Greer v. Hale

Harrison, J., delivered the opinion of the court. The questions raised in this case for consideration are: Hirst, will a court of equity relieve against a judgment obtained at law, by default, upon a contract tainted with usury? Second, if it will, what is the measure of relief? If the question were one of first impression in this State there would be great force in the view urged by the counsel for appellant that a defendant who has had ample opportunity to make his defence in an action at law without availing himself of it, should not, in a subsequent chancery proceeding brought to enforce the judgment at law, be permitted to disturb its finality by interposing the defence that the contract upon which it was founded was tainted with usury. It is, however, well settled in Virginia that a court of equity will interfere with a judgment at law to relieve against usury. This was held in Young v. Scott, 4 rand. 415, and the doctrine has since been recognized in a number of cases, the latest being Exchange Bank v. Fugate, 93 Va. 821. It would serve no good purpose to advert to the reasons which led to the exercise of this jurisdiction, for whether those reasons commended themselves to our judgment or not it would be our duty to en- , force the law as established. The change in the statute declaring that usurious contracts shall be deemed to be for an illegal consideration instead of void, as formerly, furnishes no warrant for departing from the long established doctrine that a court of equity will go behind a judgment to relieve against usury. Hor do the recent decisions of Lynchburg Nat’l Bank v. Scott, 91 Va. 652 and Munford v. McVeigh, 92 Va. 446, construing that change in the statute, furnish any ground for that contention. In the case of Munford v. McVeigh, supra, the statute law of this Commonwealth, and the decisions of this court upon the [535] subject of usury were elaborately reviewed, aud tbe conclusion reached that the change in the law which declares that usurious contracts “shall be deemed to be for an illegal consideration as to the excess beyond the principal amount so loaned or forborne” has made it possible to bring the relief afforded in courts of law and equity into harmony, and that now whether the suit be prosecuted at law or in equity, if usury be established, the lender can only recover the principal sum loaned or forborne. It may now be regarded as settled that in all cases involving the charge of usury, whether at law or in equity, no matter in what manner the question may be presented to the court, if the usury be established, the measure of relief will be that the lender can only recover the principal sum loaned or forborne, subject, of course, to the rule laid down in Munford v. McVeigh, supra, touching the application of payments. There is no error in the decree appealed from, and it is affirmed. Affirmed.