Ehrhardt v. Varn
| Decision Date | 21 March 1898 |
| Parties | EHRHARDT v. VARN et al. |
| Court | South Carolina Supreme Court |
Syllabus by the Court.
Appeal from common pleas circuit court of Colleton county; J. H Earle, Judge.
Action by C. Ehrhardt against Louisa Varn and others. From a judgment for plaintiff, defendant Louisa Varn appeals. Modified.
Howell & Gruber, for appellant.
Griffin & Padgett, for respondent.
This is an action to foreclose a mortgage of real estate against Louisa Varn, the mortgagee, and other defendants claiming some interest in the premises. The defendants Ehrhardt & Son in their answer, set up and sought foreclosure of a junior mortgage by Louisa Varn to one DeLoach, who had assigned to Ehrhardt & Son. Louisa Varn, answering the complaint and the answer of Ehrhardt & Son in the nature of a cross complaint among other defenses, alleged usury, and claimed forfeiture of all interest and counterclaim for double the excess of interest over the legal rate. The circuit court refused to allow the forfeiture of all interest and costs, but as against the plaintiff's mortgage he allowed a counter claim for $281, double the excess of interest over legal interest, and as against the defendant Ehrhardt & Son's mortgage he allowed a counterclaim for $77.26 for double the excess of interest over legal interest. The defendant Louisa Varn alone appeals.
The exceptions raise practically two questions: (1) Was there error in not decreeing forfeiture of all interest and costs of suit? (2) Was there error in allowing as counterclaim against plaintiff's mortgage $281, instead of $340.46, as claimed by appellant?
Touching the first question. The act of 1882 (18 St. at Large, p. 36) section 1288 of the General Statutes, provided that: The bonds and mortgages in question were executed in December, 1887, the first conditioned to pay $2,000, "with interest from date at the rate of ten per cent. per annum on or before the 1st day of January, 1890, interest to be paid annually"; the second conditioned to pay $500 on or before the 6th day of December, 1888, "with interest from date at the rate of ten per cent. per annum, interest to be paid annually, extended to December, 1889." The circuit court, it is conceded, properly held that these contracts are not usurious, and that they bear interest at 10 per cent. per annum, payable annually, until maturity, and thereafter at 7 per cent. per annum. The question, then, is whether plaintiff, suing on a contract not usurious in its inception, may yet incur the penalty of forfeiture of all interest and costs by subsequently charging and receiving interest thereon at a greater rate than allowed by law. Upon the $2,000 bond and mortgage dated December 5, 1887, payable January 1, 1890, bearing 10 per cent. from date to maturity, two payments were made up to maturity, viz. $213.18 January 1, 1889, $200 January 1, 1890. These payments were for interest due up to the time of payment. After maturity, the following payments were made: $200 January 1, 1891, indorsed on the bond as being interest to that date; March 28, 1892, $195.08; January 19, 1893, $172.36. These payments were for interest alone. The circuit judge held that, the contract not being tainted with usury in its inception, payments of usury thereon after its maturity do not subject the plaintiff to the forfeiture of all interest. In so far as the question of forfeiture relating to the interest received up to the maturity of the bond is concerned, the circuit court ruled correctly. The language of the statute above quoted makes this clear. The forfeiture is of every portion of the interest "unlawfully charged." In the second sentence of the act quoted above,...
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