Williar v. Baltimore Butchers' Loan & Annuity Ass'n

• Decision Date: 16 February 1877
• Citation: 45 Md. 546
• Parties: HENRY R. WILLIAR v. BALTIMORE BUTCHERS' LOAN AND ANNUITY ASSOCIATION OF BALTIMORE CITY.
• Court: Maryland Court of Appeals

45 Md. 546

HENRY R. WILLIAR v. BALTIMORE BUTCHERS' LOAN AND ANNUITY ASSOCIATION OF BALTIMORE CITY.

Court of Appeals of Maryland

February 16, 1877

APPEAL from the Circuit Court for Baltimore County.

The case is stated in the opinion of the Court.

Exception.--At the trial the plaintiff offered the three following prayers:

1. That if the jury believe the defendant loaned the plaintiff the sum of $3025, and took from him the mortgage offered in evidence in this case, that said mortgage does not conform to the provisions of the law, authorizing corporations of this kind to make advances in redemption of their stock, and must be governed by the ordinary rules between mortgagor and mortgagee, or debtor and creditor.

2. That the defendant was not entitled to receive from the plaintiff more than six per cent. per annum, by way of interest on the amount of money loaned by it to the plaintiff, and any amount so received from the plaintiff over and above six per cent per annum, was usury, and to that extent the plaintiff is entitled to recover in this action.

3. That in stating the account between the plaintiff and and defendant, if the jury find there were partial or weekly payments made by the plaintiff to the defendant on account of the money borrowed, the plaintiff should be charged with interest at the rate of six per cent. per annum on the amount borrowed, and from the aggregate of principal and interest the partial payment should be deducted, and (if in excess of the interest,) the balance to bear interest to the date of the next payment, and so on from time to time as the payments were made, until the whole was paid by the plaintiff.

And the defendant offered the following prayer:

If the jury shall believe from the evidence, that the mortgage from the plaintiff in this case to the defendant, has been paid redeemed or settled for by the plaintiff to the defendant and that the same has been released by the defendant, then the plaintiff is not entitled to recover in this case, although the jury shall believe that the amount repaid by the plaintiff included usurious interest.

The Court, (YELLOTT, J.) refused the plaintiff's prayers and granted the prayer of the defendant. The plaintiff excepted. The jury rendered a verdict for the defendant, and judgment was entered accordingly. The plaintiff appealed.

The cause was argued before BARTOL, C.J., BOWIE, STEWART and ROBINSON, J.

W. A. Wade and J. J. Wade, for the appellant.

The action is really indebitatus assumpsit, although the declaration in accordance with the statute omits the usual formal parts in such action. It is founded on the promise and agreement of the appellee, implied in law, to repay so much of the money as was paid by the appellant in excess of the principal and interest due on the mortgage. Baugher vs. Nelson, 9 Gill, 308; Scott vs. Leary, 34 Md., 390.

The provisions of our statute law on the subject of usury, do not deprive the appellant of his common law remedy.

The appellant's first prayer is fully sustained by this Court in several cases. Oak Cottage Building Asso. vs. Eastman and Rogers, 31 Md., 561, and Balt. Per. Building & L. Society vs. Taylor, 41 Md., 409.

The second prayer is but a statement of the provisions of our statute on the subject, (see Code, p. 696,) together with the appellant's common law remedy, as laid down in Scott vs. Leary.

The third prayer sets out correctly the rule for calculating interest where partial payments have been made, as announced in Fitzhugh vs. McPherson, 9 Gill & J., 51.

All Acts are to be construed prospectively, and should be so limited in their operations, unless, by express terms or necessary implication, a different intention is manifest. State, use of Mayor, &c. of Balto. vs. Norwood, 12 Md., 195; Moon vs. Dunden, 2 Exch., 22; Dash vs. VonKleck, 7 John., 477.

The appellant had a vested right to his remedy, and it cannot be taken from him by any subsequent legislation. Bedford vs. Shilling, 4 Ser. & Rawle, 401; Butler vs. Palmer, 1 Hill, 334; Bigelow vs. Pritchard, 21 Pickering, 174; New Central Coal Co. vs. George's Creek Coal and Iron Co., 37 Md., 557; Greenough vs. Greenough, 11 Penn., 489; Steamship Co. vs. Jolippe, 2 Wall., 459; Sedgwick on Const. of Statute, 351.

The appellant's claim arises ex contractu, and is protected by the Constitution of the United States, which prohibits the passage of any law impairing the obligation of a contract.

Samuel Snowden, for the appellee.

The forfeiture provided for by sec. 4, of Art. 95, for the usury, is a penalty, and the party agreeing to pay the usury by pleading the same, might prevent the recovery of such excess as was paid or agreed to be paid; and before the Act of 1876, ch. 358, he might even have paid the whole debt, including the usurious portion of it, and afterwards might sue the usurer and recover back such excess. Scott vs. Leary, 34 Md., 389.

This right to recover back was founded upon the idea that there had been some oppression or hardship upon the borrower, in the exacting of it, and although the statute, in terms, gave no such right, yet because it declared the contract or the excess over six per cent. interest void, the Courts made it an exception, from the maxim " in pari delicto potior est conditio defendentis, " and gave a remedy in an action for money had and received. Welch vs. Wadsworth, 30 Conn., 149, (156;) Browning vs. Morris, Cowp., 790.

The forfeiture of the excess was a penalty upon the usurer, prescribed by the statute for the offence of taking the usury.

By the Act of 1876, ch. 358, the Legislature repealed or amended the law, so as to confine the penalty to the pleading of the usury, and thus preventing a recovery. In cases however, when the debt out of which the usury arises, has been paid or satisfied, the penalty is taken away, thus repealing so much of the statute as permitted such recovery, and by this repeal, the right to recover usury back ceased, whether the suits were pending at the time of the passage of the Act or not. For being a repeal of penalties and forfeitures, it operated as well on existing as on subsequent suits, extinguishing not only the right of suing for the recovery, but of maintaining a claim for such a cause of action, although previously made by suit. Curtis vs. Leavitt, 17 Barb., 309, 367; Same Case, 15 N. Y., 9, 85; Butler vs. Palmer, 1 Hill, 324, 329; Norris vs. Crocker, 13 How., 429; State vs. Youmans, 5 Ind., 280.

The money in this case was paid by the appellant on the seventeenth day of September, 1875, and suit was brought by him on the 18th of October, 1875; before the trial of the case, the Act of 1876 was passed, which changed the usury law so as to entirely destroy the cause of action; and when the case was tried, there was no right in the appellant to recover. For as the law, in force at the time of the seeking of the remedy, must govern the case, he was expressly prevented therefrom. Parmelee, et al. vs. Lawrence, 48 Ill., 331; State vs. Norwood, 12 Md., 195.

But if the Act of 1876, ch. 358, is not a law repealing a penalty, it is a law which, by its express terms, has a retroactive operation, and affects all actions for usury pending at the time of the passage of the law, as well as those brought afterwards. This clearly was the intention of the Legislature, otherwise the exception contained in the law, to wit: " But this section shall not apply to any cases of claims or suits now instituted by assignees in bankruptcy," would have been useless, for if it had intended that the law should only apply to suits that might be brought afterwards, then it certainly would have made no exception at all. Such cases only as fall within the exception are excepted from the general words of the section, and therefore, according to the maxim "the exception proves the rule," all other cases are left within the operation of the enacting clause. Briggs vs. French, 2 Sumn, 251, 257; Adams vs. Bancroft, 3 Sumn., 384, 387.

The Legislature having thus plainly expressed its will that the law should operate upon pending suits, the Courts will give such operation to it, for it is well settled in Maryland that an Act of Assembly is not invalid, merely because it is retrospective in its terms, or is made applicable to pre-existing or pending cases. Elliott vs. Elliott, 38 Md., 357, 362; State vs. Norwood, 12 Md., 177, 195; Mayor, &c. vs. Sehner, 37 Md., 180, 198; Cearfoss vs. State, 42 Md., 403.

This statute is not unconstitutional as a law impairing the obligation of contracts; it is only the regulation of a matter which is always a subject of statutory regulation, and with which the constitutional provision was not intended to interfere. Savings Bank vs. Allen, 28 Conn., 97; Barlow vs. Gregory, 31 Conn., 261; Leather vs. Shipbuilders' Bank, 40 Me., 386, 388.

The only part of the contract in this case which is alleged to have been invalid, is the excess over six per cent. interest; by the terms, however, of the mortgage, the appellant agreed to pay it, and he had the option, before payment, to repudiate it, or after payment to sue for it--he elected to pay it, and the Legislature then deprived him of the remedy to recover it back, thus validating and confirming what he had not only agreed to do, but had actually executed. The contract itself contained no stipulation that if he paid the debt, the mortgagee would pay him back the excess over and above six per cent., and there being no such stipulation, the law could not impair what did not exist. Nor does it deprive the appellant of any vested right, for there is no such thing as a vested right, to plead usury. Baugher vs. Nelson, 9 Gill, 299; Sedgwick Stat. and Cons. Law, 659.

There certainly cannot be any vested...