Hardin v. Grenada Bank, 32612
| Decision Date | 09 May 1938 |
| Docket Number | 32612 |
| Citation | 180 So. 805,182 Miss. 689 |
| Parties | HARDIN et al. v. GRENADA BANK et al |
| Court | Mississippi Supreme Court |
APPEAL from the chancery court of Calhoun county, HON. L. A. SMITH SR., Chancellor.
Suit by Dr. J. A. Hardin and another against the Grenada Bank and others to cancel deeds of trust as a cloud on title of plaintiffs, wherein the defendant bank filed a cross-bill to recover a money decree. From the decree, the plaintiffs appeal and the defendants cross-appeal. Affirmed on cross-appeal and on direct appeal reversed in part and decree rendered for plaintiffs.
Affirmed in part and reversed in part.
W. J. Evans, of Calhoun City, and W. I. Stone, of Coffeeville, for appellants.
An action to recover usury paid may not be commenced, nor does the statute of limitations begin to run against it, until the cause of action accrues; and the cause of action does not accrue, within the meaning of these rules, until the usury is actually paid either in money or its equivalent; the statute does not run from the date of the making, or the due date, of the agreement to pay usury. Moreover, according to the rule prevailing in some states, that all usurious payments are to be deemed payments on the principal debt, usury is not paid until after the whole legal debt is satisfied; and under this rule the statute begins to run only after the lawful debt has been actually paid, and incorporating usurious interest in a renewal note, or in a series of renewals, does not start the statute running so long as any part of the original usurious loan remains unpaid.
66 C J. 293, sec. 281; Jones v. Brewer, 146 Miss. 142; Union National Bank v. Fraser, 63 Miss. 231; Chandlee v. Tharp, 161 Miss. 623, 137 So. 540; Beck v. Tucker, 147 Miss. 401, 113 So. 209.
Since the decision in Bank v. Auze, 74 Miss. 609, 21 So 754, our court has consistently held that, before a suit for usurious interest can be maintained, the borrower must pay or extinguish the principal debt due the lender, and any and all usurious payments will be applied to such debt until it is satisfied. It was further held in that case that the suit was not for the recovery of a penalty, eo nomine, and was not barred by the statute of limitations, as to a penalty.
McLeod v. Gray, 4 So. 544; Wood v. Essary, 170 So. 542; Feld v. Coleman, 72 Miss. 545; Weathered v. Boyer, 7 Yer. (Tenn.) 545; Kendall v. Crouch, 11 S.W. 587; Rudd v. Anderson, 14 S.W. 340; Neale v. Rouse, 19 S.W. 171.
Where the debtor of a bank periodically renewed his indebtedness, paying the old debt, accrued interest, and usury by checks, which the bank marked "Paid," and charged to the deposit thus placed to his credit, the payment and renewals became such a continuing transaction as to bar the running of limitations against the recovery of usury.
Hayes v. Bank of Lewisburg, 39 S.W. 753; Weathered v. Boyer, 7 Yer. (Tenn.) 545; Webb on Usury, page 232, sec. 209, page 552, sec. 471, and page 612, sec. 527; Pickett v. Merchants Natl. Bank, 32 Ark. 366, 2 Natl. Bank Cases 209; S. P. Moniteau Natl. Bank v. Miller, 73 Mo. 187; Peterboro Natl. Bank v. Childs, 130 Mass. 519; Stevens v. Monongahela Natl. Bank, 32 Am. Rep. 438.
Where a renewal note is given containing and providing for usurious interest, or where usurious interest is exacted, the defense of usury, not only in the particular note sued on, but in all of its predecessors where it exists, is available to the maker as a defense.
Gladwin State Bank v. Dow, 13 A.L.R. 1233; Torry v. Grant, 10 S. & M. 89; 37 C. J. 803, sec. 148; Hudson v. Wood, 208 S.W. 2; Georgia State Bldg. & Loan Assn. v. Grant, 34 So. 84; Jordan v. Holmes and Herrick, 59 So. 809.
It is our opinion that the learned Chancellor fell into error in holding that the statute of limitations began to run in 1925, by the automatic rule of application of payments and the consequent barring of any claim that we might have after three years had elapsed from the payment. However, it seems to us to work out to our advantage either way; if it be considered that the law will now apply the payments automatically, then without question the payments exceeding all the obligations of our client automatically extinguished all these obligations long before the attempted sale under the deed of trust in December, 1934, so that our claim is sustained as to the land being sold for a debt that was nonexistent. If it be taken that the usury constituted this whole series of transactions a voidable one, and good until attacked, then we had the right to come in on December 24, 1934, and off-set all the claims against Hardin and off-set them to their complete extinguishment, even before and long before the attempted trustee's sale in 1934.
A. M. Carothers, of Grenada, and Watkins & Eager, of Jackson, for appellees.
It has been well established by this court that an action to recover the over payment of interest based on a usurious contract comes within the three-year statute of limitations. This court has held that the debtor's right of action is based on an implied promise to repay this interest which has been wrongfully charged and received by the creditor.
Sec. 2299, Code of 1930; Buntyn v. National Mutual Bldg. & Loan Assn., 86 Miss. 454, 39 So. 345; Beck v. Tucker, 147 Miss. 401, 113 So. 209; Hawkins v. Ellis, 168 Miss. 429, 151 So. 569.
We submit that the statute of limitations began running against complainants as soon as they had a right to recover over interest paid regardless of whether complainants were advised of their legal rights. This record contains no charge of a concealed fraud or fraud of any kind on the part of Grenada Bank. It is a suit based on a technical overcharge of interest which the record shows was never actually paid and was shortly thereafter corrected. The complainants charge a technical violation of the usurious statute and bring this their suit some fourteen years after said technical violation, and the record shows clearly that complainants had full knowledge of this overcharge as soon as same was made.
37 C. J., pages 807-809; Gale v. McDaniel, 72 Cal. 334, 13 P. 871.
A cause of action accrues, so that limitation begins to run at the moment its owner has a legal right to sue on it.
Fidelity, etc., Co. v. Jasper Furniture Co., 186 Ind. 566, 117 N.E. 258; 37 C. J. 969; Davis v. Boyette, 120 Ga. 649, 48 S.E. 185, 102 Am. St. Rep. 118, 66 L.R.A. 258, I Ann. Cas. 386.
It is well established that ignorance of the law is no excuse for a delay in bringing suit and will not postpone the running of the statute of limitations.
Cox v. Von Ahefeldt, 105 La. 543, 30 So. 175; Lisle v. U.S. 23 Ct. Cl. (U. S.) 270; Louisville v. Werkel, 137 Ky. 784, 127 S.W. 147, 128 S.W. 587.
The recent decisions from the courts of last resort in other jurisdictions are unanimously to the effect that the statute of limitations begins to run as soon as the right of action accrues.
Beard v. Citizens Bank of Memphis, 37 S.W.2d 678; Superior Oil Co. v. Alcorn, 242 Ky. 814, 47 S.W.2d 973; Madison Lbr. Co. v. Estrade, 141 So. 431; Leffinwell v. Day, 256 N.Y.S. 459; Weinstein v. Blanchard, 109 N.J.L. 332, 162 A. 601; City of Washington v. Bonner, 203 N.C. 250, 165 S.E. 683; Miller v. National Surety Co., 14 P.2d 228; Ireland v. Shipley, 166 A. 593; Provident Life & Acc. Ins. Co. v. Heidelberg, 228 Ala. 682, 154 So. 809; Mobley v. Murry County, 173 S.E. 680; Parks v. Hines, 68 S.W.2d 364; Jackson v. Anderson, 189 S.E. 924; Kimball v. General Electric Co., 23 P.2d 295; Peteler v. Robinson, 17 P.2d 244; Tom Reed Gold Mining Co. v. United Eastern Mining Co., 8 P.2d 449.
We submit that the proper rule is that where usurious interest is contracted for or paid, all payments thereafter made shall at the election of the debtor become payments on the principal, and that as soon as sufficient payments have been made to satisfy the original amount of the indebtedness, the debtor has rights of action over and against the creditor for each and every over-payment from the date such over-payment is made.
Polkinghorn v. Hendricks, 61 Miss. 366; Brewer v. Jones, 131 Miss. 541, 95 So. 519.
It is well established that as soon as the principal amount of the indebtedness has been repaid, applying all payments to principal, the debtor has a right to recover any payments made in excess of the principal amount of the indebtedness as soon as such overpayment is made.
Bank v. Auze, 74 Miss. 609, 21 So. 754; Beck v. Tucker, 147 Miss. 401, 113 So. 209; Hawkins v. Ellis, 168 Miss. 429, 151 So. 569.
The record shows without dispute that the entire principal indebtedness had been repaid to Grenada Bank by complainants in 1925, together with an over-payment exceeding $ 2000. We respectfully submit that the statute of limitations began to run on each over-payment as soon as same was made, and that said statute began to run on each additional over-payment as soon as same was made, and that each and every over-payment was barred by the three-year statute of limitations three years after such payment was made to Grenada Bank. This means that the complainants are only entitled to recover any payment on interest on the original indebtedness made by them subsequent to December 24, 1931, suit having been filed in the Chancery Court of Calhoun County on December 24, 1934. The record shows without dispute that complainants made no payment of any kind subsequent to December 24, 1931. We, therefore, respectfully submit that they are completely barred from recovery by the three-year statute of limitations.
Chandlee v. Tharp, 161 Miss. 623, 137 So. 540.
With deference to the learned Chancellor in the court below, we respectfully submit that he was in manifest error in holding in his decree--"that the complainants did not waive the...
To continue reading
Request your trial