Gross v. Coffey , 111 Ala. 468 ( 1895 )

McCLELLAN, J.

The circuit court erred in receiving in evidence against plaintiff’s objection the depositions of E. C. Gross, taken on behalf of the plaintiff by John H. Vaught :-nd W. C. Glover, which had been suppressed on the motion of the defendant. The suppression of a deposition destroys it for all evidential purposes, and while the paper upon which it is written may. remain in the files of the court and cause, and purport on its face to bear the signature of a party to the cause, so that what is set down therein would be competent as admissions and the like against such party, upon proof of the signature or of his assent to the statements contained in the paper, in and of itself, having lost by the suppression the verification which it had as a deposition, it is no .more than any other paper casually and accidentally in the file purporting to have been signed by a party sought to be charged by the admissions embraced in it, and not evidence against . him unless preliminary proof connecting him with it is adduced. — Weeks on Depositions, §§ 365, 530; 1 Greenl. Ev., § 552.

The question of chiefest importance in this case arises on the rulings of the trial court on charges requested, and is whether usury paid can be recovered back in an action of assumpsit, that is, in the absence of a promise to repay or refund it* At common law such recovery was allowed, and in many of. the States, the action is sustained. The ruling, however, at common law, and in these States except when their statutes expressly or impliedly authorize this action, goes upon the theory that a contract to pay usury is illegal and void, and not voidable merely; and the main difference between the statutes in the States referred to and our own, lies in the fact that they either in terms declare, or have been construed and held to declare, such contracts absolutely void, while the statutes of Alabama do not so declaré, but only provide that an usurious contract cannot, when the objection is properly taken to it, be enforced in respect of the usury or interest, but may be as to the principal, and have uniformly been held to render such contracts to that extent voidable at the election of the payor, but not in and of themselves illegal and void. The common law doctrine,and the doctrine administered in those States which allow such recovery, is very ably and clearly stated by the supreme court of New Jersey through Reed, J., in Brown v. McIntosh, 39 N. J. L. 22. The contrary view — that which denies such right of recovery — is maintained by the supreme court of Massachusetts, among others, and is expressly put upon the ground that the statutes of that State do not render a contract whereby usurious interest is allowed illegal and void; and upon this consideration the court differentiates its own conclusion from the contrary one reached by the New Hampshire and other courts and referred to in argument, saying : “The 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 fomerly 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. H. 833, 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 gaye 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.” — Crosby v. Bennett, 7 Mete. 17. And upon like reasoning the same conclusion is reached in a number of other States whose statutes do not declare or render a contract involving usury illegal and void, but only provide defenses thereto in respect of the usury and interest, or forfeitures, and the like. — Van Fleet v. Sledge, 45 Fed. Rep. 743; McBroom v. Scottish Investment Co., 153 U. S. 318; Graham v. Cooper, 17 Ohio 605; Williams v. Cole, 26 Ohio St. 207; Guinn v. Boynton, 40 Iowa 304; Smith v. Coopers, 9 Iowa 376; Phillips v. Gephart, 53 Iowa 396; Bank v. Sherwood, 10 Wis. 230; Ransom v. Hays, 39 Mo. 445; Hadden v. Junes, 24 Ill. 381; Tompkins v. Hill, 28 Ill. 519; Luke v. Brown, 116 Ill. 83; Bank v. Lutterloh, 81 N. C. 142; Woodfolk v. Bird, 22 Minn. 341; Cornell v. Smith, 27 Minn. 132; Security Co. v. Aughe, 12 Neb. 504; Blain v. Wilson, 49 N. W. Rep. 224.

Alabama belongs to this latter category of States. Usurious contracts with us are not void. In any event they are perfectly valid and binding so far as the principal is concerned, and are also good, and may even be enforced in oar courts as to the interest and usury, unless the payor elects to interpose the defense as to the latter items which the statute furnishes him. — Code, §§ 1750, 1754; Masterson v. Grubbs, 70 Ala. 406; Burns v. Campbell, 71 Ala. 271; Bradford v. Daniels, 65 Ala. 133. And it is not claimed that the legislature has in any manner authorized an action for the recovery of usury paid. So that, if the question were an open one in this court, we should not hesitate to declare that usury voluntarily paid, as it was in the case at bar, if paid at all, can not be recovered back in an-action of assumpsit. The promise to pay it is not illegal and void, but voidable only at the election of the promisor. Not availing himself of the statutory defense,- it can not be said that his act in paying or the promisee’s act in receiving usury is illegal. But the question is not an open one in Alabama. It was in substance decided, against the right of recovery back in the celebrated case of Jones v. Watkins, 1 Stew. 81, and expressly so ruled in the case of Noble v. Moses Bros., 74 Ala. 604, 621; and subsequent decisions in this latter case did not overrule the first opinion as to this point.

The plaintiff must, therefore, recover, if at all, on the alleged promise of the defendant to repay and refund whatever of usury was included in the payment made by him to the defendant, and the recovery must, of course, be measured by the terms of that promise. We do not understand the alleged agreement to involve the abatement on the part of the defendant of his claim except to the extent that usury should be found to have entered into it. This eliminated, the demand of defendant stood as if no usury had ever entered into it, or been received by him, and the amount of it is to be determined on that hypothesis. In other words, the sum due the defendant at the time of the settlement on acount of principal and interest at the statutory rate is to be arrived at precisely as if no usury had been injected into the amount of the claim on its face. Interest on matured interest is not incident thereto, and is not recoverable as an incident. But an agreement to pay interest on such interest is not unlawful or usurious; especially when made after the maturity of the original principal and interest thereon. — Paulling v. Creagh’s Administrators, 54 Ala. 646. Hence it is that, .on the assumption that usury was included in the payment made to the defendant and that he promised to pay the amount of it back to the plaintiff, the amount paid by the plaintiff as 'interest on accrued interest embraced in the several renewal notes as part of the principal, and which as such the plaintiff by executing the notes undertook to pay, is not to go to swell the plaintiff’s recovery; it-is not usury, and is, therefore, not within the terms of the defendant’s alleged promise. The cases referred to by appellant’s counsel in this connection, would be in point if the defendant had agreed to refund all that he had received except the principal and eight per cent thereon— that seems to be the measure of equity the debtor has to perform when he goes into chancery to be relieved in respect of an usurious contract, (McGehee’s Admr. v. George, 38 Ala. 323) ; but it is not the measure of the defendant’s liability under the promise alleged, and which the evidence tended to establish. The charges requested by the plaintiff on this subject were properly refused.

As the judgment must be reversed for the error pointed out above in the admission of the suppressed deposition of E. C. Gross, we deem it unnecessary to consider the exception reserved to the refusal of the court to grant plaintiff’s motion for a new trial. '

Reversed and remanded.