Ellsworth v. Mitchell , 31 Me. 247 ( 1850 )

Shepeey, C. J.

This action, containing a declaration in assumpsit for money had and received, is not founded upon the Act approved on August 7, 1846. The declaration is not so framed as to enable the plaintiffs to recover by virtue of that Act; nor do they profess to have complied with its provisions. The provisions contained in the tenth section are relied upon to show, that the mortgage made to Walter Corey and C. C. Mitchell & Son, was illegal and void; and thence it is inferred, that Mitchell & Son, having received money to pay an illegal, and void mortgage, cannot retain it, but must pay it to the plaintiffs, who were subsequent mortgagees of Wyatt &. Son.

Contracts made in violation of the provisions of a statute cannot be enforced in a court of justice, and may be effectually resisted, when introduced as evidence of title by a party to them, or by one in legal privity with such party, but not by a mere stranger, who would attempt to enforce the law and to disturb the rights secured to the parties by such a contract.

This is the well established construction of statutes, which declare usurious contracts to be illegal and void.

In the case of Green v. Kemp, 13 Mass. 515, it was held, that a mortgage made to secure an usurious contract was void only .as against the mortgager and those claiming the estate under him, and that one, who had purchased the equity of redemption only, and not the entire estate, could not avoid the mortgage by proof of usury. That decision appears to have been noticed with approbation in the case of Richardson v. Field, 6 Greenl. 36, where the tenant being a party to the usurious contract was permitted to make such a defence.

In the case of Dix v. Van Wyck, 2 Hill, 522, the plaintiff, as mortgagee of personal property, claimed to recover it from an officer, who had seized it upon an execution issued on a judgment recovered by a creditor of the mortgager, and it was decided, that the officer might defeat the plaintiff’s title by proof of usury, because the creditor had seized the entire property and thereby succeeded to the rights of the mortgager. It was at the same time admitted, “ that a deed or contract can only be avoided for usury, by the party who made it, or by some one standing in legal privity with him, and not by a mere stranger to the transaction.”

The statutes prohibiting the taking of unlawful interest, and the sale of intoxicating liquors, rest upon similar principles of legislation. The rules of construction, determined to be applicable to one class of those enactments, may well be applied to the other.

The plaintiffs, as subsequent mortgagees, are alleged to come within the rule, which admits those in privity of title to show, that a contract between other parties was illegal. But the plaintiffs, by their mortgage, did not purchase or obtain a title to the entire property already mortgaged to others. Their mortgage declares, that it was “ made subject to said three mortgages and also to a mortgage to Walter Corey and C. C. Mitchell & Son.” They therefore became the owners of the property, subject to those mortgages, and did not acquire the rights of Wyatt & Son to defeat the mortgage made by them to Corey and Mitchell & Son, according to the decision in the case of Green v. Kemp, by proof, that it was made in violation of the provisions of a statute.

This would seem to be the aspect, which the case would present, if it were admitted, that the defendant had received money on account of an illegal contract unexecuted.

But the plaintiffs allege, that the mortgage, to which the defendant was a party, has been paid and not purchased by Woodward. If so, that contract was perfectly executed and extinguished, before this suit was commenced; and the plaintiffs do not present themselves as resisting a title obtained and insisted upon in violation of a statute, but as attempting to recover back money paid upon an executed illegal contract, and without having been the persons who made the payment.

When a contract not malum in se, made in violation of the provisions of a statute, has been executed, a party, who has performed by the payment of money, cannot recover it back, unless he can show, that it was not paid for value actually received, but was obtained wrongfully or by undue advantage; or unless he can exhibit a statute provision expressly authorizing such a recovery. Lowry v. Bordien, Doug. 468; Tappenden v. Randall, 2 B. & P. 467; White v. Franklin Bank, 22 Pick. 181.

By the common law, therefore, {a person, who has purchased intoxicating liquors of one not licensed to sell them, and who had received and paid for such liquors, could not recover back the money so paid.

The Act of 1846, gave new rights to the purchaser and his creditors, and if he or they would enforce those rights, they must employ the remedy and pursue the course prescribed by the Act. In the case of Andover and Medford Turnpike Corporation v. Gould, 6 Mass. 44, Parsons, C. J. says, “ But it is a rule founded in sound reason, that when a statute gives a new power, and at the same time -provides the means of executing it, those, who claim the power, can execute it in no other way.”

It will not be necessary to consider the other points presented by the arguments. Plaintiffs nonsuit.