Barger v. Taylor

On Motion to Dismiss Appeal. Per Curiam, 1. This is a suit to foreclose a mortgage. The defense is usury. The court below found the contract to be usurious, and rendered a decree for the amount of the original sum loaned against the defendant in favor of the state for the use of the common school fund, as provided in section 3589 of Hill’s Code. From this decree the plaintiff appealed, but did not serve the state with notice thereof. The defendant now moves to dismiss the appeal upon the ground that the state is an “adverse party,” and should have been served with notice. Under the decisions of this court, if it could be made to appear that the state is a “party” to the decree appealed from in the sense contemplated by the statute regulating-appeals (Hill’s Code, § 537), its interest being adverse to [230] that of appellant, the failure to serve it with notice would be fatal to this appeal. But in our opinion the state cannot, under the circumstances of this case, be deemed a “party” within the meaning of that statute. As used therein, the term “party” must be understood in the ordinary legal sense, and to embrace such persons only as become parties to the case in some mode prescribed or recognized by law, so as to be bound by the proceeding. Now, the state never was made a party to this suit, nor did it become or seek to become such. It never appeared in any way, had no right to adduce testimony, cross examine witnesses, or appeal from the decree had it been to the effect that the contract sued upon was not usurious. The statute in relation to usury requires the court to declare the forfeiture and enter the judgment whenever the contract in suit appears to be usurious: Code, § 3589. The forfeiture is to be declared by the court on its own motion, as the result of the litigation between the parties and by force of the statute. Whenever, in any action or suit on a contract, it is ascertained that the contract is usurious, the law steps in, and, propria vigore, forfeits the original sum to the common school fund of the county. The entry of the judgment or decree in favor of the state is but the means of carrying out the forfeiture, and does not make it a “party” to the proceeding in the sense that it must be served with notice, or that it is entitled to notice. The question of usury is to be determined upon the issues made and evidence offered by the parties to the litigation. By the terms of the statute the principal sum is to be deemed forfeited, and a judgment in favor of the state is to be rendered, whenever “it shall be ascertained in any suit brought on” a contract that it is usurious, but it cannot be judicially so ascertained until the final determination of the suit. So long as the parties [231] have a right to continue the litigation, either in the court of original jurisdiction or on appeal, the usurious nature of the contract remains undetermined, and the state is not entitled to judgment. When the sui-t is fully tried out, if it then appears that the contract is tainted with usury, it is the duty of the court to render a judgment in favor of the state; but, until that time arrives, the state has no interest in the proceeding, and is not entitled to be heard or to be served with notice, unless it has in some way become a part}" in the manner recognized by law. The state, therefore, bearing no such relation to the case, is not, in our opinion, an “adverse party” within the meaning of the statute providing for the manner of taking and perfecting appeals. It follows that the motion to dismiss must be overruled. Motion Overruled.