Graham v. Fitts
| Decision Date | 26 March 1907 |
| Citation | 43 So. 512,53 Fla. 1046 |
| Parties | GRAHAM et al. v. FITTS. |
| Court | Florida Supreme Court |
Appeal from Circuit Court, Manatee County; Joseph B. Wall, Judge.
Bill by William B. Fitts against John A. Graham and another. Decree for complainant. Defendants appeal. Affirmed.
Syllabus by the Court
Where a note evidencing a debt and a mortgage to secure its payment are executed at the same time in one transaction, and the mortgage refers to the note, they should be considered together in determining their meaning and effect.
Foreclosure proceedings are not prematurely brought, where the principal note provides for the payment of a given amount at a stated future date, with interest thereon, for which other notes were given payable semiannually, and also provides that 'if default be made in the payment of any interest note or any portion thereof, for the space of 10 days after the same becomes due and payable, then all said principal and interest shall, at the option of the legal holder thereof become due and payable without further notice,' and the mortgage provides for the payment of the debt evidenced by the principal, 'with the interest accruing thereon according to the true intent and meaning of said note,' and the bill for foreclosure brought by the holder of the principal note alleges a default in the payment of interest and that the complainant 'exercises the option given him in and by the terms of said note, and hereby declares all interest and principal due and owing to him, if any, by the terms of said notes, due and payable at once.'
Where a bill to foreclose a mortgage is brought by the original payee and mortgagee against the original debtor and mortgagor, it is not necessary to specifically allege that the complainant is the owner of the note and mortgage.
The payment of interest on overdue installments of interest evidenced by separate coupon notes for interest on the principal, does not constitute usury, and such interest is recoverable upon coupon notes, after their maturity, which were given at the time of the accrual of a debt for the interest to accrue thereon; for, being promissory notes, it is only just that, if not paid when due, they should draw interest by way of damages for the detention of the money. The debtor can avoid such interest on interest by paying the interest when due.
A note is not usurious because it provides for the payment of only the principal debt and the interest at the highest legal rate due thereon at the time an option is exercised to declare the debt due and payable.
When a note provides for the payment of the amount loaned with the highest legal rate of interest, and the party who negotiates the loan takes his commission from the amount loaned before it is delivered to the debtor, and it appears from a clear preponderance of the evidence that the party who negotiated the loan was the agent of the debtor, and not the agent of the creditor, the note, on such a showing, is not usurious because such commission was so deducted.
COUNSEL Chas. T. Curry, for appellants.
O. K. Reaves, for appellee.
On October 3, 1905, the appellee filed a bill in equity in the circuit court for Manatee county for the foreclosure of a mortgage on certain lands in Manatee county, executed by the appellants January 5, 1905, to secure the payment of a note for $4,000 and interest coupon notes attached, all executed by the appellants to the appellee. The bill for foreclosure alleges the execution of the note and also the mortgage of the property to the plaintiff, and contains the following allegations:
The court overruled a demurrer interposed to the bill on the grounds that (1) it contains no equity; (2) it does not appear that complainant is the owner of the note and mortgage; (3) it does not appear that the complainant has any title to the note and mortgage; (4) the interests of the defendants to the property are not particularly described.
The answer of the defendants contained a demurrer on the grounds that (1) no case for equitable relief is made; (2) the contract referred to is usurious. Answering, the defendants say the loan was negotiated through A. T. Cornwell, who was the agent of the complainant for negotiating loans, and not the agent of defendants; that said A. T. Cornwell, the agent of complainant, only paid over to defendants $3,600, although said agent demanded and required defendants to execute the note for $4,000; that said agent of complainant reserved from the $4,000 the sum of $400, claimed by him as commission for making said loan, whereby the contract became, and was and is, usurious; that the semiannual interest notes require payment of interest on unpaid installments of said interest, and thereby the contract became, and was and is, usurious; that by reason of the terms of the contract, providing for a larger amount of interest than is allowed by statute, nothing is due the complainant till its principal is due January 1, 1910.
A replication was filed, and testimony was taken before a special master. The decree 'ordered, adjudged, and decreed that the defendants are indebted to the complainant in the sum of $4,683 for principal and interest heretofore accrued upon the notes described in the bill, and in the further sum of $400 for reasonable attorney's fee incurred by the complainant in this proceeding, and in the further sum of $23.50 due said special master for his services herein, as well as for the costs of this suit.' An appeal was taken. The following errors are assigned: (1) In overruling and in not sustaining the demurrer to the bill; (2) in overruling and in not sustaining special grounds of demurrer contained in the answer; (3) in decreeing $400 attorney's fees; in finding and decreeing for the complainant on the mortgage; (4) in decreeing no usury in the contract; (5) in decreeing for complainant; (6) in not dismissing the bill.
The principal note is as follows:
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