18 Tex. 556 | Tex. | 1857
There is no question of the rule of the Court of Chancery, that if the borrower seeks the aid of the Court to have a usurious security delivered up to be cancelled, or claims the enforcement of the Statute against usury, relief will only be decreed upon the terms of paying what is really due the defendant ; and if the complainant do not make such offer by his bill, the defendant may demur. (1 Story’s Eq. 301.) But I do not understand the rule to require that the plaintiff shall aver an actual tender, and bring the money into Court, as in case of a plea of tender. The precedents are not so, nor, as I conceive, was such the practice, in the Court of Chancery. The complainant was required to offer to pay the money borrowed, with interest. The offer implied a readiness and willingness to pay ; but not that the money was to be brought into Court, or tendered as a condition precedent to the granting
It is needless to multiply references to show that it is the invariable practice of the Court of Chancery, to act upon the maxim before stated; of attending to the claims of equal justice; and, in so doing, to proceed to render its decree, prescribing the terms on which relief will be granted. Where the relief sought is the delivery up of a usurious security to be cancelled, or to prevent its execution or enforcement, the Court will decree the relief upon the terms of the complainant paying what is justly due. The only precedent condition which equity enjoins, is, that the borrower, in stating his case, shall make the offer to do equity, and relieve the lender from the penalty of the Act against usury ; that is, the forfeiture of his entire debt, principal and interest. The payment of the money, or a tender of payment, is never made a condition precedent to the rendition of the decree.
In her original petition the plaintiff prayed that an account might be taken to ascertain what was really due, because, for causes which she assigns, she was ignorant of the amount of her indebtedness ; she professed her readiness and willingness to pay whatever should be ascertained to be due. In this petition she does not expressly charge and complain that the reservation of interest was usurious ; and her profferred readiness and willingness to pay what was due, was a sufficient offer to do equity, to entitle her to relief. But in her amended petition she charges that the reservation of interest was usurious, claims the benefit of the Statute, and to be relieved against the payment of any interest. This amended petition, therefore, limits the offer to pay to the principal sum due. If the demurrer, or exceptions to the petition-, had taken the objection that the plaintiff did not offer to pay legal interest, it would have raised the question, which has been discussed with so much research and ability at the bar : that is, whether such offer
The English Statute against usury (12 Anne) made all usurious contracts void, and imposed heavy penalties on the usurer. The cases in which relief was sought in Chancery, it is said, were cases in which a remedy at law might be had, or in which a discovery was sought to sustain the defence at law, and hence that the Court was not 'positively bound to interfere, but had a discretion on the subject; and might prescribe the terms on which relief would be given. It was regarded as against conscience, that the borrower should pocket the money loaned, without being compelled to return what was really due. The Court, in the exercise of the discretion, which the Chancellor is said to have possessed in granting or withholding relief, determined that the party who resorts to a Court of ■Chancery to be relieved against a usurious contract, must pay the principal and legal interest; that the excess above legal interest is the extent to which the Court would go in granting relief. (12 Sm. & Marsh, 637.) It is an acknowledged, prin
It is also a principal as well of Courts of Chancery as Courts of Law, that no man shall be required, by his own answer, to criminate himself, or to answer to any matter, if it may subject him to a penalty. His answer to a bill charging usury, might subject him to the penalty of the loss of his whole debt, unless the penalty was waived ; and therefore it must be waived by the plaintiff to entitle him to the defendant’s answer. But the defendant might subject himself to a penalty which the plaintiff could not waive ; for if he had received the usurious interest, he would be liable to a penalty recoverable by a common informer. In such case he could not be compelled to answer. But if the plaintiff waived the penalty which was in his power, and could prove the usury without a discovery from the defendant, upon an issue, he was entitled to
The precise question before us arose and was decided by the High Court of Errors and Appeals of Mississippi in the case of Parchman v. McKinney, (12 Sm. & Marsh. 631,) upon a Statute which, like our own, only denounces the forfeiture of the interest upon an usurious agreement, and leaves the principal unaffected by it. There the debtor, as in this case, had executed deeds of trust to secure the payment of money due upon an usurious agreement, and the creditor being about. to force a sale under the deeds of trust, the debtor filed his bill to enjoin the sale, on the ground of usury, and the Court held that the rule of the Court of Chancery in England requiring the debtor to pay the principal and legal interest, did not apply to such a case ; and that the plaintiff was entitled to relief upon payment of the principal alone, without any interest. Chief Justice Sharkey said, “ From the peculiar char- “ acter of a deed of trust, and the mode of proceeding to enforce “ it, relief against it is a subject of original and primary clian- “ eery jurisdiction ; and it is also exclusive, for a court of law “ can not reach it. This party then is not to be treated as “ though he had been negligent in making his defence in another “ tribunal. He stands on the same ground that a defendant “ does, who is making his defence at law, when sued on a usuri- “ ous contract. He makes his ground of relief in the appropriate tribunal, the only tribunal that can hear it, and at the first “ opportunity. He is not, therefore, a proper object for such “ terms as the Court in its discretion may think proper to im- “ pose.”
Nor do Courts of law in England impose such terms upon application to set aside a judgment entered upon a usurious agreement, under a warrant of attorney to confess judgment; but, proceeding upon equitable principles, they will inquire into the validity of the warrant of attorney and set aside the
It thus appears that the rule in Chancery depends upon the peculiar Constitution of that Court. And it rests upon reasons and principles which, if properly applicable to a case like the present, under our Statute, even in a Court ol Chancery, manifestly have no application to our remedial system. The Statute, in the first place, does not prescribe any penalties, except the loss of the interest, to which the party might have been entitled, but for his attempt to obtain more than the law allows him to contract for and recover. But if the Statute did impose penalties, our Courts are Courts of Law as well as Equity ; and have the power which the Courts of Chancery in England and the several States have not, of decreeing forfeitures and penalties ; and there is therefore no occasion for the plaintiff to waive the penalty of the forfeiture of interest, and offer to pay it.
Again ; we have no bills of discovery in our practice ; and if the plaintiff should be under the necessity of making an appeal to the conscience of the lender, propounding interrogatories, to discover the usury, the answer of the defendant would subject him to no pains or penalties ; but only to a loss of the advantages he expected to derive from what the law deems an unconsciencious and oppressive bargain ; which it will not permit him to enforce. So that there is not the necessity, and there are none of the reasons arising from the constitution of our Courts, or the provisions of the Statute, which have operated to cause the Court of Chancery to impose terms, as a condition to giving relief. Nor is there any such hardship upon the lender, in enforcing the provisions of the law, as that which appeals to the conscience of the Chancellor under the severe provisions of the English Statute.
The general rule is, that equity follows the law ; and when the question arises in a court of law, whether a Statute shall be enforced, according to its letter and spirit, it would seem
It may be said that the lender ought not to be delayed in the recovery of what is justly his due, until the question of usury can be litigated. But the argument would apply equally to a case where he was plaintiff seeking the aid of the Court to enforce his contract. Yet that would not be deemed a sufficient reason to deny the defendant the right to set up the defence of usury. It would seem, however, that the Court should interpose by injunction no further than necessary to afford the relief sought; and the correct practice would seem to be, to grant the injunction at first only for the interest, leaving the parties to the remedy they have provided for themselves as to the principal admitted to be due. This accords with the intimation of opinion of Judge Carr in Martin v. Linsay. (1 Leigh, 556.) If then the defendant admits the usury, there will be an end of the case. Otherwise, the Court can proceed to try that issue ; and the plaintiff, in the meantime, will not be delayed in the recovery of the principal.
We conclude that the plaintiff was not required to offer to pay the principal and legal interest; if the contract was usurious she was entitled to be relieved from the payment of any interest; and the offer to pay the principal was sufficient.
The judgment is reversed and the cause remanded.
Reversed and remanded.