be declared paid in full and the mortgages canceled of record.

The court found that the note for $600 was given as a bonus for the loan of $8,000, that the transaction was usurious, and adjudged that the mortgage debt be declared paid and the mortgages canceled of record, but denied to defendants the return of usurious interest paid. Both parties appealed.

1. The contract was made in North Dakota. It was to be performed there. Its validity was therefore governed by the laws of North Dakota, notwithstanding the fact that it was secured by mortgage on Minnesota lands. Ames v. Benjamin, 74 Minn. 335, 77 N. W. 230; Manhattan Life Ins. Co. v. Johnson, 188 N. Y. 108, 80 N. E. 658, 9 L.R.A. (N.S.) 1142, 11 Ann. Cas. 223; McIlwaine v. Ellington (C. C. A.) 111 Fed. 578, 49 C. C. A. 446, 55 L.R.A. 933; 39 Cyc. 905.

The usury laws of Minnesota cannot be invoked to determine the validity or invalidity of the contract, nor will the penalties of our statute be applied. 39 Cyc. 1087; Gale v. Eastman, 7 Metc. (Mass.) 14; Salter v. Embrey, 18 South. 373; American Freehold Land & Mort. Co. v. Jefferson, 69 Miss. 770, 787, 12 South. 464, 30 Am. St. 587. As far as this case is concerned it is as though Minnesota had no usury statutes of any character.

2. The finding that the $600 note was a bonus and the transaction usurious is sustained by the evidence.

Plaintiff urges the principle that there can be no usury without a contract to charge excessive interest, Weicker v. Stavely, 14 N. D. 278, 103 N. W. 753; Egbert v. Peters, 35 Minn. 312, 29 N. W. 134, and he contends that the giving of the $600 note was not part of the contract for the loan. His testimony is to that effect. Defendants' evidence is to the contrary. The finding of the court in favor of defendants settles that point.

3. Intent to exact an excessive rate of interest is essential to usury. Ward v. Anderberg, 31 Minn. 304, 17 N. W. 630; Jackson v. Travis, 42 Minn. 438, 44 N. W. 316. This principle will save a contract which is, on its face, usurious, though not so in fact. The principle means simply that "the appearance is not conclusive * * ** that it is the

fact alone which constitutes usury." Ward v. Anderberg, 31 Minn. 304, 17 N. W. 630. But, where the parties intentionally provide for a

greater interest than the law allows, the law conclusively presumes that they intended the necessary consequences of their act. Holmen v. Rugland, 46 Minn. 400, 49 N. W. 189; Hagan v. Barnes, 92 Minn. 128, 133, 99 N. W. 415; Lukens v. Hazlett, 37 Minn. 441, 35 N. W. 265. The court having found that the contract was usurious, it properly denied plaintiff any relief,

4. More difficult questions arise in connection with the relief asked by defendant.

Defendant asked the return of double the amount of all interest paid. The court denied this. In this the court was right.

The provision of the North Dakota statute that the person making payment of usurious interest may recover back twice the amount paid is in the nature of a penalty. Ward's Adm'r v. Cornett, 91 Va. 676, 22 S. E. 494, 49 L.R.A. 550; Lucas v. Spencer, 27 Ill. 14; Morris v. Taylor, 22 N. J. Eq. 438. It is a general principle of law that penalties imposed by statute have no extra-territorial force, and they will not be enforced outside of the jurisdiction imposing them. This principle is applicable to penalties imposed by usury laws. The courts of this state will recognize the usury laws of North Dakota insofar as they affect the validity of the North Dakota contract, Akers v. Demond, 103 Mass. 318; Houghton v. Page, 2 N. H. 42, 46, 9 Am. Dec. 30, but they will not enforce in this state the penal provisions of those laws. This provision of the North Dakota statute for recovery of double the interest paid will, accordingly, not be enforced in this state, and the trial court properly denied this relief. 39 Cyc. 892, 893, 1087; Wright v. Bartlett, 43 N. H. 548; McFadin v. Burns, 5 Gray (Mass.) 599; Blaine v. Curtis, 59 Vt. 120, 7 Atl. 708, 59 Am. Rep. 702; Western Trans. & C. Co. of Michigan v. Kilderhouse, 87 N. Y. 430; Sherman v. Gassett, 9 Ill. 521; Arnold v. Potter, 22 Iowa, 194.

5. In one particular we think the judgment of the trial court was erroneous. It decreed that the mortgage debt be declared paid in full and the mortgages canceled of record.

It is a well settled rule that a party who seeks affirmative equitable relief against a usurious contract will be aided only on condition of his doing equity. A usurious contract may not be enforced against him, but, if he asks for a cancelation of instruments, he will first be required

to pay what he owes with legal interest thereon, and his so doing will be made a condition to the granting of the equitable relief that he asks. American Freehold Land & Mortgage Co. v. Jefferson, 69 Miss. 770, 12 South. 464, 30 Am. St. 587; Vandervelde v. Wilson, 176 Mich. 185, 142 N. W. 553; Long v. Greene Co. Abstract & Loan Co. 252 Mo. 158, 158 S. W. 305; Owens v. Wright, 161 N. C. 127, 76 S. E. 735, Ann. Cas. 1914D, 1021; 39 Cyc. 989, 1010, 1012; Lindsay v. U. S. Sav. & Loan Co. 127 Ala. 366, 28 South. 717, 51 L.R.A. 393; Vanderveer v. Holcomb, 17 N. J. Eq. 87, 91; Holden Land & Live Stock Co. v. Interstate Trading Co. 233 U. S. 536, 541, 34 Sup. Ct. 661, 58 L. ed. 1083; Chase & Baker Co. v. National T. & C. Co. 215 Fed. 633. This has been the rule enforced in this state in the absence of statute. Scott v. Austin, 36 Minn. 460, 32 N. W. 89, 864. Even where the usury statutes of the state give the borrower the right to a cancelation of securities, such statutes are not recognized extra-territorially and will not be enforced by the courts of other states. Hubbard v. Tod, 171 U. S. 474, 502, 19 Sup. Ct. 14, 43 L. ed. 246; Mathews v. Warner, 6 Fed. 461, 465. The judgment should be modified so as to make the granting of this relief conditional on the payment of the original loan with lawful interest.

1. Helvetia Copper Co. v. Hart-Parr Co. 137 Minn. 321, followed, to the effect that the question whether plaintiff had a right to avoid

a settlement for fraud was a question of fact for the jury.

2. Plaintiff was not, as a matter of law, barred by estoppel, by its acts, or by acquiescence, from avoiding the settlement.

1Reported in 171 N. W. 272, 172 N. W.

Same

return of money paid on liquidated claim not condition precedent. 3. In repudiating a settlement for fraud, it is not necessary as a condition precedent to return the amount of a payment made on a liquidated claim justly due and owing, simply because the payment was made as part of the transaction of settlement.

Sale of machine

remedy for breach of warranty limited by contract. 4. A provision in a sale contract that the sole remedy for breach of a warranty shall be a return of the article sold and recovery of the price paid, is a valid provision, and an action for damages for such breach cannot be maintained.

Same- refusal of vendor to accept return of machine.

5. The refusal of the vendor to receive a return and refund the price does not revive the remedy of damages for breach of warranty.

After the former appeal reported in 137 Minn. 321, 163 N. W. 665, the case was tried before Steele, J., who at the close of the testimony denied defendant's motion for a directed verdict, and a jury which returned a verdict for $6,822.72. From an order denying its motion for judgment in its favor notwithstanding the verdict or for a new trial, defendant appealed. Reversed and new trial granted as to part of issue. T. J. Stevenson, W. B. Anderson and Lawrence & Murphy, for appellant.

George T. Simpson, Henry W. Volk, and Gordon Cain, for respondent.

On February 21, 1919, the following opinion was filed:

HALLAM, J.

This is an action for damages for breach of warranty in the sale of a tractor. In May, 1909, at Charles City, Iowa, defendant contracted to sell to plaintiff an "80 brake horse power 40 tractive horse power gas tractor" to be shipped to Vail, Arizona. Plaintiff agreed to pay the freight and to pay a price of $4,300 less 5 per cent discount for cash. The tractor was shipped and arrived at Vail October 8, 1909. Plaintiff paid the freight and the cash price.

The contract contained the following warranties: "It is warranted that it is well made and of good materials and workmanship. That if properly operated it will develop the rate brake horse power continu

ously and easily. That it will successfully operate a threshing outfit of a size and capacity usually operated successfully by an ordinary steam traction engine, the actual brake horse power rating of which is the same. That for road purposes it will as successfully draw the threshing outfit used with this engine as an ordinary steam traction engine of like actual brake horse power rating will handle its load. That for tractive work on firm footing and level ground, it will pull the same load that can be successfully and continuously pulled week after week by as many ordinary horses as are represented by its tractive rating."

The contract contains this further stipulation: "If inside of six days from the day of its first use it shall fail to fill the warranty with respect to the development of power, notice shall be given to the Hart-Parr Company at their office at Charles City, Iowa, by registered letter or telegram, stating particularly wherein it fails to fill the warranty, and reasonable time given said company to send a competent person to remedy the defects, if any there be, the purchaser rendering the necessary and friendly assistance. If the engine cannot be made to develop the guaranteed power it shall be returned by the purchaser free of charge to the shipping point where received, and the payments made will be refunded, and no further claim is to be made on the company."

The complaint alleges that within the six days the engine failed to develop the guaranteed power; that defendant's agent and expert was present at the time and observed the failure, and undertook to remedy the defect and represented that he had done so; that thereafter plaintiff attempted to use it, but "the same defects in workmanship, material and design and failure to develop power appeared *** and additional defects appeared, in that * * * the explosions in the cylinder

** were not regular and frequently missed," thus diminishing the motive power; that the cooling system was improperly designed so that it became overheated; that the nuts, bolts and castings were of inferior workmanship and material, improperly fitted and joined. It is further alleged that it has been impossible to repair and readjust the engine so that it will operate as provided in the contract; that the defects in construction, workmanship and material are irremediable; that the en gine was a total failure.

The complaint then alleges that on April 26, 1910, plaintiff offered