155 Mo. 66 | Mo. | 1900
This case is the counterpart of the case of Central National Bank v. Haseltine, 155 Mo. 58. It is an action under section 5198 R. S. H. S. 1878, to recover $831.70, that being double the amount of the usurious interest paid by the plaintiffs to the defendant on the note for $2,240, on which the defendant obtained judgment against the plaintiffs in the other case referred to. It is conceded that the plaintiffs paid the defendant the sum of $415.85 to procure extensions of the note for $2,240, from time to time, between October 29, 1894, and June 14, 1896. It is also conceded that such payments were for usurious interest, and that the defendant in accepting and receiving the usury has violated the Federal statute. The sole defense is that the party who has paid usurious interest can not
In support of this contention the defendant relies upon Wheaton v. Hibbard, 20 Johns. (N. Y.) 293; Hawkins v. Welch, 8 Mo. 490; Rutherford v. Williams, 42 Mo. 18; Livingston v. Burton, 43 Mo. App. 272, and McBroom v. Scottish Inv. Co., 153 U. S. 318.
In the New York case it was pointed out that the statute of that State permitted a borrower to recover the excess of interest, over the legal rate paid, in an action of debt, if the suit was begun within one year, and if the borrower did not sue within such year, then any other person could institute such an action within the second year, and one half of the recovery went to the person suing and the other half to the poor of the town in which the offense was committed. It was also shown that at common law, under the statute of 12 Anne, ch. 16, “the party receiving more than the legal rate of interest forfeited the treble value of the moneys or things lent” to be recovered in an action for money had and received. “But the party injured can not recover any part of the principal and legal interest; and to entitle him to maintain the action, he must show that he has done all that equity requires. Bacon, Usury, G. 1 Term Rep. 153.” And it was held that the statutory remedy did not supersede the common law remedy, but that the remedies were concurrent. The suit was not brought until more than two years after the offense was committed, and it was held that the action was under the common law remedy, and that at common law the suit could not be maintained so long as the principal and legal interest remained unpaid, but as the defendant had not pleaded or proved that it had not been paid, it would be inferred that it had not been paid.
Hawkins v. Welch, 8 Mo. 490, was an action to recover
Rutherford v. Williams, 42 Mo. 18, was a suit by a grantor against the cestui que trust in a deed of trust for the value of the property sold under the deed of trust, less the debt secured thereby, which it was alleged had been fraudulently foreclosed. There was an allegation that usurious interest had been exacted. In the course of the opinion it was noted that usurious interest once paid could not be recovered (Ransom v. Hays, 39 Mo. 445), but it was held that equity would not aid a borrower except on condition that the principal and legal interest were paid.
Livingston v. Burton, 43 Mo. App. 272, was an injunction to restrain a sale of real estate under a mortgage and for a cancellation of the mortgage. The circuit court found that usurious interest had been paid, which equalled the amount of the debt, and therefore canceled the mortgage. The Kansas City Court of Appeals reversed that decree, and held that usurious interest once paid could not be recovered or applied in extinguishment of the principal, and that the plaintiff was not entitled to have the mortgage in question canceled unless he offered to pay what is due on the principal debt, “leaving out of consideration the amount of usurious interest paid.”
McBroom v. Scottish Inv. Co., 153 U. S. 318, was an action under the statute of New Mexico by a borrower to recover double the amount alleged to have been paid by him to the lender as usurious interest. The statute of New Mexico, in this regard, is very much like the National Banking Act, except that the limitation is three years instead of two.
“In Duncan v. First Nat. Bank of Mount Pleasant, in the district court of the United States for the western district of Pennsylvania, it was said: ‘Erom the origin of the loan, from the retaining of the first discount through all the renewals up to the time of final payment of the principal, or up to the time of entering judgment, there is a locus penUentiae for the party taking the excessive interest. Any time till then he may consider the excessive interest paid on account of the loan, and so apply it and lessen the principal...... Up to that time he may make his election. When payment is actually made or judgment entered, the election is made, and if, as in these cases, judgment is entered for the face amount of the notes or full amount of the loan, or payment is taken in full without any reduction by taking out the excessive interest, the cause of action is complete.’ Thompson’s National Bank Cases, 360, 362.
“In Stevens v. Lincoln, 7 Met. 525, 528, which was an action under a statute of Massachusetts, authorizing suit to recover threefold the amount of interest paid, it being alleged that interest had been paid at a greater rate than the law allowed, the court said: Tn regard to the payment of $1,158.91, whether this was a payment of the usurious interest or a part of it, we are of opinion, that while the usurious interest is unpaid, there remains the locus peniientiac, that the party may relinquish it, and recover for the balance of his debt — the contract not being rendered void by the
“So in Harvey v. National Life Ins. Co., 60 Vermont, 209, 211: ‘As the result of that transaction the plaintiff went away with nine hundred dollars in money — all he had ever received from the defendant as his own money, and the defendant with the plaintiff’s note for $1,000......Hence the one hundred dollar usury entered into and became a part of the mortgage note. The payments made by the plaintiff and by Mrs. Hardaker prior to the time of taking up the note, would in law be applied towards the payment of the legal portion of the note......All the payments made by her, as well as those made by the plaintiff, up to the final payment, were in law to be applied towards the liquidation of the legal portion of the note. Hence, the plaintiff is entitled to recover what was then legally due upon the note after applying the payments made thereon in liquidation of the legal portion of the note with interest.’ To the same effect are the following authorities: Kendall v. Crouch, 88 Kentucky, 199, 202; Smith v. Robinson, 10 Allen, 130, 132; Hawkins v. Welch, 8 Missouri, 490, 492; Hall v. Fairfield Bank, 30 Nebraska, 99, 102; Jackson v. Garner, 79 Georgia, 415.
“It is proper to say that the questions determined in Barnet v. National Bank, 98 U. S. 555; Driesback v. National Bank, 104 U. S. 52; Stephens v. Monongahela Bank, 111 U. S. 197, and Carter v. Carusi, 112 U. S. 478, do not arise here. No question is presented in the case before us as to whether the borrower, when sued for the principal debt and legal interest, may, of right, set off the amount of any penalty prescribed by the statute of New Mexico.
“The judgment of the Supreme Court of the Territory is therefore affirmed.”
This must be taken as an authoritative interpretation of the meaning of section 5198, R. S. U. S. 1878, and as that is a ‘Federal statute, the construction thereof by the Supreme Court of the United States must be followed by this court. Under the rule there laid down, the plaintiffs herein are not entitled to maintain this action, for there is no allegation or proof that they have paid or offered to pay- the debt actually due, that is the amount actually received by the plaintiffs from the defendant.
It is contended, however, by the plaintiffs that the decision of the Supreme Court of the United States in Brown v. National Bank, 169 U. S. 416, establishes a different rule and authorizes a recovery in this case. This is a misapprehension. Mr. Justice Harlan delivered the opinion in the McBroom case and also in the Brown case, and in the Brown case he cites and reaffirms the McBroom case. In the Brown case it did not appear how much of the usurious interest had been paid and how much was included in the face of the note. It is argued, however, that including it in the face of the note was a payment, b.ut the Supreme Court held that
Thus it will be seen that the Supreme Court of the United States puts the same construction upon the Eederal statute, that courts of equity and the courts of law, where the statute of 12 Anne is in force, place upon the.rights of the borrower and lender; that is, that courts will neither aid the lender to collect usurious interest promised to be paid, nor will they aid the borrower to recover such usurious interest actually paid, unless he has paid or offers to pay the amount of money actually received from the lender.
The judgment of the circuit court is therefore reversed and the cause remanded to be proceeded with in accordance herewith.