Ector v. Osborne

Allen, J. There are four requisites of a usurious transaction: “(1) There must be a loan, express or implied; (2) an understanding between tbe parties that tbe money lent shall be returned; (3) that for such loan a greater rate of interest than is allowed by law shall be paid, or agreed to be paid, as tbe case may be; and (4) there must exist a corrupt intent to take more than tbe legal rate for tbe use of tbe money loaned.” Doster v. English, 152 N. C., 341. “Tbe corrupt intent mentioned in tbe books consists in tbe charging or receiving tbe excessive interest with tbe knowledge that it is prohibited by law, and tbe purpose to violate it. Our statute makes it usury if tbe interest is "knowingly charged or received at tbe unlawful rate.” MacRackan v. Bank, 164 N. C., 26. Applying these principles, it is clear that tbe original loan of $1,000 was usurious, and tbe legal effect of tbe usury could not be avoided by tbe execution of a separate note for tbe interest, or by giving new notes, in renewal of tbe old. Ervin v. Bank, 161 N. C., 47. A borrower is not, however, compelled to plead usury, and as the defense is personal to him it may be waived. A ease in point is Berk v. Bank, 161 N. C., 206, from which we quote at length, because tbe principle declared covers tbe question involved in this appeal, and tbe principle cannot be understood without a statement of tbe facts. Tbe Court says in that case: “We find that the main exception relates to the ruling of the court upon the question of usury. Plaintiffs made to J. L. Armfield on 16 May, 1906, their note for $5,500, secured by a mortgage on the property of the partnership, which was duly executed by them and their wives. It appears that they only received $4,500, and, as they alleged, the balance, or $1,000, was usurious interest. While the reference did not find explicitly that the $1,000 was illegal interest, be did find that the plaintiffs came to a settlement with the defendant, or the defendant with them, and the negotiations resulted in an agreement of compromise, which was reduced to writing and the' substance of which is that J. L. Armfield agreed to pay and the plaintiffs to receive the sum of $600, and the latter, in consideration of the said sum, released Armfield from any and all liability for and on account of the said usurious transaction, and it is so denominated in the release, being called by eircumloeation ‘all amounts paid in excess of the legal [670] rate of interest for any and all money heretofore loaned to (plaintiffs) by J. L. Armfield/ and 'the said excess being $600, and the payment of the same, it is agreed, shall be in full settlement of all liability therefor, and of any and all causes of action which can arise therefrom.’ This was undoubtedly an admission of the defendant that the transaction in which he took the note for $5,500 was tainted with usury, and that he was in danger of losing, not only his legal interest on the note, but double the amount in interest which had been paid to him by his debtors. He therefore very prudently and wisely set about to make terms with the plaintiffs, and to relieve himself of this statutory liability, by paying $600 in compromise and adjustment of the whole amount that might have been exacted. ‘The statutes of usury being enacted for the benefit of the borrower, he is at liberty to waive his right to claim such benefit and pay his usurious debt, if he sees fit to do so. It is, therefore, held that when the debtor becomes a party to a general settlement of preceding usurious transactions, made fairly and without circumstances of imposition, his recognition of the amount agreed to be due as a new obligation will preclude his setting up the old usury in defense of the new debt. This rule is not held to apply, however, unless it is clear that the debtor has fully accepted the settlement as a just debt separate and distinct from the preceding usurious obligations.’ 39 Oyc., 1024. The $600 thus paid to the plaintiffs became their money, and was in no way involved in the account. Its payment in final settlement of the usurious transaction simply purged it of the taint, or eliminated the usurious feature, and reduced the principal to $4,500. That was the new principal, and bore legal interest.” If, as was held, a compromise and settlement followed by the execution of a release purges the transaction of usury, surely the same effect should be given to a compromise and settlement, in which the usury is eliminated, and which is approved by a judgment of the court. It follows, therefore, that there was no error in refusing to give the prayers for instruction. We have considered the exception of the defendant, although it is not assigned as error according to our rules, which require the error complained of to be “definitely and clearly presented, and the Court not compelled to go beyond the assignment itself to learn what the question is. The assignment must be so specific that the Court is given some real aid, and a voyage of discovery through an often voluminous record not rendered necessary.” Thompson v. R. R., 147 N. C., 413, approved in Porter v. Lumber Co., 164 N. C., 396. If there is an exception to an instruction refused or given, or to the admission or exclusion of evidence, the instruction or evidence should be set out in the assignment, and upon failure to do so the Court may disregard the assignment. [671] As late as Wheeler v. Cole, 164 N. C., 380, approved in Carter v. Reaves, 167 N. C., 132, tbe Court said: “It would not consider exceptions not set out in compliance witb tbe plain requirements of our rules as construed by tbis Court.” There are several exceptions in tbe record, wbicb we need not consider, as we rest our decision on facts that are not in dispute. No error.