Vandergrif v. Sweeney

• Decision Date: 12 November 1900
• Citation: 158 Mo. 527,59 S.W. 71
• Parties: VANDERGRIF v. SWEENEY et al.
• Court: Missouri Supreme Court

59 S.W. 71

158 Mo. 527

VANDERGRIF v. SWEENEY et al.

Supreme Court of Missouri, Division No. 1.

November 12, 1900.

USURY — CANCELLATION OF NOTE — ACTION IN EQUITY — RIGHT OF DEBTOR — USURIOUS PAYMENTS — APPLICATION TO DISCHARGE NOTE — LOAN BY PARTNERSHIP — DEATH OF ONE PARTNER — TESTIMONY OF BORROWER — COMPETENCY AS AGAINST PARTNERSHIP.

1. Rev. St. 1899, § 3709, provides that usury may be pleaded as a defense in all civil actions, and, on proof that usurious interest has been paid, the excess of the legal rate shall be deemed as a payment on the principal. Held that, where a debtor had paid usurious interest, he was entitled to credit the amount so paid on the note, in an action by him for its cancellation, as the provisions of the statute may be made the basis of an affirmative action.

2. The contention that a debtor, in an action in equity by him to cancel a note, was not entitled to apply usurious payments of interest to the discharge of the note, because equity would not aid him to recover such interest after payment, was without merit, since he did not ask for a recovery of the interest, but for its equitable application.

3. The fact that one partner had died subsequent to the negotiation of a loan by the firm to plaintiff did not make plaintiff an incompetent witness as to the transaction, since his testimony could be rebutted by the other partner.

Appeal from circuit court, Lawrence county; J. C. Lamson, Judge.

Action by Alous Vandergrif against M. E. Sweeney and others. From a judgment in favor of plaintiff, defendants appeal. Affirmed.

N. Gibbs and Samp Jennings, for appellants. John C. Turk, for respondent.

ROBINSON, J.

The appeal in this case was originally taken to the St. Louis court of appeals. By that court the case has been certified here, for the reason that the title to real estate is involved. The action is one in equity instituted by plaintiff to have released and canceled a deed of trust made by himself on certain lands named therein, to him belonging, to secure a note made payable to one of the defendants herein, upon which note plaintiff alleged full payment, and more, had been made, if all just credits for usurious interest exacted from him thereon are allowed, together with all the other payments made upon the principal obligation. The specific averments of plaintiff's bill as to the relation of the different defendants to the note in controversy, and as to the part each played in its procurement and collection, as well as a detailed statement of the account between plaintiff and defendants, growing out of various transactions between themselves, involving the loan in question, together with other loans, and the various payments made thereon, are unnecessary to recite here, as the trial court, after a full examination into all the facts, upon the issues as made, has found in favor of plaintiff, and, we think, properly, if the plaintiff in this character of action was entitled to have the court make the application of usurious interest exacted as a credit on the note secured by the deed of trust, that its full discharge might thus be shown. This is the principal controversy of appellants' appeal. This last proposition appellants deny, and contend that our statute does not authorize a debtor who has paid usury to a creditor to bring an action predicated thereon, or to have any relief whatever against his own conduct in so doing, except when he himself is sued; or, to use appellants' exact language: "This statute [section 3709, Rev. St. 1899] is a shield to be used by a debtor when suit is brought against him, but not a weapon with which to attack his creditor." While this court has never directly passed upon the question, as now raised and presented by appellants, so far as the writer at present can recall, it has, however, upon divers occasions, affirmed judgments predicated upon allegations of facts essential in all their general features to the facts in this case, and in so doing has determined, as a matter of necessity, the right of the debtor to so plead the usurious payments by him made, as a discharge, to that extent, of his obligation given, as facts preliminary to the right to have discharged and canceled by the court the deed of trust given as security for same, as is sought herein. Schell v. Association, 150 Mo. 103, 51 S. W. 406. While those cases do not announce in direct words a construction of the statute antagonistic to that now contended for by appellants, yet upon...