JAN. TERM, 1857. RUDDELL V. AMBLER. RUDDELL ET AL.
V. AMBLER. Although the statute (Dig ,!st, chapter 90, sec. 7) makes all hoods, bills, notes, assurances, conveyances, and all other contracts or securities whatsoever, taken upon a usurious consideration, void: yet if the debtor comes into a court of chancery to set aside such contract, on account of usury, he must, before he shall be entitled to relief therefrom,
RIIDDELL v. AMBLER. VOL. 18 whether the usury be established by the answer, or land named and specified in the deed other proof, pay or offer to pay the principal actu-of trust made to him, as trustee for his ally borrowed, or advanced to him, with legal in-co-appellant, to secure the payment of terest. A mortgage with power of sale, or deed of trust, the usurious debts set forth in his orig-given to secure the payment of money advanced or inal bill; that appellant, Ruddell, had loaned upon a usurious contract, is void, and wil become the purchaser of the land, un-be so decreed by a court of equity; but where the debtor comes into court to set aside such convey-der such sale, for the price of four hun-ance, the court will hold the property pledged, as a dred dollars, which sum was entered as security for the payment of the sum actually loaned a credit on the usurious money bond; with legal interest. and praying, among other matters, Where the debtor comes into a court of equity to be released from a usurious contract, or to set aside that the sale by Byers to Ruddell, the securities given therefor, he must pay, or ten-under the deed of trust, might be car-der the whole =cunt of principal and interest; or celled and declared void—that the pos-the court will, upon demurrer, dismiss his bill : but session of the land be divested out of if the defendant answer the bill generally, the court will proceed to render such decree as may be con-Ruddell and restored to appellee, and sistent with equity and good conscience. that both appellants might be perpetually enjoined from further proceeding Appeal from the Circuit Court of Inde-under the deed of trtist, and the asser-pendence County in Chancery. 'tion of title under the sale and V371 TTON. BEAUFORT H. NEELY, purchase of the land thereunder. Circuit Judge. The appellants filed separate answers, also, to the amended and supple-Jordan, for the appellants. mental bill. Issue was taken to the 3701 C HANLY, J. This was a bill several answers of the appellants, by in chancery, brought by the appellee replications in short, by consent. against the appellants, in the Inde-The plpadings being thus made up pendence circuit court, praying, among in the cause, it was set down for hear-other matters, that the appellant-ing upon the original, amended and Ruddell, might be enjoined or re-supplemental bills, the answers of the strained from proceeding to recover appellants to each, and the replications judgment against the appellee, on the of appellee to those answers, and the law side of the Court, -upon a certain several exhibits made by the parties money bond, on the ground that it was respectively. usurious and void; and that the appel-The cause was heard on the 26th lants might further be restrained from March, 1855, when, the record shows, foreclosing, by sale, a certain deed of the following facts, in substance, were trust, which had been made and exe-elicited: cuted by the appellee to the appellant, on the law side of the Independence Byers, as trustee for his co-appellant, circuit court, to coerce the collection Ruddell, to secure the payment of the of the balance due on the writing ob-alleged usurious money bond, upon ligatory or money bond, after the which the action sought to be enjoined, credit of the $400 was given thereon, was alleged to be founded. as the price and value of the land sold Both appellants filed separate an-by Byers to Ruddell, under the deed of swers, and on the coming in of their trust as above. answers, the appellee filed an amended On this state of facts, the court be-and supplemental bill, in which it was low, upon the hearing, decreed that charged that, since the exhibition of the consideration, for which the writ-his original bill, the appellant, Byers, ing obligatory and deed of trust had had proceeded to foreclose and sell the been executed, was usurious in the pur-
JAN. TERM, 1857. RUDDELL V. AMBLER. view of the statute in such case made same date, the appellee, to secure the and provided, and as such that those payment of the writing obligatory or securities were void in law and equity: money bond, executed and delivered declaring, also, that the sale by Byers to the appellant, Byers, a deed of trust to Ruddell, under the deed of trust, on a tract of land lying in Independ-with the proceeds to pay off and ex-ence county, with full power to sell tinguish the writing obligatory or the same to the highest bidder, and money bond. That the deed of trust was also void, and that the conveyance so executed was duly acknowledged should not, and in conscience ought and recorded in the county of Inde-not to invest the latter with any right pendence, as the law in such cases or title to the lands therein described directs and requires, and that under and specified, and directed that the 3729 the power *to sell contained writing obligatory, the deed of trust therein, Byers, in conformity there-made to secure it, and the deed from with, on the 31st August 1854 sold the Byers to Ruddell, should be given up land, and Ruddell became the pur-to be cancelled: that Ruddell be per-chaser for the sum of $400. That petually enjoined from proceeding with Byers conveyed the land, so sold and his action at law to collect the residue purchased, to Ruddell, by deed dated of the debt set forth in the writing ob-2d Sept., 1854, which was also duly ac-ligatory or money bond, and forever knowledged .and recorded in the restrained and inhibited from setting county of Independence, and that Rud-up his title under Byers to the land dell had commenced an action of debt, sold and purchased under the deed of That on or about the 21st of March, trust, and that he forthwith quit pos-A. D. 1854, the appellant, Ruddell, at session of the tract of land, and yield the pressing solicitations of appellee, it to appellee, and that both appellants let him have in cash the sum of $350, pay the costs of the suits. and agreed to pay, and did afterwards We think proper to remark, at this pay, for him, certain liabilities, judg-place, that, notwithstanding there was ments and costs, amounting in the prayer for an injunction in the original aggregate to the further sum of about bill, it does not appear that application one hundred and fifty-six dollars, was ever made to the chancellor for an which, added to the other sum loaned injunction in accordance with the him in cub kmakes the aggregate sum prayer of the bill: nor does it appear of about five hundred and six dollars that an injunction was ever awarded in —appellant Ruddell, at the same time, the cause, until the final hearing, and agreeing with the appellee to hold him the final decree was rendered. harmless against the liabilities, judg-*Ruddell and Byers prayed an P373 ments and costs assumed, and that, at appeal, upon which the cause is now the time of the advance of the sum of pending in this court. $350, and the agreement to pay the The appellants insist that there is er-residue, to-wit, on the 21st March, ror in the decree, in several respects ; 1854, the appellee, in consideration which we will proceed to consider and thereof, executed and delivered to determine. Ruddell his writing obligatory or Usury is defined by the books to be, money bond, of that date, payable to the taking of more interest, for the use Ruddell, four months thereafter, for of money, than the law allows. And $600, bearing interest after due at the to constitute the offense of usury,there-rate of ten per centum per annum; fore, there must be an agreement, that and that on the same day, and of the he, who has the use of money, shall
RUDDELL V. AMBLER. VOL. 18 pay the owner of it more than lawful cept that, in that, the rate of interest interest: that is, more than the law authorized to be taken or demanded permits to be paid for the use of money. was only five per centum per an-See 2 Parsons on (Amt. 384-5. num : so that the English adjudications The law of this State provides that upon that statute are entitled to great creditors shall be allowed to receive in-weight and consideration, by the courts terest, at the rate of six per centum per here, in determining questions arising annum, when no rate of interest is under, and growing out of, the con-agreed upon, for all moneys after they struction of ours. become due by an instrument of the There can be no doubt, we appre-debtor in writing ; on money lent, or hend, from the case made by the money due on set tlement of accounts, pleadings and proof in this cause, that from the day of liquidating or ascer-the transactions between Ruddell and taining the balance due thereon ; on the appellee were thoroughly usurious ; money received for the use of another for it is manifest beyond dispute, that and retained without the owner's the gross amount advanced in cash to, knowledge of the receipt thereof, on and assumed by Ruddell for and on ac-money due and withheld by an unrea-count of appellee, was only $506, whilst sonable and vexatious delay of pay-the bond taken to secure that amount ment, or settlement of accounts; and was for the sum of $600, payable at on all other moneys due, and to be-four months from its date. It is as come due, for the forbearance of pay-equally clear that the deed of trust, ment whereof an express promise to made by the appellee to Byers, was pay interest has been made. made to secure this usurious bond. The The parties may also agree in writing question arises, on this state of facts, for the payment of interest, not ex-what relief the appellee was entitled ceeding ten per centum per annum, on to, and what should have been decreed money due, or to become due upon any to him by the court below. contract, whether under seal or not. 1. It is said that when a statute See Digest, ch. 90, sec's. 1 & 2, p, 614. makes the usurious contract void, or It is not unlawful, therefore, in this forfeits a part of the principal, or legal State, for persons to contract in writ-interest, by way of penalty, the cred-ing for the payment of interest at ten itor, of course, must lose this, for the per centurn per annum, for the use or debtor may interpose this defense how-forbearance of money, by way of a ever inequitable it may be. See 2 Par-loan or advance. sons on Cont. 403-4; Ambler v. Rud-It is further provided by our statute dell, 17 Ark. R. 138, and authorities that all bonds, bills, notes, assurances, there cited, and note 2 thereof. conveyances aud all other contracts, or But if the debtor make himself a securities whatsoever, whereupon or plaintiff, and seek relief against a con-whereby there shall be reserved, taken tract for its usury, it is held, in equity, or secured, or agreed to be taken or re-that he must pay or tender the whole served, any greater sum, or greater amount of principal and legal interest. value for the loan or forbearance of See 2 Parsons on Cont. 404. Scott v. 374*1 any money, *goods or things in Nesbit, 2 Brown's Ch. R. 642. Ex parte action than is prescribed, shall be void. Skip, 2 Vesey 489. Banfield v. Solo-See Digest, ch. 90, sec. 7, p. 615. mons, 9 Vesey 84. Rogers v. Rathburn, 1 This statute seems to be very simi-Johns. Ch. R. 363. Tupper v. Powell, Id. lir, in its provisions, to the English 4.39. Fanning v. Dunham, 5 Johns. CA statute of 12 Anne, Stat. 2, oh. 16, ex-B. 122. Fulton Bank v. Beath, 1 Ittige
JAN. TERM, 1857. RUDDELL v. AMBLER. 429. Morganv. .Schermerhorn, Id. 544 due. Lord Eldon (3 Ves. & Bea. 14), McDaniels v. Barnum, 5 Verm. R. 292. after an interval of more than sixty Jordan v. Trumbo, 6 Gill & Johns. years, declared precisely the sanie 103. Thomas v. Mason, 8 Gill 1. rule." 375.] *Anonymous, 2 Des. Ch. R. 333. We have said that our statute declar Stone v. Ware, 6 Munf. 541. Shelton v. ing usurious contracts void, seems to Gill, 11 Ohio R.417. Day v. Cummings, be quite similar to the English statute 19 Verm. R. 496. Bolinger v. Edwards, of Anne on the same subject, except in 4 Ired. Eq. R. 449. Phelps v. Pierson, 1 the particular before mentioned. The Iowa 121. Wilson v. Hardesty, 1 Ma. authority of such names as Hardwick Ch. Dec. 66. Hindle v. O'Brian, 1 Taunt. and Eldon, when treating on that stat-413. Roberts v. Goff, 4 B. & Ald. 92. ute, should have much weight with our And it is said that this rule is predi-courts, when considering ours. We cated upon the maxim or principle in have examined the reports *of [*376 equity "that he who seeks equity to ob-the several States of this Union, as far tain relief, must do equity." See as we have been able to have access to Tiumbo, exr. v. Blizzard and Jacobs, 6 them, and have found but few adjudi-Gill & Johns. R. 24; 1 Story's Eq., sec. cated cases in which the doctrine has 64, p. 77; 1 Tucker's Corn. 371. not been maintained as we have stated It will be seen, in the sequel of this it above. So that we may safely say, case, that notwithstanding the appellee we think, that the doctrine of the has omitted to tender with his bill, or courts in this country is generally con-offer to pay the amount actually bor-sistent with the English rule on the rowed from the appellant, Ruddell, we same subject, as shown from our refer-have not seen fit to dismiss the bill, for ences above. the reason that the appellants did not The few adjudicated cases which we demur for that cause, but saw fit to have found, in which the rule that we waive the defect by their answer. If a have laid down is not fully sustained, demurrer had been interposed in the are mostly to be met with in thd Vir-first instance, or they had insisted on ginia Reports, and possibly one case in the omission in their answer, to be con-Mississippi. The rule is only qualified sidered at the hearing, we should have —not repudiated—by those cases. Tbe had no discretion but to have dismissed qualification is, that the debtor, where the bill without relief to either party, he is plaintiff; and seeks to set aside a in case no amendment should have contract on account of usury, will only been made, on leave granted for that be required to pay the principal debt, purpose. without any interest. See Young v. In Fanning v. Dunham, ubi sup., the Scott, 4 Rand. R. 415. Clarkson's ad. chancellor said : "The equity cases v. Garland, 1 Leigh R. 147. Turpin v. speak one uniform language, and I do Povall, 8 Leigh R. 93. Marks v. Mor-not know of a case in w`hich relief has ris, 3 Hen. & Munf. 463. Also Boone v. ever been afforded to a party seeking Poindexter, 12 Sm. & Marsh. (Miss.) R. relief against usury, by bill upon any 640. And these cases were made to other terms. It is the fundamental rest upon the fact that the borrower doctrine of the court. Lord Hardwick came into equity full-handed with (1 Vesey 320) said that in case of usury, proof (as it is termed) of the facts of equity suffers the party to the illicit usury—seeking no discovery of that contract to have relief, but whoever fact from the lender, but placing his brings a bill, in ease of usury, must relief upon the naked fact of usury to submit to pay principal and interest be established by proof outside of the
RIIDDELL V. AMBLER. VOL. 18 defendant's answer. See 1 Tucker's to it, by means of which the creditor tom. 370, and the review of the sev- forecloses his mortgage by an act in eral cases above referred to by the au- pais, without calling on any court to thor assist him. The debtor has no relief in We may safely, therefore, lay down that case, but by applying to this court the rule, under our statute, to be as we (chancery), and then he must comply have shown it elsewhere exists; that is with the terms of paying what was to say, when a debtor comes into a actually advanced. He deprives him-court of chancery to set aside a con- self in that case, by the power to sell, tract, on account of usury, he must, be-as he does in the other, by warrant of fore he shall be entitled to relief there-attorney to confessjudgment, of an op-from, pay, or offer to pay the principal portunity to appear and plead the actually borrowed, or advanced to him, usury. These are cases in which the with interest at six per eentum per an-party, by his own voluntary act', de-nual. prives himself of his ability to inflict We have been thus particular in upon the creditor, the loss of his entire showing the rule of equity on this sub-debt. Many other cases may be stated ject, because the appellee, in the case in which the same result will follow. before us, has sought by his bills to The party is in the same situation , if, have all the securities taken by the instead of resisting the usuriousiclaim, appellant, Ruddell, and infected with he pays it. He cannot then expect as-usury, declared void and ordered sistance to recover back more than the to be canceled without offer-usurious excess." See 5 Johns. Ch. R. ing to pay anything, and be-145. 3779 °cause such was, in effect, the If the appellants were applying to a decree rendered by the court below.. court of chancery, and were endeavor-The appellee seems not to be repre-ing to enforce any of the securities sented in this court, but we propose to made by the appellee, and the appellee treat the subject as fully as a careful re-had set up and made out the usury, as search will enable us, to the end that he has done in the case before us, by the opinion herein expressed, may be way of defense, the remedy would supported by, at least the weight of have been obvious. The securities authority. would be declared void, and ordered Primarily, the rule, which we have to be given up to be canceled. But laid down, was only applied to cases *the appellants have not re- '„F378 where debtors made application to sorted to chancery. They have caused courts of chancery to be relieved judgment to be entered at law, and be-against judgments at law rendered upon sides this have a deed of trust with the usurious contracts or securities, under power of sale, which is equal anti tan-warrants of attorney, etc. See Fan-tamount to a decree of foreclosure of ning v. Dunham, ubi sup. au ordinary mortgage, which they have But more recently, it has been ex-absolutely proceeded to foreclose, by tended by the courts, so as to make it sale of the . property, under the power embrace cases such as the one we are contained in the deed, and it is the ap-now considering. Chancellor Kent, in pellee, the debtor, who is compelled to Fanning v. Dunham, on this branch of resort to chancery and ask for relief, the subject, said : " The same objec- which he cannot get at law, against tion and difficulty occur in the case of the judgment, and other securities In-a mortgage taken to secure au usurious fected with usury by means of the loan, with the power to sell annexed original transactions and responsibill-
JAN. TERM, 1857. ties which they were intended to established by the proof, or admitted cover. by the answer, except upon the terms Perhaps it is sufficient for the pur-of paying the principal and interest poses of public justice and public poli-lawfully due thereon after deducting cy, that the law has enabled a debtor, every usurious excess. And that the in every case in which he does not of bond, the judgment, the deed of trust his own accord deprive himself of the and the conveyance from Byers to means, to plead the statute in dis-Ruddell, mentioned in the pleadings, charge of his usurious contract and of are to be deemed and taken as securi-his obligation to pay even what was ties only for the balance that may be received, and that in all cases he can, due after such deduction; and, if such by paying the actual principal received balance be not paid by the time the and the lawful interest, be relieved decree, to be entered by this court in from the usurious exaction. conformity herewith, is certified to the In view of the foregoing, we there-circuit court of Independence county fore hold that there is error in the de-in chancery, that, when the same shall cree of the court below in this, that it be so certified, the said court is hereby does not require the appellee to pay required to eater up au order in said back to the appellant, Ruddell, the cause requiring the appellee herein to : _ . um of $500, the amount really and pay the amount found to be due the absolutely advanced and loaned to the appellant, Ruddell, by the decree of appellee, with interest on that amount this court within 90 days thereafter, from the time the advance or loan was and in case of his default so to do, and made, at the rate of six per centum per in anticipation of such default, that annum ; and for this cause the decree of the court below appoint a commission-the Independence circuit court is re-er t o sell the land named in the plead-versed. And this court, under the ings, for cash in hand, at a time to be practice in such case, will proceed to by that court appointed, and on such render such decree in the premises as sale to make conveyance to the pur-ought to have been rendered by the chaser, which shall convey all the court below, that is to say : That it is right, title and interest which vested hereby declared that the writing oblig-in the appellee, and that appellants be atory or money bond, the judgment perpetually enjoined, thereafter, from thereon rendered on the law side of the asserting any title thereto under said circuit court of Independence county, usurious judgment, deed of trust or the deed of trust made to secure the conveyance from Byers, which are repayment of the bond, as well as the quired to be given up to be canceled on deed made by Byers to Ruddell in the payment of the amount found due pleadings and proof in this cause men-Ruddell, as above directed. tioned, are, and each of them is, tainted Cated:--18-465; 32-365; 34-630; 47-292. or infected with usury; and as such, should be declared void and of no effect. And it is further declared to be the settled practice and 379 11 *doctrine in equity, in this State, that the plaintiff, who seeks the aid of a court of equity to set aside a judgment at law, or other legal security on the ground of usury, cannot be entitled to relief, whether the usury be 37 Rep.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.