Craig v. McCulloch, et als.

• Citation: 20 W.Va. 148
• Court: Supreme Court of West Virginia
• Decision Date: 19 August 1882
• Parties: Craig v. McCulloch, et als.

20 W.Va. 148

Craig

v.McCulloch, et als.

Supreme Court of Appeals of West Virginia.

Submitted Juno 23, 1832

Decided August 19, 1882.

1. The power of a court to punish for contempt is arbitrary and discretionary with the court, against whom, or whose orders, the offense has been committed; and proceedings for the punishment of such an offense being in their nature criminal, this Court has no jurisdiction to review an order of the circuit court deciding, that no contempt has been committed, (p. 152.)

2. An agreement to pay interest upon interest is valid, if made after the interest, which is to bear interest, has become due and payable, (p. 153.)

3. A, being indebted to B by written contract, from time to time, as interest became due and payable by the terms of such contract, gave to B his notes for such accrued interest, and subsequently, upon a settlement between the parties, said notes with the interest computed thereon from their respective dates are added to the original debt, and an obligation is then executed by A to B for the aggregate amount bearing interest from date, and a trust deed on real estate given to secure said obligation. Held:

This is not usurious nor inequitable, (p. 154.)

4. Where an injunction is obtained upon a bill alleging a parol contract for the extension of the time for the collection of a debt secured by trust deed, and the proof does not, in the opinion of this Court, establish such a contract as would be specifically enforced by a court of equity, it will not be held, that the circuit court erred in refusing to direct an issue to be tried by a jury to ascertain, whether such contract was in fact made. (p. 155.)

Appeal from and supersedeas to a decree of the judge of the circuit court of the county of Mason, rendered in vacation on the 6th day of July, 1881, in a cause in said court then pending, wherein George W. Craig was plaintiff, and John McCulloch and James II. Couch were defendants, allowed upon the petition of said Craig.

Hon. F. A. Guthrie, judge of the seventh judicial circuit, rendered the decree appealed from.

John W. English for appellant cited the following authorities: 4 Rand. 411; 8 W. Va. 95; 4 W. Va. 610; 11 W. Va. 562; Id. 584; 18 Gratt. 231.

William A. Quarrier for appellant.

1. The defendants refused to obey the order of injunction in this case. This is a contempt.

2. A party in contempt cannot ask to dissolve an injunction until he has purged himself from the contempt. Particularly when the contempt is called to the attention of the court by affidavit. 2 High on Injunctions, section 1464.

3. The compounding of interest is illegal, except (a) when the original security provides for the stated payment of interest and the right to make the interest principal upon default of payment, (b) Or where, after interest has accrued, there be a new contract for forbearance of the original debt, in consideration of which the accrued interest should become principal. Genin v. Ingersoll, 11 "West Ya. 555; Pindcdl v. Bank, 10 Leigh 481.

4. Except where the contract is as described in point three, the compounding of interest is usurious. Ward v. Brandon, 1 Heiskell 490.

5. If the lender compound interest four times upon the borrower, no circumstances will excuse the compounding, it becomes a shift, and a device to evade the law. It is usury. Code West Ya. section 7 chapter 96; 7 Wait's Actions and Defences 611.

6. If the usury was committed and the usurious contract executed before the passage of the Code of West Yirginia, section 5 Code of Yirginia applies, and the contract for both principal and interest is void. The adoption of the Code of West Yirginia cannot revive the void contract.

7. If the original contract be void, and the original loan be forfeited, a note for the interest, legal and illegal, that accrued on the void and forfeited loan, though executed after the passage of the Code, is also illegal and void.

8. When relief is asked from a court of equity, upon the ground of a new contract, and the evidence of the existence of the new contract is conflicting, and if an issue he asked, it is error to refuse the issue. 18 Gratt. 231; 4 W. Va. 611; 8 W. Va. 95.

Howard and Simpson and Smith fi Knight, for appellees, cited: 16 W. Va. 874; 11 W. Va.' 555; 10 Leigh 481; 67 N Y. 162; 4 Rand. 406; 1 Johns. Chy. 13; 3 Ohio 17; 4 Ohio 373; 14 Am. Rep. 352; 103 U. s". 238.

Snyder, Judge, announced the opinion of the Court: In consideration of lands in Mason county conveyed by "William Langley and others to G. W. Craig, the said Craig executed to said Langley and others his four bonds, each for one thousand dollars, dated June 7, 1851, and payable four years after date. When said bonds became due, on the 7th June, 1855, John McCulloch, at the request of said Craig, paid to the holders thereof four thousand dollars and said bonds were delivered to him. McCulloch being then the owner of said bonds, Craig on the 7th June, 1856, paid to him one hundred dollars and executed to him his note of that date for one hundred and forty dollars, these two sums being the interest on said four thousand dollars from June 7, 1855, to June 7, 1856; and June 7, 1857, said Craig executed to said McCulloch another bond for two hundred and forty dollars, being the interest on said four thousand dollars from June 7, 1856, to June 7, 1857. McCulloch, also, made loans to Craig as follows: September 6, 1859, six hundred dollars, September 20, 1859, three hundred dollars, January 1, 1860, three hundred dollars, and February 1, 1862, three hundred and thirty-three dollars, for wdiieh several sums Craig gave him his notes. June 7, 1862, a settlement was made between McCulloch and Craig. A statement showing the items of said settlement is filed in the

cause by Craig and is as follows:

Amount of four bonds____....................$4,000.00

Interest on the four bonds from June 7, 1858.... 960.00

Amount of bond dated June 7, 1857............ 240.00

Interest to June 7, 1862____................... 72.00

Amount of bond dated September 6, 1859....... 600.00

Interest to June 7, 1862....................... 99.10

Amount of bond dated to June 7, 1856......... 140.00

Interest to June 7, 1862....................... 50.40

Amount of bond dated September 20, 1859...... 300.00

Interest to June 7, 1862....................... 48.85

Amount of bond dated January 1, 1860......... 300.00 Interest to June 7, 1862............

Amount of bond dated February 1, 1862 Interest to June 7, 1862............

For this aggregate of seven thousand one hundred and ninety-four dollars and twenty-one cents Craig executed to McCulloch his bond, dated June 7, 1862, payable two years after date, with interest from date payable annually; and by deed of same date Craig and wife conveyed to J. H. Couch, trustee, a tract of 1134 acres of land, lying in Mason county, in trust to secure the payment of said bond.

On June 7, 1865, Craig gave his note to McCulloch for one thousand two hundred and ninety-four dollars and ninety-live cents, that being the interest on said seven thousand one hundred and ninety-four dollars and twenty-one cents from June 7, 1862, to that date, and on June 7, 1867, he gave him another note for one thousand and eighteen dollars and sixty-nine cents, being the interest on said seven thousand one hundred and ninety-four dollars and twentyone cents and one thousand two hundred and ninety-four dollars and ninety-five cents from June 7, 1865, to that date. All the interest included in said notes was calculated at the rate of six per cent. On June 7, 1870, another settlement was had between the parties in which the interest was computed on the aforesaid bond of seven thousand one hundred and ninety-four dollars and twenty-one cents and notes ot one thousand two hundred and ninety-four dollars and ninety-five cents and one thousand and eighteen dollars an, d sixty-nine cents from June 7, 1867, to June 7, 1870, at the rate of six per cent, and then added to the principal of said two notes, making an aggregate of four thousand and twenty-five dollars and five cents as of said date. Of this sum Craig paid twenty-five dollars and five cents and gave his note to McCulloch for four thousand dollars, the residue, dated June 7, 1870, and payable one year after date with interest from date. And the said Craig and wife by deed of even date with said note conveyed to J. H. Couch, trustee, 692 1/2 acres of land, part of the aforesaid 1134 acres, and also 70 acres, in trust to secure the payment of said four thousand dollars. Craig paid the interest on said two debts of seven thousand one hundred and ninety-four dollars and twenty-one cents and tour thousand dollars, from June 7, 1870, to June 7, 1872, and the whole of said debts with the interest thereon from the latter date remaining unpaid. J. H. Couch, the trustee in each of the aforesaid trust deeds, by direction of the creditor, McCulloch, on the 30th March, 1881, advertised the lands conveyed by said deeds to be sold, on April 26, 1881, to pay said debts.

On the twenty-third day of April, 1881, the said Craig exhibited his bill to the circuit court of Mason county against the said John McCulloch and J. H. Couch, trustee, and obtained from the judge of said court an order of injunction inhibiting and enjoining the said defendants from selling said lands under said trust deeds. The ground alleged by the plaintiff for said injunction is, that, after said lands had been advertised, John A. and Charles McCulloch, sons of the defendant, John McCulloch, had verbally agreed that if the plaintiff would remove a certain judgment lien then existing on the lands in the aforesaid trust deeds conveyed, in favor of R. Alexander and renew said debts and execute a new trust deed, his wife uniting therein, to secure said debts, that the time for the payment of said debts should be extended five years upon his paying the interest thereon annually, which agreement was assented to by him; and that relying upon the...