Norman v. Peper

• Decision Date: 09 July 1885
• Citation: 24 F. 403
• Parties: NORMAN and others v. PEPER.
• Court: U.S. District Court — Eastern District of Arkansas

24 F. 403

NORMAN and others v. PEPER.

United States Circuit Court, E.D. Arkansas.

July 9, 1885

Smoote & McRae and E. C. Mitchell, for plaintiffs.

Montgomery & Hamby and B. B. Battle, for defendant.

CALDWELL J.

This is a bill to enjoin the defendant from foreclosing a mortgage under a power of sale contained therein, executed by the plaintiffs to secure an indebtedness from them to the defendant, amounting, as the defendant alleges, on the tenth of March, 1883, to the sum of $9,972.88. The grounds upon which the injunction is sought are (1) that the notes secured by the mortgage and the mortgage itself are usurious and void; (2) that, as cotton factor for the plaintiffs, the defendant rendered them accounts of sales which were false and fraudulent in respect to the weight, grade, and price of the plaintiffs' cotton, whereby they were defrauded out of large sums of money; (3) that the defendant failed to account for cotton consigned to him for sale; (4) that the defendant sold plaintiffs damaged, spoiled, and inferior goods, whereby their business was greatly damaged, and that he charged them for such goods the full price for sound goods of like character; (5) that the defendant charged the plaintiff with excessive and illegal commissions and interest.

The bill charges various other frauds on the defendant, which need not be particularly mentioned. Assuming, but not deciding, that the notes and mortgage are usurious, the plaintiffs cannot have the relief they seek, viz., a perpetual injunction against its foreclosure by notice and sale, without first paying or tendering the amount of the debt and legal interest. Pickett v. Merchants' Nat Bank, 32 Ark. 346; Spain v. Hamilton's Adm'r, 1 Wall. 604; Anthony v. Lawson, 34 Ark. 628. But they are entitled to have the accounts purged of all illegal interest, commissions, and charges. On the twentieth of April, 1882, the plaintiff executed the mortgage in question to secure an existing indebtedness of $9,581.40 evidenced by three promissory notes; and the mortgage contains this provision:

'And whereas, said Norman, Burns & Co. have also covenanted and agreed with said Charles G. Peper to consign to him during the coming cotton season-- that is to say, between the date of this conveyance and the same date of the year 1883-- at least seven hundred bales of cotton, to be sold by him, said Peper, for account of the said Norman, Burns & Co., from time to time, at the discretion of said Peper, and as he may deem it prudent and proper to make such sales; and whereas, the said Norman, Burns & Co. have also agreed with said Peper, for value received by them, that should they fail to ship and consign to him, during said season, the number of bales of cotton aforesaid, they will pay to him, said Peper, the sum of one dollar and twenty-five cents for every bale of cotton within said number of seven hundred bales which they may fail to ship and consign to him as aforesaid, and which sum of one dollar and twenty-five cents, it is agreed, shall be compensation to him, said Peper, for the commissions which will be lost to him by his not receiving such bales as may be then deficient in the consignment so to be made by said Norman, Burns & Co.'

The plaintiffs did not ship the 700 bales of cotton, and the defendant charged them up with commissions at the rate of $1.25 per bale, amounting to $875, and now claims the same as a part of the mortgage indebtedness due him. About a year previous to the execution of the mortgage of twentieth of April, 1882, the plaintiffs made an agreement like that contained in the mortgage of 1882, agreeing to ship a given number of bales of cotton to the defendant, and agreeing to pay $1.25 commissions per bale on the difference between the number of bales they should actually ship and the number they had agreed to ship. The commissions charged up under the last-named agreement on cotton not shipped or sold, and carried into the mortgage debt, amounted to $523.75. These charges for commissions for selling cotton which was not sold are clearly illegal. The rule established by the case of Cockle v. Flack, 93 U.S. 346, does not apply. In the case at bar there was no agreement for a joint...