Case ID: ga_48/html/0044-01.html
Source: Caselaw Access Project
Author: {"author": "Trippe, Judge.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

William R. Phillips et al., plaintiffs in error, vs. Dawson A. Walker, defendant in error.
    (Atlanta,
    January Term, 1873.)
    1. Equity — Judgment—Usury—Injunction—One creditor holding a common law judgment, where the debtor is involved or unable to pay all his debts, cannot enjoin another creditor in a common law judgment older than the first, on the ground that the latter has received from the debtor a sufficient amount of usury to discharge *his existing judgment, and, from that, fact, ask a decree, either that such judgment be declared satisfied, or postponed until the senior judgment is paid.
    
      2. Same — Same—Injunction—Discretion of ' Court. — Where it is claimed by the junior judgment creditor of a debtor, who is unable to pay his debts', that the holder of the oldest judgment purchased another judgment younger than either of the others, for about one-fifth the amount, under an agreement that the debtor was to have the benefit of the surplus, and, by agreement between the creditors, they released their judgment liens on a certain portion of the debtor’s property, which the debtor was to sell and pay a large portion of the proceeds to the creditor, who held the oldest execution, and it was so sold and nearly all the portion paid to said creditor, applied to the payment of the whole of the judgment so purchased by him, and on the hearing of an injunction to restrain such creditor from selling the balance of the debtor’s property, under the oldest fi. fa., and claiming the whole of the proceeds under it, and asking that the money so appropriated shall be credited to the oldest execution, the evidence being conflicting, and the Chancellor grants the injunction, this Court will not interfere with his discretion in so doing.
    Equity. Injunction. Usury. Judgments. Before Judge Hopkins. Fulton County. At Chambers. February 1st, 1873.
    Dawson A. Walker filed his bill against William R. Phillips and Edward White, making, substantially, the following case:
    White borrowed from Phillips, at different times, $2,090 00, for the use of which he agreed to pay him five per cent, per month. Subsequent to the original loans, which were embraced in two notes, together with a small portion of the usury, all beyond principal and legal interest was deducted therefrom, and White gave his mortgage on the place whereon he resided to secure the payment of the balance, Phillips retaining in his possession and control, judgments on six $100 00 notes, and on one $50 00 note, all of which were given purely for usury on the above loans. Phillips sued the two large notes to judgment, foreclosed the mortgage, and levied upon White’s property. To stay the sale, the latter gave to Phillips, purely as usury, notes amounting to $715 31. White has paid in money as usury at five per cent, per month, and *as usury on the usury at the same exorbitant rate of interest, $1,186 03. Phillips discovered that White was about to sell to Thomas Alexander forty-five acres of land for $5,625 00, and in order to complicate matters, with a view to further speculations upon his debtor in the way of usury, pending the negotiations of sale, levied upon the property. He then approached various other creditors of White who held judgments junior to his, and induced them, upon the statement that such sale was an advantageous one, and that he would receive therefrom $2,111 00, to be applied to his claims, to consent to a release of said property from their liens. But one execution, held by William Ezzard, Esq., as attorney for Bradford & Rennick, he could not control in this way. ■ The attorney for the plaintiffs was authorized to accept in full satisfaction of this execution $375 00, provided such deduction inured for the benefit of White, and not otherwise, the ñ. fa. amounting to $1,587 80, including interest and costs. ’Phillips purchased this lien for the $375 00, for the benefit of White. The sale'to Alexander was then consummated, from the proceeds of which Phillips received the $2,111 00, aforesaid, and in consideration of which he released said property from the liens which he held. This amount he applied, to the full satisfaction of the Bradford & Rennick execution, claiming that he had purchased it for himself, and the balánce to the satisfaction in part of the judgments in the Justice Courts on the $100 00 usury notes, leaving the executions upon the notes, to secure which the aforesaid mortgage was given unsatisfied in whole or in part. These last executions have been levied upon one hundred and two acres of land, the property of said White, in the county of Fulton. White is insolvent. Complainant holds a note against him for $1,525 00, and a judgment for $1,000 00, from the lien of which the forty-five acres of land sold to White were released, under the aforesaid agreement. The principal and legal interest due to Phillips has been more than paid. If the aforesaid levy is permitted to proceed to a sale, none of the judgment creditors can purchase the land without paying over to *the sheriff the amount of Phillips’ executions, which have, in fact, been paid off. The land, at public sale, will not bring more than $1,500 00. Complainant waives discovery, and prays that Phillips be enjoined from selling said one hundred and two acres of land under the aforesaid levy; that said execution, the mortgage execution, and all other evidences of indebtedness on the part of White to Phillips, be decreed to be canceled; that Phillips be enjoined from further proceeding on any of said evidences of indebtedness, or from transferring the same; that the writ of subpoena may issue.
    The answer of Phillips denies most emphatically that he purchased the Bradford & Rennick execution for the benefit of White, but on the contrary, alleges that he purchased it for his own benefit and advantage. Denies the right of complainant to set up usury for White, and especially after it had been reduced to judgment. Admits the correctness of the amounts of the loans, etc., and the rate of usury set forth in the bill.
    Upon, the hearing of the motion for injunction, conflicting affidavits were read as to the manner in which the Bradford & Rennick execution was purchased.
    The Chancellor directed that the writ of injunction should issue, upon complainant’s entering into bond and security in the sum of $2,000 00, conditioned to pay defendant, Phillips, such damages as he may sustain by reason of the wrongful suing out of the writ. To which ruling the defendant excepted.
    Collier, Mynatt & Collier, for plaintiffs in error.
    A. W. PIammond & Son, for defendant.
    
      
      judgment — Injunction—Usury.—The ruling in the first headnote is recognized m Lilienthal v. Champion, 58 Ga. 163, where the principal case is cited and distinguished. See Ency. Dig. Ga. Rep. vol 7, p. 386. '
      Same — Attack for Usury. — As to the right of a creditor' holding a common-law judgment to attack another common-law judgment obtained by another creditor, on the ground of usury, see the principal case cited in Bush v. Bank, 111 Ga. 668, 36 S. E. Rep. 902; Stone v. Loan & Trust Co., 107 Ga. 527, 33 S. E. Rep. 861.
      Recovery of Usury. — And it is held in Singleton v. Patillo, 78 Ga. 269, where the principal case is cited that one creditor of an insolvent debtor cannot recover from another usury which has been paid to the latter by the debtor, either in money or property.
    
   Trippe, Judge.

We are not disposed to carry the doctrine, in the case of Pope vs. Solomons, 36 Georgia, 541, to the extent asked for by the complainant in this case. We by no means impeach that decision. But we do not think that a common law judgment *can be enjoined either by the defendant in that judgment or by another creditor of that defendant, because there has been usury paid by him to the judgment creditor, and a decree demanded that a credit be entered on the judgment to the amount of such usury; that, we take it, is the first point made in the bill. Most of the usury paid by White to Phillips was paid on judgments. Suits were instituted on Phillips’ various notes on White. No defense was made, judgments regularly obtained, and many of them paid by White. Phillips now has a judgment at law, and also a mortgage judgment for the same debt against White. The complainant in the bill, a creditor of White, seeks to enjoin Phillips from collecting his common law fi. fa. and to have it credited with the usury heretofore paid by White to Phillips. There is a limit to the right to go behind a judgment, and where the defendant does not avail himself of the personal privilege to set up the question of usury, permits judgment to go against him, and there is' no fraudulent combination between thát creditor and debtor against other creditors, we think the judgment closes the question. We speak now with reference to ordinary judgments, and do not mean to say what construction is to be given to the provisions of the Code as to mortgages. That question does not arise in this case, for Phillips has both a common law and mortgage fi. fa. In Pope vs. Solomon, both creditors were simple contract creditors, and the debtor had absconded. The money they were contending for was in the hands of a trustee, and Pope had a right to avail himself of all the rights of the absent debtor, and there being no claim or right of Solomon fixed by judgment, the law could properly determine the equities between Pope and Solomon as to that fund.

But the next point made in the bill of complainant is free from this difficulty. It is that, by an agreement between the creditors of White, certain property of his was permitted to be sold; that a large part of the proceeds were to go into the hands of Phillips to be by him applied to his debts; that this part was so received by Phillips, but appropriated mostly *to one fi. fa. — the Bradford and Rennick fi. fa. — when but about one-fourth of the amount so applied should have gone to this fi. fa. The complainant asks that this should be corrected, and Phillips’ older fi. fa. be credited with this difference. The evidence on the hearing before the Chancellor on this point was conflicting, but the injunction was granted. It is very evident what disadvantage the creditors would labor under if this, the last property of their debtor, is forced to sale, and whilst they are disabled from running it up to a good price from the certainty of having all the money to advance, and of its being paid over to Phillips, or to go into litigation over the distribution to be made of it. Under the facts of the case the interest of all parties would be subserved by having it decided beforehand whether it was to be sold under an execution that would take nothing, or one-fourth of the whole. The inducement to the other creditors to press the bidding might be altogether controlled by that fact. And if the charges made by complainant be sustained they have the right to ask to be relieved from this disability, and to be placed back on a fair footing at the sale. We cannot say the Chancellor abused his discretion in granting the injunction on this point.

Judgment affirmed.