hard time understanding that here's something that proves they can.


Here, the general defense of usury has been interposed by counsel on behalf of both one corporate defendant and one individual defendant. The practice of charging interest at a rate higher than that allowed by applicable law constitutes usury and any loan of money or the forbearance thereof which is in excess of the legal rate is deemed to be usurious, Matias v. Arango 289 AD2d 459 (2nd Dept. 2001). The civil usury defense is unavailable to and may not be interposed by a corporation or other business entity such as a limited liability company, GOL § 5-521 and is likewise unavailable to any party who acts as a guarantor of such an indebtedness, Schneider v. Phelps 41 NY2d 238 (1977). That having been said, however, the maximum rate of interest that may be charged in such an instance cannot exceed 25% per annum, as prescribed by the criminal usury statute. Where the interest rate charged exceeds 25% per annum, the defense of criminal usury may be asserted, even on behalf of a corporate obligor as well as any guarantors of such an indebtedness, In Re Colad Group Inc. 324 BR 208 (Bankr. W.D.NY 2005), A. Conner General Contracting Inc. v. Rols Capital Corp. 145 AD2d 452 (2nd Dept. 1988). [*3]


Since usury has been established by clear and convincing evidence, the Court must next make a determination as to the statutory remedy that is applicable to case at bar. While the provisions of the Penal Law may apply, the Court finds that the General Obligations Law is equally controlling with respect to remediation. Section 5-511(1) of the General Obligations Law decrees that a contract that is found to be usurious is void ab initio and so continues in perpetuity, Wilkie v. Roosevelt 3 Johns. Cas. 206 (Supreme Court of Judicature, 1802), Sabine v. Paine 223 NY 401 (1918). The provisions of General Obligations Law Section 5-511(2) mandate that "...the court shall declare the same to be void, enjoin any prosecution thereon, and order the same to be surrendered and cancelled." G.O.L. § 5-511(2). The language of the statute is mandatory, leaves no room for judicial discretion and therefore requires a declaration by this Court that the entire obligation sought to be enforced by Plaintiff is null and void, from its very inception, Szerdahelyi v. Harris 67 NY2d 42 (1986).


Upon a careful review of the entire record before the Court, it is clear that reverse summary judgment pursuant to CPLR § 3212(b) is appropriate, both legally and factually. For the reasons hereinabove set forth, reverse summary judgment will be granted in favor of Defendants, dismissing this action with [*4]prejudice.

Accordingly, the Court determines that the promissory note sought to be enforced by Plaintiff is void ab initio, that the same is and shall continue to be wholly unenforceable, that the same is and shall be cancelled and of no further force and effect and that Plaintiff shall be barred, enjoined and prohibited from taking any steps to enforce the promissory note or any portion thereof. Accordingly, it is
ORDERED, ADJUDGED and DECREED that the application of Plaintiff for summary judgment in his favor pursuant to CPLR § 3213 shall be and the same is hereby denied in its entirety; and it is further
ORDERED, ADJUDGED and DECREED that upon searching the record, reverse summary judgment pursuant to CPLR § 3212(b) shall be and the same is hereby granted in favor of Defendants; and it is further
ORDERED, ADJUDGED and DECREED that the promissory note between Plaintiff as obligee and Defendants as obligors and guarantors dated May 17, 2011 shall be and the same is hereby declared to be null, void, cancelled, void and of no force and effect; and it is further


http://law.justia.com/cases/new-york/other-courts/2014/2014-ny-slip-op-50141-u.html

http://law.justia.com/cases/new-york/appellate-division-second-department/2015/2014-01372.html