36 Vt. 183 | Vt. | 1863
I. As to the $1500.00, claimed to have been paid as usury in the purchase of the Haverhill factory. The report of the referees shows that the purchase of the factory was a part of the. transaction by which Mussey agreed to raise for Low the sum of $20,000.00. The memorandum signed by Mussey, dated
We next inquire was that transaction a loan of money by Mussey to Low, or merely an agreement to guarantee Low’s notes and drafts to that amount? This was a fact for the referees to find, and we think that the report, and the facts stated in the report, both show that it was in substance a loan.
The nature of the transaction 'and the necessities of Low tend to show that Mussey was not merely to guarantee Low’s drafts and notes, but was relied upon to furnish money to the amount of $20,000. for two years to pay them. The mode of doing the business shows this — Mussey paying Low’s notes and drafts to that amount without looking to Low for funds, — acting throughout upon the basis that he had $20,000 of Low’s money in his hands for Low to draw upon. In this matter it is not the form of doing the business, but the substance that we are to regard. The memorandum made by Mussey, Nov. 12, indicates a loan; it is “ $20,000 for two years.” The report finds that “ Low understood, when the arrangement was agreed upon, that Mussey was to furnish the $20,000 in money.”' When the report states, that Mussey did not loan him any money, hut raised money for him by endorsing his notes and accepting his drafts, and selling them to the brokers, and transmitting the proceeds to Low, and paying the notes and drafts when they matured, — it. must he fairly understood as showing only the manner in which the business was done. That mode was more' consistent with the idea of a loan, than of a mere guaranty. The language of the mortgage has been relied upon in argument to show that it was merely an agreement to guarantee Low’s notes and drafts. It does unquestionably show that when the mortgage was made it was expected that Low should draw upon Mussey from time to time as he needed money, and that Mussey should accept and pay such drafts, or should endorse his notes for the same object. But, though it thus shows the form in which the parties expected the business would be done, it is entirely consistent with the understanding that the advancement
The purchase of the factory — was it merely .a cover for usury? The report says that the price of the factory was $2500 ; "that it was worth in fact much less than $2500, and was so understood ■by both Low and Mussey, and Low bought it at an advance beyond its real value to induce Mussey to assist him as already stated. It does not appear that Low and Mussey spoke of any •other price than $2500, or at what sum they then estimated its •true value. They would not be likely to say much on that point. The referees find its true value at that time to have been not over $1,000. The circumstances relied on to show that the parties considered it worth more — the letter of Low, his advice to sell it with the machinery at $3,000, — ‘his estimate of it in the assignment at $1,500, &c., are all too indefinite and insignificant to raise a reasonable doubt but that both fully understood that ■the purchase was a mere cover for usury. We are obliged to- so regard it.
The payment of this $2500, therefore, included at least $1500, paid as usury. The case comes within the principle of Austin v. Harrington, 28 Vt. 130 ; and the money thus paid to Mussey can not be withheld by his Administrator from the party legally entitled to it.
II. As to the $1720.00 paid Mussey by the assignees at the request and by the direction of Low.
This claim was made by Mussey after Low’s failure and assignment. He claimed that when Low’s drafts matured, in ■order-to pay them he was obliged to procure money of a broker by the name of De Grand, to whom he paid a bonus for the money to the amount of $1720. . Low claimed that by the agreement between them this was money which Mussey was bound to raise — that he {Low) had already paid the going rates of interest when Mussey got the notes discounted, and sent him only the net proceeds — and that it was usurious, and paying for money that Mussey was bound to furnish by his'contract. Mussey claimed that it was merely reimbursing him for money
These two sums therefore, being money which the estate of Mussey has no right to retain, the question arises — has Low the right to sue for them, or is that right vested in his assignees.
I. As to the $1500 paid as usury. The note for $2500 was considered as. an advancement, and was secured by the mortgage
It has frequently been decided in this state that the right to recover for money paid for usury is personal to the party paying it; that it is in the nature of a tort, and the right to sue for it does not pass to assignees in bankruptcy, and that it can not be recovered by creditors through the trustee process. The opinion of Judge Prentiss, in Moore v. Jones, reported in the 23 Vt. 739 (decided in the U. S. Dist. Ct. for Yt., Oct., 1848), has not been followed in this state, and the very point there held, that the right to sue for usury was in the nature of a contract and would pass to assignees in bankruptcy, has since been ruled the other way in Nichols et al. v. Bellows, 22 Vt. 581.
In Nelson v. Cooley, 20 Vt. 201, the Court, held, where the plaintiff had given notes to the defendants, which included usury, and which were soured by a mortgage, and afterwards sold the mortgaged premises subject to the whole incumbrance and the grantee paid the notes, that the plaintiff could sue for and recover back the usury — that although the purchaser paid the notes, still in substance the payment was from the plaintiff’s money, and he was really the party who paid the usury.
In this case the assignees took the property subject to the
But there is another and very important consideration in this case. Mussey died in January, 1856. This debt appears to have been paid to him in 1853. Neither before nor since his decease does it appear that either the assignees or the creditors of Low have demanded the repayment of this money to them ; nor have they interfered with the litigation of this claim, or with its prosecution by Mr. Low, or interposed any objection to its recovery by him. It is now too late for them to present it to Commissioners, or to seek to enforce their rights to it if they had any. After this lapse of time by which their rights, if any., have been barred, their assent to its collection by Low may be presumed. They can not collect it ofif Mussey’s estate. This being so, upon what just ground can his estate refuse to pay it to Low ? If the Administrator could say that the estate was liable to be sued by- the assignees — if in fact payment to .Low would not
As to the claim of $1720.00. In the view we have taken of this debt, the reasons drawn from the decisions in this state upon the right of the party paying usury to recover it back do not apply. This must be regarded as money obtained from the assignees and from Mr. Low by fraud.
It was money that really belonged to Low, after the long neglect and omission of .the assignees to make claim for its restitution, and when by lapse of time in the settlement of Mussey’s estate all liability for its payment by the estate to them has become barred, we think .that their assent to its collection by Low .may be presumed; and thus the estate not being-liable elsewhere is not at liberty to interpose the defence that they may be liable to the assignees. While this view is taken by some of my associates, there is still another that deserves consideration. It appears from the report of the referees that Mr. Low put into the hands of. the assignees the sum of $2800 to be applied upon his debts ; that this amount was not subject to or included in the assignment, but was held by them and paid out by Mr. Low’s directions rather as his agents than as assignees. It does not appear that this sum was kept separate from the moneys received under the assignment, or that any particular debt was paid with it.
It appears however that in the payment of this sum of $1,720, the assignees acted wholly pursuant to the directions of Mr. Low; that they as well as he objected to its payment upon the ground that the claim as presented by Mr. Mussey, was usurious and ought not to be paid by them, — and that its allowance and payment was finally agreed upon between Mussey and Low, and paid by the assignees by the request and direction of Low. It is obvious from the report that the money would not have been .paid without the consent of Low, and that it was paid because Low and Mussey agreed that it should be. When thus acting in obedience to Low’s wishes and instructions, we think they ought to be regarded as paying the amount out of that fund
•The judgment of the county court is affirmed, and the judgment to be certified to the probate court.