Davis v. Hoy , 2 Aik. 303 ( 1827 )

Skinner, Ch. J.

delivered the opinion of the Court. After reciting the facts appearing in the exceptions, as above stated, he proceeded as follows: — As to the competency of the witness, Worthington, there is no rule of law that would exclude him merely on the ground that he was holden jointly and severally with Davis for the debt. If he is incompetent, it must be on the ground of interest, or on the ground that his name is upon the note.

The principle contended for, as having been settled in the case of Walton vs. Shelley, 1 Term Rep. 296, that no party who has signed a paper shall be permitted to give testimony to invalidate it, has not been adopted here, but, on the contrary, has been held untenable by the Court on this circuit, in the case of Nichols vs. Holgate el. al. ^(a)

The reason assigned for that rule, is, that a party to an instrument gives credit to it, and no man shall hold out false col-ours to deceive others, by first affixing his signature, and after-wards giving evidence to invalidate it. If the principles assumed in that case are correct, they are not analogous to the question here presented. Worthington is not called to testify to the prejudice of one who may have been deceived by false colours, in receiving an instrument which he supposed to be valid. This exception, therefore, is not well founded ; and we have no less difficulty in discovering any objection on the ground of interest. The jury have found that the money was loaned exclusively for the benefit of Davis; that Worthington was only surety, and paid the money for Davis, who accounted to him for it.

Surely Worthington has not been prejudiced, having' received of Davis the full amount paid to Hoy, and can have no interest in any recovery that may be had.

The exception, that the suit cannot be maintained by Davis alone, but should have been brought in the name of Davis and Worthington, seems to be fully answered in the question of interest. If Worthington has no interest in that which is sought to be recovered in the suit, if the consideration did not move from him, but from Davis solely, he cannot legally be joined. These facts appeared in testimony, the jury have found them, and the charge of the court thereon was correct. The counsel for the defendant further insists, that if any action can be maintained, it must be an action under the statute for the penalty j that the statute forbids the taking more than six per cent, interest, and gives a remedy to the party aggrieved.

It is true, where a statute creates a right that did not exist at common law, and provides a specifick remedy, the statute remedy alone can be pursued. — 1 Saunders’ (Williams’ edition,} 135-6, n. 4.

But it is to be noticed, that the statute of 1797, which forbids the taking of more than 6 per cent, interest, gives no remedy to the party aggrieved. It imposes a penalty, to be sued for and recovered in a qui tam action, by any one who may prosecute, or by the publick alone.

No part of the statute of 1822 took effect till after the act here complained of transpired; it is therefore unnecessary to consider any of its provisions, excepting that as it is urged that the legislature having in that statute expressly authorized an action by the party to recover the usurious interest, it is to be inferred that no such right existed at common law.

The decision in this case must be the same as it would have been if the legislature had passed no law on the subject in 1822. It is the prerogative of the legislature to say what the law shall be in future, but of the judiciary to determine what the law was before the will of the legislature was expressed.

The important question in this case is, was the payment by the plaintiff to the defendant made under such circumstances as to preclude him from any remedy at law, to recover the excess of interest so paid over and above the interest allowed bylaw.

It is a general rule of law, that where a party pays money voluntarily, and with a full knowledge of all the facts, he cannot recover it, although the demand was unjust.

It is also a general rule, that where money is paid by one party to another upon an illegal contract, they being parliceps criminis, an action cannot be maintained, after the contract is executed, to recover the money.

But where money is paid upon a contract forbidden by the law, if the party who pays the money is not in pari delicto, it may be recovered, unless opposed by some principle other than that the contract was illegal.

If, therefore, the only objection to a recovery in this case is, that the contract, being usurious, was illegal, the money may be recovered, as the party paying is not considered particeps triminis. The law is made not to punish, .but to protect him,

That the payment in this case by the plaintiijf was in some degree voluntary, cannot be doubted. Yet, where money is taken contrary to an express prohibition of the law, made to protect the necessitous, or such as may be considered in the power of others, it is not, perhaps, correct, to say that the act of paying the money is wholly without constraint. The contract itself is clearly in contemplation of law, as well as according to the common understanding of men, imposed upon the borrower, and not voluntary on his part; he is supposed ,tp be in the power of the lender, and he is also usually in embarrassed circumstances, as well when he pays as when he borrows, and if not constrained to pay from a principle of interest alone, a sense of honour may have extorted from him that which in conscience and honour the usurer ought not to retain.

In the case of Smith vs. Bromley, Doug. 696, Lord Mansfield says, if laws calculated for the protection of a subject against oppression or extortion are violated, a recovery may be had; all above legal interest, equity will assist the debtor to retain, if not paid, or an action will lie tb recover back the surplus, if the whole has been paid. Ashurst, J. in the same case, says, on a bill to compel the defendant to refund what he has received above the principal, and legal interest, the surplus will be decreed repaid, and that the action at law ought to be sustained ; for no man will venture to take, if he knows he is liable to refund. The same doctrine is held in several other cases in, the English books, and has never, to my knowledge, been questioned. The remarks of Lord Mansfield in the case of Browning vs. Mortiss, Cowp. 792, it may not be improper to notice. He says, where contracts or transactions are prohibited by positive statute, for the sake of protecting one set of men from another, the one, from their situation and condition, being liable to be oppressed or imposed upon by the other, there the parties are not in pari delicto. The statute against usury, he says, is made to protect needy and necessitous persons from the oppression of usurers and monied men, who are eager to take advantage of the distress of others, whilst they, on the other hand, from the pressure of their distress, are ready to come into any terms, and, with their eyes open, not only break the law, but complete their ruin. Therefore, the party injured may bring an action for the excess of interest.

In the case of Boardman vs. Roe, 13 Mass. 164, the same principle is fully recognized by the court.

And we believe principles of policy require that this remedy should be afforded. There can be no doubt, if chancery will lend its aid in this case, which is not denied ; upon the same principle, this equitable action for money had and received will well lie.

N. Baylies, for the plaintiff. Wm. Upham, for the defendant.

The verdiet was properly amended by the court, there being no question made on the trial as to the statute oflimitations.

Judgment must be upon the verdict, according to the rule.

(a) Ante. p. 138