16 Tex. 200 | Tex. | 1856
It appears indisputably by the evidence, that the original contract was for the payment of a greater rate of interest than is allowed by law ; and, consequently, it was illegal and void for the whole amount of interest stipulated for. (Hart. Dig. Art. 1609.) The agreement to pay usurious interest was not expressed in the face of the note, but, it seems, was verbal. In taking up the old and giving the new note, the aggregate amount of principal and interest, computed at the
The subject was examined by the Supreme Court of North Carolina, in an elaborate Opinion by Chief Justice Ruffin, in the case of Moss v. Adams (4 Iredell, 42,) cited by counsel for the appellee. The English and American authorities were examined, and though the case does not contain the principle for which it is cited in argument here ; that is, that where the debtor does not exercise his option, the creditor may make the application, even to the extinguishment of usurious interest, the Court arrive at a conclusion in respect to his rights very-different from that maintained by Judge Story, in the case from which we have quoted ; that, if the debtor fails to make the application, the creditor may do so at any time afterwards before suit; and holding that, where neither debtor nor creditor makes the application of the payment, the law will apply it to that debt for which the creditor’s security was most precarious. The learned Judge, however, in concluding his Opinion, says, “ Perhaps it had been well to adhere to the original “ rule of the Civil Law, as more simple in itself, easily under “ stood, and, in its uniform operation, doing as much justice, “ upon the whole, as any others, however modified.” Still, he thinks the exceptions to it in the points involved in that case, so firmly established in the tribunals of the Common Law, that the Court has no choice but to adopt them. (Id. 53.) Where we find so great a contrariety of opinions and decisions, we might feel free to adopt the conclusions which seem to us most to accord with reason and justice, and which appear to command the approbation even of Courts, which have felt themselves constrained by the force of authority, to depart from them. It is admitted on all hands, that the debtor has the absolute right to make the application, if he sees proper to exercise it. If he omits to do so, and it is left to the law to make it for him, it ought, it would seem, to be made in accordance with the presumed intention of the debtor. As that intention, if express, would confessedly control the application in all
Applying this principle to the case before us, it will be seen that the consideration for the note in suit was the illegal interest exacted upon the original loan ; and it is, consequently, usurious. Where the original contract is usurious, any subsequent one, made to carry it into effect is also usurious, and its validity will be in like manner affected. Every subsequent security, given for a loan originally usurious, however remote, or often renewed, will be affected by the illegality of the original consideration. (Bride v. Hubbard, 15 Mass. 92 ; Walker v. The Bank of Washington, 3 Howard U. S. R. 62.) The law will not enforce a contract which is illegal and void. The judgment must therefore be reversed, and the cause remanded.
Reversed and remanded.