Simpson v. Charters

• Decision Date: 13 September 1939
• Docket Number: 12867.
• Citation: 5 S.E.2d 27,188 Ga. 842
• Parties: SIMPSON et al. v. CHARTERS et al.
• Court: Georgia Supreme Court

5 S.E.2d 27

188 Ga. 842

SIMPSON et al. v. CHARTERS et al.

No. 12867.

Supreme Court of Georgia

September 13, 1939

Rehearing Denied Oct. 13, 1939.

Syllabus by the Court.

1. Where, in order to obtain a loan, borrowers are required to assume and include in the principal of the notes given therefor the amount of certain worthless tax fi. fas. which the lender holds, and which neither of the borrowers has ever been legally or morally obligated to pay, the notes are usurious.

2. Where the amount of a valid execution in favor of the lender against one of the borrowers is included in the principal of notes given for a loan to several persons, the notes are not rendered usurious by reason of the inclusion of such execution, in the absence of evidence that such is a mere scheme to avoid the usury laws.

3. Where the judgment is reversed on the general grounds of motion for new trial, the special grounds will not be considered where it appears that the questions presented thereby are not likely to arise upon another trial.

Mrs Olive Capps Charters and others, as executors of the estate of T. A. Capps, deceased, brought suit on six promissory notes against E. P. Simpson, as executor of the estate of Sarah R. Simpson, E. P. Simpson individually, Mrs. Minnie Rhema Childers, Mrs. Sarah Caroline Simpson Gossett, and Edward Palmer Simpson, Jr., and for 'taxes in a sum in excess of $500, as will appear by proper tax executions which will be to the court shown.' It was alleged that the notes, dated October 9, 1933, were given to T. A. Capps by the defendants for the purchase-price of all the property franchises, and other assets which had formerly belonged to the Toccoa Falls Light & Power Company, and that Capps had agreed to make the defendants a deed to the property upon the payment of the purchase-price as evidenced by the notes. The prayers were for judgment on the notes, and for a special lien on the property therein described. The defendants pleaded that the notes contained usury, and thereby all interest was forfeited and collectible; it being alleged that the notes were given not for purchase-money but for a loan of money secured by the property described in the petition; and that the amount borrowed was $11,500, whereas the principal of the notes sued upon was $14,207.33. On a trial of the case the jury found in favor of the plainiffs the full amount sued for. The defendants moved for a new trial, which the trial court refused, and they excepted. This court reversed that judgment and granted a new trial. Simpson v. Charters, 185 Ga. 592, 196 S.E. 31. Before the next trial the defendants amended their plea by admitting a prima facie case in favor of the plaintiffs on the notes and tax executions, and assuming the burden of proof with reference to the plea of usury. B. F. Davis, as administrator of the estate of E. P. Simpson, deceased, and as administrator with the will annexed of Mrs. Sarah R Simpson, was made a party defendant. Counsel for both sides agree that the evidence on the second trial was materially different from that introduced on the first trial.

The defendants introduced in evidence the six notes sued on, dated October 9, 1933; also three notes of the same date and between the same parties, which were marked 'paid,' the total amount of the latter three notes being $1,515.42. Also, a written instrument from Miss Caroline Davenport to T. A. Capps, dated October 7, 1933, which recited that for a consideration of $11,500 Miss Davenport assigned to Capps her bid made to B. F. Davis as receiver of the Toccoa Falls Light & Power Company, 'and all rights, title, property, and interest of every kind that I may have acquired by virtue of bidding $22,000 for said property of the Toccoa Falls Light & Power Company,' and directed the receiver to make Capps a deed to the property; a deed from B. F. Davis, as receiver, to T. A. Capps, dated October 9, 1933, conveying all of the property of the Toccoa Falls Light & Power Company, in pursuance of the assignment of the bid above referred to; a quitclaim deed from Miss Caroline Davenport, E. P. Simpson, executor, E. P. Simpson, Minnie Rhema Simpson Childers, Sarah Caroline Simpson Gossett, and Edward Palmer Simpson, Jr., to T. A. Capps, dated October 9, 1933, conveying the same property described in the receiver's deed; and a bond for title, dated October 9, 1933, from T. A. Capps to E. P. Simpson, as executor of the estate of Sarah R. Simpson, deceased, Minnie Rhema Simpson Childers, Sarah Caroline Simpson Gossett, and Edward Palmer Simpson, Jr., obligating T. A. Capps to convey to the obligees therein the property described in the receiver's deed to Capps, on payment of nine notes described therein, being the six notes sued on and the three notes introduced in evidence and marked 'paid.' Also, (1) an execution in favor of T. A. Capps against E. P. Simpson, from the superior court of Stephens County, dated November 6, 1930, for $1,000 principal, $385.77 interest to date of judgment, and $13.35 costs, duly entered on the general execution docket of the county, which execution bore an entry of a nulla bona, dated December 9, 1930; (2) a tax fi. fa. for 1929 state and county taxes in the sum of $500 against Capps Cotton Manufacturing Company, transferred to T. A. Capps on January 17, 1930, and duly entered on the general execution docket; and (3) a tax fi. fa. in favor of the City of Toccoa against the Capps Cotton Manufacturing Company for 1929 city taxes in the sum of $500, duly transferred to T. A. Capps on January 23, 1930, and entered on the general execution docket on the same date.

The defendants introduced testimony which tended to prove that Miss Caroline Davenport's assignment of the bid for the Toccoa Falls Light & Power Company property to T. A. Capps for a recited consideration of $11,500, the receiver's deed to Capps made in pursuance of this assignment, the quitclaim deed to Capps, the notes sued on, and the bond for title from Capps to the defendants in this suit were all a part of a transaction whereby Capps loaned the defendants $11,500 to enable them to comply with the bid of $22,000 which Miss Davenport made for them at the receiver's sale; and that the principal of the notes $14,207.33, represented this loan of $11,500, the execution which Capps held against E. P. Simpson, dated November 6, 1930, and the two 1929 tax fi. fas. against Capps Cotton Manufacturing Company, which had been transferred to Capps. Clay Davis, one of counsel for plaintiffs but called as a witness for defendants, testified: 'I was present when the notes and bond for title were executed in this matter. I wrote them, and my father dictated them. Prior to the times of the writing of the notes and bond for title, Mr. Simpson came to our office and requested my father to go and see Mr. Capps and see if he would furnish the money to take care of the indebtedness against the Toccoa Falls Light and Power Company in order to keep it from being sold, and my father went to see Mr. Capps. * * * Mr. Capps was in our office after that, and he was discussing the agreement, and he said that if he would put in the judgment and these tax fi. fas., he would be willing to furnish the money. * * * He said he would furnish the money if he [Mr. Simpson] would put in that judgment and the tax execution and add it in with the principal. I was present when the matter was figured up for the principal and interest to maturity on the notes in suit. My father made the calculations in my office. The amounts that were used to make up the principal amount of the notes that were written by me on the 9th of October, 1933, were $11,500 and that judgment and those tax fi. fas. I just identified. * * * Mr. Simpson came to our office and talked to me and my father, and wanted my father, John H. Davis, to go to see Mr. Capps, his client, about letting him have some money, and he told us he owed Mr. Capps for the taxes on some property for 1929, and said he owed a judgment of about $1600 to Mr. Capps and wanted to pay them. He also told my father that if Mr. Capps would advance this money, that he would put these in and pay them. Mr. Capps didn't want to go into this transaction at all. Mr. Simpson was anxious to have him do it, and came to our office time and again urging my father to get Mr. Capps to do this, and it looked like Mr. Capps wasn't going to do it at all, and finally he did consent to do it in order to keep the property from being sold, and as a part of the consideration of this note they would pay this judgment of $1600 and the tax fi. fas. amounting to over $1,000. The two tax fi. fas. and the other fi. fa. were turned over to B. F. Davis for Mr. Simpson at the time of this transaction when the notes were prepared. * * * Mr. Simpson was the first person I heard mention putting the tax fi. fas. and the judgment in the consideration of these notes. He made the proposition to my father before he went out there and talked to Mr. Capps. I heard Mr. Simpson say, long after this transaction, that he owed this obligation, and that the money ought to be paid back. * * * He [Mr. Capps] said that if Mr. Simpson would add these tax fi. fas. and that judgment to the principal, he would furnish the money, and that he wouldn't be interested in furnishing the money unless Simpson made that agreement to do that.'

From the brief of evidence on the first trial, the following portion of the testimony of E. P. Simpson, since deceased was read to the jury: 'I have lived in Toccoa, Georgia, about sixty years, and have known Mr. T. A. Capps practically all of my life. I have been operating a small electric plant for thirty-seven years without interruption, except for a year or more when the electric-light plant was in the hands of a...