Court Opinion

ID: 7131812
Source: CourtListenerOpinion
Date Created: 2022-07-24 15:19:39.308855+00
Date Added: 2024-06-11T16:14:29.873725
License: Public Domain

JUDGE HOLT
delivered the opinion op the court.
A judgment by default was rendered in equity upon a note containing usury, and which was secured by a mortgage upon land. The usury haying been paid, this action at law was brought within the statutory period to recover it back. The judgment in equity is relied upon as a bar. The General Statutes, chapter 60, provide : . ' .
Section 3. .“A court of equity may grant relief for any such excess of interest, and to that end compel the necessary discovery from the. lender or forbearer.
Section 4. “ Such excess of interest may be-recovered from the lender or forbearer, although- the payment thereof was made to his assignee.”
It has been said that judgment cannot be rendered against judgment in a court of law, or a decree against a decree in equity; and it is now urged that an action at law cannot be maintained to overturn1 a judgment either at law or in' equity. Accordingly' it was held in the case of Thompson v. Ware, 8 B. M., 26, that a bill in chancery would not lie to enjoin a' judgment at law upon the ground that it embraced usury. The court in arguendo took a wide range in this case; but the above point is the only one that can be considered as having been decided by it, as it was the only one involved. It was not an action .to recover back usury paid either upon a decree or a judgment at law. The same question was presented in Moran v. Woodyard, 8 B. M., 537; where the court, however, went so far as to *74recognize that under some circumstances a decree maybe opposed to a decree, because it was there said that one might be enjoined upon grounds which would support a bill of review.
The question now before us, however, is not whether a judgment can be opposed to a judgment, or a decree to a decree; but whether usury paid upon a judgment in equity can be recovered back. It is conceded that if it be paid upon one at law, it may be recovered by suit in equity. If this distinction exists, it must either be because of statutory requirement, or because it is grounded in reason. A review of the various statutes upon the subject, and of the judicial construction which has been given to them, may throw some light upon the question.
By the provisions of the act of 1798 (2 M. & B., 852), under which Pearce v. Hedrick, 3 Litt., 109, was decided, the plea of usury was available to defeat the claim in toto; but the borrower had the right to a discovery by a bill in chancery, and then, if usury appeared, the chancellor relieved against the interest, the borrower paying the principal of the debt. He also had the right to pay the usury and then recover it back by a bill in chancery. This was also true under the usury act of 1819 (2 M. & B., 856).
We have been unable, however, to find any adjudication of the question, whether under the acts, supra, usury which had been paid upon a decree could be recovered by suit. The provisions of the Revised Statutes adopted in 1852 upon this subject are similar to those of the General Statutes now in force, save that hereinafter cited relating to limitation was not contained in the former.
*75The seventeenth section of the present Civil Code is in substance the same as the fourteenth section of the Code of 1851, and it provides: “A judgment obtained in an ordinary action shall not be annulled nor modified by any order in an equitable action except for a defense which arises or is discovered after rendition of ‘the judgment. But such judgment does not prevent the recovery of any claim which was not, though it might have been, used as a defense by way of set-off or counter claim iruthe action.”
In accordance with this provision and previous decisions it was held in the case of Chinn v. Mitchell, 2 Met., 92, that a judgment at law could not be enjoined upon the ground that it contained usury; but it was also decided, as in the subsequent case of Ross v. Ross, 3 Met., 274, that after the payment of it, the borrower could recover it back by suit. The first named case names no forum, as exclusive for this purpose; while the other says that it can be done by a suit in equity.
We perceive no good reason for a distinction between the payment of usury upon a decree in equity and a judgment at law. A borrower is allowed to reclaim money paid as usury upon the ground that it was extorted from him by his necessitous condition, and the pressure of the lender. This being so, why should he not recover it whether paid upon the one or .the other % The statute says that the “excess of interest may be recovered from the lender or forbearer, although the payment thereof was made to the assignee.” In connection with it; sec. 4 of art. 3, chap. 71 of the General Statutes should be considered. It provides: “And no action shall be prosecuted in any of the courts of this *76Commonwealth .for the recovery-of usury. theretofore paid, for the loan or forbearance ,of money, or other thing, against the loaner or forbearer, :or assignee -or either,, unless the same shall have been- instituted within one year next after the .payment thereof; and this'limitation shall apply to all-payments -made on all demands, whether evidenced by writing or existing in parol.’’ .
The limitation is made to .apply to “all payments made on all demands,’'’ and. the two- provisions of the statute, when considered, together, authorize the recovery-.of money paid as usury,- whether upon a judgment at law or-a decree in equity.,
There is no opposing of - a decree.to a decree. The relief .sought .does • not annul or- -modify .a. judgment. It has .-been satisfied.. The borrower .sues--to-.recover from the lender ■ that which he had no- right to exact, and which was .paid without. any •. consideration. The-right to -recover it does not accrue until, the payment. There is no -modification or change of the former judgment ;• ■ but a new and distinct . cause - of action arises in favor-of the borrower and.against the lender, upon-the payment of the. usury. The law then raises a promise, by- implication, of re-payment. • -A cause of action,-by virtue of the statute, arises eo instanti in. the borrower’s favor. . ,
Nor do we see any. reason why..he cannot recover1 it by an. action -at law. His right of1 recovery rests-upon a statutory provision, which fixes no particular forum, and does not limit him to an equitable action. If he seeks a discovery of usury he must go into equity; but -where he has paid it, .there is a mere *77■claim for money received by the lender to which he, in good conscience, was not entitled.
Onr conclusion is that the borrower • may recover usury paid by him, either upon a judgment at law or in equity; and that he may do so by an action at law; and the amount of usury being admitted by the pleadings, the judgment below is reversed, with directions to render a judgment for the appellant for the amount claimed in his petition.