Scott v. Williams , 1897 Ga. LEXIS 96 ( 1897 )

Little, Justice.

1. The questions to be decided in this case arise on exceptions to- the judgment of the court below in sustaining a -demurrer to the declaration of the plaintiff, and involve the .application of certain principles in the law of usury. Our ■Civil Code, §2892, declares: “All titles to property made .as part of an usurious contract, or to evade the laws against usury, are void.” The record discloses that the title in question was made to- secure a debt infected with usury; and the plaintiff, invoking this provision of our law, insists on a literal application of its precepts, while ’the defendant contends that such title is not ipso facto void. This is the question we have- to decide.

Inasmuch as there is no qualification in the statute, we .should consider first what is its effect; and we quote the language of an eminent writer, that “when the plain and unequivocal language, of the- law is rigidly followed, there ■are, to be sure, a few cases of hardship; but let it be once understood that statutes are not to be limited in their operation by over refined and artificial interpretations. Men are .■able to understand and govern themselves by the law of the land, and an incalculable amount of legal controversy is thus avoided.” It may here be referred to that the statutes ■of the several States on the question of the effect of usury •on contracts vary; in some instances, the statute declares that •contracts founded in usury are void; in others, that such •contracts are valid in the hands of a bona fide holder, etc. But it is unnecessary to pursue this branch of the investigation further, because our statute, when referring to titles infected with usury, declares the same void, and we construe these words to mean just what they say: they are void.. "When? A deed to a lot of land, though infected with usury, does not usually bear on its face any evidence that it is tainted with usury; it is prima facie a conveyance of such .title as the grantor could convey; the defect in such deed is not patent; it does not rest on the terms of it, but must be shown by extrinsic proof, which goes to the consideration expressed. Therefore, on its face and as a natural effect •of its terms, the deed conveys the title of the grantor to the premises described in the instrument, and such will be its effect until, on an examination of the consideration, it is ascertained that the consideration was usurious. Then, and not till then, will the court declare the a.pp>arent conveyance not to he a conveyance because of the vice in -the consideration. Such conveyance is to he accredited good until the ■question is made and it is adjudicated to be had.

Now, who can cause such or any other adjudication of that ■conveyance to he made? The answer is plain under the law: not a stranger -to it, but only one who- has an interest adverse to it. So that, deciding as we do that titles to property infected with usury are void, the practical effect of such de■eision is nugatory, until we further consider and determine who may have them so declared. The doctrine is well settled that the defense of usury can only be taken by the party to ithe usurious agreement, or persons representing him as privies in blood or estate. A stranger cannot set up ■ usury as a defense to an action. Tyler on Usury, p. 403. The plea of usury is a personal one, and no one can plead it but the borrower and his privies. Ryan v. Am. Freehold Mortgage Co., 96 Ga. 322; Zellner v. Mobley, 84 Ga. 749. A title may be absolutely void between certain persons, and not void as between others. 84 Ga. supra; see also Jones on Mortgages, §644. It may be said that in many cases where a transaction is declared void in terms of the common law, or even expressly "by statute, where the obvious intent of the rule or statute is to secure and protect the rights of others, the construction of law is, that it is voidable so far that it shall not operate to defeat or impair those rights. . A deed of this character is not a dead letter, hut can he avoided by the injured person only, and at such time and in such manner as may be necessary to secure those rights; in other respects, iit has its natural effects. "Wait on Fraudulent Conveyances, §445 et seq. Many other citations could he made, establishing these principles, but it is deemed unnecessary to further elaborate them. So that, while we hold that titles to property made as part of an usurious contract are void, we further hold that the right to have the same so declared rests with the borrower, his personal representatives and privies. The case of Jaques v. Stewart, 81 Ga. 81, is nolt to be taken as an authority against the correctness of the principles here ruled, although a casual reading of that case would possibly lead to that conclusion. There, 'the record shows both parties claimed title from the same source, and the contest between the parties was, which particular hill of sale made by Gordon, the one to Stewart, or the one to Jaques, conveyed the title, and this court held that Jaques, when the: bill of sale made by Gordon to Stewart was offered as showing title in the latter, might, in defense of the title conveyed to him subsequently by Gordon, show that the first 'bill of sale was infected with usury and therefore void; in other words, that Gordon, the borrower, might set up the fact of usury and have the conveyance to Stewart declared void, and that Jaques was his privy in estate, and, being such, the right to do so inured to him. These facts do> not appear in the report of the case, but are shown in the-original record of file here, and formed the basis for the> opinion rendered. 84 Ga. 750.

2. It would seem conclusively to' follow from the above reasoning, that a stranger in law or in interest would not be heard to attack a title as void because infected with an usurious consideration; indeed we can conceive of circumstances where even personal representatives, or privies in blood or estate, could not do so. This court held in the case of Zellner v. Mobley, 84 Ga. 746, quoting from Mr. Tyler, that, referring to' the borrower, “If for any reason — his desire to avoid litigation, his pride of character, or his conscientious sense of justice, he may be induced to waive bis-legal rights and to satisfy a demand, he is at liberty to do so, although it may be obnoxious to the defense of usury.” If' a borrower may exercise his personal privilege and pay off a debt infected with usury, or refuse to take advantage of this plea, preferring for such reasons as may actuate him to recognize and settle such usurious contract, no one can deny him the right, and when he chooses to do so and has done so, then neither his personal representatives nor privies can reopen the question or revise his act. In the case now under consideration, it is admitted that Perry, the intestate, made to Lewis an absolute deed to real estate to secure the payment of a debt infected with usury. Under our law, this title was void, and under any view of the law, Perry would have the right to have it so declared; and if nothing more appeared, the personal representative of Perry and his-privies in blood or estate would succeed to the same right. Rut more does appear. At the time of the delivery of this deed, Perry, the intestate, made a contract with Lewis by •wbicb the latter executed a bond conditioned to convey to Mrs. S. A. T. Perry (wife of the intestate) the land conveyed to him, on payment by her or her assigns of the debt due by Perry. Thus it appears that Perry divested himself of the right to redeem the land and placed such right in a third party. The record is silent as to the consideration which moved this last agreement. The obligee, however, being the wife of the debtor, the contract could be supported as a gift. In any event, Mrs. Perry accepted and held the bond. We are not called on to decide whether Mrs. Perry would have the right to set up usury in the deed to her obligor; that question is not involved. After the death of Perry, Mrs. Perry transferred and assigned her bond for titles to Williams, who paid the debt of Perry to Lewis, received from the latter a conveyance of the land and entered into possession. Now, Scott, the administrator of Perry, files his petition, alleging the facts; claiming that the deed from Perry to Lewis is infected with usury and void, that Williams had notice of the usury before he took the conveyance from Lewis; and he prays damages and judgment for the land and that title be vested in him as administrator on payment of the original principal in the debit owing by Perry to Lewis, with lawful interest thereon.

Under the view which we take of the case, the administrator of Perry is not entitled to any of the relief prayed for by him; nor in our opinion can 'he bring up the question of usury in the original transaction between Perry and Lewis. When Perry made the deed to Lewis, he procured the latter to make a bond for titles to a third person, and the assignee of this third person complied with the terms of the bond, paid the money and received conveyance. Perry had a right to redeem. He chose, however, for sufficient reasons, to part with his right, and when he did so, he had no further right or interest in the land. Polhill v. Brown, 84 Ga. 338; 9 Paige’s R. 137. If after -these transactions Perry could not open tbe matter and -recover tbe land, bis personal representatives could not.

Juclgment affirmed.

All the Justices concurring, except JP-ish, J., disqualified..