Summary
In Deposit Guaranty, this Court held essentially the same: "[a]lthough a right conferred solely by statute in the public interest may have accrued before the repeal or modification, it does not follow that the accrued right in such cases is a vested right, in the constitutional sense."
Summary of this case from Miss. Dep't of Corr. v. Roderick & Solange MacArthur Justice Ctr.Opinion
No. 35025.
September 28, 1942. Suggestion of Error Overruled November 9, 1942.
1. STATUTES.
A repealing statute abrogates the repealed statute as completely as if it had never been passed, and a statute modifying a previous statute has the same effect as though the statute had all the while previously existed in the same language as that contained in the modified statute, unless the repealing or modifying statute contains a saving clause.
2. CONSTITUTIONAL LAW. Statutes.
Every right or remedy created solely by a statute subsequently repealed or modified falls with the repealed or modified statute, unless carried to final judgment before such repeal or modification except that no such repeal or modification may be permitted to impair the obligation of a contract or to abrogate a vested right.
3. CONSTITUTIONAL LAW.
Where statute before modification did not expressly declare a usurious contract void, the modified statute under which contract as made by the parties would be valid did not "impair the obligations of the contract" but simply withdrew previous impediments and rendered the contract enforceable as made (Code 1930, sec. 1946; Laws 1940, chap. 204).
4. USURY.
Rights of action or defenses on account of usury are not a part of the common law, but are solely the creation of statutes which are in the nature of regulations in the public interest.
5. CONSTITUTIONAL LAW.
A right conferred solely by statute in the public interest and accruing before repeal or modification of such statute is not necessarily a "vested right" in the constitutional sense.
6. CONSTITUTIONAL LAW.
There is no "vested right" in the usury law which would prevent legislature from repealing or modifying such law so as to affect causes of action and defenses even in pending suits (Code 1930, sec. 1946).
7. USURY.
Action to recover usurious payments made to a bank could not be maintained after modification of the usury law so as to permit transactions identical with those complained of, notwithstanding the cause of action sued on had accrued under the law as it existed at the time of such transactions (Code 1930, sec. 1946; Laws 1940, chap. 204).
APPEAL from the chancery court of Hinds county, HON. FORREST B. JACKSON, Special Chancellor.
Harold Cox and Butler Snow, all of Jackson, for appellant.
It is beyond serious argument that the effect of Chapter 204, Laws of 1940, was to amend Section 1946 of the Mississippi Code of 1930 to make possible a charge by banks of $1.00 on a loan, no matter for what period, a legal charge, and to repeal said Section 1946 in so far as it provided for a forfeiture of interest and principal and the right to recover the same when paid in the case of a loan by a bank where the minimum charge of $1.00 was made.
Bradstreet Co. v. City of Jackson, 81 Miss. 233, 32 So. 999; Crow v. Cartledge, 99 Miss. 281, 54 So. 947; 59 C.J. 924, Sec. 526; 25 R.C.L. 907, Secs. 159, 160.
So, the result is that after the enactment of Chapter 204, Laws of 1940, there was no law in effect in the State of Mississippi declaring interest and principal forfeited where a minimum charge of $1.00 was made by a bank doing business in the State of Mississippi on any loan no matter how small and no matter for what period of time, and, of course, if the same was not forfeited, it could not be recovered back when paid.
The next question here involved is, what effect does the repeal of the usury statute have on the instant case where the principal and interest sought to be recovered was paid to the bank prior to the enactment of Chapter 204, Laws of Mississippi of 1940, but suit to recover the same was not begun, and, of course, judgment not rendered therefor subsequent to the passage of said Chapter 204, Laws of Mississippi of 1940, or until subsequent to the repeal of the usury statute as it might effect a loan made by a bank doing business in the state where a minimum charge of $1.00 was made.
It is imperative in the outset to note that Chapter 204, Laws of Mississippi of 1940, contains no saving clause whatsoever. We have no general saving clause statute in this state which affects this statute.
The Mississippi usury statute, Section 1946, Mississippi Code of 1930, does not provide that a contract made in violation thereof is void, but merely provides in certain instances for a forfeiture of principal and interest. Therefore, our usury statute, as are most usury laws, is but a defensive remedy created by statute. The right to sue for recovery of the forfeited principal and interest where it has been paid is but a continuation of this defensive remedy so created by statute. In any event, it is a cause of action or a remedy not known to the common law, but created by statute, and having been created by a legislative enactment the same may at any time be repealed by legislative enactment, and no person has a vested right therein until after judgment rendered.
Musgrove v. Vicksburg N.R. Co., 50 Miss. 677; 59 C.J. 1188, Secs. 724, 725, 726, 727.
There is no vested right in the usury laws which therefore may be repealed or changed so as to affect causes of action and defenses even in pending suits.
12 C.J. 974, Sec. 557.
See 66 C.J. 169, Secs. 54, 55; 66 C.J. 170, Sec. 56; 27 R.C.L. 206, par. 6; 11 Am. Jur. 1207, Sec. 377; 11 Am. Jur. 1208, Sec. 378; 12 Am. Jur. 65, Sec. 428; Cooley on Constitutional Limitations, p. 599; Ewell v. Daggs, 108 U.S. 143, 2 S.Ct. 408.
See also Tonsmeire v. Board of Sup'rs. of Harrison County, 1 So.2d 511; Barron et al. v. City of McComb, 163 Miss. 337, 141 So. 765; Love v. Mangum, 160 Miss. 590, 135 So. 223; John E. Ballenger Const. Co. v. State Board of Adjustment (Ala.), 175 So. 387; Barclift v. Fields (Ala.), 41 So. 84; Coe v. Muller et al. (Fla.), 77 So. 88; Reynolds v. Lee et al. (Ala.), 60 So. 101; Iowa Savings Loan Ass'n. v. Heidt, 107 Iowa 297; Penzinger v. West American Finance Co. (Calif.), 74 P.2d 252; Bejger v. Azwadzki (Mich.), 232 N.W. 746; Petterson v. Berry (Court of Appeals for the Ninth Circuit), 125 F. 902; Fenton v. Markwell Co. (Calif.), 52 P.2d 297; Ewell v. Daggs, 108 U.S. 143, 27 L.Ed. 683; Woods v. Buie (Miss.), 5 How. 285; Dunn v. Love, 172 Miss. 342, 155 So. 331, 79 L.Ed. 1303; 23 Am. Jur. 632, Sec. 40; 59 C.J. 1196, Sec. 734.
As we interpret one of the briefs of appellee, it seems to be suggested that Chapter 204 of the Laws of 1940 may be in violation of Item (D), Section 90, of the Constitution of 1890. We cannot conceive that the act is violative of this section of the Constitution. The act is not a local, private or special law, but plainly includes in its provisions all banks or trust companies doing banking business anywhere in the state, including both state and national banks; that is to say, all within a broad classification.
Halsell v. Merchants' Union Ins. Co., 105 Miss. 268, 62 So. 645; City of Jackson v. Deposit Guaranty Bank Trust Co., 160 Miss. 752, 133 So. 195; City of Jackson v. Mississippi Fire Ins. Co., 132 Miss. 415, 95 So. 845; Miller v. Lamar Life Ins. Co., 158 Miss. 753, 131 So. 282.
Stewart C. Broom and Harmon W. Broom, both of Jackson, and Milton Williams, of Memphis, Tenn., for appellee.
It is the contention of the counsel for the defendant and appellant that Section 1946, Mississippi Code of 1930, was repealed by Chapter 204, Laws of 1940, and that Chapter 204 having no saving clause, and the fact that the instant case was brought after the passage and enactment of Chapter 204, Mississippi Laws of 1940, then recovery by the plaintiff and appellee would necessarily be barred.
The rights given to the people by a constitution in our scheme of government are vested rights and in this connection in Section 90 of the Mississippi Constitution of 1890, paragraph (D), the legislature is prohibited from passing special laws "regulating the rate of interest on money." Therefore, if Chapter 204 of the Laws of 1940 passed by the Mississippi Legislature in session in 1940 is to be interpreted in connection with this case, then we believe it would be well for the court to take in consideration Halsell v. Merchants' Union Insurance Co., 105 Miss. 268, 62 So. 645, on suggestion of error, original opinion 62 So. 235. Also see 59 C.J. 1173, et seq.
It has long been settled in England that statutes allowing, increasing or diminishing rate of interest have not a retroactive operation. We recognize that as a solid rule of law independent of the provision in our Constitution which provides that "no law shall be passed impairing the obligation of contracts.
Eastin v. Vandorn, Walker (1 Miss.) 214.
The general rule is that, unless there is a clear legislative intent to the contrary, usury statutes will be construed to be prospective only, and not retrospective.
66 C.J. 168, Sec. 54.
It has been held that the rights to defend against the payment of usury on a preexisting loan is a vested right.
66 C.J. 169, Sec. 55.
As shown by the statement of facts on the previous appeal of this case, Williams v. Deposit Guar. Bk. Tr. Co., 190 Miss. 685, 1 So.2d 486, appellee had obtained numerous small loans from appellant bank during the period from August 1, 1934, to August 1, 1937, in each of which the bank had made a charge of one dollar for thirty days, or more than 20%, if considered as interest, with the result that under Sec. 1946, Code 1930, appellee would have been entitled, upon a suit instituted within the statutory period, to recover not only the interest paid but the principal as well.
The loans were handled by the bank in this manner in accordance with an asserted custom of banks to make a so-called service charge of $1 for these small short-time loans, and when the lawfulness thereof was challenged in Dickey v. Bank of Clarksdale, 183 Miss. 748, 184 So. 314, and the court held, as it was bound to hold under the then existing law, that such transactions were usurious, and that instead of appealing to the court to uphold them the address should be to the legislative department, that address was made; and by Chap. 204, Laws 1940, the previous law was modified so as to allow all banks, state and national, to make the charges on small loans such as were made in the present case. In brief, had Chap. 204, Laws 1940, been in existence at the time of the transactions here involved, they would have been entirely within the allowance of the law, and no question of usury could have arisen.
After the decision in Dickey v. Bank of Clarksdale, supra, appellee instituted this suit to recover principal and interest relying upon that case and the section of the statute as it stood before its modification by the subsequent enactment. On the first appeal the question was not raised that the new statute, which contains no saving clause, had the effect to nullify any right of action which existed under the previous statute, but the question has now been presented and elaborately briefed. The conclusion which we have reached on that issue makes it unnecessary to consider the several other questions presented by motions, special demurrers, etc.
Many decisions in this state have affirmed the rule, which generally prevails, that the effect of a repealing statute is to abrogate the repealed statute as completely as if it had never been passed, and that a statute modifying a previous statute has the same effect as though the statute had all the while previously existed in the same language as that contained in the modified statute, unless the repealing or modifying statute contains a saving clause. Crow v. Cartledge, 99 Miss. 281, 54 So. 947, Ann. Cas. 1913E, 470, and Musgrove v. Vicksburg N. Railroad Co., 50 Miss. 677, are among the number of such cases in this state.
The result of this rule is that every right or remedy created solely by the repealed or modified statute disappears or falls with the repealed or modified statute, unless carried to final judgment before the repeal or modification, — save that no such repeal or modification shall be permitted to impair the obligation of a contract or to abrogate a vested right. Bradstreet Co. v. City of Jackson, 81 Miss. 233, 236, 32 So. 999.
The older statute here under consideration did not denounce usurious transactions as void. All or nearly all the authorities are agreed that when the older statute did not expressly declare a usurious contract void, a modified statute under which the contract as made by the parties would be valid does not impair the obligations of the contract, but simply withdraws previous impediments and renders it enforceable as made. Sufficient of the authorities on this point are gathered in the notes in 87 A.L.R., pp. 470-473.
Rights of action or defenses on account of usury are not a part of the common law. They are solely the creations of statute, and such statutes are in the nature of regulations in the public interest. Although a right conferred solely by statute in the public interest may have accrued before the repeal or modification, it does not follow that the accrued right in such cases is a vested right, in the constitutional sense. There is no vested right in the usury laws, which, therefore, may be repealed or changed so as to affect causes of action and defenses even in pending suits. 12 C.J., p. 974; 16 C.J.S., Constitutional Law, sec. 254. By the great weight of authority, the legislature may repeal a usury law and no one has any vested right to take advantage of such laws. 12 Am. Jur., p. 65.
Inasmuch as the right of action under the old law which appellee now asserts has disappeared with the enactment of the modified statute, appellant's general demurrer should have been sustained, and not being amendable the bill should have been dismissed; and it will be so ordered here.
Reversed and bill dismissed.