McDonald v. Smith

53 Vt. 33 | Vt. | 1880

The opinion of the court was delivered by

Ross, J.

I. By the demurrer to the third plea, it is admitted that the first five items in the plaintiff’s specification were received by the defendant as extra interest or usury, upon the plaintiff’s mortgage note for 13500 ; that the mortgage has been foreclosed, and these items allowed the plaintiff in ascertaining the sum due on the mortgage note, at the instance of an attaching creditor, and against the protest of the plaintiff; and that the decree remains in full force, unappealed from. It is well settled, that the right to have usury applied in payment of the note, in respect to which it was paid, or to recover it in an independent suit, is personal to the party paying it. If the plaintiff had appealed from the decree, he would in all probability have defeated the claim of the attaching creditor, to have the usury applied in reduction of the sum due on the mortgage note. But he did not appeal, and is as firmly bound by the decree, applying the usury in reduction of the sum due on the mortgage note, as he would be by a similar judgment at law. It was decided by this court in Day v. Cummings, 19 Vt. 496, that when the usury was included in a note, and the note had passed into a judgment, and the judgment had been paid, the right of the party paying it had become adjudicated, and he was not at liberty thereafter to recover it back. Much more, when by a subsisting judgment, the usury paid has been deducted and allowed, is the right of the party paying it adjudicated, and be thereby barred from recovering it a second time. Hence, the demurrer to the third plea should have been overruled, and that plea have been adjudged sufficient.

II. The fifth plea covers the sixth, seventh, eighth and ninth items of the plaintiff’s specifications. These items are for usury paid on a mortgage note for fifteen hundred dollars. That note has passed into a judgment at law, without any of these items having been deducted or considered. It is settled by Grow v. Albee, 19 Vt. 540, and Ward v. Whitney, 32 Vt. 89, that the right to recover usury paid in respect to a note, but not included therein, nor indorsed thereon, is not barred by the recovery of judgment on the note ; nor does it matter whether the note, or judgment thereon, has been paid or not. While the party paying it might have it deducted, or plead it in offset, when sued upon the note, he is not bound to have it so applied, nor to plead it in offset; and his neglect to do so does not bar his right to recover it back in an independent suit. Such usury, usury paid eo nomine, gives the party paying it an immediate right of action against the party receiving it, for its recovery back. The money so paid is held by the party receiving it, as received without consideration, and to the personal use of the party paying it. On these principles the facts, admitted by the demurrer to the fifth plea, do not constitute a bar to the plaintiff’s right to recover the four last items of his specification ; and that plea was properly adjudged insufficient by the County Court. The result is, the judgment of the County Court is reversed, the demurrer is overruled as to the third plea, and that plea adjudged sufficient; and the fifth plea adjudged insufficient on demurrer, and cause remanded.