46 W. Va. 577 | W. Va. | 1899
John Smith borrowed money of Samuel McMillan, and also of S. B. McMillan, and on May 18, 1875, gave a deed of trust to secure the notes therefor, which bore interest at ten per cent.; and on November 18, 1878, he gave new notes to each of them, and a deed of trust to secure them, upon
The case involves no disputation as to fact, but only law questions. The circuit court erred in allowing Frank Smith to go back of January 18, 1884, and have the benefit of usurious interest prior to that date, paid on the notes of John Smith. John Smith, though a party to the suit, did not plead that usury. If he had done so, the recovery would be his, not Frank Smith’s. The plea of usury is personal to the debtor, and even a party who buys from the debtor land bound by a usurious mortgage cannot plead
There is another reason why Frank Smith cannot deduct the interest prior to January 18, 1884. On that date he paid his father’s indebtedness to the McMillans by lifting his father’s notes, and giving his own notes and deed of trust in their place. Where a stranger assumes and gives his note for a usurious debt, the usury is purged away, and this stranger cannot plead the usury which had existed between the antecedent parties. 27 Am. & Eng. Enc. Law, 956; Drake's Ex'r v. Chandler, 18 Grat. 909; Keckley v. Bank, 79 Va. 458; Bearce v. Barstow, 6 Am. Dec. 25. A change of parties to the contract obliterates the usury. For a binding consideration the new man agrees to pay a certain sum in satisfaction of the debt of the man who paid him to pay it. John Smith paid Frank Smith for paying his debts to the McMillans, — left money in his hands- with which to pay it. With what grace can he object to pay that money where it was designed he should pay? All the authorities agree that he must pay it. The money is not Ms If allowed to abate usury, he would get the land for less than he agreed to pay. Even if he had received nothing for paying it, he must pay it, antecedent usury and all. Crenshuw's Adm'r v. Clark, 5 Leigh, 65 Coffman v. Miller, 26 Grat. 698; Michie v. Jeffries, 21 Grat. 384, 345; Stone v Ware, 6 Munf. 541; 27 Am. & Eng. Enc. Law, 952. In this case John Smith conveyed to Frank Smith the mortgaged land, recognizing the McMillan debt, — in deed, providing for its payment out of purchase money; and thus John Smith waived the defense of usury, and Frank, by accepting the property, is estopped from setting it up. Sands v. Church, 6 N. Y. 347; Morris v. Floyd, 5 Barb, 130; Tyler, Usury, 407; 27 Am. & Eng. Enc. Law, 952. The deed from John to Frank Smith deposited with Frank, June 4, 1879, only one thousand dollars to go to the McMillans; but in a settlement of the purchase money for the land under the conveyance to Frank, which was made in a suit of Smith, administrator of Thomas Smith, against John Smith, Frank Smith claimed against his father the sum of one thousand three hundred dollars,, as paid for his father on the McMillan indebtedness, and was decreed a credit
The true amount payable to the McMillans is what was due January 18, 1884, from John Smith to them, w-hiteh I understand to be one thousand four hundred and forty-six dollars and two cents, with interest at six per cent, per annum from that date, not eight per cent. It is true, Frank Smith, in his notes to the McMillans, agreed to insert, and did insert, as principal, a sum for eight per cent, interest for the time the notes were to run, with the promise in them that after maturity the notes should bear ten per cent.; but that was not legal. McMillans’ counsel insists on the validity of this eight per cent, agreement on the plea that it was for purchase money of land, which renders any interest stipulated binding; but I deny this theory. If John Smith, when he conveyed land to Frank, had devoted a part of its price to pay to the McMillans, with eight or ten per cent, interest, this plea would prevail; but he did not do so. He paid Frank Smith money to be paid to the McMillans, and thus it became a mere debt to the McMil-lans, against Frank, and, when they took Frank’s notes, it was merely a case of the forbearance of money, not purchase money. Therefore, any sum incorporated into those notes for illegal interest cannot be allowed. This results in making Frank’s notes call for, as principal, the amount due on their date from John Smith to the McMillans, which I'understand to be one thousand four hundred and forty-six dollars and two cents, with six per cent, interest thereafter, subject to a credit of the Freeman notes, eight hundred and forty dollars and thirty-six cents, May 1, 1889. The depositary, or party agreeing to pay a fixed sum on a- usurious debt, need only pay that with lawful interest
As the trustee was selling to pay the notes “with legal interest,” the McMillans waived the ten per cent, from the maturity of the notes; but they included eight per cent, from January 18, 1884, to maturity, and the sale was to be for this two per cent, illegal interest, and thus Smith had right to injunction and costs. Had this two per cent, been excluded, and the sale notice had specified the proper sum for which the sale was to be made, with legal interest, there would have been no cause for injunction.
The court erred in charging to Smith the cost of sale notice and half trustee’s commission. The sale for excessive interest, though small, was unlawful, and the cost of sale notice was not lawful. How could Smith be charged with half commission to the trustee on a sale never made, and which would be unlawful? The bill is said to be de-murrable, as it did not offer to pay the balance due. It denied any balance. Decree reversed, and case remanded.
Reversed.