Rudd v. Planters' Bank

JUDGE HINES delivered the opinion of the court. This action was instituted by appellee on a bill of exchange, dated April 29th, 1872, for ten thousand three hundred and twenty-three dollars and sixty-four cents, drawn ■on J. C. Rudd, by Charles P. and John D. Rudd, payable six months after date to appellee, and accepted by James C. Rudd. Appellant, James C. Rudd, pleads usury to the full amount ■of the debt, and says that he became indebted to appellee as early as 1869, and that for the several sums due he executed, from time to time, notes or bills, in renewal of the original indebtedness, and that, on each renewal, appellee charged usurious interest at the rate of I2j^ per cent, per [515] annum, which was either paid in advance or embraced in the renewal paper. The bills taken up by the bill on which suit is brought •are as follows: bill for $1,200, dated January 24th, 1872, due in sixty 'days, net proceeds, $1,174.40; bill for $7,952.61, •dated January 20th, 1872, at sixty days, net proceeds, $7,783.03, and bill for $6,431.61, at sixty days, net proceeds, $6,294.48. On these séveral bills credits were entered April 24th, 1872, to the amount of $6,080.93. It is thus .seen that interest in excess of ten per cent, was embraced mi the bills mentioned, and carried forward into the bills ■sued on, and so apparently of all the antecedent bills. The •court below, in its judgment, purged the bill sued on of the usurious interest embraced in it, but refused to relieve ■■against the usury embraced in the antecedent bills. The judgment was for what appeared to be due on the bill in :suit, without interest. From that judgment this appeal is taken, the appellant complaining, of the refusal of the court to purge the bill of usury, and appellee, on cross-appeal, •complaining of the refusal of the court to give interest after .maturity. Smith v. Young (11 Bush) and Martin v. Reed (MS. Op., Dec. 17th, 1873) appear to establish that the execution by ■•new parties of the bill sued on, amounts to a payment of the old indebtedness, evidenced by the bills taken up, but that as the usury on the former bills had not been paid, the statute of limitations, as to such usury, did not begin to run ■at the time of the completion of this novation. A payment •of the debt is not a payment of the usury, and until it has in fact been paid, the payment of the debt alone will not .authorize the application of the statute of limitations. To :the extent that usury is embraced in the debt, and so long [516] as it can be traced, the new obligation given in discharge of the old indebtedness is without consideration. We perceive no error in the failure of the court to grant interest on the bill sued on after maturity. This was a contract to pay legal interest, not upon the debt alone but. also upon the usurious interest embraced therein. (66 Ill., Wilday v. Morrison; 76 Ill., Discoll v. Tannock; 11 Bush, Garr v. Louisville Banking Co.) The case of Evans v. Chappel (13 Bush) does not support the contrary view. There the principal, upon which the law allows interest after maturity, was not tainted with usury. The contract for usury had terminated, and the usurious interest agreed to be paid was not embraced in the sum upon which interest was-allowed after the termination of the contract. Wherefore, the judgment is reversed on the appeal and' affirmed on the cross-appeal, and cause remanded, with direction for further proceedings .consistent with this opinion.