Corey v. Hooker

BeowN, J. In tbis action plaintiffs seek to perpetually restrain tbe defendants from foreclosing certain mortgages under powers of sale therein contained, executed to Z. Y. Hooker and E. 0. Harding and assigned by them to S. T. Hooker. An injunction to tbe bearing was granted, a reference bad, and tbe case is now presented upon tbe facts and conclusions of law embodied in tbe final decree. Tbe admitted facts are tbat S. T. Hooker loaned to plaintiffs $12,000 in actual cask and received from plaintiffs tbeir notes and mortgages in amount in excess of tbat sum made to Z. Y. Hooker and E. O. Harding, wbicb were assigned by tbem to S. T. Hooker; tbat tbe excess over tbe $12,000 represents “bonus” added in tbe notes. Tbe court finds tbat S. T. Hooker, before, advertising tbe property for sale, voluntarily remitted to plaintiffs all over tbe $12,000 in actual cash loaned plaintiffs and legal interest thereon, and tbat tbe defendants have never collected anything whatsoever on either of said notes nor received any money or other thing of value on any one of tbem. It is contended by tbe plaintiffs: 1. Tbat Z. Y. Hooker in September, 1914, commenced an action against plaintiffs to foreclose these mortgages; tbat pending tbe trial at April Term, 1915, Z. Y. Hooker submitted to a voluntary nonsuit, and tbat tbe effort of defendants to foreclose under tbe powers of sale is but a continuation of tbat action, and, therefore, tbe defendants Hooker in tbis action should be treated as if they were seeking tbe aid of tbe court by legal proceedings to foreclose and have tbeir rights and equities adjusted accordingly. We are unable to see tbe force of tbis contention. Z. Y. Hooker bad tbe legal right to submit to the nonsuit, and tbat terminated tbat action, especially as Corey and wife, tbe defendants in it, took no exception. Tbe right of a plaintiff to submit to a nonsuit before verdict is well settled. Oil Co. v. Shore, ante, 51. In tbe case at bar tbe defendants ask no aid from tbe court and do not seek to foreclose tbe mortgages by legal process. 2. Tbe plaintiffs contend tbat under tbe facts of tbis case they are-entitled to recover by way of penalty $8,650, being “twice the amount of such interest paid,” and to have tbe said sum credited on tbe principal [231] of tbe notes. Tbis contention, is without merit. It is found as fact, and not denied, that plaintiffs have received in actual cash $12,000 and have never paid a penny in money or money’s worth as interest or bonus. In Rushing v. Bivens, 132 N. C., 273, it is held that usury must be actually paid in money or money’s worth before an action can be maintained therefor, and that giving a note for the usury does not amount to payment. In the opinion Judge Connor says: “We think before the plaintiff can maintain the action he must pay the usury in money or in money’s worth; he has done neither; he has paid nothing. It is well settled that the penalty is not incurred by the charge of usurious interest; it is by the taking the usury that the party incurs the penalty. No action lies therefor until it is paid.” To the same effect is Riley v. Sears, 154 N. C., 521; Pritchard v. Meekins, 98 N. C., 244. It would be most extraordinary if. plaintiffs, without having paid defendants one penny in money or its equivalent, could recover of them a penalty of $8,650 and have that sum credited upon the principal of their indebtedness. 3. Failing in that, plaintiffs contend that they are entitled to a perpetual injunction against foreclosure under the power of sale and to a cancellation of the notes and mortgages upon repayment of the principal sum of $12,000, without interest. The plaintiffs are borrowers, asking equitable relief. Such relief will be granted only upon condition of their doing equity by returning the money actually received, with legal interest. It has been repeatedly held by this Court that when a mortgagor brings an action to restrain the mortgagee from selling mortgaged property on the ground that the debt secured is usurious, an injunction Avill be refused if the mortgagee waives the usurious parts of the contract. Where the debtor comes into a court of equity and asks relief against a usurious contract he must pay the defendant the money justly due him, with legal interest thereon. Manning v. Elliott, 92 N. C., 48; Purnell v. Vaughan, 82 N. C., 134; Ballinger v. Edwards, 39 N. C., 449; Beard v. Bingham, 76 N. C., 285; Simonton v. Lanier, 71 N. C., 498; Cook v. Patterson, 103 N. C., 127; Churchill v. Turnage, 122 N. C., 426; Owens v. Wright, 161 N. C., 127. This equitable and just rule prevails in practically all the States of this Union as well as in England. 39 Cyc., 1010. The fact that the statute declares all interest forfeited does not affect the operation of the rule. Carver v. Brady, 104 N. C., 219; Cushman v. Sutphen, 42 Ill., 255. ' In reaching our conclusion we have followed the unbroken line of precedents in this Court for half a century, as well as the overwhelming weight of authority in this country as well as in England. The Alabama court has gone so far as to hold that a statute providing that usurious contracts cannot be enforced either at law or in.equity, [232] except as to tbe principal sum due, does not prohibit a court of equity in a suit by a borrower for relief against a usurious contract from granting sucb relief on condition that tbe complainant repay borrowed money with legal interest thereon. Lindsay v. U. S. Savings Bank, 127 Ala., 366; 51 L. R. A., 393. 4. Finally tbe plaintiffs contend that tbe defendants should not be permitted to exercise tbe power of sale in tbe mortgages, because they have failed to list them for taxation. Tbe statute relied on is copied and construed in Hyatt v. Holloman, 168 N. C., 387. Tbe defendants are not seeking to recover anything “by action at law or suit in equity,” and under tbe authority of that case this defense cannot avail plaintiffs. In any event, defendants would have tbe right to pay tbe taxes into court, as they have offered to do if liable therefor. But tbe judge, in sustaining all of defendants’-exceptions and finding tbe facts as contended for by them, has practically determined that tbe notes and mortgages are not liable for taxation, as defendants’ personal indebtedness exceeded them in amount. Upon a review of tbe record, tbe judgment of the Superior Court is Affirmed.