Walsh v. Mayer Mayer v. Walsh

• Decision Date: 17 March 1884
• Citation: 4 S.Ct. 260,111 U.S. 31,28 L.Ed. 338
• Parties: WALSH v. MAYER and others. MAYER and others v. WALSH
• Court: U.S. Supreme Court

111 U.S. 31

4 S.Ct. 260

28 L.Ed. 338

WALSH v. MAYER and others.

MAYER and others

v. WALSH.

March 17, 1884.

Wm. L. Nugent and W. Hallett Phillips, for Walsh.

C. W. Hornor, for Mayer & Co.

MATTHEWS, J.

The facts on which the decree appealed from was founded are stated in the opinion of the circuit court. The correctness of some of the findings is challenged by the appellants in the cross-appeal, the defendants to the original bill, but, on a careful consideration of the evidence, this court adopts them as its own, as follows:

On the second day of January, 1866, the defendants, J. D. Mayer & Co., purchased from William Barnes, who then resided in the city of New Orleans, and the said defendants then being residents of the state of Arkansas, the hotel property situate in Mississippi City, in this state, (Mississippi,) known as the Barnes Hotel, and, to secure the payment of the last installment of the purchase money, executed their promissory note for $7,500, payable two years after date, with 6 per cent. interest thereon until due and 10 per cent. thereafter until paid, which note was made payable to themselves, and indorsed and delivered to said Barnes, who held and owned the same until about the last of June, 1874, when he sold and delivered the same for value to the complainant, Walsh. To secure the payment of this note, and one for the same amount which fell due the year previous, and which has been paid and satisfied, the said defendants executed a mortgage upon the property so purchased, which was executed and recorded on the twentieth of February, 1866, and described in said mortgage. That at the time said contract was made it was agreed and understood between the parties that the deferred payments were intended by said Barnes as an investment, and that so long as the interest was paid after this note became due, that the payment of the principal sum would not be demanded, and that in pursuance of said agreement and understanding the said defendants paid up the interest, and which was indorsed upon the note as paid, to September, 1873. Sometime after the maturity of the note, Barnes, as a condition for further indulgence, demanded of the said defendants that they should execute their notes falling due at a further period for the interest up to their maturity, equal to 15 per cent. per annum, upon the note for $7,500, and also for the amount of money advanced by Barnes to pay the premiums upon the insurance policies, with 15 per cent. interest added. These notes were drawn in New Orleans, made payable to order, and indorsed and delivered to Barnes. The last of these notes was dated May 12, 1874, and made due and payable on the fourteenth day of September thereafter. These transactions all took place prior to the transfer of the note by Barnes to complainant, but were known to complainant at the time of his purchase.

At the time of the purchase of the note, complainant wrote to the defendants, notifying them that he was the holder and owner of the note, and calling their attention to the continuance of the insurance upon the property. To this letter the said defendants replied on the sixth of July, acknowledging its receipt, but nothing more. On December 1st complainant mailed a letter to defendants, informing them that he needed money; that the interest had been paid to the first of September before, and again urging funds to provide insurance on the property. Defendants replied to this letter on the eighth of December, stating that they were willing to pay three months' interest, but had been served with a writ of garnishment in the suit of the First National Bank of New Orleans, in a suit by attachment brought by the bank on said Barnes in the circuit court of Harrison county, and therefore declined to make further payment or for further insur- ance, stating that they desired to have the insurance changed and to take it at a future time. On March 2, 1876, complainant wrote a letter to defendants calling their attention to the want of insurance, in which he uses the following language: 'I think it would not be wise for you, or safe for me, to leave things in that way; the amount you owe me on the $7,500 note is too large to be left in such an unprotection condition, and I cannot consent to it.'

On the ninth of March, 1876, the defendants made and sent to the complainant the following reply to the foregoing letter:

'Yours at hand. We do not want to insure any until about July, when we expect to insure for about $15,000. We think you will run no risk in that time, as the property would be worth the amount due you if the building was to burn down.

[Signed] 'J. D. MAYER & CO.'

The suit of the bank vs. defendants was commenced in November, 1874, but owing to the death of Barnes was continued until the twenty-fourth of October, 1876, when the defendants filed their answer to the garnishment, in which they acknowledge the execution of the note, but claim that they have paid excess of interest and usurious interest thereon, which should be deducted from the note, and which when done would only leave a balance of $2,509.76, and which was owing to said William Barnes, but claimed the benefit of the statute of limitations, and which they set up as an entire defense to the said note, and upon which the suit was dismissed as to them. After this, by an arrangement between them and the bank, they gave their note to the bank for the said sum of $2,509.76, at four years, with 6 per cent. interest, but this was...