Case ID: sc-eq_19/html/0037-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Per Curiam.\n    ", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Duncan McKeithen vs. Henry S. Butler et al.
    
    B. removed from this State to Alabama, leaving behind him some unsatisfied judgments and executions. While in Alabama he executed a mortgage to the plaintiff of three slaves, and shortly thereafter clandestinely returned, with the slaves, to this State. After his return he confessed two judgments, under the executions issued on which the slaves were sold by the sheriff, and purchased by one of the creditors to whom the judgments had been confessed. The proceeds of the sale were applied, first, to the older executions, and then, the balance, to the executions on the two confessions. Held, that the plaintiff was entitled to the balance alter satisfying the older executions, and the creditors, who had received it, were ordered to account to him for it.
    Where a party seeks to enforce a usurious contract entered into in Alabama, and recovers the amount bona fide due, with interest at 8 per cent, which by the law of that State he is entitled to, it is discretionary with the court whether he shall be allowed costs, though, under such circumstances, he would, in Alabama, be entitled to costs as a matter of legal right.
    
      Before Johnston, Ch. at Richland,
    
    
      June, 1845.
    
      The Chancellor. On the 7th of February, 1840, the defendant, Henry S. Butler, then residing in Autaugo county, Alabama, having borrowed from the plaintiff, also a citizen of said county, a considerable sum of money, and also, having purchased a quantity of corn from him, executed and delivered to him, several notes described in the pleadings, in the whole amounting to $677, payable on the first of March following. These notes appear to have been given for the sum of money actually borrowed and for the price of the corn purchased; to wit: about $600 of the former and about 77 bushels of the latter at $1 per bushel.
    Cotemporaneously with these notes, the said defendant appears to have executed and delivered to the plaintiff, several other notes, which with those already mentioned amounted to $1000. There were 15 notes in all. At the same time, the said defendant also executed and delivered to the said plaintiff, a deed by way of mortgage, for three slaves, then in his possession,. and named in the pleadings, and a tract of land, situate in Alabama, and particularly described in the mortgage ,• which mortgage was conditioned for the payment of the said sum of $1000, the aggregate of all the notes, by the first of January, 1841.
    Sometime in December, 1840, and before the time for the redemption of the mortgage arrived, the said defendant clandestinely removed the three mortgaged slaves from Alabama to Rich-land or Lexington, in this State, where he arrived with them sometime in that month, or early in the next.
    On the 6th of the succeeding month, (January, 1841,) he gave his notes, and confessed judgments to his co-defendant, William Butler, for $1300, and to his other co-defendant, William Geiger, Jr. for $1700. These confessions appear to have been taken to cover debts bona fide due by him. The exact amount of these debts not being then ascertainable, the judgments were extended to sums sufficient to cover them; and it in fact appears that the debts really due to the respective creditors, exceeded the amounts received by them, respectively, under the proceedings to be hereafter mentioned.
    Henry S. Butler had migrated to Alabama from this State; and left behind him sundry debts, in the form of judgments and executions, older, of course, than the plaintiff’s mortgage; which, as I have stated, was executed in Alabama, after he had removed thither.
    On the 18th of January, 1841, shortly after Wm. Butler and Wm. Geiger had taken their confessions, their executions were levied by the sheriff of Richland, on the three slaves, which had been mortgaged to the plaintiff, and removed to this State; and on the first Monday in March following, the said slaves were sold by the sheriff at auction, and purchased by the defendant, Geiger, at $1635.
    Of this purchase money, about $600 or $700 were applied to the older executions aforesaid, and of the residue, applications were made to Geiger’s and Wm. Butler’s executions in the ratio of about $600 or $700 to the former, and near $300 to the latter.
    Henry S. Butler is a bankrupt; and the plaintiff being without other remedy, comes to have his debt paid out of the proceeds of the sale, praying a preference over Geiger’s and Wm. Butler’s executions, or that the slaves be re-sold in satisfaction of his demand.
    It is charged in the bill that these defendants obtained their present advantage by fraud ; that they incited Henry S. Butler to abscond with the property from Alabama, and to bring it into this State and give them a lien on it, with the view of defeating the plaintiff’s claim ; and that, in fact, no debt was really due by him to them. It is moreover charged that Geiger’s purchase was made at an inadequate price.
    None of these charges have been made out by proof. But it appears to me the plaintiff must still prevail, unless deprived of his' right by the taint of usury, or by his possession of a remedy out of the mortgaged land in Alabama, or by his having already received payment. These are the defences.
    It is clearly made out that the pretended payment is without foundation. The defendant, Henry S. Butler, lays claim to have applied to this debt the proceeds of a slave left in the possession of the plaintiff by a third person to be sold. The slave was sold and the price paid to the depositor: and there is not the shadow of evidence that she ever belonged to this defendant, or that he had anything to do with the bailment. The land included in the mortgage never belonged to this defendant. He had made a contract for the purchase of it; but the bargain was rescinded, and the part of the purchase money advanced by him, received bach, before he got a title. The evidence of these facts came from the purchaser of the slave and the vendor of the land ; and they were objected to as incompetent witnesses, on the score of their self-interest. But they have no interest in this cause ; and they were competent to prove by parol the substance of the transactions, (although they may have been in writing) in this suit, where the proof comes in collaterally.
    Then with respect to the usury. It is clearly established that there was usury to some extent in the transaction. I shall not determine here how far the usury extended, but leave that to be ascertained on reference. My concern is with the general principle.
    By the older statutes of Alabama, as formerly with us, where usury existed, the usurer could not enforce his contract. But by subsequent enactments, it is provided that he may recover the Iona fide debt, with interest, which in this case must be at the rate of eight per cent, per annum, which is the interest of Alabama, where the contract was made.
    The case is then reduced to the question, whether this mortgage, so far as the debt secured by it, is bona fide, is entitled under the circumstances of the case to precedence over the executions of the two creditor defendants.
    
      I had forgotten to state that the instrument was regularly-registered in Alabama, as required by the laws of that State; and to put its validity beyond question, it was also registered here, in conformity to our recent statute upon the subject of mortgages personal.
    But it is still a foreign mortgage, and the conflict is between it and the two domestic liens. It depends entirely upon its effect in its own State, whether it can prevail. By the adjudications of Alabama, we learn that a mortgage of personalty carries the title to the mortgagee, as it does with us. The case stands then, as if Henry S. Butler <! had alienated this property intermediately between” the entering up of the older executions, and that of the two junior executions. The law is plain. Suppose before the junior executions were obtained and lodged, the older executions had sold these slaves in the hands of the alienee — the sale would have been good, and the purchaser would have had a good title ; but after the vending executions should have been satisfied out of the proceeds, the alienee would have been entitled to the residue, as the owner of the property subject to the vending incumbrance. Again, suppose there were no executions older than the alienation ; suppose those obtained after the alienation to be the only executions. They would form no incum-brance upon the property, and would neither be entitled to sell it nor to receive satisfaction out of it. A sale under such executions would be void ; and the alienee would be entitled to reclaim for the property or the avails at his pleasure. These positions by a very plain combination are decisive of this case. The sale, according to our decided cases must be referred to the senior executions and was well made. Geiger obtained a good title to the negroes by his purchase. But the residue of the proceeds after satisfying the older liens were wrongfully received by himself and Wm. Butler, in opposition to the better and older right of the plaintiff’.
    It is ordered and decreed, that the debt of the plaintiff be referred to the commissioner, to ascertain what portion thereof is untainted with usury, with interest at the rate of 8 per cent, per annum — and that the plaintiff is .entitled to recover the same. That the commissioner do also ascertain the amount applicable to the liens senior to the plaintiff’s mortgage; and what was the residue of the proceeds of sale over and above them; as, also, the portion of such residue received by each of the defendants, Geiger and William Butler, upon their executions; and whether there be any further remains of said residue in the hands of Geiger, the purchaser; and that said Geiger and William Butler do pay the plaintiff, pro rata, the sums that may be thus found in their hands respectively, with interest thereon at seven per cent, per annum, so far as may be necessary to satisfy his demand, when ascertained, with its interest at eight per cent as aforesaid.
    The only remaining question relates to the costs. The law of Alabama entitles the usurer to recover the bona fide part of his debt, not only with interest but costs. This statute, however, can only operate as a direction to her own forums. The suit is brought here — and here the rule in such cases is otherwise, in relation to usury involving a breach of our own laws. This usury is not a violation of our law, but of that of Alabama. Still these considerations leave ' the point undecided. We are not to vindicate the law of Alabama, further than she vindicates it, nor are we to burden our citizens with costs under her directions.
    The point must be referred to that class of cases where there is no statutory regulation ; and falls within the discretion of the court, under the general rules of practice in this forum. Let each party pay his own costs.
    The defendants appealed, and moved the Court of Appeals to reverse or modify the decree of the Chancellor, on the following grounds, to wit:
    1. Because the mortgage of the slaves Toney, Chubbey and Ben, made in Alabama, by H. S. Butler to D. McKeithen, on the 7th of February, 1840, conditioned for the payment of $1000 on or before the 1st of January, 1841, or to be void, did not convey an estate to him, but merely created a lien on the slaves (who continued in the possession of the mortgagor) being subsequent to the older judgments and executions of Smith and Drafts, F. McCully and others, is not entitled to a preference over the judgments and executions of William Geiger and William Butler obtained in South-Carolina against H. S. Butler, who in December, 1840, had returned and had removed the said slaves to this State, which mortgage had not been recorded here, (a copy of it was recorded in the office of Secretary of State on 30th of April, 1844,) and of which the said William Geiger and William Butler had no notice at the sale of the said slaves under the said executions.
    2. Because William Geiger was a purchaser of the said slaves for a valuable consideration under executions older than the mortgage, without notice of it, and ought to be protected.
    3. Because no interest ought to be allowed on McKeithen’s demand against H. S. Butler, as there was usury in the transaction.
    4. Because the complainant ought to have been decreed to pay the costs.
    The complainant also moved the Court of Appeals to reform the decree of the Chancellor, so far as to require the defendants William Geiger and William Butler, to pay the costs, upon the ground, that the complainant demanded nothing more from them before the bill was filed, and claimed nothing more in the bill, than the principal sum due, and lawful interest, which have been allowed by the Chancellor, and which were allowed, with costs, by the law of Alabama.
    
      Caldwell, for the defendants.
    
      Gregg & Gregg, for the complainant.
   Per Curiam.

This court concur in the decree of the circuit court, and the appeal is dismissed.

JohnsoN, Harpee, Johnston and Dunkin, CC. concurring.