Lindsay v. U.S. Savings & Loan Co.

• Decision Date: 07 June 1900
• Citation: 127 Ala. 366,28 So. 717
• Parties: LINDSAY v. UNITED STATES SAVINGS & LOAN CO.
• Court: Alabama Supreme Court

28 So. 717

127 Ala. 366

LINDSAY v. UNITED STATES SAVINGS & LOAN CO.

Supreme Court of Alabama

June 7, 1900

Haralson J., dissenting.

Appeal from chancery court, Jefferson county; John C. Carmichael Chancellor.

Suit by Henrietta A. Lindsay against the United States Savings & Loan Company for relief from a building and loan mortgage. From the decree rendered the plaintiff appeals. Affirmed.

The bill averred that the complainant had negotiated and consummated a loan with the defendant, which was a building and loan association, and to secure this loan the complainant, together with her husband; executed to said defendant a mortgage upon certain specifically described real estate; that this loan was made in the manner that was usual to the making of loans by building and loan associations, and in accordance with the by-laws and regulations of said defendant. There were attached to the bill the note and mortgage given by the complainant to the defendant, and also a copy of the by-laws, showing the rules and regulations of said company. It was then averred in the bill that the agent of the defendant had represented to the complainant that the money was loaned to the complainant at 6 per cent. interest and, believing this representation, she contracted to pay only 6 per cent. interest when she borrowed the money and executed her note and mortgage; that such representation was false, and, instead of requiring the complainant to pay 6 per cent. interest, she was required to pay interest at the rate of from 12 to 15 per cent. per annum, which was illegal and usurious; that for nearly three years she paid the monthly installments required by her contract, before she discovered that the interest exacted by the defendant was usurious. The transaction and the averments of the bill as originally filed are set forth at length in the record of the case as it appeared on the former appeal (120 Ala. 156, 24 south. 171 42 L. R. A. 783) and it is unnecessary to set it out at length here. The eighth paragraph of the bill was as follows: "(8) That your oratrix is able and willing, and hereby offers, to pay to said defendant corporation whatever this court adjudges is fairly and justly due to it from your oratrix for and on account of said loan, and the interest thereon that it may be adjudged to be entitled to, and hereby offers to do equity in the premises as may appear to, and be so adjudged by, this honorable court." It was also averred in said bill that by reason of the complainant ceasing to pay the monthly installments after the discovery of the usurious interest exacted of her, and after she had offered to pay the amount due remaining upon the said mortgage indebtedness, with 8 per cent. interest, the defendant had declared that there had been default in payment of the mortgage debt as required by the contract, and was proceeding to foreclose said mortgage. The prayer of the bill was for an accounting between the complainant and the defendant corporation for the purpose of ascertaining the money justly due from the complainant after allowing the legal rate of interest, and that the complainant be allowed to redeem the real estate she had mortgaged to the defendant, by the payment of the amount ascertained to be due thereon, and, further, that the defendant corporation and its attorneys be enjoined from foreclosing said mortgage. From a decree denying the relief prayed for by the complainant in her bill as originally filed, an appeal was taken to the supreme court. On this appeal the decree of the lower court was reversed, and the cause was remanded. After the remandment of the cause the complainant amended her original bill by adding to the eighth paragraph the following words: "That complainant is advised by counsel that since the filing of this bill the chancery rule requiring complainant in a bill seeking relief from a usurious contract to offer to pay eight per cent. interest has been abrogated and annulled by the adoption of the Code of 1896 of Alabama, and that she, in equity, is only required to pay back all the principal of the debt she created by borrowing said sum of the defendant corporation, and that she is entitled to have all the payments she has made on said loan *** deducted from the principal, and then pay any residue, *** which she hereby offers to pay." Upon the final submission of the cause on the pleadings and proof, the chancellor decreed that the complainant was entitled to the relief prayed for, and could redeem the property upon the payment of the amount ascertained to be due upon the mortgage debt, together with the legal interest thereon. From this decree the complainant appeals, and assigns the rendition thereof as error.

Sam'l Will John, for appellant.

White & Howze, for appellee.

SHARPE J.

Prior to the adoption of the present Code the statutes relating to interest and usury declared with reference to usurious contracts that they "cannot be enforced except as to the principal." Accordingly, in suits for the enforcement of such contracts, wherever the defense of usury has been set up and sustained, courts of equity, as well as of law, have constantly refused assistance to the suitor, except upon the assumption that the principal, exclusive of all interest constituted the entire debt. The provision, however, was never construed as interfering with the equitable principle which requires that one who seeks equity must do equity, or as interdicting its application to a borrower who, in the attitude of a complainant, seeks relief from usury. In the numerous cases involving usurious mortgages, extending from Pearson v. Bailey, 23 Ala. 537, to Turner v. Bank (at present term) 28 So. 469, our courts have followed the generally prevailing and well-settled rule that such remedy will be afforded to a complainant only upon the condition of his paying the amount equitably due, which is considered to be the sum loaned, with legal interest. The authority of a court of equity to impose those terms is not conferred by statute, nor is it exercise for the purpose of enforcing any contractual right. "Such authority belongs to the court by virtue of its general equity jurisdiction, and, unless a statute exists providing that the party may have relief without the interposition of those terms, the rule will be invariably enforced." Tyler, Usury, 437. The power of the legislature to prohibit courts of equity from applying the maxim in cases involving usury is undoubted, and the question before us is whether the change in the wording of the statute referred to, wrought by the adoption of the present Code, has effected such prohibition. The provision now is that usurious contracts "cannot be enforced either at law or in equity except as to the principal." Code, § 2630. It is apparent that the insertion of the words "either at law or in equity" does not expressly affect the scope of the statute as it stood before the change. It is insisted for appellant that some change in effect, as well as in words, was intended, and that, unless the altered provision be construed as devesting courts of equity of the right to require such condition of borrowers, nothing has been accomplished by the alteration, and the doing of a useless thing must be imputed to the legislature. The assumed consequence does not follow. Statutes are often found in separate enactments, and in Code revisions as well, which are merely declaratory of principles already recognized as existing at common law or in equity, or which have grown out of the construction placed by the courts upon some previous statute; and it frequently occurs in the revision of statutes that changes in their phraseology are made with no other intention than to render their meaning more definite and certain. The case here under consideration involves a revision, and not the construction of a subsequent independent enactment upon the subject of a former one. In Landford v. Dunklin, 71 Ala., on page 609, it is said: "No rule of statutory construction rests upon better reasoning than that, in the revision of statutes, alteration of the phraseology-the omission or addition of words-will not necessarily change the operation or construction of former statutes. The language of the statute as revised, or the legislative intent to change the former statute, must be clear, before it can be pronounced that there is a change of such statute in construction and operation." In Bradley v. State, 69 Ala., on page 322, the principle is thus stated: "In the amendment or revision or in the re-enactment of statutes, changes...