Court Opinion

ID: 6408161
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:50:34.501906+00
Date Added: 2024-06-11T15:51:16.912688
License: Public Domain

Shaw, C. J.
This is an action of assumpsit brought to recover back money alleged to have been paid by the plaintiff to the defendant, as usurious interest, and proceeds on the ground that the money, thus received by the defendant, has been received on an alleged contract, and therefore that the plaintiff has a right, by the common law, to recover it back, as so much money had and received. The authorities cited certainly tend to show, that so long as a usurious contract was declared illegal and void, it followed, as a necessary consequence, that money paid thereon was taken illegally, and was oppressively extorted from the borrower, and therefore that this equitable action would lie, to recover it back. But now the Rev. Sts. c. 35, § 2, expressly declare that no contract, whereby usurious interest is allowed, shall be thereby rendered void, and, in order to restrain the taking of usurious interest, the statute goes on to make certain specific provisions ; first, to allow a large deduction from the claim of the lender, when the law is resorted to to enforce the performance of such a contract; and secondly, to permit the person, who has paid such interest, to recover back three times the amount, by an action of debt or bill in equity; provided such suit be commenced within two years from the payment. See Sts. 1783, c. 55; 1825, c. 143; 1826, c. 27
*19The consideration, that now by law the contract is not void, distinguishes this case from those cited, and takes away the ground upon which they rested. The ground upon which it was formerly held that an action for money had and received would lie, was, that it was illegal and oppressive to take more than six per cent, interest, and therefore it could not conscientiously be retained from the person who had paid it. This was the ground upon which the case of Willie v. Green, 2 N. Hamp. 333, was decided. For although the statute of New Hampshire, in force at that time, was like our present law, in providing that three times the interest might be forfeited and deducted, when such a contract was in suit, and gave a suit to recover back, not the whole, but a part of the usurious interest; yet, unlike ours, it expressly prohibited the taking of more than six per cent., and thereby made it illegal. But as by our statute the contract is not illegal, the party, who has suffered by paying usurious interest, is confined to the statute remedies. The right to recover back three times the amount of the usurious interest paid, is given by statute to the party who has paid, and is partly in nature of an equitable action to recover back money which the defendant cannot conscientiously and justly retain, and partly in nature of a penalty. So far as it affords a remedy to recover back money wrongfully taken, it is a substitute for the remedy at common law. If, therefore, the party might waive the statute remedy, and sue at common law, he would avoid the provision limiting such action to two years from the payment, contrary to the manifest intent of the legislature and the policy of the law.
It is proper to remark here, that the cause does not depend upon the form of action ; because if the present had been an action of debt on the statute, instead of assumpsit, the statute of limitations would have been a valid defence; all the alleged payments having been made more than two years before the commencement of this action.

Nonsuit to stand.