Court Opinion

ID: 6503080
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:15:38.85315+00
Date Added: 2024-06-11T15:54:39.749894
License: Public Domain

COLLIER, C. J.
By the act of 1834, it is enacted, that on all contracts on which a higher rate of interest than eight per cent, shall be reserved, the principal alone shall be recovered, and the same shall be void as to the interest. [Clay’s Dig. 591, § 9.] The statute of 1819 makes “ the borrower or party” to a usurious contract, from whom a higher rate of interest shall be taken, a good and sufficient witness : Provided, that if the person against whom such evidence is offered will deny upon oath the truth of what such witness offers to swear against him, then the evidence shall not be admitted. [Id. 590, § 5.] Thus we see, that the borrower of money at an unlawful rate of interest, is a competent witness to establish the usury, when sued for its recovery, unless the opposite party will negative the truth of his evidence.
*582In Mallory et al. v. Matlock, at this term, we held that chancery cannot entertain a bill for discovery after judgment at law, where the facts sought to be elicited are matter of legal defence ; unless an excuse is oifered for not having exhibited it earlier: Further, that relief cannot be obtained in equity against usury, where the party has omitted to plead it at law, and shows no excuse for the failure. It was decided in Perrine v. Striker, 7 Paige’s Rep. 598, that a court of chancery will not entertain a bill for the discovery of the usury against the alledged usurer, who is the plaintiff at law seeking to collect a note in which illegal interest was reserved! That decision was placed upon the ground that a statute of New York gave to the defendant the benefit of such discovery, by the examination of the plaintiff at the trial, which was all that could be obtained in equity. Our act of 1819, is still more favorable to the borrower. It allows him to prove the usury by his own testimony. True his statement will be disregarded, if negatived by the person against whom it is offered, but it will still be competent for him to make out his case by the testimony of third persons.
In Morse v. Hovey and Cloyes, 1 Sandf. Eq. Rep. 187, the vice-chancellor said the statute of New York, in authorizing the examination of the plaintiff at law, did not limit the examination to that mode of proof; but express provision was made for the interposition of chancery. The act was not merely permissive, but it provided that “ the court of chancery ~shall declare” usurious notes, &c. to be void, and decree them to be cancelled, whenever it shall appear by the defendant’s admissions, or by proof, that the same are usurious; and dispensed with the payment or offer of the principal sum loaned, with lawful interest, as a pre-requisite to relief in such cases. There the bill was filed pending the suit at law, to obtain the testimony of certain persons who were not examinable on the trial, and in the meantime enjoin the proceedings ; and the bill was entertained upon the ground that the defendant at law was not bound to avail himself of the testimony of the plaintiff, where there was other evidence which could be obtained through the medium of equity; and which, because of the disinterestedness of the witnesses furnished a surer test of truth.
*583In the case at bar, it is not alledged that the complainant Jones, omitted to defend at law upon the ground that he could not prove the usury by disinterested, proof, or that he was prevented from making his defence, because he believed that the defendant would deny the truth of the evidence he might give. Even if he entertained such an opinion, still he should have endeavored to make defence, and cannot after judgment come into chancery to have the advantage of evidence since discovered; especially when it is not shown that he made any effort to obtain it previously.
The cases from New York merely determine that a party when sued upon a usurious contract is not bound to examine the plaintiff as a witness to prove the usury; but if there are other witnesses whose testimony may be reached in equi-quity, that court will entertain his defence. These cases are clearly distinguishable from the present. Here, the borrower may, under the statute, be a witness, and thus establish the usury, unless the opposite party will deny it; besides the evidence discovered since the trial was admissible at law, had the defendant there, been advised of its existence before judgment. See 5 Paige’s Rep. 249; 7 Id. 598; 1 Stewt. Rep. 81; 2 Id. 42; 3 Porter’s Rep. 436 ; 7 Id. 549; 5 Id. 547.
In every view in which the case has been presented, we think the bill is wanting in equity. The decree is therefore affirmed.