Humphrey v. McCauley, 55 Ark. 143

Humphrey v. McCauley

55 Ark. 143 | Ark. | 1891

Hemingway, J.

1. usury. It is conceded that the debt secured by the mortgage is greater than the sum lent with lawful interest ; and the question is, whether the excess represents usurious exactions or sums lawfully due upon other accounts.

The defendants say positively that the excess is made up of sums exacted by the lender’s husband and agent in consideration of an extension of the debt for money loaned, while the lender and her husband state that it is made up of sums due the latter on other matters.

If the theory of the defendant is sustained, the mortgage and note are usurious ; if the plaintiff’s statement is true, she is entitled to the relief sought. There is certainly enough in the defendant’s testimony to make a prima facie case, and to cast on plaintiff the burden of showing that the transaction is not tainted with usury. In this we think she has entirely failed. The alleged indebtedness arises from a character of service usually performed in a neighborly spirit without remuneration. It is not claimed that the services were rendered under any special agreement as to compensation, and it is not shown what charge was made for any particular service. The statement is general, that Pat Mc-Cauley “looked after R. A. Humphrey’s taxes, advised his mother and tried to assist her in selling a cow;” and defendants deny that such services were performed. Upon consideration of all the evidence, we think the defendants’ theory sustained, and that charges were made for Pat Mc-Cauley under an arrangement intended to cover a claim for usury. Substantially the same facts exist as to the mortgage for $152, executed December 4, 1886, and for the same reason we are constrained to hold that it is void.

2. Recourse to grior valid seBut the note and mortgage of April 15, 1885, were untainted with usury, and passed to plaintiff as valid and binding instruments; they were never paid or satisfied except by the subsequent usurious instruments. When a recovery is denied upon the latter for usury, is the plaintiff to be denied all relief, or will she be entitled to recover upon the valid contract ? If she had originally loaned the money to the defendant upon a usurious agreement, she would be entitled to no relief, although it was used in paying the valid mortgage (Trible v. Nichols, 53 Ark., 271); but that is not this case. She purchased the valid securities, and subsequently, upon a usurious agreement, extended the time of payment, lent more money and took new securities. The taint of the subsequent illegal contract does not relate back to or affect the original contract. Tyler on Usury, p. 126; Nichols v. Fearson, 7 Pet., 104. It should therefore be enforced unless the right was lost by surrendering the securities. A surrender under the circumstances is not a satisfaction, and does not bar a recovery. Gerwig v. Sitterly, 56. N. Y., 214; Patterson v. Birdsall, 64 N. Y., 294.

3 Appropnpayments, We are therefore of the opinion that the plaintiff is entitled to enforce the mortgage dated April 15, 1885, and to collect the balance justly due thereon. But a payment of $30 was made upon the usurious security, and other payments were made to the plaintiff’s husband and agent upon exactions for extending the time of paying the mortgage. The wife knew of, permitted and even aided her husband’s ■exactions, and is chargeable with the sums so paid, just as if they had been paid directly to her. As long as any sum is due upon a lawful debt, out of or in connection with which a usurious contract has once arisen, all payments made on either should be credited on the valid claim. Payne v. Newcomb, 190 Ill., 611; Rogers v. Buckingham, 33 Conn., 81; Scruggs v. Scottish Mortgage Co., 54 Ark., 566.

4. jurisdiction °f 011 cim court' As the note for $¡10 given to the plaintiff’s husband for examining the title to the mortgaged property is not secured by the valid mortgage, the questions argued with reference to it are not before us for determination. Sec. 40, art. 7, const. 1874; Mannington v. Young, 35 Ark., 287.

The judgment will be reversed and the cause remanded, with directions to enter a decree in accordance with this opinion.