Henderson v. Tolman

ELLISON, J. This is a proceeding in equity to set aside and cancel a certain assignment of plaintiffs wages earned and to be earned from the Chicago, Burlington & Quincy Railway Company. Defendant demurred to the petition, which being overruled by the trial court, he has brought the case here. The assignment by plaintiff of his wages was to secure money borrowed by him of defendant and should' be regarded as in the nature of a chattel mortgage. The allegations of the petition show that it Avas executed to secure a loan of thirty-six dollars loaned at an exorbitant and usurious rate of interest theretofore paid and to be continuously paid. It is further alleged that defendants notified plaintiff’s employer, the railway company, of such assignment and warned such company not to pay plaintiff lfis wages, but that it should recognize and honor the assignment. That said assignment was being used thus to harrass and annoy him. The prayer is that the assignment be canceled and set aside and that defendants be compelled to desist attempting to collect his wages under the assignment. An assignment Avhich is in the nature of a chattel mortgage made to secure usurious interest is “invalid and illegal.” [Sec. 3710, R. S. 1889.] Therefore the instrument described in the petition must be considered to be illegal and, consequently, its use in diverting plaintiff’s wages was an illegal use. But the contention of defendant is that before plaintiff can have equity grant him the relief he seeks, he [501] must pay the original sum borrowed. We do not think that to be tenable, or that the authorities cited bear upon the question. We believe that the use of an instrument which is an impediment to'the úse of wages earned and which is, itself, declared to be against the policy of the law to such extent as to be condemned as illegal and which is being enforced by way of security for a promise to pay money and usury thereon, may be restrained and the instrument itself cancelled. Plaintiff is not asking to have his promise to pay back the; borrowed money cancelled. He is not asking the court to rid him of the debt which he owes. He is merely asking that a separate instrument, void and illegal, which has been taken to secure not only the valid promise but also the usurious promise, be set aside. We are of the opinion that a tender of the principal sum borrowed is not necessary as a condition to having that done. Instruments securing usurious loans have been held absolutely void at the hands of creditors of the usurious debtor and no thought entertained that a tender of the amount borrowed should be first made. [American Rubber Co. v. Wilson, 55 Mo. App. 656; Voorhis v. Staed, 63 Mo. App. 370; Lyons v. Smith, 111 Mo. App. 272.] And such security was held void when enforcement was undertaken by the mortgagee. [Tolman v. Union Casualty Co., 90 Mo. App. 274] If the instrument is void, then it is void as a security for the principal actually loaned as well as the usurious interest,. But we consider the question was really decided by us in Hilgert v. Levin, 72 Mo. App. 48. There it was said that the amount of the loan to a pawnbroker need not be returned as a condition to a right to recover the pledge to secure it and the usurious charge. We said: “The statute enacts that if usury is exacted the pledge is ‘invalid and illegal.’ This is tantamount to a declaration that the property is wrongfülly in the hands of the pawnbroker. There is no lien upon it. The pawnbroker [502] is not entitled to the possession of it. The right of possession is in the owner without the condition of paying the amount borrowed. If this were not so — if the property could be retained until the sum borrowed was paid, it would be making effective that which the statute says shall he non-effective. The plaintiff owed the ■defendant the amount borrowed less credit of usurious interest paid. The defendant has a claim against plaintiff for such sum, hut it is an unsecured claim, and she has no right to retain the property.” We entertain no doubt of the correctness of the trial court’s view and the judgment' will be affirmed. All concur.