Chaffe v. Wilson

Cooper, J., delivered the opinion of the court. There is no substantial difference between the provisions of the Code of 1871, by which the case before us is to be governed, and those of the Act of June 25, 1822, which has been construed by our courts. Under the Code of 1871, the rate of interest which a creditor might lawfully take was greater, and usury forfeited only the excess overlegal interest, and not the whole interest as under the Laws of 1822. In Bond v. Jones, 8 S. & M. 368, it was held that money paid upon an usurious contract could be recovered back by suit at law, and also in equity where there were circumstances to give the court jurisdiction. In that case, payments of usurious interest were applied to the principal of the debt. In Newman v. Williams, 29 Miss. 212, it was held that the maker of a note, not itself affected with usury, could defend against an assignee who procured it by an usurious contract from the payee ; and in Coulter v. Robertson, 14 S. & M. 18, it was decided that where A was indebted to B, and by consent of all parties gave his note to C, to whom B was indebted on an usurious contract, in a suit by C on the note thus given, the defence of usury in the contract between B and C might be successfully interposed. In M'Alister v. Jerman, 32 Miss. 142, a subsequent purchaser of lands which had been mortgaged by the vendor to secure an usurious debt was permitted to interpose the defence against the enforcement of the debt, and to compel the creditor to appropriate payments, made by the debtor on account of usurious interest, to the principal of the debt. [45] We are unable to perceive why the appellants may not insist upon the appropriation of the payments made by Stigler to the principal of the debt, which is a lien upon their property. They are certainly not purchasers of the lands subject to the debt in any such sense as to preclude them from the defence, if indeed under our decisions even a purchaser who had ex-presslj- agreed to pay the usurious debt would be compelled so to do. It is true that Smith, under whose mortgage they claim, agreed to pay the debt due to Wilson and the illegal interest thereon, but this agreement was subsequently can-celled by the parties to it, and this was done long before the complainants became the holders of the Smith mortgage. But the complainants, by virtue of a perfectly legal contract, are the owners of the equity of redemption in the lands, and it is immaterial that they have agreed to reconvey the property to Stigler in the future. The amount received by Wilson from Stigler ought to be appropriated to the payment of the debt, so far as the same is a lien upon their lands. For the payment of the usury Wilson must look alone to Stigler, who may or may not pay the same, as he may be disposed. The law will lend no aid to the enforcement of the usurious contract, but will relieve against it whenever appealed to by parties whose rights are affected by it. Decree reversed.