Sanford v. Lundquist
| Decision Date | 22 October 1908 |
| Docket Number | 14,921 |
| Citation | 118 N.W. 129,80 Neb. 414 |
| Parties | CHARLES W. SANFORD ET AL., EXECUTORS, APPELLEES, v. FRANK A. LUNDQUIST ET AL., APPELLANTS |
| Court | Nebraska Supreme Court |
Affirmed.
REESE, J., not sitting.
Our former opinion, ante, p. 408, contains a very full and accurate statement of the issues involved in this case. Defendants base their claim for reversal on the following grounds:
It is insisted by the defendants that the evidence does not show that, when the interest payments became due from time to time, the parties agreed that the past due installments of interest should be treated as principal and thereafter draw interest at the same rate as the principal note. The trial court found against defendants on this proposition, and we are unable to say that such finding is not supported by the evidence. On the trial, defendants called Mr. Charles W. Sanford, one of the plaintiffs, as their witness. Mr. Sanford testified that he was the son of Whitfield Sanford, the payee and mortgagee named in the notes and mortgages in controversy; that he attended to substantially all of the business of his father, Whitfield Sanford; that, when defendant Lundquist was notified from time to time of the maturity of the interest coupons he ; that the addition of the interest, and compounding it, was at defendant's request, "rather than to pay the interest that was due"; that no interest was ever charged on anything, or demanded on any part of the transaction in controversy, which was not due at the time it was charged, "due and past due"; that no agreement was ever made between the parties that defendants should pay any more than 10 per cent. on the amount due at the end of each year, and that no more than that sum was ever charged. Mr. Lundquist in some portions of his testimony denied these statements made by Mr. Sanford, but in other portions of his testimony corroborated him. He testified: Regardless of the fact that defendants, by placing Mr. Sanford upon the stand as their witness, vouched for his veracity, and are bound by his testimony, he is corroborated by other facts and circumstances in the case. An attempt is made to show that Mr. Lundquist is a native of Sweden, and not well versed in the English language; but from his own testimony we gather that he moved to Saunders county in 1875, and has lived there ever since; that his son Frank, a man 29 years of age at the time of the trial in the district court, has always lived at home; that he is educated in English, in fact "has been all through the county school"; that defendant did not keep anything from him or any one in the family; that he talked about this business in the family. " He testified further that, when some of the mortgages in controversy were drawn, Mr. Sanford prepared them, and he took them home for the purpose of having his wife sign them, and the next day he and his wife went to Valparaiso and executed the mortgage, and that the son Frank, above referred to, went with them. It further appears from an examination of exhibit 20 that on April 2, 1903, Mr. Lundquist wrote a letter to Mr. Whitfield Sanford, in which he uses this language: "According to Charles' statement the mortgage is $ 9,552, but you should at least throw off the $ 552 for the big interest I have been paying, for I know of no one else who has been charging 10 per cent. on farm mortgages." This letter shows that at that time the old gentlemen knew the amount which plaintiffs were demanding, yet no claim is made that he had been in any manner fraudulently or deceitfully dealt with, or that the amount claimed was not correct; nor is any claim made that he had ever paid any usury, or that he was entitled to deductions of any kind. He simply asked Mr. Sanford to "throw off" the $ 552, in consideration of the fact that he had been paying 10 per cent. interest. This testimony and these facts and circumstances, together with the fact that he deliberately and without any complaint or claim of injustice executed the notes and mortgages in controversy, so strongly corroborate the testimony of Mr. Sanford that we cannot say that the district court erred in finding that, "when the annual interest payment became due upon each of the items making up the first and second causes of action, the defendant Frank A. Lundquist and Charles W. Sanford, as agent for Whitfield Sanford, entered into an agreement whereby the said Sanford should receive 10 per cent. interest annually in advance upon each of said interest payments then due, and at the request of said defendant such overdue interest payments were carried by Sanford for him as separate loans, and such compound interest was charged by the said Sanford annually by agreement with the said Frank A. Lundquist, and was included in the renewals set forth in the first and second causes of action; that the said Whitfield Sanford, in fact, carried said interest loans under said agreement until they were merged in the notes and mortgages set forth in plaintiff's first and second causes of action. " We must therefore hold that, as to the questions of fact involved, the findings of the district court are sustained by the evidence.
Under the facts as thus found there is, we concede, some conflict in the authorities, but we think the overwhelming weight of authority sustains the conclusion of law reached by the trial court that the notes and mortgages in controversy were valid contracts which plaintiffs were entitled to have enforced. In Connecticut v. Jackson, 1 Johns. Ch. (N.Y.) 13, and Van Benschooten v. Lawson, 6 Johns. Ch. (N.Y.) 313, that eminent jurist, Chancellor Kent, announced a contrary doctrine, but we think an examination of later decisions in all the states clearly indicates that, had it not been for the eminence of Chancellor Kent, his holding in those cases would have been entirely without subsequent support. Notwithstanding his eminence, the doctrine announced by him has been repudiated in substantially every court of last resort in the land. The application of the principle announced by Mr. Chancellor Kent sustains our former opinion in this case; but a careful reconsideration of the question convinces us that the rule laid down by the learned chancellor goes too far, and that the better rule is the one now generally applied that interest upon interest cannot be stipulated for at the time of the loan or contract, but if, after the interest is due, an agreement is made that it shall carry interest, such an agreement is valid and should be enforced.
It is insisted that Mathews v. Toogood, 23 Neb. 536, 37 N.W. 265, sustains defendants' contention; but we do not so understand that case. All that that case decides is that an agreement in advance to pay interest upon interest coupons after they are due, where the principal note draws the maximum interest, will not be enforced. That is not this case. The rule announced in that case is in harmony with the holdings of many eminent courts, and is in entire harmony with our holding in this case. That an agreement to pay compound interest does not render the contract usurious is well settled in this as well as in other courts. Weyrich v. Hobelman, 14 Neb. 432, 16 N.W. 436; Rose v Munford, 36 Neb. 148, 54 N.W. 129; Steen v. Stretch, 50 Neb. 572, 70 N.W. 48; Otis v. Lindsey, 10 Me. 315; Hale v. Hale, 1 Cold. (Tenn.) 233. In the last case, the court say: In Fobes & Adams v. Cantfield, 3 Ohio 17, in a case similar to the one at bar, the court say: In Telford v. Garrels, 132 Ill. 550, 24 N.E. 573, it is said: ...
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