53 A.2d 673 | Md. | 1947
This suit was brought by Harry J. Kaufman and Elizabeth M. Kaufman, his wife, of Baltimore County, against Clarence M. Plitt, of Baltimore City, to obtain an injunction and accounting. They allege in their bill of complaint that from time to time from 1932 to 1935, while defendant and his brother, E. Wilbur Plitt, were conducting a wholesale meat business, defendant advanced sums of money to complainants' son, Roland Kaufman, a retail meat dealer, when he was unable to make prompt payments for purchases of meat. They allege that they signed for their son eight promissory notes in the total amount of $11,750, but that $2,750 of this amount was for interest and carrying charges; and that in May, 1935, the son gave four checks totalling $650, for which defendant advanced $520, and the father gave a check for $500, for which defendant advanced $450. They then allege that in 1936 defendant represented that the total amount due on the notes and checks was $6,893.22, and warned the father that he *610 would institute criminal prosecution against the son for obtaining goods under false pretenses, a charge he knew to be false, unless both parents should sign a confessed judgment note; and that on February 1, 1936, induced by defendant's threat, they gave him a note for $7,500. They further allege that on March 12, 1937, defendant obtained on the note in the Superior Court of Baltimore City a judgment by confession against complainants for the sum of $7,552.50 and attorney's commission of $750 for collection; and on July 3, 1946, he caused a writ of fierifacias to be issued on the judgment, whereupon the sheriff levied on their home at 1005 Leeds Avenue, which they own as tenants by the entireties, and advertised it for public sale on July 30. They charge that the judgment includes usurious interest amounting to $3,700, and that the amount actually due with legal interest (after deducting $500 paid for two waivers of the judgment lien, the first given in July, 1937, the other in January, 1939) does not exceed $7,500; and accordingly they tender a certified check for $7,500 payable to the order of the clerk. They pray for an injunction to prevent sale of the property under execution, and an accounting to determine the amount legally due on the judgment. Defendant demurred to the bill, and he is now appealing from an order overruling his demurrer.
From earliest times in history the taking of excessive interest for the loan of money has been regarded with abhorrence. In medieval England, the people, especially the English Church, held the opinion that the payment of any interest for the loan of money was corrupt and sinful. Under laws promulgated in the 10th and 11th centuries, when a man was found to be a usurer, his chattels were forfeited to the Crown and his lands escheated to the lord of the fee. Gray v. Bennett, 3 Metc., Mass., 522, 527;Dunham v. Gould, 16 Johns., N.Y., 367, 8 Am. Dec. 323. In 1545 Parliament adopted the Usury Act, Statute of 37 Henry VIII, ch. 9, providing that any contract for the loan of *611 money at a rate of interest higher than 10 per cent. should be wholly void. Likewise in Colonial America, the usury statutes, modeled after a later English Act, Statute of 12 Anne, ch. 16, made all usurious contracts void. In Maryland it was held by the Court of Appeals prior to 1845, in accordance with the English decisions, that a borrower, having a moral obligation to return the amount borrowed and the legal interest, could not obtain relief as a plaintiff either at law or in equity, except upon the condition that he would pay the amount due after deducting the illegal interest, but when in court as a defendant he could relieve himself from the entire contract because the statute had declared it utterly void. In 1845 the Legislature enacted that any person guilty of usury shall forfeit all the excess above the real sum actually loaned and the legal interest on such sum, which forfeiture shall enure to the benefit of any defendant who shall plead usury and prove the same. Laws of 1845, ch. 352, Code, 1939, art. 49, sec. 4. The effect of the Act was to compel the borrower who, as defendant, sought to extricate himself from a usurious contract to do exactly what he was before obliged to do when he asked to be protected against it in the position of a plaintiff.
This Court has held that no device or subterfuge of the lender will be permitted to shield him in taking more than the legal interest on a loan. In whatever part of the transaction usury may lurk, or in whatever form it may take, or under whatever guise the lender may attempt to evade the law, the court will seek to ascertain what the contract actually was between the parties and give the debtor relief. Andrews v. Poe,
At common law a person who has paid excessive interest may recover it in an action for money had and received. The law is established in this State that a borrower in a usurious contract is not in pari delicto with the lender, and hence if the borrower has paid money upon a usurious contract, he may recover at law or in equity the excess paid beyond the principal and lawful interest, but no more. West v. Beanes, 3 Har. J., Md., 568; Grinder v. Nelson, 9 Gill, Md., 299, 52 Am. Dec. 694;Scott v. Leary,
Defendant contends that complainants cannot invoke the aid of equity because the usurious dealings were not with complainants, but with their son. It has been held that a third person who has assumed for a valuable consideration to pay a usurious debt cannot avail himself of the defense of usury, for he is not concerned with the original consideration for the debt. Barneyv. Tontine Surety Co.,
Defendant criticizes the issuance of the preliminary injunction on the ground that complainants failed to file exhibits with the bill of complaint. It is a fundamental rule that in an application for the summary remedy of injunction the complainant must make a full and frank disclosure of all the facts of the case. Maas v. Maas,
The final question is whether complainants are estopped from invoking the aid of equity on account of laches. Defendant contends that if complainants wanted to dispute the amount of the judgment rendered against them in 1937, they should have done so long before 1946. In applying the doctrine of laches, the court of equity, recognizing that the policy of the law is to give repose to titles, refuses to grant relief to a claimant who has slept on his rights for an unreasonable length of time, thereby allowing his claim to become stale and causing prejudice to the adverse party. Equity takes the view that such manifest neglect constitutes an implied waiver arising from a knowledge of the conditions and an acquiescence in them. Wilhelm v. Caylor,
However, complainants have informed the Court that defendant knew for some years that they disputed the *616 judgment on the ground of usury, and since the filing of the bill they have come into possession of a photostatic copy of a letter which he wrote to them on February 2, 1937, stating the understanding with which the notes were signed and the judgment was to be entered. They declare that this letter will satisfactorily explain why they delayed so long in bringing the suit. In view of these representations we will remand the case with direction to the Court below to grant leave to complainants to amend their bill by explaining the delay in bringing the suit. We intimate no opinion as to what kind of explanation might be sufficient to make the bill good against demurrer.
Order reversed and case remanded for the passage of an orderin accordance with this opinion, with costs to appellant.