Purvis v. Woodward

• Decision Date: 20 May 1901
• Court: Mississippi Supreme Court
• Parties: WILLIAM PURVIS v. WILLIAM WOODWARD, ADMINISTRATOR

29 So. 917

78 Miss. 922

WILLIAM PURVIS v. WILLIAM WOODWARD, ADMINISTRATOR

Supreme Court of Mississippi

May 20, 1901

FROM the chancery court of Lafayette county. HON. JAMES C LONGSTREET, Chancellor.

Purvis the appellant, was the complainant in the court below Woodward, administrator, the appellee, was defendant there. The object of the suit was to enjoin a sale of lands under a deed of trust, the claim being that the debt was usurious and that the principal thereof had been paid. The debt was contracted November 21, 1877. The note given at that time was payable twelve months after its date. It included, as if it were principal, eighteen per centum interest for one year, and stipulated for ten per centum interest per annum on the whole amount after its maturity. The note was renewed in November, 1878, interest at fifteen per centum being carried into the principal for one year, and it was again so renewed in November, 1879, at which time the $ 140, mentioned in the opinion, was credited on the debt. After several small payments, there was another renewal on March 16, 1885, the note then given providing not only for interest, but including, as well, a ten per centum attorney's fee clause. Again, several small payments were made, and thereafter, on May 20, 1891, a fourth renewal note was executed, and, after same course of procedure, still another, the last, renewal note was made, November 10, 1897. The court below adjudged the debt usurious, but, applying the provisions of the code of 1871, § 2279, allowed the creditor ten per centum interest per annum on the money actually loaned, and decreed accordingly. Both parties appealed to the supreme court.

Decree on cross appeal affirmed, on direct appeal reversed and cause remanded.

Mayes & Harris, for appellant and cross appellee.

It is perfectly manifest that, starting out with a usury drawing principal, and each successive note calling for the full legal rate often per centum per annum, based on that usurious principal, the taint of usury is preserved in every note. The real question in the case is as to the effect of the enactment of the code of 1880, which changed the penalty from a forfeiture of the excess over ten per centum to a forfeiture of all interest whatever. We concede that the code of 1880 could not be and was not intended to be retroactive. It did not affect the note executed in 1879, which was outstanding and drawing usurious interest at the time when the code of 1880 was enacted. But after the code of 1880 became operative, when, in the year 1885, the holder of that usurious note, instead of collecting his debt and enforcing his contract as made, altered the same, extended the debt took a new note, which new note was for a new interest-drawing principal, observe, and a new interest-drawing principal larger than the old note, and included, moreover, a ten per centum attorney's clause, which had not appeared before; doing all these things, his liability as a usurer was fixed under the code of 1880, and from 1885 his note drew no interest whatever, and all payments subsequently made must be imputed as payments on principal. Bank v. Fraser, 63 Miss. 231; Warmack v. Boyd, 63 Miss. 488; Rozelle v. Dickerson, 63 Miss. 538.

The court will observe that this is not a question of a renewal of a loan originally untainted and innocent. The creditor in this case never saw the day when he had a debt that was countenanced by the law. The whole transaction originated in defiance of the law, and when, under such circumstances, he undertakes to renew his note and make what is essentially a new contract, such renewal and such new contract must be subject to the existing laws.

The rule that more than the testimony of one witness is needed to overturn a sworn answer does not apply in a case like this, where the answer is manifestly sworn to by a party who knows nothing of the transaction, and does not profess to have any personal knowledge of it. An answer sworn to, in order to cause the rule to apply, must be sworn to by one who swears as a witness. It is taken for his testimony. The rule originated in a period when the parties to transactions were not competent to testify. The reason why a bill sworn to by attorneys is not received as an offset to a sworn answer is because the attorney has no personal knowledge. Manifestly, the answer must be sworn to, in order that the rule shall apply, by one who has personal knowledge.

Under the statute of this state an injunction bill is not required to be sworn to. The chancellor is allowed to issue his fiat, if he is satisfied of the truth of the allegations of the bill, "by oath or other means." If he is satisfied, it is his affair what are the means by which that mental condition is reached. It is a matter addressed to his discretion.

Much was said about complainant's not doing equity by tendering what was really due. So far as the technical argument is concerned as to what constitutes a tender, the answer is that a technical tender is not needed. It is doubtful if our court would now hold that in a case like this any tender is necessary, certainly not a technical one. Such a tender is only necessary when it is offered as a reason why interest and court costs should not be allowed. It is not needed in a usury case to stop interest. Usurious loans never draw interest any way. The rule that the complainant must do equity is fulfilled if the complainant in good faith offers to pay what he admits to be due; and that such an offer was made in this case is virtually admitted in the answer itself.

Kimbrough & Kimbrough, for appellee and cross appellant.

The bill for the injunction is sworn to by attorney only, and that oath of the attorney is only on information and belief. Neither was the bill supported by any sworn or duly certified exhibit whatever. In a word, it was a naked bill, supported solely by the oath of an attorney, and on information and belief merely. We respectfully submit that this is not sufficient upon which to either grant or maintain an injunction.

The bill must be sworn to positively, and not on information and belief only. 2 High on Injunctions, secs. 1581, 1567, 1569; Campbell v. Morrison, 7 Paige, 160; Bank of Orleans v. Skinner, 9 Paige, 307; 2 Daniels Ch. Plead., 1669; Waller v. Shannon, 53 Miss. 501; Jacks v. Bridewell, 51 Miss. 882.

The allegations of the bill as to tender are insufficient to justify injunction had they been properly sustained, and the proof on the subject of tender shows that the bill should have been dismissed. Smith on Personal Property, 199; Lawson on Contracts, sec. 417; 2 Parsons on Contracts, sec. 648; 2 Bouvier Law Dic., 582; Parsons on Notes and Bills, 624; Sheredine v. Gaul, 2 Dallas, 140; United States v. Owens, 2 Pet., 527; Edgerton v. McRea, 5 How. (Miss.), 186; Emmons v. Myers, 7 How. (Miss.), 375; Guion v. Doherty, 43 Miss. 550; Savings Inst. v. Buchanan, 60 Miss. 496; Warmack v. Boyd, 63 Miss. 488; 1 Pom. Eq. Jur., secs. 391, 937; 1 Story Eq. Jur. (10th ed.), secs. 301, 64e; 2 Jones on Mortgages, sec. 1806; 1 High on Injunctions, sec. 447; Bish. Prin. Eq., 318; Deans v. Robinson, 64 Miss. 198; Mortgage Co. v. Jefferson, 69 Miss. 770.

The bill should have been dismissed and the injunction dissolved absolutely because of the long delay and circumstances of death that appear in the bill and proof. The usurious transaction occurred, if ever, in 1877 and 1878. No whisper of complaint was ever heard till Goolsby died some twenty years later, and all of the other parties had died who saw or had personal knowledge of a single transaction of the numerous ones recounted, except the complainant in the bill and his sons and sons-in-law. Lathes need not be pleaded. 13 Enc. Plead. & Prac., 183; Sullivan v. Portland, etc., R. R. Co., 94 U.S. 806.

Our contention on the facts is that both parties meant to abandon the usurious practice and eliminate it, and did so, and that there was no usury in the note of 1879 or any subsequent one. Usury laws are in derogation of the common law, and are to be strictly construed in every way in favor of the defendant. Norton on Bills and Notes, 226; Lawson on Contracts, 283.

The burden of proof in usury is on him who asserts it, and must be established, not only by the fullest proof, but as it is a penalty in the nature of a crime, it is to be established beyond a reasonable doubt. 7 Wait's Actions and Defenses, 637, and cases there cited.

The law of this state, in existence in 1879, is the law of the contract governing the case, and if usury is a penalty, only the penalty provided in 1879 can be inflicted. The law then in force fixed the penalty as a forfeiture only of the excess of ten per centum interest for usury. The contract as then made was a legal contract, entitling the defendant by law to ten per centum. Acts 1875, p. 214, reviving code of 1871, § 2279. And our new usury statute is code of 1880 and code of 1892. Both expressly state that they shall not be retroactive. All rights, remedies, etc., preserved. Secs. 4 and 5 of each of them.

There is yet another principle of law that would sustain the decree for ten per centum in this case. It is this: If the renewal notes since 1880 cannot be enforced for ten per centum, the old one given in 1879, on which they are based, will he revived, that was legally enforceable for ten per centum. When recovery cannot be had on a renewal note because it is usurious, recovery may be, nevertheless, on the former note, not usurious, for which it was given. 7 Wait. A. & D., 614. And the supreme court of the United States has held "if a security founded on a prior one is tainted, the prior one will be revived." Bernehisel v. Firman, 22 Wall., 170; Newell v. Nixon, 18 Coop., 305.

Argued orally by Edward Mayes...