Case ID: scl_36/html/0151-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Curia, per Wardlaw, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Mary A. Quarles, admx., v. W. B. Brannon & R. P. Quarles.
    
    Where, without any stipulation about interest, usurious interest was paid upon a note for two years, in conformity with the usual dealing between the parties, the jury properly found that there was a tacit understanding at the beginning that usurious interest should be paid.
    A note, given as a substitute for one which was usurious, will also be aifected by the usury; and the fact that the substitute was given to his administratrix, instead of the original lender, does not alter the case.
    A subsequent forbearance upon usurious consideration, whereby a note originally pure becomes tainted, is, in effect, a new lending; and, under our Statutes, the borrower is admissible to prove the usury, where the lender refuses to testify.
    In a joint action, ex contracts, there cannot be a severance of damages, so as to make one defendant liable for more than another.
    
      Before Withers, J., at Edgefield, Spring Term, 1850.
    This action was in assumpsit, and founded on a note executed by the defendants for $721 64, dated January 1st., 1846, due one day after date, and payable to the plaintiff, as administratrix of Hugh M. Quarles, deceased.
    The defence was usury. The evidence was derived from W. B. Brannon, one of the defendants. It appeared that he and one L. H. Mundy were co-partners in trade in the lifetime of Hugh M. Quarles, and they had been much in the habit of borrowing money, in various sums, from time to time, from Quarles. Upon these loans they paid Quarles, hy way of usury, 5J per cent, per annum upon the aggregate of principal and interest due at any time when a payment was made. When Quarles died, Brannon & Mundy were indebted to him on four notes, the principal whereof amounted in the aggregate to $1,420. One of those four notes, for $660, was due on the 1st. of December, 1841, and perhaps dated the day before, or the same day. It was given to H. M. Quarles for a lot of cotton purchased by Brannon & Mundy. On this note Quarles received usury, at the rate above stated, up to January, 1844, that is, 5J per cent, per annum on amount of principal and legal interest, for two years and one month. Quarles died before 1846 — perhaps in 1844. On the first of January, 1846, Brannon, the witness, had a settlement with the plaintiff, as his administratrix, embracing the note for $660, as well as the three other notes. The interest calculated on that occasion was at the legal rate of 7 per cent. The other three notes were entirely extinguished by means of two notes transferred to the plaintiff, amounting to $1,100, and $56 48, were left as a surplus, which was applied as a credit on the sum found due on the amount of the note for $660. Another credit was placed to the account of this latter note of $71 60.
    A statement on a separate piece of paper was produced, which Brannon said was the statement made by him, when the note sued on was given, relating to the last mentioned note alone, as follows:
    Note for $660 00
    Interest to 11th November, 1845, 182 40
    Credit $842 40 71 60
    Interest to 1st. January, 1846, 770 80 7 32
    Paid 1st. January, 1846, 778 12 56 48
    721 64
    The result was, the precise sum of the note sued upon in this case. At the time this note was given, Mrs. Quarles, the plaintiff, said to Brannon, that if he would give her security, she would charge only 7 per cent. He accordingly executed the note, the foundation of this action, with R. P. Quarles, surety. Brannon was examined for the defence, and, in the course of his examination, said that the defence set up was for the benefit of his surety, and not for his own. The plea was joint.
    Brannon said that at the time the note was given to Quarles for the cotton, (for which it will be observed the note now sued upon was given as a renewal or substitute) he did not remember that any stipulation was made as to the payment of usury. He did, however, pay to Quarles, in his' lifetime, the usury already stated upon it;' and he knew, when it was given, the established course of dealing between them.
    If the note for $660, and the other three amounting to $760, were to be combined together as one usurious transaction, and the usury paid upon the whole to be deducted from the aggregate original principal of the whole (viz. $1,420) the remainder would be less than $100, and for this the defendant’s counsel contended. Upon this point the jury were instructed that they were not to combine the several transactions, unless the parties had done so. If that out of which the present cause of action sprung, was originally separate, as it appeared to be, and had been kept so, as they might infer from the separate calculation made upon it, then the usury paid upon the other three notes could not affect the one now in question; and then only the sum paid as usury upon this particular loan could be deducted from it.
    According to the fourth ground of appeal, the plaintiff claimed that she should have been allowed some amount of legal interest on the principal sum of $660. The Circuit Judge charged the jury on that matter according to Harp v. Chandler Sp Neil, and Clarke v. Hunter Sp Hunter. He told them that when a note was originally pure, and at a subsequent time, an agreement was made to pay usury for the time to come, legal interest would accrue up to the time when the agreement for usury was made. But if, on the 1st. January, 1844, for example, Brannon paid to Quarles usury, as he says he did, for the time past, running from the date of the note, this, as taught by the case of Harp v. Chandler Sp Neil, might he evidence to lead to the conclusion that the note was corrupt at its origin.
    The second and third grounds involve the same question. Brannon was not objected to as incompetent. As preliminary to his examination, the plaintiff demanded that her counsel should be advised what he would swear, to the end that she might decide whether she would swear to the contrary, in pursuance of the preference accorded by the Statute. The information was given, and the witness was examined without further objection. It was argued to the jury that Brannon could not prove usüry in the note sued upon, because there was no usury in it, according to his account. However the note of $660 might have been affected, it was urged that the one in question was between other parties,— that is, between the plaintiff, who, though Administratrix, had received no usury, and stipulated for none, and Brannon and R. P. Quarles as makers, and not Brannon & Mundy, wp0 }la¿ the to the deceased.
    Upon that question his Honor instructed the jury that the note qjefore them was a substitute for that which was affected-by usury; that the plaintiff stood in the place of her intestate, and did not occupy the position of one who had paid a new consideration for an usurious note,.ignorant of the taint; that the transaction indicated in the note was between the same borrower and lender; that the same creditor, in the person of his administratrix, was forbearing the loan of the same money; and that Quarles, the surety, though not on the original note, had a right to make the defence of usury, well as an endorser, ignorant of the usury stipulated by ^ maker of a note for whose accomodation he endorsed, which was the doctrine of one of our own cases.
    The jury returned a verdict for the plaintiff for $451, without interest and without costs; a result attained bjf deducting from the original principal of $660, the usury at 5-g- per cent, per annum upon that sum, with interest on it, from 1st. December, 1841, to 1st. January, 1844, and deduct--ing $128 08, the amount of two payments made upon the note last referred to, to wit, $71 60 and $56 48.
    The fplaintiff appealed, and moved the Court of Appeals' for a new trial, on the following grounds:
    1. Because there should.- have been a verdict for the whole, amount of the note sued- on against the defendant, Win. B. Brannon, inasmuch as he testified that he did not plead or set up the defence of usury.
    2. Because the defendant, Brannon-, was an incompetent witness, inasmuch as the contract made with,, and the note given by the defendants to the. plaintiff was pure,, and untainted with any usury whatever.
    3. Because his Honor erred in charging the jury that this action- was to be decided in the same manner it would have been if the suit had been brought now, by the plaintiff’s-intestate, against Brannon & Mundy, on the note of six hundred and- sixty dollars.
    4. Because the verdict was erroneous under the charge of his Honor, in disallowing any interest on the note for six. hundred and sixty dollars.
    
      Adams, for the motion.
    
      Wardlaw, contra.
   Curia, per Wardlaw, J.

In this joint action, ex. contractu,; there could not have been a severance of damages, so as to make Brannon liable for more than Mundy.

A subsequent forbearance upon usurious consideration, whereby a note originally pure was tainted, was, in effect, a new lending; and, therefore, under our Statutes, the borrower was properly admitted as a witness to prove the usury, where the lender declined to testify. A substituted note, given, to the administratrix, was in no better condition than a substitute given to the intestate would have been.

The main effort of the appellant, in the argument here, has been to shake the authority of the case of Harp v. Chandler & Neil. According to that case, if the original note was entirely free from usury, the subsequent acceptance of usurious interest, or forbearance upon an usurious consideration, makes the sum due at the day on which the usury-commenced, the principal sum, which alone, after deduction of all payments, can, under our Statute of 1831, be recovered, without interest or costs. This Court has no disposition to depart from that case; but its consideration is not essential here; for here the receipt of usury from the date of the note was regarded only as evidence of original taint, and the jury have, in effect, found that the original note was taken with an understanding between the parties that usurious interest should be paid on it. There was no express stipulation about any interest, either lawful or unlawful; but there was payment of 12-J per cent, per annum made for two several years ; and this was made, not because of any new agreement/but in conformity with the usual course of dealing between the parties. It seems plain, as the jury have found, that there was a tacit understanding at the beginning that usurious interest should be paid.

The motion is dismissed.

Evans, Frost and Withers, JJ., concurred.

Motion refused,.