155 Mo. 149 | Mo. | 1900
Plaintiff brought suit by attachment against defendant on claims aggregating $1,136. There were several grounds of attachment stated in the -affidavit, among them that defendant had fraudulently disposed of her property with intent, etc. Defendant filed -a plea in -abatement to the attachment and an answer to the petition on its merits. Upon a trial on the plea in abatement there was -a verdict for plaintiff, and on a trial on the merits there was also a finding and judgment for the plaintiff for the amount -of its claim.
The evidence on the part of the plaintiff tended to prove that defendant, who w-as a merchant, had given deeds of trust .on her stock in trade to- certain banks in Joplin and Webb City to secure notes of hers which the 'banks respectively had discounted and at the date- of the deeds still held; that in discounting the notes the banks had charged and received a rate of one per cent a month, and during the time they carried the lo-ans, from the date of the no-tes up to- the date of the deeds, which was several months, the defendant had paid them interest -at that rate. The deeds of trust however -seem to have been given for the face- principal of the notes without interest. Upon thi-s evidence- the court instructed the jury to find for the plaintiff on the plea in abatement. The defendant asked instructions to the effect that giving -a deed of trust to secure -a note upon which the payee had exacted and received usurious interest was not a fraudulent disposition of property, within the meaning of the statutes in relation to -attachments, and also that the statute concerning usury -approved April 21, 1891 (Laws 1891, p. Ill), w-a-s invalid because in violation of certain provisions of the Constitution -specified. The court refused these- instructions. Exceptions were duly preserved and the cause is here on de
Thus a question as to the constitutionality of the statute was presented in tangible form in the circuit court, and is in the record here, and gives this court jurisdiction.
The record presents two questions for our consideration:
Eirst: Is the Act entitled “An Act providing that usury may be pleaded as a defense in civil actions,” etc., approved April 21, 1891, invalid as in violation of any provision of the Constitution of this State?
Second: Is the giving of a mortgage or deed of trust to secure a note bearing usurious interest, or upon which usurious interest has been paid, a fraudulent disposition of one’s property so as to render him subject to be sued by attachment ?
I. The question relating to the constitutionality of the Act of 1891 in relation to usury, has so recently been decided by this court, that it is only necessary now to refer to that decision as settling the question here. Kriebohm v. Yancey, 154 Mo. 67. The question was then carefully considered and in an elaborate opinion by Brace, P. J., the history and development of the law of usury was shown and the unquestionable validity of the statute demonstrated. The act is constitutional.
II. TTpon reading the opinion in the case just cited, it will be seen that the right to take interest, the limitation on that right, and the consequences arising upon its use or abuse are matters of purely statutory enactment, and therefore all questions as to rights and liabilities are to find their answer in the letter or meaning of the statute.
Whilst usurious exactions have always been regarded with disfavor, yet they have been classed as extortions rather
A contract tainted with fraud is void, and courts will not enforce it, but a contract tainted with usury is not void, and courts will enforce them, first stripping them of the usury. [Ferguson v. Soden, 111 Mo. 208.] Even a court of equity will not grant relief against a usurious contract until the party seeking its aid pays what is justly due less the usury. [1 Story Eq. Jurp. (12 Ed.), sec. 301.] And until the act of 1891, one who voluntarily paid usurious interest could not recover it back or plead it in part payment of the principal. [Ransom v. Hays, 39 Mo. 445; Rutherford v. Williams, 42 Mo. 18.]
In Farmers & T. Bank v. Harrison, 57 Mo. 503, loc. cit. 509, referring to statutes declaring usurious contracts void, the court say: “We have in Hissouri no such legislative acts. The ‘iniquity’ of an usurious loan 'has long since disappeared from our jurisprudence, except as to the excess above the authorized rate of interest. Even in courts of equity everywhere — which are considered as the purest tribunals — when usury is established, the contract will be enforced for 'the sum loaned, and -the borrower compelled to pay it back. The United States Supreme Court (4 Pet. 205) says, that ‘usury is now only considered an illegal or immoral act, because it is prohibited by law.’ Says another authority: ‘Usury has now ceased to be a crime. It is unlawful to the extent that it is made so by statute, and no further.’ 7 How. (Miss.) 535. It would seem, then, that
In Oates v. National Bank, 100 U. S. loc. cit. 249, the question was, could the bank be held to be a tona fide holder of a note that had been assigned to it as collateral to secure ■a usurious loan; the court said: “The statute under which the bank was organized, known as the National Banking Act, does not declare the contract, under which the usurious interest is paid, to be void. It denounces no penalty other than the forfeiture of the interest which the note or bill carries, giving to the debtor the right to sue for and recover twice the amount of the interest so paid. If we should declare the contract of indorsement void, and, consequently, that no right of action passed to the bank on the note transferred as collateral security, an additional penalty would thus be added beyond'those imposed by the law itself. ‘On what principle could this court add another to the penalties declared by the law itself V ”
The foregoing cases are cited to sustain two propositions, viz.: first, that the law does not regard a contract immoral or fraudulent simply because it is tainted with usury; second, the courts can add no penalty, as a consequence of an usurious transaction, to those which the Legislature has prescribed.
Under the statutes of this State, as they now are, the penalties to which the usurer is liable are:
1st. A forfeiture to the school fund of all interest on a judgment rendered.on such contract in his favor; 2d, a judgment against him for costs in a suit on such a contract; 3d, the borrower may have as a defense pro tanto against the principal debt, whatever usurious interest he may have already paid thereon; 4th, if a mortgage or other lien on personal property be given to secure such a debt, it is to be
III. There was a trial of the cause on its merits, and a finding and judgment for the plaintiff, and although the defendant’s appeal' seems to cover the whole case, yet in his brief the appellant’s counsel suggests no error in that branch of the case, and as he has pointed out none, we will presume there is none.
The judgment of the circuit court is reversed, and the
