Heath v. Page

The opinion of the court was delivered, by

Woodward, C. J.

— This -was an action on the case to recover a sum of money alleged to have been paid upon a usurious contract, and in excess of legal interest. The first objection taken to plaintiff’s right of recovery was, that the suit was not brought within six months after the payment of the usury, but there was no plea of the Statute of Limitations upon the record. The 2d section of the Act of 28th May 1858, Purd. 561, contains such a limitation of the right of action, but a defendant who means to avail himself of it should plead it. I suppose it to be a general principle, that all Statutes of Limitations, to be available, should be pleaded. They may be waived by the persons for whose benefit they were made, and unless pleaded upon record, plaintiffs have a right to presume a waiver, and to come to trial unprepared with evidence to meet such -a defence. The action of ejectment is the exceptional case in which the Statute of Limitations may be set up under a plea of the general issue, but it required an Act of Assembly to establish this exception. Whenever a statute does not authorize it, an act of limitation, which is a bar to the action and does not touch the merits, cannot be put in under the general issue.

If this were not so, however, we should have no difficulty in concurring both in the reasons and the conclusions of the learned judge below upon the point now before us. He held that the satisfaction of the first" mortgage was not payment and receipt of usury, from which the six months would begin to run, but that it was a mere release of lien and substitution of one security for another, and this he inferred from the tenor of the paper signed by Heath, and dated the 24th of November 1857. It is hard to see how this conclusion can be doubted, for what said Heath in that paper ? After reciting the mortgage he held against Page, he declares his motive — “ That Page may, if possible, make a sale of his interest on the most advantageous terms, and then agrees, on such sale being made, he will release and satisfy the mortgage, provided that the said Page shall procure me other good and abundantly safe real security for the whole amount now due on said mortgage, payable at the end of ten years from this date, with interest payable semi-annually.”

Was satisfaction of the mortgage under such an agreement, payment of the debt ? On the contrary, was not the debt, the “whole amount” of it, to survive for ten years on the pledge of other “abundantly safe real security?” There does not seem to be room for two opinions upon this point. If Heath’s carefully-considered written words mean anything, a change of securities, and not an extinguishment of the debt, was the thing intended.

But counsel would have had the question submitted to the jury. Whether satisfaction and discharge of a particular security be payment of the debt is a question of intention, and ordinarily belongs to the jury, because, ordinarily, the intention is to be collected from a variety of circumstances; but where it is deducible from a written document, it is the province of the court to deduce it, because the construction of all writings belongs to the court rather than the jury. We see no error in this part of the record.

The usuriousness of the original contract seems not to have been much contested, and was readily found by the jury upon ample proofs, but under the Act of 1858, the borrower could have no action to recover back the excessive interest stipulated for, until he had “ voluntarily paid the whole debt or sum loaned, together with interest, exceeding the lawful rate,” and the plaintiff, to make out such payment, relied on the agreement and letter of 10th August 1861, the agreement of 28th August 1861,' the deed of Page and wife to Heath of 13th December 1861, and Heath’s entry of satisfaction of 14th April 1862. The defendant maintained that these transactions amounted to a compromise and release of the plaintiff’s cause of action, and if they did not, that they were not a “payment” of “usury” within the meaning of the statute. This was the principal battle-ground.

To keep a clear view of it before our minds, it is necessary to remember that the first mortgage of 1856 was given upon the usurious consideration, that that mortgage was substituted by the mortgage of 19th January 1858, which was for the “ whole debt,” and of course upon the same usurious foundation as the first mortgage, and that the town-lots in Birmingham were conveyed by the deed of 13th December 1861, in satisfaction of this last mortgage.

First, then, as to the alleged compromise and release of right of action. The agreement of 28th August 1861 imports that the conveyance of the lots was to be a “ full satisfaction and payment of all claims and demands against said Page and wife,” under the existing bond and mortgage and the suit thereon, but there is not a syllable about Page giving up any cause of action he had or might' have against Heath. Indeed, as to Heath, it was only a release of such actions as arose out of the mortgage, hut, as to Page, it was a release of no cause of action whatever. Nor did the testimony of Mr. Keenan prove anything to restrain Page’s suit. There had been considerable negotiation about the mortgage — suit had been commenced, and judgment thereon taken for $12,567.90, and, says Mr. Keenan, as the result of all his interviews with Page, “ a desire to close amicably the controversy I was managing, was the idea impressed on my mind from his manner and conversation.” And again, “the substance of what he said was the expression of a desire to close up all controversy.” “ The carrying out of the written agreement was the subject-matter of these conversations.” The controversy Mr. Keenan was managing, and the written agreement alluded to, related to the mortgage, and these were the subjects to which Page’s expressions were applicable. They had no reference, and ought to have no application to his cause of action not existing then, but which arose subsequently when he had paid the usury. Doubtless he might release it upon a sufficient consideration, but we see not a spark of evidence that he said anything about releasing it.

Next, was the conveyance of the. Birmingham lots, payment of the usurious contract ? Heath agreed in the paper of 28th August 1861, that “ they should be full satisfaction and payment” of that contract; and said McKean, C. J., in Musgrove v. Gibbs, 1 Dall. 237, “ it is well established that the receipt of one thing in satisfaction of another is a good payment.” This was said of the payment of notes of hand by other notes, and in a qui tam action, under the penal provisions of our old Act of Assembly against usury. It was attempted in the argument to apply the doctrine of Musgrove v. Gibbs to the satisfaction of the first mortgage, but the evidence of substitution instead of payment was irresistible, and hence this principle could not be applied there. But here it is applicable, for, if a debt may be paid in something else than the legal currency of the country, it may be paid in land, and if a debt may be paid in land, then Heath was so paid. Under the plea of payment, evidence of payment in specific articles, not money, is constantly received in our practice : Hamilton v. Moore, 4 W. & S. 570; Richabaugh v. Dugan, 7 Barr 394. Payment is a matter of agreement; whatever the parties intend for payment, is payment. Set-off rests on mutual dealings, regardless of the intentions of parties, but when a debt shall be considered as extinguished, and what equivalent shall be received in lieu of it, whether money, cattle, or land, are questions of intention, and the law esteems that a payment which the parties have treated as payment. And what would be payment in pleading and evidence generally, is payment under the statute of 1858.

But if the Birmingham lots were payment of the mortgage, when did they become payment ? at the date of the agreement to convey them, or at the delivery of the conveyance ? This is a very material question to the plaintiff’s right of action, for more than seven months elapsed between the agreement of August 1861 and the delivery of the deed. The lots belonged to Mrs. Page, and though she signed the agreement, with her husband, she acknowledged no instrument in the forms of law until the deed was made. The deed took effect only from the time of delivery, which was in April 1862. Then it was that Mrs. Page’s title vested in Heath, and then it was that he satisfied the mortgage of record. Prior to that time the parties rested on the agreement to convey; on the 14th April 1862 they consummated the conveyance, and extinguished the mortgage. Had Page called on Heath to satisfy the mortgage before that date, the latter might well have replied that he was not yet paid his debt, for that nothing less than the deed of Page and his wife, duly acknowledged and delivered, could be payment in pursuance of the agreement. We think, therefore, that the court was altogether right in holding the mortgage paid by the conveyance of the lots, and that the date of the payment was the delivery of the deed, which was within six months before the institution of this suit. Nor is there any ground for the complaint that the court construed those papers and declared their legal effect, instead of submitting them to the crude speculations of the jury.

But it is claimed that the railroad stock which entered into the original loan should have been returned before suit brought, or at the least that it should have been credited to Heath at its present value. It is impossible for us to say what value the jury attached to the stock. The money loaned by Heath to Page in 1856 was $5000, the sum at which he took the lots in 1862 was $12,000, and the jury found a verdict for Page of $7400. The stock was the cloak of the usury. It was put into the original bargain at $5000, but was worthless at the time, or nearly so. There was evidence that it had improved some since. Was it necessary for Page to return the stock as a precedent condition to his right of action ? We think not. He had bargained for and bought it at an exorbitant rate, to be sure, but his title was none the less complete for this reason. Though the taint of the contract, it was an essential ingredient of the contract ; without it Heath would not have made the loan. Page never disaffirmed the contract, but performed it to the satisfaction of Heath by the conveyance of the Birmingham lots. It was thenceforth a fully-executed contract, and the purchased stock became absolutely Page’s property. He might have retained and deducted whatever sum would have expressed the excess over legal interest, and paid only the balance, but hé “ voluntarily paid the whole debt,” and thereby entitled himself to an action under the Act of Assembly. It is not an action in disaffirmance of the contract, nor upon an inchoate title, but it is dn pursuance of the contract, and upon a title to the excessive interest which is complete. When such contracts are made they are made under and subject to the law of 1858. Its provisions interpenetrate all usurious contracts. The lender as well as the borrower is bound to know what the law of his contract is, and after he has accepted full performance of it at the hands of the borrower, it ill becomes him to insist that the borrower should reinstate him in the condition he was before the contract was made, instead of visiting him with the consequences which he knew the'Statute had annexed to all such bargains. The action has no other effect than to reduce the contract to the legal standard of interest. It does not disaffirm, avoid, or contradict the contract, but only razees it down to lawful proportions. No return of the stock, therefore, or offer to return it, was necessary as a condition precedent to the action. The plaintiff'qualified himself to bring such an action, when he voluntarily made full performance of the contract, and that was full performance which the defendant accepted as such.

Whether the stock was counted at anything in making the verdict, we have no means of knowing. If it had any value this ought to have been ascertained, and allowed in adjusting the amount of the verdict. Judging from the amount of the verdict, we would think the stock was thrown out as worthless, and if it was, we will not say, for it is not proper to decide the point now, whether Heath can still recover it back. If included at any price, it would seem to us that the verdict was too large, but the remedy for this was a new trial, and not a writ of error.

It is said the action was misconceived, that it should have been debt and not case. The Act of 1858 does not prescribe the form of action; indeed, it does -not expressly give the right of action, but only impliedly, from the limitation imposed. The action is not for a statutory penalty, but it is to recover back an excess of interest voluntarily paid upon a usurious contract. It is necessarily founded upon the special circumstances of the case, and therefore there is no misconception in bringing an action on'the case.

When it is added that John Heath’s testimony was properly rejected as irrelevant, we have sufficiently noticed all the legal propositions contained in the assignments of error.

The judgment is affirmed.