62 N.H. 300 | N.H. | 1882
The payments indorsed on the note were made and received as payments of interest, and neither party intended that any part of the money paid should be applied upon the principal. The interest was paid in advance, although the terms of the note did not require it; and the payment of $52 for each six months' interest shows that it was the understanding of both parties, when the last payment was made, that the principal had not been reduced by the previous payments. Ordinarily a payment of an illegal claim, with full knowledge of its illegality, is irrevocable. Caldwell v. Wentworth,
The defendant having appropriated the payments to the interest, no other application could be made except at his election. The payment of the extra interest being regarded as compulsory, he might have recalled the application made by him at the time of payment, and sued for the penalty within the time limited by statute, in which case he would have recovered three times the illegal interest; or he might have recovered back the money paid as usury in an action for money had and received at any time within six years; or he might have had it applied as a payment *302
upon the principal; — but until he made his election, the law would not disturb the application made by the parties at the time of payment; and such election must be made within the period of the statute of limitations of six years. It does not appear that any demand was made upon the plaintiffs to apply the excess of the payments above the legal interest upon the principal of the note, or any notice given of the defendant's intention to avoid the application of the payments to the interest alone prior to the commencement of the action. As the defendant now objects to the payment of the illegal interest, the amount paid within six years in excess of six per cent. may be applied as a payment upon the note, as of the date of the writ, in the same manner as if filed in set-off. No interest should be allowed on the usurious payments prior to the date of the writ. Until the defendant elected to make a different appropriation, they are to be treated as voluntary payments of interest. In Briggs v. Sholes,
The defendant contends that the statute of limitations does not apply, and that, the payments being indorsed on the note, the law applies them, first, to the extinguishment of the legal interest due, and the balance in payment of the principal; and the case of Wells v. Robinson,
The payments indorsed on the note were specifically applied by the defendant to the payment of the interest; and, although by reason of the usury he is not irrevocably bound by the application then made, he still has the legal right if be chooses to insist that the money shall be so applied. The fact that it is optional with the party paying to rescind the application of the payment does not authorize the court to make an appropriation contrary to the intention and understanding of the parties. If, as the defendant contends, the law controls the application of the payments regardless of the intention of the parties in this case, it follows that no usurious interest has been paid or received on the note in suit, and *303 the defendant could not at any time have maintained an action to recover the penalty given by statute for taking usurious interest. The result of such a doctrine would be to suspend the operation of the statute of limitations in all cases where the usurious payments are indorsed on the note.
Case discharged.
SMITH, J., aid not sit: the others concurred.