Nelson v. Cooley

The opinion of the court was delivered by Davis, J. This was an action of assumpsit to recover from the defendant certain money, alleged to have been paid to him by the plaintiff above the legal interest upon a $400 note given by the latter to the former on the fifth of August, 1841. The general issue being pleaded, the case was tried by the court. The only question brought before us is, whether the facts found by the county court show, that the plaintiff made any payment of usurious interest, within the true meaning and intent of the statute, which authorises the party paying such usury to recover it back by action. We are of opinion they do. Although payment was not made directly by the plaintiff, yet, by means of the sale to Kelsey of the interest of the plaintiff in the farm mortgaged as security for the $400 note and the three $50 notes, — which last were given for interest on the other, — provision was made for that purpose, by a deduction, to the .extent of the sum due from the plaintiff to the defendant, from the consideration money» agreed to be paid. In pursuance of this arrangement, the amount specified in the several notes was subsequently paid by Kelsey. Thus the defendant received money, which in equity and good conscience he is not entitled to retain; and that money was as much the money of the plaintiff, as if Kelsey Bad first paid it .to him and be had delivered it .to the defendant. [204] If the arrangement had taken a different form, and Kelsey had paid the full consideration, $800, directly to the plaintiff, relying upon the covenants in the deed, that the plaintiff would pay the in-cumbrance, and, out of the money thus paid to him, the latter had discharged the debt to the defendant, and thus fulfilled his covenants with Kelsey, the transaction, in substance, would not have differed from the one adopted. Could Kelsey recover back the amount of usury contained in the notes? We think not. He paid only what h.e agreed to pay, and for which he received a full equivalent. He therefore sustains no injury, and needs no redress. Were we to give the statute a merely literal construction, and hold that Kelsey should be regarded as having actually paid the money, and allow him, on that ground, to sue and recover, it is obvious the recovery would be in trust for the plaintiff, the party really injured. There is no occasion to resort to such an expedient. A liberal and reasonable construction of the statute will include the plaintiff in this case. No obstacle to a recovery exists in the circumstance, that the large note was not paid until after the commencement of this suit. Its payment at all was not essential to the plaintiffs right of recovery. The $50 notes contained the usury; and when the defendant accepted the money upon them, as he did before suit brought, and surrendered the notes, he took usurious interest, within the meaning of the statute. When so received and applied, there is no room for presumption, in the absence of any declaration to that effect, that he would apply the money, or any portion of it, to the debt which was justly due to him. The result showed that he did not so apply it. This view of the subject renders it unnecessary to decide, whether the receiving the note, which was executed by Kelsey with surety, in lieu of the original note of the plaintiff, should be considered as a payment of the latter. The judgment of the county court is affirmed.