Thornton v. Dean

• Citation: 19 S.C. 583
• Parties: THORNTON v. DEAN.
• Decision Date: 29 August 1883
• Court: South Carolina Supreme Court

19 S.C. 583

THORNTON

v.DEAN.

Supreme Court of South Carolina.

Aug. 29th, 1883.

1. A penalty, under the laws of North Carolina, of double the amount of interest paid on a usurious contract, cannot be enforced by the courts of this State.

2. An executrix may sue in the courts of this State, letters testamentary having been here issued to her on the proof of a will under an exemplification of the proceedings from the proper office in North Carolina, where the original will was duly admitted to probate.

3. A note given in South Carolina, payable in North Carolina, secured by a mortgage of lands in this State, with a stipulated rate of interest which was usurious by the laws of North Carolina, but not usurious in South Carolina under the then existing law, may be enforced in the courts of this State according to the terms of the contract.

4. The mere fact that payment was stipulated to be made in North Carolina, does not raise a conclusive presumption that the contract was made with reference to the laws of that State.

5. If a contract be entered into in one place to be performed in another, the parties may stipulate for the rate of interest of either country; if the contract stipulate generally for interest without fixing the rate, it should be the rate of interest at the place of payment; if no interest be stipulated, and payment be not made, interest by way of damages is according to the law of the place of payment. Peck v. Mayo, 14 Vt. 33, approved.

6. In selling land for foreclosure, only so much should be sold as is necessary to pay the debt and costs, and it should be sold in such parcels as will secure the best price.

Before COTHRAN, J., Spartanburg, June, 1882.

The opinion fully states the case.

Mr. J. S. R. Thomson, for appellant.

Messrs. R. K. Carson, Bobo & Carlisle, contra.

The opinion of the court was delivered by

MR. JUSTICE MCGOWAN.

Mrs. Dean, the defendant, of Spartanburg county, South Carolina, being pressed by debt, solicited a loan of money from John Rutherford, of Bridgewater, North Carolina. The arrangement was made at Spartanburg, South Carolina, by which Mrs. Dean gave her note to Rutherford for $7,000, as follows:

“$7,000.00. Three years after date, I promise to pay to John Rutherford, or order, at Bridgewater, N. C., seven thousand dollars, with interest from maturity, at the rate of ten per cent. per annum, for value received.

Witness my hand and seal, this 3d day of June, 1874.

“MARY OWEN DEAN, [L. S.]

“Attest: S. BOBO.”

The interest to be due before maturity, was secured as follows: $350 for the first half year was paid in cash or deducted from the amount loaned, leaving the money actually received, the sum of $6,650, and for the remaining two years and a half, five notes for the same amount, being the interest for six months, were given, payable, respectively, in twelve, eighteen, twenty-four, thirty and thirty-six months. These notes were also made payable at Bridgewater, North Carolina. These notes were all secured by a mortgage of a lot of land in the city of Spartanburg, South Carolina, where all the papers were executed, and the money changed hands. Mrs. Dean was allowed permission to sell a part of the lands mortgaged, the proceeds of sale to go to the mortgage debt, and on June 19th, 1880, she paid to Simpson Bobo, Esq., the plaintiff's agent at Spartanburg, the sum of $3,500, which, in the absence of any direction from defendant, was applied to the five notes given for interest, and on November 1st, 1880, she paid the further sum of $1,100, which extinguished the five interest notes, and left a balance over to be credited on the large note.

Subsequently to the loan of the money, John Rutherford died, leaving a will, of which his widow, Elizabeth C. Thornton, was appointed executrix, and which was admitted to probate in Burke county, North Carolina, by D. C. Pearson, judge of Probate of that county, March 27th, 1880. The proceedings were exemplified to the judge of Probate for Spartanburg county, in this State, who admitted the same to probate, and issued letters testamentary in this State to the plaintiff, Elizabeth C. Thornton, who, as such executrix, instituted this proceeding in Spartanburg county, South Carolina, to foreclose the mortgage for the balance of the debt unpaid, upon the remainder of the mortgaged premises, which had not been sold. The principal defense was, that the fact appearing from the face of the notes, that they were payable at Bridgewater, North Carolina, the whole transaction was a North Carolina contract, and to be interpreted exclusively with reference to the laws of that State, which should be applied to the case, and which at that time prohibited the lending of money at a higher rate of interest than eight per cent. per annum, under forfeiture of all interest and costs.

The case came on to be heard by Judge Cothran, who held from the testimony: (1.) “That the contract between the parties was made in South Carolina; (2.) That the parties in making it had reference to the laws of this State in all of its material parts; (3.) That there was no intention to evade the usury laws of North Carolina, but, on the contrary, that the plaintiff was moved by a desire to relieve the embarrassment of the defendant, who was at the time under obligation to others to pay a higher rate of interest; (4.) That the place named for the payment of the note was for the convenience of the parties, and without any intention of establishing such as the place of performance; (5.) That the premises mortgaged are situated in this State, where alone foreclosure could be had; (6.) That both parties recognized and affirmed this as the place of performance, by making and receiving payments of money upon the contract in Spartanburg,” &c. The judge ordered a decree of foreclosure for the whole amount of the debt, with interest according to the terms of the contract, as that was allowable by the South Carolina law at the time of the contract.

From this decree the defendant appeals to this court upon exceptions, alleging that his Honor had erred as follows:

1. “In not at least ordering that the premises be subdivided into small lots, and only so many thereof be sold as might be necessary to pay the judgment.

2. “In not at least crediting the note sued on with the sum of $3,500 paid in June, 1880.

3. “In not at least crediting the note sued on with the further sum of $1,100 paid in November, 1880.

4. “In not finding as a matter of fact that the payments upon said note were made in North Carolina.

5. “In not finding that the plaintiff, Elizabeth C. Thornton, was not the regularly appointed and qualified executrix in this state of the will of John Rutherford, deceased.

6. “In finding that the defendant and John Rutherford, in making their contract, had reference to the laws of this State in all of its material points.

7. “In finding that Rutherford, in making the contract, was moved by a desire to remove the embarrassment of the defendant.

8. “In finding that the place named for the payment of the note was for the convenience of the parties, and without any intention of establishing such as the place of performance.

9. “In finding that both parties recognized and affirmed this as the place of performance by making and receiving payments upon the contract at Spartanburg.

10. “In not finding that the place of performance of said contract was at Bridgewater, North Carolina.

11. “In not holding that the usury laws of North Carolina operated upon said contract.

12. “In not finding at least that no more than eight per cent. interest could in any event be collected upon the note sued on.

13. “In not holding at least that the only amount recoverable in this action was the amount of money actually loaned, less the $4,600 paid thereon.

14. “In not holding that if the amount paid was applied to the payment of interest, then the defendant had a good and valid counter-claim for double the amount thereof.”

The last exception was very properly abandoned. In no view of the case can our court enforce the penal laws of North Carolina.

It was in proof that the will of John Rutherford had been admitted to probate, both in Burke county, North Carolina, and in Spartanburg county, South Carolina; and the plaintiff qualified as sole executrix...