Hynes v. Cobb

The judgment of the court was pronounced by Slidell, J. The defendants are sued as makers of a promissory note, payable to the plaintiff, and on which interest was stipulated, after maturity, at the rate of ten per cent. The note was not protested, nor is any defaultsliown, other than that created by the judicial demand. The defendants pleaded usury, and claim the nullity of the entire contract, both for principal and interest. It appears that the amount promised to be paid by the note, which was dated Nov. 30, 1841, and payable on the 1st day of January, 1842, being a little more than one month, was composed of the amount loaned on that day to the defendants, and of twenty per cent added thereto, being at a rate exceeding two hundred per cent per annum. It is urged by the defendants, that the nullity of the entire contract should be decreed. But the rule is well settled that in contracts stipulating usurious interest, the nullity attaches to the agreement for interest only, and does not destroy the obligation for the principal. See the cases of Walden v. City Bank, 2 Rob. 178. Rosenda v. Zabriskie, 4 Rob. 493. Also the case of Reed v. Duncan, 1 An. Rep. 265. Twenty per cent therefore must be stricken from the face of the note. The agreement to pay ten per cent after maturity upon a nominal principal sum, of which an important portion was in reality for usurious interest, was usurious, and .cannot be enforced. It remains, then, only to consider, whether legal interest can be granted on the amount levied, from the date of default. There was no protest, nor other evidence of default, till the judicial demand by the citation of the defendants, in the year 1845. Under the law, as it existed at the time of the making of the contract, it was provided that, in contracts which do not stipulate for the payment of interest, it ■is due from the timo the debtor is put in default for the payment of the principal. Art. 1932- So article 1935 declares that, in cases where no conventional interest is stipulated, the legal interest at the time of default shall be recovered, although the rate may have been subsequently changed by law. Looking to the terms of these articles, and to the policy of our laws prohibiting usury, we do not think we should be authorized to give even legal interest from judicial demand to a party who had stipulated an usurious conventional interest after maturity. It appears that, on the 6th January, 1845, an endorsement was made on the note of a payment, on that day, of $240, No imputation is expressed in the receipt, nor otherwise shown. In an ordinary case, the law would make the Imputation to the interest. But the article of the Code which directs that imputation, must be construed in connection with other rules in pari materia. One ■of these is that, where the receipt hears no imputation the payment must be imputed to the debt which the debtor had at the time most interest in discharging, of those that are equally due. See .arts. 21,62, 2160. Here the stipulation for interest had in law no binding force, and, looking to the spirit of the law and ¡the legislation on this subject, as a whole, we think, in the absence of any agreement, the imputation should be made to the principal. The plaintiff has asked for judgment, with mortgage upon certain property described in an act of mortgage purporting to be signed by the parties, and [365] comprising both land and siavos. It is admitted by the plaintiff, that the names of the negroes were not in the act when it was signed. The notary who passed the act, and who was also tho agent of the plaintiff in making the usurious loan, was offered as a witness by the plaintiff, and stated on his direct examination, “ that Mr. Cobb told him to put in the ten negroes; that the space was left blank in the act, and he was authorized to put the ten negroes by Mr. Cobb.” On his cross examination he says: “ The act was passed at Mr. Cobb’s house, and that Mr. and Mrs. Cobb did not object to putting the negroes in. That ho went upon the boat to Mr. Cobb’s, to pass the act. That the boat barely touched at Mr. Cobb’s.” The slaves appear by the mortgage to be the wife’s property, and in the notary’s unsatisfactory statement of this irregular proceeding, there is nothing to show that she authorized him to fill up the blank. The plaintiff has established no mortgage right to the slaves. It is therefore decreed that the judgment of the court below be reversed; and it is further decreed that the plaintiff recover of the defendants the sum of $4,138 42, without interest, and with mortgage on the land only, described in the mortgage executed on the 30th November, 1841, before Alfred J. Lowry, notary public, whereof a copy is on file in this suit, and costs in the court below, those of this appeal to be paid by the plaintiff.