Johnson v. Hull

• Decision Date: 22 April 1893
• Citation: 22 S.W. 176
• Parties: JOHNSON v. HULL.
• Court: Arkansas Supreme Court

22 S.W. 176

JOHNSON v. HULL.

Supreme Court of Arkansas.

April 22, 1893.

Appeal from circuit court, Carroll county; James M. Pittman, Judge.

Suit by W. C. Hull against James Johnson. Plaintiff had decree, and defendant appeals. Reversed.

Atkinson & England, for appellant. A. Davis, for appellee.

MANSFIELD, J.

The original agreement of the parties fixed no rate of interest except by stipulating that the highest legal rate should be paid for the use of the money. Under that agreement the money was advanced for the defendant, and the lots were conveyed to him as a security for its repayment. Thus far the transaction was without any suspicion of usury, and is unquestionable in its legal consequences. It imposed upon the defendant an obligation to restore the money borrowed, with legal interest, and invested the plaintiff with the title to the lots as security for his debt. If nothing further had been done by either of the parties, it is clear that the defendant could not have resisted a recovery of the debt, or have compelled the plaintiff to reconvey the lots until he had satisfied it. The loan and the security being complete and valid, neither of them was affected by the usurious rate of interest inserted in the note and mortgage subsequently executed for the same debt, unless the unlawful interest was contemplated by the original agreement; and there is nothing to show that it was. Humphrey v. McCauley, 55 Ark. 143, 17 S. W. Rep. 713; Tillman v. Thatcher, 56 Ark. 315, 19 S. W. Rep. 968; Marks v. McGehee, 35 Ark. 217; Dotterer v. Freeman, (Ga.) 14 S. E. Rep. 863. In the cases of Brakefield v. Halpern, 53 Ark. 345, 13 S. W. Rep. 1102, and Lowe v. Loomis, 53 Ark. 454, 14 S. W. Rep. 674, cited by appellant, the transactions between the parties were void for the usury which attached to them from the beginning, the sums borrowed having been obtained from the lenders through express agreements to pay interest at an unlawful rate. The facts in the case of Trible v. Nichols, 53 Ark. 271, 13 S. W. Rep. 796, also cited by the appellant, were very different from the facts presented here. There the ruling is that an equitable right of subrogation cannot arise where it can only be established by resorting to an agreement void by reason of usury. Here the plaintiff is under no necessity of relying upon either the note or mortgage in which the excessive interest is stipulated for, and his claim is founded upon a contract clearly separable from both of those...