Harris v. Bressler

Mr. Chief Justice Scott delivered the opinion of the Court: Since the Appellate Court has found the facts, and made the same a part of its judgment, it only remains to consider the questions of law that arise upon the record as it comes before this court. These are few in number, and will require no extended discussion. It is seen that thq court found that plaintiffs, at and before the notes in suit were sold and indorsed to them, and all persons holding them prior to the time they held the notes, were chargeable with full notice of the existence of usury in the notes sued on, as well as in the original note, which would let in the defence of usury as against the present plaintiffs. It therefore follows, the only question to be considered by this court arises on the law applicable to the facts of the case as found by the Appellate Court, and incorporated in its judgment. It appears, the court found the transaction was not purged of usury that existed by the original contract, except, perhaps, as to the sum of $58, and therefore allowed plaintiffs no interest, except upon the small sum before mentioned, and treated all payments, whether for usury, or otherwise made, as so much paid on the principal of the debt. In this ruling there was no error. The statute in force at the date of the original transaction out of which this litigation arose, provided, if any person or corporation in this State shall contract to receive a greater rate of interest or discount than the rate per cent fixed by such statute, upon any contract, verbal or written, such person or corporation shall forfeit the w'hole of said interest so contracted to be received, and shall be entitled only to recover the principal sum due to such person or corporation. (Bev. Stat. 1874, chap. 74, see. 6.) In the act of May, 1879, the words declaring the forfeiture are precisely the same as the act of 1857. The meaning of this section of the statute would seem to be so obvious as to need no construction. It ought to be understood to mean exactly what it says,—that is, if any person or corporation in this State shall contract to receive a greater rate of interest than is lawful under the statute, such person or corporation shall forfeit the whole interest “so contracted to be received, and shall be entitled only to recover the principal sum.” How the legislative intention could be expressed with more clearness it is difficult to comprehend. This statute has been in force since 1857,—now nearly thirty years,—and during that time this court has had frequent occasion to refer to it as applicablé to cases being considered. In the early ease of Stockham v. Munson, 28 Ill. 51, 'it was said, the act of 1857 declares a forfeiture of the whole interest when a usurious rate has been contracted for, and accordingly it was held, only the.principal sum was recoverable. The-doctrine of that case has been followed in many cases since that time, and the same rule adhered to, invariably. So in Hamill v. Mason, 51 Ill. 488, where the contract was usurious, in referring to Stockham v. Munson, supra, it was said, it was held in that case the recovery could only be for the principal sum, without interest, as the statute, has so provided. In Hefner v. Vandolah, 62 Ill. 483, it was said, as the note, upon its face, bore a greater rate of interest than ten per cent, the whole of the interest was forfeited, under the statute, (act of 1857,) and only the principal sum due was recoverable. In the case of Saylor v. Daniels, 37 Ill. 331, the question made as to usury arose under the act of 1857, ’and it was there said: “While it is the rule of this court that usurious interest, once paid voluntarily, can not be recovered back, yet that rule does not apply when the transaction has not been settled, and the lender brings his action for the recovery of an alleged balance. In such case, the borrower may defend by claiming credit for whatever usurious interest he has paid in. the transaction. This is not using the usury law as a sword, but strictly as a shield. ” This case has many features in common with the case being considered, and the principles stated are conclusive upon analogous questions here involved. The doctrine of .this latter case was approved and re-stated in Mitchell v. Lyman, 77 Ill. 525, where it was said: “This court, while deciding that usurious interest, voluntarily paid, can not he recovered back, holds, still, that so long as any part of the debt remains unpaid, the debtor may insist upon a deduction-of all usurious interest paid, therefrom.” It is needless to cite other cases in this court on this subject. The rule established by the earlier cases has stood so long, and has been so closely followed, it ought not now to be departed from. If a different rule is to be adopted, it should be done by legislative action, and not by judicial construction. ■ Undoubtedly there are cases where a court of equity has required the debtor to pay interest on the sum borrowed, where the contract was usurious; but it has always been done on the principle, where a party asks a court of equity for relief from the letter of his contract, which he could not obtain at law, the court will impose terms upon him to do equity. .But the principle of that class of eases can have no application in common law actions, where the defendant simply defends on the ground of his legal rights under the statute. The case of First National Bank v. Davis, 108 Ill. 633, so far as it may state a different rule from that stated in this opinion, or declare principles in conflict with the doctrine of the cases ut supra on the same subject, must be regarded as not having been well considered, and it is therefore overruled to that extent. The judgment of the Appellate Court must be affirmed. Judgment affirmed.