45 So. 130 | Ala. | 1907
Lead Opinion
The sole question on this appeal is whether the indebtedness of W. C. Darden, appellant’s deceased husband, is properly chargeable against appellant. On reference to the register to state the account between appellant and appellees, she was charged therewith, and her exceptions to the register’s report in that connection were disallowed by the chancellor. The exceptions made the points, first, that the alleged contract to assume the indebtedness of W. C. Darden (if-made, which was denied) was violative of the statute of frauds; and, second, if exempt from that criticism, it was usurious. Whether the contract was one wholly without the statute of frauds, because it was a new and independent agreement resting upon its own consideration, or wheth
Generally speaking, usury is the taking of more for the use of money than the laws allow. — Woclsey v. Jones, 84 Ala. 88, 4 South. 190; Harmon v. Lehman,, Durr & Co., 85 Ala. 379, 5 South. 197, 2 L. R. A. 589; Code 1896, §§ 2626, 2630. However, it is not in every instance usury to take more than the laws allow, since an extra and reasonable sum for incidental service or expense is not interest. — Woolsey’s Case, supra. This extra sum exacted cannot, we apprehend, in any case exceed the sum of the loan; nor can it so subvert the transaction as to make the loan a mere incident of the demanded extra charge. If such was not the rule, a subterfuge to avoid the usury statutes would be invited, and the result is apparent. Under our decisions intention has been accorded a large influence in the determination of the query: Is the contract usurious? But these adjudications do not impinge upon the rule, equally sound in reason, that intention is presumed when on its face the contract is usurious. — Van Biel v. Fordney, 79 Ala. 76. It is only when the contract is not usurious on its face that intention becomes a material inquiry.
To state the case with the utmost favor to the appellee, the appellant was a pressed and distressed' debtor, >a mortgagor, to one Hyde. The possession and ownership of a large landed estate was involved in her ability to raise and pay a balance due on the mortgage debt. Her husband had died, practically insolvent, indebted to appellee to the amount of approximately $6,000, secured only by void (as to her) mortgages on her real estate.
Solicitors for appellees have insisted that the case of Valentine v. Conner, 40 N Y. 248, 100 Am. Dec. 476, is decisive, in their favor, of this question. We do not think so, since that case is easily distinguishable from this by reference to the majority opinion, wherein it appears that the property in part involved had been previously sold by the defendants to the third party whose indebtedness was assumed by the borrower, and there was a claim on or against the property by them. Besides, we are unable to see how the majority declaration in the Valentine Case, supra, can be reconciled with the later announcement of broad principles found in Clarke v. Sheehan, 47 N. Y. 188. If appellees had stipulated that to secure the loan appellant must promise to pay, in addition to the legal rate of interest, $6,000, and she so agreed, and the loan was consummated, we feel sure no one would be found to say that the contract was not usurious. When, on the hypothetical case stated, she agrees to pay $6,000 by way of settlement of a third party’s debt for which she is wholly unresponsible, in our judgment, the conclusion must be the same. Here appellees, with' full knowledge of the distressed financial condition of the appellant and with the purpose to profit by her extreme necessity by compelling her assumption, without other consideration, of the very doubtful, if not val - ueless, debt of her deceased husband, agreed to and did
But the appellees insist that the tenure of the appellant of the land in question affords consideration for her promise to pay the W. O. Darden debt. We cannot assent to this, for the reason that the transaction, being confessedly a mortgage to secure an indebtedness, and within a court of equity, not law, the mortgage is regarded as a mere security, and the appellant entitled, in the absence of stipulation to the contrary, to the possession. —Welsh v. Phillips, 54 Ala. 309, 25 Am. Rep. 679; High v. Hoffman, 129 Ala. 359, 29 South. 658. Besides this, the record, as it' reveals the testimony, refutes any idea on the part of the appellees but the idea, uppermost, .at all times, that the loan was made in order to secure ultimate payment of the W. C. Darden debt. In fact, it is affirmatively stated that without this inducement the loan would not have been made. If, then, the appellant was entitled to the possession pending the performance of the condition, her promise to pay the W. C. Darden debt can find no support in that as a consideration. It follows that there was no consideration for her assumption of her deceased husband’s debt to appellees, and that to the extent the agreement undertook to charge her therewith it is usurious, and in consequence the appellant is not chargeable with that indebtedness. The exceptions to the register’s report, going to the exoneration of appellant from liability for the W. C. Darden debt, should have been sustained.
The decree of the lower court is affirmed in so far as it declares the deed from Hyde to Sehuessler, trustee, dated January 11, 1895, and the written agreement between Mrs. Darden and Sehuessler, construed in connection, a mortgage for the sum lawfully due them from
Affirmed in part, reversed in part, and remanded.
Dissenting Opinion
dissenting).- — The lands in question were originally the property of Judge Darden, the husband of complainant, and when sold under a mortgage were bought by complainant, or for her; the legal title being held by Hyde for her, to be conveyed when she paid for the lands. It is not shown that complainant had any independent means with which to pay for the lands, but the payments which were made on the pur
Usury is the charging of more than the legal rate of interest for the use of the money loaned, and, while the courts will sift every transaction, whatever may be the terms of the contract, and, if it is ascertained that it contains a mere shift or device to cover a real intent to receive more than legal interest for the use of the money, the contract will.be declared usurious, yet it is settled in this state that a party may make a reasonable charge for advancing his. money to another.' — Brown v. Harrison & Robinson, 17 Ala. 774; Smiley & Riley v. Lyon & Baker, 18 Ala. 552, 556; Dozier v. Mitchell, 65 Ala. 511, 518; Uhlfelder v. Cartel's Adm’r., 64 Ala. 527; Woolsey & Sons v. Jones & Bro., 84 Ala. 88, 91, 4 South. 190; Harmon v. Lehman, Durr & Co., 85 Ala. 379, 392, 5 South. 197, 2 188, 196, 197; Cockle et al. v. Flack et al., 93 U. S. 344, 23 L. Ed. 949; 7 Wait’s Actions and Defenses, 622; Nourse v. Prime el al., 7 Johns. Ch. (N. Y.) 69, 11 Am. Dec. 403. The reasoning of the New York Court of Appeals seems to be in line with that of our own court, when it holds that “a loan is not rendered per se usurious from the fact that the lenders exacted as a condition of making the loan, that the borrower should secure to them the payment of a subsisting and genuine
I cannot agree that the contract was usurious; and the next question which presents itself is whether or not the assumption of the debt of another was supported by a consideration, within the statute of frauds. In addition to the equitable considerations before alluded to, it may be remarked that the register, in his reporl, found that said debt was assumed by the complainant “for a consideration,” so that his report, which stands as the verdict of a jury, has ascertained that there was a consideration for the assumption of said debt, and, as will be seen hereafter, his conclusion was supported by the
Section 2529 of the Code of 3896, prohibiting the wife from becoming surety for the husband, has no bearing upon this case, as the complainant’s husband was dead at the time she assumed the debt. She was not a married woman, but a feme sole, and the transaction was not governed by either the letter or the spirit of said, section.
I think the decree of the chancellor should be affirmed.
Rehearing
ON REHEARING.
Rehearing denied.