Maynard v. Marshall

Bleckley, Chief Justice. 1. The title of the act was sufficiently comprehensive to cover all the provisions embraced in the body of the statute, and nothing on this subject need be said in addition to what is set out in the first head-note. 2. The statute on the subject of interest which was of force when the note and mortgage involved in this case were made, was the act of October 14th, 1879, the first section of which was in these words: “ That from and after the passage of this act, it shall no.t be lawful for any person, company or corporation, to reserve, charge or take for any loan or advance of money, or forbearance •to enforce the collection of any sum of money, any rate •of interest greater than eight per centum per annum, Hither directly or indirectly, by way of commissions for advances, discount, exchange, or by any contract or contrivance or device whatever.” This section of the act is [844] still of force without modification. So, also, is the third section of the act, which reads thus: “ That the legal rate of interest shall remain seven per centum per annum, where the rate per cent, is not named in the contract, and any higher rate must be specified in writing, but in no event to exceed eight per cent, per annum.” The j ury have found that of the amount set forth in the note as principal the sum of $99.03 was usury. This means that $99.03 over and above eight per cent, interest on the loan went into the principal of the note as a usurious charge for the use of money loaned. It results that as to the whole interest, including the usury, the contract evidenced by the note was unlawful when it was made and remains unlawful still. Inasmuch as courts will not aid in the enforcement of an unlawful contract, the interest is not collectible upon general principles. Indeed, if it were not for the language of the second section of the act, which will be presently quoted, this illegality would taint the note, not alone as to the interest, but as to the principal also ; and this it would do without any express provision in the statute declaring the note to be void. Such was the ruling of the Supreme Court of the United States in United States Bank v. Owens, 2 Pet. 527. The principal of the note, and that alone, was saved by the second section of the act, that section being in these words : “ That any person, company or corporation violating the provisions of the foregoing section of this act, shall forfeit the interest, 'and excess of interest, so charged or taken, or contracted to be reserved, charged or taken.” It is contended, however, that by the modification of this section, which took place by the amending act of September 27th, 1881, interest up to the lawful rate of interest on the principal of the loan was relieved from the taint and rendered collectible. The first section of the amending act reads as follows: “That section 2 of an act entitled 'anact to [845] regulate and restrict the rate of interest in this State, and for other purposes,’ approved October 14th, 1879, which provides for forfeiture of all interest in cases of violation of its provisions, be, and the same is, hereby amended by striking out the words ‘the interest and’ in third line of said section, so that, as amended, it will read as follows: ‘ That any person, company or corporation violating the provisions of the foregoing section of this act shall forfeit the excess of interest so charged or taken, or contracted to be reserved, chai’ged or taken.’ ” The second section of the amending act expressly repeals section 4 of the prior act, which relates to the mode of proof; and the third section repeals all conflicting laws. The question is, whether the first section ought to be so construed as to work a repeal, or even a partial repeal, of the second section of the amended act with reference to usurious contracts entered into prior to the date of the repealing act. The constitution of 1877 expressly prohibits the passage of retroactive laws, and the general rule laid down by the code is that laws prescribe only for the future. It is also a general rule applicable to amending statutes, that they are to be construed .as intended to have operation on future transactions only, and as having no retroactive purpose not plainly •expressed. The amending act left untouched sections 1 and 3 of the original act. There can be no doubt that these sections still apply to the note involved in this case, and we have already seen that they denounce in ■express terms the contract in that note to be illegal, both .as to the interest and the excess of interest. This being .so, is there the slightest probability that the legislature intended the amendment to retroact upon that note and similar contracts in existence when the amending law was passed? "We think not, and so rule. The case before us is not like that dealt with by the Supreme Court of the United States in Ewell v. Daggs, 108 U. S. 143, where the whole fabric of usury laws had been swept [846] away by a provision contained in the constitution of Texas. Ours is a case in which the legislative declaration that the contract is unlawful is left standing upon the statute book, unmodified and unrepealed. Indeed, if this were not so, it would be difficult to abide by the principle of several decisions made by this court, and yet treat contracts as gaining a legal status by the repeal of usury laws'when they did not have it at the time the parties contracted. See Shealy v. Toole, 56 Ga. 210; Campbell v. Murray, 62 Ga. 86; Broach v. Kelly, 71 Ga. 698. Are notes, deeds, etc., fatally vicious on account of usury, to become legally operative when the usury laws are repealed and again vicious when those laws are reinstated, and so continue to rise and fall as often as the policy of the State with respect to usury may change, or will the first change only take effect upon them and subsequent changes pass them by? We need not at present insist that the better and safer line of decision in respect to usurious contracts is the one which this court has heretofore adopted in the three cases just cited, because, whether the repeal of all usury laws would or would not infuse life into a contract which was not in it before, we can safely hold that where such laws are not repealed, so as to remove from the statute-book all denunciation of such contracts as unlawful, they get no new life by an amendment of the law which can be fairly construed as intended to operate prospectively only. We thus reach the same result in the present case, wherein the effect of the amending act of September 27th, 1881, has been made a direct question, as was reached in Crane v. Goodwin, 77 Ga. 362, in which the direct question appears not to have been presented. 3. The evidence was conflicting and the verdict is not altogether satisfactory to this court; but it was satisfactory to the court below, and we cannot say that there was any error in denying a new trial. Judgment affirmed.