WALSH v. MAYER


111 U.S. 31 (1884)

WALSH v. MAYER & Others. MAYER & Others v. WALSH.

Supreme Court of United States.

Decided March 17th, 1884.


Attorney(s) appearing for the Case

Mr. W. Hallett Phillips for Walsh.

Mr. C.W. Hornor for Mayer and others.


MR. JUSTICE MATTHEWS delivered the opinion of the court. After reciting the facts in the foregoing language, he continued.

Two questions arose on the facts; first, whether the bar of the statute of limitations was prevented by a sufficient acknowledgment or promise by the defendants as makers of the note; and second, whether the usurious interest paid by them could be applied in reduction of the principal debt.

The Circuit Court rightly held that the statute of limitations of Mississippi, being the law of the forum, was the one applicable to the case. Section 2161 of the Revised Code of Mississippi, 1871, provides that actions on promissory notes must be brought within six years after cause of action accrued; and section 2165 declares that in actions founded on contract no acknowledgment or promise shall be evidence of a new or continuing contract, whereby to take any case out of the provisions of the limitation act, or to deprive any party of the benefit thereof, unless such acknowledgment or promise be made or contained by or in some writing signed by the party chargeable thereby. We agree with the Circuit Court in the conclusion that the two letters of March 2d and March 9th, 1876, contain such a definite recognition and acknowledgment of the debt due on the note in suit as meets the requirement of the statute. The letter of March 9th, it is true, is signed by J.D. Mayer & Co., in their partnership name, while the note is made by the individual members; but it is a legitimate inference, from the facts found, that the firm was the common agent of all its members for the purpose, as the business of managing the property was transacted by the firm. It was indeed for the purpose of owning and conducting the hotel that the partnership was formed, and the note, though in form that of the individual partners, was regarded as a partnership obligation.

Upon the question of the application of the illegal interest paid in reduction of the principal, the Circuit Court held that the contract, as to interest, was governed by the law of Louisiana; that by the terms of that law, Rev. Stat. 269, "the amount of conventional interest shall in no case exceed eight per cent. under pain of forfeiture of the entire interest so contracted," and that, "if any person hereafter shall pay on any contract a higher rate of interest than the above, as discount or otherwise, the same may be sued for and recovered within twelve months from the time of such payment." By the Mississippi Code, 1871, § 2279, the legal rate of interest is fixed, in the absence of contract, at six per cent. per annum; "but contracts may be made in writing for the payment of a rate of interest as great as ten per cent. per annum. And if a greater rate of interest than ten per cent. shall be stipulated for in any case, such excess shall be forfeited on the plea of the party to be charged therewith."

The Circuit Court held that the whole interest paid being avoided by the Louisiana statute, a court of equity would impute its payment to the principal debt, and rendered a decree accordingly, deducting the whole amount of interest paid from the face of the note. In the view we take, it does not become necessary to decide whether the contract ought to be governed by the law of Louisiana or that of Mississippi; for we are of opinion that the decree, in this particular, is erroneous according to either.

It is not claimed that there is any express provision in the Louisiana statute that requires such an application of payments made on account of unlawful interest. It is rested altogether upon the provision that forfeits the whole interest paid, and authorizes the debtor to recover it back within the time limited. But the same provision is contained in sec. 5198 Rev. Stats. of the United States, in reference to national banks; under which it has been held that usurious interest actually paid cannot be applied to the discharge of the principal. Driesbach v. National Bank, 104 U.S. 52; Barnet v. National Bank, 98 U.S. 555. In Cook v. Lillo, 103 U.S. 792, the Louisiana statute was considered, and, upon the decisions of the Supreme Court of the State, it was decided that the usurious interest cannot be reclaimed, nor be imputed to the principal, unless a suit for its recovery is begun or plea of usury set up to the claim within twelve months after the payment is made. Cox v. McIntyre, 6 La. Ann. 470; Weaver v. Maillot, 15 La. Ann. 395.

It is said, however, that the law of Louisiana applies and governs, so far as it allows the forfeited interest to be applied in reduction of the principal, in an action on the note, but that the limitation of time, within which by that law the right must be exercised, being part of the remedy merely, is governed by the law of Mississippi, being the law of the forum, which contains no such limitation.

But the right claimed under the law of Louisiana must be taken as it is given, and is not divisible. The provisions requiring it to be asserted in a particular mode and within a fixed time, are conditions and qualifications attached to the right itself, and do not form part of the law of the remedy. If it is not asserted within the permitted period, it ceases to exist and cannot be claimed or enforced in any form. It was accordingly held in Pittsburg, &c., Railroad Company v. Hine's Adm'x, 25 Ohio St. 629, under an act which required compensation to be made for causing death by wrongful act, neglect, or default, and gave a right of action, provided such action should be commenced within two years after the death of such deceased person, that this proviso was a condition qualifying the right of action, and not a mere limitation on the remedy. Bonte v. Taylor, 24 Ohio St. 628; Pritchard v. Norton, 106 U.S. 124.

We are therefore of opinion that the Circuit Court erred in not rendering a decree in favor of the complainants below for the amount of the note, with lawful interest from the date up to which interest had been paid.

We have disposed of the case upon both appeals. The motion to dismiss the cross-appeal of the defendants below, for want of jurisdiction, on the ground that the amount in controversy is less than $5,000, is overruled. The cross-appeal, it is true, is from a decree awarding against the defendants below less than that amount, and it could not, therefore, be maintained by itself; but the appeal of the plaintiffs below, to which it is incident, opened the whole controversy here, so far as they were concerned, and that of the defendants must be allowed to have the like effect as to them, so that upon both appeals the case was brought up as it stood for hearing in the court below, the claims of the respective parties involving the question of liability as to the whole amount.

The decree is reversed and the cause remanded with directions to render a decree for the complainants below in conformity with this opinion.


Comment

1000 Characters Remaining

Leagle.com reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

User Comments

Listed below are the cases that are cited in this Featured Case. Click the citation to see the full text of the cited case. Citations are also linked in the body of the Featured Case.

Cited Cases

  • No Cases Found

Listed below are those cases in which this Featured Case is cited. Click on the case name to see the full text of the citing case.

Citing Cases