Wolfe v. Citizens Bank

Hill, J. (After stating the foregoing facts.) 1. The objection that there was no order of the court allowing the amendment to the plea to be filed at the first term was too late, having been made for the first time in this court. In Smith v. West, 134 Ga. 11 (67 S. E. 405), the court says: "In specifying the parts of the record to be sent up to this court the additional answer is mentioned . . It is too late for the defendant in error for the first time in his brief filed in this court to raise the point that this amendment was not duly allowed and therefore cannot be considered. ” 2. Should the trial court have allowed the set-pff of the usurious interest “ charged and reserved ” by the national bank on the previous notes against the note ih suit, or should he have limited the ruling on that point to the amount of the usury paid on the particular note in suit? It is clearly inferable from the evidence that all of the usurious interest on all the notes in [513] question, including the one in suit, was charged and reserved by the national bank when the notes were first made and when they were renewed from time to time by the defendant, and the evidence shows that the principal of all of the previous notes and the interest, including the usurious interest, had been fully paid by the defendant to the national bank. The defendant insists that upon the note in suit he was entitled to a credit of the aggregate amount of all the sums of usury paid by him, within the statute of limitations, on the previous notes as well as the note in suit. He bases his contention upon the law of set-off under the code. Section 4340 of the Civil Code (1910) provides that “as between the parties themselves, any mutual demands existing at the time of the commencement of the suit may be set off;” and the learned counsel for the plaintiff in error insists that the excess of interest in the previous notes, as well as in the note in suit, constitutes a demand which may be recovered either by a plea or a separate suit. Was the usury which the national bank charged and reserved on the previous notes, and which the evidence showed was paid in full to the national bank by the defendant, a mutual demand existing at the time of the commencement of the suit between the plaintiff and the defendant? What is the meaning of the words “ mutual demands, ” in the section referred to ? “ The word ‘mutual’, as applied to debts which may be the subject of set-off, necessarily imports that there must be reciprocal obligations between the parties.” 5 Words & Phrases (1st ed.), 4649. An obligation existed on the part of the plaintiff to exact from the defendant what he could legally make on the note in suit, and the defendant had the right to demand of the plaintiff that he should have a credit of the usury in the said note. But where was there any obligation on the part of the plaintiff to allow the defendant a credit on the previous notes, which the evidence does not show that the plaintiff had ever held as transferee or otherwise, and upon which usurious interest had been fully paid by the defendant to another party ? Hnder the national bank law, as he had fully paid the usury to the national bank, he might have had the right, in a separate suit, to sue for and recover the amount actually paid to that bank. Haseltine v. Central Bank of Springfield, 183 H. S. 132 (22 Sup. Ct. 50, 46 L. ed. 118). But even [514] as to the national hank, having actually paid the usurious interest to that bank, he could not set it off in a suit brought by the bank against him, but he would be confined to the remedy of a direct suit for the debt. In Zeigler v. Scott, 10 Ga. 389 (54 Am. Dec. 395), it is said: “Usury paid on a former contract may be pleaded as a set-off to the existing debt, provided it be not barred by the statute of limitations.” In that case it appears that the former contract infected with usury was between the same parties as in the suit to which it was held that the set-off could be pleaded. And in the case of Angier v. Smith, 101 Ga. 844 (28 S. E. 167), it was held that the defense of usury was good even against a- bona fide holder for value of a negotiable promissory note who acquired the title to the note before its maturity, but in that case the usury was in the note which had been transferred for value and which was in suit. The taint of usury in a note remains in it even after it has been transferred to a bona fide holder for value before due, but it cannot be the law that the amount of usury in one note, or in a dozen notes, paid by the defendant to other persons can be set off by him as a legitimate- claim, when he is sued by another on a different note. To illustrate by the facts of the present case: If, as a matter , of law, the defendant has the right as against the plaintiff, to set off the amounts of usury contained in the notes which he had previously made and paid in full to the national bank, it would allow him to collect from the plaintiff, a stranger to all the other contracts, more than half of the principal of the note of which he was the bona fide holder. We are therefore of the opinion that the learned trial judge did not commit any error in limiting the set-off to which the plaintiff in error was entitled to the amount of the usury which was contained in the note in suit, and in refusing to allow him, as a set-off, the usurious interest which he had paid to the City National Bank of Dublin on the other notes. Judgment affirm,ed. J enkins, P. J., and Stephens, J., concur.