134 Mo. App. 449 | Mo. Ct. App. | 1908
This action is on a promissory note dated November 5, 1906, due two months after date, for tbe sum of three hundred dollars with eight per cent interest, payable to A. L. Shoults, signed by respondent John H. Fridrich, and indorsed by Shoults to appellant. The defenses are want of consideration for the note and usury in the transactions out of which it grew. In 1902 Shoults borrowed some money from John H. Yette on a note with Fridrich as surety. This debt ran along until 1904, when cash to pay it was borrowed from C. W. McFarland, Osborne and Fridrich executing a note to McFarland similar to those Yette had taken; that is, with Osborne as maker and Fridrich as payee and indorser. The only conclusion to be drawn from the evidence is that Fridrich was an accommoda
Under the decision in Weimer v. Shelton, supra, respondent, as surety for Shoults, was entitled to interpose the defense of usury to tbe action instituted before the justice of the peace on the note of July 16th. The defense was not used, as the case was settled and dismissed without a trial, in consideration of the execution and delivery of the two notes to Osborne, wherein respondent took the position of maker and Shoults that of payee and indorser.' In other words, the positions of the parties to the notes of September 4th, and those of November 4th given to renew them, were the reverse of what they had been on the previous notes. The usury exacted after the settlement of the case before the justice, if credited on the principal note, would not suffice to discharge it; and appellant was entitled to a judgment for something, unless the prior usury should likewise be credited on the note in suit, by virtue of the statute. [R. S. 1899, sec. 3709.] Appellant insists this cannot be done because, as said, the dealings subsequent to the settlement were entirely detached from previous dealings and stood on a distinct consideration; whereas respondent says the prior usury had wiped out the debt, and there was no consideration for the notes of September 4th.' This is on the theory that our statutes made all the prior agreements to pay usurious interest, void. [Mo. Ann. Stat. 1899, sec. 3708, 3709, 3710.] Not only is usury prohibited, and a defendant when sued for a debt allowed to plead it in defense and have the amount paid for interest in excess of what would have been paid at the lawful rhte, credited on the principal, but now, if usury is paid, it may be recovered back from the borrower or his personal representatives. [R. S. 1899, sec. 3708.] The lender can in no case recover more than the principal with lawful interest, after deducting the usurious interest (3709) and a
“No doubt it must be taken that theré was, in fact, no claim by the plaintiff against the Honduras Government which could be prosecuted by legal proceedings to a successful issue; but this does not vitiate the contract and destroy the validity of what is alleged as the consideration. The authorities clearly establish that if an agreement is made to compromise a disputed claim, forbearance to sue in respect of that claim is a good, consideration; and whether proceedings to enforce the disputed claim have or have not been instituted, makes no difference. If the defendant’s contention were adopted, it would result that in no case of a doubtful claim could a compromise be enforced. Every day a compromise is effected on the ground that the party making it has a chance of succeeding in it, and if he bona fide believes he has a fair chance of success, he has a reasonable ground for suing, and his forbearance to sue will constitute a good consideration. When such a person forbears to sue he gives up what he believes to be a right of action, and the other party gets an advantage, and, instead of being annoyed with an action, he escapes from the vexations incident to it. The defendant’s contention is unsupported by authority.
*458 “It would be another matter if a person made a claim, which he knew to be unfounded, and, by a compromise, derived an advantage under it; in that case his conduct would be fraudulent.”
If a person who honestly believes he has a good claim against another, brings suit on it and this is compromised and dismissed in consideration of the defendant giving a new promise to pay, it looks like the dismissal of the suit and the granting of further time to pay, ought to be a consideration for the promise based on it, even though the claim was without legal merit. But it cannot be said that in all the cases the courts have observed this rule, though often they have. [1 Paige, Contracts, secs. 289, 290, 291; Spielberger v. Thompson, 131 Cal. 55; Murphy v. Murphy, 93 Ill. App. 671; County Court v. Hall, 51 S. Va. 269; Rains v. Lee, 36 S. W. 176; Weilage v. Abbott, 90 N. W. 1128.] The claim on which the new promise is based may have been so palpably without merit that this fact alone convinces the court there, is no room for finding it was asserted in the belief that it was a valid obligation; and in'rejecting such a settlement as consideration for a new promise, the emphasis is apt to be. put on its legal worthlessness rather than the 'bona fides of the claimant. Frequently the new promise itself and the parties to it, are the same persons who were parties to the former illegal transaction,' or else were so intimately connected with it, as to malee it obvious the alleged new promise is but a continuation of the old one and therefore tainted with bad faith. The case of Wheeler v. Land Co., 193 Mo. 379, is one in which the compromise of a suit against the county, the suit having no legal basis as the party prosecuting it was presumed to know, was held no consideration for a new undertaking. In the present instance the plaintiff Osborne was a party to all the usurious transactions subsequent to July, 1904, and had been paid on them much more than the three hundred dollars first lent and lawful interest; which goes to show he did not
Tbe judgment is affirmed.