Earle v. Owings
| Decision Date | 07 October 1905 |
| Citation | 51 S.E. 980,72 S.C. 362 |
| Parties | EARLE v. OWINGS et al. |
| Court | South Carolina Supreme Court |
Appeal from Common Pleas Circuit Court of Greenville County Townsend, Judge.
Action by J. E. Earle against Samuel Owings and others. Judgment for defendants, and plaintiff appeals. Modified.
Heyward Dean & Earle, for appellant. Adam C. Welborn, for respondent Owings.
On December 3, 1885, plaintiff executed a deed conveying 50 acres of land in Greenville county, S. C., to the defendant Samuel Owings. On the same day defendant Owings executed to plaintiff a mortgage to secure the balance of purchase money for said land, represented by 10 promissory notes given by Owings to plaintiff. This action was to foreclose said mortgage for the balance claimed to be due upon the last 5 of said notes. The defendants answered separately, each alleging that on December 3, 1885, plaintiff divided 50 acres of his land into five lots, and sold said lots to Samuel Owings Jacob Harris, Wilson Easley, and James Harris, and by agreement of all the parties the deed to the whole 50 acres was made to Samuel Owings, for the benefit of himself and all the other purchasers, and Owings mortgaged the same to the plaintiff to secure the balance of the purchase money, for the benefit of himself and the other purchasers, and alleging, further, that it was agreed by all the parties that, as each defendant purchaser paid plaintiff for his or her lot, Owings was to execute a deed for the same to the purchaser, and the mortgage should be released thereon by the plaintiff.
1. The circuit court considered parol testimony, taken by the master subject to objection, which was offered to show this defense of defendants, and the first question presented is whether such evidence is admissible, as violating the rule excluding parol testimony tending to contradict or vary a written instrument. We think the testimony admissible. The testimony showing why the deed was executed to Owings, instead of to each defendant separately, and why the mortgage was executed by defendant Owings on the whole land, falls within the rule which permits parol testimony to show the object or purposes with which the parties executed the instruments. Moses v. Hatfield, 27 S.C. 324, 3 S.E. 538; Brick v. Brick, 98 U.S. 514, 25 L.Ed. 256; 1 Elliott on Evidence, § 584. The testimony that plaintiff agreed to release the mortgage on each separate lot, as the purchase money therefor was paid by said purchasers, falls within the rule that when the written evidence of the contract does not contain all the terms of the transaction between the parties, parol evidence, which does not really contradict or vary the writing, is admissible for the purpose of showing a contemporaneous, collateral, and independent agreement. Chemical Co. v. Moore, 61 S.C. 166, 39 S.E. 346; Ashe v. Railroad Co., 65 S.C. 138, 43 S.E. 393.
2. The next question is whether the circuit court erred in affirming the master in the conclusion that the testimony established the above agreement as contended for by the defendants. After a careful review of the evidence, we cannot say that the conclusion of the circuit court is against the preponderance of the same.
3. The next question involves a proper construction of the notes in question, as to whether they bear 10 per cent. interest after maturity. A copy of one of the notes will suffice, and it is as follows: There is nothing in the terms of the note to suggest that interest after maturity is to be 10 per cent. On the contrary, the plain contract is to pay interest annually at that rate up to maturity. The term "annually" may have full effect between the making and maturity of the note. After maturity the law fixes the interest at 7 per cent. Ehrhardt v. Varn, 51 S.C. 550, 29 S.E. 225.
4. We inquire next whether the plea of usury is available to the defendant Owings. He was allowed by the master to amend his answer so as to plead usury in behalf of himself and his codefendants, and set up a counterclaim under the usury statute. It is excepted that Owings could not avail himself of such plea. The contract, as shown, was made with Owings for the benefit of himself and others. He was, therefore, a borrower or debtor, in the sense of the statute, notwithstanding his relation as trustee for others. The exception, therefore, cannot be sustained.
5. Is the counterclaim for usury barred by the statute of limitations--three years--as for a penalty or forfeiture? The circuit court held that the statute of limitations has no application, and this ruling is supported by the cases of Mortgage Co. v. Gillam, 49 S.C. 359, 26 S.E. 990; Allen v. Petty, 58 S.C. 240, 36 S.E. 586. Section 113, Code Civ. Proc. 1902, provides a three-year limitation for "an action upon a statute for a penalty or forfeiture, where the action is given to the party aggrieved or to such party and the state, except where the statute imposing it, prescribes a different limitation." The statute imposing the penalty does not expressly provide a different limitation, but the plain implication is that the counterclaim is available, and is effective, as long as the right of action exists on the principal sum. It is not without force or plausibility to suggest that the counterclaim is but a cross-action, and, if a direct action for the penalty could be barred in three years, the defense of counterclaim could also be barred in that time. But the design of the statute was to prevent usury by giving the debtor these two distinct remedies, and to hold otherwise than was held in the cases cited above would put it in the power of a creditor, who has violated the usury law, to deprive a debtor of the remedy intended to prevent usury, by merely postponing his action for the principal sum.
6. The next question which arises is whether the plaintiff actually received usurious interest, and, if so, how much. The case of Ehrhardt v. Varn, 51 S.C. 550, 29 S.E. 225, shows that though the contract on its face is not...
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