Butler v. Butler
| Decision Date | 03 December 1901 |
| Citation | 40 S.E. 138,62 S.C. 165 |
| Parties | BUTLER v. BUTLER et al. |
| Court | South Carolina Supreme Court |
Appeal from common pleas circuit court of Aiken county; Gage, Judge.
Action by Fannie Butler, administratrix of John T. Butler, against W. H. H. Butler and others, to marshal the assets of intestate's estate. From a decree allowing Eva H. Horner a creditor, to prove a note and mortgage against the estate plaintiff appeals. Affirmed.
W. T Gary, for appellant. G. W. Croft, for respondents.
MCIVER C.J. (after stating the facts).
Some time in September, 1899, the plaintiff brought this action against the heirs and creditors of her intestate, John Thomas Butler, to marshal the assets of his estate; to sell real estate, in aid of the personalty, for the payment of his debts; to enjoin his creditors from suing at law, and requiring them to prove their demands under the proceedings in this case. Accordingly an order was granted requiring the creditors to prove their demands before the master, and in pursuance of this order the defendant Eva Harker Horner presented her demand; and the only question presented by this appeal is as to the amount of the demand which she is entitled to have established as a debt due by the intestate. This demand is evidenced by a note bearing date the 25th of March, 1891, for $1,500, payable on the 25th of March, 1892, "with interest after maturity at the rate of eight per cent. per annum," which note was secured by a mortgage of realty executed by the intestate, John Thomas Butler. It appears from the testimony, and the fact is so found by the circuit judge, to which finding there is no exception, that seven payments on account of interest were made by the intestate in his lifetime, the amounts and dates of which are set out in the circuit decree, a copy of which should be incorporated by the reporter in his report of the case. Two of these payments show on their face that they were in excess of the lawful interest stipulated for in the contract, to wit, the payment made on the 12th September, 1892, and the payment made on the 23d of March, 1893, because it is expressly stated in the receipts given therefor that they were each made for six months' interest on the note, and the amount received--$75 in each instance--clearly shows that the interest was computed at the rate of 10 per cent., instead of 8 per cent., as stipulated for in the note; that is to say, 2 per cent. in excess of the lawful rate. Upon this state of facts the general question presented by this appeal is as to the effect of these two payments of usurious interest; the appellant contending, as we understand it: (1) That, even assuming that the original contract was not tainted with usury, yet by reason of these two payments of usurious interest the contract became infected with usury at the time of such payments, and therefore the appellant was entitled to a credit on the principal sum due of the amount of those two payments, as well as the amount of all subsequent payments; (2) that, in addition to such credits, the appellant is also entitled to a credit for the amount of double the sum of the excess of interest over the lawful rate included in those two payments. These two questions depend entirely upon the construction of the statute in regard to usury. As is said in 2 Pom. Eq. Jur. § 937, "Since the illegality of usury is wholly the creature of legislation, the provisions of the statute must furnish the rule determining the extent, limits, and occasion of relief." The provisions of our legislation upon the subject of usury are to be found in sections 1390 and 1391 of the Revised Statutes of 1893; and the questions which we are called upon to decide in this case must be determined by a proper construction of the language use in those two sections without regard to the amendments made by the act of 1898 (22 St. at Large, p. 749), for it is expressly declared in that act "that this act shall not apply to contracts made before it goes into effect"; and as that act was approved on the 10th day of February, 1898, and did not go into effect for 20 days thereafter, and as the contract here in question was made before the act of 1898 went into effect, it is quite certain that the provisions of the act of 1898 cannot be applied to this case. The provisions of sections 1390 and 1391 are as follows:
Our first inquiry is as to the proper construction of the language of these statutory provisions which constitute the law applicable to this case. In pursuing this inquiry, we do not think that much, if any, light can be thrown upon the subject by decisions elsewhere, or even decisions in this state made before the lawmaking power had declared in the language employed in these sections what the law was upon the subject of usury at the time the contract here in question was entered into. Of course, any decisions made by this court since that time must be considered as binding upon us, unless the court shall see fit to reverse or modify the same, or any one of them. An analysis of the language used in section 1390 shows clearly that the first object was to declare what should be the lawful rate of interest in this state, and the second object was to declare what should be the effect of charging, taking, agreeing upon, or allowing a rate of interest in excess of that prescribed in the section. It is equally clear that the rate of interest fixed by this statute is 7 per cent., but, by express agreement in writing, a rate not exceeding 8 per cent. may be charged; and, as the contract here in question does contain such an express agreement, it may be said that the lawful rate of interest on said contract is 8 per cent. It is equally plain that if more than that rate of interest has been charged, taken, or allowed, then the effect is to forbid the recovery in any Court in this State of anything more than the principal sum lent, without interest or costs. For it will be observed that, under the express terms of the statute, the prohibition is not only against charging, but also against taking or allowing, interest in excess of the lawful rate; and, if such excess is either charged or taken or allowed, then the effect is to prevent a recovery in any court of this state of anything more than the principal sum lent, without interest or costs. Proceeding, then, to the next section (1391), the language used clearly shows that its sole object was to provide...
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