Court Opinion

ID: 6414309
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:55:00.468583+00
Date Added: 2024-06-11T15:51:29.082902
License: Public Domain

Hoar, J.
This case depends upon principles which are fa* miliar and well settled. There are two remedies which the statutes provide for usury; one, where an action is brought upon a contract or assurance, and it appears that a greater rate of interest than is allowed by law has been reserved, taken or received, in which case the defendant shall recover his costs, and the plaintiff shall forfeit threefold the amount of the unlawful interest, and shall have judgment only for the balance due after deducting the forfeiture; and the other, where unlawful interest has been paid, and the person paying it may within two years from the time of payment have an action of contract or bill in equity to recover back threefold the unlawful interest so paid. Gen. Sts. c. 53, §§ 4, 5.
In the latter case, no recovery of the forfeiture can be had unless there has been an actual payment of unlawful interest within two years. There is a locus penitentice to the usurious lender, and if he receives no more than the sum lent, with lawful interest, he does not incur the penalty. Simpson v. Warren, 15 Mass. 460.
The plaintiff in this suit cannot therefore recover as a penalty any sum whatever, because the amount which has been paid or tendered upon the usurious contract does not equal the amount which be actually received, with lawful interest.
On the other part of the case, it was determined in Hart v. Goldsmith, 1 Allen, 145, that in a suit in equity to redeem a mortgage, if the defendant by his answer claims the performance of the usurious contract, he is to be considered as an actor within the meaning of the statute, and the mortgagor is entitled to the benefit of the forfeiture for usury in reduction of the sum payable upon the mortgage, exactly as he would have been if the defendant had brought an action to foreclose. The amount of the forfeiture being more than enough to extinguish the whole *133amount due on the mortgage note, after deducting the sum already paid or tendered, the plaintiff is entitled to a decree for redemption, without farther payment, and for his costs. He need not have tendered so much as he has ; but by doing so, he has deprived himself of the advantage of deducting the whole of the penalty.
Hart v. Goldsmith has been so recently decided that it is unnecessary to restate the reasons for the decision, the correctness of which we see no cause to question. But there is one remark which was inadvertently made in delivering the opinion in that case, which should be corrected. On page 148 it is said that “ if the doctrine urged by the defendant should prevail, the singular result would follow, that this court under one bill in equity might require a sum of money to be paid to him, which the plaintiff might immediately maintain another bill in equity to recover back.” This., would not be true, if the defendant were only required to pay the sum lent with legal interest, as in such case no penalty would be incurred. It would be true, if the contract were treated as valid notwithstanding the illegal interest reserved; and if no effect whatever were given to the proof of usury on a bill to redeem; so that the plaintiff should be allowed to redeem, only on payment of the whole sum secured by the usurious contract.
Decree that the plaintiff redeem without fwrther payment, and for his costs.