Case Name: Chase W. Atwell versus Samuel B. Gowell
Court: Maine Supreme Judicial Court
Jurisdiction: Maine
Decision Date: 1867
Citations: 54 Me. 358
Docket Number: 
Parties: Chase W. Atwell versus Samuel B. Gowell.
Judges: Appleton, C. J., Kent, Barrows, Daneortb and Tap-let, JJ., concurred.
Reporter: Maine Reports
Volume: 54
Pages: 358–360

Head Matter:
Chase W. Atwell versus Samuel B. Gowell.
When the payee of a negotiable promissory note, tainted with usury, sells it for no more than the amount of money actually loaned thereon, with lawful interest, he will not be regarded as a recipient of illegal interest, although the maker has paid the full amount, including the usurious interest, to the indorsee.
ON Report.
Case, to recover §111,21, money alleged to have been received by the defendant as usurious interest.
The writ was dated September 16, 1865.
It appeared in evidence, that the plaintiff received from the defendant the following sums of money, for which the former gave the latter six negotiable promissory notes, as follows : —
Not. 11, 1862, cash $200, note $208,60, payable in two months without int.
Dec. 1, 18C2, “ $534, 2 notes §286,50, each, “ 60 & 75 days, “
Dec. 7, 1862, “ §313, note §327, “ 20 “ “
Dec. 22, 1862, “ §465, 2 notes $322, & $192, “ 67 & 9 “ “
It also appeared that, on Feb. 12, 1863, the plaintiff paid to the defendant, on one of said notes, $121; that, on the 27th of June following, he secured the notes by mortgage on personal property ; that the mortgage and notes were assigned to one Wood, on October 17, 1864, for seventy cents on a dollar, and their full amount paid by the plaintiff to Wood, Dec. 24, 1864.
After the evidence was all in, the case was withdrawn from the jury and continued on report, the Court to draw such inferences as a jury might, and to enter judgment, according to the rights of the parties.
B. D. Verrill, for the plaintiff.
This act’on being between the original borrower and lender, it matters not to whom the amount due on the notes was finally paid by the borrower. It is sufficient that the defendant has indirectly received or retained the illegal interest, and that plaintiff, the borrower, has paid it. Webb v. Wilshire, 19 Maine, 406. The attempted avoidance of the statute responsibility, by negotiating the notes at a discount, is contrary to the spirit of the laws. The statute must be so construed as to give it effect.
The law regards the extra interest as having been received by the defendant at the time it was paid by the plaintiff. Stevens v. Lincoln, 7 Met., 525.
Howard & Cleaves, for the defendant.

Opinion:
Walton, J.
The law provides that if any person directly or indirectly receives or retains usurious interest, it may be recovered back in an action on the case. It. S., c. 45. Public Laws of 1862, c. 136.
This is such an action, and the question is whether pay ment to the assignee or indorsee of a negotiable note tainted with usury, will authorize a suit against the original holder, provided the latter, when he sold the note, received from the purchaser no more than the amount of money actually loaned with lawful interest.
We think it will not. To maintain such an action the plaintiff must show that the defendant has directly or indirectly received or retained the usurious interest sued for, — a proposition that cannot be maintained when in fact the defendant has never received or retained from either the maker or the purchaser of the note more than the amount of money actually loaned and lawful interest.
The plaintiff in this case testifies that he gave the defendant certain promissory notes in which was included usurious interest, and that he afterwards paid those notes to a person to whom the defendant sold them. But there is not only no evidence that the defendant received the full amount due on them, but on the contrary the defendant swears that he sold them at a discount so large that he did not obtain so much money as he originally loaned the plaintiff, exclusive of all interest, legal or illegal. Surely such a state of facts as these do not maintain the proposition that the defendant is the recipient of illegal interest.
When, as in Webb v. Wilshire, 19 Maine, 406, the payee of a note, tainted with usury, sells it for the full amount due on it, and the maker afterwards pays that amount to the holder, an action against the payee can be maintained, because in such a case he has indirectly received the usurious interest. But when, as in this case, the payee sells the note for less than the amount due upon it, exclusive of usurious interest, the proposition that he is the recipient of illegal interest cannot be maintained, and an action will not lie against him. Judgment for defendant.
Appleton, C. J., Kent, Barrows, Daneortb and Tap-let, JJ., concurred.