Schroeppel v. Corning

I. The bonds and mortgages against third persons, and for the moneys received upon some of which this action is brought, were assigned absolutely and in payment of the debt alledged to be usurious, or if no debt technically existed, as is claimed by the counsel for the plaintiffs, then in performance and execution, pro tanto, of the contract alledged to be usurious. To that extent the contract was executed, and was no longer executory. I do not think it material to determine whether the contract thus executed was the contract of the 26th June, or a new contract made on the day of the transfer of the securities. After the assignment and delivery of the bonds and mortgages, in either case, that part of the contract was executed and not executory. This question has been considered by Judge Bronson in an opinion pronounced by him in an action of trover brought for the bonds and mortgages. (Schroeppel v. Corning, 2 Comst. 132.) The opinion is not reported. It would be an act of supererogation on my part to go over the ground which he has occupied, and although the other members of the court had not examined that particular point, and therefore expressed no opinion upon it, for which reason it is not binding upon us as a decision of the court, carrying with it authority as such, we follow it and adopt it as the law of this case, for the reasons urged by the judge and upon the authorities cited and referred to by him.

II. If the bonds and mortgages were transferred and delivered in payment and satisfaction of the usurious debt, or in execution and discharge of the usurious contract, as we have supposed, this action can not be sustained, but is barred by the statute of limitations. (1) After payment of a usurious debt, the money can not be recovered back; but under the statute the party may recover the excess paid beyond the principal and legal interest actually due. (Vide opinion of Bronson, J. supra, and authorities cited.) (2) It is not material that an action for money had and received would not have lain until the money had been actually received, as was strenuously urged by the counsel for the plaintiff, and from which he argued that the cause of action authorized by the statute accrued at that time,

and was therefore not barred by the statute of limitations. The statute regulating the interest of money, (1 R. S. 772, § 3,) does not restrict the cases in which a party is. entitled to recover the excess paid beyond the legal interest to those in which money, or that which has been taken and received as fnoney, has been paid; but embraces every case where a party has paid or delivered any greater sum or value than is allowed by law to be taken. The form of the action, it is true, may depend upon the medium in which satisfaction has been made. If money has been paid, the action for money had and received, will lie. If property has been delivered, then the proper action to recover that property, or its value, must be resorted to, and in either case the declaration must be under the statute. ( 5 Den. 236 . 1 Comst. 132.) It is held in Schroeppel v. Corning, ( 5 Den. 236 ,) by a majority of the court, and in this opinion four of the judges of the court of appeals concurred, as we are advised, that the receipt of property by the usurer, upon a usurious contract, and exercising dominion over it as his own, is a conversion for which an action may be brought, without a demand. If so, the cause of action of the plaintiffs, or of Schroeppel, the party to the transaction in that form, was perfect, upon the -receipt by Corning of the bonds and mortgages, and the appropriation thereof to himself. And if the defendant was not a wrongdoer, guilty of a conversion by the receipt of the mortgages, as is supposed, yet the statutory cause of action for the excess of money or property paid, beyond the sum actually due, was perfect upon the payment. If the amount and value of the bonds and mortgages thus assigned was more than the amount actually loaned, with legal interest thereon, the excess of such value could have been at once recovered in a proper action under the statute, and the borrower would still have been permitted to set up the usury as a defense to his bond for $5,063, when called upon. The payment to the amount actually loaned, with interest, whether such payment was in property or money, the lender had a right to retain, as well in equity as in an action under the statute. If the value of the mortgages was less than the amount thus equitably due to the defendant, then Schroeppel had no right,

legal or equitable, to call upon the defendant to repay any part of "it ; and if there was any usury in the transaction, the borrower had an ample remedy by resisting the payment of his bond, which was wholly void. (3) This action is an equitable action, and the plaintiffs can only recover what ex cequo et bono, they are entitled to. The defendant is entitled to retain of the amounts paid to him, so much as is necessary to cover the amount actually loaned, with legal interest, and the law will apply the first payments to that purpose. The amount first paid was by the assignment of the bonds and mortgages. They were taken as payment at that time. The residue of the sum due the defendant, was secured to be paid at a future time, by the bond and mortgage of Schroeppel. The property in the bonds and mortgages passed to the defendant subject only to the right of Schroeppel to reserve so much of the value thereof, as such value exceeded the amount equitably due the defendant, and such right of action was limited to six years. This is not like the cases of Hughes v. Thomas, (13 East, 474,) and Lamb v. Clark, ( 5 Pick. 192 .) In these cases the possession of the property by the defendant was tortious. They were wrongdoers, and their acts were invalid; but in this case the receipt of the bonds and mortgages by the defendant, in payment was valid, and the delivery could not have been avoided by Schroeppel. But for the statute he would have had no remedy, and by that he had only the right to call upon the defendant to account for the excess in value over the amount actually due, and that action accrued upon the delivery of the choses in action.

III. The moneys paid by Schroeppel in satisfaction of his bond, were paid upon and in pursuance of a judgment recovered in an action upon the bond. The parties are estopped by the judgment, and can not inquire into"the consideration of it, or recover money paid upon it. The remedy of the obligor was by a defense of that action. (Thompson v. Berry, 3 John. Ch. R. 395. Bartholemew v. Yaw, 9 Paige, 165.)

Without further examining the questions already suggested, or considering those made by counsel, we think the judgment should be affirmed.

Judgment affirmed.