74 Fla. 399 | Fla. | 1917
This is a suit by Henry L. Coe to foreclose a mortgage against Frederick T. Muller, The Gulf Pine Company and a number of other defendants. Muller and The Gulf Pine Company filed answers and cross-bills setting up, among other things, that the contracts sued on were usurious. To these cross-bills the complainant below filed answers denying that the contracts were tainted with usury, and averring that any condition
Exceptions to such portions of the answers, as sought to defend against the charge of usury on the ground that the violation of the statute was not wilfully done, were sustained, and the complainant below entered his appeal, and assigns as error the judgment of the court below in sustaining the exceptions.
At the time the contract was entered into, Section 3106 General Statutes, 1906, being Section 3, Chapter 4022, Acts of 1891, was in force; but at the time the suit was brought, the Usury Act of June 12, 190-9, Chapter 5960 Laws of Florida, had been enacted, which contained a general repealing section without a saving clause.
The only change in section 3 of each of these acts which affects this controversy is that the Act of 1909, penalizes anyone- for “wilfully violating the provisions” of the act, and in the Act of 1891, the .penalty of forfeiture of interest attaches even if the usurious charge were not wilfully made.
If the contract sued on is governed by the Act- of 1909, which was in force when the suit-was brought, and not by the Act of 1891, which was in force when the contract was made, the answer of Coe to Muller’s cross-bill afforded a good defense, and the exceptions to the answers were wrongfully sustained. The question presented by the appellant’s assignment of errors is, did the Act of 1909
The Act of 1909 repealed “all laws and parts of laws in conflict therewith,” and contained no saving clause. This undoubtedly repealed that part of the Act of 1891 which penalized usurious contracts, and by the use of the word “wilfully” before the words “violating the provisions,” abolished the harsher rule of the Act of 1891 and substituted therefor a more liberal one.
It is contended by the appellees that the repeal of the Act of 1891 does not affect a usurious contract made while that statute was in force, and cites Mitchell v. Doggett, 1 Fla. 356, in support of his contention, which isolated paragraphs taken from the opinion seem, to justify. The court in that case was considering what effect the passage of the Usury Act of 1844 had on a contract which was made prior to its passage while the Usury Act of 1833 was in force, and the opinion must be considered in connection with the statutes which were under consideration. Section 3 of the Act of 1833 fixed the penalty for usury, and the Act of 1844 merely changed the lawful rate of interest from ten per cent, to eight per cent. It expressly repealed the first and second sections of the Act of 1833, but left the penalty clause unrepealed, and this provided that on any usurious contract “the interest on the usurious contract shall be void and the obligor or obligors forever exonerated from the payment of the same.”
The opinion in Mitchell v. Doggett, supra, was predicated upon the theory that the contract sued on was void. At the outset the court said: “The case at bar must stand upon the law in relation to the contract itself, and we can find no authority that declares, that a contract rendered void by statute, can, upon a repeal of that
Neither the Act of 1891 or 1909 makes a contract for usurious interest in excess of ten per cent. void. It is made unlawful, and the usurer may suffer the loss of the entire interest if the borrower chooses to exercise his privilege of avoiding payment by proper plea charging the usury. It is a privilege he may exercise or not, and may be taken from him or modified, by legislative enactment. The Act of 1891 allowed the borrower to defend against the payment of usurious interest whether contracted for wilfully or not, and the Act of 1909 deprives him of this defense unless usury defended against was wilfull.
Usury being merely a statutory defense, not founded upon any common law right, either legal or equitable, it is clearly within the power of the legislature to take it away.
The Supreme Court of Maine in Holmes v. French, 68 Me. 525, has carefully pointed out the distinction in the effect of a statute which repeals one which declares usurious contracts void, and one which merely penalizes the usurer by giving the borrower the privilege of avoiding it by proper plea, as follows:
“Had this note been given under the Stat. of 1821, c. 19, which was in terms prohibitory, and declared that all contracts made in violation thereof ‘shall be void/ there would be much force in the proposition, and- reason as well as authority would sustain us in holding that the note would not be made valid by the mere repeal of the statute, the violation of which made it void. But the Stat. of 1821, c. 19, was very materially changed in 1834. Stat. 1834, c. 122. Its penal provisions were eliminated, so that when it became embodied in the revision of 1841, (R. S. of 1841, c. 69, in force when the note in suit was made) it became remedial in its character. Chapter 69 fixed the legal rate of interest at six per cent., and provided two remedies in behalf of debtor parties to contracts in which was reserved usurious interest, viz: 1.
Whether we regard the forfeiture of the interest when more than ten per cent, is reserved, charged, or taken for a loan, as a penalty, or as a mere matter of defense which the borrower may avail himself of or not, the effect of the repealing section in the Act of 1909 on the Act of 1891, is the same. Considering it as a penalty, the authorities in this country very generally concur in the doctrine that the repeal of usury laws, without a saving clause, operate retrospectively, so as to cut off the defense of usury for the future, even in actions upon contracts previously made. Ewell v. Daggs, 108 U. S.
The strongest case in support of this doctrine is Ewell v. Daggs, supra, where it was held that even if the repealed statute declared a usurious contract to “be void and of no effect for the whole premium or rate of interest only,” that it wás to be taken as meaning “voidable merely, that is, capable of being avoided, and not as meaning that the act or transaction is absolutely á nullity, as if it never had existed, incapable of giving rise to any rights or obligations under any circumstances.” Continuing, the court said, “The effect of the usury statute of Texas was to enable the party sued to resist a recovery against him of the interest which he had contracted to pay, and it was in its nature, a penal statute inflicting upon the lender a loss and forfeiture to that extent. Such has been the general, if not uniform, construction placed upon such statutes. And it has been quite generally decided that the repeal of such laws, without a saving clause, operated reprospectively, so as to cut off the defense for the future, even in actions upon contracts previously made. And such laws, operating with that effect, have been upheld as against all objections, on the ground that they deprived parties of vested rights or impaired the obligation of contracts. The very point was so decided in the following cases: Curtis v. Leavitt, supra; Bank v. Allen, supra; Welch v. Wadsworth, 30 Conn. 149; Andrews v. Russell, 7 Blackf. (Ind.) 474; Wood v. Kennedy, 19 Ind. 68; Danville v. Pace, supra; Parmelee v. Lawrence, supra; Woodruff v. Scruggs, supra.
It is not necessary for us to adopt the rule of the Supreme Court of the United States, as laid down in that case, on the effect of the repeal of a statute declaring any part of a usurious contract void, as no such statute is before us for consideration.
The cases which hold that the repeal of a usury statute, does not affect contracts made when the statute was in force, deal with the statutes which make the contracts void, or where there are statutes to the effect that “the repeal of a statute does not affect any right which accrued, any duty imposed, any penalty incurred, nor any proceeding commenced under and by virtue of the statute repealed.”
In North Carolina usurious contracts are “void,” and the Supreme Court in Pond, Adm’r. v. Horne, 65 N. C. 84, aptly, draws a distinction between such contracts and
“The case turns upon the effect of the repealing clause. The old usury act is repealed absolutely, and the courts can give no further effect to it, but so far as the act has already had an effect, that of course, is not disturbed by the repeal.
“This rule as to the effect of the repeal of a statute is settled by the cases both in England and in- this country, and it is so consonant with the reason of the thing, that discussion is not called for.
“The question is, was the bond sued on, made void by force of the old statute, or Was the effect of the statute merely to make the bond voidable by plea? If the former, and nothing was left to be done, the repeal of the statute has no operation in regard to a matter ‘passed and closed.’ Dwarris on Statutes, 676. If the latter, and something was to be done in order to give effect to the statute, the repeal stops its further operation.” “Our case then, is narroAved to this, is a usurious contract made void by force of the old statute per se, or is it necessary to plead the statute in order to give full effect? In other words, is the contract void by force of the statute, or is the statute only a bar to the action? We are entirely satisfied that the former is. the true construction. The words are plain, ‘all contracts, bonds, etc., shall be void.’ ” “In short, the contract as alleged in the plea of usury by force of the statute ‘was, and is wholly void in law’ and the subsequent repeal of the statute does not give Adtality to that which was dead, for in the words of Dwarris the effect of the statute is ‘passed and closed.’ ”
There seem to be little if any conflict in the authorities on the doctrine that where a usury statute does not declare the contract or any part of it void, but imposes
The act of 1891 comes within the first classification, and reason and precedent support us in holding that the repeal- of that act without a -saving clause, and the enactment of the Act of 1909, which forfeits the interest only when there has been a wilful violation of the usury law in relation to charging more than ten per cent. interest, affects all actions even if the contract was niade when the former act was in force.
It follows therefore that the Circuit Judge erred in striking from the appellant’s answer to the cross-bill, such parts of it as set up the defense that he had not wilfully violated the provisions of the usury law.
The decree is reversed.