Dunbar v. Wood

6 Vt. 653 | Vt. | 1831

The opinion of the court was delivered bky

Royce, J.

— There is not enough stated in the case to avoid the note for extortion or oppression. Under the other point two questions are raised. 1. Whether the original transaction was a case of usury. 2. If it was, what is the effect upon this note.

The first question depends upon the intent of the parties at the time. If the excess of six dollars-above the amount of the execution, when the testator and Denison assumed the pajunent of it, was meant only as a compensation for trouble and expense anticipated, it did not constitute usury- But if intended to cover a loan of money it was usurious. The case does not enable us to determine how this was found. And as the jury may, under the charge given, have found it a mere cover for a loan, the other question might be considered.

The first note was given during the operation of the former statute, which, as it was always construed, avoided the usurious part of the contract, and gave a penalty, . The one in suit was executed under the present statute, which avoids the whole contract. And the question is, whether this note is subject to apportionment, on the principle of the old act, or is wholly void under the new. The argument of its total invalidity supposes, that in the exchange of securities there was a new loan, and a new reservation,of usury. As the case, however, discloses no evidence of any actual stipulation to that effect, the ground of the argument can be established only by implication. But we are not disposed to resort to implication, when the act may have a sufficient operation without it. And this is effected by leaving the statute to operate on the actual contract for usury. All the leading doctrines in reference to the intermingling of an usurious loan with a legal demand, the forbearance of a pre-existing debt upon a new security with an usurious reservation, and the substitution of one usurious security for another, may be sustained on this ground. In each case, the usurious contract is made void, and in the last the substitute is void, because the original was so: it is one void contract for another. The note for which the present is a substitute, was void for part, and good for the residue, And by analogy, this should be subject to no greater infirmity. It seems to be indifferent from what cause the void excess originated under the old law, so long as, by that law, it did not vitiate the remainder of the debt. Whether it arose from usury, from mistake, or partial failure of consideration, the consequence is the same under the new law, unless the latter has been violated by a new agreement. In this view of the case, it is resolved into a question of consideration, as affected by the former statute, and not of usury under the present.

It is insisted that the note is necessarily void, from the single fact that it contains an excess of interest. And the language of the statute is appealed to in support of this position. But the expressions there used have reference only to the usurious contract, against which the act is directed. They are intended as descriptive of that contract, and prohibitory of it. This fact is therefore not entitled to the operation contended for, unless the excess was included in the note as usury, or the price of forbearance.

. We regard these views of the case as consistent with the object and terms of the new statute, while they meet the general purpose of the proviso attached to it, which saves all rights accruing or accrued under the former act. They also appear to be called for by the state of things resulting from this change of statutes. Many existing securities being founded, like the Bote in question, on considerations which originated before the present act, are probably obnoxious to the objection now made. And the interests of creditors'might be endangered to a great extent, were such securities to be avoided, and the creditors compelled to resort to evidence, and causes of action, as they existed under the former statute.

Judgment of the county court affirmed.