Court Opinion

ID: 9866544
Source: CourtListenerOpinion
Date Created: 2023-09-26 13:13:14.096198+00
Date Added: 2024-06-11T07:41:00.055770
License: Public Domain

On Rehearing.  We come now to decide what we might perhaps better have decided before, whether the statutory penalties for usury spend their force in defeating recovery by the usurer on his contract, or whether, when they exceed the sum payable according to the contract, they will support judgment over for the borrower. The single object of appellant now is to avoid the money judgment recovered by appellees Lopez. Though the particular question was not raised below or in the original briefs and arguments here, we deem it our duty to consider it, under the doctrine of State v. Garcia, 19 N. M. 414, loc. cit. 421, 143 P. 1012, as subsequently developed and applied in Schaefer v. Whitson, 32 N. M. 481, 259 P. 618. If there is error, it is fundamental. There can be no possible theory of recovery over except that the statute permits it. The statute in question provides: “If a greater rate of interest than is hereinbefore, in section 1 (89-109) allowed, Shall be contracted for or received or reserved, the contract shall not therefore be void; but in any action on such contract, proof may be made that a greater rate of interest has been directly or indirectly contracted for or take.n or reserved, and the plaintiff shall recover only the principal less the amount of interest accruing thereon at the rate contracted for, and the defendant shall recover costs; and if interest shall have been paid, judgment shall be for the principal less twice the amount of interest paid and less the amount of all accrued and unpaid interest.” Laws 1919, c. 162, § 2; 1929 Comp. St. § 89-110. The amendment of 1933 (chapter 142) does not affect this case. This controlling section seems to contemplate mere recoupment. The only recovery provided for is by the lender. It is to be in the amount of the principal debt, less the penalties. Lines are sharply drawn between counsel as to whether a statute imposing penalties for usury is exclusive of a common-law remedy or civil action to recover unlawful interest paid. Appellant relies on Blain v. Willson, 32 Neb. 302, 49 N. W. 224, and a claimed weight of authority. Appellees Lopez rely on Lee v. Hillman, 74 Wash. 408, 133 P. 583, L. R. A. 1918B, 581, Ann. Cas. 1915A, 759. They contend that the latter is controlling upon us, as interpreting a Washington statute a few years later adopted in this state. It appears not improbable that such is the origin of our statute, and we are disposed to admit the contention, though not deciding it. But we do not see how Lee v. Hillman affects this case. True, it was there held that the statute was not the exclusive remedy for one who had been mulcted in usury. An independent and original action was allowed for the recovery of property surrendered in payment of usurious interest. But it was left an open question whether more than the excess over lawful interest could be recovered, and it does not seem even to have been claimed that anything more than the interest itself could be recovered. In a later case in the same court it is held that this right of recovery extends only to the excess over lawful interest. Trautman v. Spokane Security Finance Corporation, 163 Wash. 585, 1 P.(2d) 867. It is plain that this Washington doctrine does not help appellees Lopez to sustain their money judgment. If it be conceded that by an independenf action they might have recovered from appellant the comparatively insignificant sum representing what they had paid in excess of the lawful rate, that would have still left them largely in appellant’s debt. As before remarked, the present recovery can stand only upon the statute. We are satisfied that the statutory penalties are only available defensively and by way of recoupment. It being necessary to make new disposition of this appeal, our former judgment will be vacated. The ease permits of no money recovery for appellees Lopez except for costs. The judgment must be reversed, and the cause will be remanded for modication of the judgment to accord herewith. However, appellant will not recover costs in this court. It is so ordered. SADLER, HUDSPETH, BICKLEY, and ZÍNN, JJ., concur.