Lamoille County National Bank v. Bingham

The opinion of the court was delivered by Redfield, J. The exceptions present the single question, whether the payment by the principal of usurious interest on the note eo nomine, does enable this defendant, who is surety, to insist that such excess above lawful interest shall be applied as a payment of the note pro tanto. This question is not new in this state. It was early held that money paid as usury could not be attached by trustee process. Barker v. Esty, 19 Vt. 131; and that such claim did not pass to the assignee in bankruptcy. Nichols v. Bellows, 22 Vt. 581. The courts speak of the matter as a personal right of the victim of usury, and as a mode of redressing an injury caused by personal wrong and oppression. And it is now well settled by repeated adjudications, that it is the right and privilege of the party paying usury, to recover back such usury, or insist upon its operating as a payment pro tanto of the principal, or to waive it, at his pleasure. Ward v. Whitney, 32 Vt. 89; Churchill v. Cole, 32 [107] Vt. 93; Davis v. Converse, 35 Vt. 503. And more recently the same doctrine is affirmed in Cady v. Goodnow, 49 Vt. 400. The court charged the jury that the defendant might as fully avail himself of all such payments of extra interest by Atkins (the principal), in this suit, as the said Atkins could if he were a defendant in this suit. This, we think, as tested by the uniform course of decisions in this state, was clearly error. The exceptions show that Atkins, the principal, was a witness, but it does not appear that he claimed in his testimony that the extra interest paid by him should be applied in reduction of the note. Nor is any fact stated that would take this case out of the ordinary and well settled rules of law. Judgment reversed, and cause remanded.