Alexandria gazette. [volume] (Alexandria, D.C.) 1834-1974, 1896-01-11

case of Munford, trustee, against NC
Weighs administrator.
The opinion, which was prepared
aud delivered by Judge Keith, was an
exhaustive treatment of the whole law
of usury in Virginia. and oyerrules
and annuls the decision made in the
celebrated case of Meem vs.. Dulany.
The facts in the case decided were few
and simple. A good many years since,
McVeigh executed to Munford, trustee,
a bond for 81 1000, beginning per cent.
interest on its face, and to secure the
payment Of the bond conveyed house
and lot in the city of Alexandria. Be-
tween the due date of the bond and the
death of McVeigh he paid some 81 800
on account of interest. After his death
| the property was avertised for sale, to
pay the debt secured by the deed,
when his administrator filed bill to
enjoin the sale, alleging that the debt
! bore an usurious rate of interest, and
that under the law all the payments
made on account of interest must be
applied to the principal.
Accordingly, the Judge Of the Circuit
Court of Alexandria, being controlled
by the decision of the Supreme Court in
the case Of AIeem VS.. Dulany, entered
q decree applying all the payments
made on account of interest to the ex-
tinguishment Of the principal of the
debt, and enjoining Munford, trustee.
from collecting any more on account Of
his debt than the balance so remaining
due after such applications.
BY this decision, Munford, trustee,
lost ali the interest on the debt, and all
the payments made On account Of inter-
est were applied to the extinguishment
of the principal. Counsel for Munford,
trustee, took an appeal from the Circuit
Court of Alexandria, and based their
right 10 reverse the decree of the Cir
cult Court upon the ground that the de-
cision of the Supreme Court in the case
of Meem vs. Dulany was not warrant
ed by law.
The case was most exhaustively
argued both in printed briefs and orally
before the court Counsel for Munford,
trustee, contended that the decision OF
Meem and Dulany had shocked the
moral sense of the Commonwealth; that
it could not be sustained, either by rea-
son or authority, and called upon tho
court to annul the decision and repu-
diate the reasoning upon which it was
founded
The opinion of Judge Keith, speak
ing for all Of the judges except Judge
Reilly, who dissents, reyerses and all
nuls the decision in the case of Meem
VS.. Dulauy. The court holds, in Judge
keith's opinion, that where money has
been paid on au usurious contract, and
applied by the debtor at the time of
payment, or applied by the creditor
with the acquiescence of the debtor 10
the eXtinguishment of the interest, that
in all such cases such payments must
| be permitted to remain undisJurbed
that the court had no right to apply
them TO the extinguishment of the
principal; that in no case where pay.
ments had been applied by the debtor
to the extinguishment Of the interest
could the debtor recover any portion of
the sum so paid or, if the sum applied
to the extinguishment OF the principal,
except as to so much of such payments,
if any, as exceeded per cent. of in
terest on the principal of the debt, and
only such excess could be recovered or
| applied in extinguishment of the prin-
cipal by a suit instituted within one
year after such payments.
These principles are declared to be
the law covering cases both in equity
and at law. The whole reasoning of
the court in the case of Meem VS.. Du-
laDy, and the authorities cited in sup
port of that decision, are carefully and
thoroughly discussed, and the court
declares that the authorities cited did
not sustain the conclusions arrived at
in the case of Meem and Dulany, but
were rather authorities in support of
the opinion delivered by Judge Keith.
Judge Keith, in his opinion, points out
that the decision of the court in Meem
VS.. Dulany was only concurred in by
three judges, aud was opposed by
Judges Lewis and Richardson, and as
it overruled the decree of Judge Turn
er the Circuit Court, whose decision
was the same as that contended for by
Judges Lewis and Richardson, the
opinion of the majority was very ma
terially weakened by the circum-
stances.
The opinion of Judge Keith further
holds that where payments have been
made upon usurious contracts, and no
application has been made, either by
the debtor or the creditor, with the
acquiescence of the debtor, then the
law will apply the payments to the ex-
tinguishment of the principal, as under
the statute all contracts bearing a rate
OF interest in excess of 6 per cent. are
deemed to be for an illegal considera-
tion beyond the principal loaned or for.
borne.
Judge Keith's opinion shows the pro.
fouudest study of the whole subject,
and it elucidates all the statutes passed
upon the subject during the past CEN
tury in this Commonwealth, as we'll as
the innumerable decisions made llpop
questions growing out of the same.
Messrs. Staples and Muuford appear
ed for Munford, trustee, and John NJ
johnson, of Alexandria, for McVeigh';
administration