Mims v. McDowell

By the Court Warner, J.

delivering the opinion.

The plaintiff has assigned two grounds for errór, té'the decis-' ion of the Court below in-this case. First, Because the Court refused to charge as requested, to-wit: That- if McDowell, after notice of the usury and of plaintiff’s intention to plead it, and- *184 after he had pleaded it, voluntarily paid the note sued on, he could not recover in this suit on his mortgage. Second, That if McDowell, after notice of the usury, voluntarily gave to Williamson Ills individual note, he could not recover in this suit on the mortgage ; and because the plaintiff was not damnified and could not recover. As both the assignments of error involve substantially the same questions, they will both be considered together. It appears from the record, that McDowell became the security for Mims on a promissory note to Williamson, and took a mortgage from Mims, to indemnify him as such security. After the note became due, and suit instituted thereon against Mims and McDowell, and after McDowell was notified, that the original consideration for which the note was given, was usurious, and that Mims intended to contest the payment of the note on that ground, McDowell took .up the note from Williamson, to which he was security for Mims, and gave his own note to Williamson therefor, which was accepted by Williamson in full payment of the joint note made by Mims and McDowell. McDowell then proceeded to foreclose his mortgage under the Statute, to which Mims, the mortgagor, set up the defence of usury, and also denied the right of McDowell, the mortgagee, to recover against him, on the ground he had not been damnified: that the giving his individual note to Williamson, for the joint nóte, which had not been paid, was no payment in law of Mims’ note, to which McDowell was the security to Williamson, and consequently, had no right under the law to foreclose his mortgage. That McDowell, as Mims’ security, could go forward, and pay the full amount of the note to Williamson, and then collect it out of Mims, and deprive him of his defence of usury, cannot receive the sanction of this Court: nor did it receive the sanction of the -Court below; for the Court expressly instructed the Jury, that when, McDowell took up the joint note from Williamson, under the circumstances disclosed by the evidence, 'he took it subject to all the defences which Mims had against it; and specially instructed the Jury to enquire as to the usury, in the original transaction, on which the note was founded.

The Court also instructed the Jury, that if they believed that McDowell had given his individual note to Williamson for his (McDowell’s) and Mims’ joint note, and that Williamson had ac- *185 cépted the same, in full payment and discharge thereof, it was a good and effectual payment in law.

[1.] "Whether thfe giving a promissory note for a pre-existing ■debt, without any express understanding that it shall be received as payment of such debt, will operate as a payment thereof, we express no (opinion; but when, as in this case, it was the express understanding of the parties, that the individual note of McDowell should be received in fill payment of the joint note, and which was then delivered up to McDowell, it was a good and valid payment in law. N. Y. State Bank vs. Fletcher, 5 Wend. Rep. 85 . Tobey vs. Barber, 5 John. Rep. 68.

[2.] Because McDowell, the security for Mims, voluntarily dis¿ charged a legal liability, rather than have the money coerced out of him by the process of law, that circumstance, in out judgment, does not, in the least, impair his right to collect from the defendant, Mims, all that was legally due on the note, in the hands of "Williamson; and it appears from the record, he has had the full benefit of all the defences against the note, in the hands of McDowell, which he could have had against it in the hands of 'Williamson. In our judgment, the question of usury was fairly submitted to the Jury by file Ciourt below, and there is no error in the record. Let the Judgment of the Court below be affirmed;