110 So. 115 | Miss. | 1926
Lead Opinion
The case is substantially as follows: Jones borrowed four thousand five hundred dollars from Brewer in 1914 and executed ten promissory notes therefor, each being in the sum of four hundred fifty dollars, plus eight per cent. interest, due annually. Most of these notes were paid at maturity. Some of them remained unpaid, for which Jones executed subsequent notes and included therein the amount of the unpaid notes of the first transaction. The last-named notes also included additional money advanced to Jones by Brewer.
The Chancellor held, as a fact, that the two last notes provided for usurious interest, and that the interest on these notes, which amounted to several hundred dollars, was forfeited; but held that there was no usury charged in the interest on the ten notes executed to cover the four thousand five hundred dollar transaction first mentioned.
The court also held that Jones and his wife were indebted to Brewer on the final accounting in the sum of about two thousand three hundred fifty-two dollars and fifty cents, which amount included attorney's fees for the collection of the notes against Jones. The court further held that the usurious interest forfeited by Brewer on the notes mentioned should be credited as an offset against the amount due by Jones to Brewer under the deed of trust, but that no interest upon the usurious interest should be allowed to Jones nor should Jones be allowed to credit the usurious interest to the payment of the principal due at the time when the usurious interest was charged and collected and thus reduce the principal of the amount due by Jones, and in that way reduce the amount allowed to Brewer on the final accounting.
The main appellant, Jones, contends that the decree of the lower court is wrong in three particulars, namely: *150
First, that the court should have allowed him a forfeiture of the interest in the first transaction involving the ten notes of four hundred fifty dollars each, although the interest charged on that transaction was not usurious, because some of the notes in that transaction had been included in the subsequent notes of one thousand eight hundred dollars and one thousand four hundred seventy-six dollars given by Jones to Brewer, in which the interest was usurious, and that therefore the usurious charge in the subsequent notes tainted all of the notes with usury in the first transaction, and that the court should have held that the interest in the first transaction was forfeited as usurious.
On this proposition, we hold that the Chancellor was correct in his view that the interest charged in the first transaction was not usurious; and the fact that the subsequent notes, in a different transaction, bore usurious interest, and because such notes were partially made up of a balance due from the first transaction, did not taint the first transaction with the infirmity of usury.
The taking of the first ten notes and the taking of the subsequent notes were different transactions, were founded on different considerations, and the fact that some of the old indebtedness was included in the subsequent notes did not taint with usury the indebtedness of the first transaction. There was no such connection between the two transactions as to warrant the view that the interest in the first transaction was usurious, because usurious interest was charged in the two subsequent notes.
Second, Jones contends that no attorney's fees should have been allowed for the collection of the indebtedness against him, because he (Jones) was compelled to enter suit to cancel the indebtedness against him because of the usurious charges, and he, having established usury as charged in the bill, should not be compelled to pay the attorney's fees for Brewer in the collection of the balance of the amount due by him on the notes, but that, since he was forced to go into court to secure his just *151 rights as against the usurious charges, he should not be made to pay for the legal services provided for in the notes in favor of Brewer. It may be stated, at this juncture, that Jones did not tender any amount in his bill but contended that he owed Brewer nothing, and that, if he was owing him anything, he was willing to pay it upon such ascertainment by the accounting.
On this point, we think the Chancellor was correct in allowing the attorney's fees provided in the notes. Brewer was cross-complainant, and sought affirmative relief in the collection of the notes and the foreclosure of the mortgage, which relief was granted by the lower court. The mere fact that Brewer was brought into court at the instance of Jones (who was partially successful in his complaint) did not relieve Jones of the obligation to pay attorney's fees for the collection of the balance by Brewer, the cross-complainant below. We apprehend, though it is unnecessary to decide, that if Jones had tendered the amount of the principal debt recovered by Brewer in this case, no attorney's fees could have been charged against Jones for the collection of the balance of the notes by Brewer. The case of Burt v. Brashears,
On the third contention of Jones, that the Chancellor erred in not allowing the usury charged by Brewer in the last transaction to be applied to the payment of the principal of the notes at the time it was charged and collected, we think the point is well taken, and that the decree must be reversed in that regard so that the amount of the usury may be properly credited and a deduction allowed, as against the amount of the balance recovered against Jones by Brewer, as a proper calculation may show.
On the point presented by Brewer on cross-appeal, that is, that the court should not have allowed the amount of the usury as an offset against the amount due by Jones because it was barred by the statute of limitation *152 at the time it was offered, we are of opinion the Chancellor was correct in allowing the usury as an offset against the claim of Brewer, because while it would ordinarily have been barred by the lapse of time, yet it could be pleaded as an offset, because it was a debt due to Jones by Brewer at a time when the claim of Brewer against Jones was in existence.
In view of the above conclusions, the decree of the lower court on both direct and cross-appeals is affirmed, except as to that part of the decree which denied Jones the right to an application of the amount of the usury to the payment of the principal owed by him at the time of the charge and collection of the usury, and to this extent the decree is reversed and the case remanded for another hearing, in accordance with this opinion.
Affirmed in part and reversed in part.
Concurrence Opinion
I concur in what has been said in the opinion in chief, except that relative to what is referred to in the opinion as the third contention of Jones.
This is the second appearance of this case in this court, and the opinion rendered on the former appeal will be found in
"Jones borrowed the sum of four thousand five hundred dollars from the defendant, Brewer, on February 25, 1914, and executed his ten promissory notes therefor, each being for the sum of four hundred fifty dollars, plus eight per cent interest on the debt due; that is to say, the first note included eight per cent. interest on the four thousand five hundred dollars to January 1, 1915, the second note included interest on four thousand and fifty dollars from January 1, 1915, to January 1, 1916, and so on through the series."
Brewer admits that all of these notes have been paid except, and his effort here is to collect, the last four notes. *153
According to the allegations of the bill, usury was collected from Jones by Brewer on some of these notes that have been paid; and this court, in its former opinion, held that a payment on one of the original notes was a payment on the entire original indebtedness, and directed the usury collected by Brewer to be applied accordingly. When the evidence came in on the return of the case to the court below, it appeared that usury was not collected by Brewer on any of the original notes, the facts being that when the first of these notes, which was for the sum of seven hundred sixty dollars matured, Jones made a payment on it of one hundred thirty dollars and took up the note by the execution of a new note for the sum of one thousand eight hundred dollars, which included the balance due on the old note, additional money then loaned Jones by Brewer, two other debts not connected with the four thousand five hundred dollar debt due from Jones to Brewer, and interest. When the second of the original notes, which was for seven hundred seventy-four dollars, matured, it was taken up by a new note executed by Jones for one thousand four hundred seventy-four dollars, which included the old note, a new loan, and interest. These two notes and interest thereon were paid by Jones.
The court below held that these two notes were tainted with usury and applied all interest paid thereon to the principal, which resulted in an overpayment thereof by Jones of several hundred dollars, which amount the court further held could be set off by Jones against the four notes of the original series which Brewer here seeks to collect. No interest was allowed Jones on the usury held to have been paid by him.
His contentions here are: (1) Since one of the original series of notes was embraced in each of the two new notes included by him, one for one thousand eight hundred dollars and one for one thousand four hundred seventy-four dollars, the payment of usury thereon by him was a payment of usury on a part of the original debt of *154 four thousand five hundred dollars, and that consequently, all interest paid by him on any of the original series of notes should be forfeited; and (2) if mistaken in this, he should have been allowed interest on the amount of usury paid by him on the two new notes.
I concur in the holding of the court below on the first of these contentions, but I am of the opinion that Jones should have been allowed interest on the usury paid by him on the two notes. Usury in excess of the principal of the debt on which it is paid becomes, when paid, a debt due by the recipient thereof to the person paying it; and, under the statute, of course, bears interest at six per cent.
We are not confronted with Jones' right to interest on this set-off at a rate in excess of that borne by the debt against which he seeks to set it off.
I am unable to concur with my associates in holding that the amounts overpaid by Jones on the one thousand eight hundred dollars and one thousand four hundred seventy-four dollars notes were payments by him on another and different debt, to-wit, the unpaid notes of the original debt, and, if I am correct in so holding, the rule which regulates the application of payments, on which my associates, in effect, decide this branch of the case, has no application here. The difference to Jones whether the amounts overpaid by him on the one thousand eight hundred dollars and one thousand four hundred seventy-four dollar notes are held to be payments on the four thousand five hundred dollar debt, or are allowed to him by way of set-off, may here be of no consequence, but whether the rule regulating the application of payments or that of set-off should be applied in cases of this character may in other and future cases materially affect the rights of litigants.
Dissenting Opinion
I dissent from that part of the majority opinion holding that the appellant is liable for attorney's fees. *155
The notes provide "and ten per cent. additional as attorney's fees, if this note is placed in the hands of an attorney for collection."
The suit was filed by Jones and his wife for an accounting, and set out in detail the several notes and the several payments, and alleged that the notes were usurious; that, if the usury was applied, it would more than pay the outstanding notes, and that Brewer would be indebted to the appellants in the sum of money named in the bill.
The facts stated in the bill show that it was necessary for the appellants to file a bill and have the court ascertain the true state of accounts between the parties. The notes were not placed in the hands of an attorney for collection prior to bringing this suit, but were placed in the hands of an attorney for the purpose of defending the suit and securing such judgment in favor of Brewer as the court might award after the hearing. The provision in the note for the payment of the attorney's fees clearly contemplated that the attorney's fees were to be paid only when the notes were placed in the hands of an attorney by the plaintiff before any suit was filed by the defendant. The language does not contemplate the payment of attorney's fees to an adversary, where it is necessary to institute suit against such adversary to learn the state of the account or the amount due.
I think the present case is distinguished from the case ofBurt v. Brashears,
"It is conceded that the notes were placed with the law firm of Sillers Sillers for collection, and, under the express contract, attorney's fees became due and payable as a part of the note."
In the case before us, the notes were not in the hands of an attorney at the institution of this litigation, and under familiar rules the rights of the parties are to be determined as of the date of the institution of the suit. Not having the right to collect attorney's fees when the injunction suit was filed, they could not therefore acquire such right, especially when they were in default, as found by the court, in not rendering a true statement of accounting to the maker of the note. I think, however, the decision in Burt v. Brashears, supra, is unsound, and ought to be overruled, because attorney's fees should not be allowed where the creditor refuses to accept the full amount due and the debtor has to litigate to get his rights. Three of the judges are of the opinion that said case ought to be overruled because wrongly decided.
It seems to me utterly unfair and not within the contract embraced in the note for the holder of the note not to accept the real amount due.
Dissenting Opinion
I concur in Judge ETHRIDGE'S dissent to the extent that I agree with him that Burt v. Brashears,
Addendum
I am of the opinion that the allowance of attorney's fees, as contracted for in the notes involved, is ruled by the case ofBurt v. Brashears,
Judge ANDERSON joins me in the opinion that the Brashears case is unsound and ought to be overruled.
Overruled.