Court Opinion

ID: 9809194
Source: CourtListenerOpinion
Date Created: 2023-08-31 21:03:28.782905+00
Date Added: 2024-06-11T12:25:26.101888
License: Public Domain

Clakk, J.,
dissenting in part: Under the usury law in force up to 1866, whenever usury was shown the entire contract was void. This was so severe that the . courts felt moved to modify its stringency by holding that where the debtor had to apply to the. court for an injunction the court would not help him unless he would pay the debt and legal interest. Ballinger v. Edwards, 39 N. C., 449. The Act of 1866 in reducing the penalty *432to mere loss of interest also' made this apply, whether the debtor or creditor was the moving party, by providing that where usury was charged no interest should be allowed “either in law or equity”. The attention of the Court was not brought to this change, for it was adverted to in no decision till its effect was pointedly and ably presented by counsel in Moore v. Beaman, 112 N. C., 558 — inthe meantime the Court having followed Ballin-ger v. Edwards, without question. In Moore v. Beaman, the Court’s attention was not only called to the above change in the Act of 1866 forbidding the recovery of interest “either in law or equity” when usury was charged, but the subsequent legislative construction in The Code, Section 3836, which makes usury a “forfeiture of the entire interest which the note or other evidences of debt carries with it.” There is no exception in the statute, and, equity as a separate jurisdiction being abolished, there is no ground upon which the Court can interpolate any exception, Indeed, it will be a virtual repeal of the usury law if a creditor by dexterously securing himself by a mortgage with power of sale can secure himself against the “forfeiture of all interest” which the statute law visits, without exception, upon every “note or other evidence of debt” which is in any way tainted with usury. When this point was presented in Moore v. Beaman, the point was not necessary to a decision, and the above view was expressed only as that of the justice writing the opinion. But the Court and the profession understood it as a virtual construction of The Code, Section 3836, and accordingly in the very next volume, in Ward v. Sugg, 113 N. C., 489, in which case the plaintiff was a debtor asking an injunction agaiust a sale under mortgage, the Court held that all interest was forfeited, and (at bottom of page 492) *433expressly quote with approval that very part of Moore v. Beaman, ‘ ‘the contract, usury being pleaded, is simply a loan of money, which in law bore no interest”, and in the same opinion (on page 496) it again refers to and adopts Moore v. Beaman on that point. Thus the expression in Moore v. Beaman was expressly adopted and made the judgment of the Court in Ward v. Sugg and even the dissenting opinion in that case does not controvert that Moore v. Beaman was the law.
In Atkins v. Crumpler, 118 N. C., 532, Moore v. Beaman is cited as authority, though it is true that in that case the plaintiff was the creditor. In Smith v. B. & L. Asso., 119 N. C., 249, 255, in a case in which (like Ward v. Sugg) the debtor was the plaintiff, the Court expressly cite and reaffirm Ward v. Sugg and Moore v. Beaman as the law under The Code, Section 3836, and hold that usury, being shown, “the contract is simply a loan of money bearing no interest”. It would be an anomaly under this statute for the Court to rule that the debtor must pay the principal debt “with interest” when the statute provides that, if he does, the debtor can immediately sue to “recover back double the interest so paid.” Roberts v. Ins. Co., 118 N. C., 429.
The legislative construction is also that of Moore v. Beaman, Ward v. Sugg and Smith v. B. & L. A., supra, for in the Act of 1895, Chapter 69, it is expressly provided that if the interest is paid the debtor may recover “twice the amount of interest paid and also the forfeiture of the entire interest”; cui bono order the debtor to pay the interest? This is now the settled law both upon the decisions and the legislation above cited. To allow a party to evade the “forfeiture of usury” simply because he has secured himself by a mortgage with *434a power of sale would, be a nullification of the protection intended by the statute, except that the debtor could bring another action ‘ ‘to recover back twice the amount and the forfeiture of interest. ” Our decision (119 N. 0., 255) and the Act of 1895 both expressly say the penalty is “forfeiture of all interest and recovery of double the interest paid.” The Court should abide by these recent decisions, which are in accord with late legislation and have proved a salutary protection to the oppressed.