Meares v. Finlayson

Citation41 S.E. 779,63 S.C. 537
PartiesMEARES et al. v. FINLAYSON.
Decision Date16 April 1902
CourtUnited States State Supreme Court of South Carolina

Appeal from common pleas circuit court of Chesterfield county; Gage Judge.

Action by Iredell Meares and P. B. Manning, receivers of the Carolina Interstate Building & Loan Association, against Henry W. Finlayson. From a decree in favor of plaintiffs defendant appeals. Reversed.

Edward McIver and Stevenson & Matheson, for appellant. R. T. Caston for appellees.

JONES J.

Plaintiffs instituted this suit to foreclose two real estate mortgages executed to the Carolina Interstate Building & Loan Association,--one by the defendant Finlayson, and the other by L. H. Fesperman, payment of which was assumed by Finlayson, who had purchased the mortgaged premises. The defendant pleaded usury. The cause was first heard before Judge Ernest Gary, who made a decree sustaining the plea of usury, and ordering a reference to S.W. G. Shipp, Esq., to compute the amount due on the bonds and mortgages set forth in the complaint, under section 1390, Rev. St. This judgment on appeal therefrom, was affirmed by this court. 55 S.C. 105, 32 S.E. 986. Thereafter a reference was had under said order; the referee holding that the question of usury, and the right of Finlayson to plead usury as to the Fesperman mortgage, were concluded against plaintiffs by the affirmance of the order of Judge Gary, and, applying the penalty of usury, under section 1390, and the rules regulating settlements between insolvent building and loan associations and borrowing members, as announced in Buist v. Bryan, 44 S.C. 128, 21 S.E. 537, 29 L. R. A. 127, 51 Am. St. Rep. 787, reported that nothing was due upon the mortgages, inasmuch as the payments of dues and interest exceeded the sums borrowed, no interest thereon being recoverable because of usury. The referee also reported, with reference to the Fesperman mortgage, that the result would be the same if only payments of dues and interest thereon by Finlayson be considered, and excluding all payments made by Fesperman previous to the transfer to Finlayson. On exceptions to this report, the circuit court (Judge Gage presiding) held (1) that the referee erred in construing the decision of the supreme court as concluding the question as to Finlayson's right to set up usury with reference to the Fesperman mortgage; and (2) that all payments made and accepted as interest, as distinguished from installments on stock, should not be credited on the principal debt, for the reason that debtor and creditor had agreed to make a different application, and had in fact made it. From this decree the defendant appeals, and, upon the exceptions taken, argues two questions or propositions: (1) That the questions considered by Judge Gage were res judicata by the former decision in this case, under the issues as then presented; (2) that the rule announced in Butler v. Butler, 62 S.C. 165, 40 S.E. 138, does not apply in the case of a suit involving a settlement between an insolvent building and loan association and a borrowing member.

We sustain the first proposition, in so far as it relates to the Fesperman mortgage,--Judge Gary having sustained the plea of usury made as to both mortgages, and ordered a reference to compute the amount due under section 1390; and, that judgment having been affirmed by this court, all issues involving the right of Finlayson to plead usury as to the Fesperman mortgage were necessarily concluded. Plaintiff's ninth exception to the order of Judge Gary claimed specifically that he erred in holding that Finlayson could plead usury against the Fesperman bond and mortgage; and this court speaking through Mr. Justice Pope, whose view in this regard was concurred in by the other members of the court, dissenting on other grounds , said: "While Mr. Finlayson, as the assignee of Fesperman, could not hold the Carolina Interstate, etc., Association to the penalties for usury, because the plea of usury has been held by the courts of this state as a personal privilege, still, when he comes to settle with the association on a contract which he has...

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