Bank of Harrison v. Gibson
| Decision Date | 23 February 1895 |
| Citation | 30 S.W. 39 |
| Parties | BANK OF HARRISON v. GIBSON et ux. SAME v. BOONE COUNTY BANK. |
| Court | Arkansas Supreme Court |
Appeals from circuit court, Boone county; Brice B. Hudgens, Judge.
Suit in chancery by T. M. Gibson and wife against the Bank of Harrison, as the assignee of a note and mortgage executed by plaintiffs to defendant's assignor, to have the mortgage adjudged invalid, because covering a part of the said Gibson's homestead, and of the wife's nonjoinder in its execution, and also on the ground of usury in charging a certain commission for the loan. From a decree holding the mortgage void, but adjudging that the transaction was not usurious, defendant appeals. Modified.
The first one of these two suits was instituted in the Boone circuit court, in chancery, by the appellees, T. M. Gibson and wife, against the appellant, Bank of Harrison, as the assignee of one T. E. Garvin, and, as such, the holder of a note and mortgage executed and delivered by them to said Garvin. The history of this suit is briefly as follows, to wit: One F. M. Garvin, a son of T. E. Garvin, and one Duncan, were doing business at the town of Harrison, in said county, under the corporate name of the Harrison Investment Banking Company, and it appears that a part of the business of the concern was to negotiate loans for people who sought their services in that line. Some time, say, in June or July, 1887, the appellee T. M. Gibson, being in need of money to settle some fines and costs, and perhaps other matters, after some efforts in other directions, finally engaged the company named to effect a loan of $1,000, engaging at the same time to give a mortgage on certain real estate he then owned, and which turned out to be the lands he resided on as his homestead, to whomever would loan him the money required. As the manner of such institutions is, the investment company, through its active manager or secretary, the said F. M. Garvin, proceeded to have the title to the land examined, and to make an abstract of the same. In the meantime, appellees signed an application for the loan, in which the usual statements were made in regard to their ability to pay and meet their obligations, and the value of the security to be given. It appears that copies of this application were sent to various money lenders in different parts of the country, — one to T. E. Garvin, residing in Evansville, Ind.; one to another party in the same place; one to Gettysburgh, Pa.; and others to other points. These efforts finally resulted in an acceptance on the part of the said T. E. Garvin to make the loan to appellees on the terms and security offered by them. T. E. Garvin seems to have intrusted to his son, the said F. M. Garvin, the duty of seeing that proper instruments of writing were executed, and of approving or rejecting the security so far as its value was concerned. According to the proposition so made and accepted as aforesaid, the note and mortgage were executed, actually on the 30th July, 1887, but dated the 15th July, for reasons given in testimony explanatory of the discrepancy; and the amount of money actually paid Gibson, and for him in the settlement of certain urgent demands in the hands of the sheriff of that county, was $950, instead of $1,000, as the face of the note showed; F. M. Garvin having reserved $50 for his commission for effecting the loan, examining titles, making the abstract, and certain expenditures by him made. The mortgage having been recorded, the original of the same and the notes were transmitted to T. E. Garvin, at Evansville, Ind., his place of residence, and they were subsequently assigned for value to the Bank of Harrison, which had in the meantime become the successor of the Harrison Investment Company, as claimed by Gibson. Proof of the existing laws of Indiana on the subjects of interest and usury was duly made, and copies of the same are made part of the transcript in the case. T. E. Garvin, Catherine Duncan, his immediate assignee, and the Bank of Harrison, the holder of the note and mortgage, were made parties defendant, and all answered; Garvin and Duncan disclaiming all present interest in the suit, and the bank making its defense on the note and mortgage and the facts in support of the validity thereof, and filing a cross bill, praying foreclosure of its mortgage. The object of the bill of plaintiffs was to have the mortgage declared invalid, on the grounds that the lands included therein constituted part of the homestead of Gibson, and that the wife had not joined with him in the conveyance of the same in the mortgage, as required by statute; and on the further ground that the transactions with T. E. Garvin in the consummation of which the note and mortgage were given were in fact usurious. The decree of the court as to the mortgage of the homestead was for the plaintiffs, holding the same to be void; and on the question of usury, it was for the defendant bank, holding that the transaction was not usurious. From this decree the bank appeals to this court.
The second of these suits was instituted against Gibson and wife and the Bank of Harrison, as the makers and holder of the note and mortgage involved in the first one, in which the same attacks were made on that note and mortgage as were made by Gibson and wife in the said first suit. The basis of the second suit was a note by Gibson and wife to the Boone County Bank for the sum of $500, dated 26th day of June, 1890, and mortgage of same date, and on the same lands as were included in the mortgage involved in the first suit; that is, the homestead of Gibson, given to secure the note. The suit was for foreclosure, and the validity of the note and mortgage were not called in question, and Gibson and wife suffered decree by default. Decree for plaintiff, in effect as against the Bank of Harrison, the same as in the first suit, from which the defendant bank appealed to this court.
The two suits were submitted together, and came up for hearing as one case, on the same...
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