House v. Davis

Mr. Justice ThorntoN delivered the opinion of the Court: The bill was filed in this case to enjoin the collection of a judgment at law, and charging usury in the notes upon which the judgment was founded. The consideration of the notes consisted of money borrowed and property purchased, of House, and he sold the notes to one Phileo. It is alleged that usury forms a large portion of the amount of the notes. The usury was abundantly proved, and is indeed conceded by both parties. The bill charged that Phileo, the assignee, before the maturity of the notes, had notice of the usury, and confederated with House to cover it up. The evidence is too slight to sustain the charge. The remark of Davis to Phileo, upon the day on which the notes were renewed and made payable to the latter, must have been subsequent to the transfer of the notes and the payment of the money to House. The only other proof to support the charge, was to the effect that five or six years before the purchase of the notes, Davis stated, in the presence of Phileo, that he was paying House, upon notes for money, twenty per cent. Phileo may have heard the remark, and he may not; and if he did, he may have forgotten it. Such testimony is too unreliable to warrant the conclusion of notice of usury in the notes purchased. If the purchaser had any recollection of the remark, he might well suppose that the notes referred to had long been paid. We must presume that Phileo held the notes for value, and without any notice of facts which might impeach their validity between the antecedent parties. The law encourages the use of commercial paper, and courts should not permit such weak and uncertain evidence to impede or restrain its free circulation. We are of opinion that the court below decided correctly, that Phileo was a bona fide holder. After the dismissal of the bill as to Phileo, the court rendered a decree, and found that he was entitled to receive the full amount of his judgment founded upon the notes assigned to him before maturity, and directed that appellant, the payee of the original notes assigned, bring into court the amount of the usury, and that the maker of' the notes bring into court the balance of the judgment, by a day named. t The distinct theory of the bill is, that the purchaser of the notes had notice of the usury, and that he colluded with the payee to hold the notes in trust for him. These allegations, as we have seen, are not sustained. The case of Woodworth v. Huntoon, 40 Ill. 131, is exactly in point, and is decisive against the relief granted. In that case, the bill was filed against an assignee before maturity, for value, and a second assignee after maturity. The bill charged usury; notice of it on the part of the as-signee ; and that the assignment was colorable merely. The usury was admitted, but the court found that the first as-signee was a bona fide holder before maturity, and that the remote assignee was protected through the prior innocent holder, and the bill was dismissed without prejudice because the allegations were not supported by the proof. The complainant must recover on the case made by the bill. The proof must support, and not be inconsistent with, the theory of the bill. Though a good case may be made by the evidence,' it must not be variant from the one which the party is called upon to defend. As the cause may again be tried, it is proper to remark that the evidence shows conclusively that the Shoemaker note had been paid, and it should not be considered in making any computation. The renewal of the notes, according to the proof, should not be regarded as such an independent transaction as would make payment and satisfaction of the prior notes, so as to remove the taint of usury, so far as the payee is concerned. The notes had frequently been renewed while in the hands of the payee, and usury computed at each renewal; and if .the assignee had notice of the usury, the defense could be made as to him. The notes, upon ’ renewal, were not a satisfaction of the former notes, but only evidence of the pre-existing indebtedness. The rule to be deduced from the decisions of this court is, that so long a’s any part of the debt remains unpaid, the debtor may insist upon a deduction of the usury from the part remaining unpaid. Hadden v. Innes, 24 Ill. 381; Farwell v. Meyer, 35 Ill. 41; Saylor v. Daniels, 37 Ill. 331. As to the rate of interest to be computed upon the balance of the debt, after the deduction of the usury, six per cent only should be reckoned. Woodworth v. Huntoon, supra. The court dismissed the bill as to the assignee, and yet required the payment of money into court for the satisfaction of his judgment, when no control could be exercised over him. If the bill was amended so that the allegations and proofs were consistent, jurisdiction of all the parties' should be retained so that exact justice could be done. The maker of the notes has never paid, and may never pay, the usury; and as all the parties ihterested are before the court, the bill should be amended to correspond with the facts. The maker of the notes should be permitted to bring the amount of the judgment, and interest thereon, into court, for the benefit of the bona fide holder, and then he would be entitled to recover thé usury against the payee. The court erred in the amount of usury found, but as counsel differ so slightly as to the amount, this can easily be ascertained upon a second hearing.- The decree is reversed and the cause remanded, with leave to amend the bill. Decree reversed.