Maynard v. Hall

PiNNey, J. Tbe only question involved Is whether the plaintiff was entitled to recover any money for interest on tbe note and mortgage. They are Illinois contracts, and governed wholly by tbe Illinois laws. Tbe judgment to be given, in .respect to tbe questions of usury and interest thereon, is to be such as the courts of .that state -would give, according to the laws of Illinois. By the Revised Statutes of Illinois of 1881 (cb. 74, secs. 1, 4-6), it is provided, in substance, that tbe lawful rate of interest shall be six per cent.; that it should be lawful, by written contract, for- parties to agree that eight per cent, per annum, or any less sum; should be paid; that no person should, directly or indirectly, accept or receive, in .money, goods, etc., or in any other way, any greater sum or greater value for the loan, forbearance, or discount of any money, goods, or thing in action, than above specified, and that “ if any person or corporation in this state shall contract to receive a greater rate of interest or discount than eight per cent, upon any contract, verbal or written, such person or corporation shall forfeit the whole of said interest so contracted to be received, and shall be entitled only to recover the principal sum due to such person or corporation; and that all contracts executed after this act shall take effect, which shall provide for interest or compensation at a greater rate than herein specified on account of nonpayment at maturity, shall be deemed usurious, and only the principal sum due thereon shall be recoverable.” The above provisions are also made applicable to any written contract, wherever payable, if made in Illinois, or be [569] 'tween citizens or corporations of that state and citizens or corporations of any other state, territory, or country, or shall be secured by mortgage or trust deed on lands in such state. It is .difficult to see how there can be any room for doubt of the legislative intent where it is enacted, as in these provisions, that, if any person or corporation shall contract to receive a greater rate of interest or discount than eight per cent., such person or corporation “ shall forfeit.the whole of said interest so contracted to be received, and shall be entitled only to recover the principal sum due to such person or corporation.” The latter clause is too clear and decisive to admit of doubt or require construction. The statute is aimed at the evils supposed to grow out of usurious contracts, and it imposes the loss of all interest, not only such as might accrue before the maturity of the obligation, but that, as well, which might accrue thereafter. The case of First Nat. Bank v. Davis, 108 Ill. 683, relied on by the plaintiff, which arose under a statute the same in substance, holds that, where the contract is usurious, after the maturity of the obligation the principal sum will draw the legal rate of interest at six per cent., and' that interest at that rate may be recovered thereon. This appears to be directly contrary to the words of the statute. The decision was by a divided court; two of its judges dissenting from this view, and two others of the seven holding that the transaction in question was not usurious. The proposition, therefore, for which the case is cited, could not have had the concurrence, it would, seem, of more than three judges,— a minority of the court. In the subsequent case of Harris v. Bressler, 119 Ill. 167, 471, where the same question again arose, the case of First Nat. Bank v. Davis, supra, was considered, and it was expressly overruled, as to this question, by the unanimous decision of the court, made before' the securities in question were executed; and it was held in [570] Harris v. Bressler, siopra, that in such case no interest, but only the principal sum, could be recovered. Had the plaintiff sued the defendant Hall on the note in Illinois, it is manifest that, on the defense made that it was usurious, he could not have recovered any interest, and would have been “ entitled only to recover the principal sum due.” This view is decisive of the case. As the defendants have not applied for equitable relief, the equity rule applicable to cases requiring a tender of the principal sum loaned, as a condition of relief, does not apply. The defendants stand on the defensive, and claim only what the statute secures to them. The provision of sec. 1692, R. S., that “ when any person shall set up the plea of usury in any action instituted against him, such person, to be entitled ... to the benefit of such plea, shall prove a tender of the principal sum of money or thing loaned to the party entitled to receive the same,” is a provision of the usury laws of this state, and relates only to actions upon contracts made usurious by the provision of the statute of this state, and has no application to a case like the present, arising under and governed by the statute against usury of another state. It follows that the judgment of the circuit court is erroneous as to the sum adjudged due, and must be reversed. The plaintiff cannot have judgment for more than the principal sum of $4,000 and costs. By the OovH.— The judgment of the circuit court is reversed, and the cause is remanded with directions to enter judgment in conformity to the opinion of this court.