Garth v. Cooper & Smith , 12 Iowa 364 ( 1861 )

Wright, J.'

The reasoning used and principles recognized in Smith, Twogood & Co. v. Coopers & Clark, 9 Iowa 376, must settle this case against appellant. And to the same effect is Campbell v. McHarg, Ib. 354. The letter and spirit of these adjudications teach, that “ however it may be covered by changes and substitutions, if usury be found to exist, either directly or indirectly, its taint continues and affects all the parts through which it runs. The substitution of one contract for another, the taking a new note for the old one will not purge it.”

If it satisfactorily appeared that? the parties at the time of making the second note, intended to purge the contract of its usurious taint, and to so reform and correct it as that no part of the original illegal consideration entered into the npte which is the basis of the present action, we should be clearly of the opinion that the ruling was erroneous. From the testimony, however, we conclude, that the court belovr was justified in believing that the transaction vras a more change or substitution, designed by the plaintiff to cover up the usury. If so, the taint attaches to the new note, and plaintiff could only recover his principal.

The law is, that if the usury is established, plaintiff shall have judgment for the principal sum without either interest or costs. A judgment is to be rendered also against the defendant for the forfeited interest, in favor of the State? for the use of the school fund. And while there is no declaration in the act under consideration, providing that judgment shall be entered against the plaintiff for costs, we think, under the general provisions of the statute, this may be done. Upon the issue joined defendant was successful, and was entitled, as a consequence, to recover his costs. (§1811 of Code of 1851.) It was not the intention of the statute to leave each party to pay his own costs in this class of cases. But the costs attending the determination of the issue should be taxed and judgment rendered therefor as in other cases, against the unsuccessful party.

Affirmed.