4

a law impairing the obligation of contracts, even when it is applied to antecedent undertakings. The infringement of the law, to which the debtor is a party, by agreeing for a higher rate of interest, is no part of the obligation of the contract. The new law may be said to clothe with legality an antecedent moral obligation. It permits the enforcement of a contract, which when entered into was only binding on the conscience of the promisor It would be a strange perversion of the provision prohibiting impairment of the obligation of contracts, to hold that it was intended to preserve inviolate to an obligor, as a vested right, the privilege of repudiating in whole or in part, his deliberate personal engagements.5

In accordance with this view, retroactive effect was given to a statute containing the following provision: "No plea of usury or defense founded upon any allegation of usury shall be sustained in any court of this State." It was therefore held that the statute would take effect to prohibit the plea of usury to a suit on a note executed when the law in force rendered it void for usury. Such statutes are regarded as giving force and validity to the obligation of contracts, rather than impairing such obligation. And legislation operating retrospectively to render binding moral obli gations not theretofore legally enforcible, is not necessarily in conflict with constitutional provisions. It neither impairs the obligation of contracts, nor devests proprietary rights.8 In passing upon a statute of this character, in Welsh v. Wadsworth, supra, Judge Butler says: "It cannot be successfully claimed that it contravenes that clause of the Constitution of the United States which prohibits the enactment of a law impairing the obligation of contracts. There was no obligation resting upon the plaintiff's corporation which it could impair. So far as their duty reached under the (4.) Savings Bank v. Bates, 8 Conn. 505.

(5.) Satterlee v. Mathewson, 16 Serg. & R. 191, s. C., 2 Pet. 300, 412; Baugher v. Nelson, 9 Gill. 299, 309. (6.) Woodruff v. Scruggs, 27 Ark. 26.

(7.) Wood v. Kennedy, 19 Ind. 68; Wilson v. Hordesty, 1 Md. Ch. 66; Willar v. Balt. etc., Loan Ass'n, 45 Md. 546, 559; Kilborn v. Bradley, 3 Day, 356; Contra: Mitchell v. Doggett, 1 Fla. 356; North Bridgewater Bank v. Copeland, 7 Allen, 139; Morton v. Rutherford, 18 Wis. 298; Gilleland v. Phillip, 1 S. C. (N. s.) 152.

(8.) Tilton v. Swift, 40 Iowa, 78, 81; Welch v. Wadsworth, 30 Conn. 149; State v. Norwood, 12 Md. 195; Deutzel v. Waldie, 30 Cal. 138; Satterlee v. Matthewson, 2 Pet. 380, 412.

contract it was performed. They had delivered their money to the defendant and taken his promise to repay it, and the unperformed obligation was upon him.' That obligation, so far as void, the legislature intended to validate." The same conclusion is reached by a similar course of reasoning in several other cases 9

The forfeiture of either principal or interest is not a right guaranteed to the party who agrees to pay a rate in excess of that prescribed by law, but is in the nature of a penalty imposed upon the party who exacts it. Being a penalty, it forms no part of the obligation of the contract, nor can the right to claim it be regarded as property. When the statute, under which it is claimed, has been repealed, without a clause saving usurious contracts already made, it operates to defeat all liability to the penalties thereby imposed, with respect to them as well as subsequent contracts. 10 A statute intended to deny the defense of usury to corporations was expressed in the following language: "No corporation shall hereafter interpose the defense of usury in any action; nor shall any bond, note, debt or contract of such corporation be set aside, impaired or adjudged invalid by reason of anything contained in the laws prohibiting usury." It was questioned whether this law should not be construed as altogether prospective in its operation, for the reason that it did not expressly refer to past transactions. But the intention to give it retroactive effect was found in the terms employed, and it was denied that there was anything either in the charters of corporations or in the Constitution to prevent its application so as to prevent them from pleading usury in suits on past contracts.11

One of the most prominent cases in which this question is considered, as well on account of the importance of the issues as the magnitude of the sum in controversy, is that of Curtis v. Leavitt.12 The statute in question there was one from which the provision in the Virginia enactment quoted above was copied verbatim. Says Paige, J., in the course of a voluminous and

(9.) Andrews v. Russell, 7 Blackf. 474; Hays v. Walker, Id. 540; Grimes v. Doe, 8 Blackf. 371; and Beach v. Woodhull, Pet. CC. R. 2.

(10.) Engle v. Shurts, 1 Mich. 150. (11.) Danville v. Pace, 25 Gratt. 1. (12) 15 N. Y. 1.

exhaustive opinion: "As soon as the statute imposing the penalty is repealed, the very foundation of the action to recover it is taken away, and the action must fall with the law. The act of 1850 is in substance a repeal of the statutes of usury, so far as relates to corporations. The language, as well as the spirit of the act, applies to antecedent as well as subsequent usurious agreements."

There is an apparent conflict of principle between the doctrine of the foregoing cases, and others where it is decided that laws curing the defective execution or acknowledgment of deeds, etc., will not retroact so as to work a conveyance of property when none was effected by an instrument executed prior to the passage of the law.13

The retroactive operation of curative acts of this sort is not condemned for the reason that

they impair the obligation of contracts, but because they take the property of one person and give it to another, otherwise than by due process of law. They undertake, however, to validate void contracts, and that is the aim and purpose of statutes abolishing the penalty of usury, when that penalty is that the usurious contract shall be declared void. Yet laws validating antecedently executed void deeds are condemned by the weight of authority as decisive as that which upholds statutes abolishing the usury laws, and abrogating the penalty of usury on antecedent contracts. The cases cited above with reference to "healing acts," by which these defective conveyances are sought to be cured, deny the retroactive operation of the statute upon the rights of married women. The policy of the law which restricts their powers to contract, places them upon an exceptional footing, which will justify the distinction made between laws intended to give validity to their void contracts, and those intended to abolish the penalty of forfeiture which attaches to usurious contracts

statute providing that "usury between the payee and the maker of a promissory note, payable on time, shall not be a defense to an action thereon, brought by the indorser to whom the same was indorsed before maturity, for value, and without notice, express or implied, of the usury," would not affect the rights of parties to a note given before the statute was enacted. Under the law as it stood at the date of the note, the taint of usury would follow it into the hands of an innocent holder. The provision of the statute quoted was given a prospective rather than a retrospective construction, for the reason that it did not ex. pressly refer to past transactions. But after reaching this conclusion, Bigelow, C. J., adds: "It is not an enactment designed only to affect a remedy, or regulate the course of judicial proceedings, but if construed as operating retroactively, it would essentially impair the rights of debtors as to contracts existing before its enactment. The statute prescribing the rate of interest and prohibiting usury, and giving to debtors either a lawful claim to a deduction from the amount due on a usurious contract, or an action to recover the amount forfeited where usury has been paid, is not merely penal in its nature, or intended only as prescribing the mode and form of remedy. It creates a vested right or interest in the debtor, which he can insist upon and enforce, and which passes to his assignee in case of insolvency.' In Mitchell v. Doggett, 15 the question turned upon the construction of the statute repealed, which, when in force, declared that all the interest bargained for in a usurious contract, should be forfeited; one-half to the informer and the other to the county. The repealing act was denied retroactive force for the reason that if permitted to operate in that way, it would divest vested rights. It was admitted that if the forfeiture of interest was a mere

9714

But even with respect to the retroactive operation of statutes abolishing the penalties for usury, the courts have not been altogether

of the statute by which it had been created would amount to an abrogation of the right to claim the forfeiture. But it was denied that the usury law was penal in its nature, but rendered the contract for interest void, when the

water Bank v. Copeland, 13 it was held that a

There is also an attempt to distinguish stat

(14) Gray v. Bennett, 3 Metc. 522. (15) 1 Fla. 356.

utes which deny the right to plead usury as a defense, from those repealing the acts by which the penalties are fixed, for the reason that the former affect only the remedy, while the latter touch the right. This distinction, however, is a purely technical if not a fanciful one. There is no substantial difference in the operation of statutes of the two classes.

If

the power of repudiation were a right which the law undertook to protect from legislative impairment at all, the remedy by which alone it could be enforced would be guarded no less strictly than the right itself. The law does not employ such duplicity in laying down its rules as to say that one of two contracting parties has an inviolable legal right to repudiate his promises, and yet that the means of enforcing that right may be held at the pleasure of the legislature.

There are cases, however, where forfeitures for usury are fairly admitted to be in the nature of penalties, and the pretense of a vested right in such penalties is not set up, where the retroactive operation of statutes abolishing the usury laws is held not to deprive the debtor of the right to recover for nsury paid.16 It has been claimed that when excessive interest has been paid, the party paying the same has not only a right to plead the statutory penalty to recover it back, but that he has a right of action at common law against the payor, which a subsequent statute cannot take away.

This raises a distinction

more plausible at least than that which draws the line between statutes affecting the remedy by prohibiting the defense, and such as impair the right, by abolishing the forfeiture. The ground upon which the right of recovery is brought within constitutional protection is the implied promise to re-pay what was unlawful to demand.

It requires this to render the duty an obligation of a contract. But this seems to be carrying the doctrine of implied obligations too far. How can a voluntary promise be implied, in direct contradiction of the terms of a contemporaneous express promise with respect to the same subject matter? The payment of usurious interest is in execution of an express promise. To support an action of assumpsit to recover it back, a promise must be implied to do, what a fair interpreta

(16.) Scott v. Leory, 34 Md. 589; Willar v. Baltimore, etc., Assn., 45 Md. 546-559.

tion of the express agreement between the parties, would show that it was mutually and expressly understood that he should not do.

In Baugher v. Nelson, 17 which is cited in support of Willar v. Baltimore, &c., Association, supra, Judge Martin gives the following questionable indorsement of the doctrine that the right to recover back usury once paid is protected by the Constitution from impairment: "But in this case, no right was divested. Where vested rights are spoken of by the courts, as being guarded against legislative interference, they mean those rights to which a party may adhere, and upon which he may insist without violating any principle of sound morality. In the language son, 18 there can be no vested right to do of Judge Duncan, in Satterlee v. Matthewwrong; in the nature of things there can be no vested right to violate a moral duty or to resist the performance of a moral obligation.' And although a borrower may be justified in morals as he is in law, in resisting the payment of illicit interest extorted from him while he was in vinculis, and in consequence of his necessitous condition, he certainly can have no right, as a matter of private justice, to repudiate his contract so as to escape from the payment of the sum actually received." If the plea of usury might be justified in morals as plainly indicated in the foregoing quotation, it must be upon the ground of some such necessitous condition as would operate to coerce the mind of the borrower into acquiescence in an unconscionable demand. But this coercion, to furnish an excuse, either upon moral or legal grounds, for resistance to a demand for interest, must affect the mind of the party at the time he makes the promise, and not as in the case of Willar v. Balt. etc., Ass'n, supra, when he was called upon to redeem his promise. If it be accepted as true that no one can have a vested right "to resist the performance of a moral duty," it follows that neither the defence of usury nor the right of 'action to recover interest paid in excess of the prescribed rate, would be protected from legislative infringement. Except in cases of such unusual hardship and imposition as would warrant equitable interference to pre

(17) 9 Gill. 309.

(18) 16 Serg. & R. 191.

vent an enforcement of the contract, or to grant the party imposed upon other relief, the court will regard men as under a moral obligation to perform their promises, when such performance is not in its nature criminal. If the debtor has a moral right to resist the payment of illicit interest because the promise was made under the coercion of necessity, he would not only be morally bound to repay the principal sum received, but to pay such additional sum as the use of the money was reasonably worth. All the reasons assigned for holding the penalties attached to a violation of usury laws, as conferring rights which subsequent legislation may not abrogate, are unsatisfactory. W.

1. A PETITION TO ENFORCE a lien of the State for back taxes, which does not allege that the land had been returned delinquent or forfeited to the State for non-payment of taxes, is defective. Such defective petition, however, is cured by verdict, and a judgment rendered thereon can not, for that reason, be attacked collaterally.

2. THE CIRCUIT COURT HAS JURISDICTION to hear and determine suits for back taxes.

3. WHILE IT IS LEFT UNDECIDED, whether the statutes of limitations can be pleaded against the State for back taxes, it is held that such defense can not be available against the title acquired under a judgment in favor of the State enforcing a lien therefor.

4. SALES OF LANDS FOR BACK TAXES, under a judgment of the circuit court, are governed by the same rules, and subject to the same intendments as other judicial sales, and a purchaser thereunder need only look to the judgment, execution, levy and sheriff's deed. If they are right, all other questions are between the parties to the judgment and the sheriff.

5. THE ACT OF 1877 IS CONSTITUTIONAL. The legislature has undoubted right to provide new and different remedies for the collection of back taxes, from that which the State had when the right to enforce the collections accrued.

6. THE NEGLECT OF THE SHERIFF TO sell the land in the smallest legal subdivisions, does not invalidate the sale. While such neglect might be good ground for setting a sale aside, it is too late to right it after a deed has been executed to the purchaser.

APPEAL from Barry Circuit Court.

J. L. Smith, Attorney General, and L. C. Kranthoff, for respondent; Norman Gibbs, for appellant.

HENRY, J., delivered the opinion of the court. Mary A. Henry, a non-resident of the State, owned the northwest quarter of section 24, in township 24, of range 28, in Barry county. At the March term, 1878, of the Barry Circuit Court, a suit was instituted against her, at the relation of the State to the use of J. W. Lecompte, collector of the revenue of said county, to subject said land to sale for the payment of back taxes for the years 1870, 1871, 1872, 1873, 1874, 1875 and 1876, amounting in the aggregate to $78 68. An order of publication was made against her, which was duly published in the Cassville Democrat, a newspaper published in said county, notifying Mary A. Henry that plaintiff had commenced suit against her in the Barry Circuit Court, by petition, the object and general nature of which was to obtain judgment against her for the taxes, interest and costs due on said land (describing it) for the years aforesaid (naming them), and the aggregate amount of taxes due on said land, $78 68, and that unless she should be and appear at said court, at the next term thereof, to be begun and held at the court house in the town of Cassville in said county, on the 14th day of March, 1878, and, on or before the the 3d day of said term, answer or plead to the petition in said cause, the same would be taken as confessed and judgment be rendered accordingly. She did not appear at said term, and judgment by default was rendered in favor of plaintiff for said taxes, interest and costs, and that the said real estate or so much thereof as might be necessary, be sold to satisfy the same. Under a special execution issued by the clerk of said court on the 17th day of May, 1868, said land was, by the sheriff of said county, on the 10th day of September, 1878, sold to John W. Wellshear for the sum of $8 00. Due notice was given of the sale by the sheriff. Amos N. Kelly was in possession of the premises, and this suit was instituted by Wellshear, purchaser under said execution, against Kelly to recover the same. Kelly made defense to the suit, but a judgment was rendered against him, from which he has appealed to this court.

He insists that the petition in the case of State, ex rel., v. Mary A. Henry, did not state a cause of action, because it was not alleged in the petition that the land therein described had been returned delinquent, or had been forfeited to the State. That it was not alleged that the county clerk, within sixty days after the taking effect of the act of 1877, had made out a back-tax book, and delivered it to the collector of the county, and that said tract of land was contained in said back-tax book and remained unredeemed on the 1st day of January, 1878. That it was not alleged that the suit was against the owner of the land.

Section 1 of the act to provide for the collection of delinquent taxes, provides that "the taxes due and unpaid on any real estate which has heretofore been returned delinquent, and which has not been forfeited to the State, and the taxes due and unpaid on any real estate which has been forfeited to the State for the non-payment of such taxes, shall be deemed and held to be back taxes, etc."

A petition should allege that the land had been

returned delinquent, or had been forfeited to the State. This petition in the case against Mary A. Henry was defective, and a demurrer to it might have been sustained, but although not directly and formally averred, it is sufficiently stated to be good after a verdict, that the land had been returned delinquent. The following is a portion of said petition: "That all of said amounts above set out, together with all interest, commissions and costs thereon accruing under and by virtue of the statutes in such cases made and provided, remained due and unpaid. That defendant is the owner of said real estate, and has wholly failed, neglected and refused to pay, and still fails, neglects and refuses so to do. Plaintiff further states, that under and by virtue of the statutes, etc., all taxes assessed and levied on each respective tract of said real estate, became and are a lien on each of said tracts to the amount of the taxes, etc. That by virtue of section 5 of an act of the General Assembly of the State of Missouri, in regard to delinquent taxes, entitled 'An act to provide for the collection of delinquent taxes and taxes due on real estate forfeited to the State, and repealing section 184 of an act entitled 'An act concerning the assessment and collection of the revenue,' approved March 30, 1872, 'approved April 12, 1877,' the aforesaid collector made an agreement in writing with and employed A. B. Greenwood, and Plummer and Wear, Esq's, as attorneys in prosecuting the foregoing suit, and all others for delinquent taxes in said Barry countysaid attorneys to receive as their fees therefor ten per centum on the amount collected and paid into the treasury; which said agreement between the said collector and said attorneys was approved by the county court of said county, by an order of record entered the 4th day of January, 1878. The said per centum to be taxed as costs in the suit and collected as other costs."

The failure to state in the petition that the county clerk had made out a back tax book, and delivered it to the collector, is not a defect of which even Mary A. Henry, in a collateral proceeding, could have taken advantage after the judgment against her. All of the objections made by defendant to the petition in the suit against Mary A. Henry, are such as she only could have complained of, if she had appeared and defended the action.

If the court had jurisdiction of the subject matter of the suit, the proceedings and the judgment thereon stand upon the same ground as the proceedings and judgment in a suit between individu-als.. There is no principle which requires the application of different rules to test the validity of a judgment in a cause between the State and an individual from those which apply to a judgment rendered in a suit between individuals. The same presumptions in favor of the judgment are indulged in the one case as in the other.

Although a statement may be defective, yet, if it appear after the verdict that it could not have been given, or that a judgment rendered without proof of the matter omitted, the defect will be cured by the statute. State V. County Court of Sullivan Co., 51 Mo., 522. "It is true if the record is radically defective-if it shows that

there was no obligation, no legal indebtedness, as that judgment was rendered upon a nudum pactum, it is substantial error. But the mere omission to set out a fact, as the consideration, or the whole of the consideration, on account of which omission a demurrer could have been maintained, or any fact that must have been found by a jury, is cured by the verdict." Kercheval v. King, 44 Mo. 404. This is the doctrine held where there is a direct proceeding to reverse the judgment, and it applies with much greater force when a collateral attack is made upon a judgment of a court of general jurisdiction. A judgment might be rendered upon appeal or writ of error for reasons which would be of no force in an attack upon the judgment in a collateral proceeding.

Appellant's counsel contends that the circuit court had no jurisdiction of the cause of State ex rel. v. Henry.

Circuit courts have “exclusive original jurisdiction in all civil cases, not otherwise provided for,” &c. Article 6, sec. 22, Constitution. By section 183 of the act of 1872, the county court of the several counties had original jurisdiction in all suits to enforce the lien created by that act for taxes due and charged upon real estate. The sections of that act, as published, beginning with the 56th, each have two numbers, as follows: Sec. 56 [55]; 57 [56.] The act of 1877 repeals section 184, and continues in force all provisions of sections 178, 179, 180, 181 and 182, not inconsistent therewith. The double numbering of the sections of the act of 1872, was the work of the publisher; and the numbers in the brackets were not in the act as enrolled, and the reference to the sections by numbers in the act of 1877, is to the sections as numbered in the original. Section 184 of the act of 1872 was expressly repealed by the act of 1877, and that is the section which prescribed the proceeding in the county court to obtain a judgment against delinquent lands.

Counsel for appellant bases his argument on this point upon the erroneous assumption that the number of the sections of the act of 1872, within brackets, are those referred to in the act of 1877. Sec. 183 of the act of 1872, which conferred original jurisdiction upon the county court in suits commenced and prosecuted to enforce the lien created by that act for taxes due, was repealed by section 20 of the act of 1877, which expressly repealed "all acts and parts of acts inconsistent " therewith. A reasonable construction of the act of 1877, in connection with the constitutional provision before quoted, leaves no doubt of the jurisdiction of the circuit court to hear and determine suits for back taxes.

Appellant contends that upon the face of the petition in the suit against Mary A. Henry, it appeared that a portion of the taxes sued for and embraced in the judgment were barred by the statute of limitations, and that the judgment is, therefore, void.

It was for Mary Henry, the defendant in that suit, to make that defense there; but neither shə nor any one else can make it in this collateral proceeding. We do not determine whether the statute