Bell v. Mulholland

GOODE, J. We shall adopt the finding of the circuit court that the evidence showed the contracts between Bell and .Mulholland, when stripped of their disguises, to be loans of money secured by assignments of Bell’s monthly earnings. The real nature of the transactions was screened behind an unusually complicated mass of affidavits, contracts of agency and assignments, adapted equally to purchases in good faith of wages to be earned, and to advancements of money secured on such wages. The seeming earmark of a loan appears in the .affidavit, where it speaks of Bell having given Mulholland an assignment in blank of his salary, with full authority to-fill out and present the same to his employer, or any succeeding employer, for collection, if Bell should at any time while indebted to said John Mulholland, fail to comply with his contract. Still, that might not be conclusive in every case. It must be weighed in connection with all the circumstances and the positive testimony of the witnesses. Likely, most of Mulholland’s business was legitimate. An assignment of prospective wages to be earned under an existing employment, of either certain or uncertain duration, if made in good faith for a valuable consideration, is upheld, whether intended as619 security for present or future advances, or as an outright sale. But if the assignor has no employment at the date of the assignment, which is executed in contemplation of a possible future employment it may attach to, the contract is invalid. This is because a mere possibility, coupled with no interest, is non-assignable. Emery v. Lawrence, 8 Cush. (Mass.) 151; Mulhall v. Quinn, 1 Gray 105; Hawley v. Bristol, 39 Conn. 26; Augur v. N. Y. Belting & Packing Co., Id. 536; Thayer v. Kelly, 28 Vt. 19; Garland v. Harrington, 51 N. H. 409; Jermyn v. Moffit, 75 Pa. St. 399; Ruple v. Bindley, 91 Pa. St. 296; Payne v. Mayor of Mobile, 4 Ala. 333; Greene v. Bartholomew, 34 Ind. 235; Billings v. O’Brien, 14 Abb. Pr. (N. S.) 246; Field v. Mayor of New York, 6 N. Y. 179. Respondent was regularly employed when he made the assignments in question, which covered wages due, or to become due for his services; hence, they were valid, unless made to secure the payment of money borrowed; in which ease they were usurious. As tó all assignments of wages being void because against public policy, it may be said that such contracts have long been enforced within the limit stated, and if they are obnoxious to the policy of the State, it is the function of the Legislature, not of the courts, to invalidate them. The best evidence of a public policy as to a contract or matter not involving moral turpitude, is the action or non-action of the public through its lawmaking representatives. No statute in derogation of the right to assign wages having been enacted in this State, they stand on' the same footing as other contracts. The question is, then, were those involved in this controversy legitimate sales or illegitimate loans? This depends on what was the intention and understanding of both parties; not merely of the respondent, who claims he borrowed money, but likewise of Mulholland or his employees who, he claims, loaned it. As said, we accept the finding of the circuit court that they were loans and void. All pledges [620] and mortgages to secure a loan bearing an excessive interest are made invalid by the statutes of this State in the bands of the lender, and the courts will treat them as nullities whenever they show the plague-spot of usury, however complicated, ingenious or seemingly fair they may be. Numberless decisions have so held. R. S. 1899, sec. 7310; Fidelity Loan Guar. Co. v. Baker, 54 Mo. App. 79; Voorhis v. Staed, 63 Mo. App. 370; Davis v. Akers, 73 Mo. App. 531; Tolman v. Union Casualty Co., not yet reported. The point is made that respondent ought to be denied equitable relief bécause he participated in the illegal contracts — has unclean hands. Courts of equity are not so fastidious as to stand by while statutes of the kind in question are ignored, on the assumption that a participant is not saintly enough to enter their precincts. A chancellor should be “a creature not too bright or good, for human nature’s daily food.” The doctrine of “clean hands” goes far, but not that far. A debtor’s hands are clean enough to appeal to an equity court for relief against a usury-exacting creditor, when he has fully paid his lawful indebtedness. The law imputes all the guilt to the lender and excuses the borrower from blame as particeps criminis, on the theory that the latter was overreached or coerced by want — a legal fiction obviously, the 'true reason of the rule being that, to effectively enforce the law, courts must heed the prayers of debtors; as they must likewise let in parol proof to vary written instruments of this class by showing a contract valid on its face, to be a security for a usurious loan. Ferguson v. Stepbern, 3 Gilm. (Ill.) 547; Pope v. Marshall, 78 Ga. 635. Otherwise, in the language of an eminent jurist, used in discussing this subject: “A statute made to- prevent fraud and oppression would be made the instrument of fraud.” 1 Story’s Eq. Fur. (13 Ed.), sec. 301; Chitty on Contracts (12 Ed.), 674. Equity courts grant injunctive or other equitable relief in such cases, [621] if there is ground, for their interference; especially when the statute makes the prohibited securities utterly void so far as enforcement by the usurer is concerned, as ours does. 1 Story’s Eq. Jur. (13 Ed.), secs. 300, 301; 1 High on Injunctions, sec. 76; Id. sec. 1116; Hewitt v. Dement, 57 Ill. 500; Morgan v. Schermerhorn, 1 Paige 544; Binford v. Boardman, 44 Iowa 53;.Bowen v. Phillips, 55 Ind. 226; Wilhelmson v. Bentley, 25 Neb. 473; Rodgers v. Rathbun, 1 John Ch. 366; Tupper v. Powell, Id. 439; Fanning v. Dunham, 5 John Ch. *122. No right can be obtained or asserted on these tainted instruments. One of the ancient instances of equitable cognizance was relieving a debtor against the penalty of a bond to pay double the sum borrowed, in case of default of payment when due, by compelling the lender to take his principal and legal interest. The judgment is affirmed. Bland, P. J., concurs; Barclay, J., having been consulted, did not sit.