108 Ala. 590 | Ala. | 1895
1. The rule seems to be well established that the payment of interest on overdue installments of interest, evidenced by separate notes for interest on the principal, does not constitute usury ; and that interest is recoverable upon coupons after their maturity, which were given at the time of the accrual of a debt, for the annual interest accruing thereon; for, being promissory notes, it is regarded as just, that if not paid when due, they should draw interest, by way of damages for the detention of the money. This principle was recognized by this court, in the recent case of Guin v. N. Eng. M. & S. Co., 92 Ala. 138 ; Tilford v. Gavels, 24 N. E. Rep. 573 ; Harper v. Ely, 70 Ill. 581 ; Aurora v. West, 7 Wall. 82 ; Pance v. Bowler, 107 U. S. 529. In Caldwell v. Dunklin, 65 Ala. 464, it was said, “Each coupon attached to the bonds, for the payment of interest, was, of itself, a separate contract for the payment of money at a particular time; and if it was not paid at the time appointed, interest followed as an incident. So, of the principal; if not paid at the time appointed, interest attached. Whenever there is a contract for the payment of a specific sum of money, at an appointed time, and there is neglect or failure to pay, the contract is broken, and interest follows.’ ’ Mr. Freeman, in liis notes to the case of Morris Canal Co. v. Fisher, 64 Am. Dec. 423, states the doctrine as we have stated it above, and supports it by a long array of decisions of many courts. To the same effect, with collation of authorities, see 4 Am. & Eng. Ency. of Law, 439. In the 27th Vol. of this work, p. 998 — citing the decisions of several States, including our case of Guin v. New. Eng. M. & S. Co., 92 Ala. supra — it is said: “The more reasonable doctrine is, that such stipulations ,are not usurious, being merely intended as compensation to the creditor for being deprived of the use of interest.” But, it is added : “In a number of States, the courts have drawn a distinction between agreements of this character, made prior to default in payment of interest, and similar agreements, made after such default; and they hold, that only in the latter case can agreements for interest on interest be lawfully made.” But we appre-
2. The second question presented on this appeal is, whether a junior mortgagee, in case of the insolvency of the debtor, can plead usury against a prior incum-brance. The courts of New Jersey, New York and Indiana seem to hold the affirmative of this proposition, but it is held contrariwise in many of the other courts. Eor a citation of the authorities on the question, see 27 A. & E. Enc. of Law, 951. In Alabama it has been long held, that usury is a personal defense and cannot' be set up by a stranger to the contract, but only by the parties or their legal representatives. Griel v. Lehman, 59 Ala. 419 ; McGuire v. Vanpelt, 55 Ala. 344 ; Kilpatrick v. Henson, 81 Ala. 464 ; Welsh v. Coley, 82 Ala. 363 ; 3 Brick. Dig. 574, § 47.
3. Again, the chancellor very correctly held, that a party who has made usurious payments on a debt, can not obtain credit therefor unless he distinctly and correctly sets forth in the pleadings, the terms and nature of the usurious agreement and the amount of the payment. No attempt of this character was made by the Moores in this case. Their statements of usurious payments were very general and loose, such as a court, for the best of reasons, would disregard. Munter v. Faber, 61 Ala. 492 ; S. L. Asso. v. Lake, 69 Ala. 456 ; Woodall v. Kelly, 85 Ala. 374.
The exception to the statement of the account of the Scotch A. M. Company, by the register was, that he allowed interest, at the rate of eight per cent per annum, on over-due annual interest coupon notes on their mort
4. On the first reference in this case, R. H. Stickney was examined as a witness in his own behalf. He testified he did business with the Moores in the year 1883, by way of making advances to them, and had a mortgage on their crops that year, and on their personal property; that he demanded payment of them at the close of that year, or for the property embraced in the mortgage; that said Moores proposed to him, that instead of his selling the personal property in the mortgage at public sale, they should agree between themselves on the value of the property, and that he, Stick-ney, should take it at that valuation; that as he was going to sell the property, he might as well let them have it, as any other person ; that this proposition was agreed to, and they and Mr. Tutwiler, representing Stickney, valued the property at $2,625 ; that this agreement was in writing, and the Moores were accordingly credited on their mortgage debt with the agreed valuation. Stickney immediately sold the Moores the same property, at $2,845, payable the next Fall — an advance on'which they bought it, of $220. The Moores gave Stickney, at the time of their re-purchase of said property, a mortgage, dated 18th March, 1884, on the'same property, to secure its purchase price, and $1,500 in addition, making $4,345, alleged in the mortgage to be for advances in mules, horses, farming ntensils, provisions, &c., to enable them to make a crop during the year 1884. The note given for this sum was payable on 15th November, 1884, anl the mortgage was foreclosable on default of payment, after that day. The lands in suit were also embraced in said mortgage. On this mortgage, it appears there was advanced by Stickney during the year, for the purpose of making a crop, the sum of $1,637.87, making, with the $2,845, the price at which he sold the stock to the Moores — the sum of $4,482.87. He testified that he received from the proceeds of the cotton made and sold that year, the sum of $1,448.87, leaving due him, at the close of 1884, by the Moores, the sum of $3,034; that in the year 1885, he advanced again to them, in various sums and for purposes specified in his account detailing all the transactions, the further sum of $1,538.31; making with the
5. With the foregoing statement we may approach the points of objection and exception raised by Stickney in this statement of his account, as passed and allowed by the chancellor. It was held by the chancellor to be a running account. It was proved by the Moores, that the items of interest charged were usurious, and that fact is admitted by Stickney. In restating the account, therefore, it was ordered that usury should be eliminated, and legal interest alone should be calculated on both sides. It is not understood, that there was any objection to this order, or to the manner of its execution, in the statement of the account by the register. But, .it appears, that in 1885, the Moores paid to Stickney, proceeds of cotton raised that year, to the amount of 1,335.68. Up to this point, it had not been attempted to be shown, that Stick-ney had any mortgage or other lien on the crops of 1885, nor was it shown, that in making the payment, the Moores gave any direction as to its application. Stick-ney had shown, that he had paid to and for the Moores in 1885, the amount of $1,186.34, as appears in his itemized account B., attached to his' deposition, to the correctness of which he swore, and he is uncontradicted. He further swore, as uó his said mortgage of March 18, 1884, — to quote his own language, — that “it was partially paid for, out of the crops and the sale of the property. My account hereto attached, marked Exhibit B., for the years 1884 and 1885 will show what payments' were made thereon and how. The sale of the property was shown by the mortgage above mentioned, and the
On his .second examination, Stickney not having shown that the moneys that came to his hands in 1885, were by any separate agreement not to be applied to this mortgage on the land, applied to the register, and he allowed him in the absence of the parties, to amend his deposition, after it had been closed, showing that such moneys by agreement between him and the Moores, were to be applied for specific purposes. The register in his report, under this evidence, treated the proceeds of cotton received in 1885, as applied to such purposes, and not in reduction of said mortgage debt of the Moores on said lands. The court, on exceptions to that part of the re
In the ruling of the chancellor adopting and confirming the latter instead of the first of these reported accounts, there was error. Stickney on his first examination had rendered his account B., heretofore referred to in which, having carried the balance due him from the year 1884, he had charged the Moores with all he had advanced them in the year 1885, making with the balance
Without any other proof, if charged with the proceeds of the cotton raised in 1885, he was entitled to sums paid out for the Moores in that year. But, in addition to this, to bring himself still clearer within the equities of his claim, he proposed to show and did show, within the terms of the decree of reference, that he had mortgages on the crops of 1885, justifying the retentfoS' of the crops of that year, to the extent of the advances made within the year. By carrying all into the account of 1885, he accomplished just what, in equity, ought to
6. The admitted usury in many of the transactions between appellant, Stickney, and the Moores, on proper pleadings would have justified its elimination in a restatement of accounts between them, but the chancery court properly held, that the Moores, by the loose and imperfect statements in their cross bill, did not bring the matter before the court in the form entitling them to relief. So, there was no error in not going behind the settlement between the parties, carried into effect by the mortgage of the 18th of March, 1884.
' 7. As has been above stated, the mules included in the mortgage of 1883, were valued and taken by Stick-ney at the agreed price of .$2.625., and immediately sold back to the Moores at $2,845., at a gain of $220. All of this was but one transaction. Stickney deposes, that this was done at the instance and for the accommodation of the Moores, and that the $220. difference, was on account of a credit till the Fall of the year. Two of the Moores swear that this difference between what they sold .the mules for, and what they had to pay for them, was a device for usury. Usury, as was not denied, had been consistently charged against the Moores in some, if not all their dealings with Stickney, and it was no difficult matter for the court to give credence to their statement, that this was a usurious device, and we find no fault with his conclusion as to that matter. This conclusion was reached by him, we may add, without discrediting the statements of Mr. Stickney. He does not swear that the difference in the purchasing and selling price, was not to give him a usurious interest.
Let the appellant pay one-fourth of the costs of appeal
Corrected and affirmed.