| Ill. | Apr 15, 1860
Lead Opinion
The only question in this case is one of pleading. On a general plea of set-off, for money had and received, etc., the defendant offered to prove that he had paid usurious interest on the note. Had he filed a special plea, setting out the facts which he offered to prove, we presume it will not be questioned that he might have had the interest thus paid deducted from the principal of the note. Else nothing could be more easy than to evade the statute of usury. Whenever the usurious interest is paid in advance, the statute would become a dead letter. Such is not the true spirit of that law-; it cannot be thus evaded, weak as it no doubt is, and comparatively innocent of injury to the usurer.
But it is insisted by the defendant that the usurious interest which he has paid might at any time be recovered back, as for money paid and advanced, or for money had and received; and that having such a demand against the plaintiff, he had a right to set it off in this action. If the premise is correct, the conclusion follows. Whether that be right, depends on the statute of usury. It is this: “If any person or corporation in this State shall contract to receive a greater rate of interest than ten per cent, upon any contract, verbal or written, such person or corporation shall forfeit the whole of said interest so contracted to be received, and shall be entitled only to -recover the principal sum due such person or corporation.” It is manifest that the legislature had no intention of giving a cause of action to the person who has paid usury and fails to make the defense, when sued for the debt upon which the usury has been paid, or agreed to be paid. If Involuntarily pays the principal sum due, and the usury agreed to be paid upon it, that is an end of the matter so far as this statute is concerned. Suppose the party sued upon an usurious note fails to make the defense authorized by statute, but suffers judgment to go against him for the principal and the usurious interest, and pays it; the statute gives him no right to recover back the interest thus paid; and yet he can have no greater right where he pays it voluntarily. It was manifest that it was only the intention of the legislature to furnish a shield for defense and not a weapon for attack, by the passage of this act, and that defense should be made in a legitimate way, according to the well-settled rules of pleading.
The judgment must be affirmed.
Judgment affirmed.
Dissenting Opinion
dissenting. I am in this case unable to concur in the opinion of the majority of the court. While it is undeniably true, that many decisions of the courts of this country may be found, which hold that usury, to be available as a defense, must be relied upon by plea, yet it is believed in every case, it was only because the statute under which the decision was made, had required it to be pleaded. At the common law, the defense might, in actions of assumpsit, and debt on simple contract, be made under the general issue. 1 Chit. Pl. 477. But this rule of the common law was changed by the fourth section of the interest law of 1845, which required the defense to be made by plea. But since subsequent legislation has repealed that requirement, and has not prohibited the defense under the general issue, I am constrained to believe that the common law practice should obtain.
The majority of the court hold that the note in this case, which was given alone for usurious interest, would have constituted a defense to the extent of the sum paid upon it, had it been made under a plea of usury, whilst it could not be set off against a recovery. In general, all debts and demands which are liquidated, and owing by the plaintiff to the defendant, and which may be recovered under the common counts, can be set off, by plea in the nature of a cross-action. This then raises the question whether the excess of usury paid over the legal rate of interest may be sued for and recovered, in indebitatus assumpsit, for money had and received.
So far as I have been able to find, the British courts have unanimously held that it may be so recovered. Browning v. Morris, Cowp. R. 790; Smith v. Bromley, 2 Douglass R. 696, notes; Williams v. Hedley, 8 East, 378 ; Fitzrary v. Gwillim, 1 T. R. 153 ; Astley v. Reynolds, 2 Strange, 915 ; Chit. Cont. (8th Am. from 4th Lond. Ed.) 550, and authorities there cited. And many of the American courts have, without any qualification, adopted' the same rule. State v. Ensminger, 7 Blkf. R. 105 ; Smead v. Green, 5 Porter Ind. R. 308 ; Bunts, Ex'r, v. Tivebaugh, 12 B. Mon. 87; Parchman v. McKinney, 12 Smedes & Marsh. 631; Wheaton v. Hibbard, 20 J. R. 290 ; Boardman v. Roe, 13 Mass. 105" date_filed="1816-03-15" court="Mass." case_name="Jarvis v. Rogers">13 Mass. 105 ; Miller v. Green, 2 N. Hamp. 333 ; Grow v. Albee, 19 Vt. 540" date_filed="1847-04-15" court="Vt." case_name="Grow v. Albee">19 Verm. 540. I might multiply authorities on this point but deem it ujnnécessary, as. these, so far as I have been able to discover, are unopposed, and have not’ been overruled. As far as the weight of judicial determination can do so, I think it has determined the question that the action may be maintained, as a common law remedy. This seems to my mind to be in conformity to principle, and supported by the analogies of the law.
This case does not fall within the rule that parties in pari delicto, cannot recover. The act of agreeing to, or paying usurious interest involves no turpitude, and is not like the agreement to perform an act malum in se. Nor is it within the policy of those statutes which prohibit acts which are immoral, or against good policy. But the object of the statute is to prevent one class of community from oppressing another, having from their situation the power in a great measure to exact their own terms, however hard, from those with whom they deal. It is only prohibitory, imposing no penalty. If it did, however, it is not the penalty which creates the offense or renders the act unlawful. It is the statute which prohibits the entering into the contract. And when money has been received which it prohibits, no legal title or right to retain the money can be shown. It has been acquired in direct violation of the law, and the title is still in the debtor who paid it, and he should be permitted to recover it, precisely as if he had acquired it from any other person, by an action for money had and received. And when money may be thus recovered, it may undeniably be set off, against a demand of the plaintiff.
This action for money hád and received, has, by Lord Mansfield and other judges, been said to depend upon equitable principles. And that.it lies, whenever one person obtains money of another, which he in equity and good conscience has no right to retain. That usury, paid for the forbearance of the payment of money may be recovered, and its collection prevented in equity, seems to be well settled in the courts both of Great Britain and this country. In fact, I am not aware of any case which has denied the chancellor’s power to assume jurisdiction over the question. This, then, if Lord Mansfield is correct in saying that it is an equitable action, would seem to give the right of recovery. •
From these considerations, I am irresistibly impelled to the conclusion that the demurrer should have been overruled, and that the judgment of the court below should be reversed.