Parker v. Biglow

Morton J.

drew up the opinion of the Court. The facts in this case clearly show the note to be usurious. Indeed the usury is admitted, and the only question presented for our consideration is the amount for which the plaintiffs shall have judgment.

This must depend upon the proper construction of St. 1826, c. 27, under which this contract was made and by which it must be governed.

By the first section of that statute it is provided, “ that whenever, in any action brought on any contract or assurance for the payment of money, it shall appear to the court, before which such action shall be tried, that a greater rate of interest shall have been directly or indirectly reserved or taken, than is allowed” by St. 1825, c. 143, “the defendant shall recover his full costs, and the plaintiff shall forfeit threefold the amount of the whole interest reserved or taken, and shall have judgment and execution for the balance only, which may remain due upon said contract or assurance, after deducting threefold the amount of said interest; and whenever a greater rate of interest shall have been paid than as aforesaid, a remedy shall accrue to recover back threefold the amount of the whole interest paid.”

Under this provision it will be proper to inquire, what is the amount of the forfeiture incurred, and from what sum that forfeiture is to be deducted to ascertain the balance for whic> *439.he plaintiff is to have judgment. The plaintiff shall forfeit threefold the amount of the whole interest reserved or taken. How much interest did the plaintiff reserve or take ? How much money did the plaintiff lend, for which he received a note for $ 500 ? The statement of facts shows that he advanced, on October 28, 1828, $295-00, and on December 25, 1828, $ 168-00 more, after deducting $2.00 for the account due from the plaintiff to the defendant, making the sum of $463-00 for which the note in suit was given, leaving a deficiency of $ 37-00, which was in effect received by the plaintiff as usury. To this sum must be added the interest on the note, and the amount trebled.

But up to what time shall this interest be computed ? Shall it be for the year during which the plaintiff agreed to give a credit on the loan ? Shall it be till the time when this suit was commenced ? Shall it extend up to me time of trial ? Or shall it be prolonged until the rendition of the judgment ? It is very clear it cannot be the latter. It is agreed, that the statement of facts shall be treated as the verdict of a jury. And in no sense can interest on the verdict, which is allowed in the nature of damages for the detention, up to the rendition of final judgment, be considered as interest reserved or taken on the original contract. It is computed on a different sum and in some cases may be at a different rate. Besides, it would be unreasonable to subject the plaintiff to a penalty for the delay of the court in rendering judgment on the verdict.

It is also equally clear, that the time cannot be limited to one year, because, whatever might have been the conversation between the parties and their expectation as to the delay of payment, the note, which is the only legal evidence of the contract, is payable on demand.

Shall the interest be computed to-the time of the verdict, or shall it stop at the time of the demand, which was the commencement of the action ? It is contended by the plaintiff that it must be the latter, because the offence consists in the voluntary forbearance and giving day of payment; that after the plaintiff had commenced his action, the delay was occasioned by the misconduct of the defendant and without any default of the plaintiff; that to allow the defendant the benefit of the *440treble interest during the pendency of the suit, would afford to him strong inducements to procrastinate the" decision, and enable him to punish the plaintiff for his own misconduct. This objection appears to have some weight and is deserving of consideration.

It is to be remarked, in the first place, that in this case the defendant has not sought or obtained any unnecessary delay On the contrary, the plaintiff has brought the case to this Court by appeal. And the facts have been agreed at the first term and as soon as the cause could be reached for trial by the jury. What would be, the effect of fraudulent conduct on the part of the defendant,- or of delay procured by him for the purpose of increasing the-forfeiture, we have no occasion now to determine, and the case is not embarrassed by any consideration of the kind. The parties proceeded to have their rights determined with reasonable expedition, and the defendant only exercised his legal rights in making this defence.

This question must turn upon the true construction of the statute. The plaintiff shall forfeit threefold the amount of the interest reserved by his contract or assurance. How much was reserved by the contract ? We think it was the amount of interest calculated upon the note from its date up to the time when the amount due on the note was ascertained by the verdict of the jury. If the note had been paid by the defendant, the amount of interest reserved would be ascertained by computing the interest on the note from its date to the time of payment. In the case at bar a suit was instituted to compel payment; the defendant made a defence against the suit, which he lawfully might do, and which is fully sustained to the extent to which it is made. And the parties proceeded with reasonable diligence to determine their disputed rights. When they are determined, the balance which is legally due from the defendant to the plaintiff is ascertained. Up to this time the plaintiff, by virtue of his contract, recovers interest on the face of it. And we are of opinion, that the amount of the interest to be trebled is to be computed on the note from its date to the time of the verdict, or, in this case, to the finding of the facts which is a substitute for the verdict. And this construction is necessary to give effect to the statute. "Did the in*441terest cease on the commencement of the action, or a demand of payment, the statute would be easily evaded, and, instead of preventing, it would be a great encouragement to usury. A usurious note is not void. If the usurer reserved twenty per cent, or any other high rate of interest on a note payable on demand, and the next day or week put it in suit or made a demand, all he would lose would be threefold the interest for a day or week ; while he might recover on the contract the exorbitant interest reserved in it, for a length of time, which might depend on the ability of the borrower to meet the demand. Such a construction is unreasonable and subversive of the object of the statute.

By the above rule, to the sum first stated, of $37-00, must be added the interest on the note from December 25, 1828, to December 22, 1830, amounting'to $59-75, making in the whole $96-75, which being trebled amounts to $290-25. This is the amount of the forfeiture. From what sum shall this be deducted ? We think from the note and interest computed as before stated. The plaintiff shall have judgment for the balance which shall remain due on the contract after deducting threefold the interest. The contract is a valid one notwithstanding the usury, and the promise contained in it is to be fully enforced. This promise is to pay $ 500, with inter est, which is $ 59-75 and makes the whole amount to $ 559-75. Deducting from this, $ 290-25 as before stated, leaves a balance of $269-50 due to the plaintiff This is the sum for which a verdict would have been rendered. But as judgment has been suspended, interest must be computed from the time when the verdict should have been rendered, up to the time of the rendition of judgment. That this is the true rule is made more manifest, by comparing this clause of the statute with the next subsequent One. Suppose the defendant had paid the note and interest and sued for the forfeiture ; he would most clearly have recovered threefold the interest paid ; which would produce the same result as is above stated. To deprive the plaintiff of the interest on his note before the forfeiture is deducted, would be to subject him to a penalty of fourfold the interest reserved, instead of threefold. And we can entertain no doubt, that it was the intention of the legislature that the *442usurer should be punished for his usury by a forfeiture of all the interest reserved, and of double the amount thereof in addition thereto.

These principles are sustained throughout by the case of Brigham v. Marean, 7 Pick. 40. By the statute the defendant is entitled to recover costs.