18 App. D.C. 293 | D.C. Cir. | 1901
Lead Opinion
delivered the opinion of the Court:
1. There was no error in refusing the defendant’s prayer for an. instruction founded on his first plea. Plaintiff’s direct evidence that the money lent to defendant was her separate property, underived by gift or conveyance from her husband, is assailed as -insufficient because it appears that it was obtained from the sale of her land in Georgia. The contention is, that in the absence of proof of the law of Georgia relating to the property rights of married women, the presumption is that the rule of the common law prevails there; and that, consequently, the proceeds of the sale of her land became the property of her husband. And it is further contended that, if after receiving the money the husband acquiesced in the wife’s claim to it, it then became hers by his gift of conveyance, and was not her separate property under the statute conferring Tipon her the right to sue and be sued concerning the same in her own name as if she were unmarried. R. S. D. C., Secs. 727, 729.
The positive, and wholly uncontradicted, statement of the wife that the money lent to the defendant had not been ac
Tbe defendant, however, was in no situation to make sucb a defense to tbe action, and tbe determination of bis conten tion is not necessary.
At tbe time be borrowed tbe money, married women were authorized to contract and to bring suits concerning their separate property as if they were unmarried, and this right of separate property has been widened by the act of June 1, 1896. 29 Stat. 193.
Defendant contracted with plaintiff to borrow tbe money as ber separate property, and bis note promised to pay ber and not ber husband. It does not, therefore, lie in bis mouth to deny her capacity to sue thereon for bis default, for the. sole purpose of defeating an action to which be has no defense whatever. Credits for tbe only payments alleged to have been made have been allowed in full, and be has no pretense of set-off or counterclaim against ber husband.
2. We think that tbe plea of usury was sustained by tbe plaintiff’s own evidence.
It appears that she intrusted $300 to ber husband to be lent to tbe defendant, and that tbe rate of interest obtained! was tbe highest that could be lawfully contracted for in tbe District of Columbia. Comp. Stat. D. C., p. 283. In addw tion to this, be contracted for a bonus of $50, to be paid by tbe defendant for obtaining tbe loan. Now, bad be received tbis bonus in cash, or taken a separate obligation therefor payable to himself, and bad received for the plaintiff a note for $300 only and delivered tbe same to her without ber knowledge or approval of tbe exaction for bis own exclusive benefit, her right to recover both the principal and interest of ber note would not be impaired. Call v. Palmer, 116 U. S. 98, 102.
Under the statute regulating interest and punishing usury, and the rule that prescribes the running of the legal rate after maturity, all that the plaintiff was entitled to recover was the principal sum of $300, with interest at the legal rate after the termination of the contract rate, less the credits which she had admitted. Comp. Stat. D. C., p. 283, Sec. 3.
As the judgment follows the verdict, which separates the findings for principal and interest as aforesaid, there is no ■occasion for reversing it and remanding the case for a new trial, provided the appellee will remit the interest as contracted for from date to maturity.
The judgment will, therefore, be affirmed with costs, provided the appellee shall within ten days file with the clerk of this court a remittitur of the aforesaid part of said interest. It is so ordered.
On May 29, 1901, Mr. Prentiss for the appellant, filed a motion for a rehearing “ upon the question of the effect of usury as to forfeiture of interest and amount recoverable and the question of costs, or for a reconsideration of the condition imposed upon the appellee and the modification of the same so as to require her to enter a remittitur of all the interest, with costs to the appellant.” In support of this motion he cited, as to the interest: R. S. D. C., Sec. 715; Stark-weather v. Prince, 1 MacA. 144; Sullivan v. Snell, 1 MacA. 585; R. S. D. C., Secs. 713 and 829; R. S. U. S., Sec. 966;
As to the costs, lie contended that “ Inasmuch as the-judgment in the court below carried interest at 10 per cent, for six months and 6 per cent, for six years, amounting-to about $125, if the appellee be required to remit the whole interest the appellant will have been substantially successful on appeal and should be allowed his costs as was done inj Bressler v. Harris, supra, for the appellant could not have appealed from part only of the judgment; or the costs should be divided, as was done in Denison v. Lewis, 5 App. D. C. 328, and Ross v. Fickling, 11 App. D. C. 442.”
Rehearing
On June 7, 1901, the motion for a rehearing was denied,
delivering the opinion of the Court:
The motion for rehearing questions the correctness of the conclusion that only a part of the interest upon the principal sum shall be forfeited on account of usury, and asks for a further modification of the judgment rendered, in that respect. In stating that conclusion, a bare reference was made to the statutes in force in the District regulating the receipt of interest upon and without contract and the practice of -assessing the same in an action, as inducing the view that the interest forfeited for usury in the contract was that only to which the contract expressly applied and not that which the law gives in the’ absence, or upon the expiration, of the contract. However, the question was carefully considered though not discussed in the opinion.
The earnestness and force of the argument and the citation of authority, though not sufficient to cause us to change our conclusion, require a statement of the reasons therefor. Section 713, R. S. D. C., imposes the rate of 6 per cent, interest per annum “ upon the loan or forbearance of any
If there were no other statutory provision relating to interest and its recovery, and no settled rule in regard to its allowance in the rendition of judgment, we should not hesitate to say that section 715 was intended to limit recovery in all cases of usurious contract, to the principal sum therein named only. But it must be considered in the light of other provisions and of established rules in force when it was enacted. Since June 24, 1812, a statute has been in force which declares that 6 per centmn per annum shall be awarded on all judgments in actions upon contracts until satisfied, “ and the amount which is to bear interest, and the time for which it is to be paid shall be ascertained by the verdict of the jury sworn in the cause.” Sec. 829, R. S. D. C.
The practice has always been in this District to direct the jury to assess interest, at the contract rate, to the maturity of the demand, where it is not expressly stipulated to run until paid; and thereafter at the rate established by law. This practice has been expressly affirmed by the Supreme Court of the United States. Holden v. Trust Co., 100 U. S. 72. In that case the note in suit was payable four years from date with 10 per cent interest, payable semi-annually, and it was held, that the contract rate terminated at maturity, and the legal rate of 6 per cent, then began. The court said: “ The rule heretofore applied by this court, under the circumstances of this case, has been to give the contract rate up to the maturity of the contract and thereafter the rate prescribed for cases where the parties themselves have fixed no rate. * * * Here the agreement of the parties
Had the note in this case not been rendered usurious by the commission exacted in addition to the maximum rate of interest permitted by law, the verdict would necessarily have been for 10 per cent, interest until maturity, and at the rate of 6 per cent, only for the intervening years. The contract for 10 per cent, would expire with the time fixed for payment, namely, six months after date. Interpreting section 715 in the light of the foregoing doctrine and bearing in mind the familiar rule that forfeitures are not favored and must be plainly required, we think it clear that the forfeiture of the “ whole of the interest so contracted to be received,” means what it says — the interest of the contract, and not that imposed by the preceding section where there has been no contract, or, as interpreted, where the contract has by its terms ceased to operate.
Nor do the established rules of construction require the forfeiture, thus expressly limited, to be extended by the succeeding words, to the effect that the recovery shall be only the principal sum due. The purpose of these words is fully met, and their reconciliation with those preceding is made complete, by regarding them as intended to remove any pos
When the interest contract period expires, the penalty ends. The parties still occupy the position of debtor and. creditor in respect of the principal of the loan. When the note in this case matured, the defendant could avoid the-interest and commission, but remained under legal obligation to pay the principal on that date. It was his duty to pay, and his default entitled the plaintiff to damages. In liquidation of these damages, or by way of compensation for the plaintiff’s forbearance of the prosecution of his lawful demand when mature, the statute arbitrarily prescribes, a rate of 6 per cent, per annum before and after judgment..
Two decisions of the Supreme Court of the District, in general term, have been cited on the brief as giving an interpretation of section 715 in conflict with the views above expressed. Starkweather v. Prince, 1 MacA. 144, and Sullivan v. Snell, 1 MacA. 585. The first of these, though relating to the subject of usury, does not touch the-question involved. In the second it was said that section 715, in terms, forfeited all interest; but the question was passed with brief mention, and the main consideration was-given to other points. The bearing of the settled construction given to sections 713 and 829, upon that of section 715, which we regard -as of controlling importance, was not urged or considered.
On the other hand, in a later case in which the usury statutes were again under discussion, though this particular-question was not under consideration, the same court, without referring to the former case, expressed its opinion of’
Under a statute substantially like our section 715, the Supreme Court of Illinois seems to have held for years that a judgment for no more than the principal sum could be recovered. But the rule seems also to have prevailed that the contract governs the rate of interest after, as well as before maturity in that State. Subsequently, a divided court overruled the former decisions on the express ground that the interest of the contract ended with its maturity (Bank v. Davis, 108 Ill. 633), as has always been the settled rule in this District. That decision has itself been overruled. Bressler v. Harris, 19 Ill. App. 430; S. C., 119 Ill. 467, 473. As we have heretofore said, if it were not for that settled rule, we would take a like view of the effect of the forfeiture.
But one of the decisions of the Supreme Court of the United Sates that have been called to our attention, arose in the District. Carter v. Carusi, 112 U. S. 478. But that did not involve the construction of section 715, and sheds no light upon it.
Other cases arose under the provisions of the national banking act, which forfeit “ the entire interest which the note, bill or other evidence of debt carries with it, or which has teen agreed to he paid thereonSec. 5198, R. S.; Brown v. Marion National Bank, 169 U. S. 416, and cases cited.
It is to be remarked, however, that in the above case, the court declared the plaintiff entitled to recover the principal of his debt with legal interest from the commencement of the suit. There is nothing in the statute authorizing this recovery of interest, and hence it would seem to rest solely upon the conclusion that the maker of the note, being in default at least from the time of legal demand, must answer in damages therefor. In the District, as we have seen, the statute imposes 6 per cent, by way of damages for the breach
For tbe reasons given, we must adhere to tbe conclusion heretofore stated, and decline to modify tbe judgment pronounced.
Tbe motion is, therefore, denied.