Court Opinion

ID: 9808017
Source: CourtListenerOpinion
Date Created: 2023-08-31 20:24:58.611503+00
Date Added: 2024-06-11T12:07:39.823582
License: Public Domain

*614Walker, J.,
dissenting in part: I agree that plaintiff cannot recover the penalties for usury. The administrator' and not intestate received the usurious interest, and the latter’s estate is not responsible for what the administrator did after his death. It was the personal act of the administrator, and not done in his representative capacity so as to charge the estate with liability. Devane v. Royal, 52 N. C., 426; Tyson v. Walston, 83 N. C., 91, in the second of which cases it is said that “no executor can be subjected in his representative capacity on any demand created or originated wholly after the death of his testator or intestate.” The principle stated in Devane v. Royal, supra, has been reiterated by this Court and that case cited with approval, and as recently as Craven v. Munger, 170 N. C., 424, and Cropsey v. Markham, 171 N. C., 43. The act of receiving the excessive interest is necessary to subject any one to the payment of the penalty for usury, but I do not agree that the defendant is entitled to recover any interest on the debt. In order to incur a forfeiture of interest, it is only necessary that it be charged or reserved. As the notes contained a reservation of unlawful interest, they became noninterest-bearing, and any payments made upon them should have gone'to the reduction of the principal, as they were not in law credits on the interest. Smith v. B. & L. Asso., 116 N. C., 73-102; Cheek v. B. & L. Asso., 126 N. C., 242. It is said in Smith v. B. & L. Asso., supra: “The court properly held, in the very words of the statute, that the defendant had forfeited all interest upon the debt. In legal effect ‘the contract is simply a loan of money bearing no interest,’ and all payments are to be credited on the principal (Moore v. Beaman, 112 N. C., 558; Ward v. Sugg, 113 N. C., 489; Fowler v. Trust Co., 141 U. S., 384, 406), and in addition if the lender accepted such payments of usurious interest the borrower is given a right of action to recover back. double the amounts thus extorted within the two years before action brought. Roberts v. Insurance Co., 118 N. C., 429. The statute makes the charging or contracting for usury a forfeiture of all interest, and in addition its actual acceptance is visited with the penalty of recovering back twice the amount paid.” In the accounting to ascertain what is due, therefore, no credit should be given for any interest, and all payments should be applied in reduction of the principal, and the clear balance resulting from this settlement is all to which defendant is entitled to recover.
So far as the opinion of the Court conflicts with the views expressed by me in Owen v. Wright, 161 N. C., 129, and Corey v. Hooker, 171 N. C., at p. 232, it does not have my concurrence. If defendant is allowed to have judgment for the debt, the statute, which denies a recovery of interest, applies. Cuthbertson v. Bank, 170 N. C., 531.