Fuller v. Schaaf, et al. Street is paved with asphalt. Ash Street is not paved except at the crossing of Twenty-first Street, and the pavement at the intersection of the street was icy and slippery. The evidence on the part of the defence tends to show that the truck of the defendants, driven by their employee, left the store of the defendants at Tenth and Ash Streets about 5 o'clock P. M. for the purpose of taking an employee home who was sick. The truck was driven south on Ash Street; that the road was a dirt road, and pretty rough, and as the truck approached Twenty-first Street the driver sounded his horn when about eighteen feet from the corner, and a second time as he approached the corner; that the horn was a Klaxon, giving a loud sound, and the evidence of the driver tends to show that he reached the intersection before the plaintiff, Fuller, did; that when he got to the sidewalk line and saw Fuller coming 50 or 60 feet away from the corner, Fuller was going at a pretty high rate-about thirty miles per hour; that when the driver of the truck saw that Fuller did not intend to stop, and was going right across, he put on the emergency and foot brakes and turned to the left. Fuller was going at a good rate of speed, and struck the bumper and turned the truck right around. The pavement was slippery and covered with ice from curb to curb. The driver had the truck in second gear, and was going about eight miles per hour, and could not drive faster than eight miles per hour in second gear. The jury found a verdict for the plaintiff, and on motion of the defendants a rule has been granted to show cause why judgment should not be entered against the plaintiff non obstante veredicto. At the time of the trial we were of the opinion that there was a conflict in the evidence as to the rate of speed which the machine was going as it approached the crossing of Twenty-first and Ash Streets; and also as to which machine reached the crossing first; and as to which machine ran into the other, (which were questions for the jury to decide) and we instructed the jury that "if they find that the defendants' driver was not guilty of negligence, or that the plaintiff was guilty of contributory negligence, your verdict should be for the defendants; but if you find that the defendants' driver was guilty of negligence and that the plaintiff was not guilty of contributory negligence, then your verdict should be for the plaintiff." They found for the plaintiff. After hearing the argument of counsel, and a review of the testimony taken at the trial, and upon due consideration thereof, we can see no reason to change our opinion and interfere with the verdict. FOLEY V. EQUITABLE INVESTMENT CO. Interest-Usurious Contract-Act of May 28, 1858, P. L. 622 Set off by third person who assumes payment of debt. Under the Act of May 28, 1858, P. L. 622, a defendant debtor may retain and deduct from the amount of the debt the amount of interest paid in excess of the rate established by law, but in an action upon the principal debt a set off of usurious interest, alleged to have been paid, cannot be asserted by a third person, who, after the alleged payment of such interest, assumed the principal debt for a valuable consideration with the consent of the creditor. The rule that the vicious element in a usurious contract survives in all its transmutation applies only when the obligor or promisor remains the same. A corporation is an entity and is essentially distinct from the person or persons owning its stock. Trial without a jury, No. 488 February Term, 1918. С. Р. Erie County. Brooks, English & Quinn for Plaintiff. S. Z. Moore and Gunnison, Fish, Gifford & Chapin for Defendants. WHITTELSEY, J., October 21, 1919-This case was tried by the Court without a jury by agreement of counsel, filed in the Prothonotary's office, as provided by Act of Assembly. From the testimony taken the following facts are found, namely: First. On the 24th of April, 1905, and prior thereto, Fredprick M. Jackson and John Waldron doing business as the Household Loan Company, were engaged in the loaning of money at a high rate of interest, from 25 to 40 per cent., for which they took notes from persons to whom the money was loaned. Second. They carried on the business until sometime in 1908, when Orton W. Albee became a member of the partnership, and the business was continued by Jackson, Waldron and Albee until January 30th, 1913. Third. On the 27th day of February, 1913, the Equitable Investment Company was incorporated, and the incorporators being Frederick M. Jackson, John Waldron and Orton W. Albee, the same persons composing the partnership above mentioned; and each had the same interest in the capital stock of the corporation as he had in the partnership. In addition to these incorporators, from twentyfive to fifty other persons thereafter became owners of stock in the defendant corporation. There was no lapse or break in the business-it was continued by the corporation the same as it had been by the partners. Foley v. Equitable Investment Co. Fourth. On April 24th, 1905, the partnership commenced to borrow money of the plaintiff, P. T. Foley, agreeing to pay a rate of interest in excess of the legal rate of 6 per cent; and continued to borrow money from the plaintiff from time to time until the business was incorporated June 27, 1913, paying him interest at the rate of 20 and 25 per cent. Fifth. The total amount of interest paid by the partnership to Foley, the plaintiff, from April 24th, 1905, to June 27, 1913, the time when the business was incorporated, on money borrowed of him was twenty-six thousand five hundred sixty-four and 50-100 ($26,564.50) dollars. The legal rate of interest at 6 per cent. on the same money for the same time was seven thousand two hundred fifty-seven and 42-100 ($7,257.42) dollars the excess of the legal rate being nineteen thousand three hundred six 73-100 ($19,306.73) dollars. Sixth. At the time of the incorporation (June 27, 1913) the plaintiff held two notes against the partnership, one dated August 1, 1911, for fifteen thousand ($15,000) dollars payable two years after date, interest paid to maturity in advance; and one dated November 25, 1912, for eleven thousand ($11,000) dollars payable two years after date, interest paid to maturity in advance. Seventh. At the time of the organization of the corporation (June 30, 1913) an agreement in writing was entered into between Frederick M. Jackson, John Waldron and Orton W. Albee, parties of the first part, and the Equitable Investment Company, a corporation, party of the second part, in and by which the parties of the first part did transfer unto the party of the second part all their interest in the partnership property and assets, described in a schedule thereto attached, together with the good will of the business, and in consideration of which second party did, inter alia, agree to assume all and singular the liabilities of the partnership business theretofore conducted by them, as particularly set forth in a schedule thereto annexed, among which liabilities appeared "Patrick Foley, $26,000." Eighth. The two notes of fifteen thousand and ten thousand dollars respectively, mentioned in paragraph six above, were taken up and a new note for fifteen thousand dollars, dated August 1, 1913, was given to the plaintiff by the Equitable Investment Company, payable one year after date; and on August 1, 1914, the two notes, one for eleven thousand dollars and one for fifteen thousand dollars, were taken up and a new note for twenty-six thousand dollars was given to Foley, the plaintiff, by the Equitable Investment Company, payable one year after date, interest paid to maturity in advance. Foley v. Equitable Investment Co. Ninth. Between August 1, 1914, and April 1, 1915, the plain tiff loaned to the Equitable Investment Company, the defendant corporation, the sum of eight thousand three hundred ($8,300) dollars, which added to the twenty-six thousand dollar note above mentioned, increased the indebtedness of the defendant to the plaintiff to thirty-four thousand three hundred ($34,300) dollars. Tenth. On April 1, 1915, the Equitable Investment Company took up the note for $26,000 and gave Foley a new note for $34,300 payable thirty-six months after date, interest paid to maturity in advance. This is the note in suit. Eleventh. The interest paid by the Equitable Investment Co., defendant, to Foley, the plaintiff, subsequent to June 30, 1913, amounts to twenty-one thousand three hundred ninety and 11-100 ($21,390.11) dollars. The legal rate of interest from June 30, 1913, on the indebtedness to October 20, 1919, is twelve thousand six hundred seventy-four and 34-100 ($12,674.34) dollars, which added to $34,300 the amount of the note in suit, amounts to $46,974.34. Deduct the amount of interest paid, $21,390.11, leaves twenty-five thousand five hundred eighty-four and 23-100 ($25,584.23) dollars as the amount of debt and interest owing October 20th, 1919, to which add five per cent collection fee one thousand two hundred seventy-nine and 20-100 ($1,270.20) dollars, makes twenty-six thousand eight hundred sixty-three and 43-100 ($26,863.43) dollars, the amount for which judgment should be entered against the defendant, with interest from October 20th, 1919. CONCLUSIONS OF LAW. First. The defendant corporation having agreed to assume the debt of $26,000 owing by the partnership, Jackson, Waldron and Albee, cannot deduct and retain from the note in question the amount of the interest paid by that partnership to Foley in excess of the legal rate. Second. The defendant corporation has a right to have deducted from the note in question the amount of interest paid by it to Foley, the plaintiff, in excess of the legal rate. Third. The plaintiff is entitled to have judgment against the defendant corporation for the sum of twenty-six thousand eight hundred sixty-three and 43-100 ($26,863.43) dollars (which includes $1,279.20 collection fee) with interest from October 20, 1919. DISCUSSION. It appears from the evidence that the partnership composed of Frederick M. Jackson, John Waldron and Orton W. Albee, paid to P. T. Foley, the plaintiff, prior to June 30, 1913, the time the business was assigned by them, to the defendant corporation, and Foley v. Equitable Investment Co. the indebtedness of that partnership was assumed by the defendant corporation, the sum of nineteen thousand three hundred six and 73-100 ($19,306.73) dollars in excess of the legal rate of interest. It further appears that the defendant corporation has paid the plaintiff on the debt of the partnership, assumed by it, and on money borrowed by the defendant corporation from the plaintiff the sum of eight thousand eight hundred twenty-nine and 61-100 ($8,829.61) dollars in excess of the legal rate of interest, making in all twenty-eight thousand one hundred thirty-six and 34-100 ($28,136.34) dollars in excess of the legal rate of interest received by the plaintiff from the partnership and the defendant corporation on thirty-four thousand three hundred ($34,300) dollars for which the note in suit was given by the defendant corporation to the plaintiff. Under the provisions of the Act of May 28, 1858, Sec. 2, P. L. 622, 2nd Purdon 1888, the defendant corporation claims the right to exercise the option given to the borrower or debtor by that Act to retain and deduct such excess from the amount of the thirty-four thousand three hundred ($34,300) dollars, for which the note in this case was given, claiming that the whole amount of that debt is tainted with usury, and that Foley, the plaintiff, has been the recipient of the usury, and is therefore not an innocent party taking over an obligation tainted with usury, without knowledge thereof; and that the change of the partnership into the corporation does not prevent the latter from defending against the illegal interest paid by the partnership to the plaintiff. The plaintiff denies the right of the defendant corporation to set off the amount of interest in excess of six per cent paid by the partnership on the $26,000 debt assumed by it. There does not seem to be any doubt about the right of the defendant, the Equitable Investment Company, to retain and deduct from the amount of the $34,300 note in question the amount of interest paid by it in excess of the rate established by law, but we cannot assent to the proposition of the defendant that it can deduct from that note the amount of the excess interest paid by the partnership to the plaintiff, Foley, on the $26,000 debt assumed by the defendant corporation, as a part of the consideration of the transfer of the partnership business to it. The right of the parties to make a loan where the rate of interest contracted for exceeds that established by law seems to be recognized by the Act of May 28th, 1858, P. L. 652, above referred to. Selser and Bro., 141 Pa., 529. If this debt had been assumed by a person wholly disconnected with and having no interest in the partnership or corporation in question, as it was by the defendant corporation, in our opinion it |