Hayes v. Bank of Lewisburg

• Decision Date: 23 February 1897
• Citation: 39 S.W. 753
• Parties: HAYES v. BANK OF LEWISBURG et al.
• Court: Tennessee Supreme Court

Page 753

39 S.W. 753

HAYES v. BANK OF LEWISBURG et al.

Court of Chancery Appeals of Tennessee.

February 23, 1897.

Appeal from chancery court of Marshall county; W. S. Bearden, Chancellor.

Bill by V. O. Hayes against the Bank of Lewisburg and others. From the decree of the chancellor on the report of the master, both parties appeal. Modified.

W. W. Walker and L. A. Thompson, for complainant. Armstrong, Smithson & Armstrong, for defendants.

BARTON, J.

This bill was filed by the complainant against the defendant Bank of Lewisburg and others, as stated by complainant's counsel in his brief and argument and assignment of errors, principally to recover a large amount of usury that he claimed to have paid the bank, running through a series of years. Counsel states that other points were made in the bill, but mostly abandoned afterwards, except the usury and two or three other items of indebtedness. Such is counsel's own statement in the argument of their cause of action. Referring to the bill, we find that it alleges, in substance, that the complainant had been doing business with the defendant bank, and had become indebted to it, and paid large sums of usury, and had in this way crippled and ruined his business; that the bank itself, through reckless mismanagement, failed; that on the night before the failure the bank's officers sent for him, and got him in a room, and, taking advantage of his condition by threats and outrageous bulldozing, forced him to sell out a large and valuable lot of goods, and a brick building and lot, all of which were worth something over $11,000, at and for an agreed price of about $8,100; that he was induced to do this partly by their threats and partly by their representations that they were his friends, and wanted to protect him, and that they were looking after his interests as well as the bank's, and only wanted to secure their debt, and would have the property sold to the best advantage, and account to him for the proceeds; and, although the price was set at $8,100, they promised and agreed to square him up of all of his indebtedness, but that they failed to comply with this part of the agreement, and afterwards brought up a balance against him in the bank of $203.10, and fraudulently insisted that complainant still owed this; and they also claimed that he had transferred his books and accounts to them, which he had not done; and they afterwards collected a small balance in bank, which was his property, being a deposit which had been placed there by one N. S. Hopwood, his partner in a small stock of second-hand goods, amounting to $64.20, which they credited on the $203.10, which they claimed to be still due from him; and that they also collected $75 on the accounts of the books of the partnership of complainant and said Hopwood, which had not been transferred, and which they claim had been. The bill further alleges that the officers and assignees of the bank afterwards sold out the stock of goods and storehouse for the price of $7,500, which was a ruinous sacrifice, and nothing like the value of the property conveyed by him, and was an act of bad faith towards him. The prayer of the bill is that reference be had to ascertain the usury he had paid the bank and its officers, and also what other indebtedness the bank and its trustees owed him; that on the hearing he have a decree for the usury he had paid the bank, and also for the two items of $64.20 and $75, together with all interest and costs of suit; that the sale he had made be set aside and canceled, and that he be placed in the same condition, as near as can be, before the sale; and that he have in damages such sum as the court may think is just and reasonable, of $5,000 or more, and for general relief. The bank filed its answer, in which it admits the assignment made in October, 1891, and the sale made by the complainant to it; denies that the complainant was bulldozed, or made the conveyance to it under any duress; states that the complainant owed the bank more than $8,300 the day he settled his obligations, and that by way of settling his obligations the complainant sold to the bank, in payment of his debts, at his own rating as to value, which was largely more than it was worth, as the bank considered, but took the stock of goods and the building at the price of $8,300 as it was all the bank could get; that the bank afterwards sold out the stock of goods and the building for $7,500 on 6, 12, and 18 months' time, without interest, which would amount to $450, and that hence the proceeds only amounted to $7,050; that the complainant also sold at the same time his interest in the firm of Hayes & Hopwood, from which the bank realized $ 262.50, making in all that the bank realized from the property conveyed by the complainant, $7,256.52; that at the time of his settlement the complainant was indebted to the bank in all, $8,560.50, but on the night of the settlement part of the indebtedness was by mistake overlooked, and not put in; that they afterwards had to pay $32.18 taxes, and that for this amount, and the amount of overcheck not computed, the complainant was indebted to the bank. They deny that he had paid usury; aver that the transfer and sale of the goods was not in the nature of a mortgage, but assert that it was a straight out sale for the price agreed on, and deny that they promised to have the goods sold at any special rate, or to account to him for any balance of proceeds; in general, deny all equities. Proof was taken, and the cause was heard by the chancellor, who made a reference to the clerk and master to hear proof, and report the amount of usury, if any, the complainant had paid the bank, and how paid it, and what indebtedness, if any, there was owing by the complainant to the defendant bank outstanding, and not settled or paid, or intended to be paid, in the settlement made between the parties in October, 1891. Further proof was taken, and the master filed his report, showing usury paid by the complainant to the bank; the account running from April 20, 1887, to July 30, 1890, on notes, and up to August, 1891, on open accounts on overchecks; the aggregate being $1,220. The master further reported that the outstanding indebtedness not settled by the transaction between the parties from the complainant to the defendant was $203.10, on which the complainant was entitled to a credit from the sale of notes, etc., in the Hopwood & Co. business, amounting to $139, leaving a balance due the bank on this matter of $64.10. To this report both parties excepted. The chancellor heard the cause on the report and exceptions and the record, and overruled the exceptions of the complainant as to the item of $203.10; sustained the exception of the defendant as to $199.05 of usury paid more than six years before the bill was filed; allowed the defendant $32.18 amount of taxes paid on the property; sustained the exception of the complainant as to the item of $64.10 paid into this bank by Hopwood; overruled all the other exceptions of the defendant; decreed that the trade between the complainant and the defendant was fair; declined to interfere with the same; deducted from the $1,220 usury reported by the master the abovenamed sums of $199.05, $64, $32.18, and $203.10, making in all the sum of $498.32, and leaving a balance of $721.67, to which he added an item of $75, proceeds of notes and accounts of what was known as the "Tracey City stock of goods," which was not included in the sale to the defendant, making in all the sum of $796.67, for which he rendered a decree in favor of the complainant and against the defendant. Both parties prayed an appeal, — the complainant from so much of the decree as sustained the exceptions of the defendant as to the usury alleged to be...