Humphrey v. McCauley

• Decision Date: 21 November 1891
• Citation: 17 S.W. 713,55 Ark. 143
• Parties: HUMPHREY v. MCCAULEY
• Court: Arkansas Supreme Court

17 S.W. 713

55 Ark. 143

HUMPHREY v. MCCAULEY

Supreme Court of Arkansas

November 21, 1891

APPEAL from Conway Circuit Court in chancery, JORDAN E. CRAVENS Judge.

Mary E McCauley brought suit to foreclose a mortgage of land executed to her by Susannah Humphrey and her son, R. A Humphrey, to secure their certain promissory note for $ 311.50 with 10 per cent. interest. The defense of usury was interposed. On the hearing the court decreed that the mortgage be foreclosed. Defendants have appealed.

From the evidence it appears that, on April 15, 1885, the Humphreys executed to B. A. Mayo their note, with mortgage for $ 107.50 with 10 per cent. interest. At their request the note and mortgage were, on November 4, 1885, transferred to Patrick McCauley, husband of plaintiff, he paying Mayo the amount due. They also agreed to pay McCauley for his trouble in ascertaining whether the security was all right; and, in pursuance of this agreement, they executed to him on the date of said transfer their note for $ 10. Both of these notes and the mortgage were assigned to plaintiff by Patrick McCauley. On December 4, 1886, defendants executed to plaintiff their note for $ 152, due twelve months from date, bearing 10 per cent. interest; and also a mortgage to secure the same on the land above described. Defendants contend that this note was a renewal of the Mayo note with interest. Plaintiff insists that it was for a new loan of $ 100. It is agreed that it included the interest on the Mayo note, the $ 10 note given to Patrick McCauley, and a small sum for services of some vague character claimed to have been performed by Patrick McCauley.

On December 13, 1887, defendants executed the note and mortgage sued on. The note for $ 152 and the Mayo note and the accompanying mortgages were surrendered and cancelled. It is conceded by both parties that the new note for $ 311.50 includes the original Mayo indebtedness and a loan for $ 100, and that whichever of these amounts was embraced in the $ 152 note, the other amount was now added to make up the new note. In addition to these amounts and the accumulated interest on the notes, plaintiff testified that there was included an item of $ 22.50 which R. A. Humphrey requested her to pay to Patrick McCauley. With regard to this item the latter testified: "The $ 22.50 due me from R. A. Humphrey was for services rendered him at his request. I looked after his taxes and advised his mother through his brother, E. L. Humphrey, and I tried to assist her in selling a cow; and this is the way he came to owe me the amount. I don't remember everything I did for him. I did not furnish any money with which to pay his taxes, but simply inquired about the matter for him."

After the execution of the last note and mortgage Patrick McCauley got from defendant $ 45 for alleged personal services. In explanation of this he testified: "The $ 20 I got from defendant Susannah Humphrey, and the $ 25 note were for personal services rendered the defendant, R. A. Humphrey. He owed me for various services, the number and kind of which I do not now remember. I remember I went twice to see if I could get some seed wheat for them. The distance I went to see about the wheat was two or three miles. I came to town for them two or three times. At that time I was living about five miles from town and about three and a half miles from the defendants. I can't remember just at this time any other acts of service for the defendants, but I know that I did a great many things for them which I cannot now recall."

Judgment reversed and cause remanded.

W. L. Moose for appellants.

W. S. Hanna for appellee.

1. Usury must be proven. Tyler on Usury, p. 122.

2. A contract valid in its inception cannot be invalidated by any subsequent usurious transaction. Ib., 111, 126, 402. There must be a corrupt agreement to take a greater rate of interest than is allowed by law. Ib., 103; 41 Ark. 331. The expenses paid by the borrower cannot be added to render the contract usurious. Tyler on Usury, p. 136.

OPINION

HEMINGWAY, J.

It is conceded that the debt secured by the mortgage is greater than the sum lent with lawful interest; and the question is, whether the excess represents usurious exactions or sums lawfully due upon other accounts.

The defendants say positively that the excess is made up of sums exacted by the lender's husband and agent in consideration of an extension of the debt for money loaned, while the lender and her husband state that it is made up of sums due the latter on other matters.

If the theory of the defendant is sustained, the...