19 Johns. 147 | N.Y. Sup. Ct. | 1821
delivered the opinion of the Court, There are two questions presented by the case : 1. Whether, when money has been lent upon an usurious contract, and the contract is afterwards vacated, there yet exists such a moral and equitable duty on the part of the borrower, that a subsequent promise by him to pay the money actually lent, can be enforced at law, in an action founded on the promise ? 2. Whether we are to consider the original usurious contract, in this case, as put out of question, either on the ground of its being void, or on the ground, that the judgment has been vacated ?
1. The case of Barnes v. Headley, (2 Taunt. Rep. 182.) contains all the authorities and decisions in the British Courts, on the first point; and, in my opinion, places the validity of the promise, and the sufficiency of the consideration, beyond a doubt. In that case, the original security was confessedly usurious; it was, by mutual consent, delivered up and cancelled, and the borrowers promised to repay the principal and interest; and it was decided, that the plaintiffs were entitled to recover the principal and legal interest. It was an issue out of Chancery, and the Judges merely certified the result of their decision, without giving their reasons at large. It has been repeatedly decided in this Court, that an equitable or moral duty is a sufficient consideration for an actual promise to pay. In Hawkes v. Saunders, (Cowp. 289.) Buller, J. said, “ if such a question were stripped of all authority, it would be resolved, By inquiring, whether law were a rule of justice, or whether it was something that acts in direct contradiction to justice, conscience and equity ; but (he added) the matter has been repeatedly decided.” I consider it entirely settled, that notwithstanding the security be usurious, the money lent is a debt in equity and conscience, and ought to be repaid. This principle has long been acknowledged, and acted upon in Courts of equity. (2 Vesey, 567. 2 Brown's Ch. Cas. 649.) In the latter case, upon an application to set aside a judgment tainted with usury, it was decided, that it could be displaced only by doing what was just, and that it must stand for the money actually paid, with legal interest. In Rogers v. Rathburn, (1 Johns. Ch. Cas. 367.) the Chancellor pro
2. Upon the second point, the case shows, that the contract was, that a bond and warrant of attorney were to be given to secure the loan, and they were given accordingly. Judgment tvas entered up by virtue of the warrant, and that judgment has been set aside; the Court which set aside the judgment, did not, however, pronounce the bond to be void. The case of Scurfield v. Gowland, (6 East, 241.) bears strongly on this part of the subject. In that case, the defendant had granted to the plaintiff an annuity secured by a deed, bond and warrant of attorney, on which judgment was entered. The defendant applied to set aside the judgment, for a mistake in the memorial, and to have the securities cancelled. The Court set aside the judgment, but made no order as to the deed or bond, and there was no proof ef any offer to cancel them. The plaintiff brought an action for money had and received, to recover the money advanced, and the objection was taken, that assumpsit would not lie, the plaintiff still having his remedy on his bond and deed. Lord Ellenborough held, that the plaintiff had contracted for an entire assurance, consisting of several securities, that the defendant had taken away one of his securities, and, therefore, the consideration for the money had failed; and the Court gave judgment for the plaintiff. I think, however, that the positions advanced by the counsel, are more forcible than the reasons given by the Court. They urged, that the defendant having elected to set aside the annuity, and the Court having pronounced judgment upon its illegality, and vacated the warrant of attorney and judgment given to secure it, it was not competent to the defendant to set up the objection, upon the ground, that the annuity was still secured by subsisting instruments, the illegality of which had been declared ; and that it was nugatory to oblige the plaintiff to bring his action, in the first instance, on the bond
This appears to me to be conclusive reasoning, and directly applicable to this case. The defendant has procured the judgment entered on the bond to be set aside, on the ground, that the bond was void for usury; and he has thus deprived the plaintiff of one of his securities, and prevented his entering up a new judgment. The defendant cannot be heard to say, in opposition to his own act, and the solemn judgment of the Court to which he applied, that the bond is a valid instrument. The defendant, and the Court, have pronounced the bond to be void ; and the plaintiff admits that it is void, and has produced it in Court, with an offer to cancel it. It would be nugatory to compel the plaintiff to sue on the bond, that the defendant might avoid it by pleading the usury. I am entirely convinced, that there is no force in the objection, and am of opinion, that the plaintiff should have judgment, stipulating to cancel, and put on file, the bond and warrant of attorney, and the first note.
Judgment for the plaintiff.
Vide Utica Ins. Co. v. Scott, ante, p. 1—7.