Stockyards State Bank v. Johnston
| Decision Date | 19 October 1915 |
| Docket Number | 5634. |
| Citation | 152 P. 585,52 Okla. 32,1915 OK 837 |
| Parties | STOCKYARDS STATE BANK v. JOHNSTON ET AL. |
| Court | Oklahoma Supreme Court |
Syllabus by the Court.
The statute of this state does not make a contract, tainted with usury, absolutely void.
In an action in replevin, like the case at bar, the only question in issue is the mortgagee's right to the possession of the property covered by the mortgage, and the amount due on the notes is only incidentally involved.
If anything is due on notes secured by a chattel mortgage, and the terms of the same have become broken, the mortgagee would be entitled to the possession of the mortgaged property.
The defense of usury is a privilege extended by the statute which can be either claimed or waived, and in order to be available to those who desire to claim the privilege extended, it must be specifically pleaded, and, if not so pleaded it will be deemed as waived.
The defense of usury cannot be raised by demurrer to a petition which declares upon a usurious contract.
Commissioners' Opinion, Division No. 4. Error from District Court, McClain County; R. McMillan, Judge.
Action by the Stockyards State Bank against W. M. Johnston and others. A demurrer to the petition was sustained, and plaintiff brings error. Reversed and remanded.
Vaught & Ready and John H. Halley, all of Oklahoma City, for plaintiff in error.
The parties will be designated here as in the trial court. On the 14th day of March, 1913, the plaintiff instituted this action in replevin in the district court of McClain county. In its petition plaintiff alleged, in substance, that, on the 21st day of January, 1911, defendants borrowed of plaintiff the sum of $1,000, evidenced by a note executed to it by defendants due the 1st day of November, 1911, in the sum of $1,141, bearing interest at the rate of 10 per cent. per annum after maturity. Plaintiff further alleged that the sum of $141 shown in said note was the amount charged defendants as interest on said $1,000 from January 21, 1911, to November 1, 1911, but avers that it now intends to charge defendants interest on said loan at the rate of 10 per cent. per annum and waives all interest above $77.88 due on November 1, 1911 that there was due plaintiff on said loan, on December 5 1911, the sum of $1,087.40; that defendants had paid $287.85 leaving yet due on that date the sum of $799.55; that on the 22d day of April, 1912, there was due plaintiff the sum of $830.13, including the principal and the interest calculated at 10 per cent. per annum; that the defendants paid on that date $53, leaving the sum of $777.13 still due; that on that date the defendants executed to plaintiff a second note in the sum of $957.95, due on the 20th day of October, 1912, with 10 per cent. interest per annum from maturity, and that it was agreed that the first note given should not be canceled, but held as collateral to the second note; that the second note called for interest greater than the legal rate, but the plaintiff waived all interest in excess of 10 per cent. per annum and demanded interest on the sum of $777.13 at the rate of 10 per cent. per annum from April 22, 1912, to October 20, 1912, in the sum of $39.82, and that there was due plaintiff on the 20th day of October, 1912, the sum of $816.95 on which date $15 was paid, leaving a balance of $801.95 due and unpaid; that the interest thereon from the 20th day of October, 1912, at the rate of 10 per cent. per annum to the 12th day of March, 1913, is $31.46, and that on that date there was due plaintiff the sum of $833.41, with an additional sum of 10 per cent. thereof as attorney fees as stipulated in said notes. Plaintiff further alleged that at the same time each of said notes were executed, for the purpose of securing the same, the defendants also executed to plaintiff a mortgage upon certain personal property, copies of said mortgages being attached to its petition, and that it was provided in said mortgages that if said defendants fail to pay any part of the indebtedness secured thereby when due, the plaintiff may take possession thereof and sell the same to pay said indebtedness, costs, expenses, and attorney fees. Plaintiff's petition contained the following:
The statutory affidavit for replevin was filed in the case, and the property taken under a writ issued thereon. The defendants demurred to said petition upon the grounds that:
"Said petition does not state facts sufficient to entitle plaintiff to a lien upon the property, as in said petition claimed and set forth, and relief prayed for therein."
The trial court sustained this demurrer, holding "that the lien of plaintiff on the property replevied had been waived." From this ruling, the plaintiff appealed.
Defendants have not favored us with a brief in this cause, and on that account we are not informed upon what theory the demurrer was urged against the petition, nor the court's reasons for sustaining the same, except from the information imparted in plaintiff's brief, which we accept as correct.
The contract was admittedly usurious, and an attempt--futile we think--was made to purge the same by offering to waive all the interest charged above the contract rate of 10 per cent. per annum.
It is apparent that the only question presented in this case is, Is a mortgage void which is given to secure notes which bear a usurious rate of interest? The mortgage and note stand or fall together. Each had their origin in the same transaction. Usury was not known to the common law, being a creature of the statute, and therefore we must look to the statute in each particular jurisdiction to determine the rights and remedies of the parties to a usurious transaction. 39 Cyc. 1006. While usury statutes...
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