Spann v. Adm'rs

• Decision Date: 01 January 1857
• Parties: ELEANOR SPANN v. CHRISTOPHER H. STERNS' ADM'RS.
• Court: Texas Supreme Court

18 Tex. 556

ELEANOR SPANN

v.CHRISTOPHER H. STERNS' ADM'RS.

Supreme Court of Texas.

1857.

An offer to do equity does not consist in, or require, the actual payment or tender of payment of what is admitted to be due, nor that it should be brought into court.

The jurisdiction of our courts is without distinction between law and equity. Our statute regulating interest declares that where more than twelve per cent. per annum is contracted for, the contract shall be void for the whole rate of interest only. In order to entitle the plaintiff to relief against the execution of a deed of trust for the full amount, on the ground that usurious interest is included therein, it is not necessary to offer to pay the principal sum and legal interest thereon; nor will the plaintiff be required by the decree, if the allegation of usury be proved, to pay more than the principal sum.

It would seem, however, that the court should interpose by injunction no further than necessary to afford the relief sought; and the correct practice would seem to be, to grant the injunction at first only for the interest, leaving the parties to the remedy they have provided for themselves, as to the principal admitted to be due. 21 Tex. 441.

See this case for a discussion of the general effect of the grant of jurisdiction to our courts, without distinction between law and equity, and of the abolition of forms of action.

Appeal from Galveston. Tried below before the Hon. James H. Bell.

Suit by appellant, Eleanor Spann, against appellees, Elam Stockbridge and Melinda Stockbridge, administrators of Christopher H. Sterns. The original petition was filed November 13th, 1855, and alleged several loans of money by Sterns to plaintiff, to secure which plaintiff gave deeds of trust on property with power to sell; alleged payments in money, and transactions in other property entitling plaintiff to credits; alleged special confidence in Sterns and afterwards in defendants; that plaintiff had kept no account, and that the defendants refused to account; alleged that defendants demanded interest at twelve per cent. per annum, whereas they were only entitled to eight; and that defendants were proceeding to execute the power of sale in the last deed of trust. It did not allege usury. It concluded with the following prayer: The premises considered, petitioner prays that your honor will grant a writ of injunction enjoining and restraining the said (administrators and trustees) and all other persons acting under them, or by their authority, from making said sales; that they may be cited to appear at the next term of the district court of Galveston county and answer this petition; that an account may be taken of all the matters and business transactions between petitioner and said estate; that the balance due by petitioner may be judiciously ascertained, and which amount she is ready and willing to pay; and that if her said property or any portion must be sold, that no more than may be sufficient to satisfy and pay such balance may be sold, and that petitioners may have all such other and further relief in the premises as justice may require and the law ordain.

On the 3d of June, 1856, defendants filed a general demurrer to the petition, and for special cause assigned:

1st. The petition on its face shows that there is a large amount due from the plaintiff on the obligations therein mentioned as having been given to Christopher H. Sterns.

2d. The petitioner asks for the interposition of the court, yet she does not do, or offer to do equity by paying, or tendering the payment of what, by her own showing, she honestly owes.

June 5th, 1856, plaintiff filed an amendment to her petition, in which she recapitulated the allegations of the original, and in addition thereto charged that usurious interest at the rate of twenty-five per cent. per annum had been exacted of her, and included in each of the said contracts of loan, by said Sterns; alleged that the said Sterns, by his illegal and usurious reservation and taking of interest over and above the maximum rate allowed by law, has forfeited and lost all claim to any interest whatever on the forbearance and giving day of payment on the said sums so loaned by him to the said plaintiff, as aforesaid; and the said plaintiff claims and insists upon the right to recoup the sums so paid for interest, etc.; prayer as follows: Wherefore the said plaintiff prays, in addition to the prayer made in and by her original petition, that the interest included in the principal sums mentioned and specified in the said promissory notes may be deducted therefrom, and that all sums of money now due, as well as that paid for interest in the settlement and discharge of the note bearing date the 26th day of February, A. D. 1852, for twelve hundred and twenty-six dollars and seventy cents, may be recouped and applied to the satisfaction and discharge of the principal sums actually lent and due upon the notes and deed of trust which the said defendants are now seeking to enforce; and for such other and further relief, etc.

June 17th. 1856, case called, and demurrer to the petition sustained, etc.

L. A. Thompson, for appellant. I. The first point we make is, that there is no rule of law or equity which requires a borrower who seeks the aid of a court as plaintiff, against an usurious contract, “to pay or tender the payment of what is admitted to be due.” The rule as it is stated in Fonblanque and Story is as follows: “In equity, if the borrower seeks the aid of the court to have the usurious security delivered up to be cancelled, or claims the enforcement of the statute, relief will only be decreed upon the terms of paying what is really and bona fide due the defendant, and if plaintiff do not make such offer by his bill, defendant may demur.” Fonbl. Eq. 24, n. (h); 1 Story, Eq. Jur. § 301.

II. But, it is contended, that the above rule is not applicable to her peculiar case, and she was no more bound to offer to pay what was really and honestly due upon the obligations, than she would have been, if the lender had come into court to enforce his usurious security, and she had claimed the enforcement of the statute in the character of defendant to such suit. Nor will the court, in the position she occupies, in granting relief, impose the condition of paying the principal and legal interest; or in other words limit the relief merely to the excess over and above the legal interest.

The rule above stated is sometimes said to be based upon the maxim, that he who asks equity must do equity; and at other times upon the ground, that equity will not enforce discovery where the defendant will be subjected to a penalty. But the question as to the true foundation on which the rule rests seems to be more satisfactorily solved by Sharkey, C. J. in Parchman v. McKinney (hereinafter cited) than by any other jurist. He says: It has its foundation in the discretion which courts of equity are said to possess in granting or withholding relief; and as the cases in which relief was sought in a court of equity were generally, and perhaps invariably, cases in which a remedy at law might have been had, or in which discovery was sought to sustain the defense at law; and hence it has been said that the court was not bound positively to interfere, but has a discretion on the subject, and may prescribe the terms on which relief will be given. Now this court is a court of law as well as a court of equity; and unless it be contended, that in every case, this court administering the law on equitable principles has no other rule than discretion, the principles which govern courts of equity where the jurisdictions of law and equity are separated, can have no application.

It is not, however, considered necessary to rest our argument entirely on this position; for whatever may be the foundation or reason of the rule, it seems not to have prevailed in England in those cases where the lender upon usury takes as part of his security, a bond with warrant of attorney to confess judgment thereon. In such cases, the borrower being precluded by the character of the security from an opportunity of presenting the defense in a court of law, the statute against usury would be thereby eluded; or at least the guilty lender would be protected to the extent of his principal and legal interest, if the unfortunate borrower be forced into a court of equity to seek relief against the judgment. Therefore the courts of law, acting on equitable principles, and under their general jurisdiction, will, upon motion, enter into the validity of a warrant of attorney and judgment; vacate the warrant and set aside the judgment entered up thereon; and this without the payment of the principal and legal interest of the money lent. See Edmonson v. Popkin, 1 Bos. & Pul. 270; Machin v. Delaval, Barnes' Notes, 52, 277; Cook v. Jones, Cowp. 727; Roberts v. Goff, 4 Barn. & Ald. 92; and in New York, see Hewitt v. Fitch, 3 Johns. 250;Gilbert v. Eden, 2 Johns. Cas. 280.

And so, in cases where a mortgage is taken to secure an usurious loan, with a power of sale annexed to it; or, as in the present case, a deed of assurance in trust to some third party, who is to sell the property to pay the usurious debt upon the requisition of the creditor; in either case, the creditor or lender can foreclose his mortgage, or enforce his security by an act in pais, without calling upon any court to assist him, and the borrower is thereby precluded from making his legal defense. See Parchman v. McKinney, 12 Sm. &. Mar. 631; Marks v. Morris, 4 Hen. & Munf. 463;Scott v. Young, 4 Rand. 415;Martin v. Lindsay, 1 Leigh, 499-513;Turpin v. Porall, 8 Leigh, 93-100.

It must be borne in mind that our statute of usury, unlike the British statute of Anne, does not impose any penalty upon the lender, nor does it declare the contract void, but simply docks the interest, leaving the principal sum lent or forborne a valid debt. In these...