Chadwick v. Menard Brothers
| Decision Date | 01 January 1900 |
| Docket Number | 13,409 |
| Citation | 28 So. 933,104 La. 38 |
| Court | Louisiana Supreme Court |
| Parties | E. H. CHADWICK v. MENARD BROTHERS |
IN RE Menard Brothers Applying for Certiorari or Writ of Review to the Court of Appeals, Parish of Orleans, State of Louisiana.
Bernard Titche and Bernard I. Cahn, for Petitioners.
Benjamin Ory, for Respondent, Chadwick.
The defendants, Menard Brothers, seek to have a judgment originally rendered by the City Court, and affirmed on appeal to the Court of Appeal, decreed illegal. The said judgment condemns them, they aver, to pay excessive charges of interest.
The statement of facts, agreed to by plaintiff, Chadwick, and defendants, Menard Brothers, shows that five suits were instituted against the latter in the Fourth City Court of New Orleans on as many promissory notes on which plaintiff secured judgment, which was affirmed on appeal to the Court of Appeal.
It appears, by this statement, that the notes sued on represent balances due after settlement at maturity of the notes given by the defendants. At these settlements, made when the notes became due, The claim would be nearly all liquidated by the amount paid for asserted usurious interest if the court were to allow the repetition for which relator sues. Defendants pleaded usury in bar of the recovery of plaintiff, to which plaintiff, Chadwick pleaded the prescription of one year.
Article 2895 of the Code of 1825 limited the maximum of conventional interest to ten per cent. The rate of interest was absolutely limited to that percentage, and interest in no way could be charged above that amount, and recovery of the principal was rendered difficult, if the rate stipulated was in excess of the ten per cent. Subsequent legislation limited the nullity growing out of usurious interest to the agreement for interest only and shielded the contract from attack on the ground of nullity, and the rate of interest was limited to eight per cent. Act 25 of 1844, p. 14. From the date just mentioned, the Legislature, at different times, gave the subject of interest some attention, which resulted in the enactment of several statutes in relation thereto. We are principally concerned with the interpretation of the act passed in 1856, and, afterwards, incorporated in R. C. C. 2924. It reads: "The owner or discounter of any note or bond, or other written evidence of debt for the payment of money, payable to order or bearer or by assignment, shall have the right to claim and receive the full amount of such note, bond, or other written evidence of debt, and all interest not beyond eight per cent. per annum, notwithstanding that the rate of interest or discount at which the same may be, or may have been discounted, has been beyond the rate of eight per cent. per annum; but this provision shall not apply to the banking institutions of this State in operation under existing laws."
This article was interpreted in Crane vs. Beatty, 15th Ann. 329, the court holding that the law had in view the sale of notes for the purpose of raising money, and that the words, interest or discount, used in the body of the act expressed the same idea. The court said, in substance, that the provisions of the act could not be extended so as to authorize and legalize all transactions between debtors and creditors wherein usurious interest is added to the sum really due (or capitalized), as a consideration for an extension of time, or for the indulgence of the creditor.
This decision was rendered in 1860. The same year the Legislature enacted another statute upon the subject of interest, which we judge was not considered at all by the court, in the 15th Annual case, as the claim passed upon was of a date long anterior to the passing of the statute just referred to, besides, the decision in question only refers to the Act of 1856.
The last statute provides that the owner of any promissory note, to order or bearer, shall have the right to collect it, although it includes a greater rate of interest or discount than eight per cent. per annum, provided that such obligations shall not bear a greater rate of interest than eight per cent. after maturity.
The interpretation of the statute relative to interest came up again in 1888, in which year, in Bank vs. Regan, 40th Ann. 17, the court said: The court, in the case from which we have just quoted, gave the following as the meaning of the statute, viz: The owner of a note, though it contain a greater rate of interest that eight per cent. p...
To continue reading
Request your trial