Hubbell v. Morristown Land & Imp. Co.

• Decision Date: 12 November 1895
• Citation: 32 S.W. 965,95 Tenn. 585
• Parties: HUBBELL et ux. v. MORRISTOWN LAND & IMPROVEMENT CO. et al.
• Court: Tennessee Supreme Court

32 S.W. 965

95 Tenn. 585

HUBBELL et ux. v. MORRISTOWN LAND & IMPROVEMENT CO. et al.

Supreme Court of Tennessee.

November 12, 1895

Appeal from chancery court, Hamblen county; John P. Smith Chancellor.

Suit by George W. Hubbell and wife against the Morristown Land & Improvement Company and others. From a decree of the chancery court of appeals reversing a decree of the chancellor for defendants, defendants appeal. Modified.

S. F Powell, for appellants.

Charles Seymour, for appellees.

McALISTER J.

The original bill in this cause was filed in the chancery court of Hamblen county for the purpose of foreclosing a mortgage executed by the defendant company to secure a note for the sum of $2,500, for money borrowed by it from complainants. The defendant company is a domestic corporation chartered by the laws of the state of Tennessee, with its principal place of business at Morristown. In October, 1888, James S Churchill, secretary and treasurer of said corporation negotiated a loan of $2,500 for and on behalf of his company and with its authority, from Mrs. George W. Hubbell, who was at that time temporarily sojourning at Greenwich, in the state of Connecticut. The permanent abode of Mrs. Hubbell was at Newark, in the state of New Jersey. Churchill, as security for this loan, agreed that his company, the Morristown Land & Improvement Company, would execute a mortgage on certain tracts of land situated in Hamblen county, Tenn. The money was to be paid upon the arrival of the proper papers at Newark, N. J. Churchill thereupon returned to his home, at Asheville, N. C., where he and John H. Barnard, president of the company, both resided. The note and deed of trust for the security of the loan were executed by Barnard, president, and Churchill, secretary, of the company, at Asheville, and were forwarded to Mrs. Hubbell, at Newark, N. J. Said note is set out in the record in words and figures as follows, to wit: "$2,500. Dec. 3rd, 1888. One year from date the Morristown Land & Improvement Co. promises to pay to Mrs. C. G. Hubbell, or her order, at the National Bank of Newark, New Jersey, the same of twenty-five hundred dollars (2,500), with interest from date until paid at the rate of seven per centum per annum, payable semiannually. Jno. H. Barnard, President Morristown Land & Improvement Co. J. B. Churchill, Secty. Morristown Land & Improvement Co." The record discloses that upon the maturity of this note default was made in its payment, whereupon the present bill was filed for the foreclosure of the trust deed and the collection of the debt. It will be perceived that the transaction in question presents the anomaly of having figured, to some extent, in four different states. The loan was originally negotiated at Greenwich, in the state of Connecticut, where Mrs. Hubbell was summering; the note evidencing the loan was drawn in North Carolina; it was made payable in New Jersey, the domicile of Mrs. Hubbell; while the borrowing corporation and the land mortgaged were situated in Tennessee. The legal question arising upon these facts is in respect of the law that should govern in the enforcement of the contract. If the contract is to be determined either by the law of Tennessee or that of New Jersey, it is conceded that it is usurious, while the law of North Carolina, as well as that of Connecticut, recognizes the validity of such a contract. The chancellor was of opinion that the contract was in legal contemplation made, and was to be performed, in the state of New Jersey, and that by the laws of that state a note bearing interest at the rate of 7 per cent. per annum, was usurious and nonenforceable. Complainants were denied any relief, and their bill was dismissed. The cause was appealed to this court, and by assignment was heard by the court of chancery appeals. That court decided that the rights of the parties are determinable by the law of Connecticut, where such a rate of interest is allowable. Complainants were given a decree for the amount of...