Jefferson Standard Life Ins. Co. v. Ham

• Decision Date: 05 April 1937
• Docket Number: 32499
• Citation: 178 Miss. 838,173 So. 672
• Court: Mississippi Supreme Court
• Parties: JEFFERSON STANDARD LIFE INS. Co. et al. v. HAM

173 So. 672

178 Miss. 838

JEFFERSON STANDARD LIFE INS. Co. et al. v. HAM

No. 32499

Supreme Court of Mississippi

April 5, 1937

Division A

APPEAL from the chancery court of Coahoma county HON. R. E. JACKSON Chancellor.

Action by Ruby Ham against Jefferson Standard Life Insurance Company and others. Judgment for plaintiff, and defendants appeal. Affirmed.

Affirmed.

Maynard, Fitzgerald & Venable, of Clarksdale, for appellant.

The court below felt compelled, no doubt, to enter the decision which it did due to the cases of Roger v. Rivers, 135 Miss. 756; Jefferson Standard Life Ins. Co. v Davis, 173 Miss. 854; Jefferson Standard Life Ins Co. v. Todd, 51 So. 723. Our thesis is, for purposes of this argument, that Rogers v. Rivers correctly decided the law as existing at that time; that the Todd and Davis cases followed Rogers v. Rivers and were correctly decided insofar as the points raised on appeal were concerned which were urged and argued before the court, but that since the decision of Rogers v. Rivers, section 1951, Code of 1930, was passed, which had the effect of validating the contracts which were involved in the suits at bar.

It is not and has never been against the statutes, or policy, of Mississippi to charge interest on interest as such. The only proposition decided by Rogers v. Rivers was that rests of less than were prohibited by the Mississippi interest statute.

Section 1951, Code of 1930, authorizing less than annual rests provided specifically inter alia for semi-annual rests such as in the cases at bar and, therefore, took away the bases for the decision in the Rogers v. Rivers, conceding its correctness at the time it was decided.

It has never been objectionable to the laws of Mississippi that interest be charged upon earned interest as such. Our state has never followed the rule of some jurisdictions that interest could not be charged upon interest.

Palm v. Fancher, 93 Miss. 785; Planters Bank v. Caston, 97 Miss. 309.

Some jurisdictions under statutes against usury have permitted the charging of interest upon interest whether the rests were annual, or for lesser periods.

State of Conn. v. Jackson, 1 John Ch. (N. Y.) 13, 7 A. D. 471; Kellog v. Hickock, 1 Wend. (N. Y.) 521; Hale v. Hale, 1 Cald. (Tenn.), 233, 78 A. D. 490; 66 C. J., sec. 141.

Section 1951, Code of 1930 of Mississippi, authorized less than annual rests, providing specifically inter alia for semi-annual rests and changing the law of the state as announced in Rogers v. Rivers.

This section provides that when any particular rate of interest per annum is specified in any contract, or evidence of indebtedness, it shall not be construed as any increase of said rate, merely that the interest at the specified rate is stipulated to be paid quarterly, semiannually, or at any other period less than a year, nor should the fact that the principal and interest is paid at a date earlier than that stipulated in the contract be taken as any increase of rate percentage although paid for the whole period stipulated.

The language in the statute declaring how courts should treat contracts held to be usurious under former rules indicates that the statute is intended to effect previous transactions and have retroactive effect.

Woodruff v. Scruggs, 27 Ark. 26, 11 A. R. 778; Danville v. Pace, 25 Graf. 66 Va. 1, 18 A. R. 197.

That the Legislature has the power to validate preexisting usurious contracts is beyond question.

Welsh v. Wadsworth, 30 Conn. 149, 79 A. D. 239; Savings Bank Assn. v. Allen, 28 Conn. 97.

It is held that taking away the right of a debtor to have payment of interest on usury contracts applied to principal is within the power of the Legislature.

Iowa Savings Assn. v. Heidt, 107 Iowa 297, 43 L. R. A. 689; Ewell v. Daggs, 108 U.S. 143, 27 L.Ed. 682.

The object of curative acts is to enable parties to carry into effect that which they have designed and attempted and which has failed in its expected legal consequences because of some statutory disability, or illegality in their action. It follows that the general rule that a statute should not be held to operate retroactively unless the legislative intent is clear, has no application to curative statutes which by their nature are intended to cure previous conditions.

Brandon v. Henry, 57 So. 967, 175 Ala. 454; Max Shirley v. McCrew, 140 Iowa 163, 132 A. S. R. 248.

This court has recognized the validity of such curative acts.

Reed v. Norman-Breaux Lbr. Co., 142 Miss. 756; Borrow v. City of McComb, 163 Miss. 337.

Section 1951, Code of Mississippi of 1930, being a validating statute, section 4 of the Code preserving defenses and causes of action from changes made by the court, is inapplicable, and has no effect upon this statute.

If we be correct that section 1951 was intended to be curative and validating, it must follow that section 4 of the Code could not have been intended to apply to such statute for otherwise the Legislature would be convicted of the folly of passing a statute validating previous usurious contracts, and at the same time a statute nullifying their action and defeating their purpose, both statutes being passed at the same time upon the adoption of the code.

The Mississippi Code of 1930, section 4, saves rights in cases of repeal but it does not appear to deal with curative statutes.

Ewell v. Daggs, 108 U.S. 143, 27 L.Ed. 682; Hurtz v. Woodman, 218 U.S. 205; U. S. v. Ricesinger, 128 U.S. 398.

It remains to call the court's attention to the cases of Jefferson Standard Life Ins. Co. v. Todd, 51 So. 723, and Jefferson Standard Life Ins. Co. v. Davis, 173 Miss. 854. In neither of these cases was the point raised or urged that section 1951 was validative and curative, and that section 4 was not applicable.

Shands, Elmore, Hallan & Causey, of Cleveland, for appellants.

The phrase stare decisis, et non quieta movere,--to stand by precedents, and not to disturb settled points-- expresses the policy of the courts, and the principle upon which rests the authority of judicial decisions as precedents in subsequent litigation. The rule stare decisis has for its object the salutary effect of uniformity, certainty, and stability in the law.

7 R. C. L. 1000.

If, however, a decision or series of decisions are dearly incorrect, either through a mistaken conception of the law, or through a misapplication of the law to the facts, and no injurious results would follow from their overthrow, and especially if they were injurious or unjust in their operation, it is the duty of the court to overrule such cases. Hasty or crude decisions should be examined without fear and reversed without reluctance.

7 R. C. L. 1008, 1009.

But where the decision goes to the merit of the controversy, where the whole right of the parties is dependent upon and is governed by it, in such case, if the court should, from any cause, have erred, it is not only proper, but it is an obligatory duty upon them, a duty imperiously demanded by litigants whose rights are before them for adjudication, to re-examine the opinion so pronounced, and, if found to be erroneous, to recede from it.

7 R. C. L. 1009, 1010.

The contracts were not usurious.

Rogers v. Rivers, 135 Miss. 756, 100 So. 385; Jefferson Standard Life Ins. Co. v. Davis, 173 Miss. 854, 163 So. 506.

The question in cases of this kind is not what the creditor made, or whether he got more money by making the interest payable at periods less than a year, but whether the rate allowed by the statute has been exceeded.

Briggs v. Iowa Savings & Loan Assn., 86 N.W. 320; Cutler v. Board, 56 Miss. 115; Merchants, etc., Bank v. Caston, 97 Miss. 309, 52 So. 633; Palm v. Fancher, 93 Miss. 785, 48 So. 818, 22 L. R. A. (N. S.) 295.

In other words the test is not what the creditor makes, but what the debtor, without option, is forced to pay.

Mowry v. Shumway, 44 Conn. 493; Jefferson Standard Life Ins. Co. v. Dattel, 83 F.2d 504, 81 L.Ed. 14; 66 C. J. 200, sec. 113; Hollingsworth v. Detroit, 3 McLean 472, 12 Fed. Cas. 352; Goodale v. Wallace, 103 N.W. 651; Brown v. Johnson, 43 Utah 1, 134 P. 590, Ann. Cas. 1916C, 321; Bank of Newport v. Cook, 46 Am. St. Rep. 171; Vela v. Shacklett, 12 S.W.2d 1007; Monnett v. Sturgis, 25 Ohio St. 384; Radford v. Southern Mut. Life Ins. Co., 12 Bush. 434; Morgan v. Mortgage Discount Co., 129 So. 589; Blanchard v. Dominion National Bank, 130 Va. 633, 108 S, E. 649; Rogers v. Rivers, 135 Miss. 756.

Not only does the decision in the Rogers case, in construing the interest statute, omit words which vitally qualify the words actually construed; but it writes into the statute words which the Legislature did not use, and draws from the statute a meaning which the Legislature did not express.

Even considering the statute as if the words "payable annually" were a part of it when enacted, yet the statute cannot mean that interest is to be paid only at annual rest, at the end of a year. If that were true, on a note maturing in from one to six months, or any number of months less than a year, the creditor would collect at the maturity of the note only the principal of his debt, and would have to wait for twelve whole months before he would be authorized to collect interest on his debt which had been earned at the maturity of the principal.

Cook v. Courtright, 40 Ohio St. 248, 48 Am. Rep. 681; Taylor v. Hiestand, 46 Ohio St. 345, 20 N.E. 345; Hibbs v. Union Cent. Life Ins. Co., 40 Ohio St. 543; Hickox v. Rounds, 51 Ohio St. 56; Cutler v. Madison County, 56 Miss. 115; Maddox v. Graham, 2 Met. 56; Mobile Sav. Bank v. Bd. of Sup'rs, Oktibbeha County, 24 F. 110; Wilson v. Neal, 23 F. 129; Hawley v. Howell, 14 N.W. 199; Borner v. City of Prescott, 136 N.W. 552.

We with the utmost respect, submit...