Ossipee v. Gafney

Assumpsit. The defendant is described as Charles B. Gafney, of Rochester, in our county of Strafford, esquire, administrator of the estate of Moses Merrill, &c.

The declaration is as follows: “ In a plea of the case for that the said defendant, at said Ossipee, on the day of the purchase of this writ, being indebted to the plaintiffs in the sum of six thousand dollars, for so much money before that time had and received by the defendant for the plaintiffs’ use, in consideration thereof then and there promised the plaintiffs to pay them the same sum on demand; yet, though often requested, said defendant has not paid the same, but neglects it.”

The plaintiffs in their specification claim to recover “ the sum of $3,424.10, money of said town wrongfully paid the defendant on the 22d day of September, 1873, by the acting selectmen of said town; also, to recover another sum of $3,424.10, money of said town, by the defendant had and received by the hand of Thomas Nute, on the 22d day of September, 1873, for the plaintiffs’ use.”

Plea, the general issue, with a brief statement of the statute of limitations, and that the estate, on the first Tuesday of October, 1872, was decreed to be administered as insolvent. The case was tried by the court.

The plaintiffs claim to recover of the defendant in his private capacity, and not as administrator, — to which the defendant objected; but the court ruled in favor of the plaintiffs, and the defendant excepted.

The defendant objected to the specification as not being specific, and the court overruled the objection, — to which the defendant excepted. The question of discretion is also reserved.

It appeared that between September 1, 1864, and February 17, 1872, the defendant’s testator had loaned money to the town of Ossipee, for which he had received more than legal interest. Being then a resident in Ossipee, he had pretended to act as the agent of his brother, John Merrill, who lived in Maine, — although, in fact, the money belonged to him,— whereby he avoided taxation. December 10, 1864, he lent the town $3,000; February 24, he lent the town $2,000. For these sums ho took the notes of the town, payable to the order of John Merrill, and by him endorsed in blank. February 17, 1872, there was a settlement between Moses Merrill and the selectmen of Ossipee, of whom Merrill was one, in which the interest account was adjusted, and a new note was given, payable to the order of John Merrill, and by him endorsed in blank for the sum of $5,000, the two last mentioned notes being surrendered.

February 13, 1873, after the death of Moses Merrill, the town treasurer, by the authority of the selectmen, paid to Lois Merrill, executrix of Moses Merrill’s will, the sum of $2,000. September 22, 1873, the treasurer paid the balance of the note to the defendant, the other executor, — which last payment the court found was authorized by the selectmen.

The plaintiffs offered in evidence receipts signed by the said Moses Merrill, by which it appeared, as the plaintiffs claimed, that the sum of $1,106.51 had been received as usury by Moses Merrill in his lifetime, and which, the plaintiffs claimed, ought to have been deducted from the balance of the note paid to the defendant as administrator, and sought to recover this sum as money overpaid to the defendant, and which in equity and good conscience ought to be considered as money had and received to the use of the plaintiffs.

It was not claimed that either the defendant, or his co-executor, Lois Merrill, had ever received any usury, or that the defendant had any knowledge, when he received the payment, of any infirmity in the note by reason of usury; and it was not denied that he had accounted for the whole sum in the settlement of his account.

The plaintiffs claimed that what money had been paid usuriously on the notes of $2,000 and $3,000 ought to be considered as payment, and to go in reduction of the balance of the $5,000 note, and that the remainder of the usury ought to have been applied in set-off, and so that they were entitled to recover that amount of the defendant in his private capacity, as money paid to him without authority by the selectmen.

Evidence was offered tending to show that the town, by their vote, had authorized the commencement of their action. Exception was taken; but, in the view taken of the case, it was not material.

Upon the defendant’s motion, the plaintiffs were nonsuited; and the questions ai’ising on the case were transferred to the superior court by Smith, J.

The plaintiffs claim to recover this money of the executor in his private capacity. The claim is, that he has so conducted himself that he is liable to be sued in his private capacity; and, if the plaintiffs can recover, execution may be had against him, to be satisfied de bonis propriis, and, as the declaration stands, entirely irrespective of the condition of the assets of the estate in his hands. I understand the effect of the authorities to be, that, whenever a party has knowingly violated the law by taking usurious interest, the money which he has so taken is money which ought, in equity and justice, to be considered as money had and received to the use of the other party. Willie v. Green, 2 N. H. 333; Cross v. Bell, 34 N. H. 86, and cases cited. It is the doctrine of the cases that always the payment of unlawful interest is the result of oppression, and that always the receipt of unlawful interest is oppressive. The party so paying is considered as paying under duress, and so not in pari delicto, and, therefore, the ordinary rule, that when two parties are engaged in violating the law the law will leave them where it finds them, and will not undertake to help either, does not apply.

At a time when the general government was always in the market borrowing money at a largely usurious rate, any party who withheld his money from such safe loan and loaned it to a town was still considered as the oppressor, and the town the oppressed. The oppression is not a matter of fact to be found by the triers of fact, but a mysterious inference of law founded in the policy of the law.

This being so, if the action had been against the estate, or against the executor in his capacity as such, to recover back the money usuriously paid, no notice would have been necessary, excepting such notice and demand as is always required by the statute before commencing an action against an executor. The unlawful act in such case being the unlawful act of the intestate, and of course known to him, the right of action must have accrued in his lifetime, and would not depend upon the executor’s knowledge. In such case, the statutory demand must be made before the suit can be maintained. In this case, the estate having been settled in the insolvent course, the claim, not having been presented before the commissioners as appeared by the pleadings, would be barred, and in this state of facts the attempt is made to recover the amount of the executor de lonis propriis.

It being conceded that neither the defendant nor his co-executor had any knowledge of any infirmity in the note, or of any usurious transactions between the testator and the plaintiffs, and the note being prima facie good, and one which the selectmen were authorized to pay, and there being no pretence of any mistake or accident, it seems entirely clear that the defendant has been guilty of no violation of law. He had a right to believe the note to be good, and to treat it as such: he had a right to deal with the selectmen as the agents of the town, authorized to settle their just debts: he had a right to receive this money as money belonging to the estate of his testator, and to use it in the settlement of that estate.

If it had been made to appear that he had been notified of the state of facts on which the claim of the town is founded before he had settled the estate and paid over the money, and had had full knowledge of the usurious transactions complained of, some questions might have arisen which do not now arise. But in the existing state of facts, as made apparent by the case, I think this action cannot be maintained, and a nonsuit was rightly ordered.

The objections taken in the course of trial by the defendant, not being necessary for the determination of the case, have not been considered.