Gore v. Lewis Et Ux

• Decision Date: 01 December 1891
• Citation: 103 N.C. 539,13 S.E. 909
• Court: North Carolina Supreme Court
• Parties: Gore. v. Lewis et ux.

13 S.E. 909

103 N.C. 539

Gore.

v.Lewis et ux.

Supreme Court of North Carolina.

Dec. 1, 1891.

Usury as a Defense—Custom.

1. Where plaintiff, in an action to foreclose a mortgage, seeks to recover usurious interest, and defendant alleges the usury as defense, he is entitled to the relief allowed by Code N. C. § 8836. which provides that the charging of usury shall be deemed a forfeiture of the whole interest, and the equitable rule that a mortgagor Seeking relief should pay the sum owed, with legal interest, does not apply.

2. In North Carolina a local custom of merchants, warranting the taking of interest greater than that allowed by statute, cannot supersede or modify the statute.

Appeal from superior court, Columbus county; R.F.Armfield, Judge. Reversed.

Action by D. L. Gore against R. B. Lew-isand wife to foreclose a mortgage. From the judgment of the court below both parties appeal.

S. C. Weill, for plaintiff.

W. O. Burke-head and D. G. Lewis, for defendants.

Merrimon, C. J. The plaintiff brought this action to recover the money due upon two promissory notes executed to him by the defendants, —one for $250, due March 1, 1887; the other for $500, due March 1, 1888, —both bearing interest at the rate of 8 per centum per annum, and to foreclose a mortgage of the defendants' real and personal estate made to secure these notes. The defendants admit the execution of the notes and mortgage, but they allege that they are founded upon a usurious consideration, and hence the plaintiff has forfeited the entire interest which the notes carry with them. This is not a case where the debtor comes into the court asking equitable relief against the usurious debt or transaction of the defendants. The fact that the plaintiff asked the court for a decree of foreclosure did not deprive the defendants of their legal statutory defense. In such case, the plaintiff would be required to pay the honest debt and the lawful rate of interest, upon the just maxim that he who asks equity must do equity. Pur-nell v. Vaughan, 82 N. C. 134; Manning v. Elliott, 92 N. C. 48. But in cases like the present the strict rule of law applies. The creditor seeks to recover and enforce pay-merit of his usurious debt, and the defendants, alleging the usury as matter of defense, are entitled to have the full measure of it as allowed by the statute, (Code, § 3836,) which provides that "the taking, receiving, reserving, or charging a rate of interest greater than is allowed by the preceding section, [that fixing the rate of interest,] when knowingly done, shall be deemed a forfeiture of the entire interest which the note or other evidence of debt carries with it, or which has been agreed to be paid thereon." And such defense may be alleged and proven in this and like actions to recover judgment upon the mortgage debt and foreclose the mortgage by a sale of the property. Arrington v. Jenkins, 95 N. C. 462; Grant v. Morris, 81...