88 N.J.L. 617 | N.J. | 1916
The opinion of the court was delivered by
This is an appeal from a judgment of the Supreme Court affirming a judgment of the Second District Court of Jersey City. The suit was instituted by Weitz upon a promissory note for $400, dated May 5th, 1913, made by the defendant, Frederick J. Quigley, to the order of his father, James H. Quigley, and by the latter endorsed to the plaintiff. The defendant filed a cross-demand by way of set-off, claiming a right to recover from the plaintiff the sum of $414.38 for usurious interest charged James H. Quigley by the plaintiff on certain promissory notes made
The present appeal presents two questions for decision— first, can a debtor when sued in the District Court set off and enforce against the plaintiff a claim for usury arising out of entirely independent and 'unconnected transactions between them? In the case of Brown v. McIntosh, 39 N. J. L. 22, it was held by the Supreme Court that an action will lie in favor of a borrower against a person who has loaned the money to him, for moneys paid usurious^ upon such loan; that this right of action existed at common law, and was not destroyed or modified by the present Usury act. The doctrine of this case was reiterated in Hintze v. Taylor, 57 Id. 239. The theory of the common law is that money paid usuriously is had and received by the lender for the use of the borrower under an implied promise to repay it to him, and the form of action is assumpsit for the breach of this implied promise. Wheaton v. Hibbard, 20 Johns. 290; Schroeppel v. Corning, 5 Den. 236. The right of the borrower to maintain an action for the recovery of usurious payments being established, it follows that he may set off the same in an action brought against him by the lender to recover a debt arising out of an entirely independent transaction, this latter right being given by our revised “act concerning set-off.” Comp. Stat., p. 4836; Naylor v. Smith, 64 N. J. L. 358.
The other question raised by the appeal is whether, when a party is sued in the District Court for a debt due from'him to the plaintiff, he may set off against the plaintiff a claim for usury arising out of transactions between the plaintiff and a
The judgment under review will be affirmed.
For affirmance—The Chancellor, Chief Justice, Garrison, Swayze, Parker, -Minturn, Ka'lisgh, White, Terhune, Heppenheimer, Williams, Taylor, JJ. 13.
For reversal—None.