Reed v. Eastman

The opinion of the court was delivered by Boyce, J. The petition in this case is brought by the orator as assignee, to foreclose a mortgage given by Luke Eastman to C. J. Gleason, to secure the payment of certain notes executed by said Eastman and made payable to said Gleason, and which were transferred to the orator and the mortgage assigned to him. The defendant Whitcomb, after the execution of said mortgage, became the owner of Luke Eastman’s equity of redemption in the premises described in said mortgage, and alleges in his answer that in the notes so given by the said Eastman to Gleason, and now held by the orator, there was included a large amount of usurious interest, and insists as a matter of legal right that he is entitled to have the same deducted in ascertaining the amount due to the orator. In Ward v. Whitney, 32 Vt. 89, it is said by Poland, J., that the claim of a party for usurious interest paid, is in the nature of a penalty as for a tort, and by the statute is given or left [73] to his personal choice or discretion whether he will enforce it or not, and if he do not elect to do so, no other person, not even a surety, can set it up for him. And in Churchill and wife v. Cole & Underwood, in the same volume, Wardwood, as subsequent mortgagee, endeavored to compel the application of money usuriously paid by the mortgagor on a prior mortgage in reduction of the debt secured by the mortgage, and the same judge says that the right to recover back money is personal to the party paying it; that the statute intended that he only should enforce it, or those standing in the same legal right with him by his assent. So that if Eastman had made usurious payments to Gleason or the orator, the defendant Whitcomb, as the absolute owner of the equity of redemption, or subsequent mortgagee or surety for Eastman, could not avail himself of the benefit of such payments. Does the fact that the usury was not paid, but was included in the notes, exclude the case under consideration from the operation of the rule established in the cases above noticed. Whitcomb was not a party to the notes or mortgage executed by Eastman, and so could not defend upon the ground of privity to the contract. Neither did he acquire the right by virtue of the conveyance from Eastman to him. That conveyance vested in him all the right that Eastman had in the premises, subject, as between him and the orator, to the payment of what was apparently due upon the notes secured by the mortgage; and the right to defend against those notes upon the ground that there was usury included in them, was so far personal in Eastman that the defendant Whit-comb is not entitled to make it. This view being decisive of the case, it is unnecessary to consider the other questions which have been presented. Decree affirmed, and cause remanded.