delivered the opinion of the Court:
Pending this litigation,’ and after the decree was rendered in the circuit court, Walker was declared a bankrupt, and Jenkins appointed his assignee. Walker has, therefore, ceased to have any interest in the litigation. It is, however, urged that Jenkins can not be substituted as the plaintiff in error; that he is a stranger to the record, and hence the case can proceed no further, but must abate.
The assignee, by his appointment and qualification, becomes the owner of all the property, rights and credits of the bankrupt, for the benefit of the creditors. But this question is settled by the case of Knox v. Exchange Bank, 12 Wall. 381. It was there said the bankrupts were discharged from the judgment. “ It is quite clear that the assignee in bankruptcy of the plaintiffs in error, is the proper party to bring the writ of error, and he alone can do it.” This is conclusive of this question. If Jenkins brought the writ, that was literally in accordance with that case, and if he has been substituted since his appointment, that is within its spirit, and is sufficient.
It is urged that the answer of Walker is too loose and indefinite to admit of a deduction of the interest paid, and contracted to be paid, to Greenbaum and Foreman, over six per cent, from their notes against Walker, which are sought to be foreclosed in this suit. We shall not stop to inquire if this would be true if usury had been set up by a plea either at law or in equity, as this is neither the one nor the other. The answer does not claim a forfeiture of the interest, but simply that the excess of interest paid above six per cent be applied as a credit on the debt. This is not so stated in terms in the answer, but it is asked that the account be stated on equitable principles, and the doctrine is well and long settled that equity only allows the defence of usury to the extent above legal interest. And Walker filed a stipulation that he claimed a deduction only of the excess above six per cent. Thus it is seen that he did not attempt to plead usury in any technical sense.
From an early period equity has relieved against usurious contracts by requiring payment of the principal debt and legal interest. Relief was granted in equity in the case of Bosanquett v. Dashwood, Cases Time of Talbot, p. 38 (1734). In that case the Cottons had given to Dashwood bonds for money loaned at six per cent. They being unable to pay, he compelled them to pay ten per cent, and they entered into other agreements for that pur-pose. These agreements and payments continued fourteen years. The obligee died and the obligors became bankrupts, and Bosanquett was appointed assignee, who filed a bill to have the bonds canceled and delivered up, also for an account, and the money paid beyond the principal and legal interest refunded by the executor. The relief was decreed by the Master of the Rolls, and on appeal Lord Talbot affirmed the decree. He said, although courts of equity were governed by the same rules in the exposition of statutes, they often vary the remedies and the manner of applying them.
It was also held that, it being the province of the court to relieve against all offences against the law of nature and reason, and even in cases which, strictly speaking, may be called legal, how much more so when the covenant or agreement is against an express law,—against the statute of usury, although the party may have submitted, for a time, to the terms of the agreement by him. The payment of the money will not alter the case in a court of equity, for it ought not to have been paid. “ It is only the corruption of the person making such bargains that is to be considered;” “ it is that only which entitles the party oppressed to relief.”
The Lord Chancellor refers to the ease of Sir Thomas Miers, decided by Lord Harcourt, as an authority in point. In that case there was inserted a covenant that if the interest should not be punctually paid, it should from the time and from time to time be turned into principal and bear interest. The Lord Chancellor granted relief on the ground that the covenant was unjust and oppressive. And in 22 Winer’s Abridg. 315, it is held that usury paid on a debt may be applied as a payment. .And his lordship asked if there ever was a suit for a redemption where it was not decreed,—that if the party was overpaid he should refund. And this was said in reference to applying usury as payments on the debt. These eminent chancellors seemed to regard usury as unjust as well as illegal.
We fail to appreciate the argument that, with our increased intelligence and higher civilization, our perception of right and morals is necessarily advanced. Who can say that we may not have declined in our moral perceptions rather than advanced. But we fail to see the change in public sentiment claimed, as it has not operated to repeal the usury laws. If there is any it has produced no change of policy. There have always been persons restive under restraints of every kind, and persons who have regarded all laws for the prevention of oppression as wrong. The very forms of pleadings denominate usury as corrupt. Eminent judges have denounced it as unjust, and none, so far as our researches have gone, has ever pronounced usury meritorious or commendable. But be this as it may, the argument is impertinent to the issue, as we are powerless to repeal, modify or mitigate the provisions of the law. The argument might have effect on the lawmaking power, but can have none on the judicial department. We can only enforce the law as it is enacted.
In Willis on Pleadings in Equity, p. 171, is given the form of a bill, probably a copy of the bill in Bosanquett v. Dashwood, supra. It is very much more general in stating usury than the answer in this case. By turning to the transcript in the cases of Farwell v. Meyer, 35 Ill. 40, Sutphen v. Cushman, id. 187, Ball v. Leonard, 24 id. 146, House v. Davis, 60 id. 367, and Hawhe v. Snydaker, 86 id. 197, it will be found the pleadings setting up the usurious transactions are none of them more specific and a portion of them less so than this answer. The practice in chancery has always allowed the complainant to compel a discovery of the particulars of usurious transactions on the condition only that he waives the forfeiture of the penalty and submits to pay the debt with legal interest. If the rule be as claimed by appellees, why compel a discovery by the defendant of the usurious agreement, its terms and conditions and the amount of usury received, and other particulars ? It would certainly be singular to say the person relying on usury must set it up "with the utmost precision and prove it as pleaded, and yet he might allege in his bill that he was uninformed on these questions and compel the usurer to disclose all of the facts necessary to sustain the bill. But surely such strictness as contended for has never been enforced. And it is said in Dan. Ch. Pr. vol. 2, p. 243, that in stating a defence in an answer there must be such a degree of certainty as will inform the plaintiff of the nature of the defence, but it is not requisite that there should be the same degree of accuracy as is required in a bill.
On turning to the case of The New Orleans Gas Light and Banking Co. v. Dudley, 8 Paige, 452, one of the answers was sustained that was no more precise than this. ISTor was the defence more specific in the cases of Smith v. Nichols, 8 Leigh, 330, modifying Crenshaw v. Clark, 5 Leigh, 69, Dangal v. Simmons, 23 N. Y. 491, and Gilhardt v. Samells, 9 Ohio, 461, if even as much so as in this case.
But it is claimed that Mosier v. Norton et al. 83 Ill. 519, lays down a rule which condemns this answer. This is certainly a misapprehension. The answer in that case stated that the note was “ executed and delivered in pursuance of a fraudulent, corrupt, illegal and usurious agreement.” The answer there failed to set out any contract. It does not state with whom the agreement was made; that’the payee received or contracted to receive any usury, or even that there was usury in or connected with the note, or that if such was the case, that the payee knew the fact. The answer was therefore held insufficient in setting out the agreement, as such an answer was in The Gas Light and Banking Co. v. Dudley, supra. It is true jt is there said the rule is the same in chancery as at law. If this can be held to apply to pleading the defence, that can only refer to pleading usury in its proper sense, and could only be applied to the substance and not the form of the plea, such as to time, dates, places, sums, etc. But that language evidently refers to the proof, and manifestly announces the true rule that the quantum, of evidence must be the same in both forums. And it is no doubt true that where usury is pleaded at law, or is set up in a plea in equity, there must be strictness in setting up the substance of the defence.
It would perhaps be impossible to reconcile all of the decisions of the various courts of the Union on this question. And the same is true of expressions used in some of the cases in reference to pleas of usury in this court.
The case of Maher v. Lanfrom, 86 Ill. 513, is referred to as controlling this question. Hot from anything reported in the case, but it is said the transcript will show that a portion of the answer in that case setting up usury was fully as specific as this answer, but it was held defective, and the defence was not allowed.
If this be true, we, on further investigation and more mature reflection, are clearly of opinion that we applied too rigid a rule to that portion of the answer. It is, however, said that a petition for a rehearing was filed in that case. It is true, but the ground urged was that we had applied too liberal a rule in holding a portion of the answer sufficient. No objection was urged against the decision holding a portion of the answer insufficient. We are at a loss to comprehend how it can be supposed the fact that a rehearing was denied has the remotest bearing on this question.
It would not, as is supposed, follow the repeal of all usury laws, that even then courts of equity would refuse to afford relief. “No usury laws now exist in England, having been repealed by statute. It has nevertheless been decided that the repeal of these laws did not alter the doctrine by which the court of chancery affords relief against improvident and extravagant bargains.” Bispham’s Eq. sec. 222, p. 229. The authority referred to in support of this doctrine is the case of Earl of Argyle v. Nains, L. R. 8 Ch. App. 484, in which relief was afforded against the payment of sixty per cent interest per annum on loans, but the borrower was required to pay the principal with five per cent interest.
We are clearly of opinion that the answer is sufficient to require all interest paid over six per cent to be applied as a credit on the notes, as the contract was usurious, and all interest embraced therein above that rate to be deducted therefrom. The question of the forfeiture of all interest is not presented, but on the contrary the answer offers, as we have seen, to account on equitable terms, and Walker filed a stipulation that six per cent interest might be computed on the debt, but claimed that he should be credited by all over that rate.
Again, Greenbaum and Foreman in their bill call for the taking and stating of an account between the parties. And it is unprecedented to require a defendant, when an account is prayed, to set up with precision each item of his account with a detail of all the particulars connected therewith. All persons in the profession know that such is not the practice in bills for an account. Nor is it believed that a case can be found which holds that the parties are required to state the items of their account in bills to redeem or to have a mortgage satisfied.
In cases like the present the party calling for an account only makes a general statement of his case, leaving the itemized accounts to be presented to and stated by the master. This is believed to be the practice in all such cases. And why, it may be asked, should this case form an exception to uniform, long and well established practice ? Appellees asked for and submitted to have an account stated, and as it was in chancery, it was, of course, to be done on equitable principles. And all money paid by force of usurious agreements above legal interest, by force of the fifth and sixth sections of the interest law, was exacted against and was forbidden; by the law, and in equity is regarded as payments on the principal, and could be thus allowed on a statement of an account as called for by appellees, even without a plea or notice. Had they not called for an account it might have been otherwise. So that in every point of view the rules of equity practice require that the defence should be allowed, and the court erred in excluding it.
In all references to the master, accounts should be stated on equitable principles, whatever the purpose of the bill. "When a reference is made, it is for the purpose of determining what is due from one party to the other, and in ascertaining that fact none but legal claims should be allowed to either party. When the bills of items are presented by the parties, each has the right to contest the existence, the amount and legality of each item of the account presented against him. Nor is either party required to lay a foundation for such a contest by his pleadings, especially as it regards each item.
In this case we are satisfied, on turning to the evidence in the transcript, that it does show that there were large sums of interest over six per cent paid on arrangements, agreements or understandings of some kind to pay more than ten per cent interest, connected with and embraced in the notes involved. And not only so, but in the accounts and renewals for a considerable period before the notes were given. And all such usurious interest paid or agreed to be paid, above six per cent, should be deducted from and operate as a credit on these notes.
Of course, usury paid on transactions disconnected with this indebtedness should be rejected. But if these notes are the result of renewals, from time to time, of sums on which usury had been paid, or in which it was included, then such usury above six per cent would be a proper credit. If at any time settlements were had and new notes were given in which there was included no usury, or on which none had been paid, the master could not go behind the settlement. But as long as any portion of the debt on which usury has been paid or reserved remains, all usury above six per cent thus paid on or reserved in it should be deducted as credits. See Peddicord v. Connard, 85 Ill. 102, and Mitchell v. Lyman, 77 id. 525, where this question is discussed.
This was not done by the master, and his statement of the account was therefore erroneous and should not have been approved by the circuit court, and it was error in the Appellate Court to affirm the decree of the circuit court.
The decree of the Appellate Court must be reversed, and the cause remanded, that an account may be stated in conformity with this opinion.
Decree reversed.