79 F.2d 648 | 5th Cir. | 1935
W. L. Stedham was selling fertilizers bought from Swift & Co., and in May, 1930, gave notes for the aggregate principal sum of $15,843.47 in settlement of that season’s business, and in June, 1931, other notes for the 1931 season. In February, 1932, all the notes were secured by a deed t0 certain real estate and machinery. In January, 1933; Swift & Co. filed their bill in equity in the District Court to foreclose the deed as a mortgage and for judgment on the notes_ Stedham>s answer filed Feb 5 i933; admitted the bill, but daimed credits o£ $5 579.20 for 100 bales of cotton delivered to Swift & Co. December 10, 1930, and $2,546.16 for 60 bales delivered in October, 1931. Swift & Co. then amended and alleged that the 160 bales of cotton were pledged by Stedham to secure the notes, and after due notice,
These conclusions were all correct. The 100 bales were formally mortgaged. That cotton was later put in a warehouse and the warehouse receipts issued to Swift & Co., but there is no evidence that the parties intended to supersede the mortgage by a pledge or to add a pledging of the cotton to its mortgage. This cotton could
not lawfully be sold summarily, but ought to have been foreclosed upon regularly. The loss from a temporarily depressed market was rightly charged against Swift & Co. But the sale of the 60 bales as a pledge, though on a very low market, was valid, and Stedham is to be credited from it only with what it brought. That • Swift & Co. were seeking foreclosure in equity of their real estate security did not prevent their enforcing in the statutory way their pledge of the cotton. The remedies were consistent. The court had not in any manner taken jurisdiction over the cotton. Stedham in his original answer was claiming a credit for it as sold to Swift & Co. at an agreed price in 1930 and 1931, and was not asking the court to sell it again.
It is well settled in Georgia that usury, to cause forfeiture, must be intentional. Bellerby v. Goodwyn, 112 Ga. 306, 37 S. E. 376. The burden is on.the person asserting usury to prove usurious intent. See First National Bank v. Davis, 135 Ga. 687, 693, 70 S. E. 246, 36 L. R. A. (N. S.) 134. In the case last cited it was said that if the contract on its face expressly reserves more than the lawful interest, the intent is apparent; but where the contract on its face is for legal interest only, there must be proved some corrupt agreement or device or shift to cover usury, and that it was in full contemplation of the parties. The evidence in this case goes no further than that the amount of fertilizer for which the notes were given was $706.50 less than the face of the notes. No one testified as to how the computation was made, or that there was any purpose to contract for excessive interest. Stedham t did not plead usury and claim forfeiture of all interest, but he prayed a reformation of the notes to speak his true indebtedness, and if there was usury, that Swift & Co. be denied a foreclosure. The conclusion of the court is altogether reasonable that the purpose must have been to add legal interest to the date of maturity of the notes, and that a mistake was made in calculation. The court found an error of $99.65, but the likelihood seems to us to be that interest was. figured 35 cents less than the judge’s calculation, and that an error of $100 was made in adding up the fertilizer invoices. Such a supposition may well be indulged by a court of equity under a prayer for a just account rather than to conclude that there was concealed usury without any evidence of such an intent.
Judgment affirmed.