Case Name: Samuel Tilford vs. Sumner's Executors
Court: Tennessee Supreme Court
Jurisdiction: Tennessee
Decision Date: 1829-01
Citations: 2 Yer. 255
Docket Number: 
Parties: Samuel Tilford vs. Sumner’s Executors.
Judges: 
Reporter: Tennessee Reports
Volume: 10
Pages: 255–257

Head Matter:
Samuel Tilford vs. Sumner’s Executors.
A contract made prior to the act .of 1819, ch. 82, which is tainted W ith usury is void.
A note was made, and usurious interest reserved thereon(previous to the passage of 1819, ch. 82, but it was renewed subsequent to the passage of the act; held, that the latter note was valid and binding for the amount of the original principal and interest.
Where the usurious interest reserved upon a note, had upon each renewal of it been paid, and the note was re-exccuted for the original principal, it ivas held that the excess of interest paid on the several renewals might be deducted from the principal and legal interest, and a judgment rendered for the balance.
This was an action of assumpsit, brought by Thomas E. Sumner’s executors against Samuel Tilford as endorser upon two notes executed by John M. Tilford to the plaintiff’s testator.
The two notes upon which the action was founded, were executed in June 1820, and were renewals of notes which had been executed by John M. Tilford in 1817 for money then loaned to him;- he agreed to pay for the use of the money about or 8 per cent a month.
John M. Tilford was released, and introduced as a witness; he proved that the notes were regularly renewed every sixty days from the time of the. first- loan in 1837 to the execution of the last notes in 1820. He also proved ,, , , , . , . that upon every renewal, the interest agreed upon was paid Ijj him,and the nolcs rc-cxecutcd for the principle.
phc court was requested to charge the jury that if they believed the notes sued on were renewals of notes executed prior to the passage of the act of 1819, ch. 32, and upon which usurious interest had been reserved, that no action could be maintained upon them; that the notes which formed their consideration being void, they were void also. The court refused to give this charge, but stated to the jury,that if they believed the facts deposed to by John M. Tilford, they should deduct all the usury paid on the original contract and the subsequent renewals, and give a verdict for the balance with .legal interest. The jury found a verdict accordingly for the plaintiff. The defendant appealed in error to this court.
W. L. Brown for the plaintiff in error.
G. S. Yerger for the defendent.

Opinion:
Opinion of the court delivered by
Judge Catron.
It is contended that the promise declared on is grounded upon no consideration, and cannot be recovered upon.
It is certainly true that the contract made before the passage of the act of 1819 was void, (1Mun. 349: 5 Taun. 780;) not for want of consideration, but because it was made in violation of the act of 1741. If the act of 1819 had merely' repealed the act of 1741, without making a further provision upon the subject of interest, then this contract made in 1820 would have been valid lo the full amount claimed by the face of the note. Public policy prohibited the recovery of debts contracted for excessive gain; the- act of 1819 changed that policy, and authorized a recovery of the amount of principal and legal interest in all cases where usury formed part of the contract, declaring all such contracts binding, but subject to an abatement of the excess of interest over 6 per cent per annum, adopting the same rule previously acted upon by courts of equity when relieving against, usurious contracts, which was upon condition that the principal and legal interest should be paid. (1 T. R. 153, 225. 1 Taunt. 413. 20 Johns. 290. 2 Bro. 611. 1 Ves. 320. 3 Ves. and Beam. 14. 1. Johns. Ch. Rep. 536, 367, 439. Johns. Ch. R. 142.
The consideration was sufficient to ground a valid contract upon to the amount of damages assessed by the jury, before the repeal of the act of 1741, which was the same with the British statute of Anne. (8 T. R. 390. 2 Taunt. 167.
The act of 1819 does for the parties what they themselves might lawfully do: it rejects the excess of interest, leaving the balance' a lawful debt: This statute operated upon the contract of 1820 as certainly as if the money had been then loaned; because it discharged all former obligations prima facie, and even had none existed, as in a legal point of view there did not, still the consideration of this money lent in 1817, was sufficient to support the new contract so far as the circuit court enforced it. We think the circuit court was correct in deducting the excess of interest paid upon the several renewals of the note, and therefore we affirm the judgment.
It will be remarked that usury could not have been given in evidence under the plea of non assumpsit, if any objection had been made at the trial, because the statute contemplates a special plea of the usury upon oath, and a replication upon oath by the plaintiff. In both, the truth is to be stated as in chancery proceedings. If the defendant fails to plead upon oath, the declaration of course will be taken as true: if the plaintiff fails to reply, the plea will be so' taken. The informality of the pleadings cannot be taken advantage of, however, at this time.
Judgment affirmed.