Grow v. Albee

[542] The opinion of the court was delivered by Redfield, J. The only question, in the present case, is, whether the plaintiff is concluded by the decree of foreclosure from recovering the usury paid upon the notes included in the decree. We have examined the subject, both in this case and that of Day v. Cummings, ante, page 496; and the result of that examination is a very full conviction, that the plaintiff, upon the facts found in the case, is entitled to recover. • From this case it does not appear, that the original contract was usurious. And we cannot presume that it was. The subsequent payment of usury, under any state of the law, will not infect the original contract. And had those notes been sued, .they could not have been defended, under any state of usury laws before known in this state, upon the ground of the payment of usury subsequent to the giving of the note, and not in pursuance of the original contract. If, then, the notes given up were perfectly valid, and might have been enforced at law, so, also, was the substituted note, which was given simply for the old notes, not including usury. And although, when the defendant brought his bill to foreclose, the plaintiff might, by way of answer, have insisted upon the usurious payments, as equitable grounds for reducing the amount of the decree, — as is said in Ward v. Sharp, 15 Vt. 118,—still the defendant was not bound to make the defence there; and if made, it is rather in the nature of an equitable offset, than of a technical payment. If the usury is included in the notes, which constitute the ¡basis of the decree, then the defence must be made there, or the judgment will conclude the right. But that is upon the ground, •that, when the usury is included in the security, it is not considered -as paid, until the entire sum secured is paid; or rather, the first payments will go in extinguishment of the sum loaned, and the ¡legal interest; and so the judgment upon the security, for the last dollar only, settles the right to retain the usury. So, too, money paid in obedience to a decree or judgment of court, is not, and cannot be esteemed, an unlawful payment. So, too, the judgment upon fhe security for the whole, or any part, of the money secured, settles conclusively the validity of the contract; and no recovery back can subsequently be had, which goes upon the ground of its invalidity and illegality. [543] But when, for aught which appears, the contract was not originally tainted with usury, and when no such taint enters into its renewal, the payment of money, as usury, eo nomine, is the consummation of an unlawful payment and may be recovered back, whether the debt is paid, or not. It has no legal connection with the original contract or security whatever, and the right to retain it is in no way affected by any proceedings had in regard to the original security. See the following cases, as tending to confirm the views here taken. Smith v. Bromley, Doug. 697, n. Dey v. Dunham, 2 Johns. Ch. R. 191. Johnson v. Johnson, 11 Mass. 359. Gaither v. Bank of Georgetown, 1 Pet. 43. Simpson v. Warren, 15 Mass 460. Commonwealth v. Frost, 5 Mass. 53. Thatcher v. Gammon 12 Mass. 268. Scurry v. Freeman, 2 B. & P. 381. The mere taking security for usury is not the offencéj but the payment of it. Thomes q. t. v. Cleaves, 7 Mass. 361. And whenever the usury, eo nomine, is paid, the right to recover the excess is perfect, notwithstanding the debt may never be paid. Lloyd v. Williams, 3 Wils. 250. S. C., 2 Bl. R. 792. Wade q. t. v. Wilson, 1 East 195. Judgment affirmed.