American Mortg. Co. of Scotland v. Woodward
| Decision Date | 12 October 1909 |
| Citation | 65 S.E. 739,83 S.C. 521 |
| Parties | AMERICAN MORTGAGE CO. OF SCOTLAND, Limited, v. WOODWARD. |
| Court | South Carolina Supreme Court |
Appeal from Common Pleas Circuit Court of Aiken County; Geo. E Prince, Judge.
Action by the American Mortgage Company of Scotland, Limited against Mrs. A. J. Woodward. Judgment for plaintiff. Defendant appeals. Modified and remanded for further proceedings.
Croft & Croft for appellant. A. J. & H. P. Green, for respondent.
The plaintiff, a corporation under the laws of Great Britain and Ireland, brought this action against defendant to foreclose a mortgage upon real estate in Aiken county, S. C., and the suit resulted in a decree of foreclosure by Judge Prince dated September 7, 1908, for the sum of $1,527.13.
The first question we notice is whether the mortgage is invalid on the ground that the mortgagor was a married woman at the time of its execution, March 12, 1886, and the contract was not "as to her separate estate," as required in section 2037, Gen. St. 1882. Judge Prince held that Mrs Woodward, having acquired the property in 1881 under the statute of 1870 then in force, had unlimited power to mortgage her land, and that the limitation of her power with respect to her vested property rights was unconstitutional; but, if not, then the facts show a contract for the benefit of her separate estate within the limitations of section 2037. Since we agree with the court as to the last proposition, we do not deem it proper or needful to inquire as to the constitutionality of section 2037, as applied to the contract in issue, on the principle that such a question should not be considered unless it is necessary to the decision of the case. Mrs. Woodward herself testified that her estate derived the benefit of this money so far as it went, to pay off the mortgage to Kennedy. It appears that she and her husband resided on her land, and that her husband conducts the farming operations and secured the supplies from Kennedy. Mrs. Woodward testified: The payment of the prior mortgage was undoubtedly for the benefit of the estate. Reid v. Stevens, 38 S.C. 527, 17 S.E. 358. The testimony satisfies us that the defendant borrowed the money for herself as an original undertaking, and not as surety for her husband. The money resulting from the loan being her separate property, she had the right, of course, to apply it to the payment of the unsecured debt to Kennedy for supplies in the management of her property, even if the debt stood against her husband. Howard v. Kitchens, 31 S.C. 490, 10 S.E. 224.
The next question is whether there was usury in the transaction. From the loan of $400, $80 were deducted as commissions, of which Duncan received one-fourth and Corbin Banking Company three-fourths. Besides this $25 were deducted for abstract of title, etc., and $3.50, for recording the mortgage, leaving the sum of $291.50 actually received for the purposes of the loan. The circuit court held there was no usury. There is no usury on the face of the notes and mortgage. The note for $400, dated March 12, 1886, was payable five years after the date, with interest from date at 8 per cent. per annum, payable annually as per five interest notes attached, the note containing a stipulation that, should any of said interest not be paid when due, it shall bear interest at the rate of 10 per cent. per annum from maturity. The mortgage contained a covenant to pay the $400 on March 12, 1891, with interest from date until paid at the rate of 8 per cent. per annum, payable annually according to the one promissory note and the coupons thereto attached. The coupon notes so drawn as to make the interest payable on December 1st of each year, at the rate of 8 per cent., except the last coupon note which was for $41.07, payable on March 12, 1891. The difference between this note and the notes between the first and last coupon notes is accounted for by the fact that it included interest from December 1, 1889, to March 12, 1891. When these notes were executed, it was lawful to contract in writing for interest at 10 per cent. per annum, which involved the right to contract in writing for such rate on overdue interest. As the defendant contracted to furnish abstract of title and pay for recording papers, and as it does not appear that the charges therefor were unreasonable, we eliminate such charges from the consideration of the question of usury.
We are to consider whether the retention of 20 per cent. from the loan as commissions constitutes usury. The evidence shows that the commissions were received by Duncan and the Corbin Banking Company, and there is no evidence that plaintiff actually received any portion of the same. The question then arises whether Duncan and the Corbin Banking Company were agents for plaintiff in the transaction, and if so whether the knowledge and acts of such agents were such as to affect the transaction with usury. The Circuit Court held that Duncan and the Banking Company, were agents of the defendant, relying upon the testimony of Frederick Cook, the general manager of the Corbin Banking Company, and J. K. A. Sherwood, the agent of the plaintiff for the purpose of accepting or rejecting applications for loans; that Duncan and the Banking Company were not agents of plaintiff, but of defendant, and also relying upon an instrument in writing signed by defendant in these words: Recognizing the rule that it is incumbent on appellant to show that the conclusion of the circuit court is against the preponderance of the evidence, we are constrained to hold that the circumstances show that Duncan and the Corbin Banking Company also acted in the transaction as agents for plaintiff.
The method of negotiating such loans has been so often before the court that it is unnecessary to give any detailed statement. This court has considered substantially the same question in a number of cases: Bates v. American Mortgage Co., of Scotland, 37 S.C. 88, 16 S.E. 883, 21 L. R. A. 340; Brown...
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