Court Opinion

ID: 8256663
Source: CourtListenerOpinion
Date Created: 2022-10-16 15:32:22.288247+00
Date Added: 2024-06-11T16:43:01.028816
License: Public Domain

Mr. Justice Handy
delivered the opinion of the court.
The defendant in error brought this action in Yazoo circuit court, against the plaintiff in error, to recover the amount of an inland bill of exchange received by the defendant in error under the following circumstances: —
The plaintiff in error, with one Wilson, who was master, and *268one Patton, who was clerk, being partners in a steamboat on the Yazoo River, called the “ Hard Times,” Wilson, the master, drew the bill sued on, dated Yazoo City, February 1, 1849, at thirty days after date, for $512.50, payable to Fouche, expressing on its face that it was to be charged to account of the steamboat Hard Times and owners, addressed to and accepted by “ Geo. W. Patton for the steamboat Hard Times.” It was drawn for the use of the boat, to raise money to advance on cotton shipped, and was discounted to the clerk by Fouche, who advanced for it the sum of five hundred dollars; and it was proved to be customary for steamboats on the Yazoo River to advance money to pay charges on cotton shipped on them, and that it was the custom of trade at Yazoo City for owners and officers of steamboats to raise money by discounts •of drafts similar to the one sued on, allowing interest by way of discount, at from lj to 2J per cent, per month, and that Fouche was engaged in business of that sort. There was also testimony adduced tending to show that the drawing of the bill was unnecessary, as Wallace had ample funds to supply the proper demands of the boat, which could have been furnished if he had had notice that funds were required.
The verdict being for the plaintiff below, for the full amount of the draft and legal interest, the defendant moved for a new trial, which was denied, and thereupon this writ of error was sued out.
Several questions were raised in the court below, which are not necessary to be considered. The merits of the case turn upon the point of usury in the transaction, and our attention will be confined to that.
First. It is insisted, in behalf of the plaintiff in error, that the contract was illegal by reason of usury ; that one partner has no power to bind his copartner by an illegal contract, because the implied liability of a partner cannot be extended beyond contracts which the law recognizes as valid, and therefore that this contract being made without the knowledge or consent of the defendant, is void as to him. This is the principle contended for under the first instruction asked by the defendant; but we do not think it can be maintained under our laws.
*269The taking or reserving illegal interest is not a punishable offence under our laws, nor does it render the contract into which it enters wholly void. It only causes a forfeiture of all interest. Grand Gulf Bank v. Archer, 8 S. & M. 151.
So far, then, as the contract was legal and binding if made by the privity of the defendant, it was obligatory on the defendant, provided the draft was drawn in the usual course of business of the firm. If in other respects he was bound upon it he would not be discharged from it in tolo merely because it was void as to all interest. We think, therefore, that this instruction was properly refused.
Second. The court instructed the jury at the instance of the plaintiff, “ that if they believe from the evidence that the draft was discounted according to the usual custom of the place where discounted, to be used in the business of the boat, the law is for the plaintiff, to the extent of the money advanced and legal interest.”
It is conceded that more than the legal rate of interest was reserved by the plaintiff in discounting the draft, and it is firmly settled by this court, by numerous decisions, that under such circumstances a party can recover only the principal sum advanced by him, and must lose all interest. Bordurant v. Com. Bank Natchez, 8 S. & M. 533; Archer v. Putnam, 12 S. & M. 286; Coulter & Richards v. Robertson, 14 S. & M. 18. The custom of any particular place or trade could not change this rule and render that legal which is prohibited by law, for upon such a principle all law might be set at nought.
For the error in granting this instruction, and the erroneous verdict and judgment rendered in virtue of it, the judgment is reversed, and the case remanded for a new trial.