Mathews v. Paine

• Citation: 14 S.W. 463
• Parties: MATHEWS v. PAINE.<SMALL><SUP>1</SUP></SMALL>
• Decision Date: 01 November 1885
• Court: Supreme Court of Arkansas

14 S.W. 463

MATHEWS v. PAINE.¹

Supreme Court of Arkansas.

November Term, 1885.

Appeal from circuit court, Mississippi county; W. H. CATE, Judge.

Greer & Adams, for appellant.

SMITH, J.

The administratrix of the estate of J. F. Davies, deceased, brought an action against Mathews on two promissory notes, made at Osceola, in this state, July 12, 1877, for $627.62 and $500, respectively, and due and payable to her intestate on the 1st day of January in the years 1878 and 1879, with interest from date, at 10 per cent. per annum. The defendant admitted the execution of the notes, but alleged that they were given for an alleged balance due Davies on a certain other promissory note, dated Memphis, Tenn., April 17, 1873, for the sum of $3,402, made by J. H. Edrington & Co., of which he was a member, with 12 per cent. interest from date, and payable on the 15th day of November, 1873; that said note was illegal by the laws of the state of Tennessee, where it was made; that the notes sued on and given for said alleged balance were executed in Arkansas after the adoption of the constitution of 1874; that they included interest at a greater rate than 10 per cent. per annum, and, by the laws of Arkansas, were absolutely void for usury; that he had more than paid said original note with 6 per cent. interest thereon, and denied that he was indebted to Davies in any sum whatever.

It was agreed the cause might be tried before the court without a jury. The defendant introduced the original note made by J. H. Edrington & Co., with the indorsements thereon, showing partial payments made at various times, and amounting, in the aggregate, to $3,025.42. Blackwood, a witness for him, testified, that he recognized said original note; that some of the credits thereon were in his handwriting; that he made the calculation of interest thereon at the rate of 12 per cent. per annum; that the other credits on the back of said note, except two, are in the handwriting of J. F. Davies; that the last two credits are in the handwriting of J. W. Clapp, Jr., who was the book-keeper of J. H. Edrington & Co.; that, at the time the note for $3,402 was made, he was in the employment of J. H. Edrington & Co., and he knew John Mathews was a member of said firm; and that the words "Paid by new notes, July 12, 1877," indorsed across the face of said original note, are in the handwriting of John Mathews. The defendant then introduced the statutes of Tennessee, which it was agreed was the law at the date of the making of said original note. The substance of this legislation is that 6 per cent. is established as the legal rate of interest, when no other rate is specified, but parties may contract in writing for the payment of as much as 10 per cent. per annum. The taking or reservation of more than 10 per cent. is declared to be usury; but the effect is not to avoid the contract in toto, but only to forfeit the interest in excess of 6 per cent., and to entitle the debtor, if he has paid usurious interest, to recover the same by suit, and to subject the usurer to a criminal prosecution. The court found, as a fact, that said two notes sued on...