Webb v. . Bishop

Smith, C. J., (after stating the case.) It will be seen by a computation that in the division of the first note principal and interest at six per cent, accrued up to the giving the note of February 18, 1875, the latter is in excess of the sum due by some $226, or thereabouts, and in the absence of evidence of any other consideration must be deemed an additional consideration for the further indulgence of the debt. This excess constitutes the alleged usury in the execution of the second note, and constitutes an element with interest affecting the bond in suit. In making computation of the amount due on the second note, the interest on which was paid up to December 1, 1875, it would appear that the last instrument, the bond, was given for a sum in excess of what was due at the date of its execution by about $25. The statute in force when the first two notes were given provides that “ if any person shall agree to pay a greater rate of interest than six per cent, per annum when no rate is named in the obligation or a greater rate than eight per cent, when the rate is named, the interest shall not be recoverable at law.” Bat. Rev. Ch. 114. *102 When the bond in suit was executed the law had undergone a change and it was declared that “ all bonds, contacts and assurances whatsoever for the payment of any principal or money to be lent or covenanted to be performed upon or for any usury whereupon or whereby there shall be reserved or taken above the rate of six dollars or eight dollars on the hundred as aforesaid shall be void,” &c. Acts 1874-75, ch. 84. This statute which went into effect on March 24,1875, declares in express terms (unnecessarily, perhaps, but to avoid misinterpretation) that it shall not “apply to any existing contract,” but it is applicable to the last security taken in December of that year. In our opinion, the sum entering into the note of February 18,1875, above the principal and legal interest then due on the former note is usurious, and under the law was not recoverable, and so much of that sum, as being unpaid, enters into the bond in suit is not recoverable, the interest, however, paid on the second note must, so far as it partakes of the usurious sum be eliminated and not be counted in the reduction, because, though not recoverable, it has been paid. Bank v. Lutterloh, 81 N. C., 142. That the second note is usurious to the extent specified by the incorporating into it a sum exceeding what was due on that of which it is a renewal, is sustained by both reason and authority. There is no essential difference in taking the usury by discounting and inserting in it a larger sum than is legally due. In either case the contract has the taint. Ehringhaus v. Ford, 3 Ired., 522; Dawson v. Taylor, 6 Ired., 225; Commissioners v. Railroad, 77 N. C., 289. This result of course, pre-supposes an intent to take more than the law allows, for forbearance in making a loan and not to the case of a mistake made in calculating the sum due, when no such intent exists. *103 But the last instrument is rendered void by the statute compelling the creditor to fall back on the preceding note, ignoring the existence of the other, except as showing payment upon the indebtedness. The plaintiff may recover on this, upon the authority of Rountree v. Brinson, 98 N. C., 107, to which the pleadings may, by amendment, be made to conform in the Court below. There is, therefore, error, in the ruling, and the judgment must be set hside in order that upon' the basis of this opinion the legal sum recoverable, if any, may be ascertained and judgment given accordingly. Error.