
    Schroeppel and another v. Corning.
    
      TJswry. — Trover.—Statute of Limitations.
    Where a borrower assigns to the lender, certain bonds and mortgages, in consideration of a loan of money, at a usurious rate of interest, the title does not pass, and an action of trover will lie to recover the same.
    Where a lender upon usury receives securities. from the borrower, the latter has an immediate right of action, in trover, and the statute runs in favor of the lender, from that time.
    So, also, the statute runs against an action to recover the excess realized on such securities, from the time they were received.
    Schroeppel v. Corning, 10 Barb. 576, affirmed.
    * Appeal from the general term of the Su- |- * -^g preme Court, in the fifth district, where ajudg- L ment of nonsuit had been affirmed. (Reported below, 10 Barb. 576.)
    This wa s an action of assumpsit to recover an excess of money alleged to have been received by the defendant, beyond the principal and legal interest, upon a loan of money claimed to have been made to the plaintiff, Schroeppel. The other plaintiff, Soule, was joined as the general assignee of Schroeppel, for the benefit of his ■ creditors.
    In 1837, the defendant had money which he said he could or would loan, and also' some real estate in Syracuse, which he desired to part with, and he inquired of Schroeppel’s agent, whether he did not think the latter would take it; expressing a willingness to take security for the whole, and give a long credit.
    A negotiation was subsequently opened between the parties, which resulted in a contract, dated the 26th June 1837, whereby Corning agreed to loan Schroeppel a sum of $7500, for the term of ten years, and to sell him the property in Syracuse for $16,400; and Schroeppel agreed to assume all payments due on the lots, amounting to $5156.94, and to secure the balance to Corning by good and approved bonds and mortgages.
    The agreement was consummated on the 10th July 1837. The defendant advanced to Schroeppel the sum of $7500 in -cash, and conveyed to him the property at the valuation fixed. Schroeppel assumed the incumbrances; gave his own bond and mortgage for $5063, payable in ten' years; and assigned to Corning the several bonds and mortgages of other persons, amounting in the aggregate to $13,546.06. These amounts were intended to balance each other, and were made to do so.
    The real estate conveyed by Corning was proved to have been worth much less than the price named; it was claimed to have been worth not more than $8800. Schroeppel’s bond was prosecuted, on a default in the payment of interest, and a judgment perfected thereon in 1838, upon which the interest was paid annually, until 1847, when the whole amount, $5565.62, was paid.
    Among the bonds and mortgages assigned to Corning was one against one Anderson for $10,202, of which only $7946.09 was assigned, Schroeppel retaining the residue. This mortgage was foreclosed in 1838, in the name of Corning; the amount of it collected under the decree; the amount of Scroeppel’s interest paid to him, and the residue to Corning. The payments to the defendant under that decree, within six years before the commencement of this action, amounted, in the aggregate, principal and interest, to $8092.07.
    The plaintiff, Schroeppel, in 1844, had brought an action of trover for the three bonds and mortgages assigned, in which he recovered a verdict (5 Den. 236); but a new trial was granted, on the ground that the cause of action was barred by the statute of limitations; which was affirmed by this court, upon a technical point, (1 N. Y. 132.)
    On the trial of the cause, in October 1849, the court nonsuited the plaintiff, and the judgment perfected thereon having been affirmed at general term, the plaintiff took this appeal.
    
      Comstock, for the appellants.
    
      Sessions, for the respondent.
   Gardiner, J.

— The agreement of the 26th June 1837, between Corning and Schroeppel, did not amount to a loan, but a contract for a loan. There must be a loan of money to constitute usury; there was, therefore, no loan until the 10th of July 1837, when the money was advanced, and the land conveyed, and, of course, no usury, and no excess, by way of premium for the use of money, over and above the legal rate of interest. To call this transaction an executed contract, is merely to say that a loan, in pursuance of a previous agreement, is executed, in such a sense, that the borrower cannot avoid the contract; this would be, in effect, to repeal the statute against usury.

II. The action is barred by the statute of limitations. The plaintiff contends, that the contract consummated on the 10th of July 1837, was entire; that the sale of the land, and the other provisions of the agreement, were but a cover to conceal a loan of money, at a rate of interest prohibited by statute. The excess, whether in money or in land, and securities considered as money, by the understanding of the parties, was, so far as it was derived from the bonds and mortgages assigned, received, when the loan was made. They were received as cash, inpayment for the real estate, which was also advanced as cash ; and the excess of price over the cash value of the land, is the usury claimed in this action.

* 1091 *'l-'lie plaintiff is not at liberty to consider this J as a money transaction throughout, in order to make out a usurious loan, and then to call the bonds and mortgages chosesin action, with a view to avoid the statute of limitations, claiming that nothing was received, within the meaning of the statute, by the usurer, until the mortgagors paid money upon the securities.

Suppose, A. should advance to B. $1000, at seven per cent-.,and make it a condition of theloan,that the latter should sell to the lender abond'and mortgage, well secured, at a discount of fifty per cent.; the transaction would be usurious. The excess of interest would be equivalent to the discount stipulated, and it would be received, when the mortgage was transferred by the borrower to the lender; the excess would then be paid. ■ In this case, Corning charged, it is claimed, $7500 more than the land was worth, which he imposed upon Sohroeppel; the latter was to pay in bonds and mortgages, which were unquestionably good; and the effect of the arrangement was the same, as if the excess in value of the land had been, at the time, deducted from the bonds and mortgages assigned.

■ As this was more than six years prior to the commencement of the suit, the statute of limitations is a perfect defence to the action.

Paige, J.

(Dissenting.) — The evidence in this case was sufficient to entitle the plaintiffs to have the question of usury submitted to the jury. If the real character of the agreement was a loan, and the taking of the lands was imposed as a condition of the loan, the whole transaction was tainted with usury; and the assignment of the three bonds and mortgages to the defendant, as well as the bond and mortgage of Schroeppel, were void. (19 Johns. 509.) The loan of the money, the execution of the bond and mortgage of Schroeppel, the assignment of the three bonds and mortgages, and the sale of the land, were parts of one entire ^agreement. The ^ ^ usury consisted in the excessive price of the *- land; this excess formed a part of the consideration of the bond and mortgage, executed by Schroeppel, and of the assignment of the three bonds and mortgages.

The assignment of these three bonds and mortgages cannot be sustained, as a part execution of the usurious contract. It was not made and delivered as a payment of a previous usurious debt; but it was given in payment, or as a security for the payment, of a loan of money, made at the same time, under an agreement tainted with usury. On the 10th of July 1837, when the usurious agreement was carried into effect, Schroeppel was acting under the pressure of the same necessity which compelled him to sign- the memorandum of the agreement on the 26th of June 1837. (Story’s Eq. Juris. §§ 302, 345.) On this argument, we must regard it as conceded, that the assignment of the three bonds and mortgages was exacted as a condition of the loan; and being so, the statutes of usury expressly avoid it. They make void all bonds, conveyances, &c., and all other contracts or securities, whereby there shall be reserved or taken, or secured, or agreed to be reserved or taken, any greater sum or value than seven per cent, for the loan of money, (1 R S. 772, § 5; Act of 1837, c. 430.)

The principal question on this appeal is, whether the action of the plaintiffs is barred by the statute of limitations. It is insisted on the part of the defendant, that the assignment of the three bonds and mortgages was delivered and received in payment of the usurious loan, and that the action to recover the usurious excess of money or value, then accrued. It is also insisted, that this action is in affirmance of the contract, and admits its validity; and being so, that the plaintiffs are estopped from denying that the assignment conveyed to the defendant the title to the three mortgages. And it is also contended, that the pendency of the action of trover is a bar to this action.

I agree with Chief Justice Beardsley, that the taking and receiving, by the defendant, of the three bonds and mortgages, under the assignment of Schroeppel, was a ^ 1 1 -. wrongful taking, *and in itself a conversion. -* (5 Denio 240.) The act of receiving the bonds and mortgages, being in violation of the statutes of usury, was an illegal act; and, if illegal, it" was necessarily wrongful. The'defendant received the mortgages as owner; a.nd he assumed a dominion over them, in exclusion of the right of Schroeppel. The manual delivery by Schroeppel, did not make the possession of the defendant rightful; it was not a voluntary delivery; and, as such, is regarded "in law as the result of moral compulsion. A borrower, on usurious terms, is not a free agent; he is considered the slave of the lender; he is compelled to submit to the terms which oppression and his necessities impose upon him. (1 Story’s Eq. Juris. § 302; 20 Johns. 293; 5 Denio 240; 2 Brod. & Bing. 2; 7 Bing. 97; 2 Adol. & Ellis 12; 1 Hill 314.) Where a purchaser under a contract of sale, fraudulently obtains the possession of goods, by a voluntary delivery of the seller, his receipt of the goods is deemed in law a tortious taking; and trover lies for the goods, without a previous demand. (1 Hill 313-14; 22 Pick. 18, 20; 5 Id. 197.) A delivery of property by the owner, to make the possession of the deliveree rightful, must be, “unclouded by fraud or duress.” (1 Hill 314.) If the taking and receipt of the three mortgages by the defendant was a wrongful taking, and in itself a conversion, the right of action to sue in trespass or trover, for such taking, accrued on the day the securities came to the defendant’s hands; and, consequently, the action of trover commenced by Schroeppel in 1844, is barred.

It does not necessarily follow, because the action of trover is barred by the statute of limitations, that the present action to recover from the defendant the usurious interest paid to him by Schroeppel, is also barred. The two actions depend upon different principles, and did not necessarily accrue at the same time. The action of trover accrued, when the mortgages were tortiously taken by the defendant; the present action, being an action of assumpsit, accrued when the usurious interest Was actually received by the defendant. The former action may be barred, while the latter may remain in full force.

* Where goods, tortiously taken, are sold by the tort-feasor, it is well settled, that the owner "L of the goods has an election of remedies; he may either bring trover or trespass for the original taking, or waive the tort and bring an action for money had and received, to recover the proceeds. (1 Hill 240, and note; Lamb v. Clark, 5 Pick. 197; Jones v. Hoar, 5 Id. 285, and note; 4 Barb. 42.) When the owner waives the tort and brings assumpsit, the tort-feasor cannot allege his own wrong, for the purpose of carrying back the injury to the time of the original taking, in order to let in the statute of limitations. (5 Pick. 197.) In the action of assumpsit, the owner can recover, if the money on the sale was received by the defendant within six years, although an an action for the original taking is barred by the statute. The owner has a right to consider the defendant as his agent or trustee, and to compel him to pay over the money when received by him. When the tort is waived and assumpsit is brought, the receipt of the money on the sale of the goods gives the cause of action, and not the original tortious taking. (Lamb v. Clark, 5 Pick. 197-98; Hughes v. Thomas, 13 East 478, 480, 481, 486; Hambly v. Trott, 1 Cowp. 376-77, per Lord Mansfield.) The plaintiff who waives the tort and brings assumpsit, does not affirm the tortious act, but merely waives his claim to damages for a wrong, and seeks to recover only the proceeds of the sale. (Young v. Marshall, 8 Bing. 43, Bosanquet, J.)

Upon this principle, that of waiving the tort and suing for money had and received, I am inclined to believe, that the plaintiffs can--recover all the moneys received by the defendant, within six years, on the three mortgages assigned to him by Schroeppel, without being restricted to the amount of the usurious excess. It will be remembered, that the assignment of these mortgages was absolutely void, under the statute of usury, ana passed no title whatever to the defendant; this was so held by all the justices of the supreme court, in 5 Denio 240, 247. The assignment being absolutely void, cannot be regarded as a part payment of the usurious loan; in * 113 I case> right of recovery would be *limited to the usurious excess. In Hargreaves v. Hutchinson (2 Ad. & E. 12), and in Tregoning v. Attenborough (7 Bing. 97), the sales of the malt and silks were held to be neither payment, nor security for the payment, of the usurious loan. And in both these cases, the entire value of the goods was recovered in trover, from the lender, without any deduction on account of the sum actually loaned and legal interest.

If, in this case, there had been a previously-existing usurious debt, and the three mortgages had been voluntarily assigned by Schroeppel, as payment, when he was not acting under the pressure of the original necessity, which. compelled him to submit to the oppressive terms of the lender, the assignment would have been a valid payment, to the extent of the sum actually advanced, and legal interest, and only the usurious excess could have been reclaimed. (1 Johns. Cas. 158; 7 Paige 639; 1 Story’s Eq. Jur. § 345; 2 Hill 524.)

The statute remedy for the recovery .of the usurious excess, applies only when the lender takes and receives from the borrower money, goods or things in action which are a valid payment of the principal actually lent and legal interest, and which, to that extent, cannot be reclaimed by the borrower; as, when he voluntarily pays a pre-existing usurious debt. In such case, the only remedy of the borrower is to sue for, and recover back the sum or value paid above principal and legal interest. But when the value of goods or things in action taken and received by the lender, may be recovered by the borrower, on the ground that the acquisition by the lender was illegal and tortious, the statute remedy has no application. In such case, the borrower has a better remedy, in trespass or trover, for the whole value of the property, or in assumpsit for the proceeds.

The plaintiffs, in their complaint, limit their claim to the excess received by the defendant above the sum actually lent, and the value of the real estate conveyed, with legal interest. The principal question in the cause is, whether the action to recover this excess is barred by the statute of limitations. If the right of action accrued, when the mortgages were assigned, the action *is „ ^ barred; if it accrued, when the moneys due on the mortgages were received by the defendant, the action is not barred. I have already expressed the opinion, that the right of action in this suit did not accrue, until the moneys due on the mortgages were received by the defendant. As the assignment of the mortgages, being absolutely void, passed no title to the defendant, the plaintiffs have the right to waive the tort of the illegal taking, and to consider the defendant as holding the mortgages as the mere agent or trustee of Schroeppel, and to compel him, by an action for money had and received, to pay over the moneys due on the mortgages, when received.

The neglect of Schroeppel to appear in the suit on his bond and set up the defence of usury, estops the plaintiffs from denying that the amount recovered in that suit was justly and legally due to the defendant. (3 Johns. Ch. 395; 9 Paige 395.) The amount paid upon the judgment may be regarded as paid on account of the principal actually lent and legal interest; the moneys first paid by a borrower are applicable to such payment. (7 Met. 525.)

A borrower may, in his action, limit his claim to the usurious excess received by the lender. The plaintiffs, by so limiting their claim in this suit, do not affirm the usurious contract, and admit that the assignment of the three mortgages passed the title to the defendant. The action is founded on the assumption of the usurious character of the agreement, and of its original invalidity; and the whole right to recover rests on this basis. Where a party waives a tort and brings assumpsit, he does not affirm the tortious act, but merely waives his claim to damages for a wrong. (8 Bing. 43, Bosanquet, J.) The claim of the borrower is limited to the usurious excess, where he is precluded from a more extensive recovery, by means of a voluntary payment of a previous usurious debt, or where he, being willing- to do equity, voluntarily, in his complaint, limits himself to such excess. A waiver, by the borrower, of his claim to such portion of the proceeds of property delivered to the ' n lender under a usurious *agreement, as is neces- -* sary to repay principal and legal interest, does not deprive him of his right to claim the usurious excess.

' In this case, even if the assignment of the three mortgages is regarded as payment, it can only be so, to the extent of the principal and legal interest; and to that extent only, can the assignment be considered as passing an interest to the defendant; as to the usurious excess, the assignment is void; for the payment of usury is void. As to such excess, the defendant may be considered the trustee of Schroeppel; and, as such, obligated to pay to him all the moneys received, over and above the amount of the principal and legal interest.

The plaintiffs in their suit had an election of remedies : 1. They could have sued in trespass or trover, and recovered the entire value of the mortgages assigned to the defendant: or, 2. They could have waived the tort of the illegal taking, and recovered, in an action for money had and received, all the moneys received on the mortgages by the defendant, or any sum less than the whole amount to which they chose to limit their claim: or, 3. They might have assumed that the assignment, or the moneys received on the mortgages, were a valid payment to the extent of the principal actually lent, and legal interest, and have brought an action founded on the statute, or an action of assumpsit at common law, to recover the usurious excess.

A large portion of the moneys due on the three mortgages was received by the defendant, within six years next preceding the commencement of this suit. The action of the plaintiffs is not, therefore, barred by the statute of limitations. The remedy given by statute for the recovery of usurious interest paid to the lender, is merely cumulative. The statute, in providing this remedy, does not take away the common-law remedy of assumpsit for money had and received. (20 Johns. 292-3.) Whenever, in violation of laws made to protect the ignorant, unwary or necessitous, money is obtained from a party, by imposition, extortion or oppression, or by taking an undue advantage of his situation, he may, at common law, recover it back in an action for money had and received. (2 Burr. 1011-12; *20 Johns. -* 293; 2 Cowen 793; Smith v. Bromley, 2 Doug. 696, note; 1 Story’s Eq. Jur. § 302; 11 Mass. 376.) Statutes of usury are made to protect needy and necessitous persons from the oppression of usurers. The borrower does not stand in pari delicto with the lender; hence, he may, at common law, recover back the usurious excess, in an action for money had and received.

The pendency of the action of trover commenced by Schroeppel, in 1844, is no bar to this action. Where an action of trespass or trover,"for the tortious taking or conversion of personal property, is brought and tried on the merits of the plaintiff’s claim, and a verdict and judgment is rendered for or against him, such verdict and judgment is, undoubtedly, a bar to a subsequent action of assumpsit for a sale and delivery of the same property to the defendant, or for the proceeds of a salo of it by the defendant. (Rice v. King, 7 Johns. 20.) To render a verdict and judgment a bar 'to a subsequent action, both suits must be for the same cause of action, and the former action must have been tried on the merits of the plaintiff’s claim; the cause of action is the same, where the same evidence will support both actions.

In the action of trover for the three mortgages, com: menced by Schroeppel, the recovery was limited, on the trial, to two of the mortgages; and on the decision of the motion for a new trial, the only questions on which the case turned, were in relation to the time when the cause of action accrued, in reference to the defence of the statute of limitations, and. whether the declaration was in due form. The majority of the court decided, that the cause of action accrued, at the time of the assignment and delivery of the mortgages to the defendant, and that,-therefore, the action was barred. If the de: termination of the action of trover must depend on the question whether the statute of limitations is a bar, the verdict and judgment in that action ought not to be a [ * 117 bar to this action; for we have seen, that the cause of action in this suit, accrued at the time the moneys due on the mortgages were received, and not at the time the mortgages *were assigned and delivered. While, therefore, the statute is a bar to the action of trover, it is no bar to this action. The statute of limitations only takes away the "remedy, it does not destroy the debt. (4 Barb. 174; 5 Burr". 2630; 2 Barn. & Adol. 413.)

It cannot, therefore, be said, that these two actions are founded on the same cause of action, nor that the same evidence will support both actions. In one sense, these actions are founded on the same cause of action; the action of trover is brought to recover the value of the three mortgages, and this action is brought to recover a portion of the moneys paid on the mortgages, to the extent of the usurious interest received by the defendant. But as I have come to the conclusion, that the action of trover is barred by the statute of limitations, and, therefore, for that reason, no recovery can be had, in that action, against the defendant, and no trial can.be had therein, on the merits of the plaintiff’s claim, the pendency of that action ought not to be allowed to be a bar to this action. This point failed to attract the attention of either the justice who tried the cause, or of the supreme court who reviewed his rulings at the circuit. No demand of the moneys received by the defendant was necessary, before the commencement of this suit;. suits may be brought against agents and trustees for moneys in their hands, without any previous demand. (5 Hill 397.)

The conclusion at which I have arrived is, that the cause of action in this suit, accrued at the times the moneys due on the mortgages assigned were respectively received by the defendant, and that, therefore, the action is not barred by the statute of limitations; and that the plaintiffs have a right to recover the moneys so received by the defendant, within six years next prior to the cornmencement of the suit, to the extent of the excess above the amount of the loan of $7500, and the actual value of the land, and lawful interest on the same.

*Foot, J.

(Dissenting.) — The first question nat- -* urally in order in this action is, whether it is barred by the statutory limitation of one year. On comparing the statute of 1787 (1 E. L. of 1813, p. 64) with the one of 1830 (1 E. S. 772), it will be seen, that their provisions on this subject are substantially the same. The only differences between them are two.. 1. In the old act, the form of the action, in which the excess above lawful interest was to be recovered, was prescribed, while in the new one, it is not. 2. In the old act, the' suit for the benefit of the poor, was limited to one year, and in the new one, to three years. These differences have no bearing on the inquiry whether the legislature intended, by giving the remedies mentioned in the statute, to abolish the remedy which the borrower had at common law.

The decision in Wheaton v. Hibbard (20 Johns. 292) was made-in 1822, and is directly and pointedly in favor of the position, that the old statute did not impair the common-law remedy. With this decision before them, the revisers did not recommend, nor the legislature adopt, any change or provision, indicative of an intention to alter the law on the subject. The case of Wheaton v. Hibbard is, therefore, decisive of the question under consideration, and settles it in the negative.

The next question is, whether the action of trover for the securities, being barred by the statutory limitation of six years, this action, being for moneys received on those securities, within six years of its commencement, is also barred. On an examination of the authorities, I find two decisions, by highly respectable courts, directly in point, and in the negative. One by Sir John Leach, vice-chancellor of England (Hovey v. Hovey, 1 Sim. & Stuart 568), and the other by the supreme court of [*119 Massachusetts (Lamb v. Clark, 5 Pick. 197). In each of these cases, the injured party had an undoubted right to the action of trover, and that action was barred by the statute of limitation; and in each, he was allowed to recover for money received within six years on and for the converted property; both courts gave judgment after full argument. Sir John Leach appears to regard the principle as *settled law, and Parker, C. J., in delivering the judgment of the court over which he presided, lays down the' proposition, unhesitatingly, and says, substantially, that the wrongdoer cannot be permitted to set up his own wrong, though an action for it may be outlawed, in answer to a just claim for money he has no right to retain. This is certainly just and sound in morals. Mr. Angel also, in his treatise on limitations, lays down the law in these words: “An action of assumpsit may not be barred by the statute, when, to an action for a tort upon the same demand, the statute may be pleaded.” (Angel on Lim. ch. 9, § 5.) These authorities, and the reasons on which they are founded, bring me satisfactorily to the conclusion, that the present action is not barred-by the statute.

Another and further question also arises, and that is, whether the pendency of an action of trover for all the securities transferred by the appellant Schroeppel to the respondent, on the usurious transactions between the parties, is an abatement of the present suit. I am clearly of opinion, it is not. The two suits are not at all for the same cause of action; one is for the value of the whole securities, and founded upon the statute (Schroeppel v. Corning, 2 N. Y. 132), while the other is an action at common law, for the excess of money received over and above the principal and interest loaned, and which the lender, ex sequo et bona, has no right to retain.

Some other points were presented on the argument, but it does not appear to be necessary to notice them particularly. On the whole, I am of opinion, that the appellants have a right to recover from the respondent all sums of money received within six years previously to the commencement of this action, on the securities transferred to him in pursuance of the usurious transaction, over and above what he shall have received or realized as the principle and interest of the money loaned.

Judgment affirmed. 
      
       In the opinion, a majority of the court concurred.
     