Farwell v. Meyer (35 Ill. 40, 1864)

Mr; Justice Beckwith

delivered the opinion of the Court:

This is a suit in equity to restrain the collection of a judgment, rendered by the Cook County Court of Common Pleas, against the plaintiff in error and Henry W. Zimmerman in favor of Max A. Meyer, one of the defendants in error, upon a promissory note executed by Zimmerman as principal and the plaintiff in error as surety. Attached to the note was a letter of attorney in the usual form, pursuant tó which the judgment was entered by confession. The bill alleges that Rosenfeld & Rosenberg were the holders and owners of the note when it became due, and for a long time thereafter; and that in consideration of large sums of money paid' to them as usurious interest they agreed with Zimmerman to extend, and they did extend the time of payment, from time to time, without the knowledge or consent of the plaintiff in error, whereby he was discharged from liability. We are satisfied from the evidence that Rosenfeld & Rosenberg agreed with Zimmerman to extend, and did extend the time of payment, from time to time, in consideration of the sums of money paid them; and that these agreements were made without the knowledge or consent of the plaintiff in error; but the agreements, in order to operate as a discharge of the plaintiff in error, must be shown to have been binding as between Zimmerman and the owner of the note, at the times when they were made. An agreement for forbearance must be one which can be enforced by the principal against the creditor, and be available to him, either as a cause of action or as a defense, or it will not operate to discharge a surety. 3 Lead. Cas. in Eq. 563.

It was therefore necessary for the plaintiff in error to establish that Rosenfeld & Rosenberg were the owners of the note as alleged, or that they had authority from the owner to make the agreements mentioned. It appears that Rosenfeld & Rosenberg had possession of the note at the time the first and some of the subsequent agreements were made, while upon other occasions they declared that the note was not in their possession. Zimmerman testifies that he was informed by them, when the first agreement was made, that they were not the owners of the note.

The possession of a note indorsed in blank, unaccompanied by any declaration .in regard to its ownership, is •prima facie evidence that the holder is the owner; but when accompanied with a declaration that he is not the owner, the presumption arising from the possession is rebutted. The testimony of Zimmerman is the only evidence to sustain the allegation that Bosenfeld & Bosenberg were the owners of the note at the times when the agreements for forbearance were made; and we think it fails to establish the allegation.

Bosenfeld f interest than six per cent, will not he enforced.; and the lender or other person contracting for an illegal rate of interest will be allowed (where no forfeitures or penalties are insisted upon) only to recover six per cent., as the measure of value which our law has established for the use of money, where no agreement has been made for a higher rate, in conformity with its provisions. Although usurious interest voluntarily paid, since the passage of the act of 1857, cannot be recovered back; still, so long as any part of the debt remains unpaid, fche debtor may insist upon a deduction of the usury therefrom. The usury received is considered as having been extorted by means of the debt, and is to be applied in part payment of the same. So much of the note as the debtor was entitled to have satisfied by payments of usurious interest as was included in the judgment entered without notice, and in a manner affording him no opportunity of asserting his rights, he was entitled to have deducted, and to that extent the judgment should have been enjoined.

The decree of the court below will be reversed and the cause remanded.

Decree reversed.