Crittenden v. Ragan

• Citation: 89 Miss. 185,42 So. 281
• Court: United States State Supreme Court of Mississippi
• Decision Date: 03 December 1906
• Parties: O. B. CRITTENDEN ET AL. v. SAMUEL C. RAGAN ET AL

42 So. 281

89 Miss. 185

O. B. CRITTENDEN ET AL. v. SAMUEL C. RAGAN ET AL

Supreme Court of Mississippi

December 3, 1906

November 1906

FROM the chancery court of Washington county, HON. PERCY BELL Chancellor.

Ragan and others, appellees, were complainants in the court below O. B. Crittenden & Co., appellants, and the Geiss-Mann Hardware Company, an appellee, were defendants there. From a decree overruling the demurrer of defendants, O. B Crittenden & Co., to the bill of complaint, and to the cross-bill of defendant hardware company, O. B. Crittenden &amp Co. appealed to the supreme court.

The appellee, Ragan, sued the appellants, Crittenden and others, composing the copartnership of O. B. Crittenden & Company, and the appellee, Geiss-Mann Hardware Company. The Geiss-Mann Hardware Company adopted Ragan's bill as its cross-bill against appellants. Appellants, Crittenden & Company, were senior mortgage creditors of one Fuller, having furnished him money and plantation supplies during 1903, 1904, and 1905, securing the indebtedness by trust deeds, executed annually upon his land, live stock and other personalty, his latest trust deed to them being executed in January, 1905. Appellee, Ragan, was a junior mortgagee in two trust deeds from Fuller upon the same property. Of the trust deeds in Ragan's favor one was subsequent to a small trust deed Fuller had executed on the land in favor of the Geiss-Mann Hardware Company. In 1906 the trust deed to appellants, executed in January, 1905, was foreclosed, and the property bought in by appellants for a sum insufficient to satisfy their indebtedness.

The bill charged that the property was sold for much less than its real value, and was sacrificed; that complainant, both before and at the sale, had repeatedly, but without avail, requested appellants to render to him an itemized statement of the sum due to them by Fuller, in order that he might pay off the debt for his own protection in case the same were free of usury and satisfactory to Fuller; that as shown on the face of the trust deed, appellants had taken a note from Fuller, bearing ten per centum interest per annum on its face from its date until paid, for advances to be made to Fuller, had at once discounted the note, placing only the proceeds to Fuller's credit, and afterwards, when the advances were made, had again charged ten per centum interest per annum on such advances, thus making double charge of interest on the amount actually advanced to Fuller, constituting usury.

It was alleged that Fuller was insolvent. Complainant prayed for an accounting and purging of the indebtedness of Fuller to appellants; for the sale to be set aside, and resale decreed, and for the proceeds to be equitably applied.

Appellants demurred to the bill and to the cross-bill because of a failure to tender any amount, or to aver a willingness to pay appellants any sum which, on accounting, might appear due them by Fuller.

Reversed and remanded.

Percy & Campbell, for appellants.

Appellants' demurrers should have been sustained, because the bill and cross-bill of appellees failed to show any damage to appellees, or improper foreclosure, or fraud. Moreover, the bills show no offer upon the part of appellees to do equity, there being no offer to pay any amount whatever, although it is admitted that some sum is due to appellants.

Appellees assert that the sale should be set aside because of usury charged under the trust-deed, and because appellants failed both before and at time of sale to furnish appellee, Ragan, and other prospective bidders, with an itemized account of Fuller's indebtedness to appellants; and because personal property sold under the trust deed was not present at the place of sale.

The claim of usury is made, chiefly because the stipulations in the trust deed show that the note secured thereby was for advances to be made, as well as for past-due indebtedness, and appellants discounted the note, which on its face calls for ten per centum per annum interest from date until paid, and, crediting the proceeds to Fuller, afterwards, when the advances were made, again charged ten per centum per annum interest on such advances. But perusal of the trust deed will show that its intent is for a per centum charge only on money advanced over and above the sum mentioned as face of the note, a proper provision.

As regards appellants' alleged failure to furnish an itemized account to appellees of Fuller's indebtedness to appellants upon Ragan's demands, appellants were under no obligations to do this. Fuller, the debtor, of course had such right. But it would certainly be an inconvenient rule to require a party selling under a trust deed for a debt arising out of dealings covering several years to furnish an itemized statement to every one desiring to bid at the sale, or even to a junior mortgagee. It is not alleged that there was any concealment of the matter, or refusal to allow inspection of Fuller's account upon appellants' books, or even any request for such inspection. There must be some allegation of fraud or wrong aided by failure to furnish such account. Appellees were clearly advised as to the approximate amount of appellants' demands. Fuller's debt to appellants was stated at the sale to be a sum certain, on which were to be credited the proceeds of a few bales of unsold cotton. If appellees considered the debt to be fraudulent or usurious they had a right to injunction proceedings against appellants. If unwilling to take risk of damages on injunction bond, they might have bid the fair value of the property advertised, and then have demanded in court an accounting from appellants. Who seeks equity must do equity. But appellees say, further, that they were entitled to account demanded to see if the same were valid, so that Fuller subsequently might not attack any title under foreclosure proceedings on the ground of invalid debt. How, we say in reply, could appellants assure any bidder that the title would be...